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Bilateral Trade Relationship Between The United States And Canada: Implications Of The Free Trade Agreement

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  • WON W. KOO
  • IHN HO UHM
  • JOEL T. GOLZ

Abstract

This study's primary objective is to evaluate empirically the economic effects of the U.S.-Canada Free Trade Agreement (FTA). The paper emphasizes bilateral trade flows of agricultural and industrial products between the United States and Canada, given that the FTA removes tariff and non-tariff barriers. It evaluates the FTA's impact on the two countries' trade with third countries. The paper specifies a traditional log-linear trade model consisting of import demand and export supply equations for both agricultural and industrial products. It uses quarterly time-series U.S. and Canadian trade data for 1972-1985. Copyright 1991 Western Economic Association International.

Suggested Citation

  • Won W. Koo & Ihn Ho Uhm & Joel T. Golz, 1991. "Bilateral Trade Relationship Between The United States And Canada: Implications Of The Free Trade Agreement," Contemporary Economic Policy, Western Economic Association International, vol. 9(4), pages 56-69, October.
  • Handle: RePEc:bla:coecpo:v:9:y:1991:i:4:p:56-69
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    References listed on IDEAS

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    1. Murray, Tracy & Ginman, Peter J, 1976. "An Empirical Examination of the Traditional Aggregate Import Demand Model," The Review of Economics and Statistics, MIT Press, vol. 58(1), pages 75-80, February.
    2. Elie Appelbaum & Ulrich R. Kohli, 1979. "Canada-United States Trade: Tests for the Small-Open-Economy Hypothesis," Canadian Journal of Economics, Canadian Economics Association, vol. 12(1), pages 1-14, February.
    3. Stokes, Ernie, 1989. "Macroeconomic impact of the Canada-U.S. Free Trade Agreement," Journal of Policy Modeling, Elsevier, vol. 11(2), pages 225-245.
    4. Maury E. Bredahl & William H. Meyers & Keith J. Collins, 1979. "The Elasticity of Foreign Demand for U.S. Agricultural Products: The Importance of the Price Transmission Elasticity," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 61(1), pages 58-63.
    5. Houthakker, Hendrik S & Magee, Stephen P, 1969. "Income and Price Elasticities in World Trade," The Review of Economics and Statistics, MIT Press, vol. 51(2), pages 111-125, May.
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    Cited by:

    1. David Karemera & Won W. Koo, 1994. "Trade Creation And Diversion Effects Of The U.S.-Canadian Free Trade Agreement," Contemporary Economic Policy, Western Economic Association International, vol. 12(1), pages 12-23, January.

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