WORLD TRADE ORGANIZATION
ORGANISATION MONDIALE DU COMMERCE
ORGANIZACIÓN MUNDIAL DEL COMERCIOWT/CTE/W/122
29 June 1999
(99-2685)
Committee on Trade and Environment Original:  English/
                 anglais
inglés
COMMUNICATION FROM THE SECRETARIAT OF THE INTERGOVERNMENTAL
FORUM ON FORESTS (IFF)
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 inpreparation for the Committee Meeting on Trade and Environment to be held on 29-30 June 1999.
Comité du commerce et de l'environnement
COMMUNICATION DU SECRÉTARIAT DU FORUM
INTERGOUVERNEMENTAL SUR LES FORÊTS
Le Secrétariat du Forum intergouvernemental sur les forêts a fait parvenir au Secrétariat la
note d'information ci-jointe1, qui est distribuée aux membres du Comité du commerce et de
l'environnement en vue de la réunion que le Comité tiendra les 29 et 30 juin 1999.
Comité de Comercio y Medio Ambiente
COMUNICACIÓN DE LA SECRETARÍA DEL FORO
INTERGUBERNAMENTAL SOBRE LOS BOSQUES
Se ha recibido de la secretaría del Foro Intergubernamental sobre los Bosques el siguiente
documento de información1, que se distribuye a los miembros del CCMA para preparar la reunión que
el Comité de Comercio y Medio Ambiente celebrará los días 29 y 30 de junio de 1999.
__________
                                                     
1English only./En anglais seulement./En inglés solamente.WT/CTE/W/122
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THE WTO COMMITTEE ON TRADE AND ENVIRONMENT
GENEVA, 29-30 JUNE 1999
THE INTERGOVERNMENTAL POLICY DIALOGUE ON FORESTS:
THE INTERGOVERNMENTAL  FORUM ON FORESTS (IFF)
OF THE UNITED NATIONS COMMISSON ON
SUSTAINABLE DEVELOPMENT (CSD)2
TABLE OF CONTENTS
Subject Page(s)
I. INTRODUCTION 3
II. The IPF/IFF Process 3
III. Highlights of the Third Session of the IFF 4
IV. Trade and Environment 4
V. Other Programme Elements 5
ANNEX 7-9
                                                     
2JM-R, IFF/Secretariat, June 1999, United Nations Plaza, Division for Sustainable Development, DESA, United Nations,
New York, N.Y.10017, USA, Phone: (+1 212) 963-4151, Fax: (+1 212) 963-3463, E-mail: munoz-reyes@un.org ,
<http//www.un.org/esa/sustdev/iff.htm>WT/CTE/W/122
Page 3
I. INTRODUCTION
1. Forests are increasingly perceived as complex entities, not only from a bio-physical
perspective, but also from social, economic and political perspectives.
2. At the United Nations Conference on Environment and Development (UNCED) in
Rio de Janeiro in June 1992, forests were among the most controversial issues being considered.  Theprevailing North South polarization concerning forests did not permit agreements beyond the text of
the “Non-legally Binding Authoritative Statement of Principles for a Global Consensus on the
Management, Conservation and Sustainable Development of All Types of Forests”, the so-called
“Forest Principles”, and Chapter 11 of Agenda 21 “Combatting  Deforestation.”  By contrast, the
“Post-Rio” period 1992-1995 was one of confidence bui lding and emerging North-South partnerships,
enabling the United Nations Commission on Sustai nable Development (CSD), at its third session in
April 1995, to establish the Intergovernmental Panel on Forests (IPF), to continue theintergovernmental forest policy dialogue.
3. The mandate of the IPF was for a two-year period (1995-1997) and with a programme of
work involving several complex and politically sensi tive issues grouped in five categories.  In view of
the progress made in consensus building, the governments agreed to continue intergovernmental
forest policy deliberations and established the Intergovernmental Forum on Forests (IFF) forthree years (1997-2000) under the auspices of CSD.
II. THE IPF/IFF PROCESS
4. The two years of intensive work of the IPF resulted in over one hundred negotiated proposals
for action on a number of issues related to sustainable forest management (SFM) including national
forest programmes.  The IPF was charged with the mandate to formulate options for further actions tocombat deforestation and forest degradation and to promote the management, conservation and
sustainable development of all types of forests.  On trade and environment issues in relation to forest
products and services, the IPF was given the task of promoting the mutually supportive roles of trade
and environment.  The IPF was also requested to recommend measures for improving market access
for forest products on a non-discriminatory basis and to consider factors that might distort the trade inand the value of forest products.  The Panel was also requested to examine the issue of voluntary
certification and labelling of forest products.
5. Following the establishment of the IPF, the informal high-level Inter Agency Task Force on
Forests (ITFF) was formed, comprising the UN Food and Agriculture Organization, ITTO, the
Secretariat of the Convention on Biological Dive rsity, the UN Department for Social and Economic
Affairs, the UN Development Programme, the UN Environment Programme, the World Bank and
latterly, the Centre for International Forestry Research.  The primary purpose of the ITFF was tocoordinate the inputs of these eight multilateral international organizations into the IPF process.
6. On the basis of the outcomes of its four sessions, the IPF presented its report, containing
107 substantive conclusions and 132 negotiated proposals for action, to the UNCSD.
(In April 1997) ( sic). Those proposals under Programme Element IV cover some critical areas:
market access, the relative competitiveness of forest products, lesser-known species, certification andlabelling, full cost internalization, and market transparency.
7. The IPF report was subsequently discussed at the Special Session of the
UN General Assembly (UNGASS) in June 1997.  As a result, UNGASS decided to continue the
intergovernmental policy dialogue on forests through the establishment of the ad hoc, open-ended
Intergovernmental Forum on Forests (IFF) under the aegis of the UNCSD.WT/CTE/W/122
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8. Building upon the progress made at its previous sessions, the IFF undertook building upon the
progress made at its previous sessions, the IFF unde rtook further consideration of the implementation
of the Proposals for Action of the Intergovernmental Panel on Forests (IPF) and reviewing,
monitoring and reporting on progress in the management, conservation and sustainable development
of all types of forests;  matters left pending and other issues arising from the Programme Elements ofthe IPF Process;  and international arrangements and mechanisms to promote the management,
conservation and sustainable development of all types of forests.
9. The Forum is to also identify the possible elements of and work towards a consensus on
international arrangements and mechanisms, for exam ple, a legally binding instrument on all types of
forests.  The Forum will report on its work to the Commission on Sustainable Development in 1999.
Based on the report and depending on the decision  taken by the Commission at its Eight Session
in 2000, the Forum will engage in further action on establishing an intergovernmental negotiationprocess on new arrangements and mechanism, for example, a legally binding instrument on all types
of forests.
10. The IFF held its first, organizational meeting in October 1997.  The second session was held
in Geneva from 24 August to 4 September 1998, and the third session was held in Geneva from
3 to 14 May 1999.  The fourth session will be held in New York from 31 January to11 February 2000.
11. Between the last Meeting of the WTO Committee on Trade and Environment (CTE) held in
June 1998 and this Meeting, IFF has held two Sessions in Geneva, the Second Session was held in
August - September 1998 and the Third Session held on 3 - 14 May 1999.
III. HIGHLIGHTS OF THE THIRD SESSION OF THE IFF
12. In accordance with its approved work schedule, the IFF conducted update discussion on two
programme elements under Category II which had undergone substantive consideration at its previous
session but whose draft Co-Chairmen Reports were still heavily bracketed, namely
Programme Element II(b) – Matters Left Pending on Trade and Environment and Programme
Element II(c) – Matters Left Pending on the Transfer of Environmentally Sound Technologies toSupport Sustainable Forest Management.  The substantive discussion by the IFF at its previous
session on two other programme elements, namely, Programme Element II(a) – Promoting and
Facilitating Implementation and Programme Element II(e) – Forest-Related Work of International and
Regional Organizations, had already yielded clean and unbracketed texts on  each of these two
elements.
IV. TRADE AND ENVIRONMENT
13. Trade and Environment rank among the more complex and contentious issues being discussed
at on-going post United Nations Conference on Environment and Development (UNCED)
deliberations on forests at the international level.
14. To facilitate the task of promoting the integration of trade and environment, a general
framework has been drawn up under Principle 12 of the Rio Declaration on Environment and
Development, 1992, which inter alia , pronounces that  “Trade policy measures for environmental
purposes should not constitute a means of arbitrary or unjustifiable discrimination or a disguised
restriction on international trade.”  In support of this principle, two specific programme areas on
promoting sustainable development through trade and making trade and environment mutually
supportive, as contained in Chapter 2 of Agenda 21 – the United Nations Programme of Action for
Sustainable Development - have been adopted for implementation by governments, United Nationsorganizations, development agencies, non-governmental organizations (NGOs), independent sector
groups and other interested parties.WT/CTE/W/122
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15. On Programme Element II(b) – Matters Left Pending on Trade and Environment, an update
discussion on the programme element was conducted in conjunction with the Third Session of the
IFF.  However, greater efforts and attention we re devoted to the continued negotiation of the
Co-Chairmen Report on the element, which took place in several sessions within a contact group.  As
a result of this endeavour, substantial progress was achieved in negotiating the Co-Chairmen Report.From a text that was bracketed in its entirety at the close of the Second Session of the IFF, the
Co-Chairmen Report had been significantly cleaned up with only five bracketed parts remaining.  The
text of the text under negotiation of the last session is attached in the annex  to this paper.  There was
guarded optimism regarding the prospect that these bracketed parts might be cleared at the next and
final sessions of the IFF.
V. OTHER PROGRAMME ELEMENTS
16. Similar progress was made in respect of Programme Element II(c) – Matters Left Pending on
the Transfer of Environmentally Sound Technologies to Support Sustainable Forest Management.  At
the close of the Third Session of the IFF, there remained six bracketed parts of the Co-Chairmen
Report to be further negotiated at the next session of the IFF.
17. The IFF subjected four specific Programme Elements to substantive consideration at its
Third Session.  These Programme Elements which were discussed on a preliminary basis at theprevious session of the IFF.  Following formal deliberations, negotiations on the draft Co-Chairmen
Reports on each of these elements were conducted.
18. On Programme Element I(b) – Monitoring Prog ress in Implementation of IPF Proposals for
Action, was duly considered and negotiated during the course of the Third Session of the IFF.  There
were only two bracketed parts of the report requiring further consideration by the IFF at its lastsession.
19. Progress was also achieved in respect of each of the eight specific items under Programme
Element II(d) – Issues Arising From the Programme Elements of the IPF Process Needing Further
Clarification, namely II(d) (i) – Underlying Cause of Deforestation and Forest Degradation;  II(d)(ii) –
Traditional Forest – Related Knowledge:  II(d)(iii) – Forest Conservation and Protected Areas;II(d)(iv) – Forest Research;  II(d)(v) – Valuation of Forest Goods and Services;  II(d)(vi) – Economic
Instruments, Tax Policies and Land Tenure;  II(d)(vii) Future Supply of and Demand for Wood and
Non-Wood Forest Products;  and II(d)(viii) – Assessment, Monitoring and Rehabilitation of Forest
Cover in Environmentally Critical Areas.  Many of the Co-Chairmen Reports on these items had been
negotiated without brackets while the bracketed parts of the Co-Chairmen Reports on the remaining
items were at a manageable level.  All outstanding matters could be ironed out at the next session of
the IFF.
20. The substantive discussion on Programme Element II(a) – Matters Left Pending on the Need
for Financial Resources, drew much reference to well-known positions held by developed and
developing countries in the past.  The Co-Chairmen Report on the element contained bracketed parts
in virtually all of its paragraphs.
21. This was one of the more contentious issues that would still require tough negotiations by the
IFF at its next session.
22. Programme Element III – International Arrangements and Mechanisms to Promote the
Management, Conservation and Sustainable Development of All Types of Forests, is perhaps the most
contentious and awaited matter before the IFF as it deals with the sensitive issue regarding the future
mechanisms and arrangements for intergovernmental forest policy deliberations, including thepossibility of negotiating a legally binding arrangement or mechanism for all types of forests.  This
subject was deliberated in the Plenary and was followed by the distribution of the draft Co-ChairmenWT/CTE/W/122
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Report for consideration and negotiation.  Although a contact group was set up for this purpose, the
tangible progress made was the placement of brackets in practically every paragraph of the draft
report.  The delegates wished to deal with this matter should be dealt with in-depth at the next session
of the IFF when parties would also have the benefit of the outcome of the Costa Rica-Canada
Initiative and an opportunity to discuss the UN Secretary General’s Report on the subject for theFourth Session of the IFF.
23. The Fourth Session of the IFF, is proposed to be held in New York from 31 January
to 11 February 2000, will be the final opportunity to resolve these outstanding matters within the IFF.WT/CTE/W/122
Page 7
ANNEX
MATTERS LEFT PENDING ON TRADE AND ENVIRONMENT
(PROGRAMME ELEMENT II.B)
I. CONCLUSIONS
1. Mutually supportive trade and environment policies can effectively promote the achievement
of the management, conservation and sustainable development of all types of forests.  Taking account
that trade and environment policies have their specific objectives, decision-makers, including trade
partners, should contribute to achieving trade in wood and non-wood forest products and services
from sustainable managed forests, and implement policies and actions, in particular, avoiding policies
that have adverse effects, either on trade or on the sustainable management of all types of forests.  It isimportant to take into account the needs of developing countries for social and economic development
and environmental protection, in particular poverty alleviation.
2. The impact that international trade in wood and non-wood forest products has on sustainable
forest management can be both positive and negative.  Trade liberalization adds value to the resource
and has the potential to promote economic development, contribute to poverty alleviation and reduceenvironmental degradation, provided it is accompanied by sound environmental and social policies.
However, trade liberalization must not be a vehicle for undermining domestic environmental and
health standards which are consistent with international trade rules.  Countries should study the
positive and negative impacts of trade policies on sustainable forest management.  The
Uruguay Round yielded significant reductions to tariffs affecting forest products.  Special attentionshould be given to remaining and emerging trade restrictions which constrain market access,
particularly for value-added products.  Trade measures intended to promote sustainable forest
management should not constitute a means of arbitrary or unjustifiable discrimination or a disguised
restriction on international trade.
3. IFF recognized the potential role of voluntary certification of forest management and
labelling of forest products as among the potential tools in promoting sustainable forest management
and differentiating forest products and services in the market.  However, more practical experience is
necessary to reach conclusions on the effectiveness of such programmes.  Moreover, unsuitable
design or non-transparent application of such schemes may, in some cases, lead to unjustified
obstacles to market access. In particular, small- and medium-sized forest owners and enterprises,
including those of developing countries, may find it excessively costly to implement certification
and/or labelling schemes.  In the context of these issues, the IFF took note of the work of the WTOwith regard to voluntary eco-labelling schemes.  Proliferation of certification and/or labelling schemes
calls for further cooperative work, in line with the recommendations of the IPF, towards achieving
their international comparability and considering their equivalency while taking into account the
diversity of national and regional situations.
4. Forest products and services and their substitutes should be adequately valued through
full-cost internalization which in turn would influence competitiveness of these products and services.
In this context, countries should undertake analys es of the implications of such valuation on forest
management and economic development.  Countries should also implement full-cost internalization
strategies for forest products and services, and their substitutes, taking into consideration the potential
costs and benefits of improved efficiency and sustainability of the forest sector.
5. Some available studies carried out on the relative full life-cycle analysis of the environmental
impacts of forest products and their substitutes suggest that the former may be preferable, but further
work on such life-cycle analysis is needed.WT/CTE/W/122
Page 8
6. Increased market transparency is essential in order to improve the market access for forest
products and services [including those coming from sustainable managed forests].  In this regard, the
role of the private sector is vital but action is also needed by all interested parties to improve market
transparency. A better understanding by both producers and consumers of the potential relationship
between trade in forest products, forest services and their substitutes and sustainable forestmanagement, could help to promote responsible choices in the supply and demand for forest products,
forest services and their substitutes.
7. The nature and extent of illegal trade in wood and non-wood forest products [including forest
biological resources], is a serious concern due to damage to ecosystems, loss of biodiversity, lost
revenue by governments, forest owners and local and/or indigenous communities, and distortion of
markets for forest products and services.  National policies and international cooperation are
important to reduce illegal trade wi th the aim towards its elimination.
8. Recent changes in the markets for forest products, such as those caused by the recent financial
crisis, have raised concerns on the ability to continue the implementation of measures aimed at
sustainable forest management but have at the same time increased the need for it.  The long-term
impacts of such unpredictable events on efforts to promote sustainable forest management need
examination and monitoring.  Such situations highlight the need to develop strategies for sustainableforest management with a long-term perspective so that the negative effects of short-term market
changes can be minimized.
9. Developing countries with low forest cover and small island countries have special problems
in developing their forest sectors to meet local needs for forest products and services. They depend, in
many areas, on other countries to satisfy their needs for forest goods and services.  Trade is essentialto meet such needs and international economic and trade policies may have serious impacts on the
efforts of these countries to expand and rehabilitate their forest cover.
II. PROPOSALS FOR ACTION
10. The IFF stressed the importance of implementing IPF proposals for action on Trade and
Environment.  In order to further their  effective implementation the IFF:
(a) Urged countries, including trade partners, to contribute to achieving trade in wood
and non-wood products and services from sustainable managed forests, and
implement policies and actions, in particular, avoiding policies that have adverse
effects, either on trade or on sustainable forest management;
(b) [supported continued efforts by countries and the World Trade Organization towards
trade liberalization with special attention to removing remaining and emerging trade
restrictions which constrain market access, particularly for value added forestproducts];
(c) [urged countries, international organizations [including the WTO] and other
interested parties to undertake further cooperative work on certification and/or
voluntary labelling schemes, in line with  the recommendations of the IPF, towards
achieving their international comparability and considering their equivalence, takinginto account the diversity of national and regional situations [and to ensure such
schemes do not lead to unjustified obstacles to market access];
(c) bis [and to ensure such schemes do not lead to unjustified obstacles to market access].
Urged that, when voluntary certification and/or labelling schemes are developed and
applied, they be done so in a way to promote sustainable forest management and toavoid unjustified obstacles to market access];WT/CTE/W/122
Page 9
(d) urged countries to undertake analyses of the implications of fu ll-cost internalization
on forest management and economic development and implement full-cost
internalization strategies for forest products and services and their substitutes;
(e) requested countries, international organizations and other interested parties to
undertake further work on full life-cycle analysis of the environmental impacts of
forest products and their substitutes;
(f) called upon all interested parties to take action to improve market transparency, taking
into account the role of the private sector, to help promote responsible producer and
consumer choices in the supply and demand for forest products, forest services and
their substitutes;
(g) called upon countries to consider appropriate national level actions and promote
international cooperation to reduce the illegal trade in wood and non-wood forest
products [including biological resources] with the aim of its elimination;
(h) urged countries to develop strategies for sustainable forest management with a long
term perspective so that the negative effects of short term market changes, such as the
recent regional financial crises, can be minimized;
(i) urged countries to recognize the special importance of imports of forest products for
countries with low forest cover and fragile forest ecosystems, and small island
developing states to satisfy their needs for forest products and services to assist them
in expanding and rehabilitating their forest cover.
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