The WTO and the Forests

by Victor Menotti

Earth Island Institute Journal, Winter 2000


The WTO's Global Free Logging Agreement (FLA) would accelerate the logging of native forests, weaken environmental protections, and open the door to invasive species. The FLA is seen as such a threat that more than 130 groups have signed a letter demanding an immediate halt to the FLA negotiations. (No environmentalists, workers, or community leaders were represented at the FLA discussions.)

US Trade Representative Charlene Barshefsky has told Congress that the FLA is a "top negotiating priority" Barschfskys advisors include executives from logging giants like Weyerhaeuser, Boise Cascade, International Paper, and Georgia-Pacific.

International Paper CEO John Dillon has informed Washington that signing the FLA "is essential to the future success and growth of the US forest products industry"

Meanwhile, Deputy US Trade Representative Susan Esserman has assured timber lobbyists that the FLA is "very important for us and for the President" and has promised to "seek conclusion on the agreement" in Seattle.

More Logs, More Bugs

The FLA would eliminate tariff barriers (such as import taxes) and non-tariff barriers - that could include any environmental laws deemed to "inhibit" or "distort" trade. Industry studies project that eliminating tariffs on wood products could increase consumption by three to four percent worldwide.

The timber industry hopes to target raw log export bans, government purchasing rules favoring recycled paper or timber from certified-sustainable sources, and local building codes that require the use of non-wood materials.

Non-tariff measures up for elimination include measures to prevent the entry of invasive species. "Bioinvasion" is now the second leading cause of species extinction in the world, after habitat destruction. the WTO currently sets strict limits on what regulations governments can use to prevent the entry of invasive species. The US and other countries are advancing proposals that could challenge even these surviving safeguards as a barrier to trade.

Genetically modified organisms (GMOs) - another emerging form of biological pollution - are also under discussion at the WTO. The introduction of GMO crops and trees poses risks to native fields and forests. GMOs may migrate, mutate, multiply, and transfer manufactured traits to other organisms and species - with unpredictable results. The WTO is proposing new global trade laws that would prevent governments from stopping GMOs from entering their country.

Opening Up Native Forests

The WTO is preparing to introduce a broad agenda to promote and protect multinational logging investments. Brazil, Russia, Mexico, Indonesia, and other countries with significant tracts of native forest have traditionally limited foreign access to natural resources to prevent their exploitation by absentee owners. Proposed WTO investment rules would remove such government controls, require nations to treat foreign investors on the same terms as domestic ones, and institutionalize cut-and-run logging around the globe.

The WTO's proposed investment rules would remove the ability of governments to promote sustainable natural resource use. A WTO proposal to ban "performance requirements" would outlaw many of the preconditions that governments demand from foreign investors to ensure that some benefit actually accrues to the local economy Examples include the promise to transfer green technologies, the commitment to export a certain percentage of production (important for countries in debt), or the assurance of remaining in a given community for an agreed period.

Weakened Eco-Laws

The WTO plans to redefine the "expropriation" of a foreign investment so broadly

that it would allow any corporation to sue any national government for enacting measures that "have the effect" of reducing the foreign investors "planned profits." Such investment rules already exist under NAFTA. If adopted as a global rule under the WTO, laws designed to protect forests (or indeed, anything in the public interest) could be challenged as an illegal "expropriation," requiring full cash compensation to the foreign investor.

A showdown is coming as the WTO prepares to establish new pro-industry rules on logging practices that would override the more rigorous environmental standards set by the Forest Stewardship Council.

The US timber industry now says that it cannot compete against logging operations in countries with little or no environmental regulation or enforcement. US timber interests have specifically named the US Endangered Species Act as the biggest burden on US competitiveness.

Timber interests now want a set of harmonized global rules to "level the playing field. If adopted, these industry-set WTO standards would lock in weak protections in countries with major reserves of native resources (Canada, Mexico, Chile, Brazil, Indonesia, and Russia), while exposing relatively stronger protections (such as exist in the US) to challenge under the WTO.

Jobs, Jobs, Jobs?

US corporations are trying to promote this WTO agreement as a job-creating initiative for US workers, but industry trends make this claim suspect.

In recent years, billions of dollars were invested in new paper-mills in 'cheap-labor" countries like Indonesia and Brazil. The logic of global capitalism will likely send most of the new jobs to "lower-cost" nations.

Whether you are working to protect endangered species, reduce wood-fiber consumption, promote certified timber, encourage community-based forestry, or protect old-growth trees, the WTO is on a collision course with your efforts.

In recent years, the international forest protection community has developed a voice to influence the lending policies of the World Bank and other multilateral development institutions.

We now must do the same with trade and investment policy - the new arena of forest protection.

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

World Trade Organization