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Impacts of the FLEGT Action Plan and the EU Timber Regulation on EU Trade in Timber Product

Author

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  • Paul Rougieux

    (European Commission, Joint Research Center (JRC), Directorate D—Sustainable Resources, Bio-Economy, Via E. Fermi 2749, I-21027 Ispra, Italy)

  • Ragnar Jonsson

    (European Commission, Joint Research Center (JRC), Directorate D—Sustainable Resources, Bio-Economy, Via E. Fermi 2749, I-21027 Ispra, Italy)

Abstract

The EU Timber Regulation (EUTR) is a key element in the efforts of the European Union to curb the trade in illegal timber products. This study helps to remedy the lack of systematic, statistical analysis of the EUTR’s potential impacts on international trade in timber products. Using cointegration intervention—or shock—models we quantify potential shifts in import prices and quantities of tropical hardwood lumber and oak lumber after the entry into effect of the EUTR. We further estimate import demand models to assess the relation between temperate and tropical hardwood products and whether there was a structural change in demand elasticities after the entry into force of the EUTR. The shock model analysis indicates, for most of the bilateral trade flows where we observe cointegration and a significant shock variable, increasing import prices and decreasing import quantities of tropical hardwood lumber following the EUTR start date, consistent with a contraction of the supply of tropical timber. The results of the import demand models do not give a clear indication as to whether oak lumber is a complementary or substitute product for tropical hardwood lumber, and there are no clear signs of structural changes in demand elasticities. Aside from the analysis, an important contribution of the paper is the procedure for building a long and homogeneous time series of tropical hardwood lumber.

Suggested Citation

  • Paul Rougieux & Ragnar Jonsson, 2021. "Impacts of the FLEGT Action Plan and the EU Timber Regulation on EU Trade in Timber Product," Sustainability, MDPI, vol. 13(11), pages 1-26, May.
  • Handle: RePEc:gam:jsusta:v:13:y:2021:i:11:p:6030-:d:563203
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    References listed on IDEAS

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    1. Prestemon, Jeffrey P., 2015. "The impacts of the Lacey Act Amendment of 2008 on U.S. hardwood lumber and hardwood plywood imports," Forest Policy and Economics, Elsevier, vol. 50(C), pages 31-44.
    2. M. L. Chas-Amil & J. Buongiorno, 2000. "The demand for paper and paperboard: econometric models for the European Union," Applied Economics, Taylor & Francis Journals, vol. 32(8), pages 987-999.
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    Cited by:

    1. Kim, Ki-Dong & Shim, Gyuhun & Choi, Hyun-Im & Kim, Dong-Hyun, 2023. "Effect of the timber legality requirement system on lumber trade: focusing on EUTR and Lacey Act," LSE Research Online Documents on Economics 121106, London School of Economics and Political Science, LSE Library.
    2. Apeti, Ablam Estel & N’Doua, Bossoma Doriane, 2023. "The impact of timber regulations on timber and timber product trade," Ecological Economics, Elsevier, vol. 213(C).
    3. Prasada, Imade Yoga & Nugroho, Agus Dwi & Lakner, Zoltan, 2022. "Impact of the FLEGT license on Indonesian plywood competitiveness in the European Union," Forest Policy and Economics, Elsevier, vol. 144(C).

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