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Dynamics of the U.S.-Canada Softwood Lumber Trade: Market and Welfare Effects of the 2006 Softwood Lumber Agreement

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  • Baek, Jungho

Abstract

This article examines the effects of macroeconomic variables (i.e., housing starts, disposable income, and the exchange rate), market variables (i.e., lumber price and wage rate) and the 2006 Softwood Lumber Agreement (SLA06) on U.S. lumber imports from Canada. It also looks at the welfare consequences of the SLA06. Results suggest that macroeconomic variables are more important than lumber price in determining the bilateral trade in softwood lumber. It is also found that, although the SLA06 has a significant negative effect on lumber imports from Canada, the market and welfare impacts of the trade restriction are moderate.

Suggested Citation

  • Baek, Jungho, 2011. "Dynamics of the U.S.-Canada Softwood Lumber Trade: Market and Welfare Effects of the 2006 Softwood Lumber Agreement," Estey Centre Journal of International Law and Trade Policy, Estey Centre for Law and Economics in International Trade, vol. 12(2), pages 1-13, November.
    • Handle: RePEc:ags:ecjilt:117820
    DOI: 10.22004/ag.econ.117820
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    File URL: https://ageconsearch.umn.edu/record/117820/files/baek12-2.pdf
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    References listed on IDEAS

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    1. Giridhar Myneni & Jeffrey H. Dorfman & Glenn C. W. Ames, 1994. "Welfare Impacts of the Canada-U.S. Softwood Lumber Trade Dispute: Beggar Thy Consumer Trade Policy," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 42(3), pages 261-271, November.
    2. Noel D. Uri & Roy Boyd, 1990. "Estimating the Regional Demand for Softwood Lumber in the United States," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 12(1), pages 137-147.
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    Cited by:

    1. Parajuli, Rajan & Zhang, Daowei & Kosman, Keta, 2018. "Province specific impacts of the 2006 United States-Canada Softwood Lumber Agreement: A seemingly unrelated regression approach," Forest Policy and Economics, Elsevier, vol. 90(C), pages 1-6.
    2. Johnston, Craig M.T. & van Kooten, G. Cornelis, 2017. "Impact of inefficient quota allocation under the Canada-U.S. softwood lumber dispute: A calibrated mixed complementarity approach," Forest Policy and Economics, Elsevier, vol. 74(C), pages 71-80.
    3. Johnston, Craig M.T. & Parajuli, Rajan, 2017. "What's next in the U.S.-Canada softwood lumber dispute? An economic analysis of restrictive trade policy measures," Forest Policy and Economics, Elsevier, vol. 85(P1), pages 135-146.

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