Combating Deforestation with Trade Regulations

Fighting climate change has, over the past few years, become a major priority for nations around the globe. While there is much debate among the general population as to what drives climate change, deforestation and the lack of carbon consuming plants is proven to affect our environment in negative ways. Deforestation and the processes that happen afterwards contribute around 1.5 gigatons of carbon emissions on an annual basis. You may ask though, what’s stopping countries like China (whose agricultural business is the main contributor of deforestation in the world) from profiting from the exploitation of the world’s forests? Well, one of the most effective ways is trade regulation. The United States already has measures in place to protect trade from illegal logging and deforestation, but the European Union has recently placed tough regulations on products that contribute to deforestation, legal or illegal.

The United States Agency for International Development (USAID) says that the ever-growing demand for commodities produced in tropical areas drives deforestation, and that nearly half of the logging operations are done illegally. The Lacey Act enforces strict regulations on wood products that help the federal government understand where imports may have come from, and if the imported wood may have been harvested as part of an illegal logging operation. While this is a nice step in the right direction for the U.S. the EU has recently announced much tougher trade regulations surrounding the deforestation situation.

The EU’s new laws, agreed to by EU parliament in April, cover cattle, cocoa, coffee, palm-oil, soy, and wood, including products that contain or have been fed or made using the products. Based on the country of origin of the products being imported into the EU, there will be more compliance checks for the products above. The EU is categorizing countries into different risk levels:

• High-risk for deforestation: 9%
• Standard risk for deforestation: 3%
• Low-risk for deforestation: 1%

This means that if businesses are exporting from a high risk country 9% of your products will undergo strict scrutiny by EU customs officials. While there is no official ban on products or countries, the new law stipulates that businesses must have a “due diligence statement” filed with the EU, ensuring that their products do not come from deforested land or areas experiencing forest degradation. If a business does not provide this statement, they will not be allowed to sell their products. This simple but effective method of reducing carbon emissions has already gone into effect as of April 24th, 2023.

All attempts to fight climate change are equally important, whether it is through trade regulations or national laws, there is much still to learn about the effects of our consumption on our planet. Hopefully, someday soon, we can put an end to climate change.

To learn more about how trade regulations may affect your business, reach out to us at Allyn International!

Contributor: Robert J. Freeman

(AP, EU Parliament News, USAID)

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About Allyn International

Allyn International is dedicated to providing high quality, customer centric services and solutions for the global marketplace. Allyn's core products include transportation management, logistics sourcing, freight forwarding, supply chain consulting, tax management and global trade compliance. Allyn clients range from small local businesses to Fortune 500 firms. Allyn conducts business in more than 20 languages and has extensive experience in both developed and emerging markets. Highly trained experts are positioned throughout North and South America, Europe and Asia. Allyn’s regional headquarters are strategically located in Fort Myers, Florida, U.S.A., Shanghai, P.R. China and Prague, Czech Republic. For more information, visit www.allynintl.com