The EU views Australia as an important trade and investment partner, being Australia's second-largest trading partner after China, and second-largest foreign direct investment (FDI) partner after the United States.
The EU is Australia's third largest trading partner. Annual bilateral trade amounts to more than €45.5 billion, with a positive trade balance of more than €19 billion on the EU side. EU exports to Australia include mostly vehicles and machinery but it also registers a trade surplus as far as agri-food sector is concerned.
EU companies supply commercial services worth nearly €20 billion to Australia and hold investment in the country worth more than €145 billion.
Traditionally, Australia's merchandise exports to the EU are dominated by mineral commodities and agricultural products while EU's exports to Australia are predominantly manufactured goods.
In 2015, Australia was the EU’s leading supplier of oilseeds, zinc ores, unwrought lead and wool.
The EU is Australia's leading trading partner in services, while Australia is the EU's 10th largest trading partner in services. Services represents more than one-third of bilateral trade.
The EU is Australia's second-largest investor after the United States, with foreign direct investment (FDI) stock totalling €105.7 billion in 2015 (representing over 20 per cent of Australia's inward FDI). Conversely, Australia is the 9th largest source of FDI stock in the EU, valued at €22.4 billion (the EU being the leading destination for Australian FDI).
In 2017 discussions on the scope of a potential bilateral free trade agreement were concluded. Preliminary discussions, conducted over the past year between the EU and Australia, aimed to define areas to be covered as well as the level of ambition for a future agreement.
The European Commission is currently conducting its assessment of the potential impact that such a trade deal could have for the EU. The study takes into account the agreed scope, new opportunities the agreement could create for EU businesses, as well as sensitivities in the farming sector.