Policy Aspects
• International Agreements - Obligations/National Sovereignty
• Coherent set of policies fostering reinvestments to SFM
• National Policies
• Poverty Reduction
• Land Use Policies - trade policy changes impact on forestry option
• Sustainable Livelihood Policies
Increased Forest Values through:
• Environmental Services
• Public Procurement Policies
Instruments/Mechanisms
• Certification as market-based instrument/credibility
• Debate on evidence of green premium from certified products
• Certification may/may not provide financial incentives for SFM
• Mechanisms to structure trade to support commitments to SFM including through social, environment & economic standards
Links
• Trade Rules/Policies `neutral' and limited impact on achieving SFM
• Links between trade & SFM identified
• Debate on degree of direct/indirect impact of trade on SFM
• Debate on dependencies/interactions between GDP growth, free trade, demand, markets, supplies, ability to achieve SFM
Policy Processes
• Lack of integration/transparency/linkages between policy processes
• Lack of information/understanding on policy issues related to trade and SFM
• Established policy processes such as NFPS exclude consideration of trade-related issues
• Necessity to refer to WTO proceedings
Trade Agreements
• Sustainable Development part of WTO objective
• SFM part of Sustainable Development, and consequently free trade (?)
• Existing WTO provisions relating to trade and SFM to be examined
• Clarification on possibility of inter-linking forest-related issues
Trade Restrictions/Non-Tariff Barriers
• Needs careful consideration as could be counterproductive (ban on log imports/log export ban)
• Need to ensure fair framework for all timber producers regardless of origin or resource ownership
• Trade restrictions to stimulate local industries
• Certification/Labelling - opportunity/restriction?
• Unilateral actions of local governments
• Bilateral agreement v illegal trade - enforceability?
• Trade agreements & Trade restrictions are highly inefficient/ineffective for SFM
• Trade agreements to include performance indicators on SFM
• Incorporation of `soft law' into trade agreements a bad idea/international law?
• MEAs with trade measures have in some circumstances been ineffective - CITES
• Any other provisions?
• Co-operation agreements/investment rules possible for SFM?
DOCUMENTATION OF CHARTS:
POLICY ASPECTS
• International Agreements
• Obligations
• National Sovereignty
• SFM will differ across countries (an expression of values)
• Trade policies are unlikely to be helpful in defining SFM at the national level
• Poverty eradication
• Forest value
• National Land Use Policy
• Lowest risks for the most critical stakeholders (local people and forests) or highest potential gains?
• Set of policies should be based on local needs. In many cases, SFM is a local issue: IS TRADE?
• Make forests more valuable by developing markets: international trade (eg. carbon); national trade (eg. water)
• Consider SFM as an environmental service
• Public Procurement Policy
• Impact on SFM trade barrier
• Role of national policies and market (complementarity)
• Illegal Logging: Internationally binding agreements are difficult to craft because of the need to ensure consistency with existing International Agreements and with National Sovereignty
MECHANISMS
• Certification / National Policies / Non-Tariff Barriers
• How can mechanisms/policies be developed to structure trade to further existing commitments to SFM?
• Forest Certification: link between SFM and trade
• Credibility of the scheme
• A tool for the private sector
• Certification is private: complicates relation to rule-based policies
• Develop social, environmental and economic standards for SFM and link to trade and economic development
• While certification is and should be "voluntary and market based", governments should develop policies to stimulate the sound use of wood, notably compared with other non-renewable materials. Vibrant demand/markets for forest products should be recognised as an essential part of SFM
• Should also consider the impact of trade policy changes (liberalisation) for other commodities (esp. agriculture) on forests (if profitability of soybeans increases, it is likely to put pressure on forest land)
• Certification may create a premium in price, market access, etc. depending on many factors (eg. which system, which products, which markets, etc.)
• There is no clear evidence of a green premium from certification
• Certification (as a private, voluntary, marketing effort) may or may not provide financial incentives for SFM
2 SEPARATE QUESTIONS:
1. Is there a price premium for certified timber? If so, who benefits (owner, middle-man, retailer...)?
2. How much of the forest rent is reinvested in SFM (regardless of certified or not)?
COHERENT POLICIES
• Trade policies are inefficient instruments to ensure SFM
• Trade issues are difficult to address without becoming specific, bur general rules must be observed
1. Link between trade, economic development and SFM: no guarantee
2. Facilitate trade: inbuilt protection of environment and social issues
• GDP growth - Free trade
• Demand for forest products - Comp.
• Markets - Suppliers
- Threat or opportunity?
• Income of owners - Value of forests
• Ability to "do" SFM
• Certification: the link between trade and SFM
• Profitable trade opportunities for commodities such as soybeans and palm oil may accelerate deforestation via land conversion (eg. Indonesia, Brazil, MYL (?))
- A coherent policy includes sufficient re-investment of rents in the resource to enable/incentivise SFM
• The lack of returning of rent of SFM to the ground (not only related to certification) should be addressed
• It is an element of SFM that insufficient rent is reinvested to preserve the resource with all its environmental, social and economic attributes and values
LINKS
• Trade rules are neutral with respect to SFM and limited in the degree to which they can affect SFM
• Non-discrimination and multilateralism (notification, consultation...)
• SFM: Forests - Cuttings - Industry - Trade --
- Trade has a weak/indirect link to SFM
• Trade can serve SFM (diversification) but needs to be restricted (e.g. to avoid over-exploitation (non-tariff barriers))
• Make forests valuable through trade in products and services
• Sometimes "trade" agreements (e.g. FTAA) have consequences in processes other than trade
QUESTION:
• Where do the economic rents of certification go? Are there additional economic rents?
POLICY PROCESSES
• Trade questions are complicated. There are many issues. They are not simple; analysis is therefore difficult
• There is not one single "big" issue: makes integration necessary
• Lack of integration between trade institutions and forestry
• Greater transparency in trade - stakeholders and their economic inter-relationships
• Weak understanding of the situation, interactions/link options
• Global/Local/Regional
• Between "commodities" (forest, trade policy, environmental policy...)
• Good data and research do exist!
• Lack of information and understanding because different discussions are not linked horizontally (social, environment, economic, trade) but linked vertically (local, regional, international)
• Difficulty of communication
• Progress on definition of SFM (Certification, C+I...)
• Next step: better mutual understanding between international forest dialogue (policy) and WTO (rules based system)
TRADE AGREEMENTS AND RESTRICTIONS
• Link the different dialogues around SFM to trade dialogues
• Avoid being "driven" by WTO, but be aware of WTO discussion
• Intergovernmental processes (Helsinki, Montreal, ITTO, etc.)
• C&I and operational land guidelines
• Process is transparent and participatory
• WE KNOW WHAT SFM IS!
• National Forest Programmes: efficient tool to promote SFM (process transparent and participatory)
• Need to address the wishes of a full range of stakeholders and comprehend how international trends impact across and among
• Links between trade agreements and NFPs: trade agreements could encourage to create NFPs. NFPs could help to implement trade agreements
• Comparable "fair" framework for the timber producers in different countries, different ownership: for example, state owned, privately held
• Different direct and indirect subsidies, for example taxes
• Restricting trade to stimulate local processing industries (mixed performance): lessons for interventions to incentivise SFM?
• Sustainable Development is an objective of the WTO, as stated in the preamble to the Marrakech Agreement
• Free Trade: increases demand (products, raw materials); increases value for forests; increases the level of management; SFM
• WTO rules to be looked at:
• subsidies
• TBT
• government procurement
• Doha negotiation regarding environmental goods and services
• Trade agreements should set and/or clarify rules.
• SFM relationships should be addressed at a lower level, but within the "rules"
• Trade Agreements - WTO clarity on:
1. Certification
2. Payments for Env. Services
3. Public procurement policies
4. Bilateral agreements against illegal logging
• Clarification on formal synergies between international forests and biodiversity policies and free trade policies
• Trade restrictions: log export bans do not usually slow down logging but do reduce welfare. Need to develop a clear position on this
• Restrictions related to illegal trade need careful consideration
• Same for public procurement
• Certification/Labelling: opportunity or restriction for some market access denied as NOT certified although sustainably managed
• Preference for any given scheme (public procurement/marketing) - Trade restriction/Non-tariff barrier - Anti-competitive/unfair advantage?
• Link to SFM? Less value to natural forests - may result in conversion to plantations or other economic uses
• What happens if country X decides on an interpretation of international law and concludes that country Y is in violation and decides not to import forest products any more?
• Cooperation to include forestry (SFM)
• Need to develop practical and fair ways of full-cost internalisation for wood and competing materials, which must be WTO-compatible
• Trade agreements allow each member to set its own level of protection of plant life provided it is not discriminatory
• Agreements at international and national levels
• Adopt mechanisms to support C.I.T.E.S
• Trade agreements and trade restrictions are highly inefficient and largely ineffective approaches to achieve national resource policy objectives. MEAs with trade measures have, in some circumstances, been effective
• Bilateral Agreements - Enforceability
• Development of bilateral trade agreement (like one between UK and Indonesia (Norway & China)) would be easier to develop and effective than a multilateral trade agreement
• Is it a trade restriction if a government obliges itself to use only one certification system in its public procurement policy?
• Unilateral actions by local governments and municipalities (procurement)
• Investment rulers in trade agreements have to be analyzed (f.e. non-discriminatory national treatment)
• Mahogany inclusion on C.I.T.E.S is a trade barrier to those who produce it in sustainable terms
• The use of trade restrictions to promote SFM is unlikely to be effective and will be generally counter to broadly-agreed economic, social and environmental goals and objectives
• Trade agreements may include (be based on) measurable performance indicators (and thresholds) for SFM (including environmental, social, economic attributes)
• Incorporating "soft agreements" including generalized measures and targets into trade agreements as performance elements is a bad idea