February 9, 2001

Barbara Norton, Director of Information Industry and Chemical Industry Trade Policy
Office of the US Trade Representative
600 17th Street N.W.
Washington D.C. 20508
Fax: 202-395-9674

RE: Comments from Interested Parties on the APEC Study of Non-Tariff Measures in the Forest Sector.

Dear Ms. Norton:

The Pacific Environment and Resources Center and the other undersigned groups thank the USTR for providing an opportunity for interested parties to comment on the "APEC Study of Non-Tariff Measures in the Forest Sector" as stated in an October 30 memorandum from Acting Assistant US Trade Representative, Dominic Bianchi.

The undersigned # organization from # countries submit their views to you on the content of the APEC NTM study and the process that the USTR is following in its work on Non-Tariff Measures. The study offers an alarming "laundry list" of potential trade barriers, many of which we consider to be legitimate environmental safeguards. However, the study does not refer to any specific proposed actions upon which to comment, leaving us to assume that the measures identified as NTMs may actually be considered for elimination in APEC. We hope our comments will impact the course of NTM discussions at APEC and other trade fora.

COMMENTS ON PROCESS

In our view the APEC NTM study's listing of a large number of forest conservation and sustainable management measures as trade barriers warrants a re-evaluation based on US Government environmental objectives and a closer consultation with stakeholders. We call on the USTR to reconcile the APEC NTM initiative with its publicly stated commitment (December 2, 1999) to opposing trade liberalization that threatens legitimate forest protection measures. We also would like to know how the USTR plans to follow the guidelines for environmental reviews of trade initiatives in natural resource sectors under Executive Order 13141.

We would like to provide comments on the study but also want to understand how to make our comments as pertinent and useful as possible. In our August 29 letter to USTR, some of the undersigned groups sought clarification on the purpose and process for the NTM study review. We requested more information about any US proposals regarding NTMs and the forestry experts group and the USTR's plans for incorporating public comment into NTM discussions. The USTR has neither acted on our August 29 recommendations nor met our requests for more information.

We feel that public consultation on the APEC NTM study has been less than adequate. For example, less than half of the seven organizations that signed the August 29th letter received the October 30th notification about the comment period on the study. We hope that USTR will correct lapses in the notification process and ensure that the public has full opportunity to comment on trade liberalization initiatives, especially in matters of environmental protection and natural resource management. We also urge the USTR to follow through with its September 13 commitment, in a letter to Pacific Environment and Resources Center, to "consulting carefully with interested stakeholders to take fully into account the environmental implications - whether positive or negative - of particular NTMs here at home and in other countries."

The undersigned groups ask that the USTR provide us with information about mechanisms for public dialogue and how interested parties can participate in discussions about NTMs at APEC and other fora. We would like information about the proposed forestry experts group, how it relates to NTM identification and liberalization, and how it will pursue the environmental objectives of the US Government and its constituents.

COMMENTS ON CONTENT

We are extremely concerned about the potential implications of the study, especially the listing of a large number of forest conservation and sustainable management measures as NTMs and the suggestion that they are unacceptable impediments to trade. The study also implies an increase in the volume of traded forest products, underscoring the need for adopting - not eliminating - environmental safeguards to mitigate forest destruction. We are concerned in particular with the study's listing of certification and recycled content policies, logging bans, raw log export restrictions and phytosanitary standards as NTMs that might potentially face removal. It is clear that the elimination of many of these important safeguards by APEC or any other trade forum will negatively impact forests in the US and around the world.

We also find to be problematic the ambiguous and often contradictory way in which NTMs are defined because it results in the inclusion of a number of environmental measures that should not be in the purview of trade negotiators. The study has sought to describe and analyze a large number of policies that may have an impact on trade. This could conceivably include the universe of governmental as well as private sector policies, all of which could theoretically present some impediment to trade. The focus on "socially and environmentally motivated NTMs" is contradictory. On the one hand, the authors find that "environmental NTMs are not technically trade impediments" and on the other hand define NTMs as "restrictions which act as [trade] impediments." Included in the list of "NTMs" are legitimate environmental policies and initiatives such as certification and recycled content policies, logging bans, raw log export restrictions and phytosanitary standards. Inclusion under the rubric of "NTM" implies that all these measures are categorically trade-restrictive policies and that increasing the volume of trade has de facto priority over a country's domestic environmental goals.

We find the inclusion of the following categories and specific forest protection measures for potential liberalization unacceptable. We propose that the categories and examples of forest protection measures listed below be removed entirely from any list of NTMs that the US will consider for potential elimination. We also may contest the inclusion of other environmental protections in subsequent NTM lists and negotiations.

Environmental Protections that should not be listed as NTMs:

• LOGGING BANS AND HARVEST RESTRICTIONS: The authors themselves have pointed to logging bans that had the desired effect of curbing massive deforestation, erosion and flooding. A number of bans in place in the US and elsewhere are legitimate measures to protect habitat for endangered species. Examples listed in the study include the logging ban that China instituted to curb massive deforestation that has led to erosion and flooding, the US Endangered Species Act which restricts logging in certain areas to conserve habitat and New Zealand's Forest Amendment Action which prohibits natural forest logging without an approved sustainable management plan.
• SUBSIDIES AND INCENTIVES FOR AFFORESTATION: When applied in the appropriate context, these are important incentives for reclamation of degraded lands and protection of natural forestlands. They also have the potential to stimulate local communities towards sustainable development. Examples listed in the study include the financial incentives that China, the Republic of Korea and the US provide for reforestation and afforestation, and Thailand's government funded tree planting schemes for community forestry.
• RECYCLING AND EMISSION CONTROL POLICIES: Measures are in place in the US and other APEC member countries that reduce the use of toxic chemicals and prevent non-recycled paper from out-competing recycled paper. Examples listed in the study include Japan's restrictions on formaldehyde emissions from building products and limits on brightness in paper that prevent non-recycled paper from out-competing recycled paper, the US' minimum standards for waste paper content in newsprint, and the Republic of Korea's ban on imports of wood preservative chemicals and wood treated with such chemicals.
• PROCUREMENT AND USAGE POLICIES: Local and national procurement policies, especially requirements for recycled content, can have a significant positive effect on forest conservation. Examples cited in the study include state and local governments' environmental specifications for wood products used in public projects, the US federal minimum recycled content law of 40% and the measures that the Government of Japan is taking to significantly reduce wasteful plywood use within three years.
• CERTIFICATION AND ECO-LABELLING INITIATIVES: Certification and eco-labeling are natural market responses to the demand for more environmentally responsible products. Such programs do not belong in the study or in any list of NTMs to be negotiated, particularly if they are private, voluntary efforts to promote use of eco-friendly products, such as the US Certified Forest Products Council, the UK 1995+ Group, Green Seal, and the Forest Stewardship Council.
• LOG EXPORT BANS: When applied alongside domestic conservation measures, export bans or limits, both in the US and in the Asia-Pacific region, can stimulate more efficient use of raw materials and help take the pressure off of the national forest estate. Examples listed in the study include restrictions in the US, Indonesia, Vietnam, Papua New Guinea on the export of unprocessed wood such as raw logs to stimulate local and more efficient processing and to reduce volume of wood extracted from forests.
• PROTECTIONS AGAINST EXOTIC PESTS AND DISEASES: Phytosanitary measures have been imposed by several APEC member countries to control transmission of pests and disease. Where there has been shown to be a real danger, such policies have been recognised as legitimate defenses. Examples listed in the study include phytosanitary measures in Australia that require kiln drying and restrict imports of sawn timber containing bark, measures in Japan that require inspection and fumigation of logs under all circumstances, measures in Mexico that require all US sawn timber to be certified to have come from pest-free areas, and measures in the US to require that solid wood packing material from China be heat treated or fumigated.

The study's quantitative analysis projects an increase in volume of traded forest products, which only underscores the need for maintaining or enhancing - not eliminating - environmental safeguards to prevent forest degradation or destruction. It is clear that the potential elimination of many of these important safeguards by APEC or any other trade forum will negatively impact forests in the US and around the world. Unfortunately neither APEC nor the USTR have taken any visible steps toward reviewing the potential environmental impacts of such actions.

Projections that would significantly increase pressure on forests:

• REMOVING ALL EXPORT AND IMPORT TARIFFS AND SUBSIDIES would increase output of forest products of $2 billion, implying an increased impact on forests.
• REMOVING INDONESIA'S LOG EXPORT RESTRICTION would increase exports from $60 million to $900 million, implying an increased impact on already overcut forests. This would depress global log prices and increase global wood, pulp and paper production by $80 - $90 million.
• REMOVING THE CANADA-US SOFTWOOD LUMBER AGREEMENT, which attempts to rectify the unfair advantage Canada's forest sector has over the US due to its subsidies, would increase Canada's lumber exports to the USA by 7.5% to 10% and Canada's lumber exports to all APEC countries by 4.6% to 6.2%, resulting in additional environmental impacts on Canada's forests.

ELIMINATING OR PROHIBITING THE USE OF FOREST CERTIFICATION and labeling mechanisms would increase forest product exports from many countries with already heavily impacted forests and poor environmental safeguards.

Recommendations:

The APEC Study of Non-Tariff Measures in the Forest Sector portends a potentially dangerous turn in trade liberalization. It is of great concern to us that the USTR and APEC may negotiate a trade initiative that would increase the amount of wood harvested and traded from our planet's dwindling forests at the same time that it takes away the important protections and fair trade tools that citizens need to protect these forests. In order to prevent the improper treatment of legitimate national policies as items for negotiation in trade talks, we recommend that the USTR take the following actions:

1. Demonstrate its commitment to its December 2nd statement to oppose trade liberalization that threatens legitimate environmental protections and ultimately withdraw from all negotiations that include elimination of the above listed forest protection measures;

2. Conduct a thorough environmental review before proceeding with any forest sector NTM negotiations in accordance with Executive Order #13141;

3. Solicit informed and meaningful comments on the APEC study and any follow-up actions from a broad sector of civil society in the US and internationally;

4. Clarify its plan for discussing forest sector NTMs in other trade fora besides APEC, such as WTO, FTAA and bilateral negotiations;

5. Make available the following information to the undersigned groups and the general public so we can make more informed comments:

* Proposal and timeframe for discussing NTMs at APEC,

* Proposal for the forestry experts group,

* Plan for incorporating public comment into the US position on the APEC study.

We hope the USTR will view our comments as recommendations for how to proceed further with USG and APEC treatment of environmental policies in the trade arena. The USTR must follow through with its commitment to safeguarding environmental measures and communicate this position effectively to the APEC members, in bilateral and multilateral negotiations as well as future studies. Thank you for your consideration of this matter. We look forward to your response. Please do not hesitate to contact us if you have any questions.

Sincerely,

Paige Fischer, Forest and Trade Program Director, and Doug Norlen, Policy Director
Pacific Environment

Michael Brune, Forest Campaigner
Rainforest Action Network, California

Jim Jontz, Executive Director
American Lands Alliance

Mike Leahy, Natural Resources Counsel, and Carroll Muffett, International Counsel
Defenders of Wildlife

Bill Mankin, Director, and Jennifer McLean, Policy Analyst
Global Forestry Policy Project

Michael Marx, Executive Director
ForestEthics, California

Victor Menotti, Environment Program Director
International Forum on Globalization, California

Joe Scott, Conservation Director
Northwest Ecosystem Alliance, Washington

Dan Seligman, Director of Just Trade Campaign
Sierra Club

Allan Thornton, Executive Director
Environmental Investigation Agency, Washington DC

David Waskow,
Friends of the Earth, US

Elizabeth Ellis
The Certified Wood Products Website, Washington

Tim Hermach
Native Forest Council, Oregon

Rachel Martin
Allegheny Defense Project, Pennsylvania

Bob Mueller
Virginians for Wilderness, Virginia

Rick Steiner
The Coastal Coalition, Alaska

Doug Cornett
Northwoods Wilderness Recovery, Michigan

Jen Creasy
Shenandoah Ecosystems Defense Group, Virginia

Tracy Davids
Southern Appalachian Biodiversity Project, North Carolina

Mary Byrd Davis
Yggdrasil Institute, Kentucky

Christina Wulf
Virginia Forest Watch, Virginia

Colleen McCrory
Valhalla Wilderness Society, British Columbia, Canada

Tyhson Banighen, Executive Director
TIES - Turtle Island Earth Stewards, British Columbia, Canada

AnnaMaria Valastro
Peaceful Parks Coalition, Ontario, Canada

James Tweedie
Castle-Crown Wilderness Coalition, Alberta, Canada

W. O. Pruitt
Department of Zoology, University of Manitoba, Manitoba,Canada

Philip Thomas
International Conifer Conservation Programme, Royal Botanic Garden Edinburgh, Scotland

Melissa Rengananthan
Malaysia Nature Society, Malaysia

Adelbert Gangai
Conservation Melanesia, Papua New Guinea

Fiodor Vladimirovich Kronikovsky
Taiga Ecological Group, Russia

Anatoly Lebedev
Bureau for Regional Oriental Campaigns (BROC), Russia

Valentin Zabortsev,
Krasnoyarsk Regional "Angara-Enisei Rescue ( Rehabilitaton)"Association, Russia

Tanty S. Thamrin
Wallace Forest Ecological Protection, Indonesia

Yasar Ozturk
Arkadas ‚evre Grubu (Friends Environmental Group), Turkey

Umit …ztŸrk
Greenscreen, England

Chantal Marijnissen,
FERN, England

Mihoko Shimamoto
Faculty of Social Sciences, Hosei University, JAPAN

Takahiro Kohama
Japan Tropical Forest Action Network (JATAN), Japan

Toyoyuki Kawakami
APEC Monitor NGO Network, Japan

Patricia Vera Osses
Defensores del Bosque Chileno, Chile

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