Welfare impacts of the 1996 United States - Canada Softwood Lumber (trade) Agreement

2001 ◽  
Vol 31 (11) ◽  
pp. 1958-1967 ◽  
Author(s):  
Daowei Zhang

This paper investigates welfare impacts of the 1996 United States – Canada Softwood Lumber (trade) Agreement (SLA), which set up a tariff-regulated quota system to restrict softwood lumber export from Canada to the United States. An aggregate price model is used to estimate the price impact of the SLA, and the implied quantity and welfare effects are examined. The results show that while the anticipated change in lumber price is about $59 in 1997 U.S. dollars or 16%, on average, for the first 4 years under the SLA, the gains to U.S. producers of softwood lumber are large and the losses to U.S. consumers are much larger. In addition, Canadian producers have benefitted from the SLA in the U.S. market, and the Canadian government has collected a small amount of additional export fees. As the overall efficiency costs of the SLA are modest, the SLA can be seen as an effective means of welfare transfer from U.S. consumers to the U.S. and Canadian producers. These results should provide a framework for ongoing trade policy debate.

2006 ◽  
Vol 36 (1) ◽  
pp. 255-261 ◽  
Author(s):  
Daowei Zhang

This research note provides updated estimates on the market and welfare impacts of the 1996 United States – Canada Softwood Lumber Agreement (SLA). Using the aggregate price model in Zhang (2001), the anticipated change in lumber price is estimated at US$30 (based on 1997 dollars), or 7.4%, on average for the first 4 years under the SLA; this is smaller than the previous estimate. In the fifth year, the price impact was negative because of a decline in lumber demand, oversupply in the United States, and excessive supply from Canada due to the structure and expected expiration of the SLA. The consequent gains to US producers of softwood lumber and the losses to US consumers are reestimated.


Author(s):  
Richard D. Mahoney

How did the U.S.-Colombia free trade agreement come about? The officially named “U.S.-Colombia Trade Promotion Agreement” was the stepchild of a rancorous hemispheric divorce between the United States and five Latin American governments over the proposal to extend the North American Free Trade Agreement...


2019 ◽  
Vol 51 (3) ◽  
pp. 368-384
Author(s):  
Wilson Sinclair ◽  
Amanda M. Countryman

AbstractAfter Mexican sugar producers gained unlimited, tariff-free access to the U.S. market in 2008, U.S. and Mexican governments bilaterally agreed to constrain Mexico’s sugar exports to the United States because of dumping allegations by U.S. producers in December 2014. This analysis employs a dynamic partial equilibrium model to estimate the price and welfare impacts of the U.S.-Mexico agreement by simulating the reimplementation of North American Free Trade Agreement sugar policies. Estimates suggest liberalizing the market would decrease U.S. sugar prices, translating to an average annual decrease in producer surplus of approximately $660 million and increase in consumer surplus of $1.67 billion across the simulation.


2001 ◽  
Vol 15 (1) ◽  
pp. 125-144 ◽  
Author(s):  
Mary E Burfisher ◽  
Sherman Robinson ◽  
Karen Thierfelder

We describe the main economic arguments posed for and against the North American Free Trade Agreement (NAFTA) during the U.S. policy debate. To evaluate these arguments, we analyze recent trade data and survey post-NAFTA studies. We find that both the U.S. and Mexico benefit from NAFTA, with much larger relative benefits for Mexico. NAFTA also has had little effect on the U.S. labor market. These results confirm the consensus opinion of economists at the time of the debate. Finally, studies find that trade creation greatly exceeds trade diversion in the region under NAFTA, especially in intermediate goods.


Author(s):  
Luis Ramon Mireles

A number of trade agreements were adopted in the 1990s that promised economic growth for Mexico. The most significant was the North American Free Trade Agreement (NAFTA), which promotes open trade between Mexico, the United States, and Canada. Like WTO, NAFTA focuses on the economic aspects of trade. Occupational safety and health issues were not specifically addressed by NAFTA. Despite the presence of domestic regulatory systems, concerns over working conditions persist on both sides of the U.S.-Mexico border and the workforces face similar health problems. The upsurge in trade between the United States and Mexico must be accompanied by an international commitment to occupational safety and health in border areas. If government agencies cannot or will not intervene to reduce rates of workplace injuries and illnesses, civil coalitions must assume this role.


2006 ◽  
Vol 38 (1) ◽  
pp. 137-153 ◽  
Author(s):  
Stephen Devadoss

I develop a two-country theoretical trade model to show that Canadian subsidies increase lumber supplies and exports to the United States, and the U.S. retaliatory tariff raises U.S. prices and safeguards producers, but hurts consumers. These results underscore the shortsightedness of policy decisions in a bilateral trade dispute, as empirical results from the multiregional spatial equilibrium trade model highlight that both countries pursue myopic policies without taking into account the reactions of other exporters and importers. For instance, after the imposition of U.S. tariffs, other exporters grab the market share lost by Canada in the United States, while Canada augments its exports to other importers.


1993 ◽  
Vol 27 (3) ◽  
pp. 484-512 ◽  
Author(s):  
Wayne A. Cornelius ◽  
Philip L. Martin

Will a North American Free Trade Agreement (NAFTA) decrease Mexican migration to the United States, as the U.S. and Mexican governments assert, or increase migration beyond the movement that would otherwise occur, as NAFTA critics allege? This article argues that it is easy to overestimate the additional emigration from rural Mexico owing to NAFTA-related economic restructuring in Mexico. The available evidence suggests four major reasons why Mexican emigration may not increase massively, despite extensive restructuring and displacement from traditional agriculture. First, many rural dwellers in Mexico already have diversified their sources of income, making them less dependent on income earned from producing agricultural commodities like corn that will be most affected by NAFTA. Second, a free trade zone might induce more U.S. agricultural producers to expand in Mexico during the 1990s, creating additional jobs there instead of in the United States. Third, the links between internal migration in Mexico and emigration from Mexico are not as direct as is often assumed; even if economic restructuring increases internal population movements in Mexico, this may not translate into a great deal of international emigration. Finally, European experience teaches that free trade and economic integration can be phased-in in a manner which does not produce significant emigration, even under a freedom of movement regime. NAFTA-related economic displacement in Mexico may yield an initial wave of migration to test the U.S. labor market, but this migration should soon diminish if the jobs that these migrants seek shift to Mexico.


Politeja ◽  
2021 ◽  
Vol 18 (5(74)) ◽  
pp. 293-313
Author(s):  
Łukasz Wordliczek

The article deals with the relationship between the United States and Mexico from the perspective of the US national security. The key areas of strategic interest in Mexico on the part of the United States include: limiting illegal immigration, fighting drug-related crime, economic cooperation, both bilateral and in the wider international dimension, for example the North American Free Trade Agreement. According to the United States, all three factors and their successful implementation are necessary and constituent elements of the national interest of the United States in its most important scope, that is, in increasing the security of the state. The analysis focuses on the U.S. economic relations with Mexico at the turn of the 20th and 21st centuries. The basis of economic relations between these countries is the North American Free Trade Agreement. The genesis of the NAFTA agreement and its effects on mutual relations in the context of the U.S. national interest and security was presented. Additionally, the reasons for President Donald Trump’s change from NAFTA to USMCA are described, from the perspective of U.S. strategic interests.


Author(s):  
Amy Skonieczny

More Americans than ever before believe that money in politics weakens our democracy. Public opinion polls show that the number of people who believe that the country is run by a few big interests looking after themselves rose to nearly 80% over the past 20 years. The belief that corporate interests drive public policy is not all that surprising when you consider the growth of lobbying in the United States. According to the Center for Responsive Government, from 1998 to 2016, the amount of money spent on lobbying the U.S. government grew from $1.45 billion to $3.12 billion with well over 10,000 lobbyists in Washington. With this all this money attempting to influence policy outcomes in Washington, it is no wonder that Americans are skeptical of the intentions of government officials. However, political scientists have found a more mixed result when it comes to the actual influence of money on politics. One study asked if the amount of money spent on any given issue really influences policy outcomes. Other studies have shown some benefit to the private parties that lobby. Thus despite significant research on the topic, there is little agreement among political scientists on just how lobbying influences political actors or if lobbying directly impacts policy results. When it comes to foreign policy, corporate lobbies are an ever-present influence in the crafting of government policies. Whether in the European Union or the United States or other countries around the world, corporate lobbies view representing their interests in a truly global fashion. While corporate interests are investing in shaping foreign policy in a variety of issues areas such as defense spending, arms sales, contractors on humanitarian missions, one area is particularly vulnerable to corporate influence—trade and finance. Research shows that U.S. trade politics is heavily influenced by the lobbying of business organizations and trade associations. In fact, the U.S. administration often relies on interested corporate parties to provide it with both the expertise that shapes the agreement itself and the political case for trade liberalization that shapes the public pro-trade campaign. In turn, corporate lobbying for trade agreements is a costly and involved process. For example, during the eight years of negotiations over the TransPacific Partnership Agreement, a regional trade agreement between the United States and 11 other Pacific Rim countries, corporations paid $2.6 billion dollars to lobbyists to influence the content of the agreement and to promote it to Congress and the American public. An overview of the literature on corporate lobbying and an examination of the case of U.S. trade shows a particular example of how corporate lobbying works to influence foreign policy.


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