Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/66872
Authors: 
Ketterer, Tobias
Bernhofen, Daniel M.
Milner, Chris
Year of Publication: 
2012
Series/Report no.: 
CESifo Working Paper: Trade Policy 3985
Abstract: 
If a free trade agreement (FTA) is characterized by the exchange of market access with a large and competitive trading partner, the agreement can cause a leakage of protectionist benefits to domestic industry from lobbying against external tariff cuts. This rent destruction effect of an FTA can free policy makers to be more aggressive in multi-lateral tariff cuts. We argue that the Canadian-US free trade agreement (CUSFTA) provides an ideal policy experiment to link this mechanism to the data. Exploring the determinants of Canada's tariff cuts at the 8 digit HS product level, we find that CUSFTA acted as an additional driver of Canadian multilateral tariff reductions during the Uruguay Round.
Subjects: 
preferences
rent destruction
multilateral liberalization
CUSFTA
JEL: 
F13
F14
Document Type: 
Working Paper

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