Sydney (AFP) - EU-Australia talks to strike a trade pact were in their “last mile” Monday, Brussels said as European Union chief Ursula von der Leyen arrived in Sydney raising hopes for a deal.

Years in the making, the accord would be the latest inked by Brussels in a push to diversify trade as Europe faces challenges from the United States and China.

“Clearly there is mutual interest, and a positive hunger from both economic communities for having this new framework,” EU trade commissioner Maros Sefcovic said.

Von der Leyen’s visit with Sefcovic in tow comes as the 27-nation bloc and import-reliant nation navigate renewed energy vulnerability sparked by the war in the Middle East.

She arrived in Sydney Monday for a meeting with Australia’s head of the state, the Governor-General, before heading to Canberra, where she is expected to meet Prime Minister Anthony Albanese.

“The goal is to tie down the final details,” commission spokesman Olof Gill told a press conference in Brussels, cautioning that “the last mile is the hardest”.

Improved access to the EU market for Australia’s lamb and beef – a big no-no for some European farmers – was understood to be among the last sticking points.

Australia’s luxury car tax on European vehicles was another.

Australia’s largest export market is China and the United States is its largest source of investment.

But Canberra has redoubled efforts to diversify export markets for farmers since a 2020 dispute with Beijing saw agriculture exports blocked for several years, and then last year’s global imposition of US trade tariffs.

Likewise, the European Union is on a drive to strike new partnerships in the face of US levies and Chinese export controls.

The bloc, which is seeking greater access to Australia’s critical raw materials, is the resource-rich country’s third largest two-way trading partner and second largest source of foreign investment.

A deal could boost EU exports to Australia by more than 30 percent and save exporters about one billion euro a year ($1.15 billion), Brussels said.

Australian Trade Minister Don Farrell last week said a pact would add Aus$10 billion (US$7.1 billion) in trade for Australia in the first year.

“They are potentially our second largest trading partner if we can pull this off,” he told Sky News Australia.

Front and centre in meetings will also likely be the war in the Middle East, which has sent oil prices soaring.

In Canberra, International Energy Agency chief Fatih Birol said on Monday the world faced an energy crisis not seen in decades if the conflict was not resolved.

And von der Leyen this month said the conflict had served as a “stark reminder” of the continent’s vulnerabilities.

Australia – which is heavily reliant on fuel from abroad – has also felt the pressure from the global energy squeeze.

While conceding that some petrol stations had run out of fuel, Energy Minister Chris Bowen said Monday the country was a “long way” from rationing.