A major new study out of Auburn University published this week by the NRC Research Press demonstrates some fascinating analysis of the economic impact of the 2006 Canada-US Softwood Lumber Agreement on the American consumer:
Welfare Impacts of the 2006 United States-Canada Softwood Lumber Agreement
Rajan Parajuli, Daowei Zhang
Published on the web 24 May 2016.
Received March 25, 2016.
Canadian Journal of Forest Research, 10.1139/cjfr-2016-0141ABSTRACT
In this paper, we evaluate the market and welfare effects of the 2006 U.S.-Canada Softwood Lumber Agreement (SLA 2006) based on a U.S. import demand model for Canadian softwood lumber. We find that SLA 2006 reduces the U.S. lumber imports from Canada by 7.78% in the months when export taxes took effect. The welfare analysis based on a partial equilibrium framework shows that U.S. lumber producers gained US$1.6 billion and U.S. consumers lost US$2.3 billion in nine years under SLA 2006.
“Our major finding in that paper is: U.S. lumber producers gained US$1.6 billion and U.S.consumers lost US$2.3 billion in nine years under SLA 2006, ” lead author.
Forest Economist
Texas A&M Forest Service
College Station, TX 77845