Trade and sustainability: the impact of the International Tropical Timber Agreements on exports

Environmental sustainability standards are often portrayed as a hindrance to trade and growth. A set of novel international environmental agreements (IEAs), the International Tropical Timber Agreements (ITTAs), seeks to promote both. The ITTAs encourage international trade for member nations while requiring sustainable timber practices. This paper uses the ITTAs as a case study to examine whether IEAs can lead to environmental cooperation at the same time as increasing trade. Membership in both the 1983 and 1994 ITTAs is examined for an effect on timber exports. The analysis is conducted using panel data for 165 countries between 1970 and 2011 while controlling for year fixed effects, country fixed effects and country-specific trend terms. Estimated ITTA effects vary by ITTA year, timber category and country type. Logs exports fell for both tropical and non-tropical country members, but these decreases were offset by increases in other timber category exports. Tropical country members increased plywood exports, while non-tropical country ITTA members increased exports of sawn wood and veneer sheets. Total exports of targeted timber were unaffected in non-tropical member countries, while the 1983 ITTA increased total exports for tropical countries. These results together suggest that the sustainability clauses entailed in ITTAs have not decreased total timber exports from member countries, but have shifted exports across timber categories.