Europe and UK market profile

The European Union (EU) comprises 27 member states in a political and economic union – a single market for goods, services and capital – covering much of the European continent and representing a population of around 512 million.

The COVID-19 pandemic has caused the EU to enter a recession, impacting particularly the southern state members, with recovery to continue into 2022.

The UK left the EU on 31 January 2020 and exited the EU VAT regime on 31 December 2020 with the EU-UK Trade and Cooperation Agreement coming into force in May 2021.

The European Green Deal – which aims to make Europe the world’s first carbon-neutral continent by 2050 – provides ample opportunities in services and industries that support the green transition.

The EU is a strong investment market for Queensland – in 2019 the EU was Australia’s third largest source of foreign investment, with total investment stocks worth A$683 billion. A significant range of EU corporates are major investors in Australia.

Within the EU, Queensland’s priority markets are Germany, France, Spain, Sweden and Ireland. Non-EU priority markets in Europe include the UK, Switzerland and the Commonwealth of Independent States (CIS).

In 2020, Queensland’s total goods exports to the EU were valued at around $3.4 billion, over 5% of Queensland’s total goods exports. On the import side, 13.7% of Queensland’s total goods imports originated in the EU.

Australia commenced free trade agreement (FTA) negotiations with the EU in 2018. While the EU is generally relatively open for most manufactured products, access for many agricultural products is constrained by high tariffs and restrictive quotas, as well as a range of non-tariff barriers. Agriculture remains an issue of high sensitivity for the EU in trade negotiations.

When considered as a single economy, the EU is the world’s second biggest, with a Gross Domestic Product (GDP) estimated at US$17,564.8 billion in 2020, behind the US (US$20,807.3 billion) and ahead of China (US$14,860.8 billion).