The effect of the Canada‐US Free Trade Agreement on Canadian multilateral trade liberalization

Joseph Mai · Andrey Stoyanov

32 citations0/0 files storedCanadian Journal of Economics/Revue canadienne d économique

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Global trade and economics World Trade Organization Law Canadian Policy and Governance

Abstract

Abstract In this paper show that the Canada‐US Free Trade Agreement (CUSFTA) tariff preferences have triggered a decline in Canadian external tariffs, explaining a two percentage point reduction in the average tariff between 1989 and 1998. Next, we found that industries that generate the least export rent to the US firms experienced deeper tariff cuts in Canada; this result provides evidence of cooperation in trade policies between the US and Canada. Finally, we estimate the effect of the CUSFTA on the intensity of industrial lobbying for trade policy in Canada and find no relationship between preferential trade liberalization and lobbying activity.

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References

2001Econometric Analysis of Cross Section and Panel Data 1965Trade Liberalisation and “Revealed” Comparative Advantage 1 1992Protection For Sale 2008Estimating Trade Restrictiveness Indices 1993The Politics of Free Trade Agreements 1993Trade Liberalization and the Theory of Endogenous Protection: An Econometric Study of U.S. Import Policy 1998Regionalism and Multilateralism: A Political Economy Approach 2000Is Protection for Sale? Evidence on the Grossman-Helpman Theory of Endogenous Protection

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2018Should the WTO require free trade agreements to eliminate internal tariffs?2013Preferences, rent destruction and multilateral liberalization: The building block effect of CUSFTA 2018Do Free Trade Agreements Affect Tariffs of Nonmember Countries? A Theoretical and Empirical Investigation 2016Regionalism and falling external protection in high and low tariff members 2015Preferential versus multilateral trade liberalization and the role of political economy

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