|Agricultural Trade Fact Sheet|
TRADE ISSUES FOR FOREST PRODUCTS
MAIN FEATURES OF TRADEGlobal consumption of total roundwood rose from around 2 400 million m3 in 1970 to 3 377 million m3 in 1997. Despite the sizeable growth, only about 6-8 percent of the production enters international trade as primary forest products reflecting the fact that over half is used for fuelwood and charcoal, most of which is used domestically. Nevertheless, global trade has risen substantially, reaching US$135 billion in 1997 1. In addition to this, exports of secondary processed products such as mouldings, doors, furniture, etc., and those of non-wood forest products (NWFPs), such as rattan, rubber, Brazil nuts, oils and medicines, also make a substantial contribution.
Export volumes of industrial roundwood (mainly logs) have increased substantially since 1970, up almost 30 percent to 120 million m3 in 1997; sawnwood has almost doubled to 113 million m3; wood pulp has more than doubled to 35 million tonnes; wood-based panels has increased almost five-fold to 49 million m3 ; and paper and paperboard has almost quadrupled to 87 million tonnes.
Developed countries dominate both imports and exports. In value terms they accounted for about 80 percent of total forest product imports and exports in 1997. Five countries accounted for 53 percent of world trade. Only plywood exports are dominated by developing countries (70 percent of the world total). Much of the trade in forest products is within regions or between neighbouring countries. For example much of Europe's trade is within Europe, over 80 percent of the trade in Asia and Oceania is to other countries in the region, and a similar level of North American trade is within that region.
THE FUTURE: CHALLENGES AND OPPORTUNITIESA number of trade-related issues offer both opportunities and challenges for the future.
Increasing consumption: Increasing population, greater urbanisation, and rising incomes will result in continued strong growth in global consumption for most products, although at a lower rate than in the past. As a result of increased domestic demand, many countries will become less self-sufficient, or even change from being net exporters to being net importers. This will increase the need to trade in order to accommodate supply shortfalls in specific countries. Much trade will continue to be concentrated on intra-regional trade, particularly that between neighbouring countries, or those with trade agreements. In addition, the moves towards sustainable management are likely to reduce harvests, at least in the short-medium term. This will reinforce the need to trade in order to accommodate supply shortfalls in specific countries.
Trade liberalisation: Moves to liberalise trade will continue. For developing countries declining trade restrictions will reduce the protection in their own domestic markets and also result in a reduction in the preferential access many receive on export markets. In addition export restrictions such as bans, export quotas, or selective bans based on species, as well as direct charges such as export taxes or export levies, seem likely to continue to increase. The net impact on trade will vary considerably between countries and between products.
Views and positions on further trade liberalisation vary considerably. While efforts to further liberalise trade are widely supported, they are also opposed. For example many environmental groups consider that liberalisation of trade will increase consumption, dilute rather than improve forest management standards, and dismantle environmental regulations. They argue that it will increase the risk of pests and diseases being introduced into countries which currently have tight restrictions. They are also concerned that it will lead to controls on the use of eco-labelling and certification.
Environmental pressures: International trade has been affected by environmental concerns. Issues are related to the effects of international trade on the environment and, conversely, the impacts of environmental action on trade.
A variety of trade initiatives have been proposed and implemented as a response to environmental concerns. Some, such as actions relating to waste paper recycling and recovery, pollution controls, processing methods, etc., have already had an impact in some countries. They will continue to do so, and are likely to extend to other countries. Others, such as certification of forest products, listing timber species in the appendices of the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES), packaging regulations, and technical regulations and standards for product and processing methods, have had less effect to date, but seem likely to have a greater impact in the future.
Environmental pressures will continue to have an important influence on trade, both positively and negatively. Although there is general agreement that trade and environmental-related issues should be mutually supportive, there are widely differing views on whether this can in fact be achieved and, if so, to what degree.
One important issue is the extent to which environmental measures restrict trade. Other questions include whether actions that are being taken for environmental reasons and which act as trade barriers are legitimate within internationally agreed trade rules, such as under Article XX of GATT/WTO which allows certain measures which would otherwise be against its rules, to be taken "to protect human, animal or plant life or health", what exceptions are possible under Article XX, and whether boycotts or bans taken by sub-national governments for environmental reasons which act as trade barriers are legitimate within internationally agreed trade rules.
FAO ACTIVITIESThe 14th session of the FAO Committee on Forestry (COFO), inter alia, requested FAO to support workshops on trade-related aspects and on planning, monitoring, evaluation and legislation for sustainable management of all types of forests; to support national forest programmes (NFPS) and regional processes on criteria and indicators; to increase efforts on regional and global outlook studies; to monitor developments, identify opportunities and constraints posed by certification, and provide policy advice.
"The Plan of Action of the World Food Summit" commits FAO to continue assisting developing countries on trade issues and particularly "in preparing them for future multilateral trade negotiations, including in agriculture, fisheries and forestry inter alia through studies, analysis and training," namely to become "well informed and equal partners in the (negotiation) process".
FAO has an active programme on dealing with forestry trade issues, and it provides information, analysis, guidance and technical support on many trade issues. In particular it has been closely involved with questions of the relationship between trade and sustainable forestry development, including aspects of the environment and trade, and with trade restrictions and future trade negotiations. Studies dealing with trade issues have been published and papers on issues such as certification, trade restrictions and trade prospects have been presented at various meetings and conferences 2. The Forestry Department has been closely involved with the FAO series of training workshops for developing countries: "Training Course on The Uruguay Round and Future Multilateral Trade Negotiations in Agriculture".
This work will continue and intensify to reflect the growing interest in these issues by Member Countries.
1 All figures are from FAO Yearbook of Forest Products.
2 For example see "Trade restrictions and their impact on international trade in forest products", FAO, 1998; and "Trade restrictions and their future" Chapter in ECE/FAO Timber Bulletin Forest products annual market review, 1998-1999, September 1999.