China's surprise decision during free trade talks to impose tariffs on Australian coal shows the importance of getting an agreement soon, Prime Minister Tony Abbott says.
China reportedly plans to impose a levy of three per cent on coking coal imports and six per cent on lower grade thermal coal to boost its local coal industry.
It is a blow to Australian producers dealing with China, the second biggest market for coal, and comes as free trade negotiations continue with an agreement expected later this year.
Mr Abbott says it is a sign of how valuable the FTA will be "should we secure it in the next few months".
"Because this is the kind of hiccup in our biggest and most important trading relationship that we just don't want or need," the prime minister told reporters in Canberra on Friday.
"I think that we will work with the Chinese to get to the bottom of what seems to have happened overnight.
"But at least as important as that is trying to ensure that this vital relationship is put on the strongest possible long-term footing and that is what the free trade agreement is all about."
He had not spoken to Trade Minister Andrew Robb about this development but said the last he heard, talks were still on track.
"What we want is an agreement which secures better access to Chinese markets for our exports, particularly our agricultural exports, in return for giving Australian consumers lower-cost access to Chinese imports to this country."
The federal opposition says it shows the talks are in a shambles and comes after Agriculture Minister Barnaby Joyce acknowledged that Mr Abbott had weakened Australia's negotiating position by setting a deadline for concluding the FTA.
The trade talks began in 2005, but stalled last year over agriculture and China's insistence on removing investment limits for state-owned enterprises.
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