The following is an update on the Agreement on Climate Change, Trade and Sustainability (ACCTS) by the government of New Zealand.
Announcement of negotiations
The launch of the initiative towards an Agreement on Climate Change, Trade and Sustainability (ACCTS) was announced(external link) on 25 September 2019 by the Prime Minister of New Zealand Jacinda Ardern, together with the:
- Prime Minister of Fiji Hon. Josaia Voreqe Bainimarama
- Prime Minister of Iceland H.E. Katrín Jakobsdóttir
- Prime Minister of Norway H.E. Erna Solberg
- Vice Minister for Foreign Trade of Costa Rica Mr. Duayner Salas
The Leaders Statement was made in the margins of the September UN General Assembly Leaders’ Week in New York, USA.
It was further supported by a Joint Statement by the ACCTS Climate Change Ministers in the margins of COP25 in Madrid in December 2019
In January 2020, the ACCTS Trade Ministers also released a Joint Statement expressing their strong support for the initiative. The Statement also announced Switzerland’s participation in the negotiations.
The ACCTS Trade Ministers released a Joint Statement(external link) in Paris in October 2021. The Ministers stated their united support for the ongoing negotiations and their ongoing commitment to harnessing trade policy to achieve collective climate change action.
The ACCTS Climate Ministers reaffirmed their 2019 statement with a Joint Statement(external link) issued in the margins of COP26 in Glasgow in November 2021. The Ministers reiterated their determination to maximise the climate impact of ACCTS and to increase the alignment and mutual responsiveness of trade and climate policy responses.
The ACCTS Trade Ministers issued a Joint Statement(external link) in the margins of MC12 in Geneva on 15 June 2022. Ministers emphasised the importance the ACCTS has to lead a path forward on important trade and environment issues for multilateral action, and highlighted their commitment to conclude the ACCTS negotiations as swiftly as possible.
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, Norway and Switzerland will form the initial grouping of countries to negotiate ACCTS.
We are small, trade-dependent countries who believe trade measures and disciplines can contribute 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, provided 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. The following key areas will be covered:
- Removal of tariffs on environmental goods and new and binding commitments for environmental services:
Liberalisation of environmental goods and services mean they will become cheaper to buy in each of the ACCTS countries – accelerating access and uptake.
- Disciplines to eliminate harmful 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 to inform the development and implementation of 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, and deliver their intended environmental objectives.
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. While we will continue to make the case for multilateral action, the ACCTS countries 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.
It is important to us to hear from New Zealanders. Your views will inform our approach to the negotiations. The Government will only agree to rules which it believes are in New Zealand’s interests.
MFAT public meetings events are also used to highlight the negotiations, discuss our trade agreements and seek views on the initiative. These meetings are advertised through email, our website, Facebook and Twitter accounts.
Following the launch of the agreement, a targeted call for public submissions on the proposed ACCTS initiative ran over September – November 2019. The public submissions process showed that interested individuals and New Zealand industry representative supported ACCTS. Some submitters expressed interest in seeing ACCTS cover a broader set of issues. The future agenda and “living agreement” nature of ACCTS lends itself well to picking up issues at a later date.
Further submissions are welcome at any time on the ACCTS through the email addresses listed above.
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.
To view the official site, please click here.