EU, Australia forge landmark security, trade partnership

The European Union and Australia have announced the adoption of a groundbreaking Security and Defence Partnership (SDP) and finalized negotiations for an ambitious, balanced free trade agreement (FTA).

They also agreed to launch formal negotiations for Australia’s association with Horizon Europe, the EU’s flagship research and innovation program. These steps are designed to strengthen bilateral relations and deliver mutually beneficial outcomes amid rising geopolitical uncertainty.

The FTA’s final text was agreed during a leaders’ meeting in Canberra between European Commission President Ursula von der Leyen and Australian Prime Minister Anthony Albanese. The SDP was signed virtually on 18 March 2026 by EU High Representative/Vice President Kaja Kallas and Australian Deputy Prime Minister and Minister of Defence Richard Marles alongside Foreign Minister Penny Wong.

President von der Leyen said: “The EU and Australia may be geographically far apart but we couldn't be closer in terms of how we see the world. With these dynamic new partnerships on security and defence, as well as trade, we are moving even closer together. These agreements put in place lasting, trust-based structures to support peace and security through strength; driving prosperity through rules-based trade, and working together to uphold global institutions. We are committed to building a cleaner, more digital future for our citizens, workers and businesses. And we are sending a strong signal to the rest of the world that friendship and cooperation is what matters most in times of turbulence.”

The SDP builds on a long-standing relationship between the EU and Australia, grounded in shared commitments to multilateralism and a rules-based international order. As global security interconnects Europe with the strategically vital Indo-Pacific, deeper cooperation has become increasingly important.

The partnership establishes a robust institutional framework to enhance operational efficiency in addressing contemporary geopolitical challenges. Key elements include:

Security and Defence Dialogues to translate shared strategic priorities into practical cooperation.

Strengthened collaboration on crisis management and Common Security and Defence Policy (CSDP) missions, including joint exercises, training, and education.

Enhanced cooperation on maritime and cyber security, countering hybrid threats, and combating foreign information manipulation.

Coordination on emerging technologies, including artificial intelligence and space security, alongside non-proliferation and disarmament initiatives.

Information sharing and situational awareness across regions.

Capacity-building support for partners, particularly in the Indo-Pacific, and coordinated engagement in multilateral and regional forums.

Flexible, forward-looking approach allowing the EU and Australia to adapt their cooperation over time in response to evolving security challenges.

The concluded FTA opens the EU market to one of the world’s fastest-growing developed economies, offering substantial opportunities for European companies, consumers, and farmers. EU exports to Australia are expected to grow by up to 33% over the next decade, with an annual export value potentially reaching €17.7 billion. Sectors with strong growth potential include dairy (up 48%), motor vehicles (52%), and chemicals (20%). EU investment into Australia could rise by over 87%.

The agreement also strengthens the EU’s strategic interests in critical raw materials, making supply chains more resilient to geopolitical shocks. It incorporates strong sustainability commitments, promoting greener and fairer trade, and ensuring imports into the EU align with European climate, environmental, and animal welfare standards.

Following recent agreements with Indonesia and India, the EU-Australia FTA further diversifies Europe’s trade network in the strategically important Indo-Pacific region, bolstering Europe’s global economic and geopolitical position.

By Vafa Guliyeva