The impact of timber regulations on timber and timber product trade

Abstract

To promote legal imports of timber and timber products, some countries, such as the United States, Australia, the Republic of Korea, and members of the European Union (EU), have adopted timber trade regulations. The implementation of these regulations is the result of the increase in illegal logging and its negative impact on the environment, biodiversity, and climate change. These regulations play an important role in international trade and are part of an effort to combat illegal logging and its consequences, such as deforestation. This study analyzes the impact of the implementation of these regulations on imports of timber and timber products from timber-producing and timber-processing countries with a significant share of illegal logging over the period 1995–2019. To do so, we use a method combining the gravity approach with a matching technique such as entropy balancing. To test the robustness of our results, we estimate alternative specifications and use alternative methods such as the gravity model and Ordinary Least Squares (OLS). We find that the implementation of these regulations has a negative effect on imports of timber and timber products. This reduction in imports is mainly more significant for timber and timber products such as pulp and wood furniture and can also vary according to the country implementing the regulation..