Deforestation-free trade: the impact of border regulations on trade, production and land use in the forestry and agricultural sectors

Abstract Trade regulations on high-deforestation commodities are increasingly used to curb tropical deforestation. To evaluate their actual impact, this paper analyzes trade regulations on high-deforestation commodities under three scenarios: two based on EU measures and one exploring a globally coordinated implementation of import regulations on countries with high deforestation risk (HDR). We use a policy assessment framework based on MAGNET, a global general equilibrium model, to analyze the impact on trade, production and land use change. Our results indicate that EU-only measures can substantially reduce HDR imports into the EU, but the global impact remains limited given the EU’s modest share of world demand for products from countries with HDR. By contrast, a globally coordinated regulation targeting HDR countries would expand forest land in these countries and substantially reduce their production and trade, while shifting these activities to other parts of the world.