Preferences, rent destruction and multilateral liberalization: The building block effect of CUSFTA

• 成果类型: Article
• 署名作者: Ketterer, Tobias D.; Bernhofen, Daniel; Milner, Chris
• 署名单位: University of London; London School Economics & Political Science; American University; University of Nottingham
• 刊物名称: JOURNAL OF INTERNATIONAL ECONOMICS
• ISSN/ISSBN: 0022-1996
• DOI: 10.1016/j.jinteco.2013.10.011
• 发表日期: 2014
• 页码: 63-77
• 关键词: preferences; Rent destruction; Multilateral liberalization; CUSFTA

摘要

If a free trade agreement (ETA) 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 ETA can free policy makers to be more aggressive in multilateral 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. (C) 2013 Elsevier B.V. All rights reserved.