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The European Union wants to impose carbon tariffs on Australian exports. Is that legal?

By Felicity Deane - posted Friday, 26 March 2021


Disputes can still be initiated by countries such as Australia, forcing consultations, but without final determinations.

Although the European Union says it wants to ensure that its adjustment mechanism complies with the WTO's rules, it hasn't ruled out the possibility of relying on provisions that allow exceptions.

Both sides could make a case

Exceptions are allowed for the protection of human, animal or plant life or health or the protection of an exhaustible natural resource.

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The catch is these exceptions are not allowed to discriminate between countries and must not be disguised restrictions on trade.

It is arguable that an adjustment mechanism designed to protect the competitiveness of European industries will breach these provisions.The European Union has suggested that border adjustments will be unnecessary when the rest of the world has matched it in committing to achieve net zero emissions by 2050, so long as these commitments are back up by real actions.

But that hasn't happened yet, and despite talk by Prime Minister Scott Morrison of his "hope" that Australia can get to net zero by 2050, Australia hasn't made a commitment, and hasn't backed it with tax-like instrument.

With any World Trade Organisation determination uncertain and perhaps impossible, apart from complaining about carbon tariffs or border adjustments, there may be little Australia can do.

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This article is republished from The Conversation under a Creative Commons license. Read the original article.



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About the Author

Felicity Deane is an associate professor in the Law School at QUT. Her PhD entitled, ‘The Clean Energy Package and WTO Law: An Analysis of Compliance Issues’ was completed in August 2013. Her book Emissions Trading and WTO Law: A Global Analysis was published internationally in March 2015.

Creative Commons LicenseThis work is licensed under a Creative Commons License.

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