Publication

This paper assesses the potential economic gains to be obtained from an EU-Canada free trade agreement (FTA). The authors analyze trade patterns and barriers between the EU and Canada. They argue that the evolution of trade between the US and Canada following the signing of an FTA in 1989 provides a good illustration of how trade might increase after an EU-Canada FTA. If trade diversion has occurred due to the North American Free Trade Agreement (NAFTA), according to the authors, then an EU-Canada FTA is welfare-enhancing for Canada. For the EU, a potential FTA can level the playing field with the US.