EU Forest Watch: Special Edition, Trade

With less than two weeks to go, there is still no agreement on the agenda for the Ministerial Conference of the World Trade Organisation in Seattle. While trade officials panic, many NGOs hope the stalemate will stimulate reflection on the role of the WTO. Forest NGOs continue to campaign against tariff elimination for forest products. In preparation for the Ministerial, Fern hosted a second meeting for forest campaigners and organised a consultation meeting with Commission Officials.

Representatives of NGOs working on forests and trade issues met in Brussels on November 4, to discuss issues such as the elimination of tariffs on forest products, non tariff measures (NTMs) and the WTO’s dispute panel. A discussion note on the WTO’s dispute panel , as well as a background briefing were provided1. As a result of the meeting the attached information sheet outlining the links between forests and the WTO agenda was produced.

On November 5, forest NGOs met representatives of the Commission’s DGs for Trade, Environment, Enterprise and Development. The objective was to discuss the potential impact of a new trade round on forests, and to clarify NGO and EC positions. The NGOs felt the meeting was a positive first step to establish a constructive dialogue with the EC on the impact of trade on forests.

NGOs asked for clarification of the EC’s position on the proposal to further eliminate all tariffs on forest products (the ATL proposal). The Commission stated it is against signing the ATL proposal before or at Seattle, but it is open to signing an agreement if it became part of a trade round, and there were clear benefits for European industry.

Fern explained that the ATL, if adopted, would undermine the EU's Generalised System of Preferences which allows developing countries lower import tariffs for forest products if their forests are managed sustainably. The Commission agreed, but doesn't believe the ATL will be adopted in Seattle or implemented within the current deadlines (see next article).

The discussion on NTMs focused on eco-labelling. The EU intends to discuss eco-labelling at the WTO meeting, as it wants confirmation that its eco-label scheme is WTO compatible. The Commission does not intend to discuss other NTMs, although it would not rule any of them out.

The EU has commissioned the University of Manchester to carry out a sustainability impact assessment (SIA) of a new trade round (Forest Watch 36). On October 20, the DG for Trade organised a meeting between Manchester University and representatives of member states and civil society to discuss the methodology to be used for the SIA. Both NGOs and member states voiced their concerns.

NGOs reiterated the need to carry out a SIA of the Uruguay round first before embarking on a SIA of a possible new trade round. Further comments include:

· The terms of reference look at how liberalisation should proceed, not whether further liberalisation is beneficial.

· The underlying assumption that economic growth leads to sustainable development is flawed.

· The methodology has not identified a baseline for its analysis therefore it is impossible to calculate the true impact of trade liberalisation.

· Indicators for environmental impacts should not only be en of cycle, they should inlcude the process and focus on targets and timetables.

Some member states seemed uncertain whether the exercise was sufficiently credible to be taken on at a national level. Although there are short comings with the preliminary SIA the EC is carrying out, NGOs believe that member states should follow the example given by the Commission and carry out independent reviews taking into account the comments raised.

The Environment Audit Committee of the British Government is currently reviewing the process leading up to the Millennium Round including the EC's preliminary SIA. As part of this enquiry, the Committee is interviewing UK Government officials and civil society representatives. On November 9, a hearing dedicated to the EC's SIA was held, where NGOs presented their views on the EC's preliminary SIA.

On November 4, the US Trade Representative's office (USTR) released its review of 'The environmental and economic impact of the Accelerated Tariff Liberalisation proposal'. Under this proposal import tariffs for forest products would be eliminated by 2002. The USTR's study examines the direction and magnitude of change in timber harvest attributed to the ATL.

According to the review the ATL is projected to increase world trade by maximum 2%. As current tariffs are already low in most big consumer markets, with the exception of Asia, one would expect to see the biggest increase in timber harvest in those countries exporting to Asia, i.e. the US and Asian countries. However, the ATL study found an increase in timber harvest in Sweden and Finland of 7.6 and 11% respectively as well as an increase of 2.6% in Malaysia and 4.4% in Indonesia. The study also states that the US would not be affected by the ATL.

NGOs in the US and Europe have criticised the study as:

• it only looks at the economic impact and not at the environmental impact.

• the economic impact described is questionable and cannot be verified as parameters are unclear.

The 17th FSC Board Meeting took place in Vancouver from October 29th to November 1st. The main policy issues discussed were percentage based labelling and interpretation of Principle 9 for High Conservation Value Forests.

A new draft policy was proposed by the board for labelling products only partly sourced from FSC certified forests. The proposal attempts to overcome the technical bottlenecks experienced by some sectors in trying to bring certified timber and pulp products to the market place. The proposal reduces the threshold for FSC certified content in a product to carry a label and changes the way solid timber is labelled. It also tightens up the regulations on where the remainder of the timber or fibre originates from and requires companies to demonstrate that this is gradually replaced by FSC certified material. The draft policy will be open for comments until early February 20001.

The process for interpreting how and when certification can proceed in High Conservation Value Forests is moving ahead with a panel of scientific experts being formally appointed in November 1999. Trade unions are now actively involved in the FSC with a new board member.

1. Noemi Perez nperez@fscoax.org

Further to a political agreement reached in the Environment Council on 24 June 1999 (Forest Watch 35), the Council has now adopted its common position on a Regulation to revise a Community eco-label scheme.

According to the Council’s position:

· the eco-label scheme will extend from retailers to services and traders

· existing national schemes will coexist with the EU’s eco-label scheme

· 3 year workplans will be established.

The composition of the 'Consultation Forum of interested parties concerned' and the Eco-labelling Board is a controversial issue. In June, the EEB threatened to leave the board if the representation of industry and commerce was not balanced with respect to public interests. The common position is still unclear and the EEB is still considering its position.

• 30 November-3 December: Third Ministerial Meeting of the World Trade Organisation, Seattle

• 3-5 December: NGO Meeting to discuss Options for the Future of IFF, Ottawa