EU and Australia strengthen cooperation: Free Trade Agreement, security partnership and Horizon Europe association launched

The European Union and Australia have taken a decisive step towards deepening their bilateral relations: with the conclusion of a comprehensive free trade agreement (EU-Australia FTA), the new Security and Defence Partnership (SDP) and the launch of formal negotiations on Australia’s association with Horizon Europe, a comprehensive strategic package of global significance is taking shape.

EU–Australia Free Trade Agreement: Growth, resilience and sustainable trade

The new EU–Australia Free Trade Agreement opens up far-reaching market opportunities for European companies in a dynamically growing economy in the Indo-Pacific region.

Key economic impacts:

• Increase in EU exports of up to 33% within ten years
• Export volume of up to €17.7 billion annually
• Particularly strong growth in key sectors:
  • Dairy products: +48%
  • Automotive industry: +52%
  • Chemicals: +20%
• EU investment in Australia could rise by over 87%

At the same time, the agreement strengthens security of supply for critical raw materials and increases the resilience of European supply chains – a key factor for industry and technology in Germany and Bavaria.

Another focus is on sustainable trade: environmental, climate and animal welfare standards will be brought more into line with EU levels.

Website on the EU-Australia Free Trade Agreement

Security and Defence Partnership: Focus on cyber, the Indo-Pacific and new technologies

With the new EU-Australia Security and Defence Partnership (SDP), both partners are expanding their cooperation in key security policy areas:

Core areas of cooperation:

• Joint security and defence dialogues
• Cooperation on missions and crisis management (CSDP)
• Expansion of:
  • cybersecurity
  • maritime security
  • countering hybrid threats
• cooperation on artificial intelligence and disruptive technologies
• cooperation in the field of space security and non-proliferation
• strengthening the presence in the Indo-Pacific

In this way, the EU, together with Australia, is positioning itself as a stabilising force in an increasingly tense global geopolitical landscape.

Horizon Europe: Australia set to join the EU research programme

In parallel, the European Commission and Australia have commenced formal negotiations on Australia’s association with Horizon Europe.

Horizon Europe is regarded as the world’s largest funding instrument for research and innovation.

Significance of the association:

• Direct access for Australian institutions to EU funding
• Equal treatment with EU Member States regarding project participation
• Removal of administrative barriers
• Stronger networking between:
  • Research institutions
  • Companies
  • Start-ups and scale-ups

Australia is already involved in over 200 Horizon Europe projects. The planned association will further intensify cooperation – particularly in the following areas:

• Critical and new technologies
• Clean energy and climate protection
• Health
• Resilient supply chains

Strategic significance for Europe, Germany and Bavaria

The new agreements strengthen the EU’s position in the Indo-Pacific region, diversify trade relations and promote innovation.

For Germany, and Bavaria in particular, this presents concrete opportunities:

• Expanded access to Australian markets for businesses
• New opportunities for cooperation for research institutions and universities
• Participation in international innovation projects
• Strengthening of future-oriented sectors such as AI, energy and deep tech

BayIntAn: Initiate collaborations with Australia now

Current developments between the EU and Australia are opening up new opportunities for companies, research institutions and universities in Bavaria.

The BayIntAn funding programme (Funding Programme for the Initiating of International Research Cooperation in Bavaria) provides targeted support for exploratory trips to Australia – ideal for establishing new partnerships in the fields of innovation, research and technology. Current application deadline: 8 April 2026, 13:00.

Our tip: 

Take advantage of the current political and economic momentum and explore concrete opportunities for cooperation on the ground.

Contact BayFOR now to receive advice on funding opportunities, suitable partners and next steps, and to strategically advance your internationalisation strategy towards Australia.n.

M. A. Marcus Süß
Team Coordinator Project management
Project Manager EU project CirCoFin
Phone:  +49 911 50715-940
Email: suess@no-spam-pleasebayfor.org