Estimating Export Response in Canadian Provinces to the Canada-US Softwood Lumber Agreement

Abstract

We estimate the degree of trade diversion from provinces named under the Softwood Lumber Agreement (SLA) to provinces not named. Our regression results indicate that the SLA had a significant impact on the exports of non-named SLA provinces. Controlling for other factors, the SLA by itself would have increased exports from these provinces four times. The corresponding effect for the provinces named in the SLA is estimated at minus 5 percent. This decrease is not, however, statistically significant.