Trade Diversification Away from the U.S. or North American Customs Union? A Review of Canada’s Trade Policy Options
AbstractThis study examines Canada’s key strategic trade policy options – whether pushing for further economic integration with the U.S., or diversifying to non-U.S. markets and reducing the degree to which Canada’s economy depends on the U.S. In particular, this study compares the economic benefits of implementing a North American customs union with the benefits of increasing Canada’s trade with either emerging countries (e.g., India, China, Brazil) or with advanced partners such as Europe and Japan. The main conclusion is that there may be considerable benefit to Canada of diversifying some of its trade away from the United States provided that countries with more youthful populations and rapid growth, such as India, are targeted. Diversification to older countries such as Europe and Japan would not be beneficial. The analysis is based on a series of recent policy-modeling studies by the authors examining the economic impacts of diverse trade policies options in global economy models, taking also into consideration an important feature of the 21st century, the demographic changes around the world that accompany the globalization process for goods and services, capital and labor.
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Bibliographic InfoPaper provided by University of Ottawa, Department of Economics in its series Working Papers with number 1205E.
Length: 54 pages
Date of creation: 2012
Date of revision:
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More information through EDIRC
Canadian Trade Policy; Geographical Trade Diversification; Population Ageing; Globalization.;
Find related papers by JEL classification:
- F14 - International Economics - - Trade - - - Empirical Studies of Trade
- F15 - International Economics - - Trade - - - Economic Integration
- J11 - Labor and Demographic Economics - - Demographic Economics - - - Demographic Trends, Macroeconomic Effects, and Forecasts
- D58 - Microeconomics - - General Equilibrium and Disequilibrium - - - Computable and Other Applied General Equilibrium Models
This paper has been announced in the following NEP Reports:
- NEP-ALL-2012-04-10 (All new papers)
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