by Joel Wood
June 24, 2014
Log export policy is a matter of great controversy in British Columbia. Unions and some politicians argue for a complete ban, while previous economic analysis favors free trade in logs. This paper compares three policy options for BC log exports: a ban, an export quota, and free trade. An outright ban is by far the most costly of the three. From there, the analysis grows more complex. A quota policy that restricts log exports provides net benefits to BC when compared to both the outright ban and completely free trade. Yet from a global perspective, free trade is clearly the most desirable policy. The scarcity rent that accrues to BC from export restrictions becomes a welfare gain for foreign buyers of BC logs. There is also the potential possibility of using an abolition of export quotas as a bargaining chip for better trade deals with other countries. In either case, those advocating for an outright ban are clearly not on the side that provides the best economic benefits to British Columbians.