- Controlling international trade in illegal timber is an essential part of the international effort to reduce illegal logging, and consumer countries are taking a range of measures to exclude illegal timber from their markets. To date these include the EU's FLEGT licensing scheme and due diligence regulation, the US Lacey Act, and public procurement policies.
- Since these measures are designed to alter the existing patterns of international trade in timber and timber products, they may interact with the rules governing international trade overseen by the World Trade Organization.
Concerns are often raised about whether measures like these are compatible with WTO rules. Since the outcome of any possible dispute case would rest on the interpretation of various clauses of the GATT and other WTO agreements, and since there is no experience to date of WTO dispute cases dealing with even vaguely similar issues, in fact it is impossible to be definite about the outcome of such a case.
- Nevertheless it is important to be aware of the broad constraints placed by WTO rules in designing measures such as these, which seem likely to be increasingly used in controlling trade in illegal timber. The more the measure diverges from the core WTO principle of non-discrimination in trade, and the more trade-disruptive it is, the more vulnerable it could be to challenge.
- Within these broad constraints, governments have plenty of flexibility to adopt measures designed to exclude illegal timber from international trade. None of the main measures being pursued at present should experience any conflict with WTO rules.