Timber export taxes and trade between Russia and China: Development of the forestry sector in the Russian Far East

Abstract

Russia contains almost one-quarter of the world's forests, exceeding the combined forest area of Brazil and Canada. There are significant obstacles to the development of a sustainable forestry sector in Russia including aging infrastructure, low processing capacity, poor transportation networks, poor financial and judicial institutional quality, and widespread corruption. In 2007, the Russian government announced an ad valorem export tax on unprocessed timber, or roundwood. By investigating the export tax in relation to Russia's timber trade with China, this paper explores the motivations and challenges behind Russia's desire to support a more robust domestic forest products sector.