Technological Solutions to Authenticity Issues in International Trade: The Case of CITES Listed Endangered Species

Abstract

Authenticity of products traded across national boundaries is becoming a global challenge requiring cooperation among countries to ensure transparency in international trade. The Convention on International Trade in Endangered Species of wild fauna and flora (CITES) restricts commercial trade in endangered species, however, enforcement of CITES trade restrictions is problematic due to errors in species identification. Emerging authenticity technologies, such as the International Barcode of Life (IBOL), can strengthen the enforcement of commercial trade restrictions in endangered species. Using a case study of an endangered species of Brazilian rosewood (Dalbergia nigra), the paper develops a graphical partial equilibrium trade model to explore three scenarios: adoption of IBOL authenticity technology by a major importing country, multilateral adoption, and adoption by an exporting country. The analysis suggests that a threat of multilateral testing for the authenticity of imported rosewood could significantly reduce cross border commercial trade in the endangered species. Further, upstream testing and certification of authenticity in an exporting country could increase importers’ confidence and the demand for legally harvested certified rosewood. The results suggest that emerging technologies have the potential to address authenticity issues in international markets, reduce quality uncertainty, and act as a complement to regulatory enforcement under CITES.