China coal tariffs removed under free trade agreement

THE resource industry has welcomed reports China will remove coal import tariffs in a free trade agreement with Australia.

But unions have called it a "clever ploy" to get an upper hand on the Federal Government.

Treasurer Joe Hockey told The Australian tariffs on coal imports would be abolished when Australia and China signed a FTA.

Industry groups welcomed the move yesterday.

The Queensland Resources Council did not provide comment but is understood to support the tariff removal.

However, CFMEU national secretary Michael O'Connor said China never intended to keep the tariffs and had announced them to outflank Australia in negotiations.

"The Abbott government is being schooled by the Chinese on how to negotiate a trade deal. But it could be Australian workers paying the hefty price for that lesson given current Chinese demands," he said.

Mr Hockey said the Australian coal industry would benefit from the tariff removal.

"Once we have an FTA, it will be abolished," he told the Australian.

"The quicker we get an FTA, the quicker the tariffs will go.

"I think on both sides we are now more determined to get this done.

"I suspect it has caused some embarrassment to some people in China and it is a source of frustration for us, but there is a way through."

Shadow Trade Minister Penny Wong said the Federal Government had presented a mixed message on Chinese coal tariffs.

"The Treasurer Joe Hockey said yesterday that the coal tariffs announced earlier this month came as a complete surprise to the government," she said.

"Yet the Minister for Trade and Investment, Andrew Robb, has told the media that he negotiated the removal of the Chinese tariffs before they were announced.

"The government must negotiate a high-quality trade FTA with China that creates jobs and new export opportunities for Australians in agriculture, manufacturing and services as well as in the resources sector."

Anti-coal group Stop Australian Coal Exports spokesman John Gordon said China was reducing its coal use to curb pollution.

"Joe Hockey's claims of 'clean' Australian coal is fanciful," he said.

"The guy is on planet denial.

Mr Gordon said the government's claims that export coal was helping lift poor Chinese and Indians out of "so-called energy poverty" was not only disingenuous and wrong, it was a measure of desperation.