Embedded deforestation: The Case study of the Brazilian-Italian bovine leather trade

Deforestation and forest degradation driven by Agriculture, Forestry and Other Land Use (AFOLU) are important sources of carbon emissions. Market globalization and trade liberalization policies reinforce this trend and risk deforestation to be embedded in global value chains. Due to the complexity of global production and trade systems, deforestation risk is also embedded in the supply chains of the products and sectors that are not direct deforestation drivers. Bovine leather is a commodity closely entangled in the debates about deforestation as it is a by-product of cattle. This research focuses on leather trade between Brazil and Italy to demonstrate the channels through which Italian imports of Brazilian leather could possess embedded Amazonian deforestation and related risks. The data employed for the analysis was searched at three different levels for the leather trade between Brazil and Italy: (a) the country level annual leather trade statistics for the years 2014-2018 taken from the Comtrade database; (b) the state level leather trade data, for the years 2014-2018 taken from the Comexstat database; and (c) the exporter-importer level leather trade data for the period of August 2017-August 2018, based on customs declarations. The analysis helps to demonstrate that the Italian leather trade with Brazil possesses the risk of deforestation unless the proper traceability and due diligence systems are in place to claim the opposite. The European and Italian leather industry need to be more proactive in acknowledging the existence of the risk at different levels, putting full traceability systems in place and sending out clear market signals that deforestation is not tolerated, and that sustainability is valued.