Evaluating the impacts of an international phytosanitary standard for wood packaging material: Global and United States trade implications

Abstract

Wood packaging material (WPM) is a significant pathway by which bark- and wood-boring insects move between countries. Recognising this threat, an international standard for the treatment of WPM (ISPM 15) is being implemented by many countries. In addition, the United States has considered application of similar requirements to WPM used in domestic and bilateral trade with Canada. We use a domestic margin-inclusive version of the Global Trade Analysis model to estimate the economic and trade impacts of ISPM 15, along with alternatives of varying stringency. We also estimate the economic impacts of one of the benefits of ISPM 15; averted United States forest owner timber losses. ISPM 15 is likely to have a small, negative effect on exports and economic welfare for most countries. However, there is significant regional and sectoral variation, depending on the product mix traded. If ISPM 15 requirements are extended to United States domestic trade, the impacts on the United States are stronger. Inclusion of averted United States timber losses partly, but not completely, offset welfare and trade impacts of the ISPM 15 treatment. These results must be tempered with the additional benefits of ISPM 15 in terms of potential averted household and environmental damages.