VPA annex on independent market monitoring
In most VPAs, an article on ‘market incentives' in the main text sets out the aim of promoting FLEGT-licensed timber in the EU market. During Voluntary Partnership Agreement (VPA) negotiations to date, all partner countries have emphasised the importance of market recognition of FLEGT licences. Ensuring FLEGT licences are visible and well received in the marketplace is important for exporting countries as it will help secure and add value to their timber trade. The EU also recognises that it is important to understand how the EU market responds to FLEGT-licensed timber.
However, in order to assess the effectiveness of FLEGT licences in adding value to the timber trade, it is necessary to monitor the market. The purpose of independent market monitoring, therefore, is to assess the effects of the trade in FLEGT-licensed timber on timber markets.
In the case of Indonesia's VPA, these concerns were further developed into an annex on independent market monitoring. The EC, for its part, has appointed an independent market monitor to cover all VPA countries.
The EC has awarded a five-year contract to the International Tropical Timber Organization to conduct independent market monitoring, starting in 2014. Monitoring will analyse how FLEGT licensing affects trade flows, market developments and timber prices. The information from monitoring will track developments and help shape policies to enhance implementation and effectiveness of the EU FLEGT Action Plan.