WORLD TRADE ORGANIZATION
ORGANISATION MONDIALE DU COMMERCE
ORGANIZACIÓN MUNDIAL DEL COMERCIOWT/CTE/W/84
1 July 1998
(98-2620)
Committee on Trade and Environment Original:  English/
anglais/
inglés
COMMUNICATION FROM THE SECRETARIAT OF THE
INTERGOVERNMENTAL FORUM ON FORESTS
The attached background paper1 has been received from the Secretariat of the
Intergovernmental Forum on Forests (IFF).  It is being circulated to Members of the CTE in
preparation for the Information Session with Secretariats of Multilateral Environmental Agreements
on 23 July 1998.
Comité du commerce et de l'environnement
COMMUNICATION DU SECRÉTARIAT DU
FORUM INTERGOUVERNEMENTAL
SUR LES FORÊTS
La note d'information ci-jointe1 a été reçue du Secrétariat du Forum intergouvernemental sur
les forêts.  Elle est distribuée aux membres du Comité du commerce et de l'environnement en vue dela séance d'information avec les Sécrétariats des Accords environnementaux multilatéraux qui aura
lieu le 23 juillet 1998.
Comité de Comercio y Medio Ambiente
COMUNICACIÓN DE LA SECRETARÍA DEL FORO
INTERGUBERNAMENTAL SOBRE LOS BOSQUES
La Secretaría del Foro Intergubernamental sobre los Bosques ha enviado el documento de
base adjunto1, que se distribuye a los miembros del CCMA como parte de los preparativos para la
reunión de información con las secretarías de acuerdos multilaterales sobre el medio ambiente, que se
celebrará el 23 de julio de 1998.
                                                     
1 In English only/En anglais seulement/En inglés solamente.WT/CTE/W/84
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TRADE AND ENVIRONMENT IN RELATION TO FOREST PRODUCTS AND SERVICES:
AN OVERVIEW OF THE INTERGOVERNMENTAL PANEL ON FORESTS (IPF) AND
THE INTERGOVERNMENTAL FORUM ON FORESTS (IFF) DELIBERATIONS
I. INTRODUCT ION ................................................................................................................3
II. CURRENT STATUS AND PATTERNS OF INTERNATIONAL TRADE IN FOREST
PRODUCTS AND SE RVICES............................................................................................4
A. W OOD AND NON-WOOD FOREST PRODUCTS ..........................................................................4
B. D OMINANCE OF TRADE BY DEVELOPED COUNTRIES .............................................................4
C. D IRECTION OF TRADE .............................................................................................................5
D. F OREST SERVICES ...................................................................................................................5
E. T YPES OF TRADE -INDUCED ENVIRONMENTAL IMPACTS ........................................................5
F. I NTERNATIONAL TRADE AGREEMENTS ..................................................................................6
G. N EW BARRIERS TO TRADE ......................................................................................................6
III. IPF PROCESS................................................................................................................ .......6
A. B ACKGROUND .........................................................................................................................6
B. C ONCLUSIONS .........................................................................................................................7
C. P ROPOSALS FOR ACTION .........................................................................................................9
IV. IFF PROCESS................................................................................................................. ....13
V. SUMMARY AND CO NCLUSIO NS .................................................................................13WT/CTE/W/84
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I. INTRODUCTION
1. Forests have emerged as a priority on the national, regional and international policy and
political agendas. These priorities are often precipitated by concerns associated with: continued
alarming rate of deforestation as well as of degradation and decline of forests and other wooded lands
(OWL) and the resulting loss of environmental valu es; the ability to ensure that future demand for
forest products, services and environmental benefits are met in a sustainable manner; actions that
benefit from unsustainable forestry practices and constraints in international trade in forest products;
and inadequate co-ordination and integration of cross-sectoral, forest-related action at global, regional
and national levels.
2. The issue of forests has been the focus of international policy debate during the past decade.
It was a contentious and sensitive issue in the deliberations leading up to and during the
United Nations Conference on Environment and Deve lopment (UNCED). The three years following
UNCED, on the other hand, was a time of North-Sout h confidence building.  At its third session, in
1995, the Commission on Sustainable Development (CSD) once again initiated intergovernmental
deliberations on forest when it reviewed the Forest Principles and Chapter 11 of Agenda 21,
“Combating deforestation.” The result of this review was the establishment of the Intergovernmental
Panel on Forests (IPF) with a two-year mandate fo r its programme of work, including that on trade
and environment in relation to forest products and services.
3. At UNCED and through the IPF’s proposals for action, there has been a reaffirmation of the
rights of countries to manage and utilise their forests to meet their national priorities and policy
objectives. Consensus has also developed on the n eed to: manage forests and other wooded lands as
ecosystems in order to derive multiple benefits; and to develop and implement national forestprograms involving strong political commitment and participation of a range of interest groups and
beneficiaries, as a tool for cross-sectoral policy harmonisation and international co-operation.  While
there now exists a broad consensus on the principles and overarching approaches towards sustainable
forest management, it is also recognised that these pr inciples and approaches need to be applied in the
context of the economic, social, environmental and political realities and priorities of an individualcountry or region.
4. Realizing multiple benefits, by sustainable management of forests and other wooded lands,
would require cross-sectoral policy harmonisation with in a country, as well as the recognition of the
transboundary, regional and global dimensions of the consequences of forest management.
Consequently, approaches to SFM must reconcile national priorities and international considerations,
at the transboundary, regional and global levels.
5. Forests have multiple constituencies with both complimentary and conflicting interests.  At
present a range of special interest groups, institutions and instruments, interface with forests at
national, regional and global levels.  All of these pursue their specific interests, albeit of priority
concern, through narrow approaches when viewed  from the holistic perspective of management,
conservation and sustainable development of all types of forests.  Consequently the forest agenda
lacks a cohesive and comprehensive implementation framework and is pursued in a fractionatedmanner.   It is notable that most of these instruments and interests groups focus on specific functions
and outputs (i.e. “demands”) from forests, such as  biological diversity, carbon sequestration, trade in
endangered species, international trade in certified forest products etc, in a piecemeal manner and do
not adequately address cohesively the fundamental aspects of maintaining health and productive
capacity of forest ecosystems, as a whole, and to th ereby ensure that the conditions are met for forests
to sustainably “supply” a wide range of functions and outputs.
6. This paper provides a brief overview of international trade in forest products and services,
relationship between such trade and environment, emerging issues on non-discriminatory trade on
forest products and services and participation of developing countries on such trade.  Following that itWT/CTE/W/84
Page 4
provides the development of the international policy dialogues through the Intergovernmental Panel
on Forests (IPF) during 1995-97 and since then through the Intergovernmental Forum on Forests
(IFF).
II. CURRENT STATUS AND PATTERNS OF INTERNATIONAL TRADE IN FOREST
PRODUCTS AND SERVICES
A. WOOD AND NON-WOOD FOREST PRODUCTS
7. Wood is the most important commercial fore st product.  Only 6-8 per cent of world
roundwood production is currently traded.  The value of exports of primary forest products is
estimated to be almost $114 billion in 1994.  This represents about a 75 per cent increase in real terms
since 1970.  For some countries, forest products exports are major source of foreign exchange
earnings (FAO 1997).   At a global level, forestry contributes about 2 per cent to world GDP and 3 per
cent of international merchandise trade.  International trade is expected to expand continue expandingin the future.
8. Trade statistics on non-wood forest products (NWFPs) are not well established.  This may be
due to their relatively smaller volume and value in  international trade compared with those of wood.
Recent developments, however, show evidence of the emerging importance of NWFPs, including
increased revenues from international trade.  The relatively smaller importance of NWFPs ininternational trade may also be attributed to the current system of classification of products that are
regarded as NWFPs.   While for wood, timber from forest plantations is regarded as a product of
forests, the NWFPs from tree plantations such as rubber latex and palm oil, which generate billions of
dollars of foreign exchange for many countries in South-East Asia, are classified as agricultural
products.
B. D
OMINANCE OF TRADE BY DEVELOPED COUNTRIES
9. Despite higher production of roundwood in developing countries, international trade is still
dominated by the developed countries.  In value terms, developed countries accounted for 81 per cent
of total exports and 79 per cent of total imports in 1994.  Their greatest dominance (over 90 per cent)
lies in pulp and paper products.  In 1995, five countries accounted for 55 per cent of world exports,and ten accounted for 70 per cent.  The top two exporters, Canada and the United States, were
responsible for almost one third of the global export market.  Similarly, five countries accounted for
48 per cent of global imports and ten countries for 66 per cent.  The top two importers, the United
States and Japan, comprised nearly one third of the global import market (Bourke 1998 and Table 1).
10. The trade in forest products is highly regiona lised within three important trading blocs, the
Pacific Rim, North America and Europe (mainly We stern Europe).  Within each trading bloc the
major importers are mainly developed countries, such as Japan, the United States, Canada and theEuropean Union. However, in recent years developing countries particularly in Asia have been
increasing their share of global imports (Table 1).  Much of this demand reflects the increased growth
in consumption of industrial wood products in developing countries. Newly industrialized countries
with limited forest resources have also been increasing their imports of logs and semi-finished wood
products as raw materials for the export-oriented processing industries.  However, developingcountries such as Indonesia and Malaysia have emerged as dominant world exporters of certain forest
product exports, particularly in plywood exports where Indonesia with 46 per cent share in export
market and Malaysia with 17 per cent dominate.  Other developing countries, notably Brazil, Chile
and the Asian newly industrialising countries, are beginning to have an impact on the international
trade in wood pulp and paper products.  In general, the trade in forest products has shifted towardsvalue-added processed products.WT/CTE/W/84
Page 5
11. Owing to rapid industrialization in the East Asian region, trade in tropical timber products
among countries in this region has surpassed by far the trade with their traditional European and
North American partners.  The Republic of Korea, China and Thailand have now emerged as major
buyers with a combined share of about 33.6 per cent of total world import.  By including Japan, the
market share of East Asian countries is further increased to about 76.7 per cent.  Countries of theEuropean Union account for only about 13 per cent of the total market share.
C. D
IRECTION OF TRADE
12. Some changes has been noticed in recent years reflecting wide range of actors, including:
changes in consumption patterns, changes in reso urce availability from natural forests; investment
decisions; development of new technologies; mark et preferences; political, economic and social
changes; policy adjustments; and recent attitudes to environmental issues.  Some general trends are:
- Considerable expansion of exports of most products, with increasing numbers of both
exporters and importers;
- A decline in log exports and an increase in processed products in developing
countries;
- Substitution of softwood products for hardwood products in a number of markets; and
increased overall trade in paper and paperboard; and
- A greater diversification of markets, and increasing intra-regional trade (e.g., EU,
NAFTA, etc.).
D. FOREST SERVICES
13. Conventionally, services provided by forests and forest land were reflected only as an
intangible value of forests.  Owing to the increas ing importance being given to the environment, the
emerging importance placed on forest services as a potential area of trade has only just begun.
Unique forest habitats and ecosystems have a great potential for, among other things, ecotourism,
biological diversity in the form of biotic samples that have been marketed for pharmaceutical
prospecting, and carbon sequestration which has a potential for being traded under Kyoto Protocol ofUNFCC.  Although there exists a potential for forest  services to be marketed internationally, the
current value of this trade is still very small and not yet fully defined and developed.
E. T
YPES OF TRADE -INDUCED ENVIRONMENTAL IMPACTS
14. The types of trade-induced environmental impacts for the utilisation and management of
forests begin with harvesting.  Modern timber harvesting employing heavy machinery could severely
damage the soil, the natural drainage system and watercourse, and the residual stand if the operation is
not conducted according to strict rules and regulations of sustainable forest management.  The secondstage of environmental damages occurs during processing.  Industrial waste in the form of various
types of chemicals used during processing will fl ow and pollute the water stream which will inflict
greater damage to the human population.  Current international debates on forestry have so far been
giving greater attention to management of resources compared with manufacturing processes.  This
may be due to urgent efforts to address the issue of deforestation.
15. None of those potential damages are a direct result of international trade in forest products.
They occur regardless of whether the products are exported or not, albeit possibly at a lower level
when products are not exported.  However, as about 15 per cent of global roundwood production is
exported, and prices in domestic markets are strongly linked to prices of export products, it is
expected that international trade in forest products  will have significant influences on the production
and processing of forest products and the forest-related environment.WT/CTE/W/84
Page 6
F. INTERNATIONAL TRADE AGREEMENTS
16. The trade in forest products has generally benefitted from successive post-war GATT
Agreements.  Tariff barriers to forest products trade have continued to decline in recent years,
particularly in the post-Tokyo Round era (Bourke 1988). The extent of the decline in tariffs differs
with the market and product.  With few exceptions, developed country markets tariff rates had fallengenerally to very low levels even before the Uruguay Round schedules were agreed.  For example,
pre-Uruguay Round tariff rates for forest products in developed countries averaged 3.5 per cent
compared to 6.3 per cent for all industrial products (WTO 1994).
17. The effect of the recently concluded Uruguay Round negotiations will be to reduce tariff rates
on forest products further, including the phasing out completely of tariffs on pulp and paper products
in major developed country markets.  The extent of tariff escalation for forest products will be
reduced in most importing markets, and many tariff rates will be bound.  It is estimated that the likelygains in trade for major forest products could be in the range of US$460-593 million, but
proportionately this amounts to a gain of only 0.4-0.5 per cent of total forest product imports in the
markets analysed (Barbier 1996a and 1997).  Th e implications of the Uruguay Round for the non-
tariff barriers increasingly faced by forest products are less clear.  However, two special agreements,
the Agreement on the Application of Sanitary and Phytosanitary (SPS) Measures and the Agreementon Technical Barriers to Trade (TBT), do provide the basis for tackling certain non-tariff measures
that have been used as trade barriers against forest products.
G. N
EW BARRIERS TO TRADE
18. In recent years there has been a proliferation of additional policies and regulations that have
the potential of becoming new barriers to trade in forest products.  Those barriers include:
(a) Export restrictions by developing countries to encourage domestic processing of
tropical timber for export;
(b) Environmental and trade restrictions on production and exports in developed
countries which affect international trade patterns;
(c) Quantitative restrictions on imports of "unsustainably produced" timber products;
(d) The use of eco-labelling and "green" certification as import barriers.
19. Although only the last two measures could be st rictly defined as "new", all of these trade
measures have been increasingly employed in recent years and have the potential to affect trade flows
in forest products significantly.
III. IPF PROCESS
A. BACKGROUND
20. At its substantive session of 1995, the Economic and Social Council, upon the
recommendation of the Commission on Sustainable Development, approved the establishment of an
open-ended Ad-Hoc Intergovernmental Panel on Forests.  The Panel was mandated to pursue a
consensus and formulate options for further actions in order to combat deforestation, and forest
degradation and to promote the management, conser vation and sustainable development of all types
of forests.WT/CTE/W/84
Page 7
21. In pursuing consensus and the formulation of coordinated proposals for action, the Panel was
mandated to consider number of interrelated Categories of issues, including trade and environment
related to forest products and services.
22. At its first session, the IPF was asked to examine trade and environmental issues in a more
holistic and more mutually supportive manner.  On trade and environment relating to forest productsand services:
2
“The broad mandate assigned to the Panel by the Commission on Sustainable Development should beexamined in an integrated and holistic manner.  The overall goal is to promote the mutually
supportive roles of trade and environment.  Reports should be prepared in order to identify
opportunities and recommend measures for improving market access for forest products on a non-
discriminatory basis and consider factors that may distort trade in forest products and affect their
value, including pricing, import/export controls, subsidies and the need to remove bans and boycottsinconsistent with the rules of the multilateral tr ading system.  Reports should include an assessment of
means to promote the development of methodologies to advance the full valuation, including
replacement and environmental costs, of forest goo ds and services, and of wood substitutes, with the
view to promoting full cost internalisation.  Reports must, taking into account the interests of all
sectors and the particularities of different countries and ensuring full transparency and participationof all interested parties, examine the issue of voluntary certification and labelling of forest products,
so as to contribute to a better understanding of the role of voluntary certification with regard to the
sustainable management of forests, including th e impact of certification on developing countries.“
23. The panel was asked to draw upon the expertise of organizations, such as UNEP, UNCTAD,
ITTO and the World Trade Organization (WTO) on the preparatory work under this programme
element (trade and environment).
24. The Panel commissioned studies, produced reports and went through series of substantive
discussions during its four sessions (1995-1997).  In addition, it coordinated number of meetings and
workshops with a number of governments and international organizations.  At its fourth session, itpassed several conclusions and proposals for action on the program elements as mandated to it by the
Commission on Sustainable Development.  The conclusions and proposals for action under its
program on “Trade and Environment in relation to forest products and services” are as follows
(paragraph numbers are as appeared in the source):
3
B. CONCLUSIONS
“116. The Panel acknowledged the potential positive relationship between trade in forest products
and services and sustainable forest management.  It recognized the importance of promotingsustainable forest management through mutually supportive trade and environmental policies, in
particular avoiding policies that have adverse impacts on the management, conservation and
sustainable development of forests.  However, it also recognized the wide range and complexity of the
issues associated with this topic.  A continuing process of consensus-building is needed, including the
exploration of the possible need for specific international trade agreements in forest products andvoluntary codes of conduct for sustainable forest management to facilitate and improve trade in forest
products in specific areas.
“117. The Panel emphasized that the issues of trade and environment relating to forest products and
services should be addressed in a holistic manner, taking into account chapter 11 of Agenda 21 andthe Forest Principles.  It recognized, however, that there was inadequate information on both domestic
                                                     
2 E/CN.17/IPF/1995/3, 9 October 1995
3 E/CN.17/1997/12WT/CTE/W/84
Page 8
and international trade in non-wood products and forest services.  Further studies and data gathering
are needed to overcome those gaps in future.
“118. The Uruguay Round of multilateral trade negotiations made significant progress in improving
market access for forest products, especially in terms of reducing tariffs for all types of forestproducts.  Yet barriers to international trade in forest products, particularly non-tariff barriers, could
still impede access of forest products to the international market.
“119. Forest products obtained from sustainably managed forests may be considered to be
environmentally friendly.  Competition between different products from different regions and
between wood and non-wood alternatives is inevitable.  It need not constrain national or global efforts
to achieve sustainable forest management, but could have implications for sustainable forestmanagement and for markets for specific forest products in the future.  Further economic and market
studies, therefore, should be carried out to determine how best to use markets and economic
instruments to promote sustainable forest management.
“120. For the majority of developing countries, exports of processed products represent a small
proportion of their total roundwood production.  A dditional efforts, therefore, should be geared
towards promoting efficient and environmentally sound downstream processing industries and exports
of processed products, consistent with sustainable forest management, in order to increase their
contribution to sustainable developmen t and to increase export earnings.
“121. The Panel noted that producer countries and international institutions have undertaken many
efforts and initiatives to promote lesser used species in the international tropical timber market.
Progress is still limited, but efforts should continue and should also include temperate and boreal
species, consistent with the management, conservation and sustainable development of all types of
forests.
“122. International attention to the issues of the certification of forest management and labelling of
forest products should be put into perspective.  To date, only a small proportion of the global trade in
forest products and a small area of the world's forests are influenced by those schemes.  Because of
inadequate information and relatively few real wo rld experiences, it is still too early to assess
objectively their full potential in promoting sustainable forest management.  More studies and
information are required to clarify various uncertainties, including the impacts of certification onforest enterprises and markets; the competitiveness of forest products; the economic and non-
economic costs and benefits; the demand for certified products; the feasibility and credibility of
certification at different levels; the use of criteria and indicators; the governance and credibility of
certification schemes in the context of consistency with international agreements; and the role of
Government as a regulator, and in some countries also as resource owner.
“123. The Panel recognized that voluntary certification and labelling schemes are among many
potentially useful tools that can be employed to promote the sustainable management of forests.  In
view of the potential proliferation of schemes, there is a need to promote comparability and avoid
duplication among various voluntary certification and labelling schemes.
“124. The Panel accepted that Governments have a critical role in promoting effective sustainable
forest management systems.  However, because certification has thus far been developed as a
voluntary private initiative, different views expressed on the roles of Governments and
intergovernmental institutions in the development or regulation of certification systems require furtherclarification.  In considering possible roles for Govern ments, bearing in mind the fact that certification
is a market-driven process, distinctions should be made between the roles of Governments as
regulators, as promoters of public policy, and in some countries as forest owners.  Governments,
however, have a role in encouraging transparency, the full participation of interested parties, non-
discrimination, and open access to voluntary certification schemes.WT/CTE/W/84
Page 9
“125. International efforts should focus on ensuring that existing and new certification and labelling
schemes are open and non-discriminatory in respect of types of forests or forest products, forest
owners, managers and operators, are not used as a form of disguised protectionism and are not in
conflict with international obligations.
“126. Full-cost internalisation may contribute to sustainable forest management in the long term.
Without it, socio-economic and environmental costs may not be fully reflected in and addressed by
the market, with the result that unsustainable practices may appear more attractive and less costly than
sustainable forest management.  Only limited consensus exists on concepts, definitions,
measurements, techniques and data requirements to introduce environmental costs into pricing
mechanisms.  The relationship to substitutes, among other things, will affect the allocation of costs
and benefits of cost internalisation and market-based instruments.  Exchange of information on
various research findings and experiences in relation to costs and policy mechanisms are encouraged
so as to facilitate discussion and policy development.
“127. Greater market transparency has the potential to promote the mutually supportive roles of
trade and environment in the forest sector.  Improved market transparency would also help to address
such issues as illegal international trade in forest products, transfer pricing and market distortions.
Despite some ongoing efforts by relevant international organizations, there has been little progress in
improving market transparency for trade in forest products, and the Panel agreed that further efforts
should be encouraged.”
C. PROPOSALS FOR ACTION
On Market Access
“128. The Panel:
(a) Urged countries and relevant international organizations to study the environmental,
social and economic impacts of trade-related measures affecting forest products and services;
(b) Requested countries to undertake measures for improving market access for forest
goods and services, including the reduction of tariff and non-tariff barriers to trade in accordance with
existing international obligations and commitments, and in that context to promote a mutuallysupportive relationship between environment and trade in forest goods and services, and to avoid
conflict between measures that affect trade in forest goods and services and existing international
obligations so that environmental concerns do not lead to disguised barriers to trade;
(c) Urged all countries, subject to their national legislation, to encourage efforts by the
private sector, in consultation with interested parties, to formulate and implement voluntary codes of
conduct for promoting sustainable forest management for forest owners, forest developers and
international investors in forestry so as to improve trade in forest products, and to endeavour to ensure
that external trade policies take into account community rights, where appropriate.
“129. The Panel discussed the following options for action relating to possible agreement for forest
products from all types of forests, based on non-discriminatory rules and multilaterally agreed
procedures, without reaching a consensus on these or other possible procedures:
(a) To take note of the International Tropical Timber Agreement (ITTA) of 1994, in
particular the commitment made by ITTO members to review the scope of the agreement four years
after its entry into force on 1 January 1997;WT/CTE/W/84
Page 10
(b) To explore the possibility of extending the concept of the Year 2000 Objective of
ITTA for all types of forests;
(c) To explore the possibility of an international agreement on trade in forest products
from all types of forests;
(d) To examine the possibilities of further initiatives on trade liberalization within the
auspices of the World Trade Organization;
(e) To explore, within an intergovernmental forum on forests, intergovernmental
negotiating committee or other arrangements decided upon at an appropriate time, the possibilities of
promoting the management, conservation and sustainable development of all types of forests andtrade in forest products in the context of an international, comprehensive and legally binding
instrument on all types of forests.
“130. The Panel considered the question of the relationship between obligations under international
agreement and national measures, including actions imposed by subnational jurisdictions, but was notable to reach a consensus.  Options for action proposed included:
(a) Urging countries to remove all unilateral measures to the extent that those are
inconsistent with international agreements;
(b) Urging countries to remove all unilateral bans and boycotts inconsistent with the rules
of the international trade system, including those imposed by subnational jurisdictions, in order to
facilitate the long-term management, conservation and sustainable development of all types of forests,
in accordance with paragraph 14 of the Forest Principles;
(c) Recognizing that those matters are also  considered in forums whose primary
competence is to address trade issues.”
On Relative Competitiveness of Forest Products
“131. The Panel:
(a) Called upon relevant organizations to support efforts to gather more information and
conduct more independent market and economic studies of potential competition between wood and
non-wood substitutes, analysing the costs and benef its, including any substitution effects, and the
overall impact on the management, conservation and sustainable development of all types of forests;
(b) Urged developed countries and relevant international organizations to support efforts
by developing countries, consistent with policies and programmes for sustainable forest management,
to increase their productivity and efficiency in downstream processing activities, and to support,
where appropriate, community-based processing and marketing of wood and non-timber forest
products.”
On Lesser Used Species
“132. The Panel:
(a) Called upon countries and relevant international organizations and research
institutions to intensify efforts to promote lesser used forest species in domestic and international
markets, where increased use is consistent with sustainable forest management;WT/CTE/W/84
Page 11
(b) Urged producer countries to implement policies that are compatible and consistent
with sustainable forest management for the utilisation of economically viable lesser used species;
(c) Urged international organizations and resear ch institutions to transfer technology, and
to support national and community level efforts to develop and adapt technologies includingtraditional forest-related knowledge, for increasing the sustainable utilisation of lesser used species.”
On Certification and Labelling
“133. The Panel:
(a) Urged countries, within their respective legal frameworks, and international
organizations to consider the potentially mutually supportive relationship between sustainable forest
management, trade, and voluntary certification and labelling schemes operating in accordance with
relevant national legislations, and to endeavour to ensure, as necessary, that such schemes are not
used as a form of disguised protectionism, and to help to ensure, as necessary, that they do not conflict
with international obligations;
(b) Invited developed countries and interna tional organizations to support, including
through technical and financial assistance, efforts in developing countries to enhance the assessment
capabilities of developing countries in relation to voluntary certification and labelling;
(c) Urged countries to support the application to certification schemes of such concepts
as:
(i) Open access and non-discrimination in respect of all types of forests, forest
owners, managers and operators;
(ii) Credibility;
(iii) Non-deceptiveness;
(iv) Cost-effectiveness;
(v) Participation that seeks to involve all interested parties, including local
communities;
(vi) Sustainable forest management;
(vii) Transparency;
(d) Invited relevant organizations, in accordance with their mandate, to carry out further
studies on various aspects of voluntary certification and labelling schemes, including:
(i) Effectiveness in promoting sustainable forest management;
(ii) The relationships between various criteria and indicator frameworks and
certification;
(iii) Issues relevant to the development, implementation, promotion, equivalency
and mutual recognition of voluntary certification and labelling schemes, and
the role of government in that context;WT/CTE/W/84
Page 12
(iv) The special needs of local communities, other forest-dependent populations
and owners of small forests;
(v) The need to monitor practical experience with certification including
accreditation processes;
(vi) The development of consistent terminology;(vii) The impacts of such schemes on the relative competitiveness of forest goods
and services in the absence of equivalent schemes for substitutes;
(viii) The needs of countries with low forest cover;
(e) Invited countries to consider the relevance to certification schemes of the Centre for
International Forestry Research project on criteria and indicators for sustainable forest management;
(f) Urged countries and relevant international organizations dealing with trade in forest
products to bring the current trends on certification into perspective, and to promote comparability
and avoid duplication of efforts among various voluntary certification and labelling schemes;
(g) Called upon countries and relevant agencies to make arrangements for and support an
exchange of information and experience on certifica tion and labelling schemes, in appropriate forums,
to ensure transparency on an ongoing basis.”
On Full-cost Internalisation
“134. The Panel:
(a) Called upon countries and relevant international organizations concerned with
forestry and trade to explore ways and means to establish full cost internalisation of both wood
products and non-wood substitutes, and to undertake market and economic analyses of their
implications for forest management and development costs and for sustainable forest management.Such analyses should also examine the potential cost and benefits of improved efficiency and
sustainability at all levels of the forest industry;
(b) Drawing upon the work being carried out by countries and relevant international
organizations, encouraged the sharing of information on research findings and experiences concerning
the implementation of full cost internalisation and its application to sustainable forest management,
and relevant policy mechanisms.”
On Market Transparency
“135. The Panel:
(a) Called upon relevant international organizations and national institutions to expand
their work on market transparency for trade in forest products and services, and to include the possible
development of a global database;
(b) Invited countries to provide an assessment and share relevant information on the
nature and extent of illegal trade in forest products, and to consider measures to counter such illegal
trade.”WT/CTE/W/84
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IV. IFF PROCESS
25. Recognizing the crucial role of forests in ec onomic and social development, environmental
protection and in the planet’s life-support system, the General Assembly, and acknowledging the need
to maintain the momentum generated by the IPF process on international forest policy dialogue, at its
nineteenth special session, it decided “to continue the intergovernmental policy dialogue on foreststhrough the establishment of an ad hoc open-ended Intergovernmental Forum on Forests under the
aegis of the Commission on Sustainable Development to work in an open, transparent and
participatory manner, with a focused and time-limited mandate, and charged with, inter alia
4:
“(a) promoting and facilitating the implementation of the Panel’s proposals for action;
“(b) Reviewing, monitoring and reporting on progress in the management, conservation
and sustainable development of all types of forests;
“(c) Considering matters left pending as regards the programme elements of the
intergovernmental Panel on forests, in particular trade and environment in relation to forest products
and services, transfer of technology and the need for financial resources.” (A/S-19/29, annex,
para. 40)
26. At its first session in October 1997, the IFF was charged with the following mandate on trade
and environment issues:
"(b) Consider matters left pending on trade and environment.  Analyse the mutually
supportive roles performed by the international trade and sustainable forest
management and, in that context, issues related to non-discriminatory international
trade in forest products from all types of forests, including the role that tariff and
non-tariff barriers perform in relation to sustainable forest management, certification
issues where relevant and improved market access, taking into account the needs of
developing countries, in particular those of the least developed among them.Consider the question of the relationship between obligations under international
agreements and national measures, including actions imposed by subnational
jurisdictions, recognizing that those matters are also considered in forums whose
primary competence is to address trade issues; the relative competitiveness of wood
versus substitutes; valuation; and market transparency and the related issue of illegal
trade in wood and non-wood forest products."
27. The Forum has planned to have a substantive discussion on its coming second session in
Geneva in the autumn of 1998.  It will continue to facilitate the policy dialogue within and outside the
Forum among the countries and multilateral organizations in trade and environment issues related
with forest products and services, and their implications to sustainable forest management.
V. SUMMARY AND CONCLUSIONS
28. The IPF and IFF processes examine a range of issues related to international trade in forest
products and services.  This  examination is undertaken in context of exploring mutually supportive
role between trade and sustainable forest management.  While the IPF/IFF processes are not primarily
designed to formulate trade agreements per se , they do address and clarify a number of issues related
to international trade in forest products including:
- Encouragement of mutually supportive role among trade, environment and
sustainable forest management;
                                                     
4 E/CN.17/IFF/1997/4WT/CTE/W/84
Page 14
- Certification of sustainably managed forests for wood-based products in international
trade;
- Clarification of concepts of certification and eco-labelling;
- Clarification of “Sustainable Forest Management (SFM)” through scientifically based
internationally agreed criteria and indicators (C&I) for sustainable management offorests in a wide range of social, economic, cultural and political realities in boreal,
temperate, Mediterranean and tropical regions;
- Transfer of technology and financial cooperation to developing countries to enable
those countries to practice SFM;
- Role of governments, private sector and multilateral organizations in addressing trade
and environment issues;
- The use of traditional forest related knowledge in SFM and intellectual property
rights.
29. It is expected that in coming sessions of IFF, many developments in international policy will
emerge through active participation of governments, international organizations, non-governmental
organizations and other interest groups leading to greater consensus and more mutually supportiveinteraction between the trade in forest products and services, sustainable forest management and
environmental protection, as well as broader economic and social development in all countries.WT/CTE/W/84
Page 15
REFERENCES
Barbier, E.B. 1996a. Impact of the Uruguay Round on International Trade in Forest Products. FAO,
Rome.
Barbier, E.B. 1996b. “Trade and Environment Relating to Forest Products and Services: Consultant’s
Background Report.” Paper prepared on behalf of the International Tropical Timber Organization for
the Third Session of the Intergovernmental Panel on Forests, 9-20 September, Geneva.
Barbier, E.B. 1997. “The Effects of the Uruguay Round Tariff Reductions on the Forest Product
Trade: A Partial Equilibrium Analysis.” Paper prepared for the ESRC Conference “InternationalDimensions of Tax and Environmental Policies.” Un iversity of Warwick, Coventry, UK, 11-12 July.
Bourke, I.J. 1998. “Prospects and Challenges in the Supply and Demand of Timber in the Global
Market.” Paper presented to the International Timber Conference ‘98, Kuala Lumpur, Malaysia,
5-7 March.
Commonwealth Forestry Association.  1997.  The Wo rld’s Forest-Rio+5:  International Initiatives
Towards Sustainable Development.  Oxford, UK.
Food and Agricultural Organization of the United Nations (FAO). 1997. State of the World’s Forests
1997 . FAO, Rome.
U.N. Commission on Sustainable Development (CSD). 1995.  Report of the Open-ended ad hoc
Intergovernmental Panel on Forests on its First Session, New York, 11-15 September 1995.
9 October.
U.N. Commission on Sustainable Development (CSD).  1996a.  Programme Element IV:  Trade and
Environment Relating to Forest Products and Services.  Report of the Secretary-General, Second
session. E/CN.17/IPF/1996/11.
U.N. Commission on Sustainable Development (CSD).  1996b.  Programme Element IV:  Trade and
Environment Relating to Forest Products and Services.  Report of the Secretary-General, Thirdsession. E/CN.17/IPF/1996/22.
U.N. Commission on Sustainable Development (CSD).  1997.  Report of the Ad Hoc
Intergovernmental Panel on Forests on its Fourth Session.  E/CN.17/ 1997/12.
U.N. Commission on Sustainable Development (CSD).  1997. Report of the Ad Hoc
Intergovernmental Forum on Forests on its First Session.  E/CN.17/IFF/ 1997/4.
World Trade Organization (WTO). 1994. The Results of the Uruguay Round of Multilateral Trade
Negotiations. Market Access for Goods and Services: Overview of the Results. GATT, Geneva.WT/CTE/W/84
Page 16
Table 1. The Global Forest Products Trade - Major Importers and Exporter, 1995
IMPORTERS   US$
million EXPORTERS  US$
million
United States
Japan
Germany
Italy
France
United Kingdom
NetherlandsKorea (Republic of)
Belgium-Luxembourg
Taiwan
Spain
ChinaCanada
Switzerland
Hong Kong22 448
19 486
10 948
8 637
8 198
8 084
5 1634 972
4 066
3 840
3 826
3 8402 953
2 857
2 796Canada
United States
Finland
Sweden
Germany
France
IndonesiaMalaysia
Brazil
Austria
Russia
NetherlandsItaly
Belgium-Luxembourg
Norway27 787
18 148
11 953
10 850
7 779
5 851
4 7284 226
3 547
3 361
3 231
3 0172 874
2 791
2 179
Source: FAO.
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