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Toward a North American customs union: Rules of origin liberalization matters more than a common external tariff for Canada

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  • Georges, Patrick

Abstract

This paper shows that the general equilibrium impacts on Canadian GDP and welfare, of liberalizing NAFTA Rules of Origin (ROO), largely dominate the small effects of adopting a Common North American External Tariff (CET). Therefore, proposals for a North American CU should not be dismissed solely on the basis that a CET would marginally affect Canada while the negotiation process with the U.S. would be long and difficult--ROO liberalization matters more than a CET for Canada.

Suggested Citation

  • Georges, Patrick, 2008. "Toward a North American customs union: Rules of origin liberalization matters more than a common external tariff for Canada," The North American Journal of Economics and Finance, Elsevier, vol. 19(3), pages 304-318, December.
    • Handle: RePEc:eee:ecofin:v:19:y:2008:i:3:p:304-318
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    More about this item

    Keywords

    NAFTA Customs union Rules of origin Common external tariff Computable general equilibrium;

    JEL classification:

    • C68 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computable General Equilibrium Models
    • D58 - Microeconomics - - General Equilibrium and Disequilibrium - - - Computable and Other Applied General Equilibrium Models
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F15 - International Economics - - Trade - - - Economic Integration

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