US-Canada softwood lumber trade disputes and lumber price volatility

摘要

This paper uses analysis of variance (ANOVA) and regression analysis to study U.S. softwood lumber price volatility between 1980 and 2000, the period that coincides with several episodes of U.S.-Canada softwood lumber trade disputes. The results show that softwood lumber prices were more volatile in the 1990s than in the 1980s, with the period between 1991 to 1996 being the most volatile, the period covered by the 1996 U.S.-Canada Softwood Lumber Trade Agreement (SLA) being the second most volatile, and the period covered by the U.S.-Canada Memorandum of Understanding being the least volatile. Uncertainty, supply constraints due to the SLA and declining availability of federal timber in the western United States, and variations in housing starts were the primary causes of price volatility in the 1990s. The results of this paper have implications on resolving the U.S.-Canada softwood lumber trade disputes.