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

Daniel Trefler

STICERD - Economics of Industry Papers from Suntory and Toyota International Centres for Economics and Related Disciplines, LSE

Abstract: The Canada-U.S. Free Trade Agreement (FTA) provides a unique windowonto the effects of a reciprocal trade agreement on an industrializedeconomy (Canada). For industries that experienced the deepest Canadiantariff cuts, employment fell by 12 percent and labour productivity rose by 15percent as low-productivity plants contracted. For industries that receivedthe largest U.S. tariff cuts, there were no employment gains, but plant-levellabour productivity soared by 14 percent. These results highlight the conflictbetween those who bore the short-run adjustment costs (displaced workersand struggling plants) and those who are garnering the long-run gains(consumers and efficient plants). Finally, a simple welfare analysis providesevidence of aggregate welfare gains.

Date: 2006-01
New Economics Papers: this item is included in nep-bec and nep-int
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Citations: View citations in EconPapers (14)

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Related works:
Working Paper: The long and short of the Canada-U.S. free trade agreement (2006)
Journal Article: The Long and Short of the Canada-U. S. Free Trade Agreement (2004)
Working Paper: The Long and Short of the Canada-U.S. Free Trade Agreement (2001)
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Persistent link: https://EconPapers.repec.org/RePEc:cep:stieip:41

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