Any analysis of the impacts and interaction between trade in forest products and services and sustainable forest management is highly complex as it needs to address a vast variety of influencing factors. Most importantly, major stakeholders in forest management and in trade of forest products and services lack sufficient access to information and research as well as the means to arrive at a higher degree of mutual understanding and consensus.
There are major disagreements between stakeholders, including governments, on the causality between trade and forest management in view of the importance of either trade in forest products and services or sustainability in forest management. While one faction underlines the fact that without market access, liberalised trade and non-discrimination of timber and wood-based products any development would be at pairs, the faction in support of social and environmental safeguards for forests interprets trade dynamics and effective market development as a panacea which needs efficient limitations. Both factions are aware that expansion of trade is continuing at a high speed and that it is time for better governance at all levels as to arrive at more positive impacts and interaction.
The fragmentation of the international regime on trade and environment, including forests, seems to be reflection of this debate. The variety of institutions and instruments in place, the number of processes and initiatives has the potential to overcome the notion at the international level that trade in forest products and services can not and should not drive the policy agenda for sustainable forest management, unless major non-tariff barrier effectively limit trade and discriminate one products over the other because of their origin. While in many WTO agreements and regional trade agreements environmental concerns, including those on forests, are addressed, the "chill effect" is strong on trade policy makers turning away from the rather difficult subject of sustainability in the forestry sector.
The analysis of dynamics, trends and determining factors for trade and markets for forest goods and services has shown that indeed the forestry sector and wood processing industry is less subject to global trade negotiations under the umbrella of the World Trade Organization (WTO) whose mandate is basically limited to support the decrease of tariffs and tariff escalations for processed products rather than addressing non-tariff measures. With the exception of phyto-sanitary measures and technical barriers to trade, the WTO addresses important issues for the debate on trade and SFM like public procurement and product labelling. These issues are, however, only the consequence of the concerns over sustainable forest management. It can therefore not be expected that the WTO could be instrumental to assist in solving the most fundamental problems in the trade-environment nexus, including trade and SFM.
While tariffs play a decreasing role in trade of forest products and only substantively limit trade dynamics in a few countries, non-tariff measures of various nature are being applied by governments to support the domestic forestry sector and more specifically their domestic forest industries. This holds true for some of those countries with a high degree of plantation forestry as well as for some countries with an important natural forest resource. Consequently, there are quite differing views on how to foster sustainable forest management and/or support domestic forest and processing industries as well as community forest production. There is little information exchange, however, on the justifiation and effectiveness of non-tariff barriers like export restrictions and quota, subsidies and fiscal incentives, other incentives like infrastructure or even payments for environmental services of forests.
On the side of the consumers, major initiatives and market-based instruments have been developed. While campaigns and boycotts particularly in industrialised countries have not yielded the expected results at the origin of forest production in developing countries, certification of forest management and labelling of wood-based products have given rise to high expectations. Besides the fact that competing certification schemes have difficulties to achieve an effective consumer confidence in the market place, the overall dynamic in support of forest certification has widely influenced standard setting and implementation, governmental criteria and indicators for sustainable forest management as well as forest policy making. Insofar, certification initiatives constitute more than a tool for improvements on forest management in a given forest. This fact and experience should be taken into account when analysing forest certification and wood-based product labelling as a market-based instrument.
Quite clearly, the change in regional distribution of markets and trade patterns is accelerating due to the rapidly increasing demand in the commodity of timber, for example in China. However, the increased pressure of the international community on countries to move towards sustainable forest management has caused a shift towards non-discriminating markets which are less sensitive for social and environmental concerns. This trend to divert needs to taken into account as to engage major stakeholders of those markets in the debate on sustainable forest management and trade.
The overall trend towards plantation timber, in particular fast-growing exotic species, has caused an important imbalance in the establishment of forest resources. The majority of developing countries and a number of countries with economies in transition are not subject to international or domestic timberland investments and an increasing number is even becoming net importers of timber - a resource, they could grow domestically. While trans-national companies are engaged in tropical forest regions in developing countries in the use of existing natural forest resources, the necessary supply with timber through increased planting is not supported. Since domestic markets continue to play the major role in timer and wood-based products, more attention should be drawn to domestic markets and processing industries rather than the supply of the world market. This is also valid for the fact that many developing countries are not in he position to compete with timber supplied by countries with a more favourable investment, infrastructural and political environment.
Markets for environmental services are evolving at an interesting speed, even though they remain local or national. The call for the "internalization of externalities" like social and environmental services (climate, biodiversity, water, recreation, tourism, landscape etc.) should therefore be addressed at the national level with the exception of the evolving carbon offset trading mechanisms like the emerging Clean Development Mechanism (CDM) of the Kyoto Protocol under the UNFCCC. The theoretic potential of those services in terms of income generation in support of sustainable practices in forests need to be further analysed and their commoditization should be based on the current practices.
Trade liberalisation has forced governments and other stakeholders in several countries with reasonably strong regulatory capabilities to focus attention on addressing some underlying problems (e.g. inefficiency/over-capacity in industry). Even in weaker governance situations this effect can be positive - liberalisation has stimulated the rise in profile and capability of the private sector and civil society to engage on forest trade (the former in general to seize opportunities, the latter in general to protest at abuses) - although a period of sub-optimal, incoherent and mutually conflicting actions can be expected before effective negotiated improvements amongst these stakeholders emerges. However, a basic characteristic of the institutional architecture in many countries is that constituencies and government institutions who deal with forestry and those who deal with trade are not engaged. Not many forestry departments around the world are very good at managing and negotiating issues of forest trade. Similarly it is difficult to find examples of countries where debate on trade liberalisation has been the key lever to open up forest sector planning and the development of strategic ways forward like national forest programmes.
The international community, including governments, the private sector and NGOs as well as national constituencies have been called or agreed to engage in forest sector reforms in a comprehensive and coherent way as to address forest-related issues, problems and solutions in a cross-sectoral way. It is interesting to note that many countries are quite effectively undergoing such reform process through national forest programmes and alike. However, in only very few countries, trade in forest products and services and market development has been a major issue. Analysing market prospects and developments, clarifying and identifying comparative advantages in forest production in a given context is a matter of forest policy making and should therefore be subject to forest policy processes such as national forest programmes. Also, forest sector reforms, particularly in forest rich countries have often been driven by trade dynamics and trade policy changes, including competitive tendering of timber concessions, forest taxation, deregulation and decentralisation as well as privatisation. It depends on the way in which the forestry sector pro-actively interacts with changes in trade policy and trade dynamics as well as international or national political pressure whether the impacts and interaction between trade and SFM can be moved towards positive synergies.
In conclusion, this analysis has shown that the impacts and interactions between trade in forest products and services and sustainable forest management need to be continuously analysed and communicated to major stakeholders to facilitate the debate and to arrive at solutions that are based a better understanding of trade as the motor for development.
