In the spirit of the International Year of Biodiversity and with a view towards the 2012 United Nations Conference on Sustainable Development (Rio+20), the International Centre for Trade and Sustainable Development (ICTSD) and the United Nations Environment Programme (UNEP) held “Geneva Trade and Biodiversity Day” to explore the increasingly important intersection between trade and biodiversity policy in the promotion of sustainable development.

From WTO negotiations on fisheries subsidies to sustainability certification schemes for biofuels, trade policies have strong implications for the conservation and sustainable use of biodiversity around the globe. Similarly, ongoing talks on an international regime on access and benefit-sharing under the Convention on Biological Diversity could impact existing multilateral trade rules. Despite the clear links between these two policy-making processes, there has been relatively little international discourse or analysis that has considered how these policy communities can enhance their cooperation.

It is against this backdrop that the Geneva Trade and Biodiversity Day sought to identify and explore key issues at the trade and biodiversity nexus and provide inputs to the perceived lack of synergies between the two policy communities. In this way, participants helped to ensure that trade and biodiversity rules are mutually supportive and work together for sustainable development.

Specifically, the event aimed to:

• Improve understanding among the trade and biodiversity communities of how the pursuit of their respective goals and objectives might complement or hinder each other;
• Provide information, analysis and knowledge on the impact of multilateral trade rules on biodiversity and how biodiversity policies impact on trade and poverty reduction;
• Promote policy coherence in multi-governmental fora, including the WTO, the CBD, and WIPO, especially with regards to negotiations on an international access and benefit-sharing regime;
• Explore the synergies between trade policy and biodiversity as it relates to sectoral themes, including agriculture, intellectual property, fisheries and climate change; and
• Facilitate synergies between trade and biodiversity policy-making that results in tools that are complementary to the objectives of both communities.

This important gathering was held on 22 April 2010 at the World Meteorological Organization (WMO) headquarters, Conference Room “A”. The individual sessions brought together Geneva negotiators, international organisations, civil society and academia in an effort to foster interaction among policy makers involved in different fora, as well as with those influencing policy-making processes. See “Documentation” above for select presentations from the event.

Coming up in the next two weeks

14-18 July, Geneva, Switzerland. 57TH MEETING OF THE CITES STANDING COMMITTEE. This meeting is organised by the Secretariat of the Convention on International Trade in Endangered Species of Wild Fauna and Flora. Internet http://www.cites.org/eng/news/calendar.shtml

14-19 July, Dar Es Salaam, Tanzania. SECOND AFRICAN REGIONAL MEETING ON THE STRATEGIC APPROACH TO INTERNATIONAL CHEMICALS MANAGEMENT (SAICM) AND ASSOCIATED UNEP WORKSHOPS. This event is hosted by the Government of Tanzania. The meeting is immediately preceded by the UNEP Workshop on Strengthening Chemicals Management Infrastructures 14-15 July 2008. Internet: http://www.chem.unep.ch/saicm/meeting/afreg/Dar%20es%20Salaam/Default.htm

15-17 July, Accra, Ghana. REGIONAL WORKSHOP ON IMPROVING FOREST LAW COMPLIANCE AND GOVERNANCE IN TROPICAL WEST AFRICA. This workshop is organized by the UN Food and Agriculture Organization and the International Tropical Timber Organization. The workshop will showcase possible approaches to improving forest law compliance at the country level. Internet: http://www.itto.or.jp/live/PageDisplayHandler?pageId=223&id=3970

22-25 July, Bangkok, Thailand. TECHNICAL MEETING OF THE ASIA-PACIFIC NETWORK FOR FOOD AND NUTRITION. This meeting is on “nutrition interventions for food security – can they work effectively in isolation?” The meeting is organised by the UN Food and Agriculture Organization (FAO). For more information please contact Biplab K. Nandi.

Other upcoming events

5-8 August, Manado, Indonesia. SECOND ASIA-PACIFIC FISHERY COMMISSION REGIONAL CONSULTATIVE FORUM. This meeting is organised by the UN Food and Agriculture Organization (FAO). Internet: http://www.fao.org

11-13 August, Manado, Indonesia. ASIA-PACIFIC FISHERY COMMISSION. This is the Commission’s 30th session. The meeting is organized by the UN Food and Agriculture Organization (FAO). For more information please contact Simon Funge-Smith

15-17 August, Dhaka, Bangladesh. INTERNATIONAL CONFERENCE ON FINANCING FOR CLIMATE CHANGE - CHALLENGES AND WAY FORWARD. This conference is arranged by Bangladesh-based think tank Unnayan Onneshan and will focus on financial mechanisms for supporting mitigation activities to combat climate change. Internet: http://www.unnayan.org

17-23 August, Stockholm, Sweden. PROGRESS AND PROSPECTS FOR WATER: FOR A CLEAN AND HEALTHY WORLD. This topic is the theme for the 2008 World Water Week, the leading annual global meeting place for capacity-building, partnership- building and follow-up on the implementation of international processes and programmes in water and development. The World Water Week in Stockholm is arranged by SIWI. For the printable Programme Schedule please refer to http://www.worldwaterweek.org/Downloads/Overview.pdf. For more information please contact: tel. +46 (0)8 522 139 60 ; e-mail katarina.andrzejewska@siwi.org

The STOP GE Trees Campaign, which currently consists of 137 member organisations in 34 countries around the world, called for an immediate ban on genetically engineered trees, urging the CBD and all national governments to oppose this threat.

“These so-called second generation agrofuels are further driving the commercialisation of GE trees and will result in increased illegal logging and accelerated conversion of forests to massive monoculture tree plantations of both conventional and GE trees,” Anne Peterman, Co-Director of Global Justice Ecology Project (the North American Focal Point for Global Forest Coalition) and Co-Coordinator of the STOP GE Trees Campaign, said. “This, in turn, will further drive climate change,”

“Even GE tree scientists acknowledge this threat,” according to Peterman. “In the 2005 FAO report on GE trees, over half of researchers surveyed named unintentional contamination of native ecosystems as a major concern.”

In the official negotiations under the CBD (see related story, this issue of the BioRes), Liberia, along with the African Group, called for suspending the release of any GE trees until an assessment of potential consequences has been made. The EU and Brazil favoured invoking the precautionary principle - as defined under Principle 15 of the Rio Declaration instead of under the Cartagena Protocol, which includes stronger controls - in the use of GE trees. Some observers speculated that this position was linked to a 15-year cooperation agreement on renewable energy and trade — which included using GE trees for biofuel production — signed between Germany and Brazil the week before.

Despite the environmental concerns, the potential gains from using GE trees in the production of paper, biofuels, chemicals, plastics and other products has made the debate anything but straightforward. With environmental concerns on the one hand, and economic concerns on the other, it will be difficult to strike a compromise that will satisfy both sides.

ICTSD reporting; “Deforestation threatens biodiversity efforts,” FOE RELEASE, 22 May 2008; “Genetically engineered trees,” UNDERCOVER COP, 27 May 2008; “Genetically engineered trees hotly debated at the UN Biodiversity Convention in Bonn,” EGOV MONITOR, 27 May 2008; “Groups and scientists call for halt to releases of genetically engineered trees,” THE CANADIAN, 17 May 2008.

Forest cover is diminishing at an alarming rate around the world with 9.4 million hectares lost annually.1 This loss hides two contrasting stories. On the one hand, there is an annual net increase of 5.2 million hectares primarily in monoculture timber plantation. On the other hand, there is a larger net annual decrease of 14.6 million hectares, primarily in natural tropical forests. In Indonesia, for example, forest cover has fallen from 162 to 98 million ha since 1950 and the rate of forest loss is accelerating from 1 million ha/year in the 1980s to approximately 2 million ha/year since 1996.2 In the Brazilian Amazon, a 40% increase in annual forest clearance between 2001 and 2002 brought deforestation to 2.55 million ha per year, its highest annual level since 1995.3

Market forces favour the most financially competitive land uses, often to the detriment of sustainably managed natural tropical forests. Contributory factors include:

• Profitability of other land uses (often agriculture) such as palmoil in South East Asia or soy production in Brazil.

• Failure to capture non-market benefits (including biodiversity and wilderness values) upon which much of the value publicly ascribed to natural forests is based.

• High sustainable forest management (SFM) costs – easily marketable products (such as timber and pulp) are much more cheaply produced in plantations and by harvesting operations based on forest clearance.

• Market trends currently favour uniform product quality and design flexibility – increasingly served by softwood fibre-based and moulded products – rather than a multiplicity of variable hardwood species.4

• High cost of protecting property rights in remote locations and over the long time frames which sustainable forest management requires.5

The loss of natural tropical forests is of concern at different levels, particularly to those who value non-timber forest benefits. At the local level, natural tropical forests are needed by a substantial proportion of the estimated 1.6 billion people who rely on different types of forest cover6 for at least part of their livelihoods (for example for diverse subsistence goods and craft materials). At the national level natural tropical forests are crucial for providing various environmental services, such as the protection of watershed ecosystems, while at the international level they are important, inter alia, for biodiversity conservation and wilderness experiences.

Trade policy and natural tropical forests

Impact of trade liberalisation

The extent to which market forces are driven by domestic or international trade varies enormously, both within the forest sector and in trade originating from competing land uses. For example, Indonesian timber exports such as sawnwood and panels form a high proportion of forest-based production (57%),7 whereas in Brazil 86% of tropical timber felled goes to markets in the south of the country.8 Trade liberalisation might therefore be expected to have very different impacts in different regions.

Irrespective of regional differences in the magnitude of international versus domestic trade, tariff levels are already generally low in the forestry sector, having been progressively reduced in preceding decades.9 Further tariff reductions are therefore unlikely to substantially alter patterns of land use change (including forest cover) or trends in forest management. An important exception to this is the continuing existence of tariff escalation on some processed products, where a reduction could raise tropical forest land values (and potentially the opportunity for SFM) in competition with other land uses.10

Evaluating the impact of trade liberalisation in forest products is further complicated by assessment difficulties. Tariffs are increasingly being replaced by non-tariff measures (such as restrictions and bans, product standards and quotas) the effects of which are much more difficult to identify. This is compounded by the fact that such measures can have both positive (e.g. import bans on illegally logged timber) and negative effects (e.g. labelling standards that impede market access for sustainably harvested forest products from developing countries).

In general, impacts relating to forest management within a given area of forest are less significant than impacts on forest cover (through changes in land use). It is the conversion to agricultural land which is the most frequent reason for forest loss,11 often simultaneously liberating low cost timber supplies from land conversion which undermine the prospects for sustainable management in remaining forest areas.12 Further liberalisation for agricultural products, where tariff levels remain much higher, is likely to have a more significant impact on competitive land use change than further forest product liberalisation.

Harnessing the trade potential

Since trade liberalisation in both agricultural and forest products affects competitive land use values, it is worth considering how the outcomes of the current round of trade negotiations (across all products) could actively support the maintenance of tropical forest cover and SFM, for example by helping to raise the returns from SFM relative to alternative land uses and to unsustainable forest use.

Market-based tools to promote trade in forest products from sustainably managed forests are one positive option, such as certification of forest management and labelling of forest products.13 To support these efforts, countries need to ensure that the outcomes of discussions on eco-labelling at the WTO under the trade and environment mandate cater for the certification of sustainably harvested timber and non-timber forest products. Also of relevance here, in particular for developing countries, is ongoing work at the WTO to finalise the conditions for recognising the equivalence of sanitary and phytosanitary measures. This would also include the mutual recognition of countries’ forest certification schemes in an effort to avoid having to apply for the different schemes and standards.

More also needs to be done to improve market access for sustainable forest products, especially with regard to non-tariff barriers and unilateral measures. Such considerations can shape the negotiations on market access for non-agricultural products at the WTO, as well as ongoing negotiations on the elimination of tariff and nontariff barriers for environmental goods and services. While the definition of environmental goods is yet to be resolved, it could feasibly cover sustainably harvested forest products, thereby improving market access for such products and providing an incentive for their production. The protection of forests and promotion of sustainable forestry has also been suggested for inclusion as an environmental service,14 thereby helping to give monetary value to some of the non-timber benefits of forests, although the proposal has so far not received major backing in the negotiations.

Keeping trade policy in perspective

Despite the potential for trade policy to support or at least not impede SFM, it is important to put its usefulness to achieve SFM in perspective. Many argue that trade policy is a blunt instrument for addressing problems of forest management and that more direct approaches are needed, including appropriate domestic regulation, adequate institutional arrangements, enforcement and monitoring mechanisms, international approaches outside the WTO and broader poverty reduction strategies.

Conclusion

While forest issues may not feature explicitly in the current round of trade negotiations, they are likely to be relevant in a number of negotiating areas and SFM-related priorities should inform countries’ negotiating objectives and strategies. Assessing the impacts of trade negotiations on natural tropical forests is challenging and has to take account of the context and regional dynamics both within and outside the forest sector. It is important to take into account both the limited capacity for effective forest governance in many contexts and the potential for conflict between creating incentives to promote SFM and the removal of non-tariff barriers. Above all it is essential for trade negotiators to recognise the legitimacy of values that cannot be expressed in monetary terms. This underlines the importance of incorporating forest management and forest livelihood expertise in relevant trade delegations. _

References

1 FAO (2001) State of the world’s forests, FAO Rome, Italy.

2 FWI/GFW (2002) The state of the forest: Indonesia. FWI, Bogor, Indonesia. 102pp.

3 Amigos da Terra (2003) Deforestation in Amazonia reached 25,500 square kilometres in 2002 – 06/25/2003 http://www.amazonia.org.br/english/noticias/noticia.cfm?id=72851

4 EC (2000) Competitiveness of the European Union Woodworking Industries., EC, Luxembourg. FAO (2001) State of the world’s forests, FAO Rome, Italy.

5 Hyde, W. (2003) The global economics of forestry. Draft available from the author.

6 World Bank (2001) A revised forest strategy for the World Bank group. Draft 30 July 2001. World Bank, Washington D.C., USA.

7 FAO (2001) State of the world’s forests, FAO Rome, Italy.

7 FWI/GFW (2002) The state of the forest: Indonesia. FWI, Bogor, Indonesia. 102pp.

7 Amigos da Terra (2003) Deforestation in Amazonia reached 25,500 square kilometres in 2002 – 06/25/2003 http://www.amazonia.org.br/english/noticias/noticia.cfm?id=72851

7 EC (2000) Competitiveness of the European Union Woodworking Industries., EC, Luxembourg. FAO (2001) State of the world’s forests, FAO Rome, Italy.

8 Smeraldi, R. and Verissimo A. 1999 Hitting the Target Timber Consumption in the Brazilian domestic market and promotion of forest certification. Friends of the Earth Amazonia Programme, São Paulo, Brazil.

9 Bourke, I.J. (2001) Trade restrictions and their future. FAO, Rome, Italy. 7pp. http://www.fao.org. 10 See for example the Committee on Trade and Environment’s Report to the 5th Session of the WTO Ministerial Conference in Cancún, WT/CTE/8, 11 July 2003, page 6.

11 Angelsen, A. and Kaimowitz, D. (2001)Agricultural technologies and tropical deforestation. CABI., Wallingford, UK. 422pp.

12 Macqueen, D.J., Grieg-Gran, M., Lima, E., MacGregor, J., Merry, F., Scotland, N., Smeraldi, R. and Young, C.E.F. (2003) Exportando sem crises: A indústria de madeira tropical brasileira e os mercados internacionais. Small and Medium Enterprise (SME) series. International Institute for Environment and Development, London, UK.

13 UNFF (2001) Trade and sustainable forest management – Note by the Secretary-General. Produced for the United Nations Forum on Forests (4-15 March 2002). E/CN.18/2002/5.

14 Classification Issues in the Environmental Sector – Communication From The European Communities And Their Member States, 28 September 1999, S/CSC/W/25.