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8 Ways the EU–Australia Free Trade Agreement Could Benefit Your Business Strategy

The EU–Australia Free Trade Agreement creates commercial benefits for European businesses trading with, investing in, or expanding into Australia.

To help businesses navigate what the agreement means in practice, the French-Australian Chamber of Commerce and Industry (FACCI) hosted a consultation webinar bringing together experts from the Australian Centre for International Trade and Investment (ACITI), BDO Australia, and the European Australian Business Council (EABC) to break down the key provisions and benefits. 

The EU–Australia FTA creates practical opportunities for European businesses to improve competitiveness, expand product lines, reduce administrative barriers and costs, accelerate investment decisions, and strengthen their long-term Australian market strategy. Below is a summary of the webinar discussion, offering indicative advice on 8 areas of change that European executives should understand and begin considering as potential opportunities: 

1. Tariff elimination on goods
2. Raised FIRB investment screening threshold
3. Innovation mobility pathway
4. Liberal rules of origin
5. Expanded government procurement access
6. Digital trade commitments
7. Luxury car tax threshold increases for EVs and fuel-efficient vehicles
8. Geopolitical certainty and rule of law stability

1. Tariff elimination on goods

What changes: The most immediate financial benefit of the EU–Australia FTA is the elimination of the general 5% tariff currently applied to many European goods imported into Australia. 

Why it matters: The practical applications are more varied than they might first appear. The suggestions below offer considerations on different strategic uses of the 5% saving:

• Pocket the saving as a direct margin improvement with no change to pricing or volume
• Pass it on as a price reduction, bringing European goods into direct competition with suppliers from Japan, Korea, and China, all of which already enjoy zero-tariff access to the Australian market
• Redirect the 5% saving into Australian marketing spend to grow market share
• Make previously unviable products viable for high-volume, low-margin businesses where current margins sit below 5%
• Introduce additional product lines that were previously not cost-effective to import
• Strengthen government and commercial tender competitiveness

Note: Some sectors, including medical devices, already receive tariff exemptions and will not see a change from this provision.

2. Raised FIRB investment screening threshold

What changes: For European companies looking to invest in Australia, one of the most tangible procedural changes is the increase to the Foreign Investment Review Board (FIRB) screening threshold. The current threshold requiring FIRB approval for European investors is AUD 347 million. Under the FTA, that threshold rises to AUD 1.498 billion.

Why it matters: In practice, the benefits are numerous. It saves time, reduces legal costs, and enables faster deal execution. For mid-sized acquisitions and joint ventures that previously fell within the screening zone, this removes a significant administrative hurdle.

3. Innovation mobility pathway

What changes: The FTA introduces a dedicated mobility pathway for researchers and technical specialists moving between Australia and Europe. Distinct from general migration streams, this is specifically designed to facilitate knowledge transfer and create commercialisation opportunities from research collaboration.

Why it matters: For companies operating at the intersection of R&D and commercial application, this pathway enables more fluid movement of the specialist talent that drives innovation partnerships. Businesses in advanced manufacturing, life sciences, clean energy, and technology sectors stand to benefit most directly.

4. Liberal rules of origin

What changes: The rules of origin under the FTA are relatively permissive. Components from third countries can be incorporated while a product still qualifies for preferential tariff rates. This is particularly relevant for businesses with complex, multi-country supply chains.

Why it matters: The more immediate operational benefit is in the declaration process. Rather than obtaining a formal certificate of origin from a third-party body, exporters can self-declare origin through a declaration of origin. This removes a procedural step, reduces fees, and speeds up the export process, which is particularly valuable for businesses managing high shipment volumes.

5. Expanded government procurement access

What changes: The Australian Government has added new entities to its procurement schedule under the FTA, beyond those already listed under its existing World Trade Organisation Government Procurement Agreement obligations. 

Why it matters: European companies will gain access to more Australian government procurement tenders. These contracts are frequently large-scale and financially significant. 

Note: The specific list of new entities had not yet been publicly released at the time of the webinar. Businesses with public sector offerings in infrastructure, technology, professional services, and defence-adjacent industries should monitor the release of the entity list and assess where new opportunities and benefitsemerge.

6. Digital trade commitments

What changes: The FTA includes a set of digital trade provisions that matter for any business operating across borders digitally. Australia commits to no customs duties on electronic transmissions, which is significant given that the WTO moratorium on e-transmission duties recently expired. 

The agreement also prohibits forced data localisation in Australia as a condition of market access, prohibits forced transfer of source code, and formally recognises e-signatures, e-contracts, and e-authentication. 

Why it matters: For software companies, data-intensive businesses, and any organisation managing cross-border digital services, these commitments reduce regulatory risk and remove barriers that have complicated market entry elsewhere.

7. Luxury car tax threshold increase for EVs and fuel-efficient vehicles

What changes: The current Luxury Car Tax threshold for fuel-efficient vehicles sits at approximately AUD 91,000. Under the FTA, that threshold rises to AUD 120,000 for fuel-efficient and electric vehicles. 

Why it matters: This directly reduces the tax burden for eligible European EV and fuel-efficient vehicle exporters, improving price competitiveness in a market where uptake of electric vehicles is accelerating. For manufacturers and distributors operating in this segment, the change makes a material difference to the landed cost of vehicles and the commercial case for expanding the Australian offering.

8. Geopolitical certainty and rule of law stability

What changes: In an environment where trade is increasingly weaponised for geopolitical purposes, a binding legal framework between Australia and the EU provides businesses with greater predictability and reduced international market risk.

Why it matters: The agreement creates a stable, rules-based foundation for bilateral trade and investment planning. For companies making long-horizon decisions on market entry, capital allocation, or supply chain configuration, that legal certainty has real value at a time when it cannot be taken for granted.

An FTA That Depends on Ratification and Business Advocacy

The EU–Australia FTA is a high-impact, economy‑wide agreement that eliminates most trade barriers, benefits many sectors (agriculture, services, energy, luxury, transport, etc.) and strengthens investment and supply chains. However, the business opportunities are only as real as the ratification process that unlocks them. Both the Australian and EU parliaments must vote to pass the agreement before it enters into force, and that is not a foregone conclusion. This process is expected to take 12 to 18 months, with entry into force targeted for approximately 2027.

That is where business advocacy becomes decisive. Companies must actively engage with their government representatives to make the case for ratification. In a volatile geopolitical environment, every effort must be made to accelerate the process. No trade deal is perfect, but this agreement delivers broad benefits across sectors and needs to be advocated for.

Watch the full webinar:  Webinar | EU–Australia Free Trade Agreement - What it means for businesses

Insights drawn from the FACCI webinar "EU–Australia FTA – Business Consultation on Impacts and Priorities" on 9 June 2026, featuring Jerome Fournand (General Manager, FACCI), Jason Collins (Chief Executive Officer, EABC), Dr. Prudence Gordon (Executive Director, ACITI), Andres Reith (Partner, Business Services, BDO Australia), and Caragh Johnson (Director of Policy & Institutional Affairs, EABC). This summary should be read as a general overview of the discussion rather than complete or formal advice, and should not be relied upon as such.