Costa Rica signs groundbreaking trade deal to remove tariffs on hundreds of products that benefit sustainability

By IDEAS

The Ministers for Trade from Costa Rica, New Zealand, Iceland and Switzerland announced the conclusion of negotiations for the Agreement on Climate Change, Trade and Sustainability (ACCTS).

ACCTS partners have worked through fifteen rounds of mostly virtual negotiations to develop an innovative and groundbreaking trade agreement focused on the climate change, trade and sustainability agendas, and which is consistent with their obligations under the World Trade Organization (WTO).

The ACCTS will deliver new, high quality, trade commitments that meaningfully contribute to addressing climate change as well as loss of biodiversity, pollution, and other serious environmental challenges. 

Tariffs will be eliminated on over 300 environmental goods on entry into force of the Agreement, including solar panels, wind and hydraulic turbines, electric vehicles, wool fibre, recycled paper, electric static converters, and wood products offering a more environmental alternative to carbon-intensive construction materials.  The Agreement also includes commitments on conservation and sustainable management of ecosystems relevant for the production of environmental goods. Tariff elimination will make such products cheaper to buy, thereby incentivising use and investment in related technologies.

The principles-based guidelines for voluntary eco-labelling programmes and related institutional mechanisms will provide an innovative and useful tool to promote trade in sustainable products by helping ecolabels to best achieve their environmental purposes. They will help consumers and businesses to receive meaningful information to assist in choosing products based on their environmental credentials, while avoiding the inadvertent creation of barriers to trade.  The guidelines may also assist firms to add value to their environmentally-friendly goods and services.

The ACCTS includes a dispute settlement mechanism and other institutional mechanisms to ensure meaningful implementation. 

The ACCTS also includes a review mechanism so that further trade policy actions can be included in the future and new technology developments can be considered, to ensure the ACCTS continues to address contemporary trade, climate and sustainability challenges, for example regarding non-tariff barriers.