Cited by 1,071Global trade and economicsCanadian Policy and GovernanceLabor market dynamics and wage inequality

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

Trefler, Daniel·2004·American Economic Review

DOI 10.1257/0002828042002633

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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 industry-level 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).

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Authors: Trefler, D.
Affiliations: Canadian Institute for Advanced Research (CA)
Corresponding author: Trefler, Daniel
ORCID: Trefler, Daniel
Venue: American Economic Review
Publisher: American Economic Association
Published: 2004-09-01
Volume: 94
Issue: 4
Pages: 870-895
ISSN: 0002-8282 (ISSN-L)
DOI: 10.1257/0002828042002633
OpenAlex: W3023641402
Cited by: 1,071
References: 43
Citations by year: 2026: 39 · 2025: 35 · 2024: 27 · 2023: 52 · 2022: 72 · 2021: 58 · 2020: 31 · 2019: 60 · 2018: 48 · 2017: 54 · 2016: 55 · 2015: 62 · 2014: 61 · 2013: 50 · 2012: 58
FWCI: 57.18
Type: journal article
Language: en
Open access: closed
Locations: American Economic Review (publishedVersion)
RePEc: Research Papers in Economics (submittedVersion)
Topics: Social Sciences › Economics, Econometrics and Finance › General Economics, Econometrics and Finance › Global trade and economics
Social Sciences › Political Science and International Relations › Canadian Policy and Governance
Social Sciences › Economics, Econometrics and Finance › Economics and Econometrics › Labor market dynamics and wage inequality
Keywords: Canada-United States Free Trade Agreement, reciprocal trade agreements, tariff reduction, employment effects, industrial restructuring, displaced workers, adjustment costs, deindustrialization

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

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