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An Evaluation of Canadian and U.S. Policies of Log and Lumber Markets

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  • Devadoss, Stephen

Abstract

The recent lumber trade war between Canada and the United States deals with Canadian stumpage policies, Canada’s log export controls, and U.S. retaliatory duty. This study determines the appropriate level of U.S. countervailing duty (CVD) by employing a vertically interrelated log–lumber model. The theoretical results show that the U.S. CVD can be greater (will be less) than the Canadian subsidy for a vertically related log–lumbermarket (for lumber market only). Empirical results support the theoretical findings in that the U.S. CVD for the log–lumber market (lumber market alone) is 1.55 (0.91) times the Canadian subsidy.

Suggested Citation

  • 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(01), pages 1-14, April.
    • Handle: RePEc:ags:joaaec:45517
    DOI: 10.22004/ag.econ.45517
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    File URL: https://ageconsearch.umn.edu/record/45517/files/jaae-40-01-171.pdf
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    References listed on IDEAS

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    1. Giancarlo Moschini & Karl D. Meilke, 1992. "Production Subsidy and Countervailing Duties in Vertically Related Markets: The Hog-Pork Case Between Canada and the United States," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 74(4), pages 951-961.
    2. Jean-Thomas Bernard & Luc Bouthillier & Jérôme Catimel & Nancy Gélinas, 1997. "An Integrated Model of Québec-Ontario-U.S. Northeast Softwood Lumber Markets," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 79(3), pages 987-1000.
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    Cited by:

    1. van Kooten, G. Cornelis, 2014. "Is Free Trade the End All Be All? The Case of Log Exports," Working Papers 162236, University of Victoria, Resource Economics and Policy.
    2. Zhai, Jun & Kuusela, Olli-Pekka, 2022. "Incidence of domestic subsidies vs. export taxes: An equilibrium displacement model of log and lumber markets in Oregon," Forest Policy and Economics, Elsevier, vol. 135(C).
    3. Parajuli, Rajan & Sarangi, Sudipta & Chang, Sun Joseph & Hill, R. Carter, 2016. "The United States-Canada softwood lumber trade: An actual versus optimal export tax," Forest Policy and Economics, Elsevier, vol. 73(C), pages 112-119.
    4. van Kooten, G. Cornelis, 2014. "Benefits and costs of impeding free trade: Revisiting British Columbia's restrictions on log exports," Journal of Forest Economics, Elsevier, vol. 20(4), pages 333-347.

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