WORLD TRADE  
ORGANIZATION  TN/MA/W/48 
28 January 2005 
 
 (05-0372) 
Negotiating Group on Market Access Original:   English 
  
 
NON-TARIFF BARRIERS 
BUILDING CODES AND THE WOOD PRODUCTS SECTOR 
SOME SUGGESTED NEGOTIATING OPPORTUNITIES 
 
Communication from New Zealand and the United States 
 
  The following communication, dated 28 Ja nuary 2005, has been received from the 
Delegations of New Zealand and the United States. 
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I. THE GLOBAL FOREST PRODUCTS INDUSTRY 
1. The forest products industry, with sales of US$950 billion, is one of the world’s largest 
industrial sectors and an important contributor to the living standards of developing and developed 
nations alike. Forest products are derived from one of the world’s few renewable resources, and 
supply the base material for a significant number of ot her key world industries. World trade in forest 
products is valued at more than $200 billion, a nd has quadrupled over the last three decades.   
2. For wood products, the specific product focus of  this proposal, world exports increased 15 per 
cent from 2001-2002. Traditionally, de veloped countries have been th e major producers and exporters 
within the global wood products industry. However,  global exports in wood products from developed 
countries decreased by almost $1 billion dollars each year from 1999-2001.    
3. Meanwhile, developing countries have been increasing their position in the global trade of 
wood products. Developing countries represent 12 of th e world’s top 20 exporters of wood products.  
Their dominant position in the trade of a number of specific product categories makes them well-
placed to capitalize on new opportunities (see Attachment A). In some cases, the wood products sector is among the largest earners of foreign ex change. Consider the following (based on 2002 data);
 
 
• Brazil along with Indonesia, Malaysia, and China are four of the top five exporters of wood-
based panel products.  
• Malaysia is the world’s third largest exporter of logs. 
• Indonesia is the second largest exporter of molding and millwork.  
• South Africa has steadily increased its world e xports of wood products and realized an 
average growth rate of 8 per cent from 1999-2002.  
• China is now the fifth largest importer of all wood products and the largest importer of logs 
and tropical wood products. 
 TN/MA/W/48 
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 4. Many WTO members have expressed interest in the wood products industry, from either a 
producer, consumer or exporter perspective. 
 
II. NTBS RELATING TO BUILDING CODES ARE A PROBLEM FOR THIS 
INDUSTRY 
5. International trade in wood products is adversel y affected by non-tariff barriers (NTBs).  This 
proposal focuses in particular on certain aspects of bu ilding codes (described below) that can restrict 
the use of wood products in building and constr uction, even where such wood products can be 
demonstrated to be safe and effective.  Such non- tariff barriers can severely hinder trade and erode the 
benefits of tariff elimination.  These barriers result in increased costs to industry and in some cases 
effectively ban wood products from certain segment s of the market.  Removing such unwarranted 
barriers to the broader use of wood products in bu ilding and construction will help stimulate economic 
activity in a range of associated industries.  Cons equently, we believe that a focus on these types of 
NTBs will boost global welfare, benefiting both developing and develope d economies by increasing 
the sector’s contribution to employment and economic growth.  6. The thrust of this proposal is to use th e NAMA negotiation process to begin a dialogue to 
identify and address unwarranted barriers to the use of  wood products that exist within the ambit of 
building codes.  This will make it easier for businesse s to handle the multiple a nd variety of standards, 
technical regulations and conformity assessment procedures that exist, and which currently can 
unnecessarily increase costs and prevent market access.   In proposing this, it is recognized that the 
NAMA negotiating group, and the WTO, are not standards-setting bodies, and that there already exist a wide range of international standard setting bo dies.  The United States and New Zealand emphasize 
the importance of consensus-based  processes in setting standards in such organizations.     
 
III. SPECIFIC ASPECTS OF BUILDING CODES THAT CAN CREATE BARRIERS TO 
WOOD PRODUCTS 
7. Authorities incorporate and reference technical re gulations, standards, a nd related conformity 
assessment procedures into their mandatory buildi ng codes to help ensure that each individual 
material, product, or system used in building or  construction can be re lied on to have certain 
properties or to behave in an expected manner.1  But those technical regulations, standards, and 
related procedures can also create NTBs.  There are several specific areas suggested for focus. 
 
(i)  Technical regulations and standards that crea te an inappropriate incentive for use of limited 
types of products 
 Trade barriers can arise where technical regulati ons and standards used in or referred to in 
building codes do not conform to basic WTO ru les, such as those found in the Agreement on 
Technical Barriers to Trade (TBT), or internati onal standards do not meet TBT Committee principles 
regarding transparency, openness, consensus and impartiality, for example by raising costs and 
establishing criteria that favor domestic producers.    
                                                     
 
1   Definitions for terms such as technical regulations, standards and conformity assessment procedures 
can be found in Annex 1 of the WTO Agreement on Technical Barriers to Trade.  TN/MA/W/48 
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 (ii)  Differing technical regulations and standards  in different jurisdictions create market 
segmentation  
 Differences in technical regulations, standa rds and conformity assessment procedures 
between Members can impede trade by narrowing the range of markets in which a particular product 
can be sold. 
 
(iii)  Exclusive reliance on nationality or geographic location of conformity assessment bodies, 
rather than criteria of technical competency  
 Conformity assessment systems can also become NTBs, for example where a country only 
allows its own organizations to provide such assu rances.  Such arbitrary requirements can greatly 
increase the costs of imported products and result in the arbitrary exclusion of imports.  
 
(iv) Duplicative and/or discriminatory testing requirements  
 An important aspect of testing is which test methods  are used, and whether the results from 
the test method chosen can be compared meaningfully with the results of other tests.  If a test method 
is not well described, or even more fundamentally, if  there is disagreement over which test method to 
use, or whether there is comparability in the results  produced by test methods, then it can be difficult 
for manufacturers to conclusively establish that th eir products meet the requirements of a technical 
regulation.  In some situations, results from accep ted test methods for similarly constructed specimens 
are not recognized unless the product is ret ested, which is expensive and unnecessary. 
 
(v) Overly restrictive limits on use of wood products in national building codes   
 Many national building codes prescriptively limit or prohibit the use of wood structural 
materials or contain onerous testing requirements th at pertain only to wood.  These restrictions can 
significantly and artificially dampen the demand fo r high-quality wood construction materials that 
have a record of performance equal to or better than  that of other building materials.  Appropriate 
reliance on performance-based rather  than design-restrictive or prescriptive requirements could be a 
way to overcome such problems. 
 
(vi) Problems with counterfeiting and lack of enforcement of technical regulations  
 Counterfeit and mislabeled products crowd out th e market available to genuine product.  
Similarly, lax enforcement of building codes can re sult in the use of products that do not meet the 
level of performance specified and can be a probl em. Both can pose safety and quality issues that 
reduce consumer confidence and thus reduce the ove rall market for all wood products of that type .   
 
IV. HOW NAMA COULD HELP REDUCE OR ELIMINATE NTBS TO WOOD 
PRODUCTS IN BUILDING CODES 
8. Clearly, most of the NTB issu es identified above center around technical barriers to trade and 
reflect the inability, unwillingness, or simple lack of opportunity of Members to pursue avenues for 
reducing the barriers caused by differences in the standards and conformity assessment procedures 
that underpin national building codes.  Consequen tly, Members interested in reducing the market 
segmentation that these barriers create can take the o pportunity of this dialogue  to explore options for 
addressing them. Discussions toward this end can be conducted in the WTO/NAMA context, and will 
need to adequately reflect the views of releva nt regulatory authorities and other stakeholders, 
including industry and relevant standard-setting bodies. 
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 9. Because the above-described problems tend to be  interrelated, the options for solving the 
problems may relate to one or more of the probl ems.  Briefly speaking, interesting avenues for 
consideration could include:  
• Processes for increasing acceptance of alterna tive consensus standard s for identifying wood 
products that satisfy established performance requi rements at the level participants consider 
appropriate, for example a framework through wh ich to identify test methods and standards 
that provide equivalent performance; 
• Options for increasing the transparency and opp ortunity for meaningful, non-discriminatory 
participation in the standards development process; 
• A framework to make it easier for all competent and qualified laboratories and conformity 
assessment bodies to verify that the requirements of standards and technical regulations are 
being met;   
• Options for revising test requirements to elim inate redundancy and ensure more equality in 
test requirements for competing materials; e.g., working to ensure that successful test results 
apply to all similarly constructed specimens; 
• Modify building codes and underlying standards to place greater reliance on true performance 
criteria that all construction materials would be equally eligible to meet and eliminate 
prescriptive provisions that exclude materials or products which are not of specific characteristics (for example, those not manufactured from certain species); 
• Encourage acceptance of alte rnative means through which the objectives of building codes 
can be met (i.e., use of “alternative compliance mechanisms”) to enable the widest possible 
use of appropriate materials, products and processes; and 
• Encourage the proper specification and installation where these are required to meet a 
regulated level of performance, and encourage enforcement to combat the use of falsely 
labeled or other counterfeit produc ts in building applications. 
 
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ATTACHMENT A 
 
Leading Wood Importers 2002 Le ading Wood Exporters 2002
(U.S. Dollars) (U.S. Dollars)
Imports from the World Exports to the World
United States 15,723,989,035 European Union (25)** 12,142,129,619
European Union (25)** 14,773,126,229 Canada 12,102,294,203
Japan 9,235,326,000 United States 5,100,131,436
China 4,143,010,543 Indonesia 3,278,138,582Canada 2,152,881,023 Malaysia 2,953,977,432
South Korea 1,826,476,547 China 2,830,459,187
Hong Kong 1,136,046,597 Brazil 1,765,358,177Mexico 950,384,708 New Zealand 1,177,119,461
Chinese Taipei 903,626,976 Chile 1,124,624,217
Norway 805,507,583 Hong Kong 1,001,336,021Switzerland 799,194,002 Thailand 674,968,276
Australia 579,959,625 Australia 644,899,388
Egypt 551,992,414 South Africa 360,957,245Thailand 437,525,412 Mexico 358,569,298
India 413,133,810 Norway 343,022,073
Israel 269,613,000 Chinese Taipei 286,056,935Malaysia 261,557,348 Cameroon 272,458,048
Turkey 229,751,418 Honduras 249,081,273
Singapore 225,735,321 Croatia 221,868,893Philippines 186,022,451 Singapore 200,032,435
Croatia 152,697,651 Philippines 143,870,708
Romania 144,163,980 Argentina 139,068,676South Africa 139,612,729 Turkey 115,060,901
Indonesia 120,548,867 Bulgaria 105,237,569
Tunisia 115,828,820 Papua New Guinea 104,979,258
Source: World Trade Atlas (2002) 
** for purposes of this analysis import and export data was calculated on the 25 EU members. 
 
 
 
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