INTERNATIONAL TIMBER TRADE AGREEMENT (ITTA)
Letter from Gareth Thomas MP, Parliamentary
Under-Secretary of State, Department for International Development
to the Chairman
Hilary Benn wrote to you in May 2004 to inform
you of the Council Decision to open negotiations on the International
Timber Trade Agreement, (ITTA). This is the treaty that governs
the International Tropical Timber Organisation, (ITTO). ITTO was
created in 1983 and aims to conserve tropical forests. ITTA is
renegotiated periodically to take into account changes in global
forest policies and the world timber trade.
Hilary's letter outlined the areas of the Agreement
identified for review and possible amendment. I am writing to
you now, to update you on the negotiations which reached a conclusion
in January 2006. The main changes to the Agreement concern its
scope and funding.
The scope of the Agreement remains clearly focused
on the tropical timber trade while noting the value of environmental
services, the potential for poverty alleviation and the importance
of sound governance, law enforcement and control of trade in illegally
harvested timber. The contribution of members remains, as for
other commodity agreements, a 50/50 split between Consumer and
A supplementary contribution to provide guaranteed
funding for policy work will be split 80 per cent for Consumers
and 20 per cent for Producers and will not exceed 30 per cent
of the overall total contribution;
A "Thematic Programmes Account" was
agreed that will provide opportunity for interested donors to
make funding available in ways consistent with current aid practices.
It is likely to focus on issues such as governance, poverty and
The votes allocated to each member remain the
same. It consists of two parts: an Initial Vote allocation of
10 and an additional element based on the volume of trade. It
was agreed that exclusive competence by the European Commission
could be accommodated if agreed by Member States.
The ITTA 2006 is expected to come into force
in 2008 and will operate for 10 years, with the possibility of
extensions of up to eight years. ITTO will continue to function
under the 1994 ITTA until the new Agreement is ratified.
Overall, UK interests have been met in the new
Agreement. The primary focus remains the international tropical
timber trade but with recognition of important issues such as
governance, poverty and livelihoods. The contribution for UK in
2006 is US$ 105,480 (£60,548)*. The figure under the new
Agreement is estimated at US$ 130,741 (£75,100).
The estimated increase in contribution for the
UK of US $25,000 (£14,360) compares with increases of US
$208,000 (£119,479) for Japan and US $211,000 (£121,202)
for China, reflecting the importance of the tropical timber trade
to these countries.
Although the new Agreement provides for exclusive
competence by.the European Commission, the views on partners'
level of competence are not yet clear. Some parts of the Commission
and some Member States want exclusive competence while other parts
of the Commission and the larger Member States want the mixed
competency that currently prevails in practice.
Exclusive competence would make administration
related to the Agreement easier for the Commission. The new Member
States, most of whom have little interest in tropical timber or
forestry development, all appear to prefer exclusive competence
as this would mean that the costs of membership would not be borne
out of national budgets. The larger Member States, and Finland,
France, Germany, Netherlands, and Spain in particular, are implacably
opposed to exclusive competence. They see the new Agreement as
a positive instrument for future forestry development in which
they want to have a say. This is an argument the UK should support.
These Member States are also reluctant, in general to cede exclusive
competence to the Commission. DG Environment recognises that this
commodity agreement is also concerned with environment and development
matters and appears to be in favour of mixed competence.
The next step is for the Commission to present
a decision for signature and ratification by the European Community,
together with a proposal for a Declaration stating the nature
and extent of Community competence in matters governed by the
ITTA. This will then be considered by the European Council. A
timetable should be announced by the Commission's Legal Service
at a forthcoming meeting of the Council Working Party (Proba).
It is possible that discussion of competency could be protracted
and I will write to the Committee again once the Commission's
Declaration has been made and the Council's initial response is
*FT exchange rate US$ 1 = £0.574 (8 February
15 February 2006