International trade and biodiversity loss in Latin America: part of the problem and part of the solution?

What do a German eating his traditional sausages, a Frenchman tasting his typical cheeses and an Italian wearing his famous leather shoes have in common? All of them, through their consumption and customs, have a share of responsibility, whether they are aware of it or not, in the accelerated loss of biodiversity in the dry forests and savannas of central South America. 

The South American Gran Chaco extends across Argentina, Paraguay, Bolivia and Brazil over more than one million square kilometers, an area equivalent to France and Germany combined. Despite extending over latitudes where other continents have only deserts, this region was until 30 years ago covered by hardwood forests, savannas and wetlands. These ecosystems are capable of absorbing large amounts of greenhouse gases from the atmosphere and are home to a rich biological and cultural diversity.

Accelerated deforestation

Since the mid-1990s, the benefits that the ecosystems of this vast region provided to society have been vanishing at an accelerated rate due to deforestation for the expansion of commercial agriculture and cattle ranching. In fact, the South American Gran Chaco holds the sad record of being one of the most deforested regions in the world.

This phenomenon is driven by landowners in Argentina, Paraguay, Bolivia and Brazil, who replace forests and savannas with soybean and corn monocultures, or pastures for cattle.

A large part of the grains, meat, hides, and tannin produced in the South American Gran Chaco is exported to Asia and Europe (around 60% and 20%, respectively). This is made possible by a well-oiled supply and export chain of raw materials, which is controlled by a few multinational companies.

The raw materials route

These biodiversity-damaging trade connections are usually invisible to society. Fortunately, initiatives such as Trase Earth now make it possible to trace the path taken by these raw materials from the place where they were produced to the country where they are consumed. This non-profit initiative was founded by the Stockholm Environment Institute and Global Canopy in 2015 to empower civil society and governments in the search for deforestation-free raw material supply chains.

Within Europe, Spain, and Italy are the main importers of soybeans and corn from the Argentine Chaco, although the largest volume of these grains travels to the Middle East and Southeast Asia. Both in Europe and Asia, they are mainly used to feed cows, pigs, and chickens raised confined. Thus, Old World “artisanal” products such as German sausages or French cheeses are made from grain-fed animals whose production generates high environmental and social costs in the New World.

The manufacture and consumption of shoes, handbags, and luxury car upholstery in Europe also drive biodiversity loss in the South American Gran Chaco. The European Union imports two thirds of the leather produced in the Paraguayan Chaco, with Italy being the main importer with 25,000 tons of leather per year. To make matters worse, these leather are tanned with tannins extracted from the Quebracho tree, the main hardwood tree species in the Chaco forests. At the beginning of the last century, the quebrachales (as the Quebracho tree’s forest is called) were decimated by the English. Since the early 2000s, an average of 30,000 hectares of quebrachales in the Argentine Chaco have been cut down annually by Italian companies to extract tannin for leather tanning.

The responsibility of consumers and producers

What are European consumers and South American producers doing to halt the accelerating loss of biodiversity in the Gran Chaco? Actions, including those of their governments, are diverse and depend on three key factors.

First, they depend on how those responsible perceive the biodiversity loss they cause. Argentina’s large landowners manage their fields in the Gran Chaco from their offices in Buenos Aires, thousands of kilometers away. From there, they do not see the bodies of wild animals burned by the fire they ordered to be used to “clean” the land and plant corn, soybeans or pastures. The same happens with the Germans, who enjoy their sausages made from pigs fed with grain from deforested and burned fields. 

Second, some producers and consumers manage to perceive the negative consequences of their decisions, but still fail to change their logic. This is the case of many producers who today see how the soils of their fields are degraded, and what used to be a forest became a desert in a couple of decades, but continue to expand deforestation blinded by the extraordinary rents they obtain in the short term. Just by speculating on the price of land, a landowner can buy forested land in the Bolivian Chaco at US$100-250 per hectare and then sell each deforested hectare for US$2,500.

Third, those driving biodiversity loss in the Gran Chaco may want to reverse the damage caused by their production or consumption decisions, but they do not always succeed in effectively contributing to the solution. For example, an Italian who becomes aware that a brand of shoes in his country uses tanned leather tanned with tannins from the illegal logging of Chaco’s Quebracho trees may choose to buy another brand. However, the decision of a few conscious buyers will not be enough for Italy to stop importing leather and tannins from deforested areas.

Transforming international trade

Fortunately, a growing number of European consumers perceive that their consumption decisions generate negative impacts on the other side of the world. Many of them care and are willing to support import regulation policies. So much so that the European Union is promoting a regulation for its member countries to stop importing grains and meat from deforested areas after 2020, for example, in the Gran Chaco and other regions of South America.

Unfortunately, the entry into force of this EU regulation planned for 2025 has been postponed in response to lobbying by multinationals such as Bunge, Cargill and JBS, or by the Argentine Rural Society and the European People’s Party, among others. This stance clearly demonstrates that many South American producers, multinational exporters and European consumers are still not willing to stop the accelerated loss of biodiversity caused by their actions, even if this puts their own business and the welfare of society at risk.

Due to the current rules of international commodity trade, we have producers blinded by extraordinary rents on one side of the world causing invisible environmental damage to consumers on the other side of the world. Can a change in the rules of international commodity trade reverse this situation? To do so, we must first identify who has the power to transform international trade, and then whether they have sufficient incentive or pressure to do so. It is up to them to make international trade part of the solution to biodiversity loss, rather than continuing to be the main driver of the problem.

_{*Text produced in association with the Inter-American Institute for Global Change Research (IAI). The views expressed in this publication are those of the authors and not necessarily those of their organizations.}

_{Machine translation proofread by Janaína da Silva}

Biologist. PhD in Environmental Studies from Victoria University (New Zealand). Assistant researcher at the National Council for Scientific and Technical Research (CONICET) / Argentina).

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