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Animal Liberation has reacted angrily to the Federal Government's plan to allow legal action to be taken against groups that call for a boycott of Australian products.

The amendment to the Trade Practices Act would empower the Australian Competition and Consumer Commission (ACCC) to sue on behalf of those affected by any such boycott.

The proposal by the Federal Treasurer, Peter Costello, was sparked by a call from the People for Ethical Treatment of Animals (PETA) for an international boycott of Australian wool, as a protest against mulesing of sheep.

"There's no law that's going to stop ignorant commentary, but there will be a law which will allow the ACCC to stand up for Australian farmers where they suffer from a boycott," Mr Costello said.

The president of Animal Liberation Victoria, Patty Mark, says the law flies in the face of everything Australia stands for.

"I think it's outrageous and I don't think there's any way the Australians will stand for such a move," she said.

"I mean Australia's a democracy, it's a land of fair go that everybody has a right to speak up and speak out.

"I think for the Government to try to push this through there'll be a national uproar."

'McCarthyist'

Greens leader Bob Brown says it is a cynical exercise that would turn the ACCC from a consumer watchdog into a corporate attack dog, and is aimed at stopping citizens from campaigning on ethical issues.

"This is a McCarthyist move and I don't say that lightly," he said.

"To stifle dissent in Australia, to shut up people who want to bring to public light things that are going wrong in the corporate sector, things that are against the public interest."

Senator Brown says it means taxpayers are being asked to pay to protect the interests of corporations.

"The idea here by the Treasurer is to put out of action people who speak out against animal cruelty, people who speak up against destruction of old growth forests, people who speak up against exploitation of immigrant workers, people who speak up against uranium mining where it's foisted onto Aboriginal groups who want their homelands protected," he said.