Global Free Logging Agreement

Global Forest Protection vs The New WTO Agenda
(Summary of
Free Trade, Free Logging )

by Victor Menotti, Director of the International Forum on Globalization Environment Program

The world's forest are on the chopping block at the World Trade Organization (WTO).  When trade ministers  meet in Seattle at the WTO's Third Ministerial, November 30 - December 3, 1999, they plan to introduce a sweeping new agenda to increase worldwide consumption of wood products, open up native forests to logging, weaken environmental protections, and open the door to invasive species.  The most urgent initiative is a new forest products agreement that U.S. Trade Representative Charlene Barshefsky told Congress is a top negotiating priority.  A number of other agenda items could have even greater impacts on forests.  Advising her are executives from Weyerhaeuser, Boise Cascade, International Paper, and Georgia-Pacific. No one representing protections for forests or workers is at the table. Below is an overview of the new WTO Agenda for forests.

Stimulating Demand for Wood Products

New Forest Agreement:  The U.S. is pushing to complete by December a new agreement on forest products separate from the broader WTO agenda so as not to get bogged down.  The agreement focuses on reducing what the industry considers "barriers to trade."  The result will be cost reductions for wood products consumers, stimulating demand and intensifying logging.  While the current scope of talks covers only tariffs (import taxes), negotiations are expected to introduce "non-tariffs," which can refer to anything, even environmental laws.  The U.S. and other big exporters want total elimination of tariffs on wood products worldwide, particularly in the enormous Japanese and Korean markets.  Regarding non-tariffs, of most concern to forest protection advocates are things such as customs procedures at national borders intended to prevent the entry of invasive species.  "Bioinvasion" is now the second leading cause of species extinction in the world, after habitat destruction.  Also, the timber industry is targeting local building codes that require the use of non-wood materials; their elimination could further stimulate demand for wood products.   Non-tariff measures are not yet officially on the table, but industry leaders are preparing to introduce them.

Weakening Protections against Invasive Species

The WTO sets strict limits on what governments can do to prevent the entry of invasive species via a binding agreement known as the Sanitary and Phyto-Sanitary, or SPS, Agreement.  While the SPS Agreement currently forbids countries from enacting some of the most effective safeguards that could minimize bioinvasion risks, the U.S. and other countries are advancing proposals that could make even existing safeguards challengeable (illegal) as a barrier to trade.  Another emerging form of biological pollution, the unregulated spread of genetically-modified organisms (GMOs), is under discussion at the WTO.  The increasing use of gentically-modified varieties of tree seeds poses risks to native forests, where unwanted GMOs may migrate, further mutate, multiply, or transfer to other organisms and species, often with unpredictable results.  Proposed rules for the trade in biotechnology products would prevent governments from taking measures to stop GMOs from entering their country.

Opening Up Native Forests

Logging corporations are increasingly going abroad in search of larger forest reserves and less costly labor and environmental regulations.  The WTO is preparing to introduce a broad agenda to protect such foreign investments.  Among the ideas being advanced is that of National Treatment, which would require nations to treat foreign investors on the same terms as domestic ones.  Brazil, Russia, Mexico, and other countries with significant tracts of native forests have traditionally limited foreign access to natural resources to prevent their exploitation from being determined by absentee owners.  WTO investment rules would institutionalize "cut-and run" logging around the world and prevent governments from favoring local entities which may tend to be more accountable to the land and its inhabitants.

Weakening Environmental Protections

Also on the investment agenda is a new definition of "expropriation" that would allow foreign investors to sue governments for passing legislation that reduces profits from a planned investment.  If approved, new government measures to protect forests (or anything in the public interest) could be challenged as an illegal "expropriation" that requires full cash compensation to the foreign investor.  Known by critics as the "Pay the Polluter" principle, the WTO's proposed investment rules would send a chill over new environmental protections around the globe.

Threatening Certification Initiatives

American industry is feeling a real squeeze from competitors who operate in countries with little or no environmental regulation or enforcement. Realizing that they cannot compete on such unequal terms, they now want to create a set of  harmonized global rules to "level the playing field."  If adopted, industry-set standards would lock-down weak protections in countries where there is major logging of native forests still to be done (Mexico, Chile, Brazil, Indonesia, Russia, etc.), while opening up stronger protections (as in the U.S.) to challenge under the WTO.  The WTO has undertaken a broad discussion on adopting industry-defined standards through the International Standards Organization (ISO), and is also considering eco-labeling rules that could define some certification schemes as potential barriers to trade.

Jobs, Jobs, Jobs?

Department of Commerce statistics show that as wood products exports have increased from the U.S., employment in the sector has decreased.  This relationship undermines the conventional wisdom that increased exports create more jobs.  What's going on?  As companies compete more directly in globalized markets, they are automating production (which requires less workers) to increase their competitiveness.  As of 1996, the Department of Labor's Trade Adjustment Assistance program had certified over 5,500 U.S. workers in the forest products sector who have lost their jobs as a result of the North American Free Trade Agreement (NAFTA).