New Zealand leading trade agreement driving action on climate change and the environment

New Zealand is leading a first-of-its-kind agreement that will use trade rules to tackle climate change and other environmental issues, Prime Minister Jacinda Ardern announced today.

Norway, Iceland, Costa Rica and Fiji are joining New Zealand in negotiations on the Agreement on Climate Change, Trade and Sustainability (ACCTS), jointly launched at the United Nations in New York.

“Tackling climate change is a long-term issue this Government is committed to, and that will require action both at home and abroad. It also needs to be addressed in trade rules,” Jacinda Ardern said.

“This agreement aims to show that we can use trade rules to support action on climate by removing barriers on environmental products and services.”

The ACCTS agreement intends to:

• Remove tariffs on environmental goods and make new commitments on environmental services
• Establish concrete commitments to eliminate fossil fuel subsidies
• Develop voluntary guidelines for eco-labelling programmes and mechanisms

“Trade can’t sit outside of our work to tackle climate change. In fact international trade rules are uniquely placed to be part of the solution by removing trade barriers for green products and services and stopping pollution being subsidised.

“If trade rules can require subsidies to be removed from things like agriculture, then it is only consistent that they also require subsidies to come off polluting fossil fuels.

“Globally, we are subsidising fossil fuel production and consumption to the tune of over $500 billion US dollars a year. This is the height of policy incoherence on an issue where we can’t afford to carry on the mistakes of the past.

“ACCTS will establish prohibitions and disciplines to eliminate fossil fuel subsidies that drive the use of greenhouse gas emitting fuels instead of clean energy.

“Despite commitments from the G20 and APEC to remove fossil fuel subsidies, we are seeing dangerously little action occurring.  Legally enforceable trade rules would change that.

“Equally we can use trade rules to incentivise environmentally good products and services by the immediate removal of tariffs from them. For example wind turbine parts and solar panels attract tariffs, despite being good for the environment.

“We are starting with a small group of like-minded countries that will produce an agreement that can be then used as blueprint for wider change,” Jacinda Ardern said. 

ACCTS negotiations are expected to start in February 2020.