Agriculture Minister and Labor counterpart dismiss climate target trade threats

Australia's major trading partners are preparing to slug exports from countries that don't have deadlines to decarbonise their economies, but the federal government and Labor's agriculture spokesman dismissed the threats, saying climate targets aren't currently a concern for trade.

The European Union has committed to reach net zero emissions by 2050 and proposed a carbon border tax that will see high-emissions exports hit with an import levy. China recently announced a 2060 deadline to reach net zero and US presidential candidate Joe Biden has announced a Clean Energy Revolution commitment with a 2050 deadline.

Deputy Nationals leader David Littleproud and Opposition Agriculture spokesman Joel Fitzgibbon at the National Press Club of Australia in Canberra. Credit:Alex Ellinghausen

However, Agriculture Minister David Littleproud said during a debate at the National Rural Press Club in Canberra on Thursday it would be "jumping the gun" to set carbon deadlines now and Labor's agriculture spokesman Joel Fitzgibbon agreed.

"[Trade Minister] Simon Birmingham and I will continue to have negotiations with our counterparts over market access for exporters," Mr Littleproud said.

About 80 per cent of Australia's agriculture sector's revenue comes from exports, and Australia's major agriculture groups such as the National Farmers Federation, GrainGrowers, and the red meat industry have set their own firm net zero deadlines in a bid to to maintain access to their markets and avoid tariffs they may incur in the absence of government policy.

The federal government has said it would achieve net zero emissions by some time in the second half of the century.

While Labor has committed to decarbonise the economy by 2050, Mr Fitzgibbon has criticised this decision, arguing his party's policy should be limited to match the Coalition.

Mr Fitzgibbon agreed with Mr Littleproud that an emissions deadline "might be jumping the gun a bit" and described the farm sector's targets as businesses hedging against risk.

Investor Group on Climate Change policy director Erwin Jackson said more than 50 per cent of Australia's two-way trade is now with countries with mid-century targets to reach net zero emissions.

"This is only going to grow and it's inevitable they'll start to put in place trade or other geopolitical influences to ensure trading partners meet their commitments under the Paris Agreement," he said.

"Every major policy reform attempted in the US has involved some sort of measure to ensure China in particular is playing ball, and the US industries aren't disadvantaged. It's inevitable a future president will look at similar measures."

In confirmation hearings last week the EU's new Trade Commissioner, Valdis Dombrovskis, said while the carbon border adjustment mechanism was still in development, he hoped legislation would be ready to be put to Parliament by mid-2021. Mr Dombrovskis replaced Phil Hogan, who had been criticised for not doing more on the environment, pledging to put "climate action at the top of the agenda" for the EU. Mr Dombrovskis will now become the EU's chief negotiator with Australia on the looming EU-Australia free trade deal.

Mr Dombrovskis said the tax would have to be World Trade Organisation compliant, meaning EU producers would be subject to the same carbon limits as those from Australia to "prevent discrimination between foreign and domestic products". The move is likely to incentivise EU producers to go carbon neutral, while potentially hitting Australian exporters with the levy if they fail to meet the EU targets.



Australia has been pushing for climate and trade outcomes to be separated in negotiations over the free trade deal but the agreement is unlikely to get through European Parliament without a strong climate commitment. EU Commission President Ursula von der Leyen relied on the support of environmentally focused MPs to get elected last year.

EU's Ambassador to Australia Michael Pulch said von der Leyen "has presented an ambitious policy strategy to address the global challenge of climate change".

"Such a proposal will be developed in full transparency including stakeholder consultations and is expected to be presented in the course of next year."

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