The expert consultation entitled "Trade and Sustainable Forest Management - Impacts and Interactions" was organized by the Food and Agriculture Organization (FAO) of the United Nations and was held at FAO Headquarters in Rome from 3 - 5 February 2003. Seventy three experts from governmental institutions, the private sector, NGOs and the research community from 26 countries came together in their personal capacity.
The objective of the expert consultation was to contribute to a common understanding on how current developments in trade policies and their implementation impacts on sustainable forest management and how efforts in sustainable forest management are changing trade patterns. In order to achieve the objective, participants approached the topic in a comprehensive way based on an analysis of a broad variety of issues. The meeting was not expected to come to agreed results, but was rather aimed at providing a forum to discuss issues related to trade and SFM in an open and informal manner.
Presentations and discussions in plenary during the first day included3:
• current debates on trade and forest management
• global trends in trade in forest products
• public policies as well as private sector and NGO initiatives
• trade restrictions and trade agreements
• links between trade, finance and industrial structure
• links between governance and trade in forest products
• cross-sectoral policy impacts
• trade policy and patterns of forest land-use
• new markets for environmental services
Four working groups convened during the second day of the consultation and discussed key issues. The plenary and the working groups provided a forum to exchange ideas and to analyse trends and developments in further detail without necessarily aiming to reach consensus on the subjects discussed. The preliminary outputs of these working groups were presented and discussed in plenary on the third day.
The first working group on "Trade Measures and Policies" exchanged views on how to put in place more comprehensive policies that might foster sustainable forest management. The working group considered policies with both direct and indirect linkages to trade, such as poverty reduction, environmental services, public procurement and others. Trade-related instruments and mechanisms such as certification as a market-based instrument and their inherent social, and environmental standards, were discussed.
The working group then sought to identify the more important linkages between trade and forest-related policy processes at different levels. Improved information sharing between trade and forest policy processes was identified as one important area, as well as increased transparency and a better common understanding of the issues at stake. It was noted that trade agreements, such as WTO rules, recognise the principle of sustainable development, but clarification of the role of such provisions for SFM was felt to be needed. The definition of the term "trade restrictions" varied considerably and their justification, also with regard to the local community level was left open for further discussion. In the discussions on the current development of bilateral agreements to address illegal logging and timber trade, its interrelation with national sovereignty in forest management, conservation and development was also considered. The group concluded that a wide range of issues needs further consideration and that the potential of trade and related agreements for SFM continues to be an important, but controversial topic.
The second working group on "trade, finance and industrial structure" assessed current trends in the consolidation of resource ownership, processing facilities, distribution networks and consumer groups for different sub-sectors of the forest industries. Pulp and paper, solid wood and timberland investment companies in boreal, temperate, tropical and subtropical regions were the subject of discussion.
The view that the tropical solid wood sub-sector faced more severe challenges in terms of its economic competitiveness, social acceptability and ecological sustainability was discussed. The fragmented industrial structure and varied ownership patterns of this sub-sector were taken by some participants to be indicative of the current state of forest management, but not substantially responsible for the difficulties faced in enhancing sustainable management in the sector. Some causal factors were also addressed, such as the lack of profitability of the sector, due to ecological characteristics, price competition from 'illegal' timber sources and substitute materials, and the high risk associated with political and insecurity of tenure, compounded by inadequate insurance provision.
With a view to strengthening the potential for sustainable forest management, the group discussed the current emphasis on capturing a greater spectrum of forest values through markets for environmental services, and the continued efforts by companies to improve industrial efficiency through technological investment. The need for stakeholders to meet to discuss and facilitate financing for natural forest management in the tropics was highlighted by various participants.
It was debated whether or not the current adversarial relationship between the private sector and some major international NGOs needed to be overcome to make way for a more constructive dialogue. It was further suggested that concerted efforts should be made to improve public relations and promote the renewable nature of wood in comparison with competing substitutes.
The third working group on "Governance and Trade" decided to concentrate on two general contexts: (i) `production for export' context - based primarily on the group's Latin America and West-Central Africa case experience; and (ii) `consumption of imports' context - based primarily on the group's European case experience.
The group discussed the interactions between forest products trade and governance which were viewed as critically dependant, but also as often indirect, diffuse and/or weak. The impacts of agricultural and oil trade were considered to be often greater than those of forest product trade. It was felt that improved research and analysis, as well as monitoring, should go hand in hand with institutional strengthening and improved internal regulations. Decentralisation and the way in which policies are established were discussed, including regulations on foreign direct investment. Some participants felt that further trade liberalization should not be promoted without prior establishment of an effective regulatory regime at the national level.
Policy actions, institutional reforms and their implementation in situations where trade and governance are not mutually supportive might cause displaced impacts which could be hard to predict and may prejudice one group against another. It was proposed that trade agreements and major trade policies changes could possibly be preceded by a sustainability impact assessment. Some participants were of the view that national forest policy processes, such as NFPs could assist in overcoming problems in governance, trade-SFM relationships and, in particular, land ownership and access to the resource. Some participants also suggested that some fundamental principles for actions shaping trade in support of improved forest governance should be identified like transparency, inclusive participation in decision-making processes and public debate
The fourth working group on "extra-sectoral influences and the environment" analysed the impact of major extra-sectoral influences on SFM and trade in forest products and discussed the potential of environmental forest services in international trade.
Relevant sectors influencing forest activities such as agriculture, finance and investment, technology, demand in forest products and infrastructure have been identified and discussed. The analysis of these influences has shown that they affect the forest sector as a whole rather than being specific to trade in forest products. General trends are difficult to assess and need to be addressed in their specific context. Cross-sectoral linkages hinder the identification of key opportunities and limitations for SFM. Further research is needed in order to verify how the direct influences identified affect trade in forest products and services.
Key forest services potentially tradable on the international level are watershed protection, carbon sequestration/storage, biodiversity and recreation. At the local and national levels also other forest services can be important and could be valued to support sustainable forest management. Most of these services could and should complement the production of and trade in wood and non-wood forest products in the context of an integrated production system on a landscape/ecosystem level.
The plenary discussion of these issues following their presentation on the third day resulted in a rich debate amongst the diverse range of participants, revealing diverging views and different ideas. While the meeting had deliberately not sought to come to a consensus on these sensitive topics, there was considerable interest in some of the promising ways forward identified by the working groups. The encouraging interchange achieved in the working groups underlines the importance of an enhanced dialogue amongst constituencies to continue to inform and shape the debate on trade in forest products and services in the promotion of sustainable forest management. The plenary discussions indicated that there is some interest in international policy processes relating to forest products trade and those on SFM being receptive to take up the findings of this expert consultation.
Continuing to build on research findings of the recent past and extending the process of meaningful engagement with the many actors and their institutions will foster the common understanding on the impacts and interactions between forest products trade and sustainable forest management.
The outcome of the expert consultation portrayed the wide range of issues and views discussed and presented during the consultation. However, considerable research, monitoring and debate between interest groups and constituencies need to be undertaken. This expert consultation showed the constructive and positive spirit of communication and cooperation on a sensitive topic.
2 Co-Chairs of the expert consultation were Mr Amha bin Buang, Assistant Director, Economic Information and Market Intelligence, International Tropical Timber Organization (ITTO) and Mr Wulf Killmann, Director, Forest Products Division, FAO.
3 The items are not listed in order of priority.