Australia’s opposition moves to block the European Union trade pact

Australia’s free trade agreement with the European Union is facing a growing political fight just months after it was signed, raising doubts about whether the pact can clear parliament and take effect.

The deal was signed in March by Prime Minister Anthony Albanese’s government and the European Commission after eight years of negotiations. The government has said the agreement could support up to $30 billion in trade by lowering barriers between Australia and one of the world’s largest economic blocs.

Under the pact, European food, wine, cars and clothing would become cheaper or easier to access in Australia. In return, the EU would remove or phase out tariffs on a range of Australian exports, including food, critical minerals and manufactured goods.

But the agreement has become a new flashpoint in domestic politics, with critics arguing that some key Australian industries did not get enough in return and that the EU secured terms that are too favorable for Europe.

The opposition coalition now appears increasingly likely to oppose the agreement. Nationals leader Matt Canavan has said the coalition would block it when it comes before parliament for ratification. That stance would create a major problem for the Labor government, which needs Senate support to approve the deal and cannot do so on its own.

The Greens have also not guaranteed their backing, leaving the government short of a clear path in the upper house. Without support from either the coalition or the Greens, the agreement cannot be ratified.

The political split has opened a debate over which parts of the economy would benefit and which would be left exposed. Supporters say the pact would improve Australia’s access to a major export market and prevent local producers from falling behind competitors in countries that already have trade deals with Europe. Opponents say the gains are uneven and that some sectors would still face major barriers.

Former Liberal finance minister Mathias Cormann, who served in previous coalition governments, broke with the emerging opposition line on Monday and urged lawmakers to support the agreement. Speaking at an event on the Gold Coast, he said there was no realistic prospect of securing a better deal in the near term and argued that Australia should accept the benefits currently available.

Cormann said that if Australia rejected the agreement now, it could be left waiting another decade while competitors such as New Zealand continue to deepen their access to the European market.

That argument has been echoed by parts of the farm sector. Vegetable growers, who stand to benefit from the removal of most levies on their products under the agreement, said politicians should not let the opportunity slip away. Michael Coote, chief executive of AUSVEG, described the EU pact as a rare opening and warned that blocking it could damage growers and national food security.

The group pointed to the onion trade as an example of what can happen when Australia moves more slowly than its competitors. It said Australian onion exports to Europe fell by almost half after the New Zealand-EU free trade agreement came into force in 2025.

Other farm industries are far less convinced. Beef producers have argued that the agreement offers only limited new access to a European market already shaped by heavy agricultural subsidies. Their concern is that Australian producers would face strong competition and only modest gains, despite the political importance of the deal.

Steelmakers have also criticized the package, pointing to a 50% tariff that would still apply to some exports to Europe. That has added to claims from opponents that the final text falls short of a balanced outcome for Australian industry.

Another point of dispute is the inclusion of a legal commitment linked to climate targets. Critics say that requirement goes beyond trade and binds Australia to obligations that should be debated separately. For supporters, the clause reflects the kind of conditions now common in major international agreements.

Opposition treasury spokesman Tim Wilson said on Monday that the coalition supports free trade in principle but does not believe this agreement advances the interests of Australian agricultural producers. His comments underscored the pressure inside the opposition, where skepticism about the pact has hardened as rural and industrial concerns have become more vocal.

Trade Minister Don Farrell has pushed back strongly. He said abandoning the agreement now would amount to economic self-harm and accused Liberal leader Angus Taylor of allowing the Nationals to dictate the coalition’s position. Farrell and the government have framed the pact as a strategic economic step that would strengthen Australia’s trade base at a time of global uncertainty.

The dispute also matters beyond the sectors most often mentioned in the political debate. For beverage companies, a delay or defeat would likely prolong uncertainty over when European wine would gain broader access to the Australian market and under what competitive conditions. That could affect planning for importers, distributors and local producers, even if the final commercial impact would depend on how the agreement is implemented.

The fight now centers on whether the government can win enough support before the ratification process reaches a vote. The agreement was presented in March as a major breakthrough after years of talks, but it is now at risk of becoming another example of how trade policy can unravel when domestic political costs become harder to manage than the economic case for a deal.

For Labor, the challenge is no longer only to defend the contents of the pact. It must also persuade enough lawmakers that rejecting it would leave Australia worse off than accepting a compromise that many industries see as incomplete.