The EU-Australia Agreement and the European Geography of de-risking
On 24 March, negotiations on the Free Trade Agreement (FTA) between the European Union and Australia were concluded. Beyond the bilateral surface of the agreement, this development should be understood as part of a broader European strategy centred on economic security, resilience, and the diversification of supply chains, with the dual objective of, on the one hand, strengthening Europe’s position in the Indo-Pacific and, on the other, making value chains more stable in a phase marked by significant international instability, industrial competition, and mounting pressure on strategic raw materials. In this sense, the agreement does not merely constitute an expansion of access to the Australian market but rather represents one element of the broader geoeconomic reconfiguration pursued by the EU. From a strictly economic standpoint, the benefits for the Union are already clearly measurable. In 2024, Australia ranked as the EU’s 20th partner in goods trade, accounting for approximately 1% of the European total, while the EU remained Canberra’s third-largest trading partner after China and Japan, representing 8.6% of Australia’s total trade. In the same year, bilateral trade in goods reached 49.4 billion euros, with a European surplus of 27.9 billion euros. On the services side, the latest available figure, for 2023, indicates bilateral trade amounting to 38.1 billion euros, pointing to an EU surplus of 17.9 billion euros. Overall, the data confirm a significant trade relationship that is structurally favourable to the EU. In goods, current levels remain above those of 2021, despite a recent normalisation compared with the peaks recorded in 2022-2023.
In terms of actual trade composition, the EU exports to Australia primarily machinery and equipment, transport equipment, and chemical products, while importing mainly mineral and vegetable products. The agreement builds upon this advantageous asymmetry with the aim of supporting and further strengthening it, generating up to 1 billion euros per year in tariff savings, growth of up to 33% in European exports over the coming decade, and an estimated increase of around 4 billion euros in EU GDP by 2030.
From the perspective of European de-risking, the most strategic dimension of the agreement concerns Critical Raw Materials (CRMs). Australia possesses an extractive base of particular relevance to Europe’s green and digital transition: it accounts for 53% of global lithium extraction, 28% of bauxite/aluminium, and 16% of manganese, while the EU’s dependence on imports remains extremely high, reaching 100% in the case of lithium, 99% for tantalum, 96% for manganese, 81% for cobalt, and 55% for bauxite/aluminium. Within this framework, the FTA is intended to make European access to these resources more stable and predictable through the reduction or elimination of tariffs, the prohibition of export restrictions and export taxes, the limitation of discriminatory practices, and the strengthening of cooperation along value chains. It is no coincidence that the agreement builds upon a trajectory already set in motion with the EU-Australia Memorandum of Understanding on CRMs of May 2024 and the roadmap approved in December of the same year.
Against this backdrop, the Australian dossier demonstrates its consistency with the broader European strategy of reducing strategic dependencies. On 5 March, during the fifth meeting of the Joint Committee of the *Comprehensive Economic and Trade Agreement *(CETA), the parties simultaneously launched negotiations for a Digital Trade Agreement. On 27 January, Brussels concluded the FTA with India; on 17 January, it signed the agreements with Mercosur; and on 6 February, the European Commission published its study on the Middle Corridor, now explicitly regarded as a strategic axis for redesigning Euro-Asian routes, interconnections, and supply chains. Taken together, these developments indicate that the EU’s objective is not merely to multiply trade agreements, but rather to move towards simultaneously expanding export markets, reliable partners, and infrastructure networks, while reducing exposure to overly concentrated dependencies vis-à-vis aggressively competitive markets.
The same logic also directly affects the nuclear sector. On 10 March, Brussels published the new European strategy on Small Modular Reactors (SMRs), referring, within the broader framework of the Nuclear Illustrative Programme(PINC), to investments of approximately 241 billion euros by 2050. This figure, combined with nearly 390 billion US dollars in European clean energy investment in 2025, signals a growing EU inclination to strengthen its energy autonomy in line with the objectives of the Green Deal and, more broadly, with the intention of stimulating and thereby consolidating a solid industrial base in the energy sector. From this perspective, the persistent dependence on external supplies of uranium and on services linked to the fuel cycle makes the geographical diversification of partners a coherent component of the European de-risking strategy.
At a further level, the agreement with Canberra may also be read as a possible indirect political basis for greater EU-Australia convergence in Africa in the CRM sector. On the one hand, Brussels is already oriented towards building in Africa alternative value chains to those dominated by China through “Global Gateway”, the “Lobito Corridor”, and value-chain partnerships with the Democratic Republic of Congo and Zambia; on the other hand, Australia already maintains a significant presence on the continent, with more than 170 companies listed on the Australian Securities Exchange (ASX) active in 35 African countries, as well as a Memorandum of Understanding signed in June 2025 with the Secretariat of the African Continental Free Trade Area (AfCFTA), aimed at promoting Australia-Africa economic partnerships.
In this sense, the two strategies appear compatible and synergistically complementary. The EU tends to provide financial and infrastructural capacity, while Australia contributes operational experience, advanced mining know-how, and an industrial presence already well established in the extractive sector. A further aspect concerns the way competitors operate on the African continent, insofar as environmental and social constraints that are relatively less stringent than those to which European firms must adhere increase their direct competitive flexibility to the detriment of European industry; precisely for this reason, closer cooperation with Australian actors could offer the EU additional room for manoeuvre in the development of infrastructure, refining, and value chains in areas of high strategic priority, indirectly strengthening the construction of credible alternatives to Chinese centrality.
More precisely, complementarity between the EU and Australia would not be confined to the extractive upstream but could extend above all to the development of the intermediate stages of the value chain, which are still heavily concentrated in China today. The European Critical Raw Materials Act aims, in fact, to cover at least 40% of European demand for strategic raw materials through domestic processing by 2030. Canberra is moving in the same direction, with its 2026 project framework identifying 29 processing projects ready for investment, supported by the Critical Minerals Production Tax Incentive, amounting to approximately 4.9 billion US dollars. In this regard, more structured cooperation could produce a dual effect: within the EU, Australian expertise could help accelerate refining capacity, process efficiency, and metallurgical know-how; in Africa, convergence between Australia’s operational presence and European infrastructure projects could foster value chains that combine extraction, semi-processing, and refining, in line, among other things, with the trajectory that the main African countries dependent on raw materials have embarked upon in response to this structural economic weakness. In this respect, potential enhanced EU-Australia cooperation on the African continent would become a direction consistent with the industrial objectives of both parties and, indirectly, suited to reducing Chinese centrality in segments in which Beijing remains the world’s leading refiner.
From this perspective, the FTA with Australia appears particularly significant, as it signals the EU’s determination to turn into strategy an emerging structural vulnerability rooted in its high exposure to concentrated external dependencies in the fields of energy and mineral supply. At the same time, the conclusion of the agreement also highlights Australia’s interest in strengthening trade liberalisation and consolidating a win-win partnership model with a longstanding ally, in a context of progressive diversification of its trade relationships and partial rebalancing vis-à-vis the weight of China in the Australian market. For the EU, moreover, the agreement with Canberra should be read not as an isolated episode, but rather in light of a broader European de-risking strategy aimed at diversifying partners, value chains, and sources of supply, thereby limiting the risk that systemic imbalances and exogenous crises may undermine the Union’s energy security, monetary stability, and industrial resilience.