NZ group cautions US to not turn climate change into ‘tit-for-tat tariff war’

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A proposal by the United States to tariff goods on countries which don’t meet their climate goals would be too complex to implement, a group representing New Zealand exporters says.

Containers being unloaded at Lyttelton Port

Photo: RNZ / Nate McKinnon

New US President Joe Biden is vowing to impose carbon fees on nations failing to cut emissions in accordance with the Paris Climate Agreement.

In December, the Ministry of Business, Innovation and Employment (MBIE) said Aotearoa was not on track to meet its obligations.

Export NZ executive director Catherine Beard said it would be a big issue for New Zealand’s economy if the US did impose import taxes, but the proposal didn’t appear to be realistic.

“It’s easy for [Biden] to say things like that but the practicalities of working out the system would be incredibly complex and you have to be careful you don’t turn climate change into a tit-for-tat tariff war,” Beard said.

Catherine Beard

Catherine Beard
Photo: Business New Zealand

She added New Zealand businesses had a “number of strong positives” going for them in respects to curbing carbon emission. These included a high percentage of renewables in the country’s power system, and our energy intensive companies are amongst the greenest in the world.

“We do have an emissions trading scheme and it’s going to get a lot more expensive going forward.

“The whole emission reduction task will get quite crunchy because it will mean increased costs and that’s supposed to change behaviour,” she said.

However, Beard was optimistic about the new Biden administration, saying he had already signalled a desire to re-engage in multilateral trade partnerships.

“New Zealand really wants the US to re-engage the World Trade Organisation and re-appoint some appellate judges so we can have cases and disputes heard.

“Small countries like ourselves rely on a rules based system and currently the rules aren’t working very well,” she said.

Exporters are hoping for a more outward looking and engaged United States, and one which possibly would be willing to re-enter the Comprehensive and Progressive Agreement for Trans-Pacific Partnership trade agreement, Beard said.

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