London, March 24th (Argus) - The long-awaited free trade agreement between the EU and Australia aims to ensure that the EU can consistently obtain key raw materials, including lithium, bauxite, manganese, and tantalum.
The agreement, signed today after eight years of negotiations, will reduce or eliminate bilateral tariffs on key raw materials and value-added products such as nickel, cobalt, copper, and rare earth oxides.
Australia's lithium production accounts for approximately one-third of the global total and it is one of the largest suppliers of bauxite, iron ore, zirconium, and rare earth elements in the world.
Australia and the EU have committed to deepening cooperation in key raw materials under this agreement, including possible joint financing for key projects to strengthen the supply chain.
According to the agreement, European producers may save over 1.1 billion US dollars in tariffs in the next 10 years, and it is expected to add approximately 7 billion US dollars to the Australian economy annually. Europe is Australia's third-largest trading partner.
The agreement was reached at a time when geopolitical tensions are escalating. The EU is seeking to reduce its exposure to US tariffs and its heavy reliance on China.
European Commission President Ursula von der Leyen said that in a period when tariffs and supply chains are increasingly weaponized, this agreement is crucial.
She said: "The trade of key raw materials is highly vulnerable to economic and geopolitical disruptions, and reaching an agreement with reliable partners is crucial for stabilizing the EU's supply chain."
To further diversify the strategic trade partnership, the EU signed a free trade agreement with the Southern Common Market (Mercosur) in South America after 25 years of negotiations on January 17th, and concluded an EU-India trade agreement on January 27th.
The Australian agreement now needs to be approved by the majority of EU countries. After the official signing by Australia and the EU, the European Parliament must pass it by a majority vote for the approval to be completed.
