The Agreement on Climate Change, Trade, and Sustainability – A New Step in Establishing A WTO Legal Framework for Environmental Trade?

The Agreement on Climate Change, Trade, and Sustainability (ACCTS), signed in November 2024 by Costa Rica, Iceland, New Zealand, and Switzerland, offers an innovative solution to the longstanding challenge of aligning trade and environmental policies within the World Trade Organization (WTO). As an open plurilateral agreement, ACCTS provides a flexible framework for like-minded nations to pursue ambitious environmental trade initiatives, addressing key issues such as the liberalization of environmental goods and services, fossil fuel subsidy reform, and eco-labeling. While its effectiveness and future within the WTO remain subjects of observation, the ACCTS exemplifies how small groups of WTO members can take the initiative in creating a dynamic and adaptable agreement that could pave the way for broader multilateral cooperation in addressing climate change through trade.