New Zealand will lead five-way trade talks with Norway, Iceland, Costa Rica and Fiji to try to use trade to combat climate change by slashing fossil-fuel subsidies and abolishing tariffs on environmental goods.
Called the Agreement on Climate Change, Trade and Sustainability (ACCTS), the agreement plans remove tariffs on environmental goods, make new commitments on environmental services, establish concrete commitments to end fossil-fuel subsidies and introduce an “eco-labelling program”.
The group of countries are looking to revive international efforts to embed climate action in trade deals, acting as a counterweight to United States-led efforts to ink trade agreements that bolster markets for carbon intensive products.
So far there is little detail, with negotiations expected to start in March 2020.
Work on the deal was announced in New York by New Zealand Prime Minister Jacinda Ardern,along with Norwegian Prime Minister Erna Solberg, Costa Rica’s Vice minister for Foreign Trade Duayner Saver Chaverri, Icelandic Prime Minister Katrín Jakobsdóttir and Fijian Prime Minister Frank Bainimarama.
Ms Adern said; “Tackling climate change is a long-term issue my government is committed to, and that will require action both at home and abroad. It also needs to be addressed in trade rules.
“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 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 programs 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,” she added.
“This will increase market access for goods and service that are more sustainable to nature”, Mr Bainimarama said.
The Fijian leader also sounded a warning that the trade deal could not be an excuse for protectionism.
It could be a “means for countries with a trade advantage to use the agreement as an excuse for dumping goods, or promoting goods or putting in place new barriers on imports under the guise of sustainability”, he said.
“Climate change is a serious threat to us all and we fully need to step up our efforts,” Norway’s Erna Solberg, the only politically conservative leader of the grouping, said.
“I’d like to emphasise that Norway is a firm supporter of a rules-based international trading system.
“We hope that WTO members will join this agreement in due course, and we look forward to cooperating, to find productive and constructive ways to use trade to address the climate challenge.
“I think our size does not fairly reflect our ambition”, Ms Ardern commented while announcing the deal.
“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,” Ms Ardern said.
The four developed countries in the deal all generate most of their electricity via hydro or geothermal energy.
Fiji gets about half of its energy from hydro and diesel makes up much of the rest.
“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”, Ms Ardern said.
“As relatively small, outward facing, trade-dependent countries that rely on economic development that is both sustainable and inclusive, we believe that urgent progress is required and a transformative approach is needed.
“We are ready to act now,” a joint statement from the nations said.
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