Modeling Japan-South Seas trade in forest products.

Abstract

The international trade of forest products has generated increasing research interest, yet experience with modeling such trade is limited. Primary issues include the effects of trade barriers and exchange rates on trade patterns and national welfare. This paper attempts to add to experience by modeling hardwood log, lumber, and plywood trade in a region that has been mostly overlooked: East Asia, specifically Japan and the South Seas nations (Indonesia, Malaysia, and the Philippines). Japan-South Seas trade is important because of its significance in global forest-products trade and because of the large changes in trade barriers and exchange rates since 1970. In this paper, I describe the development of an economic model, JIMP, for investigating trade issues in the region. The model uses reactive programming to solve for a spatial equilibrium. Preliminary results suggest that: (1) restrictions on log exports will benefit South Seas nations only if the nations act together, and (2) relatively small fluctuations in exchange rates influence trade patterns as much as do large changes in tariffs.

Citation

Vincent, J.R. 1987. Modeling Japan-South Seas trade in forest products. Gen. Tech. Rep. PNW-GTR-210. Portland, OR: U.S. Department of Agriculture, Forest Service, Pacific Northwest Research Station. 28 p