Author: Sheng Sun (PEL Fellow)

For a long time nation-states were considered “too big for the small problems and too small for the big problems” in public international law and governance, and therefore to some extent have been displaced by public international institutions and private standard-setting. However, to the extent that globalization diminished the voices of local populations and amplified the powers of global political and economic elites, there was bound to be a reckoning between local and global forces for the control of the nation-states (Eric Posner 2017 and Moghalu 2017). It is in this anti-globalization context that nation-states still matter and are increasingly allowed, by international legal norms, to take regulatory measures with extraterritorial and transnational implications. State-based transnational regulatory measures are becoming an important way to deliver international regulatory mandates that directly regulate trans-border private business operations.

The regulation of illegal timber trade exemplifies the dilemma and opportunity of this trend in a changing global system. Several state-based transnational regulatory measures emerged after the 2008 global crisis. Notably, in 2008, the U.S. amended the Lacey Act to criminalize the import of logs that violated export country laws. The European Parliament passed the EU Timber Regulation, which became effective in 2013 and prohibits the placing of illegally harvested timber on the European market and also obliges economic operators who put timber products on the EU market to exercise due diligence. Australia, Japan and South Korea have similarly joined in these state-based transnational regulatory efforts.

The state-based nature of these measures, however, belies the complex economic and political incentives driving them — described by many as a classic “baptists-and-bootleggers” overlap of environmental arguments and private industrial interests. The complexity of incentives has raised serious questions as to whether these measures would, in fact, faithfully serve the international public interest rather than become protectionism in the guise of “legitimate regulation.” The chaotic situation also makes it extremely difficult for various state-based regulatory regimes to coordinate and cooperate.

With the retrenching of the United States in international public governance and multilateralism, and with the dramatic economic and geopolitical rise of China and other emerging economies, the progressive regulations in discerning markets like the U.S. and the EU will have declining policy impact. China is now the global motor of timber trade. The country hosts the world’s largest wood-manufacturing industry and has the fastest-growing wood product consumption. It is also the biggest timber importer. Compared with the past European and American primacy in global geo-economics and in public international law and governance, the system now has a complex, decentralized, but potentially more democratic structural configuration.

So, what kind of role could and should the emerging and developing countries including China take in accommodating to, maintaining, re-creating, and fostering a responsible and rule-based international forest governance system? How can we promote intergovernmental coordination and cooperation between different state-based transnational regulatory regimes, particularly between the developed countries and the emerging and developing countries? Answers to these questions will determine the shape of international forest governance as well as the global forest health in the coming decades. Importantly, the experience acquired in the forest sector will also likely shed light on other important issues of public international law and governance.