At the time of writing this piece, news accounts suggest that the announcement by President Joe Biden of his Administration’s much-anticipated Indo-Pacific Economic Framework (IPEF) is imminent. This trade strategy is an important acknowledgement of the importance of the Indo-Pacific to the U.S. and global economy, and strategic relationships that must be fostered and maintained, even if there are things left to be desired, such as market access commitments. Given the importance of the Indo-Pacific as a source of globally-sourced wood products, it is an opportunity for our industry to achieve greater trade facilitation with, and deliver more technical assistance to, participating countries.
Following the Trump Administration’s withdrawal from the Trans-Pacific Partnership (now known as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP)), the Biden Administration has sought a new paradigm to strengthen influence and counter China in the strategically vital Indo-Pacific region. Instead of pursuing more traditional bilateral or multilateral free trade agreements where greater market access is typically given and received, the Biden Administration is seeking to build a new “framework” that builds economic prosperity in the region by reaching agreements that encourage innovation, strengthen competitiveness, rebuild supply chains, and expand opportunity. Unfortunately, it has not been entirely clear how this prosperity will be achieved without the usual incentive of reducing barriers to trade by lowering or eliminating tariffs.
In spite of that uncertainty, we at IWPA saw engagement with the Biden Administration as it developed the new IPEF as critical. IWPA and our members have deep ties in the region, which is a key source of legally- and sustainably-sourced wood products. Wood products from Indonesia, Vietnam, and Malaysia are particularly important to U.S. manufacturers and consumers, with these nations ranking as the 6th, 7th, and 13th largest exporters of forest products to the U.S., respectively. We urged the Biden Administration to strengthen these bonds, and pledged to support them as they do.
While we see the reduction or elimination of tariffs as the easiest and most straightforward way to increase economic integration, we submitted public comments to the Office of the U.S. Trade Representative outlining the following principles which we believe would be environmentally and commercially beneficial to both the countries that decide to participate in IPEF and the international wood products industry:
• The U.S. should commit to working with key public and private stakeholders in the Indo-Pacific to promote trade in legally- and sustainably-sourced wood products in an effort to prevent illegal deforestation and reduce carbon emissions. Trade in, and use of, legally- and sustainably-sourced wood products is proven to provide benefits for climate change mitigation and carbon sequestration.
• The U.S. should partner with Indo-Pacific nations to build the capacity of wood products industry stakeholders to comply with national legal sourcing requirements. Expanded access to legally- and sustainably-sourced international wood products increases U.S. manufacturing competitiveness.
• The U.S. should work with Indo-Pacific nations to implement trade facilitation measures that enhance trade in legally- and sustainably-sourced wood products for industry stakeholders that have a clear record of commitments to fulfilling legal sourcing requirements such as pre-clearance or reduced inspections. Current legal sourcing requirements rely on criminal and civil penalties to ensure compliance. Trade facilitation such as pre-clearance or clear communication of applicable laws among parties to IPEF would provide a positive incentive for devoting additional compliance resources to ensure legal and sustainable sourcing.
The Biden Administration’s rollout of IPEF is just the first step towards increasing economic integration across the Indo-Pacific, and we are advocating for that work to continue. As these important negotiations proceed, IWPA will continue to work with the Biden Administration and our partners around the world to advance our mission of building acceptance and demand here in North America for globally sourced wood products from sustainably managed forests.
