Trade Policy and the Welfare of Southeast-Asian Timber Exporters: Some Implications for Forest Resources
An applied general equilibrium model of the global trade in forest products has been used to assess the impact of tariff and export tax reductions on forestry, the wood processing sector and the agricultural sector. The focus of this study is on Malaysia and Indonesia and the implications for their forest resources. Three key results have emerged: firstly, trade liberalisation does not necessarily lead to increased log production since the real producer's price does not always rise. Secondly, the Uruguay Round tariff changes may make forestry a less-attractive form of land use when compared with agriculture. Thirdly, the proliferation of log export barriers amongst tropical countries has a cartel-like effect; thus elimination of such barriers may be detrimental to tropical exporters.
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