Economic review of the tariff liberalization of the import of wood and wood products: Evidence from a developing country

Abstract

In recent years, import tariff liberalization of wood and wood products has attracted the attention of developing countries; especially in countries with sharp decrease in the forest green areas. However, due to the increase in demand for wood products in developing countries and the limitation of internal resources in these countries, the import tariff is very important. On the other hand, increasing the import tariff of wood to meet the domestic demand of each country and reducing the pressure on the forests could be effective. Therefore, in this article, the effects of reducing the tariff on wood and wood products on GDP, import of economic sectors and domestic production of wood and wood products, and followed pressure on the forests of a developing country (Iran) is examined based on a computable general equilibrium model. This model is designed based on micro data matrix of 2017 in Iran which faced with reduced forest size. Our results showed that reduction in the import tariff of wood and wood products, cause increases the import in this sector, gross national product, and prosperity. It also reduces the pressure on forests in the country. Therefore, we recommend that other countries that are facing the reduction of forest green areas, reduce the wood import tariff based on a specific time schedule so that help the growth of forest green areas in susceptible and needed areas which in turn help to improve the condition of the planet.