The problem of restrictions on trade is the basis of this paper. More specifically, the implications of the U.S.-Canadian Lumber Agreement are outlined in the Introduction. Chapter II offers a history of modern international trade theory as well as current trade theories. The next chapter further dissects a particular theory; the effects of trade-restriction reduction. In Chapter IV a model of the Canadian export tariff as proposed in the 1986 Agreement is explained as are empirical results and their effects on the U.S. economy.