4. Question No. 4—Trade and Export GrowthHon JAMES SHAW (Minister for Climate Change) to the Minister for Trade and Export GrowthQuestion No. 4—Trade and Export Growth4. Hon JAMES SHAW (Minister for Climate Change) to the Minister for Trade and Export Growth: How will the Agreement on Climate Change Trade and Sustainability announced today use trade rules to tackle climate change and environmental issues?Hon DAVID PARKER (Minister for Trade and Export Growth): Tackling climate change is a long-term issue that this Government is committed to. This requires action at both home and abroad. I'm pleased to inform the House that we believe that trade rules and trade relationships can play a more substantive role in overcoming the climate challenge and now's the time to use them. The Agreement on Climate Change Trade and Sustainability will eliminate tariffs on environmental goods and make new commitments on environmental services. It will establish concrete commitments to eliminate fossil fuel subsidies and develop guidelines for eco-labouring programmes and mechanisms. We believe trade rules can be part of the solution by removing trade barriers to green products and services and eliminating subsidies that incentivise the production and consumption of damaging fossil fuels. Hon James Shaw: What difference will removing tariffs on environmental goods and services make to the accessibility and cost of things like renewables such as solar and wind technology?Hon DAVID PARKER: It'll change the relative economics of going clean. Transforming our economies to a low-carbon future requires innovation and access to low-carbon technologies. We know that trade and investment can help drive this. The elimination of tariffs on environmental goods and services provides more certainty for investments and it will support the decarbonisation that we need to combat climate change.Hon James Shaw: How will the provisions of the agreement be legally enforceable to ensure that countries are bound by their commitments to tackling environmental issues?Hon DAVID PARKER: New Zealand together with Norway Iceland Costa Rica and Fiji are proposing to use legally enforceable trade rules to turn these commitments into action. Our vision is an enforceable trade agreement which has treaty status. The exact legal structure is still to be determined but I can say that the legal form will support an outcome that has real impact. At the moment the multilateral rules in this respect are inadequate and they're stuck and we think that this will be a pathfinder agreement that will apply initially to those countries but will expand over time.Hon James Shaw: Does the Minister intend to bring other countries into the agreement including New Zealand's major trading partners?Hon DAVID PARKER: Yes. That is the outcome that we hope over time. By negotiating initially with a group of like-minded countries we'll be able to achieve a high-quality agreement that hasn't been able to be achieved through the multilateral Word Trade Organization process. We will design this in a way which is open to newcomers. We call it open plurilateralism and we hope that this pathfinder agreement will be adopted by a greater number of countries including our major trading partners. It's noticeable that of course the Trans-Pacific Strategic Economic Partnership Agreement which was started by the last Labour Government which led to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership is an example of how these things can work out in practice.Hon James Shaw: What actions has New Zealand taken to support international efforts to eliminate fossil fuel subsidies?Hon DAVID PARKER: As part of this agreement we propose to have legal commitments on the phasing out of fossil fuel subsidies. It is absolutely absurd that the relative economics of clean renewables suffer by comparison to the more than US$500 billion per annum that go into fossil fuel subsidies. If we can help eliminate those fossil fuel subsidies then we will have a better climate outcome for the world.Hon Gerry Brownlee: Will the Government continue to pursue trade agreements with countries even if they do subsidise fossil fuels?Hon DAVID PARKER: While our preference is to deal with countries that aren't unfortunately the countries of the world have not been able to agree in environmental agreements on enforceable mechanisms to reduce climate change emissions. They have ambitions stated but there are no enforceability mechanisms. We want through this agreement to have an agreement with a growing suite of countries with enforceability mechanisms. We hope that that in time will grow to all countries in the world but we're not proposing to cease trading with countries who are not yet in the agreement.Hon Gerry Brownlee: Does that then mean that the Government will suspend negotiations with the US the UK the EU the enhancement of the China agreement and India all on the basis that they are subsidisers of fossil fuels?Hon DAVID PARKER: No it doesn't and in fact I just said that it doesn't but what it does mean is that we will be working with like-minded countries to show the benefits of not having subsidies on fossil fuels.Hon Gerry Brownlee: Lip-service!Hon DAVID PARKER: Lip-service he says. Well why did the former Prime Minister from the National Party also support the elimination of fossil fuel subsidies?