New Zealand has signed historic climate trade deals with Switzerland, Costa Rica, and Iceland, removing tariffs on more than 300 different products (including 41 timber products) in a move that will address climate change and rapidly expand “green exports.”
The Agreement on Climate Change, Trade and Sustainability (ACCTS), originally flagged in 2019, is a key part of New Zealand’s push to use trade rules to tackle climate change – using green trade to double exports within the next decade.
The “groundbreaking” deal will liberalise tariffs on environmental goods, support new environmental services, and eliminate fossil fuel subsidies.
“The Agreement on Climate Change, Trade and Sustainability (ACCTS) opens up commercial opportunities for New Zealand businesses by focusing on trade in sustainable goods and services,” according to NZ Trade and Agriculture Minister Todd McClay. “Crucially, tariffs will be removed on key exports, including 41 wood products and wool.”
Wood is critical to Brand New Zealand’s push into global markets.
New Zealand’s Wood Processing and Manufacturing Industry has welcomed the new deal, with the Christopher Luxon government now looking to boost the country’s $2.8 billion log market.
“Under brand New Zealand, we have a leading story to tell as to the value our wood products and timber used in construction play in addressing climate change and sustainability challenges,” according to Mark Ross, CEO of the WPMA, who said that the new deal will not only deliver commercial benefits for New Zealand, but it will send a strong environmental message to our trading partners.
“‘Wood provides multiple benefits to New Zealand, and it is positive to see the government backing our industry in removing unnecessary barriers and implementing new trade Agreements,” Mr Ross said.
“Export growth will help fund the wood processing industry, with value-added wood products encouraging greater onshore processing of logs, more employment in our regions, and increasing our global contribution to embodied carbon storage.”
New Zealand’s Small Country, Big Climate Agenda
Minister McClay said the agreement is New Zealand’s first with countries outside the World Trade Organisation: “Only through a strong economy can we lift incomes, reduce the cost of living, and provide Kiwis with the public services they deserve. The ACCTS deal helps to achieve this.”
According to the New Zealand Ministry of Foreign Affairs and Trade, “the ACCTS will open new markets for New Zealand exporters and, as an open plurilateral agreement, will grow in commercial benefit over time as new members join.”
“A key example is the environmental goods chapter, which eliminates tariffs on over 300 environmental goods…this reduces costs associated with important New Zealand exports such as wood products and timber used in construction, wool fibre, slag wool for insulation, recycled paper, and electric static converters.”
Alongside commercial benefits, the ACCTS brings together some interrelated elements of climate change, trade, and sustainable development agendas and demonstrates how they can be mutually reinforcing.
“New Zealand’s view, and the view of the countries that have joined the ACCTS initiative, is that trade policies, practices, and rules have an important and substantive role in addressing sustainability issues,” according to New Zealand’s Ministry of Foreign Affairs and Trade.
- To learn more about New Zealand’s approach to climate change and trade, click on this special feature.
