RESOURCES

A CUT ABOVE; BUILDING THE MARKET FOR FREE TRADE TIMBER. By Duncan McQueen. International Institute for Environment and Development, 2008. Unlike coffee and cotton, timber has yet to become a fair trade commodity. But now its time has come. Rights over forest resources are increasingly ceded to small-scale community forest enterprises (CFEs), as large-scale industrial logging is now largely discredited in the sustainable development context. The fair trade emphasis on just pricing for poorer producers is exactly what CFEs need as incentive to invest in sustainable forest management — and secure environmental and poverty reduction benefits at one stroke. With fair trade timber, CFEs could boost their entrepreneurial capacity using democratic business models with in-built social and environmental responsibility. The Fair Trade Labelling Organizations International and Forest Stewardship Council are exploring the ways and means through a new partnership, but more is needed. Consumers must be made aware of why paying higher prices is key to creating CFE incentives for sustainable forest management and poverty reduction. Time and money are needed for consumer education and installing fair trade timber in producer country forest policies, market segregation and procurement policies at all levels. For more information, please see http://www.iied.org/pubs/display.php?o=17033IIED&n=1&l=71&c=trade.

EPA NEGOTIATIONS IN THE CARRIBBEAN REGION: SOME ISSUES OF CONCERN. South Centre Analytical Note, 2008. This analytical note explores some of the main challenges related to the EPA negotiations in the CARIFORUM ACP region, particularly with respect to Market Access and regional integration, Agriculture, Manufacturing, and trade in Services. This note highlights some of the region’s main concerns and explores some possible positive linkages between the EPA's and the WTO Doha Round of negotiations in an effort to increase negotiators’ understanding about the EPA developmental implications. For more information, please see
http://www.southcentre.org/publications/AnalyticalNotes/Other/2008Jan_CARIFORUM_EU_Background_Note.pdf.

TERMS OF TRADE SHOCKS AND ECONOMIC RECOVERY. By Norbert Funke, Eleonara Granziera, and Patrick Imam. International Monetary Fund, February 2008. This paper focuses on the macroeconomic impact of negative terms of trade shocks and tries to identify factors that contribute to a fast recovery in growth after persistent negative shocks. It is well known that sizable terms of trade shocks, which reflect a sudden, large, and enduring change either in import or export prices tend to affect income. Though at times it is difficult to
determine whether a shock is transitory or permanent, governments need to be ready to respond to a shock. While some countries seem to suffer for a prolonged period from a negative terms of trade shock, others have recovered quickly or even managed to increase average growth. The paper assumes that appropriate macroeconomic policy, supported by structural reforms and solid institutions, can help revive growth after a terms of trade decline. It also attempts to differentiate between policies needed immediately after the shock and policies needed to keep growth momentum alive. The paper is available online at http://www.imf.org/external/pubs/ft/wp/2008/wp0836.pdf

BILATERALISM IN SERVICES TRADE; IS THERE FIRE BEHIND THE (BIT-) SMOKE? By Rudolph Adlung and Martin Molinuevo. WTO Working Paper, January 2008. In most of the current literature, the spread of regionalism in international trade relations is discussed in terms of a rapidly rising number of preferential trade agreements (PTAs). Far less attention is given to the even more rapid proliferation of bilateral investment treaties (BITs) and their overlap with obligations assumed by WTO Members under the General Agreement on Trade in Services (GATS). About 60 percent of world foreign investment stocks are in services and, thus, covered by mode 3 (commercial presence) of the GATS. A closer look reveals that BITs generally apply across a far wider range of sectors, in particular in the case of LDCs and developing countries, than those scheduled under the GATS. Furthermore, a number of obligations enshrined in BITs go beyond their potential counterparts under the GATS. At the same time, since most WTO Members have not listed relevant exemptions from the Most-Favoured-Nation (MFN) clause of the Agreement, their BIT obligations are to be applied on an MFN basis. While this extension may not cause problems in many cases, given generally liberal investment regimes and the focus of most treaties on protecting rather than liberalizing access, inconsistencies remain between the two frameworks. Based on an assessment of relevant provisions, this article discusses options on how WTO Members could proceed. The paper is available online at http://www.wto.org/english/res_e/reser_e/ersd200801_e.htm.