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Although we have tried to use plain English content on the site, you may come across specialist terms and acronyms. Find out what they mean in our glossary of terms.
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New - Friends of Fossil Fuel Subsidy Reform
The Friends of Fossil Fuel Subsidy Reform is a group of non-G20 countries that support the reform of inefficient fossil fuel subsidies. A new website covering the topic has been launched by the New Zealand Ministry of Foreign Affairs and Trade
The government aims to harmonise its objectives for trade and the environment, multilaterally through the WTO and OECD, regionally in the APEC context, and via free trade agreements, to contribute to the overarching goal of promoting sustainable development worldwide.
Government policy is that trade and environment outcomes can and should be mutually supportive. In other words, trade rules, if designed appropriately, can contribute to positive environmental outcomes. Key ongoing multilateral negotiations in this context include negotiations in the WTO to remove barriers to trade in environmental goods and services, and negotiations to reform and eliminate fisheries subsidies.
In 2001, the government adopted a framework for integrating environment issues and trade agreements. The framework guides New Zealand’s trade negotiations with other countries and seeks to ensure a linkage between trade and environment policy, including a mutual commitment to meet environmental standards.
The core elements of the framework are cooperation, consultation, and establishing common principles on trade and environment.
In 2001 the government adopted a framework for integrating environment issues into trade agreements. The framework guides all of New Zealand’s FTA negotiations, and seeks an explicit linkage between trade and environment policy. The core elements of the framework are cooperation, consultation, and agreed common principles on trade and environment.
All of New Zealand’s recent free trade agreements include environment outcomes that are consistent with this framework, including, for example, China, Malaysia and the Philippines. These are generally in the form of legally binding side agreements to the FTA. for example - Malaysia Environment MOU (PDF 37KB).
Central to the New Zealand approach are cooperation programmes undertaken on implement the environment cooperation agreements. These programmes are coordinated and led in New Zealand by the Ministry for the Environment, with input from other agencies. The programmes are based on priorities agreed jointly with our partner countries. They involve a broad range of stakeholders including government departments, research organisations, universities, businesses and local authorities.
Examples of cooperative activities undertaken pursuant to these agreements include the following:
For more information see the Ministry for the Environment website on International Trade and Environment [external link].
The Marrakesh Agreement, signed in 1994, established the World Trade Organisation. In the Preamble of the Agreement WTO Members recognise that their:
"relations in the field of trade and economic endeavour should be conducted with a view to raising standards of living ... while allowing for the optimal use of the world’s resources in accordance with the objective of sustainable development, seeking both to protect and preserve the environment and to enhance the means for doing so in a manner consistent with their respective needs and concerns at different levels of economic development”.
In recognition of this, the Committee on Trade and Environment (CTE) was established in 1994 with a broad-based mandate to identify the relationship between trade and environmental measures in order to promote sustainable development, and make appropriate recommendations on whether any modifications of the provisions of the multilateral trading system were required.
Following the launch of the Doha Round in 2001, the CTE has been restructured into the CTE in Regular Session and the CTE in Special Session (CTESS).
The CTESS is the body that negotiates how WTO members will achieve the mandate set out in paragraph 31 of the Doha Development Agenda. This mandate and the negotiations cover three areas:
This negotiation is about the relationship between trade provisions contained in MEAs and WTO rules, and how to ensure that policy is implemented in a manner consistent with both sets of agreements. There has never been a formal dispute between the WTO and an MEA, so the question of precedence of one agreement over the other has not been legally tested in either the WTO or in any MEA
MEA Secretariats have been invited on an ad hoc basis to participate as observers in CTESS, pending a more formal decision on criteria for MEA observer status in the WTO. New Zealand has been supportive of MEA observership being put on a more permanent footing until the formal issue of criteria is resolved.
Environmental goods and services can be broadly defined as goods and services that measure, prevent, limit, minimise or correct environmental damage to water, air and soil, as well as problems related to waste, noise and eco-systems. In recent years there has been an increasing focus on environmental goods and services related to climate change. There is, however, no agreed definition of “environmental goods” or “environmental services”.
New Zealand has tabled a number of submissions in the environmental goods and services negotiations. New Zealand’s approach has been to support the submission of lists of environmental goods to serve as “reference points” to help identify which products may be considered environmental goods (in the absence of an agreed definition). New Zealand has emphasised the importance that any list be “living” - in other words, that a list could be updated and expanded to reflect the development of new environmental technologies.
In 2007 New Zealand joined with other “Friends of Environmental Goods and Services” (Canada, the European Communities, Japan, Korea, Norway, Taiwan, Switzerland, and the United States) in submitting a joint list of 153 environmental goods under the following categories: air pollution control; management of solid or hazardous waste and recycling systems; clean-up or remediation of soil and water; renewable energy plant; heat and energy management; waste water and potable water treatment; environmentally preferable products, based on end-use or disposal characteristics; cleaner or more resource-efficient technologies and products; natural risk management; natural resources protection; noise and vibration abatement; environmental monitoring, analysis and assessment equipment.
APEC has been involved with efforts to liberalise trade in Environmental Goods and Services since the early 1990s. APEC’s work on Environmental Goods and Services helps support the work taking place at the World Trade Organisation. In 2009 APEC adopted the Environmental Goods and Services Work Programme which mandated APEC members to undertake further work to support the development and dissemination of Environmental Goods and Services in the APEC Region. A small group was subsequently formed to oversee this process, and New Zealand was appointed to lead this group in February 2010.
The CTE in Regular Session deals with its original agenda, contained in the 1994 Marrakesh Decision on Trade and Environment [external link] and the non-negotiating issues of the Doha Ministerial Declaration. As mandated under paragraph 32 of the Doha Declaration, the CTE is giving particular attention to:
Any recommendations made by the Committee must be compatible with the open and non-discriminatory nature of the multilateral trading system. This means they must not affect the rights and obligations of WTO members under existing WTO rules (paragraph 51).
Environmental labelling schemes are a potentially effective method of informing consumers about environmentally friendly products; however they can also be misused for the protection of domestic markets. The increasing number of environmental labelling schemes poses problems for developing countries in particular, which may be at a disadvantage due to a lack of full participation in the processes for setting environmental standards and regulations.
New Zealand has an interest in ensuring that any work on this issue balances legitimate environmental objectives on the one hand, and principles of transparency, non-discrimination and equal participation in standards-setting and access to labelling schemes on the other.
Private labelling schemes and private standards have been around for many years. The first private eco-label, the German Blue Angel programme, was established in 1977. Another well known private labelling standard, Global G.A.P, was launched in 1997 (by its predecessor EUREP-GAP) that certifies agricultural products around the globe. Since then other labelling schemes and private standards have evolved to address issues such as fair trade, sustainable marine and forestry harvesting, and animal welfare. More recently private labelling schemes have been established to provide information on the carbon or GHG footprint of products and services. The proliferation of private labelling schemes and standards based on environmental, social and animal welfare standards has occurred predominantly in European and North American markets, however many standards now also apply in Asia markets.
The Ministry of Foreign Affairs and Trade and New Zealand Trade and Enterprise collate information on significant private labelling and standards trends in offshore markets, particularly in the area of sustainability. Further information is available on the New Zealand Trade and Enterprise website [external link].
Environmentally harmful subsidies are subsidies (i.e. government assistance) to industries or sectors of the economy which have the direct or indirect effect of harming the environment. Subsidies that stimulate greater production and consumption of goods than would otherwise be the case, can distort the allocation of resources (including natural resources), exacerbate resource depletion, and increase pollution. Subsidies can also have a dampening effect on the uptake of new technologies and production practices designed to improve production and resource efficiency. In agriculture, OECD research has found that policies to subsidise inputs to production or outputs can maintain or increase production above what would otherwise be the case. Subsidies can encourage greater use of inputs that have harmful environmental effects. Examples include water pollution from greater use of fertilisers and pesticides, soil erosion, loss of biodiversity, and increased GHG emissions (OECD, 2010). [1]
In addition to their contribution to air, water and land pollution, environmentally harmful subsidies can distort resource allocation within and between countries. Their reform or removal at the international level could benefit both the economy and the environment, and as such, addressing these distortions is commonly viewed as a “win-win” opportunity whereby trade and environmental objectives are seen as mutually supportive. Fossil fuel subsidies remain high particularly in a number of developing and emerging economies, while agricultural and fisheries subsidies are particularly pervasive in many OECD countries (OECD, 2010). [2]
New Zealand strongly supports reforms to environmentally harmful subsidies. In 2009, G20 and APEC Leaders committed to rationalise and phase out inefficient fossil fuel subsidies over the medium term. New Zealand supports these initiatives to phase out fossil fuels subsidies,andhas been actively involved in the creation of the Friends of Fossil Fuel Subsidies Reform group of non-G20 countries. The Friends group so far includes Denmark, Norway, Sweden and Switzerland, and its objective is to support the G20 and to encourage transparency and ambition as G20 countries implement their fossil fuel subsidies reform commitment.
OECD and IEA research has estimated that phasing out fossil fuel subsidies by 2020 could reduce global GHG emissions below business as usual by 10% in 2050 (OECD, 2008), so the reform of fossil fuel subsidies offers significant environmental and climate change benefits.
New Zealand has also been a key participant in negotiations in the WTO to discipline fisheries subsidies and has advocated a broad prohibition on fisheries subsidies which contribute to overfishing and overcapacity.
Tariffs are taxes on imports imposed as they cross the border. Non-tariff barriers may include unnecessary, onerous and inefficient bureaucratic requirements (‘red tape’), labelling requirements, standards or specifications that add to the cost of getting imports on foreign shelves.
[1] OECD, ‘Interim Report of the Green Growth Strategy: Implementing our commitment for a sustainable future’, 2010, p. 26, Document reference number C/MIN(2010)5.
[2] Ibid, p 22.
The JWPTE was established in 1995 with a mandate to:
New Zealand is an active participant in the JWPTE and has co-chaired the Committee since 2007.
The government seeks to address trade and labour-related matters to reflect the objective of promoting decent work in the global economy. In 2001 the government adopted a framework to integrate labour issues into free trade agreements to guide all of New Zealand’s trade negotiations with other countries. The core elements of the framework are co-operation, consultation and establishing common principles on trade and labour.
All of New Zealand’s recent free trade agreements include labour outcomes that are consistent with this framework, including, for example, China, Malaysia and the Philippines. These are generally in the form of legally binding side agreements to the FTA e.g. Malaysia Labour MOU.
Despite efforts by New Zealand and like-minded countries, opposition from most developing countries prevented trade and labour from making its way onto the Doha negotiating agenda.
However, paragraph 8 of the Doha Ministerial Declaration states: “We reaffirm our declaration made at the Singapore Ministerial Conference regarding internationally recognised core labour standards. We take note of work under way in the International Labour Organisation (ILO) on the social dimension of globalisation.”
In addition, the ILO’s 2008 Declaration on Social Justice for Fair Globalisation (endorsed by all ILO members) notes that: “the violation of fundamental principles and rights at work cannot be involved or otherwise used as a legitimate comparative advantage and that labour standards should not be used for protectionist trade purposes” [Part I A (iv)].
New Zealand - consistent with its trade and labour policy framework - continues to pursue its interests in this area by:
The New Zealand Department of Labour has responsibility for negotiating these agreements alongside the Ministry of Foreign Affairs and Trade, and for the implementation of these agreements, in consultation with other departments,
Examples of cooperative activities undertaken pursuant to these agreements include the following, undertaken under the Arrangement on Labour Between New Zealand and the Kingdom of Thailand:
