Australia’s relations with the European Union: towards a deeper regional engagement

Nina Markovic, Foreign Affairs, Defence and Security Section

Key issue 
Australia and the European Union (EU) expanded their bilateral cooperation during the 43rd Parliament, especially in the areas of targeted development assistance, human security and environmental affairs.

Facts and figures

In June 2013, the President of the European Commission, José Manuel Barroso, remarked during the Australian Governor-General’s visit to Brussels that bilateral relations between Australia and the EU were moving to a ‘much higher degree of cooperation and political alliance’. On this occasion, the Australia–EU Leadership Dialogue was launched. In 2012, Australia and the EU marked the 50th anniversary of official diplomatic relations.

Australia cooperates with the EU through a high-level institutional and sectoral dialogue, with information exchanges occurring with relevant security organisations, such as Europol. Dialogue between Australia and the EU is facilitated through: diplomatic ties, cultural and education institutions, business councils and global forums, including the United Nations and Asia–Europe Meeting (ASEM). Australia’s chairing of the G20 leaders’ summit in 2014 offers a further opportunity for advancing bilateral dialogue, especially on the provision of official development assistance (ODA) in the Asia-Pacific region.

The population of the EU is approximately 507 million across 28 countries. People-to-people links constitute the historical bedrock of Australia–EU relations. Every year, over one million EU citizens and Australians visit each other’s region and about 30,000 EU citizens migrate to Australia annually. Since 70% of Australians claim European heritage, rich historical and cultural connections exist between the two regions. A shared military history is, for example, a very important aspect of Australia’s relationship with several EU countries.

For over three decades, Australia has built a productive working relationship with the European Parliament, the only directly-elected EU institution. The Secretary-General of the European Parliament, Klaus Welle, visited Australia in May 2011. Official exchanges of parliamentary delegations and party meetings between like-minded Australian and EU parliamentarians take place on a regular basis. Increasing numbers of high-ranking EU officials have visited Australia in recent years, including the Presidents of the European Council and the European Commission, the EU’s foreign policy chief and a large number of EU ministers.

Key areas of cooperation

Political dialogue

The 2008 Australia–EU Partnership Framework, which forms the basis for political dialogue, was updated in 2009. Guided by this document, Australia and the EU have expanded political and sectoral dialogue in education, science and research, innovation, environmental matters and nuclear energy. The Framework allowed for the broadening of consultations within the United Nations and other global forums on security issues of international importance.

In October 2011, Australia and the EU began negotiations on a treaty-level Framework Agreement. Described by Prime Minister Rudd as a ‘significant milestone in the Australia–EU relationship’, the EU’s High Representative for Foreign Affairs and Security Policy noted that the proposed agreement ‘provides a firm basis for expanding our practical collaboration in areas such as foreign affairs and security, ODA, climate change, research, science and education’. Negotiations are ongoing and it is likely that the agreement will necessitate legislative scrutiny and ratification from both Parliaments.

Trade in goods and services

Trade and investment are pivotal aspects of the bilateral relationship. The EU is among Australia’s most significant economic partners and the largest single source of Foreign Direct Investment (FDI).

In 2012, the value of trade in goods and services between Australia and the EU was $81.6 billion. The EU accounted for 13.2% of Australia’s total trade in goods and services. The balance of trade on goods and services with Europe recorded a deficit of $34.4 billion.

Key imports from the EU included medicinal substances, passenger motor vehicles and civil engineering equipment. Australia’s main exports to the EU were gold, coal and agricultural products.

The graph below shows Australia’s main individual trading partners from the EU in 2012, the largest being the United Kingdom.

The graph below shows Australia’s main individual trading partners from the EU in 2012, the largest being the United Kingdom. 

Source: Department of Foreign Affairs and Trade

The EU and Australia are also promoting closer collaboration in the education sector (including joint degrees), as well as jointly funded science and research projects. In 2009, the European Commission became a founding member of the Global Carbon Capture and Storage Institute in Melbourne. In 2011, both parties agreed to explore linking carbon pricing mechanisms for greenhouse gas emissions. These discussions continue.

Agricultural matters

In December 2008, Australia and the EU signed a new agreement on trade in wine. This agreement, which came into force in September 2010, is particularly significant for Australian exporters, as Europe is the biggest market for Australian wine. The 2008 agreement replaces a 1994 arrangement; it is intended to protect the ‘geographical indicators’ of both parties on the basis of non-discrimination and reciprocity. As a result, Australian wine producers are no longer able to sell products labelled as ‘champagne’ or ‘sherry’, for example, whilst Australia has obtained protection for over 100 of its own geographical indicators.

Many European regional foods are also protected under EU law by geographical indication, designation of origin or under traditional speciality (such as feta cheese). Australia is therefore likely to be involved in further negotiations on any agreement covering agricultural products.

Development cooperation

In 2011, Australia and the EU established mechanisms of delegated cooperation arrangements for aid delivery. Under exploratory arrangements, the EU has agreed to deliver Australian aid to South Sudan, while Australia agreed to deliver a component of the EU’s assistance to Fiji. The Pacific headquarters in Sydney of the European Investment Bank has facilitated trilateral dialogue between Australia, the EU and a third recipient country in the region.

Following the 2013 federal election, the Presidents of the European Council and the European Commission issued a joint statement which noted:

Australia and the European Union, as like-minded partners, share an increasing political dialogue. Our cooperation on foreign and security policy, as well as on economic and development policies and on climate change, contributes significantly to addressing global challenges. The conclusion of negotiations on the Framework Agreement will make our partnership stronger, more comprehensive, and effective.

Further reading

N Markovic, Australia’s evolving relationship with the European Union: an update, Background note, Parliamentary Library, Canberra, 25 October 2012.

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