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The Welfare Impacts of U.S. Trade Restrictions against the Canadia n Softwood Lumber Industry: A Spatial Equilibrium Analysis

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  • Roy Boyd
  • Kerry Krutilla

Abstract

In this paper the authors estimate the production and welfare impacts of various U.S. trade restrictions on Canadian lumber. After building a model which incorporates the regional character of the North American lumber market, the authors simulate a variety of tariffs and quotas now advocated by a number of U.S. lawmakers. They find that the tariff losses incurred by Canadian producers could be substantial, depending on the elasticity of their export supply. Voluntary restraint agreements, however, might lead to Canadian gains as high as 40 percent of their preexisting profits.

Suggested Citation

  • Roy Boyd & Kerry Krutilla, 1987. "The Welfare Impacts of U.S. Trade Restrictions against the Canadia n Softwood Lumber Industry: A Spatial Equilibrium Analysis," Canadian Journal of Economics, Canadian Economics Association, vol. 20(1), pages 17-35, February.
    • Handle: RePEc:cje:issued:v:20:y:1987:i:1:p:17-35
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    Citations

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    Cited by:

    1. Mogus, Anthony & Stennes, Brad & van Kooten, G. Cornelis, 2005. "Canada-US Softwood Lumber Trade Revisited: Examining the Role of Substitution Bias in the Context of a Spatial Price Equilibrium Framework," Working Papers 37016, University of Victoria, Resource Economics and Policy.
    2. Stennes, Brad & Wilson, Bill, 2005. "An analysis of lumber trade restrictions in North America: application of a spatial equilibrium model," Forest Policy and Economics, Elsevier, vol. 7(3), pages 297-308, March.
    3. Zhe Chen & Zhongzhong Hu & Kai Li, 2021. "The spillover effect of trade policy along the value Chain: Evidence from China's rare earth‐related sectors," The World Economy, Wiley Blackwell, vol. 44(12), pages 3550-3582, December.
    4. 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.
    5. Janelle Mann & Derek Brewin, 2021. "Investigating the Impact of Trade Disruptions on Price Transmission in Commodity Markets: An Application of Threshold Cointegration," JRFM, MDPI, vol. 14(9), pages 1-7, September.
    6. Ethan Sabala & Stephen Devadoss, 2021. "Spatial equilibrium analysis of Chinese tariff on world cotton markets," The World Economy, Wiley Blackwell, vol. 44(7), pages 2188-2202, July.
    7. Stephen Devadoss, 2009. "The Softwood Lumber War: Politics, economics, and the long U.S.-Canadian trade dispute," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 18(1), pages 197-203.
    8. Devadoss, Stephen, 2006. "Is There an End to U.S.-Canadian Softwood Lumber Disputes?," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 38(1), pages 1-17, April.
    9. Devadoss, Stephen, 2008. "An Evaluation of Canadian and U.S. Policies of Log and Lumber Markets," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 40(1), pages 1-14, April.

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