Senior macroeconomic strategy specialist at Rabobank, Bas van Geffen, notes that in the context of geopolitical risks, the EU is pushing to diversify its economic alliances, signing a free trade agreement with Australia after agreements with Mercosur, India and Indonesia. The deal combines tariff cuts, higher agricultural quotas and a security and defense partnership, with an emphasis on access to Australia’s key raw materials.
Brussels is deepening trade links in the Asia-Pacific region
“In the face of geopolitical risks, the EU continues to seek to diversify its economic alliances. Brussels signed a free trade agreement with Australia following agreements with Mercosur, India and Indonesia. Parliament still needs to approve the deal, but it should be less controversial than the Mercosur agreement.”
“The EU-Australia deal includes a combination of tariff reductions and higher quotas on certain dairy products, beef and sheepmeat. The agreement protects geographical product names, much to the dismay of Australian farmers who believe access to the European market remains difficult.”
“Trade Commissioner Sefcovic said the deal should increase annual bilateral trade by around €20 billion over the next decade, but this is probably not the EU’s main motivation.”
“The security and defense partnership highlights a geopolitical theme, and improved access to Australia’s key raw materials could be an extension of that.”
(This article was created with the assist of an artificial intelligence tool and has been reviewed by an editor.)
