Singapore, Chile and New Zealand launch negotiations for a new green trade pact

Singapore, Chile and New Zealand have launched negotiations for a green trade pact which could include cooperation in areas like sustainable aviation fuel, carbon credits and renewable energy certificates.

Prime Minister Lawrence Wong, Chilean President Gabriel Boric and New Zealand Prime Minister Christopher Luxon announced this on Oct 31 on the sidelines of the Asia-Pacific Economic Cooperation leaders’ meeting in Gyeongju, South Korea.

Speaking at the launch held at Sono Calm Gyeongju hotel, PM Wong said the agreement will modernise trade and investment policies to support the flow of environmental goods and services.

“Our aim is to set common rules and standards around these topics so that there will be coherence and common foundations in what we do,” he said.

Known as the Green Economy Partnership Agreement (Gepa), it will also unlock new opportunities in the green economy for companies, and good jobs in these sectors.

It will lower barriers to trade while accelerating the green transition, he added.

Other potential areas of cooperation floated in earlier discussions include trade-related climate measures, which PM Wong said could be better aligned with policy goals to minimise trade disruptions.

He noted that in the past, growth and sustainability were often seen as competing priorities.

But technological breakthroughs have challenged this assumption and demonstrate that growth and sustainability can be mutually reinforcing, PM Wong said.

“Trade can facilitate our collective green transition, by facilitating cross-border flows of the goods, services, technologies and finance that enable this,” he said.

The agreement to launch negotiations was signed by Minister for Sustainability and the Environment Grace Fu, Chile’s Minister of Foreign Affairs Alberto van Klaveren and New Zealand’s Minister for Trade and Investment Todd McClay. The signing was witnessed by PM Wong, Mr Boric and Mr Luxon.

Singapore is proud to partner Chile and New Zealand in this endeavour, PM Wong said.

“We may be three small countries, but we have a proven track record of pioneering innovative agreements together.”

The trio, along with Brunei, started the Trans-Pacific Strategic Economic Partnership which evolved into the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).

They also started the Digital Economy Partnership Agreement (Depa), he noted.

The CPTPP is a free trade agreement first signed in 2018 which now has 12 members including Japan, the United Kingdom, Canada and Mexico.

The Depa, which facilitates digital trade, was signed in 2020. South Korea in 2024 joined as the fourth member, and China is among nine other economies keen to also do so.

Both pacts continue to receive interest from other aspiring economies – a sign of the value which others see in them, PM Wong said.

“Now, we are applying that same collaborative spirit to the green economy,” added PM Wong.

All three leaders spoke about their common goals in establishing the agreement.

Mr Boric said the three countries are like-minded and share common values. Chile has promoted various initiatives to foster the green economy and now 70 per cent of its electricity comes from cleaner sources, he noted.

“I am confident that this process will bring more opportunities and benefits to our people,” he added.

Mr Luxon also emphasised the shared approach the three countries have to global trade. 

“We have worked together many times before in support of open and rules-based trade.”

He noted that it is fitting that negotiations launch in 2025, as it is a significant year for bilateral relations between New Zealand and both Singapore and Chile.

Earlier in October, Singapore and New Zealand upgraded their relationship to a Comprehensive Strategic Partnership. 

“The drive for this new agreement is our recognition that there is a global shift towards more resilient, durable, greener economies that is under way and to meet climate and environmental goals, and that does bring challenges, as well as significant economic opportunities for us all,” said Mr Luxon.

In a statement announcing the launch, Singapore’s Ministry of Trade and Industry (MTI) said this marks the culmination of a year of collaborative work by the three countries in the Joint Working Group on Trade and the Green Economy, which was established in November 2024 at the sidelines of the Apec meet in Peru.

The working group considered proposals for a possible new instrument to enhance plurilateral cooperation on trade-related issues in the green economy, it added.

In a separate joint ministerial statement on Oct 31, the three countries said their vision for Gepa is to support new trade opportunities and efficiencies for businesses, reinforce the rules-based order, and lower trade barriers while achieving climate action.

The agreement will be an “enabling framework” to enhance trade and investment in environmental goods and services.

It will also seek to foster coherence in emerging trade-related climate measures and deepen collaboration to promote low-carbon solutions and sustainable practices.

Given the rapidly changing economic and technological landscape in the green economy, the Gepa will be a “living document” that considers collaboration in new areas over time, it said.

It also complements ongoing work on the green economy at relevant World Trade Organisation committees as well as workstreams within Apec and other international forums, it added.

PM Wong said he looks forward to a substantial outcome by the next Apec meeting.

He also encouraged officials from the three countries to look beyond conventional approaches, embrace new ideas and draw on private sector insights as they develop the Gepa. 

“I am confident that by joining hands, we can turn trade into a force for good, catalysing economic growth while doing our part for the environment and for global climate action.”

PM Wong is in Gyeongju for the Apec meet till Nov 1. He will then travel to the capital Seoul for an official visit at the invitation of South Korean President Lee Jae Myung, where they are slated to upgrade relations between the two countries to a strategic partnership.

Source: The Straits Times © SPH Media Limited. Permission required for reproduction.

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