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Accounting for the new gains from trade liberalization

Chang-Tai Hsieh, Nicholas Li (), Ralph Ossa and Mu-Jeung Yang

Journal of International Economics, 2020, vol. 127, issue C

Abstract: We challenge the conventional wisdom on the variety and productivity gains from trade liberalization which are commonly referred to as “new” gains from trade. In particular, we show that the import variety gains measured in studies such as Broda and Weinstein (2006) are counteracted by exactly analogous domestic variety losses. Similarly, we show that the domestic productivity gains measured in studies such as Trefler (2004) are counteracted by exactly analogous import productivity losses. We then account for all these gains and losses in an application to the Canada-US Free Trade Agreement and show that Canada actually experienced net “new” losses from trade.

Keywords: Gains from trade; Trade liberalization; CUSFTA (search for similar items in EconPapers)
JEL-codes: F10 F12 F14 (search for similar items in EconPapers)
Date: 2020
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Working Paper: Accounting for the new gains from trade liberalization (2017) Downloads
Working Paper: Accounting for the New Gains from Trade Liberalization (2016) Downloads
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Persistent link: https://EconPapers.repec.org/RePEc:eee:inecon:v:127:y:2020:i:c:s0022199620300854

DOI: 10.1016/j.jinteco.2020.103370

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