The International Tropical Timber Council’s Trade Advisory Group (TAG) has welcomed the European Commission’s proposal to delay the EUDR application date by 12 months to December 30, 2025.
“This will allow more preparation time for the timber industry to comply,” TAG co-chair Barney Chan said in a draft statement this week. “However, the industry is concerned over the uncertainty of the delay as well as new 11th-hour amendments, which are problematic for multiple reasons,” Mr Chan said.
“While we acknowledge that the International Tropical Timber Organisation (ITTO) is not able to impact either the delay or the regulation, we would be remiss if we did not highlight this issue, given the seismic impacts the EUDR (EU Regulation on Deforestation-free products) has and will have on the global forestry policy and trade.”
“We urge the commission to work with consumers and producers to ensure a smooth implementation of the EUDR.”
Tropical timber markets are very unsteady at present, and there are many ‘unknowns’ ahead. The World Bank’s latest Global Economic Prospects report highlighted the struggles and slow recovery of global trade in 2023, marking one of the weakest performances in 50 years outside of global recessions.
“wood product manufacturers everywhere are reeling from skyrocketing shipping costs and irregular shipping schedules due to, firstly, the drought in Panama severely curtailing ship passages through the Canal and secondly, the ongoing conflicts in the Red Sea region.”
Barney Chan, chair of the International Tropical Timber Council’s Trade Advisory Group.
“Complaints about the logistics in exporting timber products are loudest from Vietnam, China, Indonesia, Brazil, and Malaysia.”
Shipping costs are squeezing global traders.
Exporters in many producer countries are not happy that shipping companies are using the continuing fallout from the COVID-19 pandemic and geo-political conflicts as reasons to increase marine freight and other logistics costs.
Prior to these recent increases, freight charges from Southeast Asia to the US or EU were around US $2000 per 40-ft container. In the post-COVID pandemic, freight charges soared between US $18,000 and $20,000, and now, because of the war in Ukraine and the Red Sea chaos, freight charges to US and EU markets vary between US $8000 and $10,000.
“Ultimately, these costs will not only depress trade but be passed along to the consumer at a time when price consciousness is an increasing barrier to the use of wood,” Barney Chan said.
So, amid all these global uncertainties, what can ITTO do to help the timber industry?
The Global Legal and Sustainable Timber Forum (GLSTF) was created in 2023 by ITTO and Macao’s Commerce and Investment Promotion Institute, and the inaugural forum was convened in 2023.
In September 2024, the GLSTF launched the Action Framework for Promoting Legal and Sustainable Timber Supply Chains to strengthen international collaboration among stakeholders in timber supply chains, promote the sustainable development of the timber industry, contribute to sustainable development goals, and combat climate change.
In her opening address at GLSTF 2024, ITTO executive director Sheam Satkuru asserted that the GLSTF is a collaborative platform of timber industry stakeholders designed to strengthen networking and business exchanges to facilitate sustainable forest management and the legal and sustainable use and trade of timber and wood products.
During that GLSTF meeting in Macau and subsequent discussions among TAG members globally, it was established that the buyers of tropical timber in traditional markets are not receiving information about the progress tropical timber producers have made and are continuing to make towards SFM.
Mr Chan said a mechanism was needed to communicate, educate, promote, market, and publicise the tremendous progress tropical timber producers have made and are continuing to make on traceability, legality, and sustainability since the Rio Earth Summit in 1992.
“It seems a natural fit now for ITTO and GLSTF to work together on addressing the negative perceptions in the market,” he said.
“Firstly, a working group of stakeholders must be formed to define what and how to communicate to the buyers of our products. The information of what the producers have been doing towards SFM could be collated to be used in a campaign to address consumer perceptions.”
TAG proposes setting aside resources and finances to employ a dedicated person to handle this important task. Someone who can work without distractions and with help from all ITTO members is desperately needed.
“This 100% focus on rebuilding demand for tropical timber trade is what TAG asks from ITTC today,” Mr Chan asserted. “Together, we can create a narrative that demonstrates what we all know – that wood is sustainable, that trade benefits forests, and that together, we can protect tropical forests for the future.”
[The Trade Advisory Group (TAG) was established in 2000 at the 28th session of the International Tropical Timber Council. TAG, comprised of Council of the Americas member representatives and invited experts, advocates for open markets, trade facilitation, and rules-based trading systems in the Western Hemisphere.
TAG members share a common commitment to the principle that international trade is a critical element in achieving sustainable economic growth in the US and the nations of the Americas. It is a leading platform for policy-level idea generation and guidance related to hemispheric trade and investment, consistent with the longstanding values of the Council of the Americas.]
