Comments from WWF on the Forest study : June 2004

Comment from WWF	Response from Indufor/IDPM
Key WWF Comments (recommendations):
The Commission must allocate adequate resources for the study	In depth case studies and increasing the number of case studies would require additional resources beyond the scope of the project.
Number of scenarios must be increased and there should be regional scenarios.	The focus of the negotiations is on possible new trade measures as a follow-up to the Uruguay round. From that viewpoint selecting the implementation of the Uruguay agreement as a baseline is logical just like in other studies. However, since the baseline is affected by a number of factors, special attention will be paid to baseline description incl. sustainability trends. Regional trade and sustainability issues will be covered using various means, including case studies and analysis of inter-regional trade impacts. However, it is difficult to see a need for regional scenarios; the scenarios that are to be assessed should be linked to trade measures under negotiation at Doha.
There should be better cross-referencing between this study and the impact assessment of the FLEGT	Yes, this will be done especially in the assessment of mitigation and enhancement measures, which will be completed after the mid-term phase.
The study should address the impact of illegal trade and not just restrict itself to the legal trade in timber. It should also cover forest products in general – not just timber	Yes, the study will address illegal trade in the description of the current trade flows, in the case studies and the assessment of M&E measures. The SIA must set priorities and since timber and industrial forest products dominate production and trade, they will receive most attention. Forest-related environmental services are not yet defined and there are no comparable statistics, which makes their analysis difficult. Systematic data on trade in NWFPs is also very limited.
The study should consider the full range of legislative options open to the EU to tackle the problems of illegal and unsustainable timber	Legal M&E measures will be addressed in the SIA. However, the main focus of the study is on assessing the economic, social and environmental impacts of trade liberalisation and related M&E measures and not the problems of illegal and sustainable timber as such..
It is essential that a wide range of case studies are conducted to inform the analysis. Russia and China should be case study countries in addition to Laos, Bolivia, Peru, Ghana, Gabon.	The number of case studies is limited by the budget. The selected case study countries are already representative and especially cover important countries and situations where trade liberalisation may have major impacts. New case study countries, if well selected, can provide useful information representing specific contexts if time and budget allowed. The impacts of China and Russia on trade as related to WRO will be discussed in the report. Small countries with limited trade volumes remain easily special cases.
The Doha round is not being negotiated in a vacuum – the international trade in forest products is being affected by numerous other actors and agreements. The study must take these into consideration in its analysis.	These SIAs are about the DDA, which explains the focus of the studies. Mid-term report will identify other international measures that affect trade; these will be referred e.g. when describing baseline situations concerning tariffs or identifying M&E measures.
The role of SIAs is to inform policy, not simply assess the policy options on the table. SIAs should assist negotiators in coming up with sustainable negotiating positions from the outset. This study needs to come up with suggestions for the negotiators, not wait for the negotiators to come to them.	We agree in principle, but it should be noted that policy development is a long term continuous process. The SIA study is timed to make a significant contribution to that process.
Detailed WWF Comments:
These objectives of the forestry SIA are too narrow. The overall aim of the SIA should be to influence trade policy and make it more sustainable	The objectives are in the TOR and follow the general objectives adopted for the SIA of DDA.
On the specific wording of the objectives, the report seems to suggest that it will either assess a unilateral ban on non-certified forest products, or unilateral preferential access for these products.	The study will of course consider both but these options are alternatives to each other.
A unilateral ban on all timber from certain regions at risk of unsustainable and/or illegal logging. Both need to be covered	OK.
The study should explore legislative options aimed at halting the import and marketing of illegally harvested timber and wood products, including from countries without licensing scheme and bilateral agreements with the European Union	The study will review a range of M&E measures, including various legal options. The weight given to the analysis of various options, including non-legislative ones, will depend on the preliminary analysis. This study is about SIA of trade liberalisation and identification and assessment M&E measures related to this; its main theme is not about stopping or controlling trade in unsustainable or illegal forest products.
Another flaw, is that the study is limited to examining the incremental effect of the Doha round of negotiations.	Following the TOR, the focus of the SIA is on DDA and studying related incremental impacts.
It has been widely understood that the DG Trade commissioned study is the vehicle for assessing whether actions proposed under FLEGT would contravene WTO.	The TOR make no reference to interpreting the legality of FLEGT in relation to WTO rules. FLEGT will be assessed as a mitigation measure and comments to its general feasibility will be made.
In addition the timetable for this study does not fit in at all with the other required assessments and with the progression of the legislative proposals under the FLEGT	The timetable is determined by the EC.
The Inception Report does not discuss other woodland products and critically fails to discuss the illegal timber trade	The next phases of the SIA will pay more attention to the issue of illegal trade in forest products. However, without evidence the study will not equate increasing liberalisation with an increase in illegal logging and associated criminal activities. The Inception Report has reviewed the evidence and there are many other causes for illegal logging; national demand most often being the dominant driving force. The next study phases will shed more light on the issue.
The study needs to develop more scenarios and they must be more detailed.	See the second response above.
The analysis of NTMs will require detailed assessments of each measure at a regional, national and even local level	Given the TOR and the constraints of the study it is important to concentrate on those measures, which are likely to be negotiated.
The impacts should be explored at a local level, not just a national level.	Case studies will though try to look at impacts at local level.
The study should also consider that different social groups – for example women, or indigenous peoples can often bear a disproportionate share of the impacts, and this should be recognised and factored into the study	OK. The Inception report and the case study plans have made it clear that one objective is to identify possible vulnerable countries or groups.
All interested parties and stakeholder groups should be considered.	The recommended objective is endorsed but implementation is constrained by the timing and resources of the study. Case studies will play an important role in stakeholder consultations.
The final criteria identified is “availability of data”. In WWF’s view, where a measure has been identified as having a significant potential impact, a lack of data is not a sufficient argument to not consider it.	OK. There are limited resources and also some impacts would require specific additional studies for which there is no time. The SIA will flag if there are indicators for which more information will be needed. If there are problems with reversibility, the SIA will flag the issue and adopt a precautionary approach.
WWF proposals for additional indicators	Some of these already included, some will be added.
Case study countries and groupings	See earlier comments. The next phase will have more forestry-specific groupings.
We are concerned by the 6^th criteria for selecting flanking measures for assessment: “easiness of the application/enforcement in terms of political support, compatibility and synergy with existing national or international measures, and simplicity”.	Changed to “Compatibility and synergy with existing national or international measures, and simplicity”.
Stakeholders must be given adequate opportunity and time to respond to the reports and to prepare for dialogues – in the case of the inception report, time is very tight between the publication of the report and the dialogue – less than two weeks	The recommendation is justified and the provided schedule for the entire SIA provides opportunities as defined in the TOR
Illegal logging and crime: Section 3 fails to consider the role of illegal logging and criminal activities in the forest sector.	OK. Will be addressed in the next study phases and added also to the causal framework.
We strongly dispute the assertion on page 16 of the report that “In countries, such as Russia, Norway, Finland, Sweden, Canada, and the United States, the forest cover is slowly increasing, and as a whole, forests are managed sustainably”.	We would welcome information on which studies WWF has used in drawing this conclusion. The statistics used in our report indicate that the forest cover is increasing in all these countries and the logging levels in Russia are below 50% of what they used to be. Excluding Russia, most of the forest have management plans and also the forest are increasingly certified. There are of course sustainability issues everywhere but the SIA must put the issues into perspective. The most recent FAO FRA and SOF reports provide more info on these aspect, and justify the focus put on developing countries
The use of overall forest cover as an indicator is rather crude and conceals problems of forest degradation and fragmentation.	Yes, it is true, and the Inception Report mentions it.
The causes of deforestation: This section needs to be expanded to consider pressures such as forest conversion as a result of agricultural expansion and large scale industrialisation	Agricultural expansion and also infrastructure development have been identified as important causes of unsustainable forestry. There is no evidence that would link large-scale industrialisation with significant impacts on forest cover at international, regional or even national scale. Any additional information on this item would be used if can be made available
The role of wilderness and forest protection could usefully be explored alongside other consumption trends in Section 3.4.2.	In the draft MTR, some info on conservation has already been added but we’d appreciate if WWF could provide more info on trends.
When assessing the effect of reducing tariffs it is important the consultants consider the impact of lost tax revenue on these countries’ governments.	Yes, it will be mentioned as one economic impact.
Assessing NTMs will have to be conducted on a measure-by-measure and case-by-case basis. Tools such as case studies will be important and historical analyses of the effect of introducing and removing such measures will need to be consulted.	Relevant measures will be addressed.
Another problem with the Export restrictions paragraph, is the claim that a log export ban is effectively the same as an excessively high export tax	In purely economic terms it is; otherwise no so in the future these two will not be equated.
Subsidies and anti dumping measures	The study will look at the impacts of agricultural trade liberalisation, but this is very much a cross-cutting issue which needs to be tackled also as a possible social and environmental impact in the agriculture SIA
We would disagree with the contention that the main target of public procurement policies is tropical hardwood timber	Until now that has been the case in practice but it is correct that the aim applies to all timber (not only tropical hardwoods).
While some countries may see certification and ecolabelling as discriminatory, it is important to recognise that the general consensus is that voluntary, non governmental certification & labelling schemes should not be considered as NTM under WTO rules.	A good point, but the influence of these schemes is relevant to the study.
It is essential that multiple and detailed scenarios are developed to model these changes.	See earlier comments.
It is also important to recognise that the greatest reductions in tariffs are likely to occur in developing countries and their markets precisely those countries with limited regulatory capacity and frameworks to cope with the associated impacts	Yes, this may be correct and will be studied.
The aim of an SIA is not simply to assess trade policy, it is also to come up with sustainable policy options. The consultants should be actively influencing the development of the EC negotiating position, making it more sustainable.	It is not the task of the SIA to come up with EC negotiation positions although it is hoped that the assessment provides useful information to help negotiators. The SIA will focus on the analysis of likely trade measures and scenarios; it is not worthwhile to study something that will very likely not be on the agenda.
We would welcome more exploration of the role of China – both as a producer and consumer of forest products and more attention being paid to inter-regional trade	Both will receive more attention in the next study phases.
It is important the study explore the effect of tariff changes at a local level particularly in areas with vulnerable forest habitats and social groups including indigenous peoples.	An attempt to do this will be made using case studies.
It is worth noting that higher wood prices would also intensify existing forest management and result in conversion to plantations favouring key economic species.	Possibly sometimes, but not always.
Bullet point five should clearly acknowledge that forest plantation establishment often requires clearing of natural forest.	OK. However, in many countries plantations have been established on former agricultural or waste land.
We strongly disagree with the assertion in bullet point 6 that the forestry industry is not driven by less stringent environmental legislation, but instead by economies of scale.	There is no comprehensive evidence that we are aware of on forest industries locating in countries with less stringent environmental legislation. If WWF has such evidence we would appreciate further information. Industry tends to locate where the raw material is, and close to the markets.
We disagree with the last sentence (6^th bullet point) which states that the link between these threats (increased of forest production threaten the livelihoods of indigenous people rights) to forest products exports is not always clear and definitely not automatic	We are not aware of any evidence indicating that the link is clear and automatic. We would welcome further information if available.
Cross cutting issues – Agriculture: This section also needs to consider legislation on illegal logging and voluntary licensing.	This will be covered as part of the M&E measures