Trade & investment, explained.
Election results in Europe over the coming year are likely to shape the political and public appetite for free trade (© European Union 2026 – Source: EP)
The hardest part of this trade agreement isn’t negotiating it, but winning approval.
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EU–Australia FTA: the threat to ratification runs both waysEU–Australia FTA: the threat to ratification runs both ways
At a meeting on the sidelines of the UN General Assembly in September 2026, Australia’s Prime Minister Anthony Albanese, along with the Presidents of the European Council, Antonio Costa and the European Commission, Ursula von der Leyen indicated (Opens in new window) their hope that the recently concluded “comprehensive, ambitious, balanced and commercially meaningful free trade agreement” would be signed “as soon as possible”. The free trade agreement (FTA) between the European Union (EU) and Australia has been presented as an essential step in furthering EU–Australia bilateral relations, adding to the extensive suite of trade deals that the EU and Australia both have and a sign of their shared commitment to protecting open trading relationships. Yet, while the agreement represents a willingness of both parties to compromise and find common ground, its ratification faces considerable obstacles.
Within Australia, the government’s jubilation at the conclusion of the negotiations could soon be replaced with recrimination over its demise. The Labor government is facing stiff resistance from the Coalition opposition in parliament. The government will have to rely on either the Coalition or the Greens to get the agreement passed in the Senate. National Party leader Matt Canavan has thrown the gauntlet down, arguing (Opens in new window) that the agreement represents the “worst trade deal ever”. For Canavan, the agreement fails to protect Australian agricultural producers and unnecessarily commit Australia to environmental and climate obligations.
What has become a standard feature of EU trade agreements, the chapter on trade and sustainability, has raised the ire of the Coalition for what Canavan has called (Opens in new window) Labor’s use of the “trade agreement as a back door to progress its contentious climate policies”. Liberal leader Angus Taylor has also raised his objection (Opens in new window) to embedding environmental and climate change rules within the deal at a meeting with European ambassadors in August.
These concerns are likely to be further heightened by the formal complaint lodged (Opens in new window) to the European Commission by a Dutch environmental justice organisation (Both ENDs), in partnership with a number of New Zealand organisations, alleging that New Zealand has broken environmental and climate promises it made in its FTA with the EU. A negative ruling against New Zealand could ultimately result in the suspension of the agreement. While this case could embolden the Coalition’s contention that the agreement undermines Australia’s sovereignty, it could also push the Greens over the line in supporting the agreement. Greens senator Sarah Hanson-Young has indicated (Opens in new window) that the party will look closely at the environmental and climate protections provided in the agreement before deciding on whether to support or reject the agreement.
Even once the text of the agreement is released, the Nationals seem unlikely to give ground in Australia as rivals in the One Nation party continue to gain political momentum in their traditional electoral heartland. But the future of the FTA doesn’t simply rest in the hands of Canavan and his supporters. Any one of the EU’s 27 member states (and the European Parliament) also has the potential (Opens in new window) to scuttle the deal.
This agreement is one of a suite of FTAs (Opens in new window) the EU has recently concluded, including with the Latin American bloc Mercosur, as well as Indonesia and India. Ratification is a lengthy process, as attested by the EU–Canada trade agreement (CETA) which though signed in 2016 is still awaiting final ratification (Opens in new window) from 10 EU member states (Belgium, Bulgaria, Cyprus, France, Greece, Hungary, Ireland, Italy, Poland and Slovenia).
While there are many who would applaud the collapse of the FTA here in Australia and in the EU, there are also many who would lament the loss of market access.
Among these states, France represents a major stumbling block. The government blocked the submission of CETA to the National Assembly for fear that it will be fully rejected following the Senate’s rejection in 2024. The French government has faced strong domestic backlash (Opens in new window) following its failed attempts to stop the historic Mercosur agreement. And while the government is supportive of the deal with Australia, France’s influential agricultural lobby groups have opposed the deal, with political support from opposition parties. As noted (Opens in new window) by French MEP Céline Imart, the challenge facing Australia’s FTA is less about its substantiative content but by the “cumulative effect” of these recent agreements for sectors who already feel weakened and left behind. This will become even more pressing if Marine Le Pen were to win the presidential election in 2027 as the party is deeply sceptical of the benefits resulting from the FTA for French farmers and manufacturers.
Numerous member states will be facing challenging and consequential elections over the coming year – including Spain, France, Poland and Italy – with the electoral results likely to shape the political and public appetite for free trade. While there are many who would applaud the collapse of the FTA here in Australia and in the EU, there are also many who would lament the loss of market access, the projected investment potentials, and the opportunities for collaboration. It will also impact future initiatives to strengthen and deepen EU–Australia relations.
About the author
Margherita Matera
Dr Margherita Matera is a Lecturer in International Relations, School of Social and Political Sciences, The University of Melbourne.
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