SYDNEY, March 24 (Reuters) - The EU and Australia finalised a long-awaited free trade deal on Tuesday as Europe seeks to diversify its export markets and expand ties beyond its traditional partners.
Factbox-Highlights of EU-Australia trade agreement
Main Features of the EU-Australia Trade Agreement
SYDNEY, March 24 (Reuters) - The European Union and Australia finalised a long-awaited free trade deal on Tuesday as the bloc seeks to diversify its export markets and expand ties beyond its traditional partners.
Here are the highlights:
Overall Benefits
Both sides will eliminate tariffs on almost 100% of EU exports of goods, with the exception of certain steel products and some EU farm produce. The European Commission says EU exports to Australia will be spared 1 billion euros ($1.2 billion) of Australian duties, and the value of those exports should rise by a third over 10 years. Australia says the agreement will be worth about A$10 billion ($7 billion) annually to its economy.
Agriculture
Tariff Reductions
Tariffs will fall to zero from day one for key EU export products such as wine and sparkling wine, some fruit and vegetables, including preparations and fruit juices, chocolate, sugar, confectionery and ice cream and many processed agricultural products.
Tariffs on EU cheese will drop to zero over three years.
The EU will also remove tariffs on most Australian agricultural products including wine, nuts, fruit and vegetables, honey, olive oil, most dairy products, wheat, barley and seafood.
Quota Volumes and Safeguards
Australian beef, sheep meat, sugar, rice, wheat gluten, skimmed milk powder and butter will get either new or expanded tariff rate quota volumes. For beef, a flashpoint for farmer demonstrations over the EU's deal with South American bloc Mercosur, the annual quota will rise over 10 years to 30,600 metric tons. The EU says this represents around 0.5% of EU domestic consumption and less than 2% of all Australian beef exports.
Both sides can trigger safeguard measures to counter import surges.
Protected European Product Names
Geographical Indications (GIs)
Australia will fully protect 165 EU 'geographical indications' (GIs) for agrifood products such as Comte cheese and 231 spirits GIs such as Irish whiskey. In some cases, including for Ouzo or Pecorino Romano, there is a relatively short phasing-out period.
Transitional Arrangements
For some other products, such as feta or gruyere, prior Australian users having used the term in a continuous manner for at least five years can retain the right to use the terms assuming the origin of the product is clearly labelled.
Prosecco Wine
Producers who make and sell Prosecco wine in Australia will be allowed to continue doing so domestically. Exports will be stopped after 10 years.
Automobiles
Liberalisation of Market Access
Australia will fully liberalise market access for all EU passenger cars and other vehicles, with the exception of a few tariff lines on trucks, for which duties will be gradually removed over a short period.
Luxury Car Tax
Australia will also increase the 33% luxury car tax threshold for electric vehicles to A$120,000, which should principally benefit EU producers. About 75% of EVs from the EU will then be exempted from paying the luxury car tax.
Critical Minerals
Elimination of Duties and Export Restrictions
The EU will eliminate already low duties on imports of Australian critical minerals and hydrogen. The two sides have agreed to ban export restrictions.
Level Playing Field and Investment
The agreement is also designed to create a level playing field in terms of access to Australia's resources, such as aluminium, lithium and manganese, and open up investment opportunities to Europeans.
Services
Market Access for Services
The deal will make it easier for EU firms to sell services in Australia, including professional and business services, maritime transport, and financial services. The agreement will reduce and eliminate discrimination and expand opportunities for EU and Australian service providers and investors.
Investments
Treatment of Investors
EU investors will receive the most favourable treatment accorded to any foreign investor in Australia, and in most cases be treated in the same way as Australian investors. Both EU and Australian investors will be able to establish their companies and operate them freely, in each other's territories.
Additional Information
($1 = 1.4255 Australian dollars)
(Reporting by Praveen Menon and Christine Chen in Sydney. Editing by Edwina Gibbs and Mark Potter)
