Twenty forest industry CEOs gathered in London on Friday and sounded a warning that world governments’ response to the economic crisis may actually make trade worse.
The meeting’s chairman, Holmen‘s CEO Magnus Hall, summed up the mood of executives at the International Council of the Forest and Paper Associations event.
“Whilst needed in the short run to face the urgency of the current crisis, the shift to a political economy based on governments’ intervention might have the perverse effect of unlevelling the playing field and fuelling protectionism,” he said.
CEOs said government subsidies risk creating deep distortions in competition and inhibiting investment flows needed for rebooting the economy. Protectionism and a focus on regional economy could reduce global trade and may deepen the crisis, they added.
In the longer term, executives expressed optimism that the industry will adapt to the new conditions. There was a belief that the forest products industry model may hold the answer to “many of the questions facing humanity”.
But they noted that the forest sector itself had not yet reached its full potential in providing a model of sustainable production and consumption.
