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The Effect of the Canada-US Free Trade Agreement on Canadian

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  • Joseph Mai

    ()
    (Department of Economics, York University, Toronto, Canada)

  • Andrey Stoyanov

    ()
    (York University)

Abstract

In this paper show that the Canada-US Free Trade Agreement (CUSFTA) tari¤ 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 which 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 e¤ect 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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Bibliographic Info

Paper provided by York University, Department of Economics in its series Working Papers with number 2014_2.

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Length: 40 pages
Date of creation: 02 Feb 2014
Date of revision:
Handle: RePEc:yca:wpaper:2014_2

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  1. John Kennan & Raymond Riezman, 1990. "Optimal Tariff Equilibria with Customs Unions," Canadian Journal of Economics, Canadian Economics Association, vol. 23(1), pages 70-83, February.
  2. Pravin Krishna, 1998. "Regionalism And Multilateralism: A Political Economy Approach," The Quarterly Journal of Economics, MIT Press, vol. 113(1), pages 227-250, February.
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  5. Tobias Ketterer & Daniel M. Bernhofen & Chris Milner, 2012. "Preferences, Rent Destruction and Multilateral Liberalisation: The Building Block Effect of CUSFTA," CESifo Working Paper Series 3985, CESifo Group Munich.
  6. Jeffrey M Wooldridge, 2010. "Econometric Analysis of Cross Section and Panel Data," MIT Press Books, The MIT Press, edition 2, volume 1, number 0262232588, December.
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  8. Bown, Chad P. & Crowley, Meredith A., 2007. "Trade deflection and trade depression," Journal of International Economics, Elsevier, vol. 72(1), pages 176-201, May.
  9. Stoyanov, Andrey, 2009. "Trade policy of a free trade agreement in the presence of foreign lobbying," Journal of International Economics, Elsevier, vol. 77(1), pages 37-49, February.
  10. Baybars Karacaovali & Nuno Limao, 2005. "The Clash Of Liberalizations: Preferential Vs. Multilateral Trade Liberalization In The European Union," International Trade and Finance Association Conference Papers 1037, International Trade and Finance Association.
  11. Imai, Susumu & Katayama, Hajime & Krishna, Kala, 2009. "Protection for sale or surge protection?," European Economic Review, Elsevier, vol. 53(6), pages 675-688, August.
  12. Christian Broda & Joshua Greenfield & David Weinstein, 2006. "From Groundnuts to Globalization: A Structural Estimate of Trade and Growth," NBER Working Papers 12512, National Bureau of Economic Research, Inc.
  13. Trefler, Daniel, 1993. "Trade Liberalization and the Theory of Endogenous Protection: An Econometric Study of U.S. Import Policy," Journal of Political Economy, University of Chicago Press, vol. 101(1), pages 138-60, February.
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