Implications of Restrictions on Imports of Canadian Softwood Lumber to the Southern Softwood Lumber Industry

James C.O Nyankori,Stephen K Nodine

doi:10.52324/001c.9336

Abstract

A number of policy options for the U.S. softwood industry are under consideration and there are indications that some form of restriction of the Canadian imports is imminent. The purpose of this paper is to evaluate the effects of trade restrictions and domestic subsidy on the southern softwood lumber industry. It specifically examines the effect of import tariffs and quotas on Canadian softwood lumber and domestic subsidy of the U.S. softwood lumber industry.

Highlights

The annual consumption quantity of softwood lumber in the United States increased by 7.9 percent between 1970 and 1982
The softwood lumber industry is an important component of the U.S economy
The free trade solution is shown in Table 2 and indicates that the total U.S softwood lumber production was absorbed in the domestic market and amounted to 65.4 percent share of the U.S softwood lumber market

Summary

Introduction

The annual consumption quantity of softwood lumber in the United States increased by 7.9 percent between 1970 and 1982. The annual domestic production of softwood lumber decreased by 11.6 percent but import quantity increased by 46.6 percent. These, together with trends in production, imports and consumption of softwood lumber in the United States over the past decade, suggest that Canada has a comparative advantage in softwood lumber production. In a number of areas in the southern region of the United States, the local economies have been dominated by the softwood lumber industry. In such areas, the multipliers associated with the softwood lumber industry are much higher than those of other manufacturing industries (Flick et al, 1980). The softwood lumber industry in the South is in a general state of decline which most observers have attributed to the Canadian imports

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Conclusion