Detecting Illegal Trade Practices by Analyzing Discrepancies in Forest Products Trade Statistics: An Application to Europe, With a Focus on Romania
Discrepancies in bilateral trade statistics for forest products have recently attracted attention as potential indicators of illegal trade practices. For example, if exporters understate quantities to evade export taxes or quotas, then one might ex...
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| Language: | English en_US |
| Published: |
World Bank, Washington, D.C.
2013
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| Online Access: | http://documents.worldbank.org/curated/en/2004/04/4133622/detecting-illegal-trade-practices-analyzing-discrepancies-forest-products-trade-statistics-application-europe-focus-romania http://hdl.handle.net/10986/14104 |
| Summary: | Discrepancies in bilateral trade
statistics for forest products have recently attracted
attention as potential indicators of illegal trade
practices. For example, if exporters understate quantities
to evade export taxes or quotas, then one might expect
reported exports to be less than reported imports.
Discrepancies in trade statistics can exist for reasons that
have nothing to do with illegal activities, however, such as
measurement error and shipment lags. Any attempt to infer
evidence of illegal activities from statistical
discrepancies must control for these other explanations. The
author estimates the discrepancies between reported imports
and exports for bilateral flows of sawnwood traded by
Romania and other European countries. The author also
examines whether these discrepancies reflect illegal
activities by the traders. The mean discrepancy for sawnwood
exported by Romania during 1982-97 was significantly
different from zero for coniferous sawnwood but not for
nonconiferous sawnwood. Yet the sign of the discrepancy for
coniferous sawnwood-reported exports tended to be greater
than reported imports-implies that illegal trade activities
were more likely occurring in Romania's trading
partners than in Romania. An econometric analysis of
bilateral trade statistics for Romania and other European
countries finds evidence that measurement error, shipment
lags, and intentional underreporting all play a role in
explaining discrepancies for both types of sawnwood. The
econometric model is not sufficiently reliable, however, for
estimating the portion that was due solely to illegal
activities or determining whether those activities occurred
primarily in Romania or in its trading partners. Moreover,
given that it is based on observed discrepancies in
bilateral trade statistics, it fails to detect illegal trade
activities that occur simultaneously in both importing and
exporting countries. For these reasons, econometric methods
appear unlikely to be of practical use in revealing illegal
trade activities in the Romanian forest sector. |
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