Property rights, forest rents, and trade: The case of US countervailing duties on Canadian softwood lumber

At the core of the softwood lumber countervailing dispute between the US and Canada are forest rents and how they affect trade. Inquiries in this domain have largely been targeted towards 2 questions: (1) Are Canadian stumpage fee systems collecting full economic rent? and (2) Does the level of stumpage fees influence Canadian exports to the US? The first question is largely an empirical question that has proven difficult to address. The second question has largely been approached theoretically with clear results. However, for both of these questions, most analyses have not, to a large degree, considered the specific context of the property rights within which these issues are placed. This paper considers how the property rights embedded in forest tenures in Canada influence forest rents, and thereby influence the answers to the above two questions. Unfortunately, more explicit consideration of the property right settings adds complexity and thereby makes responses to these two questions more ambiguous. Within this context, we are largely left with the need for empirical analyses of behavior to assess these issues.