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Two papers in international trade

This thesis presents two papers dealing with international trade policy in North America. The first
is "An Empirical Analysis of Protectionist Forces in the United States and Canada" and the second is
"Imports as a Cause of Injury: the Case of the 1986 Softwood Lumber Dispute".
The first paper addresses the question of what motivates firms and industries to initiate "less than
fair value" (LFV) complaints. The theory of rent-seeking is tested by analyzing data on the frequency of
countervailing duty and antidumping complaints from 1975 to 1987 in both Canada and the U.S. A reduced
form model is specified that expUcitly incorporates factors that are assumed to affect the supply and demand
for protection, including federal elections, business cycles, and statutory changes to laws governing antidumping
and countervailing duty procedures. The results indicate that the frequency of LFV cases, in both
the U.S. and Canada, rise during low points in the business cycle, and when relative competitiveness and
profitability in manufacturing decline.
The second paper takes a specific countervailing duty case, that of the Canada-U.S. softwood lumber
dispute of 1986, and addresses the question of whether the U.S. industry suffered injury from the alleged
less than fair valued Canadian lumber imports. The relationship between various measures of injury
for the U.S. industry and various hypothesized causal factors, including stumpage prices, is analyzed. The
six measures of injury are: prices, output, market share, employment, accounting profits, and stock market
profits. Structural models are specified and reduced form models tested for the 1975 to 1987 time period.
The analysis indicates that stumpage prices, as proxied by B.C. stumpage levels, appear to have
had littie effect on any injury sustained by the U.S. industry. Alternative specifications, using "leaked
rents" to the B.C. industry as a proxy for the alleged subsidy, also showed little effect on the U.S. industry.
Business cycle effects and the exchange rate are the most important determinants of performance. Counterfactual
simulations using tiie estimated equations permit the hypothesizing of how the U.S. industry would
have fared under alternative economic scenarios. This provides a useful framework for evaluating causes of
injury, since one can control for all other factors besides those alleged to be unfair.

Identiferoai:union.ndltd.org:LACETR/oai:collectionscanada.gc.ca:BVAU.2429/2975
Date11 1900
CreatorsFullerton, John Michael
Source SetsLibrary and Archives Canada ETDs Repository / Centre d'archives des thèses électroniques de Bibliothèque et Archives Canada
LanguageEnglish
Detected LanguageEnglish
TypeElectronic Thesis or Dissertation
RelationUBC Retrospective Theses Digitization Project [http://www.library.ubc.ca/archives/retro_theses/]

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