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The effect of the Canada‐US Free Trade Agreement on Canadian multilateral trade liberalization
Author(s) -
Mai Joseph,
Stoyanov Andrey
Publication year - 2015
Publication title -
canadian journal of economics/revue canadienne d'économique
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.773
H-Index - 69
eISSN - 1540-5982
pISSN - 0008-4085
DOI - 10.1111/caje.12168
Subject(s) - tariff , free trade , international economics , economics , commercial policy , international trade , liberalization , trade diversion , rules of origin , trade barrier , free trade agreement , point (geometry) , international free trade agreement , market economy , geometry , mathematics
Abstract In this paper show that the Canada‐US Free Trade Agreement (CUSFTA) tariff preferences have triggered a decline in Canadian external tariffs, explaining a two percentage point reduction in the average tariff between 1989 and 1998. Next, we found that industries that generate the least export rent to the US firms experienced deeper tariff cuts in Canada; this result provides evidence of cooperation in trade policies between the US and Canada. Finally, we estimate the effect of the CUSFTA on the intensity of industrial lobbying for trade policy in Canada and find no relationship between preferential trade liberalization and lobbying activity.