Bridges Trade BioRes • Volume 6 • Number 2 • 3rd February 2006

NEW TROPICAL TIMBER TRADE AGREEMENT CREATED


NEW TROPICAL TIMBER TRADE AGREEMENT CREATED

Representatives from over 180 governments and international organisations reached consensus on a successor pact to the 1994 International Tropical Timber Agreement (ITTA) on 27 January, following two weeks of intensive negotiations in Geneva. The new commodities agreement aims to promote the expansion and diversification of international trade in legally harvested tropical timber from sustainably managed forests, as well as to encourage the sustainable management of such forests. Like its predecessor, the new treaty was negotiated under the auspices of the UN Conference on Trade and Development (UNCTAD). Once ratified, it will replace the 1994 pact, which will expire at the end of 2006. Delegates expressed relief that both timber consuming and producing members of the 1994 pact were able to reach agreement based upon the four rounds of talks that have been held since 2003 (see Bridges Trade BioRes, 25 November 2005. Both sides were able to overcome their differences, citing a spirit of good faith as well as concessions made in the last days of the talks on the scope of and funding for the new agreement.

Commodities agreement and/or MEA?

On the question of the scope of the new pact, references to ecological services, non-timber forest products (NTFPs) and certification and voluntary market-based mechanisms proved particularly contentious. The preamble of the final agreement recognises "the importance of the multiple economic, environmental and social benefits provided by forests, including timber and non-timber forest products and environmental services". References to certification and market-based mechanisms were removed from the preamble, but the agreement does in its ‘objectives’ section encourage information sharing for voluntary mechanisms such as certification. The reference to certification was included despite comments from India, Malaysia and Brazil that references to certification could lead to the Agreement prejudicing members’ rights under trade agreements. This reflected concerns among a number of timber-producing countries that the new agreement should not tell countries to support certification per se, as trade rules, such as in the WTO Agreement on Technical Barriers to Trade (TBT Agreement), include disciplines on government-approved barriers to trade which some fear could include forest certification. Instead, these countries would prefer to maintain the policy space and autonomy to choose how to encourage sustainable forest management amongst private actors, without implications for trade rules.

The new agreement also aims to contribute to sustainable development and poverty alleviation; improve information sharing on timber trade; promote increased processing of sustainably-harvested tropical timber in the countries where it is grown; improve the marketing and distribution of tropical timber; encourage members to develop national policies aimed at the sustainable use and conservation of forests and their genetic resources; strengthen capacity for forest law enforcement and governance and to address illegal logging and related trade; promote understanding of NTFPs; and recognise the role of forest-dependent indigenous and local communities.

Financing as the key question

Some of the most controversial issues in the talks centred upon financing for the new accord and what proportions of the necessary funding should come from developing-country timber producers and mainly developed-country consumers. A significant proportion of the impact of the ITTA on the trade in sustainably harvested timber is felt through project funding. Such grants — authorised by the International Tropical Timber Council, the treaty’s governing body, and administered by its secretariat, the International Tropical Timber Organization (ITTO) — have been falling steadily since the early 1990s. During the negotiations, demands from developing-country timber producers for increased funding clashed with a range of different offers from developed countries. In the final hours of 27 January, however, the EU and producer countries were able to resolve their differences over the proposed funding structure. The final text agrees that in the assessed Administrative Account of the new pact, consumers and producers will split the costs of basic administration, that producers will shoulder one fifth of core operational costs and consumers four fifths, and that the operational costs will not be more than one third of administrative costs.

IGOs applaud the deal, NGOs noticeably absent

"The agreement establishes a framework for cooperation between exporters and importers," said Manuel Sobral, executive director of the ITTO. Lakshmi Puri, the head of UNCTAD’s Division on Trade in Goods, Services, and Commodities, reaffirmed the importance of the pact as the only internationally-negotiated agreement on forests. However, environmental groups have been noticeably absent from talks, with many of them turning towards the Convention on Biological Diversity and the EU-sponsored Forest Law Enforcement, Governance and Trade processes rather than the ITTA and the UN Forum on Forests.

The treaty provides for a complex division of voting power among the 33 producing and 26 consuming countries that are members of ITTA-1994. Each of the two blocs is assigned 1000 votes. These are divided among producer countries on the basis of regional distribution, each country’s relative share of tropical forest resources, and timber export volumes. Consumer countries’ voting power is linked to their imports of tropical timber. Governments will be able to sign onto the new pact as of 3 April. It will enter into force once it is signed or ratified by 12 producer governments accounting for 60 percent of their votes, and 10 consumer governments accounting for 60 percent of tropical timber imports in 2005.

Additional Resources

For daily reporting, see IISD linkages

For previous news coverage of ITTA and other forestry developments, visit http://www.trade-environment.org/page/ictsd/news/forestswater.htm

For relevant resources, visit http://www.trade-environment.org/page/theme/nat_res/forest.htm

For relevant links, visit http://www.trade-environment.org/page/links/forests.htm

ICTSD reporting; ENB Vol. 24 No. 65-75, 16-27 January.