Implications of liberalisation in the forest sector

The implications of liberalisation in the forest sector are complex. Some forms of liberalisation, e.g. the removal of escalating tariffs in developed country markets offers some environmental and social benefits for forests and forest dependent people. However the implications of more generalised liberalisation measures offer some cause for concern. The impacts of open markets in the forest sector vary widely according to domestic policy factors, including land tenure, cost of capital, structure of the industry and according to the nature of the forest resource.

There is a strong case to accompany any initiatives to liberalise the forest sector with a requirement to assess the implications at a country, regional and even forest level.

There have been pressures on the US government to withdraw its support from the Accelerated Tariff Liberalisation initiative. This has come from both NGOs and members of Congress on the basis of fears that liberalisation in the forest sector would encourage unsustainable logging and concerns about the negotiation process within APEC (the trading group that has put forward the proposal). However, the US is likely to continue to support the APEC initiative as it is a key part of its overall trade policy strategy based on liberalisation in key sectors. This sectoral approach contrasts with the EU's aim of a comprehensive trade agreement.

The implications for ethical trade of accelerated liberalisation in the forest sector are not clear as the impacts are indirect.

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