- Controlling international trade in illegal timber is an essential part of the effort to reduce illegal logging. Consumer countries are taking a range of measures including the EU's FLEGT licensing scheme and Timber Regulation, the Australian Illegal Logging Prohibition Act, the US Lacey Act, and public procurement policies in several countries.
- Since these measures are designed to alter the existing patterns of international trade in timber and timber products, concerns are often raised about their compatibility with World Trade Organization rules.
- The outcome of any potential dispute case would rest on the interpretation of various clauses of the GATT and other WTO agreements, but there is no experience to date of WTO dispute cases dealing with even vaguely similar issues.
- It is important to be aware of the broad constraints placed by WTO rules in designing such measures for controlling trade in illegal timber, which seem likely to be increasingly used. 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 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.