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TRANSCRIPT
Tony S.-H. Hsu and Emily C.-C. Chang
Department of Agricultural Economics
Symposium on “The Sustainable Use of Forest Resources in Northeast Asia,” Univ. of Toyama, Jan. 18, 2017
2
² Multilateral WTO ³ Total of 164 member states ³ Progress of the Doha Round
negotiations has been slow
² Bilateral or regional FTAs are currently being undertaken by many parties
³ 1948-2016 GATT/WTO Statistics ³ Total of 423 RTAs are in effect (July, 2016)
Organization
of Regions
Population
(mil.)
Share of global
GDP (%)
GDP growth rate in
2011-2015 (%)
Intra-regional
trade share (%)
Year of negotiation completion
Negotiation regulations
Leading country
TPP (12 Countries) 800 38.2 4.2 41.6 2015 Fully open USA
Source: IMF, World Economic Outlook Databases (WEO) estimated value, October 2013.
Note: Figures in parentheses indicate the FTA as a percentage of global GDP
Global Trend → Regional economic integration Ø As of November 2016, there were 635 notifications of global regional
trade agreements made to the WTO. Ø 「Trans-Pacific Partnership」 (TPP): Singapore, Brunei, New
Zealand, Chile, USA, Australia, Peru, Malaysia, Vietnam, Japan, Canada and Mexico.
Ø ASEAN plus six countries (Mainland China, Japan, Korea, New Zealand, Australia, and India): “Regional Comprehensive Economic Partnership Agreement” (RCEP) Negotiation.
Ø China, Japan and Korea FTA: Agriculture, industry, and the service industry are open, and also includes energy security and environmental issues, etc. that have not yet been covered by the WTO; coupled with the above three parties signing an investment agreement, the Northeast Asian Economic Circle is formed, but currently the latest negotiations do not yet have results, and are ongoing.
Central America
Countries signing FTA with Taiwan:
Panama, Guatemala,
Nicaragua, El Salvador,
Honduras, a total of 5 countries,
signed four FTAs from 2004-2008.
Mainland China
Signed the Cross-Straits
Economic Cooperation Framework Agreement (ECFA) on
June 29, 2010.
Signed the Cross-Straits
Services Trade
Agreement on June 21, 2010, 2010.
Japan Signed the “Taiwan-
Japan Investment Agreement”
on September 22, 2011, effective
January 20, 2012.
Signed the Memorandum
of Understanding
on Cross-Straits
Banking on November 28,
2013.
New Zealand Signed the
Taiwan - New Zealand
Economic Cooperation Agreement (ANZTEC) on July 10,
2013.
Singapore (ASTEP)
Signed the Taiwan-
Singapore Economic
Partnership Agreement (ASTEP) on
July 10, 2013.
The EU ECA
Promoting the Taiwan-EU ECA, 17 ECA results
briefings were held in
16 EU member states.
USA TIFA
consultations resumed in
March 2013.
The EU ECA, TPP,
RCEP
Currently being promoted
7
Year Event
2010 March
New Zealand, Singapore, Chile, Brunei (four countries that joined the P4 Agreement), the United States, Australia, Peru, and Vietnam, for a total of eight countries, began negotiations
October Malaysia participates in negotiations (9 countries in total)
2011 November APEC Leaders 'Meeting, TPP Leaders' Meeting (in Honolulu)
2012 November Mexico and Canada join negotiations
2013
February Japan-US Leaders' Meeting: Japan and the United States issue a joint statement
March Prime Minister Abe demonstrated “Negotiation Participation"
July Japan participates in negotiations (in Malaysia)
August TPP Ministerial Meeting (in Brunei)
October TPP Leaders Meeting, Ministerial Meeting (in Bali)
December TPP Ministerial Meeting (in Singapore)
2014
February Japan-US Ministerial Meeting (in Washington), TPP Ministerial Meeting (in Singapore)
April Japan-US Ministerial Meeting (in Washington), Japan-US Leaders Meeting, Ministerial Meeting (in Tokyo)
May TPP Ministerial Meeting (in Singapore)
September Japan-US Ministerial Meeting (in Washington)
October TPP Ministerial Meeting (in Sydney)
November TPP Leaders Meeting, Ministerial Meeting (in Beijing)
2015
April Japan-US Ministerial Meeting (in Tokyo), Japan-US Leaders Meeting (in Washington)
July TPP Ministerial Meeting (in Hawaii)
September – October TPP Ministerial Meeting (in Atlanta), reaching an agreement
2016 February TPP Ministerial Meeting (in Auckland), signing ceremony
• Japan: 1. After the House of Representatives passed the TPP on
November 10th, 2016, the Senate passed the TPP Agreement and the related supporting bills on December 9th.
2. On November 14, 2016, Japan’s NHK and Nikkei News reported, in the Senate TPP Special Committee, Abe said that while the US is going through a period of political transition, Japan must take the lead in having the TPP take effect as soon as possible.
3. According to the Washington Post, on November 14, 2016, Japanese Prime Minister Shinzo Abe indicated that he will try to persuade US President-Elect Trump and other TPP members to pass the TPP domestically as soon as possible.
Source：Ministry of Economic Affairs and this study.
• New Zealand: 1. New Zealand's Minister of Trade responded to the Trump Policy
Statement by saying that New Zealand would like the US to give priority to discussing any bilateral trade agreement with New Zealand. Since the New Zealand Parliament had approved the TPP amendment bill three times by November 15, 2016, and the Governor signed it on November 21, New Zealand will wait and see what the future development of the TPP agreement looks like.
2. The New Zealand government called on other TPP members to continue their efforts to finalize their domestic procedures and said they needed to give the United States’ new administration time to consider the implications of the TPP agreement for US trade.
Source：Ministry of Economic Affairs and this study.
• Mexico: According to the Mexican Economist’s report on November 11, 2016, Mexican President Ildefonso Guajardo said “We have to move forward, and we have to agree to revise the terms of the TPP that it cannot take effect with less than 85% of GDP. We must talk to our TPP partners to find ways to avoid wasting our respective 3 to 7 year effort of getting to this outcome of the agreement. Our TPP members must study the amendments to the entry into force of the provisions of the TPP, so it can still be effective even with the decoupling of the new US government position (no commitment, no timetable).”
• Peru: On November 22, 2016, Eduardo Ferreyros, Peru’s foreign trade minister, in an interview with the country’s largest media daily El Comercio, said that in the face of US President-Elect Trump’s threatened exit from the TPP, as long as 11 member states unite and jointly asses the US exit from the TPP, even if the US is absent, if the terms are amended, then the TPP will still have the opportunity to take effect in the future. He greatly stressed that the TPP is currently the best agreement, and can bring benefits to Peru. Regardless of whether or not the US joins, Peru will continue to push the TPP into force.
• Australia: According to the newspaper The Australia, on November 23, 2016, in the face of US President-Elect Trump’s threat to leave the TPP on his first day in office on January 20, 2017, and in spite of domestic opposition calling for renunciation of the agreement, Australian Prime Minister Malcolm Turnbull continues to push for the TPP, believing that it can bring Australia more export opportunities, employment and economic growth, and has ratified the TPP and sought to bring it into force.
• Singapore: Singapore Prime Minister Lee Hsien Loong said at the Singapore People's Action Party (DPP) conference on December 4 that if the US withdraws from the TPP, the TPP will be aborted and Singapore will have to wait for a full-scale economic partnership agreement (RCEP), with other economies in the Asia-Pacific region to promote trade liberalization.
• Malaysia: In a press release from November 24, 2016, Malaysian Trade and Industry Minister Mustafa said, on November 19, the TPP members reviewed the progress of the TPP approval in Peru. As it is unclear whether or not the US will participate in the TPP, Malaysia and other member states agreed to consider future action as soon as the new US government confirms their policy direction.
After a certain number of years, industrial products will become almost fully open. Agricultural products rules allow members to make some degree of reservations. • After the agreement came into effect, the members immediately abolished tariffs of 87.73% of the products, and
the final total liberalization ratio was about 99.13%.
1.Substan+alliberaliza+onofthegoodsmarket(1/2)
Country
Products with immediate tariff reduction (%)
Products that were the last for the tariff to be
reduced to 0 (%) Longest
tariff reducti
on period
Exceptional product list Agricultural
Products
All items
Agricultural
Products
All items
Japan 51.3 86.21 81.0 96.80 16 years
Fresh or chilled beef, frozen beef, partially fresh or chilled pork, milk and shea oil, wheat or mixed grains, barley, rice, solid cane sugar or beet sugar and chemical and pure sucrose, candy, cow, horse, or sheep skin, raw silk, footwear.
Malaysia 96.7 84.70 99.6 99.90 16 Implementation of the quota: frozen poultry, duck eggs
Peru 82.1 80.72 96.0 99.36 16 Corn starch, potato starch, cheese, brown rice, semi-milled or whole-milled rice, beet sugar, glucose syrup.
Mexico 74.1 77.71 96.4 99.26 16
1. Partial tariffs: some coffee, used cars. 2. Implementation of national quotas or for certain countries to exclude
tax cuts: milk composition-based modulation products, milk powder, condensed milk, cream, cheese, palm oil, sugar.
3. Only part of the tariff for Japan: semi-trailer used with road tractor, cars carrying more than 10 passengers, other categories of cars carrying more than 16 passengers, trucks 7.3-15 tonnes, other trucks, electric cars, motorized drilling vehicles, cement mixing car。
Country
Products with immediate tariff reduction (%)
Products that were the last for the tariff
to be reduced to 0 (%)
Longest tariff
reduction period
Exceptional product list Agricult
ural Products
All items Agricult
ural Products
All items
USA 55.5 90.17 98.8 99.31 30 years
1. The implementation of tariff quotas, for different countries to retain different items, such as:：
• Japan: beef (final zero tariff), sugar and sugary products. • Australia: sugar, fresh cream and ice cream, condensed milk,
butter, milk powder, cheese and other dairy products quota restrictions.
• Canada: cheese, skim and whole milk powder, yogurt and dairy products, condensed milk, fresh cream and milk drinks, butter and substitutes, sugar and sugar products.
• Chile: sugar and sugar products. • Malaysia: sugar and sugar products. • New Zealand: cheese, milk powder (final zero tariff), condensed
milk, cream and substitutes, organic cream. • Peru: cheese (final zero tariff), condensed milk and light milk (the
final zero tariff), refined dairy products, sugar and sugar products. • Vietnam: sugar and sugar products. 2. For years 1-29, Japanese vehicles had a tariff of 25%, and the tariff
was reduced to zero in year 30. 3. For Australia and New Zealand, products such as: milk powder,
cheese, yogurt, whey 1-2 years to implemented tariff quotas for years 1-29, and were reduced to zero tariffs in year 30.
1.Substan+alliberaliza+onofthegoodsmarket(2/2)
Source: Bureau of International Trade and this study
Country
Products with immediate tariff reduction (%)
Products that were the last for the tariff to be
reduced to 0 (%) Longest tariff reduction
period Exceptional product list
Agricultural
Products All items
Agricultural
Products All items
Singapore 100 100 100 100 0 -
Canada 86.2 94.90 94.1 98.86 12 Implementation of tariff quotas: keeping chickens and eggs, some poultry meat, some cheese, some dairy products, chocolate ice cream ingredients, butter and its alternatives.
New Zealand 97.7 94.61 100 100 7 -
Vietnam 42.6 64.61 99.4 97.86 21 1. WTO tariff quota products to maintain the original tax
rate: eggs, duck eggs, beet sugar, sugar cane, salt, rock salt, sea salt.
2. Implementation of tariff quotas: used cars.
Chile 96.3 94.40 99.5 98.39 8
Wheat and sugar tax rates are based on the same tax rate of Chile and Australia, Canada, Japan, Mexico, Peru, the US BTA and the Pan Pacific Strategic Economic Partnership Agreement (P4). Malaysia and Vietnam will only cut part of the ad valorem tax rate, the non-part of the ad valorem tax law applicable to No. 18.525.
Australia 99.5 93.04 100 99.87 4 Used cars
Brunei 98.6 91.67 100 100 11 -
Source: Bureau of International Trade and this study
• In the past, under the WTO framework, members list open service projects, while unlisted projects are not open. The TPP negotiates and lists the retained service projects, while the unlisted projects are open and do not add to the reserved items. Overall, TPP members open more projects than under the WTO framework.
• TPP members are still entitled to retain more sensitive services projects.
2.Furtheropeningoftheservicesmarket
3.Openingthedomes+cgovernmentprocurementmarket • Mexico, Chile, Peru, Australia, Malaysia, Vietnam, and Brunei, a total of seven countries, did
not know the WTO Government Procurement Agreement (GPA) members do not have to open a government procurement market, however under the TPP they commit to open the central authorities to purchase goods, services and engineering from other members; for example, Chile, Malaysia and Vietnam commit to open up most of the engineering services market.
• 5 WTO (GPA) members, the US, Canada, New Zealand, Singapore and Japan, have already opened up the government procurement market to each other, but some members have promised even further opening up under TPP; for example, opening up wholesale and telecommunications services in Canada; catering, management consultancy services, etc. in Japan.
• Bringing in important current international economic and trade new issues, and issues the WTO does not yet have specific standards for (WTO-Extra), such as: Labor, environment, e-commerce, SMEs, government-controlled undertakings and designated monopolies, harmonization, transparency and anti-corruption, development, cooperation and capacity building.
• Food safety inspection and animal and plant quarantine measures (SPS), technical barriers to trade, investment in intellectual property, government procurement, trade in services and other relevant provisions of WTO-related content (WTO-Plus).
4.Addingandstrengtheningeconomicandtradepolicystandards
5.Improvingthetransparencyofthegovernmentandan+-corrup+onrequirements
• Transparency, participation in due diligence and due process of law, such as provisions that may affect trade or investment within the 60 days comment period.
6.Expandingthespaceofcommercialac+vi+esofprivateenterprises
• Members may request assistance information on grants, loans and other assistance provided by government-controlled enterprises, and such assistance shall not affect the competition of members.
• Members are required to set up an open website to assist SMEs in understanding and using the TPP Agreement. The information contained on the website includes the Agreement, Tariff Schedules, Specific Product Rules of Origin, Customs Regulations, Inspection and Quarantine Regulations, Foreign Investment Regulations and Labor Regulations.
• The import and export of “remanufactured products” shall not be restricted (§2.11). • Origin: Encourage manufacturers, importers and exporters to sign a certificate of origin
(§3.20).
• Deliberate breaking of anti-theft measures, with commercial interest, will be prosecuted (§18.68).
• Import and domestic use of counterfeit labels and packaging, will be prosecuted (§18.77).
• It is not mandatory for a broadly commercialized software owner to provide an original code (§14.17.1).
• The establishment of an office or any form of enterprise as a condition for practicing within the borders of the country (§10.6).
• To address potential trade barriers to environmental goods and services and to address global trade-related environmental challenges through bilateral and multilateral cooperation programs (§20.18).
• Clearly stipulates that public participation includes procedures, opportunities and exchange of views; and that environmental impacts are dealt with through dialogue, information exchange, consultation, ministerial consultation and dispute settlement (§20.9、§20.20、§20.21、§20.22、§20.23).
7.Tocreateaneweraofstandards Goods
Intellectual Property
Rights
Environment
E-Commerce
Trade in services
• The objectives of this Chapter are to promote mutually supportive trade and environmental policies; promote high levels of environmental protection and effective enforcement of environmental laws; and enhance the capacities of the Parties to address trade-related environmental issues, including through cooperation.
• Article 20.15: Transition to a Low Emissions and Resilient Economy • The Parties recognize that each Party’s actions to transition to a low emissions
economy should reflect domestic circumstances and capabilities and, consistent with Article 20.12 (Cooperation Frameworks), Parties shall cooperate to address matters of joint or common interest. Areas of cooperation may include, but are not limited to: energy efficiency; development of cost-effective, low emissions technologies and alternative, clean and renewable energy sources; sustainable transport and sustainable urban infrastructure development; addressing deforestation and forest degradation; emissions monitoring; market and nonmarket mechanisms; low emissions, resilient development and sharing of information and experiences in addressing this issue. Further, the Parties shall, as appropriate, engage in cooperative and capacity-building activities related to transitioning to a low emissions economy.
• Article 20.17: Conservation and Trade • The Parties commit to promote conservation and to
combat the illegal take of, and illegal trade in, wild fauna and flora. To that end, the Parties shall
3.(a) exchange information and experiences on issues of mutual interest related to combating the illegal take of, and illegal trade in, wild fauna and flora, including combating illegal logging and associated illegal trade, and promoting the legal trade in associated products; 4. (b) maintain or strengthen government capacity and institutional frameworks to promote sustainable forest management and wild fauna and flora conservation, and endeavour to enhance public participation and transparency in these institutional frameworks.
• TPP New Environmental Commitments in TPP • TPP requires each TPP partner country to implement its obligations
under the Convention on International Trade in Endangered Species of Wild Fauna and Flora, which regulates trade in many timber species, including Big-leaf Mahogany, Spanish Cedar, and Ramin, which grow primarily in Southeast Asia.
• TPP includes commitments to combat trade in illegally harvested timber, including species protected under CITES, as well as any other species taken or harvested illegally, regardless of its source country.
• TPP enforces environmental and conservation laws, including with respect to timber harvesting. Illegal logging is, by definition, harvesting that occurs in violation of a nation’s laws and, as such, stepped-up enforcement is necessary to address illegal logging.
• TPP implements strong anti-corruption protections. Bribery and corruption are often key factors in the failure of countries’ forest governance schemes.
• All of these commitments are fully enforceable and subject to dispute settlement.
• Combating Illegal Logging Through TPP • TPP provides a unique opportunity for key timber consuming and
exporting countries to work together to reduce deforestation, protect endangered species, promote sustainable forestry, and combat illegal logging and associated trade. Illegal logging is a significant environmental challenge in many parts of the world as the demand for paper, furniture, and other wood and agriculture products grows.
• TPP can help protect one of the most ecologically and economically significant regions of the world. TPP parties account for about a quarter of global timber and wood products exports by value: Peru is home to 13% of the world’s tropical forests, with over 170 million acres of rainforest; Malaysia is one of the largest exporter of tropical timber products in the world; and Brunei’s forested areas account for over 70% of its total land area.
deregulation
full liberalizati
on
living comprehensive
“High quality, high standards”
Emphasizing a number of “behind the border” issues, such as telecommunications, state-owned enterprise restructuring, and so on, will inevitably involve different areas of domestic regulatory changes.
Advertised as non exclusive, all departments must be included in negotiations.
In addition to traditional tariff issues, issues such as capacity building, small and medium enterprises, supply chain management, competition policy, state enterprises, harmonization of laws and regulations, labor, and the environment are also among the topics.
The content of the future agreement will incorporate emerging issues (digital economy, cloud technology) or new member states, as the economic environment progresses.
26
Items Value(NT$bil)
Total Production 501.64
Crop Production 245.17
Livestock Production 163.97
Fishery Production 92.25
Forestry Production 0.24
1) Control national forest resources and build a long-term monitoring and surveying system for forest ecosystems. Strengthen scientific and technical research in the forestry industry and increase the sustainable operation of forests.
2) Improve the conservation, operation, and application of forest land and water resources.
3) Increase the carbon dioxide absorption of forest trees and promote and guide the development and sale of new lumber and bamboo production technologies.
4) Strengthen the planting and restoration of protective coast-forest in order to construct a green corridor along the coast.
5) Strengthen the prevention and control of and response to invasive plant species and brown root rot disease.
6) Promote the planting of trees and forestation. 7) Promote the interests of the people engaged in the forest industry and strengthen
their aspiration for afforestation.
1) Strengthen the preventive and proscriptive mechanism of improper development of forest land, theft of forest products and byproducts. Developed the forest fire incident command system and promoted the forest fire protection education and the fire extinguishing training.
2) Control and supervise the exploitation of national land and strengthen forest protection work.
3) Conserve natural resources and restore deteriorated forest lands. 4) Adopt ecological engineering and concepts of energy savings and carbon
reduction to protect forest, land, and water resources and improve forest roads. Planning for the above will use water shed as base units.
Cultivation of Forest Resources 1) Carry out preliminary forestation and tree tending in national forest lands,
strengthen the restoration of degraded land, and increase the capability of the forest to absorb carbon dioxide. Establish strategic partnership in the forest products industry and accelerate the delicate transition of the forestry industry.
2) Create multiple layered forest according to the principles of ecological management to increase biodiversity.
3) Strengthen guidance for private forests and the development and utilization of specially forest products.
Australia 5.6%
Malaysia 22.2%
Canada 7.2%
Vietnam 5.8%
New Zealand 3.9%
United States 4.4%
Japan 1.2%
Chile 1.1% Mexico
0.0%
Peru 0.0%
Singapore 0.0%
Other countries
48.5%
Import Value of Forestry Products in Taiwan, 2015
TPP 51.5%
Other countries
48.5%
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Forest Import Value 832 918 1,020 1,320 1,317 1,370 1,488 1,507 977 1,601 1,828 1,627 1,707 1,750 1,458
-
500
1,000
1,500
2,000 Trade value
(US $mil)
Year
ImportValueofForestryinTaiwan
ImportItems
Conifers針葉樹 19.51%
Hardwoods闊葉樹 32.39%Veneer
單板 8.49%
Plywood合板 17.84%
ImitaAonWood
人造材 9.07%
Firewoods薪炭材 0.08%
Bamboo竹
0.14%
Rest of forestry products 12.49%
Saw-Timber用材：針葉樹、闊葉樹、單板、合板、人造材、薪炭材
Japan 23.3%
United States 11.5%
Vietnam 3.5% Singapor
e 3.6%
Malaysia 1.5% Canada
1.0%
Mexico 0.2%
Australia 0.4%
Chile 0.0%
New Zealand 0.0%
Peru 0.0%
Other countries
55.1%
Export Value of Forestry Products in Taiwan, 2015
TPP 44.9% Other
countries 55.1%
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Forest Export Value 106 107 121 147 128 142 144 144 110 116 118 121 123 112 92
-
100
200 Trade value (US $mil)
Year
ExportValueofForestryinTaiwan
0.00%
Conifers針葉樹 11.39%
Hardwoods闊葉樹 30.80%
Veneer單板 10.67%
Plywood合板 19.12%
ImitaAonWood
人造材 21.75%
Firewoods薪炭材 0.26%
Bamboo竹
0.75%
Rest of forestry products 5.25%
ExportItems
Saw-Timber用材：針葉樹、闊葉樹、單板、合板、人造材、薪炭材
35
37
No. Industries No. Industries No. Industries
1 Agricultural products 18 Medicines 35 Pollution remediation
2 Livestock 19 Rubber products 36 Construction project
3 Forestry 20 Plastic Products 37 Wholesale and retail
4 Fishery 21 Non - metallic mineral products 38 Transportation and warehousing
5 Mineral 22 Iron and steel 39 Accommodation and catering
6 Procfood 23 Other metals 40 Dissemination services
7 Alcoho 24 made from metal 41 Telecommunications services
8 Tobacc 25 Computer, electronic and optical products 42 Information services
9 Cotton fabric 26 Power 43 Finance and Insurance
10 Clothing and apparel goods 27 Equipment 44 Real estate and residential services
11 Leather, fur and their products 28 Car 45 Professional, scientific and technical services
12 Wood products 29 Other means of transport 46 Support services
13 Paper and paper products 30 Furniture 47 Public administration; compulsory social security
14 Printing and Data Storage Media Reproduction 31 Other products and machinery repair 48 Education Services
15 Petroleum and coal products 32 electricity supply 49 Health care and social work services
16 Chemical materials 33 Gas supply 50 Art, entertainment and leisure services
17 Plastics 34 Water supply 51 other service
• In the concept of environmental awareness and resource sustainability, the signing of international trade contracts will not only take into account tariff issues, but countries’ Technical Regulation, Conformity Assessment Procedure, and Standard will often result in Agreement on Technical Barriers to Trade.
• In the TPP Specification for Forestry Products section, only licensed businesses are permitted to cut down trees. Therefore, this study assumes that the price of forest products imported from abroad is increasing, and analyzes the influence on the upstream and downstream related industries.
• In Taiwan, the forest industry production of conifers, broad-leaved trees, bamboo and other products can be used as raw production materials by downstream manufacturers. Goods directly processed by forest products include wood products, paper and paper products.
• In related industries, processing industries that will use forest products have products that include furniture, leather, fur and their products, printing and data storage media reproduction.
• Of additional industries that may use forest products, chemical decomposition industries may use products like chemical materials and plastics.
41
• According to the TPP specifications, only licensed businesses are permitted to cut down trees, so it is assumed that the price of imported logs from abroad is increasing.
Simulation Number
Description
Sim1 Assuming a 10% rise in the import price of logs
Sim2 Assuming a 20% rise in the import price of logs
Sim3 Assuming a 30% rise in the import price of logs
Simulation Number Real GDP CPI Real
consumption Imports Exports
Sim1 -0.022 0.001 -0.015 -0.021 -0.032
Sim2 -0.044 0.002 -0.030 -0.043 -0.065
Sim3 -0.065 0.003 -0.045 -0.064 -0.097
Units:%
• Due to the increase in import prices of forestry products, a direct result is a decrease in imports. Under the premise of a reduction of imports of forestry products as raw materials, reduced domestic exports, a rise in GDP and a rise in the consumer price index result, with the most clear increases and decreases occurring in Sim3.
Ind. Sim1 Sim2 Sim3 9 Cotton fabric -0.027 -0.054 -0.081
11 Leather, fur and their products -0.069 -0.137 -0.205
12 Wood products -0.476 -0.946 -1.411
13 Paper and paper products -0.031 -0.061 -0.092
14 Printing and Data Storage Media Reproduction -0.019 -0.038 -0.057
16 Chemical materials -0.026 -0.051 -0.077
17 Plastics -0.035 -0.070 -0.105
19 Rubber products -2.174 -4.321 -6.435
Units:%
Ind. Sim1 Sim2 Sim3 9 Cotton fabric -0.102 -0.202 -0.301
11 Leather, fur and their products -0.020 -0.040 -0.060
12 Wood products 0.285 0.570 0.855
13 Paper and paper products -0.009 -0.017 -0.025
14 Printing and Data Storage Media Reproduction 0.000 -0.001 -0.001
16 Chemical materials -0.063 -0.126 -0.187
17 Plastics -0.041 -0.082 -0.123
19 Rubber products 0.295 0.606 0.934
Units:%
• Strict regulation of deforestation may lead to a decrease in the amount of global timber production and thus an increase in prices. This study simulates the impact of the rise of timber prices on domestic macro-economy and various related industries.
• On the general side, imports are reduced, GDP rises, and consumer price index also rises.
• Under pressure of rising timber import prices, forestry import amounts have decreased and domestic production has increased. Among the industries associated with forest industries, the most severely affected are products that directly undergo processing, including wood products, paper and paper products. In addition, industries where processing uses wood products including furniture, leather, fur and their products, printing and data storage media reproduction, etc. will also be affected.
• It is worth noting that the increase in the import price of wood will cause downstream manufacturers to increase imports of wood and its products in order to meet domestic consumption needs; in addition, as a substitute for wood products, rubber products will also see a situation of an increase in imports.
• From the above conclusions, we can find that if international log market prices increase, in addition to an overall negative macro-economic impact, associated industries will also experience losses. Therefore, it is recommended that in addition to taking relevant measures, the most direct method is the development of domestic plantations; for logging, a census of forest resources can be an effective way of regulation and management.
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