WORLD TRADE
ORGANIZATIONWT/CTE/W/169
17 October 2000
(00-4285)
Committee on Trade and Environment Original:  English
THE INTERNATIONAL TROPICAL TIMBER AGREEMENT (ITTA)
Communication from the ITTO Secretariat
This background paper is circulated to Members in preparation for the MEA Information
Session on 24 October 2000.
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I. INTRODUCTION
1. The International Tropical Timber Agreement (ITTA) is one of the several intergovernmental
international commodity agreements (ICAs) negotiated by United Nations conferences under theauspices of the United Nations Conference on Trade and Development (UNCTAD).  Unlike the
conventional ICAs, which focus on price stabilization measures (commonly referred to as the ICAs
with economic provisions) or those considered as administrative agreements, the ITTA is often
categorised as a developmental agreement which seek s to promote the international trade in tropical
timber, the sustainable management of tropical forests, and the development of tropical forestindustries through international cooperation, policy work and project activities.
2. The ITTA was adopted in 1983 and entered into force in 1985.  In November 1986, the
International Tropical Timber Organization (ITTO) began to function in the administering of the
provisions and operation of the Agreement following the appointment of the Executive Director and
the selection of Yokohama as the headquarters.  The ITTA, 1983 was succeeded by the ITTA, 1994
which entered into force on 1 January 1997.
II. MEMBERSHIP
3. As of 1 September 2000, the membership of the ITTA, 1994 and ITTO stands at 56,
comprising 30 producing members and 26 consuming members including the European Community
(EC), as set out in the Annex.
4. The current membership of ITTO represents mo re than 75 per cent of the world's tropical
forests and almost 90 per cent of the world trade in tropical timber products.  Although the ITTA,1994 could still benefit from an expanded membership, all members that are considered "key players",
save the Russian Federation, are already party to the Agreement.  In spite of it being an
intergovernmental organization, ITTO adopts a policy of openness to ideas from members of trade
and non-governmental organizations (NGOs).  Many of its members include advisers on trade and on
the environment in their delegations.  There is no information indicating any non-parties which are incompliance with the ITTA, 1994.WT/CTE/W/169
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III. TRADE MEASURES
5. There are no provisions for trade measures in the ITTA, 1983 and the ITTA, 1994.  Neither
are there trade measures being proposed nor decisions being taken to introduce these measures within
the ambit of the Agreement.
6. However, much focus is being given to the achievement of the ITTO Year 2000 Objective.
Originating from a proposal for the ITTO Action Plan, 1990, the Objective emerged in the form of a
commitment of all members made in Bali in 1990 to achieve exports of tropical timber products from
sustainably managed sources by the year 2000.  Following the adoption of the Objective, much work
had been undertaken towards operationalizing that goal.  This included the formulation of a strategy
adopted in 1991 by which members, through international collaboration and national policies and
programmes, will progress towards achieving sustainable management of tropical forests and trade in
tropical timber from sustainably managed resources by the year 2000.  The strategy has since beenincorporated as one of the operative objectives of ITTA, 1994.
7. The foregoing has spurred ITTO to embark on its pioneering mission of assisting efforts to
bring tropical forests under sustainable management.  This involves, inter alia , the development of a
series of guidelines covering the sustainable management of natural tropical forests (1990);  the
sustainable management of planted tropical forests ( 1991);  the conservation of biological diversity in
tropical production forests (1992);  and the protection of tropical forests against fire (1997).  Work on
the development of a definition of sustainable forest management and a set of criteria for measuring
sustainable forest management was also initiated at an early stage in ITTO's establishment (1991),
well before the launching of the Helsinki and Montreal processes for non-tropical forests after
UNCED 1992.  Since then, a revised version of the ITTO Criteria and Indicators has been approvedin 1998, followed by the adoption in 1999 of the ITTO Manual for the Application of Criteria and
Indicators for Sustainable Management of Natural Tropical Forests.
8. ITTO has also commenced work on the development of auditing systems of sustainable forest
management and an assignment is on-going to develop guidelines providing essential elements for a
framework of adequate auditing systems for sustainable forest management to assist ITTO membercountries in formulating national systems based on local conditions.  Independent ITTO missions
were dispatched to Sarawak (1989) and Bolivia (1995) to assess forest management and offer
recommendations for improvement, while several proj ects have been approved for implementation in
member countries with the view to enhancing capacity in managing tropical forests on a sustainable
basis.
9. As the costs of bringing tropical forests under sustainable management are substantial and
increasing, and recognizing the need to develop mechanisms for the provision of new and additionalfinancial resources and expertise to enhance the capacity of producing members to attain its
objectives, the ITTA, 1994 provides for the establishment of the Bali Partnership Fund for the
sustainable management of tropical timber producing forests.  The fund is exclusively reserved for
producing members to achieve objective (d) of the ITTA, 1994 and is additional to the Special
Account which remains in existence.  Following the entry into force of the ITTA, 1994, work on
finalizing the operation of the Bali Partnership F und has been completed and members as well as the
international donor community, are being asked to make pledges and contributions to the fund.
10. The ITTO Year 2000 Objective is arguably the earliest attempt at operationalizing and
applying the concept of "integrating trade and environment and making them mutually supportive".
Given the stark reality of the complexities and constraints in bringing tropical forests undersustainable management, the Objective has been considered as a challenging goal to be accomplished
within a very short period of time.  In view of th is, and taking into account that sustainable forest
management has evolved from a notion of sustained yield at the beginning to one of a continuousWT/CTE/W/169
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process of ecosystems management, the objective is to be viewed as a guiding goal to facilitate ITTO
and its members towards the achievement of sustainable forest management.
11. Since the year 2000 has arrived, the time has come for the review of the Objective to take
place.  At its Twenty-Eighth Session in Lima, Peru on 24-30 May 2000, the International Tropical
Timber Council (ITTC), inter alia , undertook a review of the progress made by ITTO and its
members towards achieving the ITTO Year 2000 Objective.  The focus of the review was on progress,
together with the factors contributing to or hinderi ng it.  Following the review, the ITTC reaffirmed
its full commitment to moving as rapidly as possible towards achieving exports of tropical timber and
timber products from sustainably managed sources.
12. According to the independent study on the review, commissioned by ITTO, progress has been
made by producing members in policy and legislative reform;  reorganization of administrative
arrangements;  development of new strategies and master plans for forestry;  establishment of apermanent forest estate (PFE);  consultation with  local communities;  expansion of forest lands
dedicated to conservation;  usage of the ITTO Guidelines and Criteria and Indicators;  development of
standards for forest management;  investigation of the possibility of timber certification;  increasing
awareness of the importance of sustainable forest management;  and producing more value-added
exports.  The study further identified six producing member countries, namely Ghana, Guyana,Indonesia, Malaysia, Cameroon and Myanmar, which seem to have established all the conditions to
manage some of their forests sustainably at the forest management unit level.  Other producing
members are moving in the same direction, although all producing members still encounter problems
of full implementation in the forests.  These prob lems include strategies not being fully acted upon;
shortage of qualified and trained personnel as well as finance;  illegal logging and poaching;protected areas not adequately managed;  application and enforcement of guidelines and regulations;
creating greater awareness of sustainable forest management among concessionaires, timber industry,
forest workers, farmers and other communities;  establishing a sound basis for sustainable harvesting;
implementing strict engineering specifications for road design;  greater practice of reduced impact
logging (RIL);  and securing and protecting the PFE.
13. As for the consuming members of ITTO, progress is noted in respect of their commitment to
sustainable forest management relating to their forest resources, the incorporation of criteria and
indicators for sustainable forest management and the development of timber certification schemes.
The developed consuming members have also provided technical and financial support to producing
members, though not necessarily channelled through ITTO.  All consuming members have reported a
reduction or a phased reduction of import tariffs on timber and timber products, particularly from
developing countries.  Against these positive de velopments, concern is expressed that many good
ITTO projects which are relevant to the ITTO Year 2000 Objective have remained unfunded, thereby
raising the question of how seriously the Objective has been taken by the donors.  Higher tariffs and
duties being applied to processed tropical timber products are not helping producing members which
are striving to develop capacity for secondary and tertiary processing.  More could be done by
consuming members to disseminate information concerning the beneficial changes that are occurringin the management of natural tropical forests.
14. With regard to ITTO, the study acknowledges that ITTO has probably done more in the
thirteen years of its existence than any other orga nization to advance the idea of sustainable tropical
forest management.  ITTO's pioneering work, especi ally in the development of its action plan, series
of guidelines, and the ITTO Criteria and Indicators of Sustainable Management of Natural TropicalForests, is highlighted.  ITTO has also been able to mobilise some US$138.5 million of pre-projects
and projects in direct support of the ITTO Year 2000 Objective, covering a wide range of subject
areas including policy and legal issues, institutional strengthening, forest resource, forest health,
sustainable forest management, conservation, community participation and trade and industry.  In
terms of total actions taken by ITTO thus far which are directly relevant to the ITTO Year 2000Objective, ITTO has managed to raise some US$145 million, which represents 75 per cent of the totalWT/CTE/W/169
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amount of some US$190 million of funding that has been mobilised by ITTO since its inception.  Yet
the study points to a number of lost opportunities.  These include the diluted nature of the first version
of the ITTO Criteria and Indicators;  the reluctance of ITTO to assume a more proactive role in timber
certification;  and the inadequate effort by ITTO to publicise its achievements and those of its
members.
15. In spite of the complexities and constraints encountered by ITTO and its members, progress is
being made by them towards the achievement of the ITTO Year 2000 Objective.  The review carried
out has been useful in providing ITTO and its members with a valid basis to formulate and implement
appropriate follow-up policies and strategies for the new century and millennium.
16. As there are no provisions for trade measures in the ITTA, 1994, there is concern regarding
pressures for urgent and definitive measures to be taken to save the world's tropical forests in the form
of threats of bans and boycotts, as well as discrimination against tropical timber and unilateral actionsto restrict or prohibit the use of tropical timber.  In view of these, the ITTA, 1994 has a specific
objective of providing a forum for consultation to promote non-discriminatory timber practices.  In
this connection, the Agreement contains an important provision for non-discrimination in Article 36
which states that nothing in the Agreement authorizes the use of measures to restrict or ban
international trade in, and in particular as they concern imports of and utilization of timber and timberproducts.  This provision is meant to prevent the use of the ITTA, 1994 as a basis for discrimination,
particularly against tropical forest and timber.
17. Under Article 32 of the ITTA, 1994, members are generally obliged to use their best
endeavours and cooperate to promote the attainment of the objectives of the Agreement and to avoid
any action contrary thereto.  Members also undertake to accept and carry out the decisions of theITTC and shall refrain from implementing measures which would have the effect of limiting or
running counter to them.  As provided for in Article 31 of the ITTA, 1994, any complaint that a
member has failed to fulfil its obligations under the Agreement and any dispute concerning the
interpretation or application of the Agreement shall be referred to the ITTC whose decision shall be
final and binding.  Article 33 of the ITTA, 1994 provides the authority to the ITTC to relieve amember of an obligation under the Agreement on account of exceptional circumstances or emergency,
while Article 34 of the Agreement provides for differential and remedial measures and special
measures for developing consuming members and for members in the category of least-developed
countries respectively.
IV. TIMBER CERTIFICATION AND LABELLING
18. Timber certification and labelling is closely related to the issue of sustainable forest
management and has emerged with an initial focus on tropical forest and timber.  The overridingobjective of timber certification and labelling is to distinguish products from sustainably managed
sources.  It is observed that, of late, there has been a shift from the threat of bans and boycotts against
tropical timber to the call for the certification and labelling of the product.  However, on account of
several factors, including the globalization of the world economy, continued pressure from
environmental non-governmental organizations and growing competition among forest products and
from non-wood substitutes, the scope of timber certification has expanded to cover non-tropical
forests and timbers as well.  Although these specific developments are welcomed, there remain
several concerns on a host of issues on timber certification, including the proliferation of initiatives,
the credibility factor and the possibility of timber certification being used as a non-tariff barrier and a
means to discriminate against a particular product.
19. For these reasons, ITTO's work on timber certification began at a relatively early stage with
the commissioning of a report on "The Economic Linkages Between International Trade in Tropical
Timber and Sustainable Management of Tropical Forests" in 1993 leading to the convening of the
Working Party on the "Report on Certification and Labelling of All Timber and Timber Products" inWT/CTE/W/169
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Cartagena, Colombia in 1994.  This was followed by a detailed study on "Market and Market
Segments for Certified Timbers" in 1995, a comprehensive "Study on the Development in the
Formulation and Implementation of Certification Schemes for All Internationally Traded Timber and
Timber Products" in 1996 and the "Study on Timber Certification:  Progress and Issues" in 1998.
ITTO has also commissioned a "Comparative Study on the Auditing Systems of Sustainable ForestManagement", which is being followed up by the development of guidelines for a framework of
adequate auditing systems for sustainable forest management.
20. The contributions of ITTO to the development of principles, criteria and indicators of
sustainable management of tropical forests are of direct relevance to the issue of timber certification.
Besides commissioning relevant studies on the subject, ITTO provides support to member countries in
the formulation, implementation and evaluation of projects related to timber certification.  ITTO's
current work is focused on the possibilities and requirements for the conceptualization of aninternational mutual recognition framework linking the various Sustainable Forest Management
standards and certification systems which have been developed throughout the world.  This work
addresses the proliferation of initiatives and schemes, which is causing confusion in the market, to
enhance the credibility of these initiatives and schemes.WT/CTE/W/169
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ANNEX
ITTA MEMBERSHIP
Producing Members Consuming Members
Africa
Cameroon Australia
Central African Republic Canada
Congo China
Côte d'Ivoire Egypt
Democratic Republic of Congo European Community
Gabon Austria
Ghana Belgium/Luxembourg
Liberia Denmark
Togo Finland
Asia & Pacific France
Cambodia Germany
Fiji Greece
India Ireland
Indonesia Italy
Malaysia Netherlands
Myanmar Portugal
Papua New Guinea Spain
Philippines Sweden
Thailand United Kingdom
Vanuatu Japan
Latin America Nepal
Bolivia New Zealand
Brazil Norway
Colombia Republic of Korea
Ecuador Switzerland
Guyana United States of America
Honduras
Panama
Peru
Suriname
Trinidad and Tobago
Venezuela
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