NEGOTIATIONS SET FOR A NEW TIMBER AGREEMENT

5:16 AM Apr 7, 1993

NEGOTIATIONS SET FOR A NEW TIMBER AGREEMENT
Geneva 7 April (Chakravarthi Raghavan) -- Efforts to negotiate a successor agreement to the International Tropical Timber Agreement (ITTA) are to begin in Geneva at a UN Conference under UNCTAD auspices.

Wisber Loeis, Deputy Minister of Foreign Economic Relations of Indonesia and former Indonesian Permanent Representative to the UN in Geneva, is expected to Preside over the Conference. The International Tropical Timber Council has recommended his name and it is to be formally approved at the opening session Tuesday next.

A major issue before the Conference, due to run till 16 April, is the proposal of the producers to extend the scope of the Agreement to cover all timber -- tropical, temperate and boreal forests -- and not merely focus on tropical timber. The consumer countries have been opposed to this.

The ITTA, concluded in 1983, entered into force provisionally on 1 April 1985, and has 23 producing countries and 27 consuming countries, besides the European Community, as its members. The ITTA, as stipulated in its provisions remained in force for an initial period of five years and has twice been extended for periods of two years at a time.

The present agreement is due to expire on 31 March 1994. If a new agreement is negotiated and concluded before then, but has not yet entered into force, the Council of the agreement can extend the current agreement again and it will remain in force until a new agreement replaces it.

The present agreement seeks to ensure that the economic use of tropical timber is in balance with conservation efforts and environment needs, and provide a framework for cooperation and consultation between producing and consuming countries to promote expansion and diversification of international trade in tropical timber and improving structural conditions in the market.

Its activities include Research and Development aimed at improving forest management, reforestation, wood utilization, market intelligence, encouraging processing of tropical timber in producing countries, improvement in marketing, distribution of exports and maintaining an ecological balance.

Since the conclusion of the ITTA, the UNCED Earth Summit at Rio de Janeiro in 1992 and its Agenda-21 action programme as well as the non-binding forest principles, has brought the issues higher up on international agenda.

The major consuming countries have been looking at the Tropical timber resources, located in the developing world, as a "global resource" to which they are entitled, both for timber resources as well as to serve as a "lung" to absorb their carbon dioxide emissions from ever-increasing energy consumption and life-styles. They have found it easy to satisfy their local environment lobbies by focusing on tropical timber forests and their sustainable management, with most of the burden cast on the producers.

The producer countries in their proposals for the new agreement have sought to restore a balance by calling for an agreement to include within its scope all types of timber -- tropical, temperate and boreal -- and for measures and mechanisms for financial help and technology transfers to the developing countries,

In this view, their proposal would create through the new agreement an International Timber Trade Organization, open to any country engaged in International Trade in Timber.

The producer proposal on financial resources and mechanisms calls on developed country members to provide "new and additional financial resources" to enable developing member-countries to meet "agreed full incremental costs" to them of implementing measures fulfilling the objectives of the agreement and benefit from its provisions.

The implementation of the financial assistance commitments (by the developed countries) "shall take into account the need for adequacy, predictability and timely flow of funds and importance of burden sharing among the contributing members," the producers proposal stipulates.

The extent to which developing member-countries would implement their commitments under the Agreement is linked to the extent to which developed countries implement their commitments relating to financial resources and transfer of technology, taking fully into account need for sustainable development.

The financial mechanisms proposal envisages provision of financial resources to developing countries on a grant basis, with the mechanisms functioning "under the authority and guidance of, and accountable to" the International Timber Trade Council that will be created under the Agreement.

The Council has the mandatory responsibility of determining the policy, strategy, programme priorities and eligibility criteria relating to the access and utilization of the resources.

"The mechanisms shall operate within a democratic and transparent system of governance," the producers proposal further stipulates.

The proposals also call for a Special Account to be set up to finance development of projects and pre-projects of developing countries to achieve the objectives of the Agreement.

The Special Account is to be mandatorily financed by annual contributions of developed member-countries, as well as unearmarked voluntary contributions. The mandatory annual contributions are to be an agreed percentage of the total share of value of trade in timber among the member countries.

The R & D projects to be eligible for finance include those relating to activities in developing member-countries on:

* sustainable utilization of wood with a view to improving efficiency, including sustainable utilization of lesser-known and lesser-used species;

* sustainable development of natural forests including reforestation and rehabilitation;

* value added product development,

* harvesting and logging infrastructure,

* transfer of technology and human resources development and training,

* institutional framework and national planning.

Other R and D activities eligible for project financing include: market transparency and statistical and economic information; market elasticity and substitutability including marketing of new products; pricing and internalization of sustainable development costs in member-countries; environment and social-economic effects of trade in timber.

The consumer countries have been opposed to the move to extend the scope of the agreement to cover all timber, rather than merely tropical timber as now.

Their objectives provide for enhancing ability of members to "trading only in tropical timber products from sustainable sources" and for "increasing the ability to conserve other forest values".

While the consumers proposal envisages a "special account" for financing projects, there is no provision for mandatory contribution. The special account's resources will be drawn from the Second Account of the Common Fund, Regional and International Financial institutions and voluntary contributions.

One producer source noted the focus of the developed countries, in the run-up to and since the Earth Summit, on measures to 'green' the developing world and ensure sustainable management of forests, and the attempts of some of the industrialized countries and their leaders to impose trade and other sanctions on developing countries failing to meet 'sustainable management of tropical forests' and said, the test of the new agreement would be whether the North is willing to accept similar obligations to that of the South on its own forest and timber resources and "put its money where its mouth is".