Ambiguity in Timber Trade Regarding Efforts to Combat Illegal Logging: Potential Impacts on Trade between South-East Asia and Europe

Abstract: Raised public concern in the European Union (EU) about the legality of its timber imports has pushed the European Commission to raise its standards and legality demands for wood imports. Combining literature reviews, structured interviews and trade data analyses, this study assesses the potential influence from Forest Law Enforcement Governance and Trade (FLEGT) (with its Voluntary Partnership Agreements (VPA) system and new legislation EU Timber Regulation (EUTR)), and third party verification schemes on the timber trade between tropical countries and Europe. These instruments have the potential to reduce the amount of illegally sourced timber being placed on the market, and they seem to have resulted in both increasing support of legality verification and certification uptake. However, there are signs of increased ambiguity in trade that could originate as a side effect of the transition towards a stricter regulation for tropical timber. Such ambiguity is explicitly taken into account here. Possible consequences from increased ambiguity are substitution of oak lumber for tropical hardwood lumber, and a diversion of exports of tropical timber to destinations with a less stringent regulatory framework than the EU. Evidence of these trade patterns in the literature reviews, interviews, and trade data analyses seems to confirm that ambiguity in international trade markets has actually increased since the introduction of these instruments.