Australia & The EU

Australia and the European Union (EU) enjoy a constructive and substantial bilateral relationship built on a shared commitment to freedom and democratic values and a like-minded approach to a broad range of international issues.

Australia and the EU work together to support global efforts to combat terrorism and the proliferation of nuclear and conventional weapons, and to promote peace, sustainable development, good governance and human rights.

Australia and the EU cooperate increasingly closely in the Asia-Pacific region, including to enhance security, stability and good governance, and to improve the coordination of development cooperation assistance among donors to the region. The EU is a significant provider of development assistance to the Pacific and South East Asia.

The 28 members of the EU as a bloc constitute one of Australia’s largest trading and investment partners.

Key EU institutions

The main institutions of the EU are the European Council, the Council of the European Union (informally known as the Council of Ministers), the European Commission and the European Parliament. The EU has also established its own foreign service—the European External Action Service.

The European Council, the highest authority, is composed of the heads of state or government of the member states. It does not legislate but defines the general political direction and priorities of the EU, and to that end provides guidance to the Council of the European Union and the European Commission (the President of which is also a member of the European Council).

The Lisbon Treaty on EU reform, which entered into force on 1 December 2009, created the new position of permanent President of the European Council, appointed for a two-and-a-half-year term, renewable once. The President of the European Council chairs its meetings, is the face of the EU internationally and holds discussions on its behalf with heads of state or government of third states. The President is appointed by the EU Heads of State and Government. The current European Council President is Donald Tusk, former President of Poland (2007-2014). President Tusk took office on 1 December 2014.

The Council of the European Union is the EU’s pre-eminent decision-making body. It has both executive and legislative powers and meets in ten subject-based council ‘configurations’, including Economic and Financial Affairs (Ecofin), Competitiveness (including internal market and industry) and Foreign Affairs. All configurations, except Foreign Affairs, are chaired by the Minister from the country that holds the Presidency of the Council, which rotates every six months. The Foreign Affairs Council is chaired by High Representative of the Union for Foreign Affairs and Security Policy, Federica Mogherini.

Since the Lisbon Treaty’s entry into force in 2009, the EU’s external relations are managed by the High Representative, who is also a Vice-President of the European Commission. The High Representative also exercises authority over the EU foreign service—the European External Action Service.

The European Commission, comprising one Commissioner from each member state and led by a President, has the sole right of initiative to propose laws (called directives) at EU level, which—when approved by the Council and the Parliament—member states are obliged to include in their national legislation. The Commission is also the EU’s executive body and public service. The current European Commission President, Mr Jean-Claude Juncker, took office on 1 November 2014 for a five-year term.

The European Commissioner for Trade is responsible for the EU’s common trade policy governing international trade. The current Trade Commissioner is Ms Cecilia Malmström.

The European Parliament is the only directly elected EU institution. It shares decision-making power with the Council on most internal market policies and has budget approval powers. The Parliament has the right to approve or reject the nomination of Commissioners. With the entry into force of the Lisbon Treaty, the Parliament gained an expanded role in a number of new areas including trade, agriculture and justice and home affairs. The EU last held parliamentary elections in May 2014.

Economic overview

Operating as a single market with 28 member states, the EU is the world’s largest trading bloc and the world’s largest economy. The EU is the world’s largest trader of services and manufactured goods, and the largest source of outbound foreign investment. The EU’s combined GDP in 2015 was USD 16.2 trillion and it includes four of the world’s 10 largest economies (Germany, the UK, France and Italy).

Member state economies operate within an EU system of ‘competences’ or responsibilities for policy areas. The EU (rather than individual member states) has exclusive responsibility for the EU customs union, trade and investment policy and competition rules. Because of the great differences in per capita income among member states and in national attitudes toward inflation, debt and foreign trade, the EU faces challenges in implementing common economic policies.

Since 1993 the EU ‘internal’ or single market has facilitated free movement of goods, capital, services and people within the EU. The internal market was intended to drive economic integration amongst member states to become a single EU wide economy.

The EU’s Economic and Monetary Union (EMU) involves the coordination of economic and fiscal policies, a common monetary policy, and a common currency, the euro. Whilst all 28 EU Member States take part in the economic union, nineteen member states (collectively called the Eurozone) have adopted the euro as their currency.

The most recent country to adopt the euro was Lithuania on 1 January 2015.

Bilateral relationship

Australia and the EU have a long-standing and fruitful bilateral relationship, and in 2012 celebrated 50 years of formal diplomatic relations. Sir Edwin McCarthy, Australian public servant, trade negotiator and diplomat, took up his position as the first Australian Ambassador to the European Economic Community in March 1962.

The Australia–EU Partnership Framework currently sets out the direction of bilateral cooperation. The Framework was launched during Australia–EU Ministerial Consultations in Paris in 2008. It outlines specific cooperative activities and is designed to be revised regularly. The first revision was done in October 2009, and provides an updated focus on practical cooperation in the following areas:

  • shared foreign policy and global security interests
  • the multilateral rules-based trading system and the bilateral trade and investment relationship
  • the Asia–Pacific region
  • energy issues, climate change, fisheries and forestry
  • science, research, technology and innovation, education and culture and facilitating the movement of people.

The original Framework replaced the June 1997 Australia–European Union Joint Declaration on Relations [PDF] and the subsequent 2003–08 Agenda for Cooperation [PDF 120 KB].

The Australian Foreign Minister holds regular consultations with EU counterparts. Foreign Minister Julie Bishop last visited Brussels in April 2015 where she met with European High Representative Mogherini, senior European Commission counterparts and members of the European Parliament. On 22 April 2015, Foreign Minister Bishop and European High Representative Mogherini issued a joint declarationannouncing the conclusion of negotiations on a legally binding Framework Agreement that will support the Australia-EU bilateral relationship across all areas of cooperation and also signed an agreement to facilitate Australian engagement in EU-led crisis management operations.

Once it enters into force, the Australia-EU Framework Agreement will provide an institutional framework that will elevate the bilateral relationship between Australia and the EU. It will set out a platform for cooperation on a broad range of issues with the EU and/or the EU member states. These issues include: non proliferation, counter-terrorism, human rights, democracy promotion, development, economic and trade cooperation, climate change and environment, education and culture, research and innovation, and justice.

The Framework Agreement is currently moving through Australia’s and the EU’s domestic treaty approval processes and has not yet been signed.

The Australia-EU Crisis Management Agreement provides a legal framework to facilitate the participation of Australian civilian and military personnel in crisis management operations organised and led by the EU. EU crisis management operations can be civilian or military in nature and may focus on supporting military, police, judicial and customs reforms, peacebuilding and capacity-building in countries experiencing crisis situations. EU crisis management operations may be deployed to facilitate agreements ending hostilities, ensure compliance with these agreements and help ensure the security of civilians, refugees, humanitarian workers and United Nations (UN) personnel. The crisis management agreement entered into force on 1 October 2015.

In 2015, the EU announced its intention to launch an EU-Australia Leadership Forum to further enhance the relationship.

Trade and Investment Minister, the Hon Steven Ciobo MP, visited Brussels on 28 29 April 2016. During his visit, he met with the Commissioner for Trade, Cecilia Malmström, Commissioner for Digital Economy and Society, Günther Oettinger and a number of senior officials and business representatives from the EU and member states.

High-level visits to Australia in recent years have included:

European Commission President Jean-Claude Juncker and former European Council President Herman Van Rompuy visited Australia for the G20 Leaders’ Summit in Brisbane in November 2014.

Former Commissioner for Trade, Karel De Gucht, visited Australia in July 2014 to attend the G20 Trade Minister’s meeting in Sydney and to meet with Trade and Investment Minister Andrew Robb.

The Australian Parliament has maintained contact with the European Parliament for many years. The European Parliament is an important conduit for advocacy of Australia’s interests and has an Inter-parliamentary Delegation for Relations with Australia and New Zealand. Reciprocal visits by parliamentary delegations are usually held each year. Most recently, a delegation from the European Parliament visited Australia on 8-10 February 2016.

Development cooperation

The EU is an important partner for Australia in development cooperation activities, particularly in the Pacific where it is a significant donor. For further information on our work with the EU, see Australia’s bilateral partnerships.

The EU in Australia

The EU has been represented in Australia since 1981 by a Delegation of the European Commission, now a Delegation of the European Union. The Delegation’s role is to represent the EU; to further develop bilateral relations; to inform the EU on political, economic, trade and development matters in both Australia and New Zealand; to promote and protect the EU’s interests and values and to spread knowledge and to raise awareness of the EU in Australia and New Zealand. The Delegation is not responsible for trade promotion or consular matters, which are handled by the embassies, consulates, trade commissioners or national tourism offices of EU member states.

Community presence in Australia

People-to-people links between Australia and Europe are deep and longstanding. Nearly 70 per cent of Australians have European ancestry. Almost 30,000 new European migrants arrive annually and over 1.3 million Europeans visit Australia and 1 million Australians travel to Europe each year. The great sacrifices made by Australians during two world wars in Europe are an integral part of our national history and identity and represent a strong Australian contribution to Europe’s evolution over the past century.

Bilateral trade and investment relationship

Australia and the EU have a convergence of views on many global economic issues and cooperate to promote international prosperity in the WTO and G20.

The EU is Australia’s second largest trading partner and largest source of foreign investment. In 2015 two-way merchandise trade was valued at $59.5 billion and two-way services trade was worth $29.9 billion. In 2015 Australia exported $23.5 billion worth of goods and services to the EU. Australia’s major merchandise exports to the EU include, coal, oil seeds, alcoholic beverages (primarily wine), ores and concentrates, lead and gold. The major merchandise imports from the EU include passenger motor vehicles, medicaments (incl. veterinary), and pharmaceutical products.

Australia’s major services export to the EU in 2015 was personal travel services (mainly recreational travel) – worth $5.3 billion. Personal travel services were also the largest single services import from the EU during the same period with a value of $7.5 billion.

The Australian Prime Minister together with the President of the European Council and the President of the European Commission agreed in a joint statement on 15 November 2015 to start the process towards a comprehensive and high-quality Free Trade Agreement (FTA).

In 2015, the EU’s foreign direct investment in Australia totalled $157.6 billion – 21.4 per cent of Australia’s total inwards foreign direct investment. The EU accounted for $111.8 billion of outwards Australian direct investment as at 2015.

Australia is well placed to be a reliable and efficient supplier of goods and services to Europe. For information on export opportunities, see the Austrade country profiles for the various member states.

Source: DFAT European Union Brief