United States Forest
Products Production and Trade Flows
Trends
ABSTRACT
The United States solid wood and
paper products industry is a world leader in the
production and export of a variety of construction,
industrial and consumer related products. The
United States industry enjoys a number of
competitive advantages including a large fiber
base, highly skilled labor force, state-of-the-art
technologies, and adequate energy and water
resources. At the same time, the United States is
the largest and most open market in the world, with
low to zero tariffs on most wood and paper products
and with an efficient transportation and
distribution system accessible to all
suppliers.
Solid Wood
Products
Softwood lumber production,
which represents the lion's share of the United
States solid wood industry, has traditionally
fluctuated with the strength of construction
activity, particularly in the residential housing
sector. However, a number of factors have affected
United States softwood lumber production in this
decade, including the reduction in allowable timber
harvests on Federal forest lands in the Western
United States Another important trend in the solid
wood industry has been increasing competition
between plywood and oriented strand board (OSB),
with OSB taking growing market share.
Exports of wood products have
increased from about US$3 billion in 1980 to US$7.2
billion last year. Importantly, the ratio of
value-added products rose from 53 percent to 62
percent of the total. The largest export markets
are Japan, Canada, and the European Union, followed
by Mexico and Korea. With the decline in United
States lumber production, imports of softwood
lumber have increased in recent years. The United
States negative trade balance in solid wood
products stood at US$4.3 billion in
1996.
Paper Products
United States production of
paper and paperboard reached 86.3 million tons in
1997, more than the combined total of the next
three largest producing nations. Production growth
averaged 2.75 percent during the 1990s, slightly
higher than the 2.6 percent annual growth
experienced in the 1980s. All major industry
segments with the exception of packaging and
industrial converting paper experienced growth over
this period as kraft papers lost significant market
share to plastic bags. Strong growth in
printing-writing papers provided the underlying
strength to overall paper and paperboard production
in the 1980-1990 period, while the containerboard
sector provided support to industry production
growth since 1990.
The United States paper market
has become much more globalized during the past two
decades. The 1980's saw a sharp influx of
printing-writing papers, which continued to rise at
a reduced pace during the decade of the 1990's. On
the other hand, rising exports have underpinned
production growth in the past decade. Not only was
there an increase in exports of kraft linerboard,
the industry's traditional export commodity, but
also of bleached paperboard, newsprint and
printing-writing papers. On a volume basis, the
United States trade deficit in paper and paperboard
stood at 2.3 million tons in 1997, compared to 5.6
million ton deficit in 1990. Much of the volume
growth has been in exports to developing countries
in Asia and Latin America, as well as to Canada and
Western Europe. The United States is among the
world's largest market wood pulp exporters and the
largest recovered paper supplier to world
markets.
The United States solid wood and
paper products industry has had to face growing
challenges both at home and abroad. Domestically,
environmental issues - related to fibre access,
product manufacturing and disposal - have added
significantly to the industry's cost of production,
sometimes without demonstrated environmental
improvement.
In the United States, as well as
globally, international trade in wood and paper
products is growing at a faster rate than the
industry's output (e.g. global exports have
increased at more than twice the rate of world
paper and paperboard production during this
decade.) Consequently, the removal of trade
impediments - both tariffs and non-tariff barriers
- and improved access to global markets has become
of critical importance to the economic health of
the industry. This point has become very apparent
as events in the Far East have demonstrated that
protected markets produce economic distortions and
can undermine the long-term competitiveness of
economies and industries. The APEC forest products
trade liberalization initiative provides the best
opportunity to remove barriers in a region
representing some US$70 billion in trade of wood
and paper products. The APEC initiative should
serve as a stepping stone to achieve global free
trade in our sector at an early date.
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