Abstract
This study assesses the impacts of the North America Free Trade Agreement (NAFTA) and the World Trade Organization (WTO) negotiations on the U.S. forest products industries using a computable general equilibrium model. A global trade model consisting of ten sectors and ten regions was developed. Several scenarios were designed to simulate the tariff reductions proposed in the NAFTA and WTO negotiations. The effects of NAFTA and WTO on output, trade balance, welfare, and factor income were examined. The results indicate that NAFTA liberalizations will benefit the U.S. lumber sector, but reduce the output and trade balance of the paper and pulp and forestry sectors. The WTO will improve the trade balance of the U.S. forest products industries. In general, free trade will be beneficial to the U.S. economy as well as the forest products industries.Key wordsComputable general equilibrium modeltrade policytariffswelfare
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