Can CITES benefit from integrating standard trade-policy analysis?

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At the current meetings of the CITES Animals and Plants Committees (AC 34 and PC28), there is a most interesting document tabled by South Africa and Switzerland on the Inclusion of socio-economic factors and risk assessments in CITES listing decisions (AC34 Doc. 44/PC28 Doc. 28).

It proposes revisions of the CITES Resolution (Conf. 9.24 (Rev. CoP17)) that governs the criteria for amending CITES Appendices I and II to give greater weight to socio-economic factors and risk assessments. It further calls for an intersessional working group to consider these revisions and draft guidelines for applying socio-economic factors and risk assessments and to report back next year.

Socio-economic considerations

The document proposes the following addition to the criteria for amending the Appendices:

  • Consider the different stages of supply chains and provide information on market structure and how the market will likely respond to changes in trade policy (including trade restrictions or trade bans). Include factors such as market size and price trends.
  • Describe the nature of consumer demand and how consumers, and therefore market prices, will likely respond to changes in supply (i.e. price elasticity of demand).
  • Provide information gathered from consultations with resource users and other affected stakeholders indicating areas of disagreement, taking into account property and resource rights.
  • Describe potential positive and negative impacts on local livelihoods and cultural and traditional use and how these may influence the desired conservation outcome.

In so doing, the document is proposing to integrate standard assessment methods and tools applied by the World Trade Organisation (WTO) and UN Trade and Development (UNCTAD) to trade barriers.

The first bullet is asking for a standard WTO/UNCTAD trade policy analysis workflow including a mapping of the supply chain stages, characterisation of  the market structure, and estimation of price/quantity response.

The second bullet is looking for a demand-side elasticity analysis which will be challenging as HS-coded data will unlikely be available for species-level trade. It is also looking for an analysis of the nature of demand – e.g., whether the wildlife good is a necessity or luxury, whether substitutes are available, and whether the use cultural/traditional. This can be done with standard market/consumer research.

The third bullet can use the guidance developed by UNCTAD’s Biotrade Initiative which many range States already engage with through a related biodiversity-trade programme. This includes its stakeholder/value-chain mapping tools and resource assessment for wild-collected species.

The fourth bullet requires an assessment of the sustainability impact of a trade measures. The EU’s handbook for trade sustainability impact assessment is probably the best tools available to tackle these considerations as it systematically assesses economic, social, human rights, and environmental impacts of a trade measure side by side.

In short, there are well-developed methodologies and tools used by the WTO, UNCTAD and others to determine the socio-economic implications of trade measures such as amendments to the CITES appendices. The Parties could adopt these to improve the effectiveness of CITES decisions.

Risk assessment

The document also proposes to incorporate risk assessment as follows:

  • Explain how the proposed amendment will lead to the desired conservation outcome by considering both benefits and risks.
  • Include projections of potential outcome scenarios following the adoption of the proposal, detailing how the amendment is expected to affect the species conservation status and international markets.
  • Consider potential unintended consequences that might emerge such as shifts to the use of other species, the necessity of registration of captive breeding or artificial propagation operations causing a supply shortage, or continued demand shifting the trade from well-regulated trade (sustainable, legal, and traceable) to illegal trade.

The first bullet is asking for an explicit theory of change – how a CITES trade measure will actually conserve a species – alongside a regulatory impact assessment of benefits, costs, and risks as developed by OECD.

The second bullet requires transparent modelling of likely impacts on both species conservation and international markets based on different assumptions regarding likely trade flows and wildlife management responses.

The third bullet  addresses the possibility of substitutions,  the cost of compliance, and the incentive to trade illegally. The WTO approach would include cross-price elasticity / substitution analysis  and compliance-cost / regulatory burden analysis of a technical barrier to trade such as a CITES appendices amendment. Gaps in export and import trade data can also be used to assess any shift to illegal trade.

Intersessional working group

Integrating socio-economic considerations and risk assessments into the decision-making process for amending the Appendices will not only be technically challenging, but it will also be politically sensitive. Though there is already some institutional cooperation between CITES, UNCTAD and the WTO – for example through UNCTAD’s BioTrade programme – this has not yet extended to the analytical criteria used in listing decisions themselves

The proposed intersessional working group could benefit from inclusion of experts from the WTO and UNCTAD as well as the EU, OECD, and others to consider how available guidance, methodologies, and tools for assessing trade measures can be adapted for CITES purposes. Demonstrating that there is already significant know-how and capacity to enhance the CITES decision-making processes – and available only a few tram stops away in Geneva – may help South Africa and Switzerland to soften political sensitivities to evolving the way CITES operates.

by Francis Vorhies

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