AThe Australian government has responded sharply to the European Union’s climate initiative. “We are very concerned that the proposed carbon tax at the border is just a new form of protectionism that is undermining global free trade and hurting the Australian labor market,” said Minister of Commerce Dan Tehan. The new Deputy Prime Minister Barnaby Joyce seconded: The EU’s plan is “a wonderful way to simply introduce a new tax”. Joyce continued, “Delete the word ‘carbon dioxide’ and you will be left with ‘inches. The whole thing means that the EU does not believe in the basis of free trade. “
Business correspondent for South Asia / Pacific based in Singapore.
The rejection comes at a time when Canberra and Brussels actually wanted to hit the home stretch of a free trade agreement. At the same time as their harsh criticism, however, the Australians are campaigning for the goodwill of the EU – they need their votes to prevent the Great Barrier Reef from being placed on the list of threatened World Heritage Sites by UNESCO in China next week. That would put a heavy strain on Australia’s billion dollar tourism business.
Double the burden for Australia
The Australians fear that they will be burdened twice: on the one hand, on the direct export of steel and aluminum products worth around 20 billion Australian dollars (12.7 billion euros) to Europe. On the other hand, to an even greater extent for EU imports from China: There, steel is cooked from Australian ore and Australian coking coal and delivered to Europe. The large raw materials companies in Australia have been urging their customers to switch to more climate-friendly production in order to avoid fines themselves. “A reduction in greenhouse gas emissions will not be achieved through higher trade barriers,” warned Tehan. “It will only be achieved by cutting costs and accelerating the adoption of green technology around the world, especially in developing countries. We want to create incentives, not punish, when it comes to reducing emissions. “
From the United States there are scant reactions from official sources, the tenor of which is rather positive. A White House spokesman said the government would analyze the European climate program, but is generally in favor of the border adjustment tax on goods that cause high external climate costs. This indicates a change of heart in the American government. The climate ambassador John Kerry had argued in the spring that such a border levy for particularly climate-damaging products should only be the last resort because it burdens global trade.