Elasticities as a lens for international sustainable governance: tropical sawnwood trade between the European Union and Sub-Saharan Africa

This study evaluates the import demand elasticities for tropical sawnwood between major European Union (EU) importing countries—France, Germany, and Italy—and two key Sub-Saharan African exporters, Cameroon, and Ghana. Using the autoregressive distributed lag error correction approach and two-stage least squares, the analysis reveals that France exhibits elastic demand for Cameroonian sawnwood (−1.20) and nearly unitary elastic demand for Ghanaian sawnwood (−0.96) in the long run. In contrast, Ghanaian sawnwood demand is elastic in Germany (−1.22) and highly elastic in Italy (−2.24). These findings hold significant implications for policymakers and international forest governance. Elastic trade relationships highlight the potential for trade diversion and market shifts that may undermine regulatory efforts such as the Forest Law Enforcement, Governance, and Trade (FLEGT) Voluntary Partnership Agreement and the EU Regulation on Deforestation-Free Products Act (EUDRs). Conversely, relatively inelastic demand may allow for stricter enforcement of deforestation-free supply chains with minimal market disruption.