WORLD TRADE WT/CTE/W/48
14May1997
ORGANIZATION(97-2016)
Committee onTrade andEnvironment
RESULTS OFTHE ADHOC INTERGOVERNMENTAL
PANEL ONFORESTS
Note bytheSecretariat
1. ThisNote provides Members oftheCommittee onTrade andEnvironment withanupdate
oftherecent developments oftheUNAdHocIntergovernmental Panel onForests (IPF), including
some excerpts ofrelevant decisions reached atitsfourth session, held11-21 February 1997.
2. In1995, theUNEconomic andSocial Council, uponrecommendation oftheCommission on
Sustainable Development, approved theestablishment ofanopen-ended Ad-Hoc Intergovernmental
Panel onForests (IPF). TheIPFismandated topursue aconsensus andformulate options forfurther
actions tocombat deforestation andforest degradation, andtopromote themanagement, conservation
andsustainable development ofalltypes offorests. Inaddressing itsmandate, theCommission on
SustainableDevelopment"recognizesthesovereigntyofcountriesovertheirnaturalresources,asdefined
inPrinciple 1(a)oftheForest Principles. TheCommission alsorecognizes thattherighttodevelopment
must befulfilled soastoequitably meetthedevelopmental andenvironmental needs ofpresent and
future generations."
3. Thereport ofthefourth session oftheIPFcontains conclusions "which reflect theoverall thrust
ofthediscussion under various programme elements [although] onlytheproposals foraction were
agreed asaresult ofnegotiations." Insubmitting itsconclusions andproposals, theIPFalsorecalled
itsmandate, andinparticular drew itsattention to(Page 2,paragraph 7):
"(a) Reiterate thevalidity oftheForest Principles;
"(b) Recognize thattheForest Principles andtheforest-related andother relevant chapters
ofAgenda 21haveformed thefoundation foritswork;
"(c) Recognize theprogress thathasbeenmade since UNCED, including theresults of
several regional, international andcountry-led initiatives, which have contributed significantly to
international dialogue onforests, national reports andbetter understanding ofsustainable forest
management;
"(d) Emphasize thatitsproposals foraction aremeant tocomplement, supplement and
elaborate upon theabove-mentioned instruments withaviewtofacilitating theirimplementation;
"(e) Stress that,tothatend,itsconclusions andproposals foraction should notdetract from
thedecisions andcommitments made atUNCED;
"(f) Recognize thatthere isaneedaswellasapotential forimproving theeffectiveness
ofexisting national andinternational cooperation onforests byimplementing itsproposals foraction;WT/CTE/W/48
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"(g) Stress theneed, inimplementing itsproposals foraction, toprovide foreffective
partnership between andcollaboration among allinternational parties andmajor groups, andinthat
context wishes toemphasize thecrucial roleofwomen."
Report oftheAdHocIntergovernmental Panel onForests
onitsfourth session
(New York, 11-21 February 1997)
IV. TRADEANDENVIRONMENTINRELATIONTOFORESTPRODUCTSANDSERVICES
Conclusions
116. ThePanel acknowledged thepotential positive relationship between trade inforest products
andservices andsustainable forest management. Itrecognized theimportance ofpromoting sustainable
forest management through mutually supportive tradeandenvironmental policies, inparticular avoiding
policies thathaveadverse impacts onthemanagement, conservation andsustainable development of
forests. However, italsorecognized thewiderange andcomplexity oftheissues associated withthis
topic. Acontinuing process ofconsensus-building isneeded, including theexploration ofthepossible
needforspecific international trade agreements inforest products andvoluntary codes ofconduct for
sustainable forest management tofacilitate andimprove trade inforest products inspecific areas.
117. ThePanel emphasized thattheissues oftrade andenvironment relating toforest products and
services should beaddressed inaholistic manner, taking intoaccount chapter 11ofAgenda 21and
theForest Principles. Itrecognized, however, thattherewasinadequate information onbothdomestic
andinternational trade innon-wood products andforest services. Further studies anddatagathering
areneeded toovercome those gapsinfuture.
118. TheUruguay Round ofmultilateral tradenegotiations made significant progress inimproving
market access forforest products, especially interms ofreducing tariffs foralltypes offorest products.
Yetbarriers tointernational tradeinforest products, particularly non-tariff barriers, could stillimpede
access offorest products totheinternational market.
119. Forest products obtained from sustainably managed forests may beconsidered tobe
environmentally friendly. Competition between different products fromdifferent regions andbetween
wood andnon-wood alternatives isinevitable. Itneednotconstrain national orglobal efforts toachieve
sustainable forest management, butcould haveimplications forsustainable forest management and
formarkets forspecific forest products inthefuture. Further economic andmarket studies, therefore,
should becarried outtodetermine howbesttousemarkets andeconomic instruments topromote
sustainable forest management.
120. Forthemajority ofdeveloping countries, exports ofprocessed products represent asmall
proportion oftheirtotalroundwood production. Additional efforts, therefore, should begeared towards
promotingefficientandenvironmentallysounddownstreamprocessingindustriesandexportsofprocessed
products, consistent withsustainable forest management, inorder toincrease theircontribution to
sustainable development andtoincrease export earnings.WT/CTE/W/48
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121. ThePanel noted thatproducer countries andinternational institutions haveundertaken many
efforts andinitiatives topromote lesser usedspecies intheinternational tropical timber market. Progress
isstilllimited,buteffortsshouldcontinueandshouldalsoincludetemperateandborealspecies,consistent
withthemanagement, conservation andsustainable development ofalltypes offorests.
122. International attention totheissues ofthecertification offorest management andlabelling of
forest products should beputintoperspective. Todate, onlyasmall proportion oftheglobal trade
inforest products andasmall areaoftheworld 'sforests areinfluenced bythose schemes. Because
ofinadequate information andrelatively fewrealworld experiences, itisstilltooearly toassess
objectivelytheirfullpotentialinpromotingsustainableforestmanagement.Morestudiesandinformation
arerequired toclarify various uncertainties, including theimpacts ofcertification onforest enterprises
andmarkets; thecompetitiveness offorest products; theeconomic andnon-economic costsandbenefits;
thedemand forcertified products; thefeasibility andcredibility ofcertification atdifferent levels;
theuseofcriteria andindicators; thegovernance andcredibility ofcertification schemes inthecontext
ofconsistency withinternational agreements; andtheroleofGovernment asaregulator, andinsome
countries alsoasresource owner.
123. ThePanel recognized thatvoluntary certification andlabelling schemes areamong many
potentially useful tools thatcanbeemployed topromote thesustainable management offorests. In
view ofthepotential proliferation ofschemes, there isaneedtopromote comparability andavoid
duplication among various voluntary certification andlabelling schemes.
124. ThePanel accepted thatGovernments haveacritical roleinpromoting effective sustainable
forest management systems. However, because certification hasthusfarbeendeveloped asavoluntary
private initiative, different views expressed ontheroles ofGovernments andintergovernmental
institutions inthedevelopment orregulation ofcertification systems require further clarification. In
considering possible rolesforGovernments, bearing inmindthefactthatcertification isamarket-driven
process, distinctions should bemade between theroles ofGovernments asregulators, aspromoters
ofpublic policy, andinsome countries asforest owners. Governments, however, havearolein
encouraging transparency, thefullparticipation ofinterested parties, non-discrimination, andopen
access tovoluntary certification schemes.
125. International efforts should focus onensuring thatexisting andnewcertification andlabelling
schemes areopenandnon-discriminatory inrespect oftypesofforests orforests products, forest owners,
managers andoperators, arenotusedasaformofdisguised protectionism andarenotinconflict with
international obligations.
126. Full-cost internalization maycontribute tosustainable forest management inthelongterm.
Without it,socio-economic andenvironmental costs maynotbefullyreflected inandaddressed by
themarket, withtheresult thatunsustainable practices mayappear more attractive andlesscostly than
sustainable forest management. Onlylimited consensus exists onconcepts definitions, measurements,
techniques anddatarequirements tointroduce environmental costs intopricing mechanisms. The
relationship tosubstitutes, among other things, willaffect theallocation ofcosts andbenefits ofcost
internalization andmarket-based instruments. Exchange ofinformation onvarious research findings
andexperiences inrelation tocostsandpolicy mechanisms areencouraged soastofacilitate discussion
andpolicy development.
127. Greater market transparency hasthepotential topromote themutually supportive rolesoftrade
andenvironment intheforest sector. Improved market transparency would alsohelptoaddress such
issues asillegal international tradeinforest products, transfer pricing andmarket distortions. Despite
some ongoing efforts byrelevant international organizations, therehasbeenlittleprogress inimprovingWT/CTE/W/48
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market transparency fortrade inforest products, andthePanel agreed thatfurther efforts should be
encouraged.
Proposals foraction onmarket access
128. ThePanel:
(a) Urged countries andrelevant international organizations tostudy theenvironmental,
social andeconomic impacts oftrade-related measures affecting forest products andservices;
(b) Requestedcountriestoundertakemeasuresforimprovingmarketaccessforforestgoods
andservices, including thereduction oftariffandnon-tariff barriers totradeinaccordance withexisting
international obligations andcommitments, andinthatcontext topromote amutually supportive
relationship between environment andtradeinforest goods andservices, andtoavoid conflict between
measures thataffect trade inforest goods andservices andexisting international obligations sothat
environmental concerns donotleadtodisguised barriers totrade;
(c) Urged allcountries, subject totheirnational legislation, toencourage efforts bythe
private sector, inconsultation withinterested parties, toformulate andimplement voluntary codes of
conduct forpromoting sustainable forest management forforest owners, forest developers and
international investors inforestry soastoimprove tradeinforest products, andtoendeavour toensure
thatexternal trade policies takeintoaccount community rights, where appropriate.
129. ThePanel discussed thefollowing options foraction relating topossible agreement forforest
productsfromalltypesofforests,basedonnon-discriminatoryrulesandmultilaterallyagreedprocedures,
without reaching aconsensus onthese orother possible procedures:
(a) TotakenoteoftheInternational Tropical Timber Agreement (ITTA) of1994, in
particular thecommitment made byITTO members toreview thescope oftheagreement fouryears
afteritsentry intoforce on1January 1997;
(b) Toexplore thepossibility ofextending theconcept oftheYear2000Objective ofITTA
foralltypes offorests;
(c) Toexplore thepossibility ofaninternational agreement ontrade inforest products
from alltypes offorests;
(d) Toexaminethepossibilitiesoffurtherinitiativesontradeliberalizationwithintheauspices
oftheWorld Trade Organization;
(e) Toexplore,withinanintergovernmentalforumonforests,intergovernmentalnegotiating
committee orother arrangements decided upon atanappropriate time, thepossibilities ofpromoting
themanagement, conservation andsustainable development ofalltypes offorests andtrade inforest
products inthecontext ofaninternational, comprehensive andlegally binding instrument onalltypes
offorests.
130. ThePanel considered thequestion oftherelationship between obligations under international
agreement andnational measures, including actions imposed bysubnational jurisdictions, butwasnot
abletoreach aconsensus. Options foraction proposed included:
(a) Urgingcountriestoremoveallunilateralmeasurestotheextentthatthoseareinconsistent
withinternational agreements;WT/CTE/W/48
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(b) Urging countries toremove allunilateral bansandboycotts inconsistent withtherules
oftheinternational trade system, including those imposed bysubnational jurisdictions, inorder to
facilitate thelong-term management, conservation andsustainable development ofalltypes offorests,
inaccordance withparagraph 14oftheForest Principles;
(c) Recognizingthatthosemattersarealsoconsideredinforumswhoseprimarycompetence
istoaddress trade issues.
Proposals foraction ontherelative competitiveness offorest products
131. ThePanel:
(a) Called uponrelevant organizations tosupport efforts togather more information and
conduct more independent market andeconomic studies ofpotential competition between wood and
non-wood substitutes, analysing thecostsandbenefits, including anysubstitution effects, andtheoverall
impact onthemanagement, conservation andsustainable development ofalltypes offorests;
(b) Urged developed countries andrelevant international organizations tosupport efforts
bydeveloping countries, consistent withpolicies andprogrammes forsustainable forest management,
toincrease theirproductivity andefficiency indownstream processing activities, andtosupport, where
appropriate, community-based processing andmarketing ofwood andnon-timber forest products.
Proposals foraction onlesser usedspecies
132. ThePanel:
(a) Called uponcountries andrelevant international organizations andresearch institutions
tointensify efforts topromote lesser usedforest species indomestic andinternational markets, where
increased useisconsistent withsustainable forest management;
(b) Urged producer countries toimplement policies thatarecompatible andconsistent with
sustainable forest management fortheutilization ofeconomically viable lesser usedspecies;
(c) Urged international organizations andresearch institutions totransfer technology, and
tosupport national andcommunity levelefforts todevelop andadapt technologies including traditional
forest-related knowledge, forincreasing thesustainable utilization oflesser usedspecies.
Proposals foraction oncertification andlabelling
133. ThePanel:
(a) Urgedcountries,withintheirrespectivelegalframeworks,andinternationalorganizations
toconsider thepotentially mutually supportive relationship between sustainable forest management,
trade, andvoluntary certification andlabelling schemes operating inaccordance withrelevant national
legislations, andtoendeavour toensure, asnecessary, thatsuchschemes arenotusedasaform of
disguised protectionism, andtohelptoensure, asnecessary, thattheydonotconflict withinternational
obligations;
(b) Inviteddevelopedcountriesandinternationalorganizationstosupport,includingthrough
technical andfinancial assistance, efforts indeveloping countries toenhance theassessment capabilities
ofdeveloping countries inrelation tovoluntary certification andlabelling;WT/CTE/W/48
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(c) Urged countries tosupport theapplication tocertification schemes ofsuchconcepts
as:
(i) Open access andnon-discrimination inrespect ofalltypes offorests, forest owners,
managers andoperators;
(ii) Credibility;
(iii) Non-deceptiveness;
(iv) Cost-effectiveness;
(v) Participation thatseeks toinvolve allinterested parties, including localcommunities;
(vi) Sustainable forest management;
(vii) Transparency;
(d) Invited relevant organizations, inaccordance withtheirmandate, tocarry outfurther
studies onvarious aspects ofvoluntary certification andlabelling schemes, including:
(i) Effectiveness inpromoting sustainable forest management;
(ii) Therelationships between various criteria andindicator frameworks andcertification;
(iii) Issuesrelevanttothedevelopment,implementation,promotion,equivalencyandmutual
recognition ofvoluntary certification andlabelling schemes, andtheroleofgovernment
inthatcontext;
(iv) Thespecial needs oflocalcommunities, otherforest-dependent populations andowners
ofsmall forests;
(v) Theneedtomonitor practical experience withcertification, including accreditation
processes;
(vi) Thedevelopment ofconsistent terminology;
(vii) Theimpactsofsuchschemesontherelativecompetitivenessofforestgoodsandservices
intheabsence ofequivalent schemes forsubstitutes;
(viii) Theneeds ofcountries withlowforest cover;
(e) Invited countries toconsider therelevance tocertification schemes oftheCentre for
International Forestry Research project oncriteria andindicators forsustainable forest management;
(f) Urged countries andrelevant international organizations dealing withtrade inforest
products tobring thecurrent trends oncertification intoperspective, andtopromote comparability
andavoid duplication ofefforts among various voluntary certification andlabelling schemes;
(g) Called upon countries andrelevant agencies tomake arrangements forandsupport
anexchange ofinformation andexperience oncertification andlabelling schemes, inappropriate forums,
toensure transparency onanongoing basis.WT/CTE/W/48
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Proposals foraction onfull-cost internalization
134. ThePanel:
(a) Called uponcountries andrelevant international organizations concerned withforestry
andtrade toexplore ways andmeans toestablish fullcostinternalization ofbothwood products and
non-wood substitutes, andtoundertake market andeconomic analyses oftheirimplications forforest
management anddevelopment costsandforsustainable forest management. Suchanalyses should also
examine thepotential costandbenefits ofimproved efficiency andsustainability atalllevels ofthe
forest industry;
(b) Drawing upon thework being carried outbycountries andrelevant international
organizations, encouraged thesharing ofinformation onresearch findings andexperiences concerning
theimplementation offullcostinternalization anditsapplication tosustainable forest management,
andrelevant policy mechanisms.
Proposals foraction onmarket transparency
135. ThePanel:
(a) Called upon relevant international organizations andnational institutions toexpand
theirwork onmarket transparency fortradeinforest products andservices, andtoinclude thepossible
development ofaglobal database;
(b) Invited countries toprovide anassessment andshare relevant information onthenature
andextent ofillegal trade inforest products, andtoconsider measures tocounter suchillegal trade.