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Trade creation and trade diversion in the Canada – United States Free Trade Agreement


  • Kimberly A. Clausing


In this paper the changes in trade patterns introduced by the Canada‐United States Free Trade Agreement are examined. Variation in the extent of tariff liberalization under the agreement is used to identify the impact of tariff liberalization on the growth of trade both with member countries and non‐member countries. Data at the commodity level are used, and the results indicate that the Canada‐United States Free Trade Agreement had substantial trade creation effects, with little evidence of trade diversion. JEL Classification: F13, F14 Création de commerce et diversion de commerce dans l'Accord de libre‐échange Canada‐U.S. Ce mémoire examine les changements dans les patterns de commerce international engendrés par l'Accord de libre‐échange entre la Canada et les Etats‐Unis. La variation dans l'intensité de libéralisation tarifaire selon les secteurs dans l'Accord est utilisée pour identifier l'impact de la libéralisation tarifaire sur la croissance du commerce à la fois entre les pays membres et avec les pays non‐membres. A l'aide de données par produits, on montre que l'Accord a eu des effets substantiels de création de commerce mais qu'il n'y a pas lieu de croire qu'il y a eu beaucoup de diversion de commerce.

Suggested Citation

  • Kimberly A. Clausing, 2001. "Trade creation and trade diversion in the Canada – United States Free Trade Agreement," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 34(3), pages 677-696, August.
  • Handle: RePEc:wly:canjec:v:34:y:2001:i:3:p:677-696
    DOI: 10.1111/0008-4085.00094

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    JEL classification:

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


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