  
  
INF/TE/SSD/W/1  
 
15 February 2021  
(21-1261) Page: 1/2 
  Original: English  
 
 
TRADE AND ENVIRONMENTAL SUSTAINABILITY STRUCTURED DISCUSSIONS (TESSD)  
COMMUNICATION BY NEW ZEALAND  
The following communication, dated 5 February 2021, is being circulated at the request of the 
delegation of New Zealand.  
 
_______________  
 
 
1  BACKGROUND  – WHY FOSSIL FUEL SUBSIDY REFORM NEEDS TO BE PART OF THE TESSD 
WORK  
1.1.  Fossil fuel subsidy reform (FFSR) is not a new issue. The G20 and APEC members committed 
to action on this issue in 2009. Since then, they and others, such as the Friends of FFSR, the V20, 
Pacific Island Forum Leaders, and the G7 have issued statements calling for the phase out of 
inefficient  fossil fuel subsidies.  
1.2.  In 2015 Leaders from all UN member states endorsed the need for FFSR in Sustainable  
Development Go al 12.C; and the UN Secretary General has continuously highlighted FFSR as a 
priority issue for addressing climate change, including at the 2019 Climate Summit in New York. In 
2020, the Friends of FFSR, joined by the United Kingdom as the incoming co -host of the UN Change 
Conference of the Parties (COP26), urged governments, businesses and other organizations to 
support accelerated action to eliminate fossil fuel subsidies, and by doing so, play a significant part 
in climate change mitigation. It remains th e case that, without addressing the issue of fossil fuel 
use, we won't be able to reach the goals set out in the Paris  Agreement.  
1.3.  While COVID -19 has led to an unprecedented and unexpected economic downturn for 2020, 
recovery from the crisis also presents a n opportunity for countries to implement a green recovery. 
During the 2020 Petersburg Climate Dialogue the IMF Managing Director pointed to FFSR and carbon 
pricing as priority areas of work for implementing a green recovery.  Reform of these subsidies 
provides a means to free up fiscal resources to support those who need the greatest support 
throughout an effective COVID recovery.  
1.4.  New Zealand remains convinced that it is essential that the trade community plays its role to 
support global efforts in addressing climate change. It is to this end that we continue to advocate 
for beginning to discuss this issue at the WTO in a coordinated and meaningful manner. The TESSD 
has the potential to make a significant contribution to this di scussion.  
1.5.  New Zealand's proposed approach for the TESSD includes making explicit what we see as the 
next steps; sharing information and experiences at the WTO, to develop a supportive international 
setting for addressing these subsidies and to assist dome stic reform.  
1.6.  This sharing of information and experience is even more important in light of the COVID -19 
pandemic. WTO Members are launching stimulus packages of unprecedented size to assist the 
economic recovery. Governments are investing in infrastructure, and supporting private investment, 
and considering tax policies to assist all those affected by the economic conseque nces of the 
pandemic. This presents a window of opportunity to consider and eventually reform subsides, and 
divert this public funding towards the recovery.  INF/TE/SSD/W/1  
 
- 2 - 
 
  1.7.  Lastly, FFSR is linked to other trade and environmental sustainability issues that this group of 
co-sponsors has identified in the Communication such as the circular economy and upstream causes 
of plastic pollution (i.e. incentives to produce cheaper virgin products using fossil fuels), combatting 
illegal, unreported and unregulated fishing, and the co nservation and sustainable use of biodiversity.  
2  PROPOSAL FOR THE FFSR DISCUSSION IN THE TESSD  
2.1.  Building on the background outlined, New Zealand proposes that FFSR should form one of the 
elements of the TESSD in 2021. New Zealand remains committed to its in ternational leadership on 
this issue and stands ready to support the co -conveners in setting the forward work programme for 
the TESSD.  
2.2.  New Zealand suggests the following structure to the discussions on FFSR that could be adopted 
by TESSD co -sponsors:  
1. 5 March: Impacts of FFSR on trade and environmental sustainability .  
 
Discussion on the importance of FFSR in addressing the climate crisis, its linkages to other 
trade and environmental sustainability initiatives such as fisheries subsidies and upstream 
drivers of plastic pollution, the impact of FFS on trade flows, climate and social development. 
Progress made to date and what we should do next.  
 
2. 27- 28 May: FFSR in action .  
 
A presentation of successful case study on reform, ranging from peer reviews, to 
understanding significant domestic legislative policy changes. There is potential to include 
developing and developed Members to share information and experiences, as well as lessons 
learnt from undertaking reform.   
 
3. 16- 17 September: Advancing FFSR at the WTO: Joint Ministerial Statement on FFSR .  
 
Discussion on the proposed MC12 Statement, what is the Statement seeking agreement on 
from Members. What happens once the Statemen t is presented at the Ministerial. What 
action can WTO Members take to advance the issue ahead of the Ministerial?   
 
4. 24 -25 November: Transition towards clean energy.  
 
A discussion on the supporting Members transition away from reliance on fossil fuels, 
exploring opportunities that the green recovery has presented. Opportunities to invite 
Members to present and reflect on opportunities and challenges of the green recovery, 
lessons learnt and the path forward. This could include a discussion on the developm ent 
aspects of the fossil fuel subsidy issue.   
 
__________  