The Long and Short of the Canada-U. S. Free Trade Agreement

Daniel Trefler

American Economic Review, 2004, vol. 94, issue 4, 870-895

Abstract: The Canada-U. S. Free Trade Agreement provides a unique window onto the effects of a reciprocal trade agreement on an industrialized economy (Canada). For industries that experienced the deepest Canadian tariff cuts, the contraction of low-productivity plants reduced employment by 12 percent while raising industrylevel labor productivity by 15 percent. For industries that experienced the largest U. S. tariff cuts, plant-level labor productivity soared by 14 percent. These results highlight the conflict between those who bore the short-run adjustment costs (displaced workers and struggling plants) and those who are garnering the long-run gains (consumers and efficient plants).

Date: 2004
Note: DOI: 10.1257/0002828042002633
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Working Paper: The Long and Short of the Canada-U.S. Free Trade Agreement (2006)
Working Paper: The long and short of the Canada-U.S. free trade agreement (2006)
Working Paper: The Long and Short of the Canada-U.S. Free Trade Agreement (2001)
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