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Illegal Extractions of Renewable Resources and International Trade with Costly Enforcement of Property Rights

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  • JINJI Naoto

Abstract

Illegal extractions of renewable resources threaten sustainable use of those resources. The world community has recently paid increasing attention to the issue of illegal logging. This paper tries to explain why it is important to exclude illegally logged timber from the international market by using a stylized model in the literature of trade and renewable resources. It is shown that a fall in the price of timber may cause a switch of management regime from enforced property rights to open-access, expanding the supply of timber and reducing forest stock. When several countries export timber, an increase in illegal logging in one country due to a regime switch may also increase illegal logging in other countries. While conflicting with the GATT/WTO rules for reasons of discrimination by process and production methods (PPMs), import restrictions only on illegally logged timber will be effective to prevent the international diffusion of illegal logging.

Suggested Citation

  • JINJI Naoto, 2007. "Illegal Extractions of Renewable Resources and International Trade with Costly Enforcement of Property Rights," Discussion papers 07011, Research Institute of Economy, Trade and Industry (RIETI).
  • Handle: RePEc:eti:dpaper:07011
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    File URL: https://www.rieti.go.jp/jp/publications/dp/07e011.pdf
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    References listed on IDEAS

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    1. Naoto Jinji, 2007. "International trade and renewable resources under asymmetries of resource abundance and resource management," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 37(4), pages 621-642, August.
    2. Michael Francis, 2005. "Trade and the enforcement of environmental property rights," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 14(3), pages 281-298.
    3. Grant E. Issac & William A. Kerr, 2003. "Genetically Modified Organisms and Trade Rules: Identifying Important Challenges for the WTO," The World Economy, Wiley Blackwell, vol. 26(1), pages 29-42, January.
    4. Read, Robert, 2004. "Like Products, Health and Environmental Exceptions: The Interpretation of PPMs in Recent WTO Trade Dispute Cases," Estey Centre Journal of International Law and Trade Policy, Estey Centre for Law and Economics in International Trade, vol. 5(2).
    5. Reinhard Quick & Christian Lau, 2003. "Environmentally Motivated Tax Distinctions and WTO Law," Journal of International Economic Law, Oxford University Press, vol. 6(2), pages 419-458, June.
    6. Naoto Jinji, 2006. "International trade and terrestrial open-access renewable resources in a small open economy," Canadian Journal of Economics, Canadian Economics Association, vol. 39(3), pages 790-808, August.
    7. Hotte, Louis & Long, Ngo Van & Tian, Huilan, 2000. "International trade with endogenous enforcement of property rights," Journal of Development Economics, Elsevier, vol. 62(1), pages 25-54, June.
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