The Trans-Pacific Partnership and the Environment

Created: Wednesday, 30 September 2015 12:20

The Trans-Pacific Partnership (TPP) has had a fair degree of media coverage, both during its seven year negotiation, and since negotiations concluded on October 8 2015. Less has been heard however, on the Environment Chapter of the TPP, and what it might mean (if anything) for New Zealand and our environmental regulations.

What is the TPP?

TPP is a free trade agreement that will liberalise trade and investment between 12 Pacific-rim countries: New Zealand, Australia, Brunei Darassalam, Canada, Chile, Japan, Malaysia, Mexico, Peru, Singapore, the United States and Vietnam.

The rationale for an Environment Chapter in any trade agreement is to break down trade barriers that exist under the guise of environmental regulations; to promote higher standards of environmental protection globally; and to reduce trade advantages that one country may have over another because of lower environmental standards.

So, for a country like New Zealand with relatively high standards of environmental regulation, and with a highly trade exposed economy, environmental provisions in a trade agreement are welcomed.

Comments and Key Outcomes

TPP Parties made two general commitments that will underpin mutually supportive trade and environment policies:

1. TPP Parties will not fail to effectively enforce their environmental laws in a manner affecting trade or investment; and
2. TPP Parties will not waive or otherwise derogate from such laws in a manner that weakens or reduces the protections afforded in those laws in order to encourage trade or investment.

Key outcomes of the Environment Chapter include:

• Transparency provisions in relation to fish subsidies that contribute to overfishing and illegal, unreported and unregulated fishing.
• Obligations to adopt measures to address illegal domestic trade in wild flora and fauna.
• Provisions encouraging the development of "flexible voluntary mechanisms" to protect natural resources and the environment. This means using a market for an environmental end, a good example of which is the New Zealand Emissions Trading Scheme.
• Obligations in relation to three multilateral environmental agreements – the Montreal Protocol on Substances that Deplete the Ozone Layer; the International Convention for the Prevention of Pollution from Ships; and the UN Convention on Trade in Endangered Species.
• Reinforcing other multilateral commitments that have a particular trade and environment dimension (biodiversity, reducing greenhouse gas emissions, marine fisheries, liberalising trade in environmental goods and services).

What does the TPP Environment Chapter mean for New Zealand?

TPP environment provisions are consistent with laws New Zealand already has in place. Therefore no changes to any domestic environment regulations are required.

Our environment is increasingly affected by what other countries do within and beyond their borders, however. For example in relation to goods that we import impacting our environment in the way they are used and disposed of within New Zealand; and the release of greenhouse gas emissions and HFCs impacting our atmosphere and ozone protection. Therefore provisions in trade agreements that further reinforce multilateral environment agreements are helpful to us.

Finally, New Zealand benefits from raised environmental standards among its trade partners. For example, a reduction in any trade disadvantages that New Zealand businesses face if their competitors face weaker domestic environmental regulations and/or enforcement (and thus lower compliance costs) than us. Our fishing industry benefits from a reduction in the amount of illegal overfishing taking place in other jurisdictions.

What next?

The TPP is expected to come into force in two years, once countries have completed their domestic legislative procedures.

More information on the broader agreement can be found on a TPP website set up by the Ministry of Foreign Affairs and Trade.

The contents of this publication are general in nature and are not intended to serve as a substitute for legal advice on a specific matter. In the absence of such advice no responsibility is accepted by Brookfields for reliance on any of the information provided in this publication.