Effects of tariff liberalization on the global forest sector: application of the GTAP model

Abstract

SUMMARY This study investigated the effects of tariff liberalization on the global forest sector by using a computable general equilibrium model, based on the standard Global Trade Analysis Project (GTAP) model and its database, version 5. Tariff liberalization would generally cause only small changes in the terms of trade, real GDP, and the consumption and prices of forest products in most countries. National welfare would increase substantially in Indonesia by more than one billion US dollars in the long run. The prices of forest products would decrease in most countries. The effects of tariff liberalization would also be small on production with few exceptions, for example Indonesia and Malaysia. The major impact of tariff liberalization would be on trade of the developing countries in South America and Asia. Some of the changes in exports or imports of forest products could be more than 50%.