Negotiations for the Agreement on Climate Change, Trade and Sustainability

·       The Government of New Zealand has taken the lead in negotiating a new agreement that seeks to address the interlinkages between climate change and international trade rules. Negotiations for the Agreement on Climate Change, Trade and Sustainability (ACCTS) were launched at the United Nations General Assembly Leader Week in September 2019, and will initially involve Norway, Iceland, Costa Rica and Fiji, as well as New Zealand.

·       The negotiations will focus on international trade rules that are currently presenting a barrier for States to realize their climate change commitments, particularly subsidies on fossil fuels. Subsidies currently play an important role in incentivising the usage of fossil fuels. Apart from removing subsidies on fossil fuels, the ACCTS could also play an important role in creating trade incentives for green technologies, thereby providing more impetus for States to achieve their climate change commitments. 

·       The ACCTS negotiations will cover three key areas:

o   Elimination of tariffs on environmental goods and new commitments on environmental services;

o   Disciplines to eliminate fossil fuel subsidies; and

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

·       Negotiations for the ACCTS will begin in early 2020. Rather than seeking to engage the entire international community in the first instances, these five States are taking a novel approach by seeking first to come to an Agreement, and then encouraging other States to sign on. In doing so, these States are demonstrating their commitment to environmental outcomes, as well as the role that individual States can play in generating broader multilateral action, particularly in circumstances where such action may be stymied by outliers.

·       Small and developing States should stay abreast of developments in these negotiations and consider any outputs that are produced following the first round of negotiations. IILA can assist small and developing States to engage with the negotiation process, assess their domestic trade rules in light of these developments, and identify whether any eventual ACCTS is congruent with their national rules.