Keynote speech by President von der Leyen at the European Australian Business Council event

“Check against delivery”

Let me start by thanking the European Australian Business Council for hosting this event.

Madam Governor of New South Wales,

Mr President of the Legislative Council,

Dear Minister,

Excellencies,

Dear representatives of Australian and European companies,

Ladies and Gentlemen,

It is such a pleasure to be in Sydney today. First of all, let me acknowledge the Traditional Owners of the land on which we meet, and pay my respects to their Elders past, present and emerging. I also extend that respect to any First Nations people joining us today. This city is very proud of its unique culture and heritage. And rightly so. I am so impressed by the vibrant aboriginal culture and heritage of this city. At the same time, Sydney is a global hub. People from all continents have met here over the centuries. Every part of Sydney proves how deeply Australia and Europe are connected. Your iconic Opera House was designed by a Danish architect. One of the liveliest districts is named after a German geologist, Ludwig Leichhardt, and it is home to some great Italian restaurants. And when I look at you in the audience, I see the representatives of so many companies doing business on both our continents. Some European firms have been here since before Australia became a federation in 1901. And today, more than 3,000 European companies operate in every sector of the Australian economy. You invest, employ and innovate across oceans. And you make both Australia and Europe much stronger than we could ever be on our own. My point is simple. What binds Australia and Europe is more than history. It is how closely our societies are woven together. And this closeness rests on a shared way of seeing the world. We both believe in free competition on global markets – but it must be fair. We believe in the power of technology – but it must always be guided by our values. And we believe that we may live in different hemispheres, but our security is connected. This is what brings us together.

Australia is more than a like-minded friend to Europe. In recent years, you have been an inspiration. You were among the first to face economic coercion and export controls. And when similar pressure was put on Europe, we drew directly on your experience, and your refusal to give in. You were the first in the world to protect children on social media. Protecting our children in the online world has become an important matter for the European Commission. And now, several European countries are following your lead. When Russian tanks rolled into a peaceful European country, you did not just condemn the aggression. You became the largest supporter of Ukraine outside of NATO. To me, this is the essence of the Australian spirit. You stand by your mates. Australia and Europe do not just think the same. We believe in the same values. We know we can always trust each other. And we act in unison, side by side. Because progress is forged by the choices we make, and the courage to make them together. So yes – Australia may be far away from Europe on the map, but we are close at heart.

Ladies and Gentlemen,

Partnerships like ours are more important than ever in today's volatile world. Trust is a precious currency – in increasingly short supply. And the value of trust is not only political but economic. War in the Middle East is rocking the entire global economy. This is not only about oil and gas. So many other value chains risk being disrupted. From fertilisers and food to the chemical industry. And this comes on top of the other supply chain shocks – we have all suffered in recent months. Tariffs and export controls have already brought disruption – in your business plans and on your factory floors. Trade, investment and technology are being weaponised. For years now, the global economy has become more and more competitive. But now it feels like we have reached a tipping point. We are no longer just in a ‘race' for primacy. This is a fight. So companies and countries across the world are now factoring in this new level of volatility. We are all at work to address the chokepoints in our supply chains. We are all looking for new markets for our exports – and for business partners we can truly trust. As a result, global trade is not retreating but rerouting. As Australia's Lowy Institute has put it, this is the moment of ‘resilience diplomacy'. That is the art of working with partners to resist shocks – and build new alliances for growth. This is exactly what Europe is doing right now – with a special focus on the Indo-Pacific region.

Tensions in the Indo-Pacific are mounting. But this remains the most dynamic region in the world. It is home to 60% of the global population. It is the heart of global trade routes. And it boasts many of the fastest-growing economies in the world – with countries like India, Vietnam or Tanzania now outpacing China. We Europeans want to tap into this dynamism. And our offer is clear. We are not just the second-largest economy in the world. We are one of the largest foreign investors in the region, and our presence is only growing.

Most importantly, we are reliable and predictable. With Europe, what you see is what you get. And this is what partners across the world are looking for. This is why, in just one year, we have had a big bang of new trade deals. Like the incredible new Free Trade Agreement with Australia, which we announced just yesterday. Or the new agreement with Indonesia we concluded last summer. And last month, I was in India for what was called ‘the mother of all trade deals'. We are also making progress with the Philippines, Thailand and Malaysia. With these agreements we are building a global community, committed to free and fair trade. And we want to expand this community even more, for instance, by cooperating with the 12 members of CPTPP – the Trans-Pacific Partnership. Together we could foster rules-based trade across four continents. We can become a global reference point for stability and economic security. And Australia holds a central place in our strategy of regional engagement.

Already today, Europe is Australia's third-largest trading partner and second-largest foreign investor. But beyond the quantity of our exchanges, it is the quality that matters. Our standards are aligned like no others. Be it on environmental protection, labour rights, or online safety – we speak the same language. But as one of you put it – our economic relationship was running on old software. I have come here to change this. With a new mega-deal that can bring our partnership to the next level.

Let me focus on three key aspects of it. First, investment. Second, raw materials. And third, security.

To my first point. Yesterday with Prime Minister Albanese, we concluded negotiations for our Free Trade Agreement. We are eliminating tariffs on 100% of our trade. There will be no more export restrictions, no export monopolies, and no export taxes. The deal can add almost EUR 4 billion to European GDP by 2030 and I was told almost AUD 8 billion to your GDP, but I just heard AUD 10 billion. So it is growing already since the last 24 hours. Indeed, this seems to be the economic power of our closer friendship!

But the investment component of the deal is just as important. Today, European companies operate in Australia at a comparative disadvantage. They face higher tariffs than companies from Asia. And there are also barriers to foreign investment from Europe. The screening thresholds are three to four times lower than for our competitors. Until now, it was much easier for a Chinese company to invest here than for a European company. But no longer. Our FTA will liberalise investment flows in both directions. This also means new investment opportunities in Europe for Australians. Australian ‘superannuation' funds are now the fourth-largest pension pool in the world – with assets close to EUR 3 trillion. These funds are increasingly turning towards Europe – because of our stability and our high sustainability standards. Now we can attract even more of them, bringing welcome capital to European companies. This is a true win-win. We are turning our mutual trust into tangible benefits.

The same goes for raw materials – and that is my second point. Australia has vast supplies of the most critical minerals. As your prime minister said, you have pretty much the entire periodic table – including the world's largest supply of lithium. But we know that China controls most of the global capacity for processing and refining. And much of the added value of your natural resources ends up leaving Australia. This is where our deal comes into play. Australia and Europe have already started joining forces in this field. Two years ago, we signed a raw materials partnership. As a result, your companies have already struck agreements to export critical rare earths for magnets into Europe. And just recently, the European Investment Bank has agreed with your government to invest in mineral projects in Australia. So we do not start from scratch. But our new trade deal can supercharge our cooperation. We are removing tariffs not only on raw materials but on finished products. And with no limits to European investments in Australia, we can invest together to develop local processing and higher-value manufacturing. Together, we can remove many of the bottlenecks that currently choke our value chains.

Some may ask: Why should Australia and Europe integrate their value chains? After all, we are far away. I believe the answer is straightforward. And it is once again about trust and values. For both of us, raw materials must be sourced and traded responsibly. So our new agreement includes a very clear commitment from both of us. In every joint project, we will always protect nature and the rights of local communities. This is what like-mindedness means in practice. And it is a message to investors. If you want sustainability and predictability, Australia and Europe are open for you.

Ladies and Gentlemen,

To my final point. Greater economic cooperation between us is a no-brainer. But today I am not only here for a free trade agreement. Our partnership is entering a new era also on security and defence. And the reason for this is clear. The security needs of Europe and Australia are closer than ever before. We both want the conflict in the Gulf to de-escalate. And we both want to avoid new escalations elsewhere in the Indo-Pacific. Because the Indo-Pacific is now the world's security cockpit. And tensions here pose a direct challenge to European trade and prosperity. More than 40% of European imports are from the Indo-Pacific. Taiwan produces 60% of the world's semiconductors and 90% of the most advanced chips. Security and stability in your region matter to Europe, and to the whole world. So just like you, we have also followed with concern the movements of the Chinese flotilla that sailed right around Australia. In this new reality, Australia's role as a beacon of peace and stability is even more important to us. Already last year, European countries joined Australia's freedom-of-navigation exercises in the South China Sea and the Talisman Sabre training mission. The time was ripe to take our security cooperation to the next level. This is why I launched the idea of a full Security and Defence Partnership between Australia and Europe. We managed to conclude negotiations in just one year. And this only confirms the sense of urgency on both sides. So, what will this partnership do? Not only will we hold joint military exercises on land and at sea. We will also pool our expertise on hybrid threats and cybersecurity. We will cooperate on counter-terrorism and online radicalisation. And crucially, the Security and Defence Partnership can boost both our defence industries. European defence firms already have a major presence in Australia. Thales has almost 3,800 employees across 35 sites. Making munitions, sonar and reinforced vehicles. Rheinmetall is the largest supplier of military vehicles to the Australian Defence Forces. And MBDA has announced that Australia could soon be the first overseas producer, for its advanced MISTRAL air defence system.

Australian firms are also a key part of European defences. Like DroneShield, which supplies anti-drone technology to European armed forces. Now with the new Partnership, we open the possibility to involve each other in our respective defence initiatives. This could create new economies of scale for our defence industries, boosting production and bringing costs down. This is a new foundation for our defence industrial cooperation. Even though we are separated by thousands of miles of ocean, this shows how close we have become – and how far we can go when we work together.

Ladies and Gentlemen,

Let me go back to where I started. Australia has often been an inspiration for Europe in recent years. And one thing that does inspire me is the concept of mateship. When things get hard, you bond together. And this is the same spirit that brings me to Australia. The world we live in is conflictual and competitive. Old alliances are put into question. But we Europeans know who we can trust. And we know that this is a true mateship between Australia and Europe.

Thank you very much.