Benefits and Costs of Impending Free Trade: Revisiting British Columbia's Restrictions on Log Exports

Date

2014

Authors

van Kooten, G. Cornelis

Journal Title

Journal ISSN

Volume Title

Publisher

Journal of Forest Economics

Abstract

The government of British Columbia (BC) imposes restrictions on the export of logs from public and private forestlands, primarily to promote local processing and associated employment benefits. Most economists wholeheartedly oppose BC’s export restrictions, arguing that BC’s citizens are worse off as a result of the government’s measures. In this paper, it is shown that, while free trade in logs might well maximize global wellbeing, it might not necessarily result in the greatest benefit to BC. Indeed, both economic theory and a follow-up numerical analysis indicate that some restrictions on the export of logs can lead to higher welfare for BC than free trade. Thus, log export restrictions could be economically efficient from a local perspective, but only if the transaction costs of obtaining necessary permits are not excessive.

Description

Keywords

international trade, log exports, forest industry, quota rents

Citation

van Kooten, G.C., 2014. The Benefits and Costs of Impeding Free Trade: Revisiting British Columbia’s Restrictions on Log Exports, Journal of Forest Economics 20(4): 333-347.