Determinants of Temporary Trade Barriers in Global Forest Products Industry

Imposing temporary trade barriers (TTBs) as remedy actions against imports has become popular among global countries in recent decades. Many countries have employed these trade barriers to protect domestic firms from possible injury by unfair international trade. This study evaluated the main factors that influenced the implementation of TTBs in the forest products industry from 1995 to 2015 for two scenarios: a global and developing countries scenario; and a paper and non-paper products scenario. A two-step sample selection model was employed to assess the determinants of the decision to impose TTBs and the frequency to implement TTBs for the scenario of global and developing countries. From the perspective of forest products, determinants of applying TTBs on paper and non-paper products were examined with the probit regression. For the scenario of global and developing countries, the import, employment in agriculture, forest coverage rate, inflation, and GDP per capita were significant determinants. For the scenario of paper and non-paper products, variables of the forest area, imports, exports, GDP per capita, tariff rate, expenditure on education, and employment in agriculture were significant. The results show that a country with a large per capita GDP is more likely to file more TTBs against others. One implication is that countries should be cautious to impose TTBs, as it may cause the attention to shift from the inefficiencies of domestic forest firms to the unfair trade actions of exporters.