Implementation of the EU-Cameroon Voluntary Partnership Agreement policy: Trade distortion, rent-seeking and anticipative behavior

Abstract

This paper empirically investigates the impact of the implementation process for the Voluntary Partnership Agreement (VPA) in Cameroon on the volume of exported wood from Cameroon to the European Union (EU). This is achieved by applying time series analysis, change point detection, and vector autoregression with exogenous variables. No previous research has quantitatively analyzed the long-term impact of VPAs on traded wood. Two major conclusions are drawn. First, the VPA, and accompanying improved forest governance, negatively impacted on the wood volume exported from Cameroon when it came into force (December 2011). However, wood extraction in Cameroon's neighboring countries increased as operators can still economically benefit from less stringent environmental standards in these countries. Second, this paper observes anticipative behavior before the VPA came into effect. During the negotiations, exports decreased due to redirection of the trade flows, and uncertainty concerning the outcome of the negotiations. However, during the months before the VPA came into force, wood exports sharply increased. This is explained by rent-seeking behavior by operators who wished to benefit from the less stringent trade conditions, whilst they lasted.