Any trade deal with Europe might hinge on Australia's commitments to climate action, the federal government has been warned.
And allowing the giant Adani coal mine in Queensland to go ahead is likely to send the wrong signal.
The Turnbull government hopes to finalise a trade deal with the European Union by 2019.
Francois Gemenne, director of the Hugo Centre at Belgium's University of Liege, says there must be a stronger connection between markets and addressing climate change.
He notes some European parliaments are baulking at a trade deal with Canada because they're not sure it tallies with the EU's climate commitments.
"The negotiations on climate can no longer be separated from the negotiations on trade or on development," Mr Gemenne told AAP.
The question mark over Australia's possible integration with a European carbon market needed to be resolved.
Mr Gemenne believes the world's eyes are still on Australia after Donald Trump pulled the US out of a global deal on climate action.
While there's been no domino effect, there was still a strong risk some countries might use the US move to downgrade commitments to cutting emissions.
If the objective of limiting global warming to two degrees is to be met, planned cuts need to increase.
"The question now is will it be possible to ask the other countries to upgrade their commitment when the US is backtracking?" Mr Gemenne said.
Discussions around the planned Adani coal mine - including whether taxpayers should provide a loan for infrastructure - sent a global message, whether the government realised it or not.
"If this were to go ahead obviously that would be a signal in the wrong direction," he said.
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