Panama Free Trade Agreement with US

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Obama signs the "United States-Korea Free Trade Agreement Implementation Act". Official White House photo courtesty of Pete Souza.After five long years, the US Congress finally signed the free trade agreement with Panama last Friday. While Panama isn’t a huge trading partner for the US in terms of timber or other goods, it will definitely help us as we begin to export valuable hardwoods to clients in the US.

Panama already waives export tariffs on timber produced in managed reforestation plots. The addition of a free trade agreement means that Planting Empowerment's sustainably produced hardwoods won’t be slapped with import tariffs upon entering the US. This will increase returns for Planting Empowerment investors and benefits to our partner communities.

Plantation Visit with UN REDD Negotiators and Indigenous Leaders

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Photo of a toucan sitting on a branchA family in Nuevo Paraiso keeps a pet toucanPrior to the most recent United Nations Climate Change negotiation (conveniently held in Panama City), we hosted a group of REDD negotiators in our Nuevo Paraiso plantation. The REDD negotiators were interested to see how the Equitable Forestry model engages with our partnering landowners.

One of the largest drivers of deforestation in Panama is the contingent of small landowner who deforest to gain land title and practice subsistence agriculture and/or cattle ranching. Negotiators are working to develop REDD policies that provide incentives and a framework for activities such as Planting Empowerment’s mixed native species plantations, which can be an alternative income source for small landowners.

 

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Conservation Refugees

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Members of Arimae's agricultural association looking at a map of the community's reservationTwo weeks ago the New York Times published an article featuring an Oxfam report on the forced and violent eviction of more than 20,000 Ugandans from their homes. In an effort to access the United Nation’s Clean Development Mechanism, in 2005 the Ugandan government granted the New Forests Company (NFC) a 50-year license to grow eucalyptus and pine for carbon credits. As seen by big financial supporters of the NFC such as the World Bank, European Investment Bank and HSBC (as well as many conservationists) this would help protect land, grow trees, capture carbon, provide needed jobs and generate almost $2 million in revenues. Everyone wins, right?

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Economic Development vs. Conservation

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Indigenous girls in Arimae perform a traditional danceIndigenous girls from Arimae perform a traditional dance"Don’t you think you’re ruining the traditional values and culture of this community by introducing technology into it?”

A young tourist posed that question to me during her recent visit to our indigenous partner community Arimae. She opposed the idea of teaching computer classes in what was supposed to be an authentic indigenous village (She did, however, take advantage of the computers to check her email).

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ITTO reports China’s timber demand increasing

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The ITTO’s bi-weekly market update newsletter contained an interesting lead story on surging demand from China. From 2001 to 2010, log imports doubled from 17 million cubic meters (m3) to 35.4 million m3.

 ... With the international supply of commodity wood products falling and with rising domestic demand analysts expect to see a strong upward pressure on timber prices in the domestic market.

Interestingly, the article predicts that by 2015 the deficit of timber will be 180 million m3 - an increase of 550% increase over the amount imported in 2010. Meanwhile, log imports from Russia increased 12% by volume and 40% by value just in the first half of the year.

The report did not cite its source of information, but even after discounting the projected deficit by 50%, the growth in future demand and prices could be significant.

That’s positive news for the value of the timber being produced on Planting Empowerment’s plantations.