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The Effect of CUSFTA and NAFTA on Canada’s Export Composition

Author

Listed:
  • Manouchehr Barjesteh Maleki

    (University of Saskatchewan)

  • Hamed Samarghandi

    (University of Saskatchewan)

  • Joel Bruneau

    (University of Saskatchewan)

Abstract

This research analyzes the effect of the North American Free Trade Agreement (NAFTA) and its predecessor, the Canada-USA Free Trade Agreement (CUSFTA), on the evolution of the export composition of Canada. This research applies a multivariate time series model to measure Canada’s export composition using 11 indices including diversification, extensive margin, intensive margin, product sophistication, and economic complexity. These measures are crucial in assessing the trade risk and economic development potential of a country. This study extends the literature by computing and assessing a comprehensive set of measures of export performance (11 measures) and using a long time series spanning five decades (1970–2019). The results indicate that, for Canada, higher economic integration through a free trade agreement with the USA is associated with a positive change in export diversity estimated by the Herfindahl-Hirschman and intensive margin index.

Suggested Citation

  • Manouchehr Barjesteh Maleki & Hamed Samarghandi & Joel Bruneau, 2025. "The Effect of CUSFTA and NAFTA on Canada’s Export Composition," Journal of Industry, Competition and Trade, Springer, vol. 25(1), pages 1-35, December.
  • Handle: RePEc:kap:jincot:v:25:y:2025:i:1:d:10.1007_s10842-025-00448-7
    DOI: 10.1007/s10842-025-00448-7
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    References listed on IDEAS

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    More about this item

    Keywords

    CUSFTA and NAFTA; Product diversification; Herfindahl-Hirschman index; Intensive margin; Extensive margin; Product sophistication; Economic complexity;
    All these keywords.

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F15 - International Economics - - Trade - - - Economic Integration

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