Session 1: Forestry in Asia and the Pacific — overview

Mette Loyche Wilkie ¹

The Global Forest Resources Assessment 2005, led by the Food and Agriculture Organization of the United Nations and based on reports from 229 countries and territories, highlighted that globally the rate of deforestation was continuing at an alarming rate, but the net loss of forest is slowing down due to planting of new forests and natural expansion of forests in some countries. In Asia and the Pacific, a net loss of forest area in the 1990s was turned into a net gain in forest area for the period 2000 to 2005. This paper examines these trends in more detail by looking at intraregional differences, trends in selected countries, key drivers of deforestation and afforestation, innovative incentive schemes and the availability and reliability of existing information in an attempt to answer the following questions: "What do we know about the current state of the forests in Asia and the Pacific?" and "What do past trends and existing goals and opportunities tell us about the likely future trends?"

Keywords: Global Forest Resources Assessment, deforestation, afforestation, Asia and the Pacific, trend analysis

Introduction

The title of this paper is adapted from a recent article written by Peter Duinker from Canada in which he describes current efforts at developing different scenarios for the future state of Canadian forests (Duinker 2007).

The paper aims to answer the following two questions:

• What do we know about the current state of the forest resources of Asia and the Pacific?
• What do recent trends and existing goals and opportunities tell us about the likely future trends?

Methods

Most of the data in this presentation are based on the results of the Global Forest Resources Assessment 2005 (FRA 2005) led by FAO. More than 800 people contributed to FRA 2005, including forest inventory specialists in 172 countries and the teams they assembled in order to prepare the national reports that formed its backbone. The methodology used is described in detail in the FRA 2005 main report (FAO 2005).

Information on the area of oil-palm, soybean and sugar cane harvested annually was extracted from FAOSTAT, which is based on information supplied by individual countries. Information on national goals related to forest area was obtained from press releases and government Web sites.

The figures on forests presented for Asia and the Pacific in this paper exclude the Russian Federation, although some of its forests geographically fall within Asia. Regional totals are further broken down by four subregions as follows:

East Asia: China, Democratic People"�s Republic of Korea (DPRK), Japan, Mongolia, Republic of Korea.

South Asia: Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan, Sri Lanka.

Southeast Asia: Brunei Darussalam, Cambodia, Indonesia, Lao PDR, Malaysia, Myanmar, Philippines, Singapore, Thailand, Timor-Leste, Viet Nam.

Oceania: American Samoa, Australia, Cook Islands, Federated States of Micronesia, Fiji, French Polynesia, Guam, Kiribati, Marshall Islands, Nauru, New Zealand, Niue, Northern Mariana Islands, Palau, Papua New Guinea (PNG), Pitcairn, Samoa, Solomon Islands, Tokelau, Tonga, Tuvalu, Vanuatu, Wallis and Futuna Islands.

Discussion

Extent of forests in Asia and the Pacific and their characteristics

Globally, forests cover 30 percent of the total land area or just under 4 billion hectares. The forests of Asia and the Pacific together account for about one-fifth of the world's forests and cover around 26 percent of the land area in the region, or 734 million hectares. Their distribution is shown in Figure 1.

Figure 1. Distribution of forests and other wooded land in Asia and the Pacific

East Asia currently contains the largest area of forest (245 million hectares), followed by Oceania (206 million hectares), Southeast Asia (204 million hectares) and South Asia (79 million hectares). Two countries, China and Australia, account for half the forest area of the region and the top ten countries account for 64 percent of the regional total. The remaining 36 percent of the forest area is divided among 37 countries and territories (Figure 2).

Figure 2. The ten countries with the largest forest area in Asia and the Pacific, 2005

Ten countries and territories reported to FRA 2005 that forests cover more than 65 percent of their total land area; seven were in Oceania, with the Federated States of Micronesia, American Samoa and Palau topping the list with 90.6 percent, 89.4 percent and 87.6 percent respectively.

Seven countries and territories reported that forests cover less than 10 percent of their land area, of which two (Nauru and Tokelau) reported that they have no forests. Marshall Islands was the only reporting unit with no forest area estimate.

Sixteen percent of the forest area is classified as primary forest, with no visible signs of past or present human activities. This percentage is lower than the global average of 36 percent due to high population density and the absence of large forest massifs such as those found in the Congo Basin, the Amazon region and the boreal forests. More than half of the forests are naturally regenerated but with visible signs of human activities, while 18 percent are intensively managed forests of native species and 9 percent are classified as forest plantations — primarily of introduced species. The percentages of forests classified as intensively managed and as forest plantations are both more than twice as high as the world averages of 7 and 4 percent respectively reflecting the long tradition of forest management and afforestation in the region.

The forests of Asia and the Pacific are increasingly being conserved and managed for multiple uses; they are playing crucial roles in mitigating climate change and in conserving biodiversity and soil and water resources. Thirty percent of the forest area has protection of soil and water resources or conservation of biological diversity as the primary function with another 29 percent designated for multiple use (Figure 3).

Figure 3. Designated primary functions of forests in Asia and the Pacific, 2005

Deforestation and forest area change, 1990—2005

Deforestation is continuing at an alarming rate at the global level, but due to concerted efforts to plant new forests and to natural expansion of forests on abandoned agricultural land in some regions, the annual net loss of forests is decreasing. At the global level, the net change in forest area from 2000 to 2005 was estimated at -7.3 million hectares annually, down from -8.9 million hectares per year in the period 1990 to 2000. However, the world is still losing an area of forest equivalent to the total area of Bhutan, Fiji and Brunei Darussalam combined each year — or 200 km² per day. The largest net losses of forests are taking place in Africa and South America, while the area of forests in Europe is continuing to increase (Figure 4).

Figure 4. Annual net change in forest area by region, 1990—2005

Asia, which experienced an average net loss of around 800 000 hectares per year in the 1990s, reported an average gain of around 1 million hectares per year in the last five years. These numbers include the forests of West and Central Asia and exclude Oceania. However, the same trend is evident for the Asia—Pacific region as a whole, where a net loss of 1.3 million hectares per year in the 1990s was converted into a net gain of more than 600 000 hectares per year in the period 2000 to 2005 (Table 1).

Table 1. Extent and change of forest area by subregion, 1990—2005

Overall, Asia and the Pacific have lost around 10 million hectares of forest between 1990 and 2005 or 1.1 percent over 15 years. The global average is about 3 percent for the same period. However, there are very large differences between the four subregions. While the forest area in East Asia increased by 37 million hectares between 1990 and 2005, the forests of Southeast Asia decreased by 42 million hectares during this period. Oceania also experienced a net loss of forests (six million hectares), while the area of forests in South Asia in 2005 is slightly larger than in 1990 (an increase of about 2 million hectares) — Figure 5.

Figure 5. Trends in forest area by subregion, 1990—2005

At the national level, the differences are even more pronounced. Figure 6 shows the annual rate of change by country or area for the period 2000 to 2005 while Table 2 presents the changes in forest area by country, subregion and region for the periods 1990—2000 and 2000—2005.

Figure 6. Forest change rates by country or area, 2000—2005

Looking at the ten countries with the largest forest area (Figure 7), it is evident that China is the main reason why the forest area in the Asia—Pacific region is showing a net increase, while Indonesia and Myanmar, followed by Australia have reported the largest losses in terms of number of hectares. India, Japan and Thailand show no or fairly limited changes over the last five years.

Figure 7. Annual change in forest area change in the ten countries with the largest area of forest, 2000—2005

Tables 3 and 4 list the five countries with the largest net annual losses and net annual gains in forest area. Most, but not all of them are among the top ten countries in terms of forest area.

Table 2. Change in forest area in Asia and the Pacific, 1990—2005

Data source: FAO, FRA 2005.
Note: The 1990 figure on the extent of forest for Guam is an FAO estimate based on
information provided for 2000.

Table 3. Five countries with largest annual net loss in forest area, 2000— 2005

Table 4. Five countries with largest annual net gain in forest area, 2000— 2005

Forest area changes 2005—2020: the business as usual scenario

Figure 8 shows the "business as usual" scenario — a linear extrapolation of the trends for the period 2000—2005 to 2020. Assuming that the estimates of the forest area in 2000 and 2005 are accurate and that the rates of gain or loss continue at the same rate as in the last five years, then the result is a larger forest area in 2020 than today — and this area will be 5 million hectares larger than the forest area in 1990.

However, the forest area of Southeast Asia will decrease quite dramatically over the next 12 to 15 years, while that of East Asia will increase even faster.

Figure 8. Forest area 2020. Scenario 1: business as usual

Key drivers affecting forest area changes

Some of the drivers that may affect the business as usual scenario include the following — for ease of reference referred to as the "5 Ps":

1. Population pressure
2. Prosperity
3. Profits
4. Productivity
5. Policies and politics

High population pressure results in an increase in demand for land for agriculture, habitation and infrastructure. Combined with prosperity, this generally leads to increased demands for forest products and services and, in many cases, to a change from primary production. The forest lands may thus be subject to less pressure and the forests themselves valued higher as prosperity increases. A recent paper by Kauppi et al. (2007) looked at the 50 most forest-rich countries in the world and concluded that no country with a GDP of more than US$4 600 per capita showed a decrease in the total growing stock of forests.

Profits from alternative land uses, including ranching and crop production, often determine whether forests are conserved or converted, while increased productivity in agriculture and plantation forestry may alleviate the pressure on natural forests.

Policies, be they concerned with ensuring self-sufficiency in rice production, the setting aside of forested protected areas, large-scale plantation programmes or a possible future mechanism providing incentives to reduce deforestation under the United Nations Framework Convention on Climate Change (UNFCCC) will all have an impact on the future trends of forest area and the availability of forest resources.

Two examples serve to illustrate some of the external and internal drivers of change.

Possible impacts of agricultural policies: External factors such as population pressure, prices of agricultural products and agricultural policies often play a decisive role in shaping the trends related to forests. There is currently a rising concern about the possible impact of expanded cultivation of agricultural crops such as oil-palm on the forest area in Asia and the Pacific.

Figure 9 shows the rapid increase in the area of oil-palm production as reported by selected countries to FAO. Malaysia and Indonesia are, by far, the world's largest producers of palm oil and Thailand is the third largest producer in Asia and the Pacific. While the annual increase in the area harvested in Malaysia now seems to be slowing down, Indonesia shows a continuous rapid increase. Thailand is also increasing its area, but at a much lower level.

Figure 9. Trends in oil-palm production (harvested area), 1990—2006

While palm oil has been used traditionally for cooking purposes, much of the recent expansion in the area harvested is caused by demands for palm oil as a biofuel. With the current interest in biofuels how will this affect the forest area in these and neighbouring countries?

Figure 10. Annual changes in area of forest and selected agricultural crops

Will the next assessment show that the net loss of forest area in the period 2000 to 2005 increased for these three countries? Or is there no correlation between the two trends? This is difficult to say. However, the apparent constant rate of forest loss is due to the lack of a monitoring system providing data at more regular intervals in Indonesia, which accounts for the major part of the net forest area loss. On the other hand, the expansion of these three crops would, if all of these areas were established on former forest land, explain less than 25 percent of the current annual loss of forest area. So while future forest resource assessments may show a correlation, the expansion of agricultural crops for biofuel is unlikely to be the sole driver of change.

Possible impacts of forestry policies: On the positive side, a number of countries have reported an increase in forest area over the last 15 years. Is this a temporary phenomenon or can they continue the existing rate of expansion until 2020?

Three targets listed by the governments of China, India and Viet Nam are provided hereunder:

If China continues to expand the forest area at the same rate as in the last five years, the target of 23 percent forest cover will be reached well before 2020. Further afforestation efforts may then be significantly reduced unless the target is then revised upwards. Viet Nam may also reach its target on time given recent trends, while India (depending on the definition of tree cover) will need to increase its afforestation efforts to meet its target.

Forest area changes 2005—2020: an alternative scenario

Incorporation of these targets into the trends shown earlier, while assuming that the current rate of change in all other countries remains the same as it was for the period 2000 to 2005, results in the second scenario shown in Figure 11. As shown, the total forest area will then be reduced by 2020. It will still increase in East Asia, but at a slower rate, while the increase in South Asia will be faster than before.

Figure 11. Forest area 2020. Scenario 2: incorportion of afforestation targets

Figure 12 compares the two scenarios. The dotted line represents business as usual based on the trends from 2000 to 2005 and the solid line takes the afforestation targets into account.

At the regional level, the change in forest area is fairly small in both scenarios. However, this should not be a cause for complacency as the variation at the subregional and national levels is still large.

Figure 12. Forest area 2020: comparison of two scenarios

Data availability and quality

How good are the data on which these scenarios are based?

The vast majority of countries in Asia used the results of a relatively recent forest inventory to report on the forest area for FRA 2005, while many small island states and territories in the Pacific relied either on remote sensing or expert estimates (Figure 13).

The average year of the latest assessment was 1997 by country and around 2001 if weighted by the forest area.

Most countries had more than one inventory over time for the change analysis, but they were not always completely compatible. Forecasting was in most cases done through linear extrapolation — in some cases including more recent statistics on forest plantations.

While not perfect, the information availability and quality was fairly good overall — and considerably better than in some of the other regions, such as Africa and the Caribbean.

Changes in forest characteristics

The size of the forest area is perhaps not the best — and certainly should not be the only — indicator of the extent of forest resources.

When analysing forest characteristics, it is clear that substantive changes have taken place in terms of the composition of the forests of Asia and the Pacific since 1990.

While the region has gained more than 20 million hectares of forest plantations and intensively managed forests, it has lost 27 million hectares of primary forests. These have not necessarily disappeared but have been subject to human activities such as selective logging and are therefore no longer classified as primary forests (Figure 14).

Tables 5 and 6 show the changes in extent of primary forests and plantations respectively. Particularly worrying are the fast rates of loss of primary forest in Indonesia, Papua New Guinea, Mongolia, Cambodia, Viet Nam and DPR Korea and the lack of information from a number of countries including Bangladesh, India, Myanmar, Pakistan and many of the Pacific islands.

Large increases in the area of forest plantations are notable in China, Viet Nam, India, Indonesia and Australia.

Some of the forest areas classified as semi-natural forests have been established by planting of native species, while others have been established by assisted natural regeneration. If we look at all planted forests in the Asia—Pacific region, they now equal an area of 130 million hectares — or 10 million hectares more than the area of primary forests.

Do we wish to reinforce or change these trends?

Table 5. Change in extent of primary forests, 1990—2005

Data source: FAO, FRA 2005.

Table 6. Change in extent of forest plantations, 1990—2005

Conclusions

There are many drivers affecting the extent of forests and their management and use. Many are external and may be difficult to influence. However, concerted efforts to reduce rates of deforestation and establish new forests through afforestation transformed a net loss of forest area in Asia and Pacific as a whole in the 1990s into a net gain in forest area in the period 2000 to 2005. This is mainly due to large-scale afforestation in China.

Demands for timber, agricultural products and biofuels may place increased pressure on the forests in this region, while a possible incentive scheme to reduce carbon emissions due to deforestation may provide additional funding needed to significantly reduce the current net loss of forests in some countries. Ambitious forest cover targets have been set by a number of countries and progress towards them is encouraging. However, they will not negate the loss of natural forests elsewhere.

The author predicts that forest area in Asia and the Pacific in 2020 may well be more or less the same as the area existing in 1990 in terms of number of hectares. However a large variation between countries and regions in terms of losses and gains in forest area will remain and there will be very dramatic changes in terms of the composition of these forests with the area of planted forest continuing to increase and the area of primary forests continuing to decrease during the next ten to 15 years or more.

Predictions about the future depend on the availability and quality of data on the current status and recent trends. While we have relatively good data on forest area and net changes over time, we still know far too little about the actual deforestation rates — and the information on the status and trends of primary forests in the region is poor.

It is hoped that by 2020 we will have not only reduced the current rates of deforestation and forest degradation, but also we will have reliable and comprehensive data to prove this.

Bibliography

Duinker, P. 2007. Whither the forests of Canada? The SFM Network's Forest Futures Project: Tomorrow's Forests. Sustainable Forest Management Network Newsletter, Summer 2007. (Also available at http://www.sfmnetwork.ca/docs/e/TF%202007%20Summer%20English%205%20final.pdf)

Food and Agriculture Organization. 2005. Global Forest Resources Assessment 2005. Progress towards sustainable forest management. FAO Forestry Paper 147. Rome.

Kauppi, P.E., Ausubel, J.H., Fang, J., Mather, A.S., Sedjo, R.A. & Waggoner, P.E. 2007. Returning forests analyzed with the forest identity. PNAS (November 2006) 103: 17574— 17579.

¹ Senior Forestry Officer, Global Forest Resources Assessment, Forestry Department, Viale delle Terme di Caracalla 00153 Rome, Italy. Tel: +39-06-5705-2091. Fax: +39-06-5705-5137. E-mail: [email protected]. Web site: www.fao.org/forestry/fra

Ahma bin Buang¹

Among the three tropical forest zones — the Asia—Pacific region (APR), Latin America and the Caribbean (LAC) and Africa, the APR ranks second to LAC in terms of the size of the tropical forest resource base. In spite of this, the APR is by far the leading and most dynamic zone in the production and export of primary and secondary processed tropical timber products.

Although global economic growth may in some ways be impacted by spiraling petroleum prices, the subprime credit fallout and the weakening US dollar, the demand prospects for tropical timber can be expected to remain positive in tandem with the long-term trend of expanding global production and trade in forest products. However, the extent to which the APR is able to retain and consolidate its lead in the years ahead is contingent upon its ability to effectively address the multiplicity of challenges at hand including a declining natural tropical forest resource base; high rate of deforestation and forest degradation; widespread illegal logging and trade; growing market requirements for legality and sustainability as well as product standards and specifications; increased competition from tropical timber from other regions, non-tropical timber and other competing products; and the impact of globalization.

Keywords: tropical timber, production, trade, sustainable forest management

On behalf of our Executive Director, Dr Manoel Sobral Filho, I should like to thank FAO for inviting ITTO to participate in this important conference. Let me also briefly express how honoured ITTO is to be collaborating with FAO, both bilaterally and in concert with other relevant partners, on many germane issues concerning forestry, including the ongoing APFSOS II initiative.

My presentation concerns the prospects and outlook for the Asia—Pacific region (APR) from the perspective of tropical forests and timber, with emphasis on some key aspects of utilization. In the context of ITTO, the APR is one of the three tropical forest zones, the others being Latin America and the Caribbean (LAC) and Africa. With a total Permanent Forest Estate (PFE) area of 207 million hectares, the APR ranks second to LAC in terms of the size of the tropical forest resource base. However, it is by far the leading and most dynamic zone in the production and export of primary and secondary processed tropical timber products.

For many years, the APR has consistently led the other two zones in the production of roundwood (logs) including those utilized for the production of primary products, accounting for a 55 percent share in 2006. Its corresponding shares in the production of sawnwood, veneer and plywood were 46, 59 and 84 percent respectively.

The dominance of the APR in the exports of primary tropical timber products has been more pronounced, securing a hefty share of 73 percent in 2006. Its corresponding shares in the exports of logs, sawnwood, veneer and plywood were 69, 60, 50 and 90 percent respectively.

The APR also features prominently in the production and export of secondary processed wood products, which have experienced continuous and rapid expansion since the mid-1990s. In 2006, it accounted for 67 percent or US$7.3 billion of the total value of Secondary Processed Wood Products (SPWPs) exports by all ITTO producing countries in all the three zones estimated at US$10.9 billion.

So, by all accounts, the APR's performance has been quite impressive. Of course, this performance is in comparison only with those of the other two producing zones. Even so, there are a few areas in which the APR's lead may be challenged by the advances being made in those zones; for example, progress in plantation development as well as SPWP production and exports in LAC and also the gains made by non-ITTO producers within and outside the APR, for example Viet Nam. From the global perspective, the APR's performance is much moderated by the magnitude of the production and exports of non-tropical timber products and even by the production and exports of some tropical timber products and SPWPs by ITTO consumer members, notably China, the EU and Canada.

Be that as it may, credit should be given where it is due. Given that the task of managing natural tropical forests is far more complex and demanding than that of non-tropical forests and considering the numerous challenges and obstacles tropical forest products face in the international markets, the APR's achievement is, indeed, commendable. However, the question I am posing is whether and for how long will the APR be able to maintain its present position as the leading tropical forest zone, accounting for the bulk of the world's production and exports of tropical forest products?

This question comes against the backdrop of global production and trade in forest products that have experienced significant expansion over the past decades, fueled by increased demand — especially for SPWPs — and principally on account of demographic and economic growth factors. This is reflected in the consumption and import patterns for tropical timber products in ITTO consumer countries.

In addition, many tropical forest countries are already importing wood products to supplement domestic supplies in order to cope with increasing domestic demand and consumption. Likewise, Europe has launched an initiative on mobilizing wood resources in the medium and long term. Although the prevailing spiraling of petroleum prices, weakening of the US dollar and the subprime credit fallout may have a direct impact on the housing and interior wood product markets, the demand prospects for tropical timber products can be expected to remain

positive in tandem with the long-term trend of expanding global production and trade in forest products.

While things are looking promising on the demand side, there are concerns over some key supply and trade issues that may hamper the APR's ability to keep its lead in the production and export of tropical forest products.

Most of the supply issues revolve on the APR's shrinking tropical forest resource base both in quantitative (i.e. forest loss, deforestation) and qualitative (degradation) terms. This problem is not peculiar to the APR but its rate of forest cover decline is the most acute in comparison with Africa and LAC. Although the rate is falling, deforestation and forest loss in the APR have persisted over the last decade. With their forest cover plummeting to the lowest level of 35 percent in 2005, ITTO producers in the APR are trailing behind ITTO producers in the other zones in this regard.

The ITTO report Status of tropical forest management 2005 shows that the APR leads the other two producing zones in terms of percentage share of sustainably managed PFEs (53 percent) and certified natural production PFEs (47 percent). However, the actual size of these PFEs that were sustainably managed and certified was insignificant (i.e. 9.5 percent) in relation to the total area of PFEs in the APR. Moreover, these figures pale in comparison with those already achieved by non-tropical forests.

This indicates that the tropical forest resource base of the APR is not only shrinking but much of it is not sustainably managed. Indeed, the quality and productivity of the resource base are being eroded by the combined impact of disturbances, widespread illegal logging, unsustainable exploitation, poor management, weak enforcement as well as rights and tenure conflicts. Cases concerning many of these issues in the APR are well-known and documented. The situation, if not checked, can undermine the ability of the resource base to provide continued support to the forest-based industry in the region that has so far contributed the biggest share of the world's production and export of tropical forest products.

In fact, the APR is already losing out to LAC in the development and management of tropical forest plantations. Although the total area of planted production PFE in the APR is seven times greater than that in LAC, the proportion of the area certified in the latter is eight times larger than in the former. A comparison of the contribution of productive forest plantations to the share of roundwood production in the two zones shows how LAC is outperforming the APR by relying on the productivity and efficiency of its smaller area of forest plantations as the major source of roundwood production.

Although it may have peaked, deforestation still poses a serious problem in the APR where forests remain victim not only to poverty but to development as well. The APR will have to be more effective in combating deforestation despite the complex underlying and cross-sectoral drivers involved. The crux of the problem is still the low level of financial attractiveness of sustainable forestry in relation to other competing land uses. Hence, in addition to sound policies and effective implementation, further incentives are required to prevent forests from being converted and lost. It is hoped that recent pronouncements made by APEC and the governments of Australia and Indonesia on afforestation and reforestation in the context of heightened global concern over climate change will lead to further shaping and operationalization of the concept of payments for the environmental services provided by forests as an added incentive to combating deforestation.

For basically the same reasons, the overall progress towards sustainable forest management (SFM) in the APR has been slow and was limited to only 20 million hectares in 2005 — less than 10 percent of the total area of the PFE of 207 million hectares. While some progress has been made in the areas of policy and legislative reform, as well as administrative and technical capability in strengthening forest management, the problems of full implementation are still prevalent especially with regard to illegal logging, unsustainable harvesting and effective enforcement. The APR must do more in the field of enforcement and governance to rein in illegal logging, which has remained widespread in the region despite numerous initiatives and strategies taken at the national level, supported by several international donors and NGOs. In fact, the elevation of illegal logging, high on the policy agenda of donors and consuming countries, has resulted in a shift of emphasis, focus and priority from sustainability to legality; this is an unfortunate distraction that could slow down the march towards achieving the ultimate goal of SFM.

On the issue of the APR trailing behind LAC in the development and management of tropical forest plantations, efforts by the APR in this regard have yielded mixed results even though species identification and selection are not problematic and the region has the experience and capability in the cultivation and management of these species. The main drawback seems to be the lack of a policy and incentive package and a conducive environment to attract adequate and sustained investments for the establishment of forest plantations run and managed on a large commercial scale and on a profit-oriented basis.

It is worth noting that appropriate policy measures to promote afforestation, reforestation, SFM and plantation development will entail a considerable period of gestation. While waiting for the time to reap what has been sowed, strategies of supplementing wood supply to meet increasing demand in the interim may be required for the APR. It is highly likely that the region may have to emulate Europe's effort towards mobilizing wood from sources outside forests and through recycling. Another alternative is to rely on imports, as has been successfully demonstrated by China, Viet Nam and Thailand. The key success factor for this import strategy is high efficiency and competitiveness among timber-processing industries in order to absorb and offset the costs of importing raw and intermediate materials.

Apart from the supply issues that can impact upon the APR's capacity in the production of tropical timber products, there are trade issues that can interfere with and disrupt the free buying and selling of these products in the international markets, and, thereby, affect the APR's present lead in the exports of these products.

In general, tariff issues are less problematic for forest products because most tariffs on primary products are already at low or zero levels. As the exports of processed and higher value forest products have expanded and surpassed those of primary products, attention must be placed on the reduction or elimination of tariffs on these processed products, including tariff peaks and escalation. Unfortunately, the current negotiations of the WTO Doha Round have stalled due to the impasse on the negotiations on agricultural products and have yet to be revived. In addition, there is growing concern over the impact of further trade liberalization and globalization for forest products on SFM and the environment.

In contrast, non-tariff barriers are of crucial importance to tropical forest products as many of these issues have stemmed from growing consumer concern over the legal and sustainable status of the supplies of these products. One particular worry is over the effect of evolving product standards, technical regulations and other related requirements in consuming markets that can turn into technical and non-tariff barriers to trade. Examples are those on formaldehyde emissions under the Japan Agriculture Standard and California regulations, the EU CE marking, packaging standards and building codes. There are signs indicating the revival of bans and boycotts against tropical timber, which were previously discontinued in favour of certification and verification of legality. Recent examples are the reported ban imposed by Norway on the imports of tropical timber and an unconfirmed report of a ban effected in New Zealand. These are over and above the bans and purchasing restrictions on tropical timber that have been placed by state, local and municipal authorities in Europe and the United States.

Certification is another potential impediment to trade in tropical timber, considering that certified tropical forests constitute less than 10 percent of the total area of certified forests worldwide. In line with the shift from sustainability to legality, consumer demands for verification of legality are being pushed either as an initial phase of meeting the sustainability requirement or a separate requirement in its own right. Both of these requirements are being pursued through public and private timber procurement policies designed to cut off the imports and consumption of illegal and unsustainably produced timber products. The current EU initiative of negotiating Voluntary Partnership Agreements (VPAs) with tropical timber exporting countries is seen as a precursor to legislation against the imports and utilization of illegal and unsustainable tropical timber in the continent. In addition, more tropical timber species have been included in the appendices of CITES without due regard to the issue of states lacking capacity to regulate the supply of the listed species and to effectively manage the implementation of the inclusion of the species in the appendices of CITES.

The trouble with these barriers and impediments is that they are proliferating and overwhelming tropical timber exporters; they have varying definitions and requirements for legality and sustainability that are confusing and untenable for exporters. Most of all, they tend to be discriminatory against tropical timber. As they can seriously undermine the exportability of tropical timber products, APR producers have to redouble their efforts to fight against discriminatory tendencies towards their products by insisting on a level playing field and that import requirements should apply to all timbers and competing products, all eligible schemes, certificates, labels, licences and alternative documents. They should also strive to build capacity to meet the requirements through cooperation and pooling of resources.

Over and above all of these requirements, the APR will have to contend with greater competition from tropical timber products from the other two producing zones, non-tropical timber that is strong in reliability of supply and price competitiveness and from other competing products that are non-renewable, non-biodegradable and less environmentally friendly but are not necessarily subjected to the same vigorous conditions, requirements and scrutiny that are being placed on tropical timber. There is no other way for APR exporters of tropical timber to act other than to meet this competition squarely by being more competitive themselves in terms of prices, costs and quality.

While the demand prospects for tropical timber are promising, there are many challenges that the APR needs to confront in order for it to retain its coveted position as the leading and most dynamic zone in the production and export of tropical timber products in the years to come.