Source: UNIVERSITY OF WASHINGTON submitted to NRP
COMPETITIVENESS IN INTERNATIONAL FOREST PRODUCTS
Sponsoring Institution
National Institute of Food and Agriculture
Project Status
COMPLETE
Funding Source
SPECIAL GRANT
Reporting Frequency
Annual
Accession No.
0190132
Grant No.
2001-34270-11189
Cumulative Award Amt.
(N/A)
Proposal No.
2001-05696
Multistate No.
(N/A)
Project Start Date
Sep 15, 2001
Project End Date
Sep 30, 2003
Grant Year
2001
Program Code
[(N/A)]- (N/A)
Recipient Organization
UNIVERSITY OF WASHINGTON
4333 BROOKLYN AVE NE
SEATTLE,WA 98195
Performing Department
MANAGEMENT AND ENGINEERING
Non Technical Summary
Forest products exports from Washington and Oregon declined over the last three years. Lumber mills and paper mills have been forced to shut down because of local raw material shortages, while Canadian products have replaced US products in many markets. Markets will recover and the long-term potential is larger. Understanding environmental impacts, changing export opportunities, and value-added processing opportunities are critical as industry attempts to offset the effects of decling supply. CINTRAFOR works in partnership with state and federal agencies, trade associations, and forest industry managers, providing research data collection and analysis, policy review, information dissemination, and the ability to bring multidisciplinary skills together in problem-solving efforts. The Center also cooperates with other institutions across the US and the world whenever those capabilities are important to the research and outreach activities.
Animal Health Component
100%
Research Effort Categories
Basic
(N/A)
Applied
100%
Developmental
(N/A)
Classification

Knowledge Area (KA)Subject of Investigation (SOI)Field of Science (FOS)Percent
6050699301034%
6060699301033%
6030699301033%
Knowledge Area
605 - Natural Resource and Environmental Economics; 603 - Market Economics; 606 - International Trade and Development;

Subject Of Investigation
0699 - Trees, forests, and forest products, general;

Field Of Science
3010 - Economics;
Goals / Objectives
To provide both quality research and effective communications to potential users, the Center's activities are organized into three interrelated areas: Research, Outreach/Public Service, and Information Services. Current priorities for productive research include: Research: Address key, current or future issues arising from or impacting the international traide of forest products (such as the restructuring resulting from the Asian financial crisis); Provide research support for solving problems that impede the development of forest products exports (such as the causes of lower quality in Japanese 2x4 construction); Provide detailed country-market analysis and competing supplier profiles for those countries involved in forest products trade (such as the increasing opportunity in China and the increasing competition from Latin American countries); Assess technical, economic, and policy aspects of market opportunities for industry (such as the impacts of engineered wood products, tariff and non-tariff barriers and local standards, and changing environmental policies); Maintain a computer-based competitive trade model that supports research on regional development in global forest products trade, environmental linkages, and the evaluation of policy changes [the CINTRAFOR Global Trade Model (CGTM) is the only such model in the US]; Accumulate and disseminate, worldwide, information on wood construction, design, and development that provides potential for exports of value-added products (such as changing export trends by product category, and place of origin and destination); Provide new technologies or technology transfers that can substantially impact productivity, yield, utilization, and trade opportunities (such as the best use of 2x4 technology construction systems in Japanese construction); Evaluate the socioeconomic impact and stability issues related to international trade (such as the impact of changing environmental and trade regulations). Outreach/Public Service: Provide and disseminate information from research program activities to regional, national and international audiences impacted by international trade (by a newsletter and fact sheets on recent research findings available on the international web and published research reports); Maintain a structured program of symposia, conferences, workshops, seminars, publications and consultations in cooperation with others working in support of international trade. Information Services: Collect, maintain and distribute comprehensive data and research related to the international trade of forest products where it is otherwise not generally available to researchers, industry, and agency users; Support cooperative efforts in providing information services, avoiding duplication of easily accessed reference materials available from other sources.
Project Methods
CINTRAFOR has assembled a statistical database on China. An analysis of the changing housing/construction market and how constraints on harvesting will likely affect the sourcing of building materials for these markets is needed to determine how best to penetrate China's growing market. Canadian and NAFTA free trade pacts are being challenged by structural and policy changes which may undermine the intent of these agreements. Evaluation of these changes relating to the intent of the agreements and the impact on international competitiveness is considered a high priority in anticipation of the approaching reassessment of the quota agreement. A cooperative research program with the Washington State Department of Community, Trade, and Economic Development on improving the technology transfer of 2x4 housing construction systems to Japan has identified engineered products as a potential area with less cultural resistance. These research findings will provide the basis for an in-depth analysis of the progress of transferring building technology to Japan and the design of an Advanced 2x4 Technology Transfer Seminar Series. The CINTRAFOR Global Trade Model of competing international forest product supply regions was redeveloped from data collection and research modeling efforts by the International Institute for Applied Systems Analysis. The model has supported policy simulations that demonstrate the impacts of both trade and environmental policies. Supplementary funding has been obtained from the World Bank, USEPA, USAID, IIASA, and other sources for specific projects. Improvements in understanding the economic effectiveness of new riparian protection regulations and stream restoration efforts are needed. It is critical that changing regulations and foreign competition that may affect the viability of the forst products sector in the PNW be evaluated. The success of the CINTRAFOR sponsored 1996 Japan Housing Conference led to successful three more export forums. Conference participants recommended similar conferences in alternate years. An international wood marketing conference has become an annual goal. Conferences are planned to be self-sufficient but may require financial support. Brief summaries of research results in newsletter format and as summary fact sheets are distributed to a targeted distribution list of interested parties with unrestricted access also available through our website. Completed working papers are made available to the public at cost with complimentary copies provided to peer researchers. Presentations will continue to be made at trade association meetings and other conferences on a travel-cost reimbursement basis. Export statistics not readily available through other sources are collected, analyzed, and made available to researchers, company managers, and policy makers. Published statistical data is provided through the newsletter and other reports to users. Statistical data includes bi-directional wood trade flows for several world regions to help assess the impacts of timber supply disruptions on country competitiveness.

Progress 09/15/01 to 09/30/03

Outputs
A range of research projects were developed and implemented. Examples of the projects supported under this grant include: an analysis of trade disparities, material substitution in the US residential construction industry, the impacts of regulatory changes on Canadian competitiveness, the potential impact of proposed import safeguards in Japan on US log and lumber exports.

Impacts
The results of this research continued to promote the competitiveness of US wood products in international trade. More importantly, these results were critical in convincing the Japanese to reconsider the application of a safeguard duty on imported softwood lumber.

Publications

  • Eastin, I., J. Roos, and P. Boardman. 2001. A Technical Evaluation Of The Market For US Wood Windows Within The Japanese Post And Beam Construction Industry. CINTRAFOR Working Paper 84. University of Washington, Seattle, WA.
  • Eastin, I.L., C.M.C. Garcia, and E.C. Cortiguerra. 2001. Some Considerations For The More Effective Production And Marketing Of Non-Timber Forest Products In The Philippines. . Final Report submitted to FPRDI and ITTO for the FPRDI-ITTO Project PD 15/96 Rev. 2. 112 pages.
  • Impact of Regulatory and Market Changes on Competitiveness of Softwood Lumber Exports to Japan. 2001. Progress Report Submitted to the Softwood Export Council. Portland.
  • Eastin, I. and R. Braden. 2001. Opportunities for Alaskan Wood Products In Japan. CINTRAFOR Working Paper 81. University of Washington, Seattle.
  • Eastin, I.L. and J.Perez-Garcia. 2002. An Assessment of Trade Discrepencies in the Forestry Sector. Proceedings of the International Tropical Timber Organization Ministerial Meeting. November, 2002. Yokohama, Japan.
  • Eastin, I.L. and J. Fukuda. 2001. The Impact of Regulatory Changes on the International Competitiveness of the Canadian Softwood Lumber Industry. Forestry Chronicle V(77)N(2). pp:1-9.
  • Eastin, I.L., S. Fleishman, and S. Shook. 2001. Softwood Lumber Substitution in the Residential Construction Industry: 1998. Forest Products Journal V(51)N(9).
  • Shook, S. and I. Eastin. 2001. A Characterization of the US Residential Deck Material Market. Forest Products Journal V(51)N(4). pp:28-36.
  • Eastin, I.L. 2002. Market Opportunities for Alaska Yellow Cedar and Western Red Cedar in Japan. Final Project Report Submitted to the Alaska Manufacturers Association. 71pp.
  • Gardner, S. and I. Eastin. 2002. A Country Profile of the Forestry and Wood Products Sectors in Chile. CINTRAFOR Working Paper 90. University of Washington, Seattle.
  • Cunningham, K. and I. Eastin. 2002. Factors that Influenced the Export Success of Forest Products Companies in the Pacific Northwest During the 1997-1998 Japanese Economic Downturn. CINTRAFOR Working Paper 89. University of Washington, Seattle, WA.
  • Eastin, I.L. 2001. The Market Outlook for Softwood Lumber in Japan. In: Proceedings of the Conference on Value Chain Management in the Forest products Industry. Edmonton, Alberta. pp: 158-175. Eastin, I., P. Boardman, and J. Perez-Garcia. 2001. JAPAN WOOD MARKET RESEARCH STUDY: A Competitive Assessment of the Japanese Forestry and Forest Product Sectors. CINTRAFOR Working Paper 87. University of Washington, Seattle.


Progress 10/01/01 to 09/30/02

Outputs
1. China. Current research identified non-structural wood building materials, Chinese product-market characteristics, US company competitive advantages, entry strategies, and how these relate to company performance. Linkages among these factors were evaluated to assess successful business strategies of foreign firms in China's non-structural wood building materials market.

2. Japan. CINTRAFOR's study represents the first phase of a more comprehensive analysis of Japan's possible WTO Safeguard Actions and their impacts on the competitiveness of the Japanese forestry and forest products sectors. In this first phase we are gathering information on the wood products sectors in Japan, its products and substitutes, the general economy, government policies, and potential Safeguard Actions to produce a preliminary competitive assessment of the Japanese forestry and forest products sectors.

3. Japan. While the Asian economic crisis has adversely impacted the performance of most North American forest products exporters, a small number have experienced export gains. A complete update to this study is ongoing, with new surveys being sent out and analyzed.

Impacts
Project findings indicate that US exporters are losing market share and value in the export market. The transition in Japan, particularly to a performance-based code and to more pre-cut housing, is driving demand for more stable products; thus the findings are encouraging processors to emphasize drying and engineered wood over green lumber. Results also show that a shift in product mix and marketing approach can offset the constraints of a changed demography, restrictive building codes, and an unfamiliar set of consumer preferences and business practices.

Publications

  • No publications reported this period


Progress 10/01/00 to 09/30/01

Outputs
(1) China. Current research assesses willingness to pay for wood building materials and potential acceptance of wood frame construction in China. Research identified non-structural wood building materials Chinese product-market characteristics, US company competitive advantages, entry strategies, and how these relate to company performance. Linkages among these factors were evaluated to assess successful business strategies of foreign firms in China's non-structural wood building materials market. (2) Japan. CINTRAFOR's study represents the first phase of a more comprehensive analysis of Japan's possible WTO Safeguard Actions and their impacts on the competitiveness of the Japanese forestry and forest products sectors. In this first phase we are gathering information on the wood products sectors in Japan, its products and substitutes, the general economy, government policies, and potential Safeguard Actions to produce a preliminary competitive assessment of the Japanese forestry and forest products sectors. Research determined that there are no technical barriers to US wooden doors and windows in the Japanese post and beam housing sector. Included in the study are specifications and construction details for the major segments of this sector and strategies to increase the competitiveness of US wooden doors and windows in this market. Current research is being undertaken to identify the use of US engineered structural wood products and systems by Japanese construction professionals; describe their perceptions of these products relative to traditional lumber and plywood; categorize the builders in use categories for differentiation purposes and to collect further demographic information on the Japanese homebuilding industry. These activities will focus on Japanese-style wall, floor and roof systems whose major structural components are US engineered wood products. While the Asian economic crisis has adversely impacted the performance of most North American forest products exporters, a small number have experienced export gains. This study looked at how different marketing factors can influence the performance of North American firms exporting wooden building materials to Japan.

Impacts
Project findings indicate that US exporters are losing market share and value in the export market. The transition in Japan particularly to a performance based code and to more pre-cut housing is driving demand for more stable products thus the findings are encouraging processors to emphasize drying and engineered wood over green lumber. Results also show that a shift in product mix and marketing approach can offset the constraints of a changed demography, restrictive building codes, and an unfamiliar set of consumer preferences and business practices.

Publications

  • No publications reported this period