Anthony Albanese is expected to meet with EU President Ursula von der Leyen on the sidelines of the G20 summit in Johannesburg.
Officials aren't expecting the agreement to be signed immediately but say progress is likely.
Trade Minister Don Farrell spoke with his EU counterpart Maroš Šefčovič on Thursday, with the Australian side describing the talks as positive.
The EU Trade Commissioner said a few months more would be needed to iron out all the details but good progress was being made.
"I hope that in the spring of the next year we can go to that finishing line," Mr Šefčovič told the ABC's 7.30.
Australia has long sought to secure better access to European markets for local beef producers, a demand EU negotiators have so far refused to budge on.
Media reports suggest the government is open to dumping its luxury car tax in exchange.
Speaking on the tarmac in Johannesburg, Mr Albanese talked up the importance of global trade.
"One in four of Australia's jobs depends upon trade, and it is important therefore that I represent Australia at forums like this, advancing Australia's economic interests and supporting Australian jobs," he told reporters.
"(The G20 is) the most important gathering for which Australia is a member. It represents 85 per cent of the global economy, 75 per cent of global trade," Mr Albanese said.
The prime minister is also planning to meet with his Indian counterpart Narendra Modi, and the pair are expected to discuss an updated free trade agreement.
Mr Albanese flew from Perth to the South African capital on Thursday for the summit, which is being boycotted by US President Donald Trump.
A total of 42 countries will attend Africa's first G20, but Mr Trump has refused to attend, citing discrimination against the country's white farmers.
South Africa's President Cyril Ramaphosa has denied Mr Trump's allegations.
It comes after Mr Albanese secured a $3 billion Australia-US critical minerals deal after meeting Mr Trump at the White House in October.
The summit will provide an opportunity for Australia to advance its interests without Mr Trump's presence, Monash University head of politics and international relations Zareh Ghazarian said.
"Security and conflict is obviously a huge issue, climate change which is something governments are grappling at a domestic level, and trade will also feature as a key part of discussions," Dr Ghazarian said.
"It will give Australia an important global forum to engage with other leaders."
Mr Albanese has also flagged conversations with leaders from Korea, Japan, Europe and Canada during his two days at the summit.
