Should Canada Unilaterally Adopt Global Free Trade?

Commissioned Study, Canadian Council of Chief Executives, May 2014

49 Pages Posted: 12 May 2014  

Dan Ciuriak

Ciuriak Consulting Inc.; C.D. Howe Institute; Centre for International Governance Innovation (CIGI); BKP Development Research & Consulting GmbH

Jingliang Xiao

Infinite Sum Modeling; Ciuriak Consulting Inc.

Date Written: May 12, 2014

Abstract

Against the background of evidence of the dominant role of unilateral initiatives in advancing global trade liberalization in recent decades and of the deadweight costs of utilizing preferences under bilateral/regional free trade agreements, this study evaluates the implications of Canada adopting a policy of unilateral free trade. While this option has been applied with great success by city states such as Singapore and Hong Kong (and is being tried out by Shanghai), it is an open question whether a large, territorially diversified economy such as Canada could realistically contemplate it. The present study concludes that unilateral liberalization generates gains equivalent to those under major FTAs that Canada is pursuing and that a policy of unilateral liberalization is something that Canada can contemplate and should evaluate in greater detail, including the political economy aspects. Most important would be the possible impacts on Canada as a destination for foreign direct investment.

Keywords: Canada, Unilateral Liberalization, preference utiilzation, cost of preference utilization, CGE model

JEL Classification: F13, F14

Suggested Citation

Ciuriak, Dan and Xiao, Jingliang, Should Canada Unilaterally Adopt Global Free Trade? (May 12, 2014). Commissioned Study, Canadian Council of Chief Executives, May 2014. Available at SSRN: https://ssrn.com/abstract=2435302

Dan Ciuriak (Contact Author)

Ciuriak Consulting Inc. ( email )

83 Stewart St.
Ottawa, Ontario K1N 6H9
Canada

C.D. Howe Institute ( email )

67 Yonge St., Suite 300
Toronto, Ontario M5E 1J8
Canada

Centre for International Governance Innovation (CIGI) ( email )

57 Erb Street West
Waterloo, Ontario N2L 6C2
Canada

BKP Development Research & Consulting GmbH ( email )

Romanstrasse 74
M√ľnchen, 80639
Germany

Jingliang Xiao

Infinite Sum Modeling ( email )

16167,Glenbrooks Pl
Vancouver, BC - British Columbia v4n1t3
Canada
6047245981 (Phone)
6047245981 (Fax)

HOME PAGE: http://www.infsum.com/en/

Ciuriak Consulting Inc. ( email )

83 Stewart St.
Ottawa, Ontario K1N 6H9
Canada

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