American Economic Review: Vol. 94 No. 4 (September 2004)
Print Article Summary Export Citation
Sign up for Email Alerts Follow us on Twitter
The Long and Short of the Canada-U. S. Free Trade Agreement
Trefler, Daniel. 2004. "The Long and Short of the Canada-U. S. Free Trade Agreement." American Economic Review, 94(4): 870-895.
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).
Article Full-Text Access