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The impact of preferential market access: British imports into Canada, 1892–1903

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  • Ian Keay
  • Brian D. Varian

Abstract

Canada initiated the formation of the (modern) imperial trade bloc in 1897 when it extended preferential market access to imports from Britain. British goods initially received a preferential reduction of one eighth of the applicable duty, rising to one quarter in 1898 and one third in 1900. Because duties varied across imported commodities, the uniform relative margins of preference resulted in cross‐commodity variation in the absolute margins of preference. This cross‐commodity variation is exploited in our paper. Relying on a data set that includes over 32,000 Canadian import products, we find that a 1 percentage‐point increase in the absolute margin of preference was associated with a 5.4% increase in the value of imports from Britain. Counterfactually, if Canada had not adopted a preferential trade policy, by 1903, the value of British imports into Canada would have been reduced by approximately one half. Les conséquences de l'accès préférentiel au marché: importations britanniques au Canada de 1892 à 1903. Le Canada a amorcé la formation du bloc commercial impérial (moderne) en 1897 en élargissant l'accès préférentiel au marché aux importations britanniques. Au départ, les marchandises britanniques ont reçu une réduction préférentielle d'un huitième des droits applicables. Cette réduction est ensuite passée à un quart en 1898 et à un tiers en 1900. Puisque les droits variaient d'une marchandise importée à une autre, les marges de préférence relatives uniformes ont entraîné une variation entre les marchandises des marges de préférence absolues. Notre article exploite cette variation entre les marchandises. En nous appuyant sur un ensemble de données incluant plus de 32 000 produits importés au Canada, nous constatons qu'une hausse de 1 point de pourcentage de la marge de préférence absolue a été associée à une hausse de 5,4 % de la valeur des importations de l'Angleterre. En revanche, si le Canada n'avait pas adopté une politique commerciale préférentielle, en 1903, la valeur des importations britanniques au Canada aurait été réduite d'environ la moitié.

Suggested Citation

  • Ian Keay & Brian D. Varian, 2024. "The impact of preferential market access: British imports into Canada, 1892–1903," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 57(1), pages 140-164, February.
    • Handle: RePEc:wly:canjec:v:57:y:2024:i:1:p:140-164
    DOI: 10.1111/caje.12703
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    References listed on IDEAS

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