An Evaluation of Canadian and U.S. Policies of Log and Lumber Markets Report as inadecuate

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The recent lumber trade war between Canada and the United States deals with Canadianstumpage policies, Canada’s log export controls, and U.S. retaliatory duty. This studydetermines the appropriate level of U.S. countervailing duty (CVD) by employing a verticallyinterrelated log–lumber model. The theoretical results show that the U.S. CVD can be greater(will be less) than the Canadian subsidy for a vertically related log–lumbermarket (for lumbermarket only). Empirical results support the theoretical findings in that the U.S. CVD for thelog–lumber market (lumber market alone) is 1.55 (0.91) times the Canadian subsidy.

Keywords: countervailing duty ; dispute ; log ; lumber ; subsidy

Subject(s): Agribusiness

Agricultural and Food Policy

International Relations/Trade

Political Economy

Issue Date: 2008-04

Publication Type: Journal Article

PURL Identifier: Published in: Journal of Agricultural and Applied Economics, Volume 40, Number 1 Page range: 171-184

Total Pages: 14

JEL Codes: F13

Series Statement: JAAE

Record appears in: Southern Agricultural Economics Association (SAEA) > Journal of Agricultural and Applied Economics

Author: Devadoss, Stephen


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