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Action against illegal logging: interaction with international trade agreements

Action against illegal logging: interaction with international trade agreements. Duncan Brack Associate Fellow, Energy, Environment & Development Programme, Chatham House. Forest Governance and Trade: Exploring Options Chatham House, 24 January 2007. Questions.

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Action against illegal logging: interaction with international trade agreements

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  1. Action against illegal logging: interaction with international trade agreements Duncan Brack Associate Fellow, Energy, Environment & Development Programme, Chatham House Forest Governance and Trade: Exploring Options Chatham House, 24 January 2007

  2. Questions • How do these agreements affect measures taken to exclude illegal timber products? (mainly FLEGT); and • Do they provide opportunities to promote these measures? • WTO • US Free Trade Agreements • EU Economic Partnership Agreements • International Tropical Timber Agreement • Issues around potential development and extension of the FLEGT licensing system

  3. World Trade Organisation • Doha Round started 2001 • Suspended July 2006 • US trade promotion authority ends summer 2007 • Some progress over aid for trade – but not really WTO issue

  4. Liberalisation of trade in forest products • Roundwood production +0.5%, trade +2%; South–South trade increases more (higher barriers) • Trade in value-added products increases; logs falls, except where log export bans removed • Most export-oriented developing countries benefit most • Environmental impact negative; increased pressures • Some increased incentives for SFM; also for expansion of plantations • Many negative social impacts

  5. WTO: Conclusion • Liberalisation of trade in forest products will exacerbate problems of illegal logging where they exist • Measures taken to exclude illegal products can be seen as WTO-supportive

  6. US Free Trade Agreements • More focus now on bilateral FTAs, as multilateral talks (WTO, FTAA), in trouble • FTAs/TIFAs with Cambodia, Honduras, Indonesia, Malaysia, Peru • Some FTAs have environmental side agreements – e.g. US–Singapore MoI, US–Indonesia MoU • FTAs have increased trade in forest products; side agreements ineffective against illegal logging • 2006 election will reduce trend to FTAs, increase pressure for side agreements • FTAs could offer opportunity to include controls

  7. EU Economic Partnership Agreements • Bilateral trade agreements with ACP countries, currently under negotiation • Should enter into force 2008, but currently in trouble • Trade liberalisation impacts limited, as tariffs already low • FLEGT VPAs will be preferred route to tackling illegal products • Need for coherence of development assistance, EPAs, VPAs

  8. International Tropical Timber Agreement • ITTA 2006 due to replace ITTA 1994 in 2008 • Illegal logging controversial issues during negotiations, though includes some references • ITTO’s activities limited to project funding and data analysis • No likelihood of extending role to control trade

  9. Developing FLEGT • In basic form, three major flaws: • Product coverage limited: raw timber, sawnwood, plywood, veneer • Really designed to deal with simple case of single country exporting directly to the EU, and VPA partners under no obligation to control imports– so potential problems: • Circumvention • Laundering • Covers only EU amongst consuming nations

  10. Extending product coverage • Product coverage should be extended to all products • Impact assessments for all VPA partners

  11. Covering multiple cross-border movements • System should evolve so that license travels with the timber through every stage of chain of custody • Need to segregate licensed and unlicensed products (as in certification schemes) • Need for independent monitoring / verification • VPAs need to cover imports into partner countries • Regional VPAs would make sense • Licensing system should cover all exports from participating countries • Pressures will encourage these moves anyway

  12. Extending licensing to consumer countries • Imports of high-risk products (2005): EU 23%, China 19%, Japan 12%, US 11% • Japan: possibilities of G8 initiative; procurement policy; imports from VPA countries • China: sensitive as re-exporter • US: generally hostile to trade controls; sensitive as exporter; political changes

  13. A FLEGT MEA? • Balance of responsibilities between countries; what requirements for evidence of legality? • Financing mechanism • Compliance system – against non-complying parties, and against non-parties?

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