The Promise of Cooperation in Latin America: Building Deforestation-Free Supply Chains

Abstract

An EU Regulation proposed in 2021 prohibits the trading of deforestation-linked commodities and products on the EU market.1 The Regulation aims this ban at its own market, but it has unavoidable consequences for commodity producing Latin American countries. The proposed Regulation will affect trade with the European Union, a key trade partner for Latin American countries. If this type of regulation is increasingly adopted by other industrialized countries, which currently represent the largest share of exports for Latin American countries, the trade impact in Latin America will be even broader. We argue that regulatory approaches focused on global supply chains—such as the EU Regulation—represent an opportunity to reinvigorate existing, albeit weak, Latin American environmental cooperation to tackle key drivers of deforestation, notably, agricultural expansion. Despite the global relevance of the region's forests and biodiversity, Latin American cooperation has not been significant in forest conservation.2