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Australia will use the WTO and the Cairns Group of 20 agricultural exporting countries to make its pitch for the “trade liberalisation” approach to bringing down emissions.
Senior Australian officials have been waiting for the Morrison government to develop an alternative to the plans by the EU and Britain to impose carbon tariffs. The issue could come to a head at a number ofkey global forums this year including Mr Biden’s climate talks in April,the G7 summit in Britain and the COP26 climate summit in Glasgow.
The EU,frustrated by global inaction on emissions reduction,has advocated for carbon levies to be applied on imported goods – such as aluminium,steel and chemicals – that are produced in countries with weaker climate laws. It has already committed to a carbon border tax by 2023,which is likely to hit products made with Australian raw materials.
The move by the European Parliament to adopt a resolution in favour of carbon tariffs – which could slog Australian importers with a levy of up to $77 per tonne – comes as Australia and the EU are in the advanced stages of negotiating a free trade agreement.
Its climate push follows Japan,China and South Korea – some of Australia’s main trading partners – pledging in 2020 to hit net-zero emissions by mid-century.
The National Farmers Federation,which chairs the Cairns Group Farm Leaders,is aiming for a 50 per cent reduction in non-tariff barriers impacting Australian farm exports by 2030.
NFF president Fiona Simson said it was “a little bit rich” of the EU to be talking about a level playing field with its own high tariffs,small quotas and billions of dollars in trade-distorting subsidies.
“This is an economy with some highly protectionist measures in agriculture,” she said.
“There’s lots of doubt about the mechanism they are attempting to impose and in any objective look they practice many trade-distorting activities or policies.”
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The agriculture sector,which accounts for about 14 per cent of Australia’s annual greenhouse gas emissions has made significant progress over the past three decades,with pollution levels in cropping and grazing falling by 69 per cent from around 300 million tonnes per year in 1990 to around 92 million tonnes.
Ms Simson said Australian agriculture was the “envy of the world” in its climate ambitions and achievement in reducing emissions. The NFF hasset a target of net zero emissions by 2050 while the red meat industry,which has reduced its emissions by around 60 per cent since 2005,is aiming for net zero in a decade.
She said addressing trade-distorting practices and cutting tariffs was the only way to achieve a level playing field.
“Australia exports about 75 per cent of its agricultural produce and our farmers are amongst the least subsidised in the world,” Ms Simson said.
“We want everyone to be able to compete on the same field and that does not come with more protectionist measures.”
Business Council of Australia chief executive Jennifer Westacott told theAustralian Financial Review Business Summit this week that possible EU and US carbon tariffs on Australia’s carbon-intensive goods should spark action to “rapidly decarbonise” the economy.
“[The international move] tells us as a country we have to have a very ambitious and well-planned decarbonisation of our economy,because the tax will be on goods,” she said.
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