Beyond trade: what the New Zealand case means for climate, justice and the rules of the global economy

A. Climate obligations and the integrity of the Paris Agreement

A pledge you have no plan to meet is not a pledge.

The issue. The Paris Agreement works only if countries deliver the national pledges they make, and make each new pledge stronger than the last. Its own compliance committee is facilitative and non-punitive by design, so delivery relies on good faith, peer pressure and, increasingly, courts.

What this case shows. New Zealand's own emissions reduction plan puts the gap between its policies and its 2030 pledge at 84 million tonnes, and its Treasury estimates that closing it offshore would cost NZD 4.4 to 5.0 billion. The Prime Minister has said the government "ain't sending billions of dollars offshore", and there is no funded plan to close the gap at home. Its 2035 pledge changes the accounting method, which makes it look more ambitious than the 2030 pledge without being comparable to it, and sits well below what its own Climate Change Commission advised was feasible (up to 69 per cent). Meanwhile it removed the legal requirement that its carbon market settings accord with the pledge at all.

Why the precedent matters. In its July 2025 advisory opinion, the International Court of Justice found that states' climate obligations, including under the Paris Agreement, require stringent due diligence. On 20 May 2026 the United Nations General Assembly welcomed that opinion; New Zealand voted in favour, while recording reservations on the legal issues. A trade agreement in which both parties chose to make the Paris Agreement binding is one of the few settings where those obligations meet a formal process with consequences attached. If the clause holds here, it shows that climate commitments in trade agreements bind as firmly as market access commitments.

B. Agriculture, food systems and fair competitive conditions

The non-regression promise protects farmers everywhere from a race to the bottom.

The issue. Agriculture is at the centre of both climate policy and trade politics. Food systems produce around a third of global emissions, and farmers on both sides of every trade agreement are told that climate rules will leave them undercut by competitors who face none.

What this case shows. Agriculture produces about half of New Zealand's gross emissions and about 90 per cent of its biogenic methane. The government lowered its 2050 methane target range from 24 - 47 per cent to 14 - 24 per cent, against its officials' recommendation of a single 24 per cent target, and removed the legislated backstop that would have brought agricultural emissions into its carbon market, citing export revenue and the risk of "sending jobs and production overseas". That is the reasoning the agreement's non-regression promise exists to rule out: weakening environmental protection in order to encourage trade.

Why the precedent matters. Picture two dairy farmers, one in the Netherlands and one in New Zealand, both asked by their governments to cut emissions. If one government drops that requirement to help its exporters, the other farmer is undercut, and her government comes under pressure to drop its rules too. The farmers who invested early in cutting emissions lose first, and in the end the climate loses on both sides. The non-regression promise exists to stop that spiral: each side keeps the protections it already has, so neither has to choose between its farmers and its climate targets. The same test applies to the EU, whose own record on agricultural emissions is weak.

C. Fossil fuels and the energy transition

Reopening the oil and gas frontier in the decade that decides 1.5 degrees.

The issue. On the International Energy Agency's net zero pathway, keeping 1.5 degrees within reach leaves no room for new oil and gas fields. Governments that license new exploration or subsidise gas lock in emissions and infrastructure for decades.

What this case shows. New Zealand reopened its offshore waters to oil and gas exploration in a law that entered into force in August 2025, two weeks after the International Court of Justice said that granting fossil fuel licences and providing fossil fuel subsidies may be internationally wrongful. Its own foreign ministry had warned that the reversal could be seen as inconsistent with its trade agreements, including this one; the Cabinet paper described the aim as reinvigorating investment in petroleum exploration. Applications for new permits have followed, most from companies based outside New Zealand. The government has also set aside NZD 200 million to co-invest in gas fields and made its first allocation in September 2026. It has put out to tender a gas import terminal with a charter cost of NZD 90 to 180 million a year over 15 years; on 23 September 2026 it postponed the decision on the terminal until after the general election, having dropped a proposed levy on power companies to pay for it.

Why the precedent matters. Trade agreements usually protect fossil fuel investment. This one contains commitments that point the other way. Testing them against a decision to reopen an oil and gas frontier shows whether climate language in trade policy can constrain the most consequential energy choices a government makes. The postponed terminal decision shows those choices are still being made, and the commitments bind whichever government makes them.

D. Investment protection, corporate accountability and regulatory chill

"Investor confidence" is not a reason to lower environmental protection. The agreement says so.

The issue. For decades, trade and investment rules have made it risky for governments to regulate in the public interest: investors can sue states, and the mere threat chills climate policy. Corporate accountability has moved the other way, into the courts, where communities have begun to hold large emitters liable for harm.

What this case shows. New Zealand's law barring climate claims in tort was justified in part by business and investor confidence. The Ministry of Justice had "not identified any evidence that the ongoing court proceedings have had a measurable impact on business confidence", and advised against the law; the government passed it anyway. The select committee record notes Mike Smith's account that the government discussed his legal rights with the defendants while he was not given the same opportunity. The outcome is regulatory chill without a lawsuit: the state removed corporate accountability pre-emptively, to reassure investors.

Why the precedent matters. Here a trade agreement is being used against that logic rather than for it. The non-regression promise says a government may not reduce environmental protection to attract investment. If investor confidence cannot justify stripping a legal route to accountability, that principle reaches well beyond New Zealand, and into every debate about whose confidence trade policy is designed to protect.

E. Civic space, access to justice and the rule of law

When a government closes the courtroom, it closes a space for citizens.

The issue. Access to courts is part of civic space. When the other routes fail, litigation is how citizens, communities and Indigenous peoples hold the powerful to account, including on climate.

What this case shows. In February 2024 New Zealand's Supreme Court unanimously allowed Mike Smith's climate case against six major emitters and fossil fuel suppliers to proceed to trial. In August 2026, after the Bill was introduced under urgency and given a shortened select committee process, Parliament passed a law that bars such claims, applies the bar to his case by name, and excludes compensation. Ninety-three per cent of the 623 written submissions to the Justice Select Committee opposed the law; more than half raised the rule of law and retrospectivity; the New Zealand Law Society has warned that rushed processes and urgency undermine the rule of law.

Why the precedent matters. Shrinking civic space is usually discussed as a problem in other parts of the world. This case shows it is a question for wealthy democracies too, and that trade commitments can have something to say about it. A government cannot close its own courts to climate claims in order to reassure investors and then present itself as a champion of the rule of law abroad.

F. Indigenous rights, Te Tiriti o Waitangi and climate justice

The court case the new New Zealand law shut down was brought by a Māori leader to protect his people's land.

The issue. Indigenous peoples are among those most exposed to climate harm and among the most effective defenders of ecosystems. In Aotearoa New Zealand, the rights of Māori, the Indigenous people, rest on Te Tiriti o Waitangi, the 1840 treaty between Māori chiefs and the British Crown that is widely regarded as the country's founding document. Those rights are routinely treated as an afterthought in both climate and trade policy.

What this case shows. Smith v Fonterra is the lawsuit the new law extinguished. Mike Smith (Ngāpuhi, Ngāti Kahu), a climate leader in the National Iwi Chairs Forum, sued six of New Zealand's largest emitters and fossil fuel suppliers, including the dairy company Fonterra, over climate harm to Māori land in Northland in which he holds customary interests. He sought no money, only a court order that the companies cut their emissions to net zero by 2050, and argued in part that tikanga, Māori customary law, should shape how the courts develop the law. The Supreme Court allowed the case to go to trial. Submitters raised concerns under Te Tiriti and tikanga about the law that stopped it, and the complaint asks the European Commission, if it takes the case up, to consult the Māori organisations affected.

Why the precedent matters. Access to justice is how rights on paper become rights in practice, and for Indigenous peoples the courts are often the forum that listens when governments do not. New Zealand closed its courts by statute to an Indigenous claimant whose case its highest court had allowed to proceed, to give businesses and investors "legal clarity and confidence", in the words of the government's own impact statement. That is why Mike Smith is a co-sponsor of this complaint. In his statement supporting it, he says that domestic avenues for climate accountability "have been progressively weakened or closed", which makes the complaint "a rare remaining avenue" for asking Europe to hold New Zealand to obligations both parties chose to make legally binding. The stakes reach well beyond New Zealand. Indigenous peoples in Colombia, Peru, Ecuador, Central America, Mexico, Chile and Kenya also live under EU trade agreements with sustainability chapters, often defending their lands against mining, agribusiness and energy projects that trade and investment help drive. If a government can close its courts to an Indigenous claimant to reassure investors, and a sustainability chapter has nothing to say about it, those chapters offer little to Indigenous peoples anywhere. Mike Smith speaks for himself, not for Māori as a whole, and Both ENDS does not speak for Māori. Some Māori organisations regard the trade agreement itself as inconsistent with Te Tiriti, a question for Māori to determine.

G. Labour rights and a just transition

Rollback does not protect workers. Planned transition does.

The issue. A just transition means that workers and communities dependent on high-emission sectors are not left to carry the costs of change. It depends on predictable climate policy, planned in advance and paid for fairly.

What this case shows. The measures in this case replace planning with reversal: a carbon market cut loose from the national pledge, the plan to price agricultural emissions by 2030 dropped, with no replacement, public money set aside to co-invest in gas fields, and a gas import terminal on a 15-year charter still under consideration. Lock-in of this kind makes the eventual transition steeper and less fair, not gentler.

Why the precedent matters. This is a climate case, not a labour case. But the only panel ever convened under an EU trade agreement's sustainability chapter was on labour rights, in South Korea in 2021. It found a breach, and the agreement provided no sanctions to back it. Whether sustainability commitments can be enforced at all is a question trade unions and labour rights defenders have as much stake in as climate campaigners. What happens here sets the terms for both.

H. Enforcement of sustainability chapters and the credibility of EU trade policy

Europe wrote this promise. The question is whether it enforces it.

The issue. Every EU trade agreement since 2011 contains a trade and sustainable development chapter. For most of that time they have had no teeth. In 2022 the EU committed to change that, including by making trade sanctions available for serious breaches of the Paris Agreement. The EU-New Zealand agreement was the first to include that option.

What this case shows. The Commission presented this agreement as its flagship proof that trade and climate go together. The Single Entry Point was created so that civil society could bring cases to it. This complaint uses that mechanism for its intended purpose, on evidence drawn almost entirely from the partner government's own documents, against a wealthy and like-minded partner. It is as clear a test as the system will ever get.

Why the precedent matters. If the EU does not act here, every sustainability chapter it signs from now on is worth less than the paper it is printed on, and the communities living under EU trade agreements in Latin America, Africa and Asia will know it. If it does act, it has to explain why the same standard should not apply to its other partners and to itself. Either outcome says something about what EU trade policy is for.

I. Partner country policy space and development cooperation

Trade rules usually punish governments that regulate more. This one can hold them to their word.

The issue. Both ENDS has long argued that trade and investment rules shrink the policy space governments need for climate, social and industrial policy, especially in the Global South. Most trade disciplines constrain states that regulate more; very few constrain states that regulate less.

What this case shows. This complaint does not restrict New Zealand's right to regulate. It asks New Zealand to keep commitments it chose, negotiated and advertised, and it has no power over New Zealand's Parliament. That is the reverse of the investor protection model: a commitment that protects the space to act on climate rather than punishing its use.

Why the precedent matters. The precedent cuts two ways, and we say so. Enforcement tested first against a wealthy partner is a fairer starting point than enforcement tested first against a poorer one. But if climate enforcement in trade becomes a tool the EU uses selectively, or against partners who lack the finance and technology to comply, it becomes another form of conditionality. Enforcement credible enough to matter has to come with cooperation, finance and support for partners who need it, and has to apply to the EU as well. That is the standard we will hold this process to.

J. Competitiveness, deregulation and the backsliding of climate commitments

Around the world, climate promises are being shelved in the name of competitiveness.

The issue. Across many countries, including in the EU, climate and sustainability rules are being weakened or delayed in the name of competitiveness, simplification and strategic autonomy. The argument is almost always the same: that protecting the climate costs growth, investment and jobs.

What this case shows. Most of the measures in this complaint were justified in those terms: investor confidence for the law closing the courts, investment for the reopening of offshore exploration, export revenue for the methane target and agricultural pricing. In several cases the government's own officials found the economic case weak; on the methane target, its own impact statement put the difference in modelled GDP in 2050 at close to zero.

Why the precedent matters. This case is a test of whether a binding climate commitment still binds when a government decides competitiveness comes first. The answer matters for New Zealand and just as much for Europe, which is making the same argument about its own rules. The complaint holds both governments to account: Wellington for its promises, Brussels for enforcing what it signed.

What connects them

One question runs through all ten: who trade rules are written for. For decades they have been enforced when they protect investors and exporters, and treated as aspirations when they protect the climate, workers, communities and courts. This case asks whether that can change, starting with a promise Europe itself wrote. We will report at every stage.

More information:

• Announcement, press release
• Read the case explainer