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Trade Barriers In The Pacific Forest Sector: Who Wins And Who Loses

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  • JOHN PEREZ‐GARCIA
  • BRUCE LIPPKE
  • JANET BAKER
Abstract
This study uses a global model of the forest sector to examine changes in log production, consumption, prices, and trade and discusses the impacts of changes on economic wealth transfers for log export ban and log export tax scenarios. The results indicate that trade barriers are inefficient in allocating logs to domestic processors when a supply shortage exists. The trade barrier produces economic losses that exceed the benefits to the processors. A log export ban reduces log prices in the Pacc North‐west by 8.5% and reduces timber harvests by 6.7%. The logs diverted to domestic mills save 1,208 more jobs than log export job losses but at an average annual cost of £230,463 per job saved. Economic transfers benefit lumber producers in the region under the ban. However, the benefits amount to 61% of regional timber producer losses including losses in the log export price premium, 39% of the loss to Asian processors, and 55% of the global consumer losses. Globally, lumber consumers lose £733 million. A log export tax scenario produces smaller impacts on prices and harvests since it does not eliminate total log exports. The tax scenario saves no jobs, and the average economic gain per job lost is £24,251 or about two‐thirds of the current average salary in the forest products sector in the region. A log tax has the ability to retain £78 million in tax revenues.

Suggested Citation

  • John Perez‐Garcia & Bruce Lippke & Janet Baker, 1997. "Trade Barriers In The Pacific Forest Sector: Who Wins And Who Loses," Contemporary Economic Policy, Western Economic Association International, vol. 15(1), pages 87-103, January.
    • Handle: RePEc:bla:coecpo:v:15:y:1997:i:1:p:87-103
    DOI: 10.1111/j.1465-7287.1997.tb00457.x
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    References listed on IDEAS

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    1. A. Clark Wiseman & Roger A. Sedjo, 1981. "Effects of an Export Embargo on Related Goods: Logs and Lumber," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 63(3), pages 423-429.
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    Cited by:

    1. Zhang, Han & Zhao, Qing & Kuuluvainen, Jari & Wang, Changhai & Li, Shiping, 2015. "Determinants of China's lumber import: A bounds test for cointegration with monthly data," Journal of Forest Economics, Elsevier, vol. 21(4), pages 269-282.
    2. Kooten, G. Cornelis van, 2013. "Modeling Forest Trade in Logs and Lumber: Qualitative and Quantitative Analysis," Working Papers 149182, University of Victoria, Resource Economics and Policy.
    3. Budy Resosudarmo & Arief Anshory Yusuf & Ditya A. Nurdianto, 2012. "Preliminary Analysis of REDD on Indonesian's Economy," Working Papers in Economics and Development Studies (WoPEDS) 201204, Department of Economics, Padjadjaran University, revised Dec 2012.
    4. Jianbang Gan, 2006. "International Trade and Forest Conservation Leakage," EcoMod2006 272100030, EcoMod.
    5. Shimamoto, Mihoko & Ubukata, Fumikazu & Seki, Yoshiki, 2004. "Forest sustainability and the free trade of forest products: cases from Southeast Asia," Ecological Economics, Elsevier, vol. 50(1-2), pages 23-34, September.
    6. van Kooten, G. Cornelis & Johnston, Craig, 2014. "Global impacts of Russian log export restrictions and the Canada–U.S. lumber dispute: Modeling trade in logs and lumber," Forest Policy and Economics, Elsevier, vol. 39(C), pages 54-66.
    7. Buongiorno, Joseph & Johnston, Craig & Zhu, Shushuai, 2017. "An assessment of gains and losses from international trade in the forest sector," Forest Policy and Economics, Elsevier, vol. 80(C), pages 209-217.
    8. Budy P. Resosudarmo & Arief Anshory Yusuf, 2006. "Is the Log Export Ban Effective? Revisiting the Issue through the Case of Indonesia," Economics and Environment Network Working Papers 0602, Australian National University, Economics and Environment Network.

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