The European Union and Australia have reached a free trade agreement after eight years of negotiations. Under the arrangement, the EU claims that exports will grow by as much as 33% over the next 10 years, reaching a value of $20.5 billion annually.

The deal was signed in Canberra by Australian prime minister Anthony Albanese and European Commission president Ursula von der Leyen with both leaders describing it as a win-win.

Almost all tariffs will be removed as part of the broad-ranging free trade agreement.

"EU exporters, producers and farmers will save a billion euros in tariffs," said Von der Leyen. "Our exports of goods to Australia are expected to grow by 33% over the next decade and our farmers will benefit from greater export opportunities combined as usual with strong safeguards."

A major sticking point has been the issue of quotas on Australian beef and lamb. The amount of beef set to hit European markets is expected to rise tenfold over the next decade. While farmers in Australia had wanted the ability to export more, Albanese says the agreement is a victory for the country's economy.

"The Australia European Free Trade Agreement will lower trade and investment barriers between Australia and the EU, a market of around 450 million people," he said. "This agreement is worth $10 billion to the Australian economy on an annual basis."

While some agricultural sectors oppose the arrangement, certain industries in Europe are lauding the deal.

"It will deliver tangible benefits for EU spirits and help level the playing field with other major spirit drink producers, who already enjoy tariff-free access to Australia," said Pauline Bastidon, Trade & Economic Affairs Director of spiritsEUROPE. 

"This agreement sends a strong signal about the importance of open, rules-based trade and the EU's ambition to not only talk the talk, but also walk the walk when it comes to trade diversification," she added.

The agreement follows similar free trade agreements struck between the EU and nations including Indonesia and India over recent months. European leaders say such moves will help secure supply chains and protect against geopolitical shocks. The deal will facilitate EU access to Australian critical raw materials such as aluminum and lithium.

"At times of geopolitical rivalry and protectionism, the EU stands for certainty, predictability and economic opportunities for its workers, producers and consumers," said Bernd Lange, chair of the Committee on International Trade. 

"We choose cooperation over isolation. There is no time to waste: expanding our network of reliable partners is an economic and geopolitical necessity."

The leaders also agreed a security and defense partnership. EU foreign affairs chief Kaja Kallas says this will see the sides undertake joint exercises, "share information, build resilience against cyber and hybrid threats, and deepen cooperation from crisis response to maritime security."

The agreement has been nearly a decade in the making but must still be approved by the European Union's member states and be ratified in Australia before coming into effect.