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WTO and the Fate of the World's Forests

by Victor MenottiSpecial to CorpWatch
November 1st, 2001

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Many of the people who converged on Seattle for the 1999 World Trade Organization summit knew that the international organization posed a number of threats to the world's forests. Despite the collapse of the Seattle talks, the same agenda has quietly crept forward in the WTO, putting the fate of the world's forests and the people who depend on them at even greater risk as new negotiations open on November 9th in Qatar. At stake is the question of who will control and benefit from the world's forests.

Recently, United States Trade Representative Robert Zoellick declared that, regardless of the September 11th tragedy, the World Trade Organization would launch a "New Round" of global negotiations. "While we will take every possible step to ensure security, it is important that the World Trade Organization meeting in Doha proceed so that the world trading system can continue to promote international growth, development, and openness." Zoellick emphasized. Expanded WTO powers would further rollback the ability of people to use their governments to set limits on corporate activity worldwide, say critics.

According to the World Resources Institute, commercial logging is the primary cause of disappearing "frontier forests" (forest ecosystems that still support their original species diversity.) Global forestry corporations, like Boise Cascade, International Paper, Mead, and Weyerhaeuser, all would like expanded WTO rules to ensure unfettered access to forest resources and consumer markets. They use industry groups, like the American Forest and Paper Association (AF&PA), to lobby Washington and, in essence, help write the US position on trade and shape the WTO agenda on forest issues. This close collaboration allows industry to use the WTO as an instrument to discipline governments, overriding measures that might pinch corporate profits. The AF&PA even uses it's clout as a sales pitch to potential members.

"AF&PA can open doors for your products around the world," boasts the Association's website. "Our staff of experts can provide you with information on your foreign markets, put you in contact with key officials in Washington and foreign capitals and offer expertise in dealing with trade barriers," it goes on to promise.

The new global corporate regime is designed to accelerate industrial logging for export, to concentrate corporate control over forest resources, and to reduce protections for forest ecosystems and forest peoples. Inevitably, such an agenda will increase species extinction, climate instability, and fresh water scarcity. Heavy human costs will follow by displacing traditional peoples whose livelihoods depend on forest ecosystems. NAFTA's record reveals free trade's devastating double blow for forests: US logging companies increased logging while reducing protections for soil, water, biodiversity, and small scale producers of forest products.

Three types of rules currently under discussion at WTO headquarters in Geneva would undermine any real hope for global forest conservation. The first are existing policies that many developing nations want to change, called "implementation issues." Poor nations are not raising any new conservation issues, but existing rules greatly impact them. These rules prevent poor countries from curtailing cheap imports, restricting efforts to counter the entry of invasive species, and labeling requirements. Secondly, the WTO's 'built-in" agenda, which continues negotiations in agriculture and services from the last round of trade talks, could expand corporate farms into frontier forests. And third, so-called New Issues refer to the ambitious, multi-pronged agenda, pushed by rich nations, to restrain efforts at regulating foreign investors, protecting local businesses, and determining public expenditures.


Implementation Issues

Many governments now face stiff political resistance when trying to implement WTO rules at home, despite threats of sanctions. People living with AIDS in South Africa and Brazil successfully defied the global pricing monopoly by drug companies created by WTO patent rules. Indian farmers have led a global campaign to reject the way these same "intellectual property rights" establish corporate ownership over genetic resources, such as the patent on Basmati rice. As they did before Seattle, developing countries have again presented lists of changes they want.

Existing WTO rules that impact forest conservation include:

  • Dumping. Big timber-exporting nations flood other countries' markets with low cost timber, knocking out producers who may use (relatively) more sustainable forestry practices. One of Japan's largest and most efficient forest producers can not competitively deliver its logs to Tokyo any cheaper than Douglas Fir imported from the United States. Owner Shintaro Tajima explains that "such 'dumping' of wood products threatens to end a family business and cultural tradition that has endured 700 years." Meanwhile, US lumber producers have been inundated by softwood imports from Canada, whose government sells timber from public lands at way-below market rates, fails to limit clear cutting and lacks any endangered species laws. "The failure to reflect ecological and social costs in the price of forest products has devastating implications for the health of forest ecosystems and the communities who depend on them," says Jim Jontz of the Alliance for Sustainable Jobs and the Environment. Canada is now taking the US to the WTO to challenge any nation's right to restrict imports in order to conserve jobs or forests.

  • Invasive Species. Aiming to remove all measures that hinder trade, WTO sets restrictions on what governments can do to prevent the import of invasive species and foreign diseases. Expanding trade volumes and deregulated border checks have unleashed an explosion of exotic species introduced to different ecosystems, where they overtake native plants and animals. Timber-exporting nations view precautionary measures by timber-importing governments take against invasive species as trade barriers.

  • Eco-labeling. Already, WTO rules on government procurement prevent elected officials from using eco-labels (which inform consumers about the conditions under which wood products are harvested) to guide their choices when purchasing wood or paper products. WTO rules pose a potential threat to even voluntary third-party eco-labeling because they are seen as "discriminating" against products without eco-labels. When informing people about products becomes a barrier to trade, it becomes clear how easily the WTO can be utilized to serve corporate interests as opposed to those of consumers it claims to serve.


The Built-In Agenda

In addition to problems with existing WTO rules, the last round of talks mandated that negotiations would continue in two areas, Agriculture and Services, known as the "Built-In" agenda of the WTO's work plan.

  • Agriculture. WTO's Agreement on Agriculture has already impacted forests by intensifying industrial agriculture, yet there has been no official discussion of it. Expanding export markets can encourage landholders to clear forests and replace them with industrial monoculture crops (oil palm, soybeans, cattle, etc.) for export. The WTO faces deep internal conflict over whether it will expand or shrink its powers over national governments to provide sustainable farming and food security policies.

  • Services. WTO's General Agreement on Trade in Services (GATS) could put many of today's public services on the negotiating table as new markets for global corporations. While most of the focus is on education and health care, some conservationists are concerned that "services" may be defined so broadly as to include "extraction services" of natural resources, resulting in more favorable terms for foreign companies seeking logging concessions.


New Issues

As in Seattle, rich countries are trying to load up the WTO's agenda with "new issues" for discussion, but many countries are resisting their inclusion. Among them are:

  • Investment. The MAI is back. Global timber corporations would like the WTO to force changes in national foreign investment laws so that timber can be easily accessed. New WTO rules in investment could restrict people from using their governments to regulate foreign investors. The WTO's proposed investment agenda could also transfer much of the world's remaining frontier forests (such as those in Brazil, Russia, Indonesia, and Canada, which are held by governments as public lands) into the hands of foreign corporations. Furthermore, the so-called Investor-State mechanism could paralyze the ability of nations like Chile from ever enacting or even strengthening forest protection laws because foreign logging companies would have the legal right to sue for compensation caused by any government measures that reduce planned profits.

  • Market Access. Inevitably, expanding market access for unsustainably produced wood products will intensify forest exploitation. WTO Market Access talks cover two broad areas. The first, Tariff Elimination, would accelerate logging in Malaysia, Indonesia and Chile by reducing the tariffs (and overall costs to consumer) that nation's levee against wood imports.

The second area, called Non-Tariff Measures (or NTMs), are considered to be almost any measure that distorts trade. Some of the measures already identified by Pacific Rim nations includes raw log export bans, eco-labels, harvesting restrictions, and just about every other policy tool for better forest management. The United States timber lobby has even identified national monetary policies, such as official intervention in currency markets, as a so-called distortionary measure that should be disciplined. "We think Trade Promotion (aka Fast Track) Authority legislation should identify currency issues as a principal negotiating objective," said. Ronald Budzik, vice president for government affairs of Mead Corp., and chairman of the American Forest & Paper Association's (AF&PA) international trade subcommittee.


A Different World Since Seattle

Revolt inside the WTO Seattle summit and outside on the street exposed the institution's role as a global corporate government. The result has been unprecedented scrutiny of an institution that most people never before knew existed. Secrecy continues to be essential to the WTO's survival, and choosing the nation of Qatar only hardened WTO's public image as a distant and opaque body. Internally, the WTO faces a grave lack of confidence among member governments because Seattle left many poor countries bitter and resentful of the WTO's exclusive decision-making process. Deep mistrust continues to prevent governments from agreeing on a common agenda for the next stage of negotiations. Even WTO Director General Michael Moore has questioned the value of the institution if it fails to launch a new round.

Since Seattle, popular movements around the world have expanded their resistance to the WTO. Millions of people have pledged to actively oppose the launch of a new round and work to reduce the WTO's powers. Sadly, activism by the movement for global forest conservation has dropped off. Conservationists and forest dependent communities need to reconnect with trade activists, otherwise many of the policy tools being pushed for forest conservation could be wiped out by a strengthened WTO. NGO activity must aim to ultimately subordinate the WTO, as well as the International Monetary Fund and World Bank, to new international institutions.

Johannesburg, South Africa's World Summit on Sustainable Development (Earth Summit II) in September 2002 will be the first of a series of opportunities to take the debate about globalization to international fora other than the economic institutions. Global corporate watchdog groups can use these international meetings to highlight the problems of the WTO, IMF, and World Bank, and to generate pressure for a people-driven, UN-supported strategy to transform our international economic institutions into agencies that serve the needs of the 21st century.

CorpWatch's 2001 coverage of the WTO was made possible through the generous support of the Humanitarian Group for Social Development.

Victor Menotti is Program Director of the International Forum on Globalization.