Analysis of trade in illegally harvested timber: Accounting for trade via third party countries

The paper presents a model to analyse trade in illegally harvested timber with a particular focus on trade via third party countries. The model is deduced from the conventional input-output-analysis. In contrast to this type of analysis, inverse export coefficients are introduced to analyse the effect of a certain amount of country-specific supply, e.g., of illegally harvested timber, to the use of wood and wood products of all other countries, based on trade relationships. A database has been compiled especially for application of the model. It comprises data on industrial round-wood production in terms of industrial wood harvested and removed from the forest; recovered wood fibre in the form of recovered paper and waste wood; bilateral trade of 272 wood-based commodities in m³ raw wood equivalent (rwe), and domestic use of those commodities. Two scenarios expressing high and low estimates of illegal harvesting for all countries have been employed in the model. The model reveals the trade linkages between all countries of the world and allows quantification of the global supply and use arising from illegal harvesting. Furthermore it allows calculation of the import of illegally harvested timber for each country of the world. And finally, the model likewise allows the quantification of domestic use of illegally harvested timber for each country of the world. The results show that international trade increases the global domestic supply of illegally harvested timber by more than 70% in each scenario. In particular industrial round-wood from Papua New Guinea, Malaysia, Indonesia and Myanmar passes through many countries until it ends in form of finished wood products in the country of final destination. Not only due to suggested illegally harvested timber in the own country, but also due to strongly developed trade relationships, China holds the lead in total supply and use of illegally harvested timber. However this result must be seen against the background of the large population in China. This aspect also helps to explain the predominant position of China, Brazil and Russia with regard to the domestic use of illegally harvested timber. A comparison of import of illegally harvested timber on the basis of “simple” (covering only bilateral trade) and inverse export coefficients demonstrates the model's merit. The hitherto usually simple approach underestimates the “real” trade by a third up to a half.