Effects of economic shocks, trade liberalization, and recycling policies on the global forest sector

In the modern global economy, the future of the U.S. forest products industries depends largely on world markets. The primary objectives of this study are to investigate the potential impact on the United States, its main trading partners, and the global forest sector of: the Asian economic crisis, the accelerated tariff liberalization with APEC and EU countries, and the increasing U.S. wastepaper recycling, towards the year 2010.; To this end, this study develops a comprehensive econometric model, the Global Forest Products Model (GFPM), based on the PELPS III framework (Zhang et al. 1993). The GFPM model improves PELPS III by improving the trade module, adding welfare analysis capabilities and expanding modeling capacity for large global studies. The GFPM model has been validated in various ways to verify its reasonableness and robustness for the purpose of this study. The first scenario starts from the year 1997, and projections to 2010 serve as a basis of comparison for the other three scenarios.; In the second scenario, the GFPM model is applied to investigate the impact of the Asian economic crisis. Results suggest that the effects of the Asian crisis would be lowering world demand and prices, and changing trade patterns. U.S. exports would decrease and imports would increase. The crisis would stimulate the U.S. economy, and the U.S. demand for all commodities would increase.; In the third scenario, the GFPM model is applied to investigate the effects of Accelerated Tariff Liberation (ATL) worldwide. The projections show that the ATL would cause small changes in world and U.S. production, but significant changes in world and U.S. trade, and the trade would shift towards more processed products. World prices would decrease. The total world and U.S. welfare would increase slightly.; The fourth application of the GFPM deals with the international effects of further U.S. wastepaper recycling. The projections show that the U.S. would gain in terms of social welfare and improve its trade balance of pulp and papers. World paper prices would decrease significantly. While the welfare of major paper consumers would increase, the welfare of major paper producers would decrease.