Labor Trade Minister Don Farrell said the government would not compromise on a trade agreement signed with Europe earlier this year, raising the prospect the deal could fail in the face of Coalition opposition.

“If they reject the agreement and it fails then that is on their head,” Senator Farrell told The Australian.

“Free and fair trade is absolutely vital to the future prosperity of this country, and we need to send a message to the rest of the world that not just the Labor Party, it’s Australia that supports free and fair trade.”

Nationals MPs today said they opposed the agreement because it does not provide enough access to European markets for Australian farmers and has strict climate-change requirements.

The Opposition transport spokeswoman, Bridget McKenzie, said no deal would be better than a bad deal.

“We’ve made it very clear that we will not be supporting a bad deal,” she told ABC radio. “And the first principle of any free trade arrangement is that no deal is always better than a bad deal.”

The Coalition can only block parliamentary approval of the agreement with the support of the Greens, a party generally sceptical about the benefits of international trade.

Under the agreement reached in March, 97.8 per cent of Australian goods sold overseas, measured by value, will be allowed to enter the European Union duty-free.

After seven years this figure will rise to 98 per cent, increasing the size of the Australian economy by up to $7.8 billion by 2030, according to the Europeans, although the Albanese Government usually puts the benefit at $10 billion a year.

The deal, which took eight years to conclude, was promoted by Senator Farrell as particularly good for farmers by eliminating tariffs on wine, nuts, fruit and vegetables, honey, olive oil, most dairy products, wheat and barley and seafood.

But Europe will charge 50 per cent tariffs on some Australian steel and European cheese will remain heavily subsidised, making if difficult for Australian cheese to compete.

The document includes legally binding climate-related commitments, which are at odds with the Coalition’s decision to oppose net zero emissions of greenhouse gases by 2050.