Geopolitics and the EU-Australia Trade Agreement

Martijn Huysmans

No 13110, CESifo Working Paper Series from CESifo

Abstract: Geopolitics is often seen as a risk for trade. This article shows how geopolitics can also increase trade openness: issue linkage with security can enable previously elusive trade compromises. In March 2026, the EU and Australia concluded negotiations for a Free Trade Agreement (FTA). The EU’s insistence for Australia to protect EU Geographical Indication (GI) food names such as Feta and Prosecco contributed to a repeated Australian walkout in 2023, suggesting an FTA was not feasible. However, in 2026 an FTA was concluded after all, alongside a Security and Defense Partnership. This article hypothesizes that US President Trump’s lack of reliability brought the EU and Australia closer together, pushing them to find detailed compromises to enable the conclusion of an FTA. Empirically, it leverages a survey experiment with 800 Australian voters and an analysis of GI provisions. The empirics are consistent with geopolitics having facilitated the trade deal, and “America First” politics contributing to middle power alliance-seeking such as between the EU and Australia, or the EU and Canada.

Keywords: geopolitics; trade; security; geographical indications; survey experiment (search for similar items in EconPapers)
JEL-codes: F13 F52 O34 Q17 (search for similar items in EconPapers)
Date: 2026
References: Add references at CitEc
Citations:

Downloads: (external link)
https://www.ifo.de/DocDL/cesifo1_wp13110.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ces:ceswps:_13110

Access Statistics for this paper

More papers in CESifo Working Paper Series from CESifo Contact information at EDIRC.
Bibliographic data for series maintained by Klaus Wohlrabe ().