​Executive Summary
The study examines where excess wood exists, how much can be imported to the US, and what opportunities exists for US investments overseas.  The study begins with an examination of global demand.  Data on global consumption of industrial roundwood reveals a structural break in consumption patterns during the early 1990’s.  Part of this break is the result of the collapse of the former Soviet Union.  The shut down of not only its consumption but also its production sectors has had a visible impact on global consumption.  Also efforts to produce timber in a sustainable fashion in tropical forests and environmental restrictions on softwood timber harvests significantly constrained timber supply in the 1990’s, leading to reduced global consumption of forest products.
Two projections of future consumption are made.  Using a growth rate of consumption observed prior to the 1990’s results in projected consumption of nearly 3 billion cubic meters by 2050.  Using a growth rate of consumption estimated during the 1990’s results in a projection of 2 billion cubic meters by 2050.  Near-term consumption is projected to increase from 300 million to 800 million cubic meters over the next 20 years.
The study also examines global timber supply projections using the ATLAS timber projection model, and their implication for excess supplies of wood fiber.  Excess supplies are defined as the volume over rotation age assuming no growth in current demand.  The model produces the biological potential for timber production for plantations established in New Zealand, Australia, Indonesia, Brazil, China, Argentina, Uruguay and Chile.  The projections are based on specific assumptions about growth rates, rotation ages and areas planted in 1995.  The projections indicate that in the short to medium term (from now to 20 years from now), there may be up to 400 million cubic meters (MMm3) of available wood in the Asian wood basket.  These wood resources are close to China and represent 3.5 times the timber consumed in China in 1997.  The Asian plantation wood is likely to compete with non-plantation wood particularly from Russia, and to some extent Scandinavia.  Over the longer term, it is likely to compete with Chinese plantations as well.
Several countries in Latin America have the potential to develop inventories above rotation age totaling over 500 MMm3.  Much of the additional short-term fiber from these plantations may fill European and North American markets, but are likely to come under competition from large non-plantation wood fiber sources in the northern hemisphere, such as Canada and Scandinavia, as well as the US fiber resource in the South.
The study also estimates economic supply for softwood logs using the CGTM.  We develop cost curves by ranking the quantity of sawlog supply available at a given price.  The cost curves assume no growth in demand over the projection period from 1993 to 2040.  An additional 200 MMm3 of sawlogs would be produced with an increase of $188/mbf (2000US$ or $40/m3 in 1980US$).  Finland produces the lowest cost sawlogs followed by New Zealand and then the US South.  The three regions provide the bulk of the first 100 MMm3 of addition sawlogs.  The interior region of western Canada, sourcing wood fiber from native forests, provides additional wood in the mid- to longer-term.  Regions such as the US West provide little or no additional wood supply because they are meeting current demand.
Supplying the least cost manufacturing capacity is modeled in a similar fashion as supplying least cost sawlogs.  The European region of Finland, Sweden and the western continental countries provide the majority of the lower cost manufacturing capacity.
The study concludes that while plantation wood may have a biological potential to produce nearly 1 billion cubic meters of wood fiber in the near-term term, there will be competition from wood fiber from non-plantation sources including Scandinavia, Canada and the US.  The sourcing of non-plantation wood fibers from these regions appears to remain more competitive with plantation fiber according to simulations with the CGTM. 
The 1 billion cubic meters of potential wood fiber is greater than the upper bound of 750 million cubic meters projected for the near-term demand for industrial roundwood.  However, the projection of biological supply is sensitive to plantation growth rates and rotation ages used in the study.  Timber inventory projections decline significantly with changes in these assumptions.  Future work will require better information on area planted, their growth and management intensities defining rotation ages.  

​Summary
Although comprising a small fraction of the forest resource in the Pacific Northwest (PNS), the region’s hardwoods are becoming an increasingly important sector in terms of both domestic and overseas markets.  This has occurred despite a generally negative attitude among foresters and the general public.  This attitude has been fostered by a variety of factors.  Perhaps foremost is the common situation in which lands logged of coniferous stands are invaded by light-seeded, pioneering, fast growing hardwoods, especially red alder.  Because this invasion prevents natural restocking of conifers and frequently overwhelmed planted conifer seedlings, hardwoods became viewed as pests.  Prior to the 1960’s and 70’s, vast areas of former conifer lands became covered by vigorous stands of hardwoods.  Since that time, foresters have invested substantially in hardwood control programs.  Young hardwoods were sprayed or manually removed during early thinnings to prevent competition with planted conifers.  Older hardwood stands were converted to conifers by logging off the hardwoods, salvaging better material for lumber or chips, and replanting with conifers.  These activities, combined with various statement in corporate and public agency reports of what was being done to eliminate the hardwood problem and get lands back into productive conifers, conveyed an impression to the public that hardwoods were worthless weeds.  Furthermore, early use of red alder in hidden parts of furniture and as an inexpensive substitute that was often stained to imitate other woods reinforced its reputation as a lesser species. Unfortunately, these attitudes have persisted while alder has gained acclaim in both national and international markets for furniture lumber and for pulp chips.  It is widely regarded for its many good properties and, in furniture, for its versatility to be used naturally or to imitate many other species.  Interest has also grown in several other Northwest hardwood species.  Indeed, during the recession of the early 1980’s , a Weyerhaeuser executive state “In the 1980’s, we suddenly found that our most consistently profitable lumber operations in the (Northwest) region were two small alder mills, which were developing customer ties in the Japanese and California furniture industries.” (Bingham,1986).
 
Although many are becoming aware of the increased value of the PNW hardwoods, there is little current information on the present size and scope of industries using the resource, developments in markets and the resource base and issues or problems that are confronting this industry.

​Summary
Initial world trade in pulpwood had been confined to trade in pulp logs, which for the most part were regional flows such as between European and Scandinavian countries.  However, beginning in the early 1960s a market began to develop for pulpwood, not in the round wood form but rather in the form of wood chips.  Beginning in 1965, with the introduction of specialized chip carriers by the Japanese, the international market for wood chips began to increase substantially.  During the period 1961-1965, before the advent of the specialized wood-chip carriers, world trade in wood chips amounted to only 523 thousand cubic meters (FAO 1984).  However, in 1966, following the introduction of chip vessels, wood chip trade had increased to 1.8 million cubic meters and by 1970 the volume traded had reached 7.4 million cubic meters.  By 1980 world imports of wood chips had increased to 19.2 million cubic meters and a record setting 1.1 billion U.S. dollars (CIF), (FAO f1984).  since 1980 these figures have declined, but it is clear that the international wood chip trade plays a very important role for both importers and exporters of forest products.

Summary
Forest Products is one of the major industries in the Washington State economy.  In 1984 the timber industry employed 56.4 thousand people, and generated gross revenues in excess of 3 billion dollars (U.S.).  During the last several years, this industry has been experiencing a transition as both domestic and foreign markets have changed dramatically.  Continued competition in both product and factor markets has increased the State’s involvement in overseas markets, especially those in the Pacific Rim countries.  Many of the technological changes and industry renovations taking place within the forest products industry are focusing on these international markets.  Legislative and government organizations at both the State and Federal levels are seeking to encourage and implement free trade policies in forest products as a means of expanding the natural economic benefits of trade.  This brief overview of the forest products industry in the State of Washington seeks to identify the major features of this industry and the current levels of international trade in forest products.  This overview has been prepared by CINTRAFOR in cooperation with the Washington State Department of Trade and Economic Development and the Washington State Department of Natural Resources.