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Diversion et création d’échanges commerciaux dans le cadre du système canadien de préférences tarifaires

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  • Ahmad, Jaleel

    (Université Concordia)

Abstract

This paper explores in quantitative terms the potential effects on trade flows as a result of Canadian tariff preferences in favor of the developing countries instituted in 1974. The paper develops a model of trade creation and trade diversion due to preferences based on imperfect substitution, within each product category, between preference-granting, preference-receiving and non-preferred countries. This model depart from the usual assumption of the customs union theory that countries trade in perfect substitutes. The model is then applied to the 1978 trade date under BTN chapters 25 - 99 on a 4-digit classification. One major conclusion of the paper is that the assumption of perfect substitution tends to overstate the magnitude of trade creation and trade diversion, while the method based on less than perfect substitutability seems to offer more realistic estimates of the actual impact of trade preferences.

Suggested Citation

  • Ahmad, Jaleel, 1979. "Diversion et création d’échanges commerciaux dans le cadre du système canadien de préférences tarifaires," L'Actualité Economique, Société Canadienne de Science Economique, vol. 55(1), pages 68-81, janvier.
  • Handle: RePEc:ris:actuec:v:55:y:1979:i:1:p:68-81
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    1. Riedel, James, 1977. "Tariff concessions in the Kennedy Round and the structure of protection in West Germany : An econometric assessment," Journal of International Economics, Elsevier, vol. 7(2), pages 133-143, May.
    2. Morawetz, David, 1974. "Extra-union exports of industrial goods from customs unions among developing countries," Journal of Development Economics, Elsevier, vol. 1(3), pages 247-260, December.
    3. Verdoorn, P. J. & Schwartz, A. N. R., 1972. "Two alternative estimates of the effects of EEC and EFTA on the pattern of trade," European Economic Review, Elsevier, vol. 3(3), pages 291-335, November.
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