Internal Trade in Canada: Case for Liberalization

39 Pages Posted: 27 Aug 2019

See all articles by Jorge Alvarez

Jorge Alvarez

International Monetary Fund (IMF)

Ivo Krznar

International Monetary Fund (IMF)

Trevor Tombe

University of Calgary

Date Written: July 2019

Abstract

This paper assesses the costs of internal trade barriers and proposes policies to improve internal trade. Estimates suggest that complete liberalization of internal trade in goods can increase GDP per capita by about 4 percent and reallocate employment towards provinces that experience large productivity gains from trade. The positive impact highlights the need for federal, provincial and territorial governments to work together to reduce internal trade barriers. There is significant scope to build on the new Canadian Free Trade Agreement to more explicitly identify key trade restrictions, resolve differences, and agree on cooperative solutions.

Keywords: International trade agreements, Total factor productivity, Bilateral trade, Comparative advantage, Patterns of trade, Internal trade, gains from trade, input-output linkages, Canada, trade cost, non-geographic, internal trade barrier, trade barrier

JEL Classification: F1, F4, R1, E01, F13, E2, O4

Suggested Citation

Alvarez, Jorge and Krznar, Ivo and Tombe, Trevor, Internal Trade in Canada: Case for Liberalization (July 2019). IMF Working Paper No. 19/158. Available at SSRN: https://ssrn.com/abstract=3442872

Jorge Alvarez (Contact Author)

International Monetary Fund (IMF) ( email )

700 19th Street NW
Washington, DC 20431
United States

HOME PAGE: http://https://sites.google.com/site/jalvarezecon/

Ivo Krznar

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

Trevor Tombe

University of Calgary ( email )

University Drive
Calgary, Alberta T2N 1N4
Canada

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