Back in July, at the World Trade Organization (WTO) meeting, the European Union expressed its concerns about the Japanese ''wood stimulus programme''. The EU worries that the programme promotes the unilateral use of national species and thus constitute a competitive disadvantage for European exporters.
Canada, New Zealand, the USA and Malaysia joined the EU and also expressed concerns that their future timber exports to Japan will be affected.
According to the Japanese Government, the ''wood stimulus programme'' is no barrier to trade. The programme has the aim of encouraging the use of wood from national forests that are increasing in volume. The Japanese say that the programme is non-discriminatory and that foreign exporters are welcomed to support it.
According to the Canadian Timber Trade Association BCWood, if the Ministry of Agriculture, Forestry and Fisheries (MAFF) programme enters into force, at least 50% of the wood used in construction must be from Japan. The remaining portion may be imported, but must be certified and come from a ''growing forest''. The Japanese MAFF has prepared a budget of Y 43 billion (EUR 320 million) to support the use of domestic wood in new home starts and renovation work. For this year, 100,000 starts are planned to be built under this programme, with the MAFF giving subsidies of Y 300,000 per home.
BCWood doubts that Japan can support such a programme from its national timber industry resources. It is therefore expected that the programme will soon be relaxed and will be covered by imports as in the past.
Jim Ivanoff, director of Asia BCWood, sees a political dimension in the context of various negotiations on free trade agreements. Japan is currently negotiating a free trade agreement with the EU and Canada and aims to become a member of the Trans-Pacific Strategic Economic Partnership (TPP), with the US leading talks. Ivanoff believes that the measures are a way to keep the forest industry quiet, until the ongoing negotiations will be over.
By a free trade agreement, the EU expects a rise of 32,7% in its exports to Japan. The softwood timber export represent a 1,2% share of total exports to Japan. It is hard to believe that the ''wood stimulus programme'' will have a lasting effect, given the increase in softwood timber exports to Japan seen in recent months.
EU's softwood timber exports to Japan
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