Trade restrictions have important impacts on exporters. The difficulties they impose apply to exporters in both developed countries and developing countries. They also apply to those seeking to export to both developed and developing countries. The type and effect of different restrictions vary considerably, and are very product and country specific.
Tariffs: Although generalized statements are difficult to make, it is clear that in developed countries most tariffs on forest products are currently generally quite low (less than 5 percent for most products) and only have a relatively limited impact on imports. There are, however, some significant exceptions to this statement, both in terms of countries and products. Wood-based panels (especially plywood), some value-added products, and various types of paper products have rates between 10-15 percent in several countries.
Tariffs are both country and product specific, and whether they create problems depends very much on who the exporter is and who the importer is. It is difficult to state that any particular country is good or poor in this respect. Most countries are a mixture, with some products having low rates and others higher rates. Only a small number of countries, developed or developing, have low tariffs on almost all products - e.g. Singapore, China Hong Kong, and to a lesser degree Taiwan Province of China and the Republic of Korea. Tariffs are currently substantially higher in most developing countries than in developed countries.
Many exporting countries are, however, able to avoid full rates by benefiting from special preferences which apply to specified countries. Members of regional groupings get benefits from others in the group, and some countries give special rates to countries that they have close trade or political ties with - e.g. NAFTA (North American Free Trade Agreement), ASEAN (Association of Southeast-Asian Nations), European Union-ACP (African, Caribbean and Pacific Group of States), New Zealand-Australia, Commonwealth countries, etc. - while most (but not all) developing countries get the benefits of the Generalized System of Preferences (GSP).
When the Uruguay Round commitments are fully implemented, tariffs in developed countries on many products will be reduced to very low levels, or completely eliminated. Even before they are fully implemented, negotiations for further reductions may have already begun if the proposed "Millennium Round" of WTO multilateral trade negotiations gets underway. In addition, regional agreements are likely to exert further downward pressure on tariff rates. In developing countries some reductions will result, but not to the same degree. In almost all countries tariffs will continue to come down so that they become less significant. The gains will be country-specific, being limited to certain products in particular markets, with some countries continuing to maintain high tariffs on some, but not all, of their products. Wood-based panels (especially plywood) and some value-added products will continue to face greater tariffs than most other products, and thus future gains there are likely to be much greater than for other products.
Non-tariff measures (NTMs) are much more difficult to evaluate, but in recent years appear to be of more significance than tariffs. The main reason that evaluation is problematic is because it is extremely difficult to determine whether the measures that exist are being used to restrict trade or for other legitimate reasons. The future net effect of NTMs on individual countries will vary, depending on the products, the trade partners involved and the commitments these partners have made and will make, individually in the various negotiations. At least in the future NTMs will be subject to more scrutiny and control than at present. Individual NTMs do not appear to be of major significance, but there are much greater difficulties when a number of measures exist together, and where tariffs are also present. Non-tariff barriers (NTBs) are declining in some cases, but increasing in others. However, even in the more liberal situations the uncertainty created can inhibit exporters.
They are more likely to continue to create difficulties, and thus will need continual attention and pressure to ensure they are not used as disguised barriers. In particular, measures such as health and technical standards create problems in specific situations - a situation that will continue. The level the standards are set at, and the way in which they are administered, will continue to require attention. This is an aspect which may be included in the next round of multilateral trade negotiations. Forestry would benefit most from any further progress on strengthening the rules in the SPS and the TBT Agreements to limit or remove the ability of non-tariff measures to be used as trade barriers.
Strenuous efforts should continue to be made to identify where difficulties exist or may arise in the future, analyse their impacts, and ensure that they are not discriminatory and trade restrictive. Efforts will continue to be needed to combat excessively restrictive practices, and also to develop appropriate positive responses which address the legitimate goals of some of these measures.
Trade impediments such as those connected with environmental issues, particularly those which attempt to use trade controls to encourage sustainable forest management (certification, eco-labelling, CITES [Convention on International Trade in Endangered Species of Wild Fauna and Flora], etc.) are currently relatively limited in their impact, but appear to have the potential to cause increasing difficulty in some markets. All of these are actions taking place around environmental issues. Some of them deal with transport, processing and consumption issues, while others relate to the method by which the forests are being managed. While technically not NTBs, the effects of these and their purpose is to all intents and purposes the same. They are currently having an impact on trade levels and patterns in a number of areas.
The exact effect and direction in which these will move is difficult to predict with any real certainty. It will be heavily dependent on which markets institute them, the degree of support that is given by consumers, legislators and traders, and the extent to which harmonization or at least mutual recognition of different practices is achieved. While many have valuable objectives, they can also have undesirable effects. They are difficult for exporters to react to since they are often based on issues which are difficult to either prove or disprove. Another factor which makes them especially troublesome to exporters is that they are currently outside international trade rules. Inclusion of issues connected with the environment in a new round of multilateral trade negotiations might result in a clearer focus on aspects that are of interest and concern to forestry.
Although the effect on trade of most of these trade impediments has been limited to date, they are generating a considerable degree of market uncertainty in many markets. As an important step in trying to avoid the detrimental effects of these measures, countries and companies must ensure that sound forest policies exist so that buyers can be confident that the products they are dealing with come from soundly managed resources.
As an overall assessment, in general tariffs are not a major problem, but for specific products in some countries they can be significant. NTMs are more difficult to assess, but some appear to create considerable difficulties. Trade impediments are currently a difficulty in some situations, but seem likely to create greater difficulties in the future. Since they are in general outside the scope of international rules and negotiations they require considerable attention. Although some of these measures have the potential to have positive influences in many markets, and many companies see them as a useful marketing tool for increasing their market share, for others they have the potential to act as NTBs. The challenge is to develop systems which retain the positive elements, while avoiding the negative effects.
Perhaps the greatest problem, and a continuing difficulty, comes from the fact that a number of different trade restrictions apply at the same time - tariffs, NTMs and impediments. Thus, even where individual barriers may not be of major consequence, collectively, the effect may be much more severe. Both recognition of this cumulative effect and an understanding of the underlying purposes of many measures which have an indirect impact on trade could be usefully considered in a new round of multilateral trade negotiations.
Although in general tropical countries are not singled out for more difficult treatment than non-tropical countries, there are certain exceptions to this. Typically the same rules and regulations apply to each. There are, however, areas in which it is more difficult for them to meet the specified requirements, some where they face higher tariffs or requirements, and some where they are specifically targeted. The latter is particularly true of those that fall under the category of trade impediments, such as in the regulations of municipalities. This is an area where tropical countries appear to be facing much greater difficulties than non-tropical countries. Tropical timber producers are all developing countries and as such they face additional difficulties - many have less human and financial resources, expertise, or opportunity to keep up with changing rules and regulations. They also often have less influence in negotiating processes.
Although many restrictions are being reduced, trade barriers will continue to be one of the many problems that exporters of forest products must overcome or adapt to for some time to come. Trade barriers exist for a variety of reasons and these reasons, including the protection of domestic industries, will not disappear overnight. This applies equally to developed and developing countries.
