Modeling the Effects of Invasive Species on the International Trade of Forest Products Joseph Buongiorno, Shushuai Zu, Ruhong Li U.W. Madison James Turner Forest Research, Rotorua, NZ Jeff Prestemon USDA-FS, SO

Background U.S. forests at risk –Chestnut blight, early 1900s –Dutch Elm Disease, mid-1900s –Balsam and Hemlock Woolly Adelgids –Sudden Oak Death –Gypsy Moth –Spruce budworm –Oak wilt U.S. is largest producer, consumer, importer Globalization –GATT-WTO –NAFTA –FTAA Growing trade => growing threat Other countries face same issues

Objectives Losses incurred by producers and consumers due to timber supply reductions caused by invasive species Effects of regulations (phytosanitary rules and import bans) on producer and consumer welfare

Global Forest Products Model  Dynamic Competitive equilibrium  Demand  Supply  Trade  14 forest products  180 countries

GFPM Product Flow Raw materialIntermediate productFinal product Fuelwood Industrial roundwood Other roundwood Other fiber pulp Waste paper Fuelwood Other industrial roundwood Sawnwood Plywood Particleboard Fiberboard Newsprint Printing & writing paper Other paper & paperboard Mechanical pulp Chemical pulp

π T T T+1 Q T P T P T+1 Q T+1 GFPM dynamics

Alternative Scenarios  Status quo projections, 2002 – 2012  Ban on global trade of logs

Status quo:World plywood consumption

Status quo: Net Trade of Industrial Roundwood

Status quo: U.S.A

Status quo: World Prices

Effects on industrial roundwood ConsProdImportExport United States3%-1% -100% Brazil2%-1% -100% China-17%48% -100% Indonesia3%2% -100% Japan-43%18% -100% Malaysia9%-3% -100% EU-15-5%7% -100% Russian Fed7%-35% -100% World-2% -100%

Effects on Sawn wood ConsProdImpExp United States-1%4%0%172% Brazil-2%0% 14% China-9%-65%20%-33% Indonesia-1%4%0%15% Japan-7%-61%82%0% Malaysia-4%5%0%12% EU-15-2%-5%7%-1% Russian Fed-1%7%0%14% World-2% 11%10%

Effects on Wood Panels ConsProdImportExport United States-2%2%-4%73% Brazil-2%4%-8%14% China-12%-21%7%-19% Indonesia-1%5%0%11% Japan-7%-77%54%-1% Malaysia-6%12%39%18% EU-15-7%-8%7%1% Russian Fed0%20%-17%66% World-5% 8%

Effects on Wood Pulp ConsProdImportExport United States1%3%0%18% Brazil3% 0%4% China6%1%6%0% Indonesia-1%0% 1% Japan-2%-11%43%-30% Malaysia11%19%0%---- EU-15-4%-3%1%3% Russian Fed0%1%0%3% World0% 4%

Effects on Paper and Paperboard ConsProdImportExport United States0%1%-4%3% Brazil2%3%-2%9% China0%5%-12%10% Indonesia-1% -6%-2% Japnan-1%-2%25%-24% Malaysia0%7%-2%42% EU-150%-3%1%-4% Russian Fed-1%0% 3% World0% -2%

Effects on prices WorldU.S.A Industrial Roundwood4%-3% Sawnwood7%5% Panels17%6% Pulp8%23% Paper and paperboard2%

Future Work Finish log export ban scenario analysis Study effects of treatment costs on trade, production, and prices Develop timber supply sub-model to simulate effects of invasive species