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

Published online by Cambridge University Press:  26 January 2015

Stephen Devadoss
Stephen Devadoss*
Affiliation:
Department of Agricultural Economics, University of Idaho Moscow, ID
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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–lumber market (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.

Keywords

countervailing dutydisputeloglumbersubsidyF13
Type
Articles
Information
Journal of Agricultural and Applied Economics , Volume 40 , Issue 1 , April 2007 , pp. 171 - 184
Copyright
Copyright © Southern Agricultural Economics Association 2008

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