New Zealand with Costa Rica, Fiji, Iceland and Norway have launched a new initiative - the Agreement on Climate Change, Trade and Sustainability (ACCTS).

Our aim for this first-of-its-kind agreement is to bring together some of the inter-related elements of the climate change, trade and sustainable development agendas.

Announcement of negotiations

The launch of the initiative towards an Agreement on Climate Change, Trade and Sustainability (ACCTS) was announced (external link) by the Prime Minister Jacinda Ardern, together with the Prime Minister of Fiji Hon. Josaia Voreqe Bainimarama, the Prime Minister of Iceland H.E. Katrín Jakobsdóttir, the Prime Minister of Norway H.E. Erna Solberg, and the Vice Minister for Foreign Trade of Costa Rica Mr. Duayner Salas  on 25 September 2019. 

This was announced in the margins of the September UN General Assembly Leaders’ Week in New York, USA.

Why do we need an agreement on climate change, trade and sustainability?

The urgent need for countries to increase their climate and environmental actions is well known. There is a critical need for increased global action if we are to limit global warming to 1.5 degrees Celsius above pre-industrial levels.

New Zealand’s view and the view of the countries that have joined us as participants in the ACCTS initiative, is that trade policies, practices and rules have an important and substantive role to play.

Negotiating an agreement on climate change, trade and sustainability has the potential to help bring together some of the inter-related elements of the climate change, trade and sustainable development agendas and demonstrate how they can be mutually reinforcing.

The case for using trade rules to discipline fossil fuel subsidies is particularly compelling. Globally, countries are subsidising fossil fuel production and consumption to the tune of over $500 billion US dollars a year. Subsidies make these greenhouse gas emitting fuels cheaper to produce and buy, acting as an incentive to use and produce more. Just as trade rules are used in the World Trade Organization (WTO) context to address industrial and agricultural subsidies, they have an important role to play here also.

The ACCTS negotiation is an opportunity for New Zealand to lead in this area and help create rules and best practice that reflect the needs and concerns of New Zealanders.

Who is involved?

New Zealand, Costa Rica, Fiji, Iceland and Norway will form the initial grouping of countries to negotiate ACCTS. 

We are small, trade-dependent countries who believe trade measures and disciplines can make a contribution to helping to address the urgent challenge we face for sustainable development in general and on climate change in particular. We traditionally have much in common in terms of strategic alignment on trade policy issues and we share the goal of achieving a high quality agreement with concrete and substantive outcomes as quickly and effectively as possible.

Once initial negotiations on ACCTS conclude, the intent is that ACCTS will then be open for other WTO members to join, if they are able to meet the required commitments. In this way, we hope that the ACCTS initiative will be a pathfinder toward multilateral action and provide an example of how trade rules can substantively help address climate change and other serious environmental challenges.

What is the envisaged scope?

The parties will consider a range of trade related issues that have the potential to contribute meaningfully to addressing climate change and other serious environmental issues. Three key areas will be covered:

  • Elimination of tariffs on environmental goods and new commitments on environmental services

Liberalisation of environmental goods and services products mean they will become cheaper to buy in each of the ACCTS countries – accelerating access and uptake, and so helping to improve the environment.

  • Disciplines to eliminate fossil fuel subsidies

Disciplines to eliminate fossil fuel subsidies will help remove the perverse effects of these environmentally harmful and socially regressive subsidies. This has the potential to deliver many trade, economic, social and environmental benefits.

  • The development of guidelines for voluntary eco-labelling programmes and associated mechanisms to encourage their promotion and application

This will help support the development of high-integrity eco-labels that are transparent in their criteria and meaningful to consumers.

The parties will also be able to put forward other issues for consideration, either in the initial phase of the negotiations or afterwards through the ‘living agreement’ concept.

How does this fit in with other initiatives in these areas?

The ACCTS initiative will complement and build on other work and processes under way in these areas such as New Zealand’s leadership on fossil fuel subsidy reform (FFSR). New Zealand has taken a lead role in advocating  for the reform of fossil fuel subsidies through our establishment of an informal 'Friends' group to promote the benefits of reform, and our work in the WTO, APEC, United Nations Framework Convention on Climate Change (UNFCCC) and the OECD.

The ACCTS initiative complements our continued advocacy and leadership on this global climate change issue.

How will this help multilateral efforts in trade and climate change?

Multilateral action remains New Zealand’s priority in relation to these issues - that hasn’t changed. While we will continue to make the case for multilateral action, the five of us are ready to act now. We consider that there is an important role for plurilateral agreements like ACCTS to play as a pathfinder and template for action.

Our vision is that ACCTS will demonstrate in practical terms how trade rules can support climate and broader environmental objectives while generating momentum towards an eventual multilateral set of solutions. 

Have your say

It is important to us to hear from New Zealanders. Your views will inform our approach to the negotiations and there will be further opportunities to engage as negotiations get under way. The Government will only agree to rules which it believes are in New Zealand’s interests. 

Email us at tradeforall@mfat.govt.nz to share your views and register your interest in future engagement opportunities.

Submissions are open until 5pm on 6 November 2019.

Published submissions

Your contact details will not become publicly available if submissions are published. Please note that individual statements or parts of statements may be published online or publicly released by the Ministry of Foreign Affairs and Trade. Only your name or organisation’s name and email address are required on a submission.

Upcoming trade policy events

Find details on our upcoming trade policy events.