OECD Trade Policy Studies

ISSN :
1990-1534 (online)
ISSN :
1990-1542 (print)
DOI :
10.1787/19901534
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A series of OECD reports on various aspects of trade policy. Recent reports have covered such topics as universal access to basic services offered internationally, the role of non-tariff barriers, and environmental requirements and market access.

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Illegal Trade in Environmentally Sensitive Goods

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Author(s):
OECD
Publication Date :
20 Sep 2012
Pages :
144
ISBN :
9789264174238 (PDF) ; 9789264174221 (print)
DOI :
10.1787/9789264174238-en

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Illegal trade in environmentally sensitive goods, such as threatened wildlife, timber, hazardous waste, and ozone-depleting substances, has been a long-standing issue in the international trade and environment agenda.  The nature of such illegal trade makes it difficult to fully understand its extent and impact on the environment.  Developing effective policies to reduce illegal trade requires a clear understanding of what drives this trade and the circumstances under which it thrives.  In this report, evidence-based on customs data and information from licensing schemes is used to document the scale of illegal trade, as well as the economic and environmental impacts of such trade.  National and international policies have an important role to play in regulating  and reducing illegal trade and the report highlights a range of measures that can be taken at both levels.

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    Foreword

    The objective of this report is to provide an overview of the economic and policy issues involved in illegal trade in environmentally sensitive goods and to highlight a set of key policy messages for OECD and non-OECD governments. The work has been overseen by the OECD Joint Working Party on Trade and the Environment (JWPTE).

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    Executive summary

    This publication reviews the evidence on the key drivers of illegal trade in environmentally sensitive goods. This includes factors such as differential costs, as well as enabling conditions such as regulatory and enforcement failures. It also provides an overview of the main economic, social and environmental impacts. The report reviews the data collected by customs and licensing schemes for selected environmentally sensitive goods, including wildlife, fish, timber, ozone-depleting substances (ODS) and hazardous waste. It examines the extent to which this information can be used to identify and measure illegal trade.

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    Defining illegal trade in environmentally sensitive goods

    In this chapter we review the meaning of term "illegal trade in environmentally-sensitive goods". The five different areas presented in the publication are discussed, namely: wildlife; logging and its associated timber trade; illegal, unreported, and unregulated fishing; controlled chemicals (particularly in ozone-depleting substances); and hazardous waste. The chapter concludes by presenting the structure of the publication.

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    Key drivers and main impacts of illegal trade

    This chapter examines first the main drivers of illegal trade. This includes economic factors such as cost differentials on the supply side, as well as demand patterns. In addition, the role of governance failures is discussed. An overview of the economic, environmental and social impacts of illegal trade is then provided for five categories of goods: wildlife, fish, timber, ozone-depleting substances and hazardous waste.

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    Assessing illegal trade flows based on customs and licensing scheme data

    There are many possible indicators of illegal trade in environmentally-sensitive goods. In this chapter we review the evidence related to discrepancies in trade data from exporting and importing countries. Wide variations between different countries’ statistics may indicate illegal trade in some form. However, caution must be exercised. Discrepancies may indicate any one or several of a wide range of other factors such as measurement methods, data inputting or conversion errors and inconsistencies.

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    Licensing and trade controls for environmentally sensitive goods

    In this chapter we assess of the role of licensing schemes in addressing illegal trade in environmentally sensitive goods. The experience of licensing systems is reviewed for six agreements: the Convention on International Trade in Endangered Species of Wild Flora and Fauna (CITES), the EU’s Forest Law Enforcement, Governance and Trade Initiative, the Catch Documentation Scheme for Patagonian toothfish of the Convention on the Conservation of Antarctic Marine Living Resources (CCAMLR), the Rotterdam Convention on chemicals, the Montreal Protocol on ozone-depleting substances, and the Basel Convention on hazardous waste.

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    The effect of domestic environmental policies on illegal trade

    This chapter assesses the role of domestic environmental policies on illegal trade in environmentally sensitive goods. The focus is on incentive-based mechanisms. The first section looks at the role of property rights regimes for resource management. It is followed by a review of selected taxes and charges related to pollutants and waste. In the third and final section, the case of economic incentives targeting trade flows directly is assessed, with a case study on the timber trade.

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    Illegal trade in environmentally sensitive goods: Conclusions

    In this report we have examined the evidence, drivers and governance of illegal trade flows in environmentally sensitive goods such as wildlife, timber, fish, chemicals and hazardous waste. In some cases, the ‘illegality’ of the trade is a function of the characteristics of the good itself (e.g. protected species, ozone-depleting substances) and in some cases it is a function of the means by which it is harvested, exploited or manufactured (e.g. timber, fish).

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