Free world faces ‘new reality’ and Europe is becoming ‘independent’: EU chief
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More news: EU Commission President Ursula von der Leyen has warned countries with economic models built on “stability and safety” that they are facing a “new reality” as war rages in Europe and the Middle East.
Speaking to Parliament House on Tuesday, von der Leyen did not reference the US specifically, but confirmed Europe was “rearming” and becoming “independent” — after Donald Trump’s return prompted questions about Washington’s commitment to the continent.
Von der Leyen insisted trade diversification “was and is a necessity” as the global order is upended and middle powers grapple with their dependence on major powers, specifically China.
“The threat to our supply-chain security and the shock to our industrial base need urgent responses. These are responses we can only devise together,” she said.
Her comments came after confirmation the EU had finally struck a free trade deal with Australia after years of stop-start negotiations.
The announcement came just months after it tied up free trade deals with India and South America, other negotiations that were accelerated in recent months.
“Europe is open for business. We are rearming. We are decarbonising. We are preparing. We are becoming an independent Europe,” she said.
“And this means a more outward Europe.”
Von der Leyen also said that surging petrol prices, caused by the US-Israeli war on Iran, was evidence that no country could view itself in a silo.
“One of the indulgences of past decades has been to think that our world and our interests can be defined by our neighbourhood. Nowhere proves that more falsely than Australia,” she said.
“Take energy prices. None of us is immune to the shocks, both geopolitical and economic, that the war in Iran brings to our populations.”
But she warned that a global confrontation with dependency on energy supply chains had been taking place in Europe since 2022, when the continent reduced its dependence on Russian gas in the wake of Ukraine invasion.
“There were warning signs, and we learnt the lesson in the hardest of ways,” she said.
“Diversification was and remains a necessity.”
Von der Leyen is the first female world leader to address Australia’s parliament, coming just weeks after Canadian Prime Minister Mark Carney issued similar warnings in Canberra.
What they said: “The world we live in is brutal, harsh and unforgiving. It feels upside down. What we knew as certainties are in question,” von der Leyen told parliament.
Australia and EU finally strike trade deal after long-running negotiations
The news: Prime Minister Anthony Albanese and European Union (EU) Commission President Ursula von der Leyen have confirmed Australia and the EU have struck a long-awaited free trade agreement (FTA) and defence pact.
The context: Speaking to reporters in Parliament on Tuesday, Albanese described the deal as a “defining moment in the relationship between Australia and the European Union.”
“Today we can announce that after eight years of negotiations, Australia and the European Union have signed a landmark trade deal,” he said.
The agreement will see 98% of the current value of Australia’s exports entering the EU duty free.
The deal, which Australia estimated will be worth $10 billion annually to its economy, comes after years of — at times fractious — negotiations.
Talks collapsed in 2023 following disagreements over the level of access to Europe’s markets for Australian red meat producers, and Australian producers using names linked to European geography — like ‘prosecco’ and ‘feta’.
But as Capital Brief revealed in January, the EU reached out to Canberra to reignite talks as US President Donald Trump’s tariffs caused uncertainty in global trade.
The EU has agreed to allow Australian producers to phase out the use of geographical indicators (GIs) for some products — ‘feta’, ‘romano’ and ‘gruyere’ — over the next decade. That is a similar solution to one struck between the bloc and New Zealand in their FTA. Other GIs have been preserved.
Von der Leyen said the deal was an important message as major powers — a thinly-veiled reference to the US and China — increasing use “tariffs as leverage and supply chains as vulnerabilities to be exploited”.
The bloc has also agreed to allow 30,000 and 35,000 tonnes of Australian beef into its market every year, up from the current annual quota of around 3000 tonnes.
And as Capital Brief also revealed last week, the deal includes lifting import tariffs on Australian critical minerals — resources increasingly vital in modern technology and defence equipment.
Von der Leyen said there is “something unique about the partnership between Europe and Australia”.
“This is a relationship built for the long term,” she said.
“I’m so grateful to say that after almost a decade of work, of patience, of persistence, we have concluded the EU-Australia free trade agreement.”
The deal also includes a defence component, as questions swirl over the US’ long term commitment to Ukraine and China grows increasingly assertive in the Indo-Pacific.
What they said: “This is a comprehensive, balance and commercially meaningful agreement that will reduce costs for Australian consumers and open new markets for Australian producers,” said Albanese.
“It is a win win. It eliminates tariffs on key Australian exports including wine, seafood and horticulture, and it means our high-quality Australian produce including beef, sheep meat, dairy, rice and sugar, will have access to consumers in the European market.”
The sources: Anthony Albanese and Ursula von der Leyen joint press conference, Anthony Albanese and Ursula Von der Leyen joint statement
