Effects of China's WTO accession on global forest product trade

Abstract

Abstract As one of the world's fastest growing economies and important forest product markets, China has recently become a member of the World Trade Organization (WTO) with commitments to further opening its markets to the world. This study analyzes the effects of China's entry into the WTO on global forest product trade using a computable general equilibrium model. Two scenarios are analyzed: (1) unilateral trade liberalization by China resulting from its WTO accession and (2) combination of China's trade liberalization with the Uruguay Round (UR). Our results indicate that China's accession to the WTO would significantly increase its imports of forest products and reduce its domestic market prices of lumber and wood products as well as pulp, paper, and allied products. Most of Chinese new imports would be used as intermediate goods by industries to produce final products for domestic consumption and re-export. The Association of Southeast Asian Nations (ASEAN) and the Asian New Industrializing Economies would benefit most from the unilateral trade liberalization by China. The combination of China's WTO accession and the UR would strengthen the competitiveness of North America and the European Union in Chinese forest product markets. Although China's accession to the WTO would affect forest product trade flows between China and its trade partners, it would have relatively small impacts on the world price, production, and trade value of forest products.