Province-Level Impacts of Canada's Trade Agreements: Ontario and the Canada-Korea FTA

International Trade Journal, published online 11 September 2015, DOI: 10.1080/08853908.2015.1064333

27 Pages Posted: 26 Dec 2014 Last revised: 12 Sep 2015

Dan Ciuriak

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

Dmitry Lysenko

Nova Scotia government

Jingliang Xiao

Infinite Sum Modeling; Ciuriak Consulting Inc.

Date Written: December 24, 2014

Abstract

Canada has recently concluded free trade agreements (FTAs) with two major economies, one trans-Atlantic (the EU) and one trans-Pacific (Korea); as well, it is negotiating a still larger agreement with Pacific Rim countries in the Trans-Pacific Partnership (TPP) initiative. From an economic geography perspective, Canada’s provinces stand to be affected very differently by these agreements, depending on their geographic location within Canada (proximity to the west coast versus the east coast). As well, given the highly asymmetric degree of liberalization across different sectors that these agreements entail, provinces stand to be affected differentially based on their areas of specialization in trade and, thus, their degree of trade exposure to sectors undergoing relatively deeper liberalization. However, there is no existing multi-country computable general equilibrium (CGE) model that is capable of simulating the impact of such agreements on Canada’s provinces as separate trading entities, including the impact on interprovincial trade flows, which would also be impacted by international trade liberalization. In this study, we introduce a hybrid approach to developing estimates of FTA impacts on Canada’s provinces, using a dynamic version of the Global Trade Analysis Project (GTAP) model to generate Canada-level impacts, which are then decomposed on the basis of computable partial equilibrium (CPE) model simulations of the same agreements. We demonstrate the approach by developing the impacts of the Canada-Korea FTA on Ontario.

Keywords: Canada, Ontario, provincial trade, trade liberalization, CGE, CPE, GTAP, GSIM

JEL Classification: F14, F15, F17

Suggested Citation

Ciuriak, Dan and Lysenko, Dmitry and Xiao, Jingliang, Province-Level Impacts of Canada's Trade Agreements: Ontario and the Canada-Korea FTA (December 24, 2014). International Trade Journal, published online 11 September 2015, DOI: 10.1080/08853908.2015.1064333. Available at SSRN: https://ssrn.com/abstract=2542568 or http://dx.doi.org/10.2139/ssrn.2542568

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
München, 80639
Germany

Dmitry Lysenko

Nova Scotia government ( email )

Canada

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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