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Nailing the Homeowner? Assessing the Impact of Trade Restrictions on Softwood Lumber

Featuring Michael Carliner, National Association of Home Builders; Christopher Boesen, National American Indian Housing Council; Dave Modi, Georgia Pacific; and Scott Cameron, CHEP USA, Inc.

The Cato Institute
1000 Massachusetts Avenue, NW
Washington, DC 20001

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Read the event transcript (PDF, 48 pp, 88 kb)

Even though Canada is the United States' largest trading partner and most goods flow freely across the border, one U.S. industry-softwood lumber-continues to lobby successfully for the imposition of trade barriers against our neighbor to the north. Currently, the Softwood Lumber Agreement imposes quotas on exports from four Canadian provinces. A recent Cato study, "Nailing the Homeowner: The Economic Impact of Trade Protection of the Softwood Lumber Industry," finds that trade restrictions add an estimated $50 to $80 per thousand board feet to the price of lumber-a 20 to 35 percent increase over the free-trade price level. Critics of the current policy claim that trade barriers drive up costs for lumber-using businesses and price some 300,000 lower-income families out of the housing market. Advocates of lumber protection, on the other hand, claim that trade barriers are necessary to offset unfair subsidies enjoyed by Canadian lumber producers. The SLA is set to expire in April 2001, and the U.S. and Canadian governments are considering options that might replace the SLA.