LATIKA M BOURKE: Greens likely to pass EU deal that Coalition claims could lead to climate sanctions

The Greens are likely to support the EU trade deal, making Coalition demands that the Government renegotiate the agreement redundant.

The Government immediately rejected the new Opposition complaint, saying its claim that the EU could sanction Australia over climate policy was “completely incorrect”.

Sources with knowledge of private discussions between the Government and the minor party told The Nightly that the Greens were supporters of the trade deal struck in March and announced during EU Commission President Ursula von der Leyen’s visit to Australia.

Greens support would be crucial as it would give the Government the numbers to pass the deal in the upper chamber and ratify the agreement.

Greens trade spokesperson Senator Peter Whish-Wilson said talks were ongoing.

“We’re discussing the deal with the Government and will be reviewing the detail with an open mind,” he said.

“We’re pleased to see no Investor State Dispute Settlement classes as we’ve historically always voted against free trade deals if these are included. Multinational corporations should never have special rights to sue governments for the decisions they make in the public interest.”

The Opposition has strongly criticised the agreement and called on Trade Minister Don Farrell to renegotiate.

The Opposition’s trade spokesman and Nationals Leader Matt Canavan has complained about the access to European markets for Australian meat producers.

But this week the Opposition’s foreign spokesman Ted O’Brien went further, claiming that the agreement would allow the EU to sanction Australia over climate targets.

“For the first time, Australia faces legally binding climate commitments in an FTA, including enforceable obligations and the prospect of sanctions,” Mr O’Brien claimed in The Australian.

The most high-profile use of EU sanctions is those used against Russia’s Vladimir Putin for illegally invading Ukraine.

Sanctions of this type would require the unanimous support of the EU’s 27 member states, and only after extensive consultations. But the Opposition believes a lesser-kind of trade punishment, such as tariffs would be used rather than Putin-style sanctions.

“While Australia won’t be forced to comply with every EU rule immediately, there will be a ratchet effect: once embedded, expectations harden, and deviation becomes increasingly costly — economically and diplomatically,” Mr O’Brien wrote.

“Over time, Labor will likely use the FTA as grounds to adopt an expanding suite of European regulations — most notably a Carbon Border Adjustment Mechanism, deforestation-free supply chains and tighter industrial emissions standards.

“Future climate policy decisions taken in Canberra could trigger trade consequences imposed from Brussels, such as suspending parts of the agreement or imposing trade penalties.”

Trade Minister Don Farrell said Mr O’Brien was “completely incorrect”.

“Our trade deal with the EU opens up a market of 450 million consumers for Aussie producers and farmers — a market equivalent to Australia’s population sixteen times over,” he said.

“Australia relies on trade for our future prosperity. A world that is closed to our exports only hurts our own businesses and people.

“We need to demonstrate to the rest of the world that there are countries that still believe in free and fair trade.

“Claims that our trade agreements prevent Australia setting our own domestic climate policies are completely incorrect.”

The text of the proposed agreement states that temporary remedies can be used if one side fails to refrain from any act or omission that materially defeats the object and purpose of the Paris Agreement.

It also says: “The Parties recognise the right of each Party to determine its sustainable development policies and priorities, to establish the levels of domestic environmental and labour protection it deems appropriate and to adopt or modify its relevant law and policies in a manner consistent with its commitments under . . . international agreements.”

The Paris Agreement does not set Australia’s carbon reduction targets. Those are controlled by domestic legislation and processes and make up what is called the Nationally Determined Contributions.

This means the government of the day could change the NDCs and still remain in the Paris Agreement from which US President Donald Trump has withdrawn.

Opposition Leader Angus Taylor said as recently as last week that he would not be copying Mr Trump but remained determined to drop Australia’s net-zero goal if in power.

“We’re not proposing to get out of the Paris Agreement because, frankly, it’s not going to change anything we do,” Mr Taylor told Sky.

“I’m not a big believer in being dictated to by any international organisation. Our focus is on getting rid of net zero, getting energy affordable again, and getting abundance in energy.”