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ITEM IV — TRADE IN FOREST PRODUCTS

AUSTRALIA said the Panel must consider the work of other fora, such as the WTO. He said there is a growing need for a labeling and certification process. Several schemes are under development and, for certification and labeling to contribute to sustainable forest management, it will need wide international support. An assessment of the status of current schemes is essential and he proposed hosting an international conference to discuss labeling issues, tentatively in early 1996.

MALAYSIA said that this was the "most contentious" issue confronting the IPF and added that sustainability for trade should be approached in the most holistic fashion, rather than solely on tropical forests. The complexity of the issue is only beginning to be appreciated and the Secretariat should provide a paper on unilateral bans that have been instituted by local authorities and national governments and offer recommendations on how these bans and restrictive measures could be lifted.

The REPUBLIC OF KOREA recalled Article 13(a) of the Forest Principles, and said that trade rules should be non-discriminatory and consistent. He added that free trade should be facilitated and should be consistent with the WTO framework. He supported Malaysia, noting that attempts to substitute wood with plastic and metal is not environmentally friendly.

COLOMBIA stated that the Panel should consider full-cost internalization regarding the cost of forest products and said that forests are the property of regional indigenous groups. He said that certain groups would like to restrict forest and wood products because they think that indigenous groups cannot place them on the market in the best way.

BRAZIL reiterated that the Secretariat's proposal in paragraph 13(i) for a discussion paper addressing trade in forest products is the greatest departure from the decisions of the CSD. He said that the IPF should develop a clear idea of what measures could be taken at the international level to improve market access for forest products on a non-discriminatory basis and a better understanding of the factors that affect trade including subsidies, import/export controls, protectionist measures, and full-cost internalization.

GERMANY will hold a workshop on this issue in 1996, and added that this issue is of highest interest to all concerned.

The US stated that the Panel should draw heavily on the work already completed by other relevant bodies and suggested the production of a synthesis paper. The proposed paper should focus on national and international factors that can inhibit trade and evaluate methods of full-cost internalization. UNCTAD could provide assistance in this area. The Panel should refer to the ITTO for consideration of the costs and benefits of marketing schemes. The Panel should draw on the work of the WTO, UNCTAD and UNEP and not duplicate the work of these organizations. The WTO Trade and Environment Committee is the appropriate body to prepare the discussion paper proposed in paragraph 13(i).

The NETHERLANDS indicated that certification and labeling are important to stimulate conservation and merit discussion.

UGANDA stressed the need to consider issues related to the domestic trade in forest products in addition to international trade. Because of the contentious nature of the issue, it is particularly important to follow the CSD mandate. The work of other international bodies, such as the ITTO, should be referred to when addressing trade issues.

COSTA RICA would like to expand this area of work regarding the services provided by the forest, such as carbon absorption, and their relation to marketing. FRANCE said this issue is delicate and important and suggested that the IPF add consideration of the total internal cost for competition costs and for wood products.

BRAZIL said that the Panel should not go beyond the terms of reference and should not exceed internationally accepted regulation on certification. He added that expert meetings and conferences could fragment the process. The EUROPEAN COMMISSION stated that it gives high priority to free trade and to the work under Item IV. The IUCN expressed the need to recognize the negative impacts that multilateral corporations have on forests and suggested that the Panel establish a corporate code of conduct relating to activities that directly impact forests. The proposed code would be voluntary and should address the use of double standards employed by some countries that follow practices illegal in their home countries when conducting work abroad.

CANADA agreed that the discussion of trade should be approached in a holistic manner in accordance with the CSD mandate. He noted the need to refer to work already completed in this area and suggested that the Panel enlist the assistance of the WTO, ITTO and UNCTAD in evaluating this work. He also stated that a synthesis paper on trade would be quite useful and, given the importance of this issue to the private sector, industry and NGO participation should be encouraged.

JAPAN reiterated the need to address trade holistically and take into consideration work done elsewhere. While he welcomed the Australian initiative to host an expert meeting on labeling and certification, he added that the meeting should address whether such a certification scheme was practical or feasible prior to beginning a dialogue on product and labeling schemes for specific forest products.

MEXICO noted the need to recognize instances where discriminatory practices have been employed in relation to trade in forest products. He suggested a synthesis paper for this issue and that such a paper address cases where extraterritorial application of trade laws has occurred. He also agreed that it would be premature to establish certification and labeling schemes before clearly determining that they would be practical.

COLOMBIA emphasized the need to reach a common understanding of the basic issues related to trade before discussing "sub-issues" such as certification and labeling. Sustainable development of forests is not currently possible in light of present wood pricing schemes. The implementation of any certification schemes should be voluntary. The Economic Commission for Latin America and the Caribbean may prove to be a valuable resource to the Panel as it has recently produced a report on environmental management with particular emphasis on forests.

FUNDACION DE PERU stated that discussion of trade in forest products must be undertaken in holistic manner and suggested that the Panel address the establishment of sustainable consumption patterns as a related issue.

The PHILIPPINES reiterated that the Secretariat's report does not reflect the CSD's decisions. Since trade is a sensitive issue, decisions already reached should not be altered. VENEZUELA reemphasized the need to utilize work already accomplished in order to avoid duplicity. The REPUBLIC OF KOREA agreed that it was premature to establish certification schemes without first understanding how they would affect trade. Certification schemes must be voluntary.

NORWAY stated that any policy formation related to the use of forest resources must undertake a long-term perspective given that results could not be expected for several decades. He noted that economic growth, social and recreational needs, and environmental factors should be taken into account in the development of international policies that respect regional differences.

The NETHERLANDS recommended that the Panel consider issues related to the timber industry in drafting trade policies. A recently produced ITTO report would be helpful in this regard.

CO-CHAIR'S SUMMARY: The Co-Chair noted the generally expressed view that this issue be considered in a holistic manner. The Panel should address the CSD's mandate in its entirety while not going beyond it. There is a need to establish policies related to the use of forest products and sustainable forest management that follow a long-term perspective. There is also a need to examine trade policies that are currently not working, particularly with regard to the employment of discriminatory trade practices. There is a possible need to develop a code of conduct for industry, and fully evaluate previously completed and on-going work in order to avoid duplication of efforts. Any evaluation should look towards the potential for use of alternative schemes and restructuring present schemes. Certification should be approached by first considering existing national schemes which could serve as a guide for international ones, although it was not agreed that the establishment of international certification schemes would be part of the Panel's work programme.

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