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Trade Liberalization and Inequality in Canada in the 1990s

In: The Review of Economic Performance and Social Progress 2001: The Longest Decade: Canada in the 1990s

  • Daniel Schwanen

    (Scientist at the Institute for Work and Health)

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    In this chapter, Daniel Schwanen addresses the impact of the major trade liberalization efforts undertaken by Canada and its trading partners beginning with the Canada-U.S. Free Trade Agreement (FTA) in 1989. The author focuses in particular on the question of whether liberalized trade could have been a factor behind the emergence of greater inequalities in Canada in the 1990s. The author divides Canadian manufacturing industries into five groups according to their sensitivity to trade liberalization in the 1990s and to the direction taken by exports and imports following the opening of trade. Schwanen concludes from this exercise that more open trade may have contributed to inequalities in Canada, by favoring certain groups already doing relatively well, while being unfavourable to many less-skilled and lesser-paid groups.

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    This chapter was published in:
    This item is provided by Centre for the Study of Living Standards & The Institutute for Research on Public Policy in its series The Review of Economic Performance and Social Progress with number v:1:y:2001:ds.
    Handle: RePEc:sls:repsls:v:1:y:2001:ds
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    1. Werner Antweiler & Daniel Trefler, 2002. "Increasing Returns and All That: A View from Trade," American Economic Review, American Economic Association, vol. 92(1), pages 93-119, March.
    2. Daron Acemoglu, 2000. "Technical Change, Inequality, and the Labor Market," NBER Working Papers 7800, National Bureau of Economic Research, Inc.
    3. Dinopoulos, Elias & Segerstrom, Paul, 1996. "A Schumpeterian Model of Protection and Relative Wages," Working Paper Series 471, Research Institute of Industrial Economics.
    4. Helpman, E., 1998. "The Structure of Foreign Trade," Papers 18-98, Tel Aviv.
    5. Peter Gottschalk & Timothy M. Smeeding, 1997. "Cross-National Comparisons of Earnings and Income Inequality," Journal of Economic Literature, American Economic Association, vol. 35(2), pages 633-687, June.
    6. Eugene Beaulieu, 2000. "The Canada-U.S. Free Trade Agreement and labour market adjustment in Canada," Canadian Journal of Economics, Canadian Economics Association, vol. 33(2), pages 540-563, May.
    7. Jeffrey G. Williamson, 1998. "Globalization, Labor Markets and Policy Backlash in the Past," Journal of Economic Perspectives, American Economic Association, vol. 12(4), pages 51-72, Fall.
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