Written by Angelos Delivorias.
Australia is one of the world’s biggest economies, and possesses raw materials reserves that place it at the centre of the green and digital transition. In addition, its geographical position and military capabilities make it a central player in the geostrategic balance of the Indo-Pacific. In the past 70 years, Australia has been mainly governed by the Australian Labor Party and the Coalition (the alliance between the Liberal Party of Australia and the National Party of Australia). In the most recent elections in 2025, Prime Minister Anthony Albanese and the Labor Party were re-elected.
The country has had long and strong relations in several sectors with the United States (US). At the same time, the decisions and rhetoric of President Donald Trump’s administration have created tensions in the relationship. Similarly, the country shares strong relations with China, albeit concentrated in fewer areas (mainly trade and migration); nevertheless, these relations have become increasingly strained over the last decade, peaking during the COVID-19 pandemic. The current government has been trying to adopt a firm tone towards the US and diversify its economy and defence, without jeopardising the deep relations between the two countries. It has also adopted a less confrontational tone towards China, while at the same time trying to diminish its reliance on bilateral trade.
In 2026, relations between the EU and Australia reached a new milestone, with the conclusion of a free trade agreement (FTA) and a security and defence partnership (SDP). The FTA eliminates tariffs on almost all Australian goods entering the EU and vice versa. It gives greater access to the respective agricultural markets while protecting several geographical indications. Thanks to the elimination of tariffs on critical minerals, the EU secures greater access to necessary inputs and strengthens the resilience of its supply chain. The SDP – the EU’s 11th (out of 12) since the launch of the Strategic Compass – reflects the bloc’s willingness to play a more active global role, in collaboration with like-minded partners who share converging strategic interests.
Read the complete briefing on ‘Australia: Current landscape and engagement with the EU‘ in the Think Tank pages of the European Parliament.
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