Toward a North American Customs Union Rules of Origin Liberalization Matters More than a Common External Tariff for Canada

Patrick Georges

No 0704E, Working Papers from University of Ottawa, Department of Economics

Abstract: This paper shows that when moving from the North American Free Trade Agreement (NAFTA) to a Customs Union (CU), the general equilibrium impacts on Canadian GDP and welfare, of removing Rules of Origin (ROO), are potentially larger than the small effects resulting from the adoption of a common external tariff (CET). Therefore, proposals for a CU should not be dismissed solely on the basis that the establishment of a CET would marginally affect Canada while the negotiation process with the U.S. would be long and difficult -- rules of origin liberalization matters more than a common external tariff for Canada.

Keywords: NAFTA; Customs Union; Rules of Origin; Common External Tariff; Computable General Equilibrium (search for similar items in EconPapers)
JEL-codes: C68 D58 F13 F15 (search for similar items in EconPapers)
Pages: 27 pages
Date: 2007
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Citations: View citations in EconPapers (1)

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Journal Article: Toward a North American customs union: Rules of origin liberalization matters more than a common external tariff for Canada (2008)
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