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Is There an End to U.S.–Canadian Softwood Lumber Disputes?

Published online by Cambridge University Press:  28 April 2015

Stephen Devadoss
Stephen Devadoss*
Affiliation:
Department of Agricultural Economics, University of Idaho, Moscow, Idaho
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Abstract

I develop a two-country theoretical trade model to show that Canadian subsidies increase lumber supplies and exports to the United States, and the U.S. retaliatory tariff raises U.S. prices and safeguards producers, but hurts consumers. These results underscore the shortsightedness of policy decisions in a bilateral trade dispute, as empirical results from the multiregional spatial equilibrium trade model highlight that both countries pursue myopic policies without taking into account the reactions of other exporters and importers. For instance, after the imposition of U.S. tariffs, other exporters grab the market share lost by Canada in the United States, while Canada augments its exports to other importers.

Keywords

Canadian subsidylumber marketU.S. tariffWTO rulingF13
Type
Articles
Information
Journal of Agricultural and Applied Economics , Volume 38 , Issue 1 , April 2006 , pp. 137 - 153
Copyright
Copyright © Southern Agricultural Economics Association 2006

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