Forest ProductsTrade Highlights
U.S. and Japan Announce Measures in Housing Area
On May 3, 1999, the United States and Japan announced a series of measures that will be undertaken by Japan over the coming year to further deregulate its housing sector. The measures are reflected in the Second Joint Status Report of the U.S.-Japan Enhanced Initiative on Deregulation and Competition Policy. Notable among the measures announced are commitments by the Ministry of Construction to have in place by May 1, 1999, performance-based standards for three-story, multi-family wood construction (and certain commercial and mixed-use construction) in urban areas, to utilize public comment procedures in implementing revisions to the Building Standard Law, and to establish and implement a system of recognized/designated evaluation bodies for the nationwide acceptance and evaluation of test data for building methods and materials.
Mexico's New Customs Accounting System Postponed
Implementation of a regulation which would require importers to deposit into a bank account 100 percent of the duties assessed on the difference between the actual invoice value and the value of the shipment based on a predetermined reference price has been delayed a second time due to continuing problems on how the scheme will be administered. The regulation, first published in December 31, 1998, was originally to have been implemented on April 1, 1999, and now is scheduled to be implemented on July 1, 1999. Wood products are included on the list of agricultural and food products subject to the reference price scheme, as are apples, olive oil, pastas, lasagne, cookies, beer, wines, champagne, and cognac. It is likely that importers' costs will increase as a result of the regulation.
Estonia to Become 135th Member of WTO
On May 21, 1999, the General Council of the World Trade Organization (WTO) approved Estonia's entry into the WTO. Estonia will become the 135th member of the WTO once it notifies the WTO Secretariat that it has completed its national ratification proceedings.
Canada to Request Arbitration on Softwood Lumber
On June 9, 1999, Canada's Minister of International Trade, Sergio Marchi, announced that Canada will seek recourse under the U.S.-Canada Softwood Lumber Agreement following the U.S. Governments decision to review the tariff classification of two types of softwood lumber products (notched studs and rougher headed lumber), which could result in these products being moved into a tariff category covered by the terms of the Agreement. Canada indicated that it will seek consultations (the first step in the dispute settlement process) on notched studs and arbitration on rougher headed lumber. (Consultations on rougher headed lumber occurred in April.) The United States has requested arbitration on British Columbia's decision in June 1998 to lower stumpage rates (the price for standing timber). A panel decision could be forthcoming as early as next month
Philippines Industry Seeking Adjustments in Tariff Rates
The Philippine Tariff Commission held hearings on April 13, 1999, to consider petitions filed by private firms to adjust applied tariff rates on a variety of products. The petitions included requests to raise tariffs on a number of items in the forest products sector, including newsprint, book and bond paper, tissue paper, and kraft sack paper. According to press reports, the Federation of Philippine Industries has also asked the government to maintain all tariff rates at their 1999 levels through the year 2000.
International Tropical Timber Organization Meets
The Twenty-Sixth Session of the International Tropical Timber Council (ITTC), the governing body of the International Tropical Timber Organization (ITTO), met in Chiang Mai, Thailand, May 28 - June 3, 1999. The ITTC took ten decisions covering a wide range of topics, primarily related to the functioning of the organization and ITTO's Year 2000 Objective, i.e., "having all tropical timber entering international trade come from sustainably managed sources by 2000." Updates were also provided on two studies which are underway, "Market Access Opportunities for International Trade in Tropical Timber," and the "Downturn in the International Tropical Timber Market."
Indonesia Reduces Export Tax on Wood Products
On March 16, 1999, the Government of Indonesia reduced the export tax on 13 commodities, including logs, sawn timber, railroad sleepers and veneer, by 10 percent, from 30 percent to 20 percent. The decision was in line with the IMF loan agreement. The amount of logs and sawn timber that can be exported is still determined by the Minister of Forestry and is set based upon the needs of the domestic wood products industry. Log exports are limited to 5.0 million cubic meters and sawn timber exports to 1.5 million cubic meters.
Intergovernmental Forum on Forests Meets
The Fourth Session of the Intergovernmental Forum on Forests (IFF) met May 3-14, 1999, in Geneva, Switzerland. The IFF was tasked by the United Nation's Special Session on Environment with promoting and facilitating implementation of proposals for action put forth by the Intergovernmental Panel on Forests (IPF); reviewing, monitoring and reporting on progress in the management, conservation and sustainable development of forests; and considering matters left pending by the IPF in the areas of trade and environment, transfer of technology and the need for additional financial resources. The IFF also was tasked with identifying and working toward a consensus on the elements of possible international arrangements and mechanisms to cover forests, and with reporting its findings to the U.N. Commission on Sustainable Development in the year 2000. Significant progress was made on a number of issues at the recent meeting, but no agreement was reached on IPF's overarching issue, i.e., whether a new global treaty on forests is needed, which in the minds of many developing countries is linked to the establishment of a new international fund for forests. The U.S. continues to believe that negotiations on a new global treaty would distract from activities underway bilaterally and regionally, as well as result in no real improvement in the forest situation, i.e., would result in standards that are lower than those that currently exist in many countries, including in the United States.
Australia Initiates Import Risk Assessment of Lumber
The Australian Quarantine and Inspection Service (AQIS) has initiated an import risk assessment on green, unseasoned lumber. Over the next 6-12 months, every shipment of Douglas fir, Hemlock, and Western Red Cedar will be inspected for insect infestation. Should inspections reveal high interceptions of pests and diseases, the importation of green lumber could be banned, accelerating an already decreasing market for the U.S. due to market share losses to Australian and New Zealand-produced lumber. The U.S. has already put in place kiln-dried and heat-treatment certification programs in Europe and Korea, which may also work for Australia. However, this would mean increased costs to U.S. producers.