Countries draft trade deal to address climate change

Trade ministers for Costa Rica, Iceland, New Zealand and Switzerland have finished negotiations on a trade deal focused on tackling climate change, pollution and loss of biodiversity.

The deal — the agreement on climate change, trade and sustainability (ACCTS) — will include an "ambitious" list of environmental goods, with a definition and criteria for updates, the ministers said. The agreement will eliminate tariffs on more than 300 goods, including solar panels, wind turbines, electric vehicles and wood products. It will also outline conservation and sustainability commitments for the production of such items.

The agreement will also "contribute a meaningful definition of fossil fuel subsidies to international efforts", the ministers said. On these, there will be "clear prohibitions and a limited set of exceptions to safeguard fundamental policy goals", the ministerial statement added.

Pledges to phase out fossil fuel subsidies by various countries, including the G7 and G20 groups, are long-standing. But subsidies for fossil fuels remain widespread and totalled $7 trillion in 2022, according to the IMF.

The legal review of the text must be completed before it is signed, ratified and implemented, the ministers said. Their ambition is for the ACCTS to be "a pathfinder agreement that will drive momentum" at the World Trade Organisation, they added.

Norway participated in all 15 rounds of negotiations and hailed the "great progress" made. But the country needs more time to assess the agreement, Norwegian foreign minister Espen Barth Eide said.

By Georgia Gratton