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Trade Costs and Changes in Canada's Trade Pattern

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  • John M. Curtis
  • Shenjie Chen

Abstract

This paper measures the size and composition of non‐tariff trade costs such as transport, wholesale, and network costs incurred in Canada's merchandise trade using Statistics Canada's latest ‘trade margins’ statistics. It examines how changes in these trade costs have influenced Canada's merchandise trade pattern and the course of economic integration. Our results show that as tariffs have been substantially reduced and largely abolished, costs associated with transport and distribution services now appear much larger than remaining customs duties; therefore, liberalisation in services might be the next key step in promoting greater merchandise trade. Further, reducing transport and other trade‐related costs has helped ‘reverse’ the ‘home market effect’, expanding Canada's domestic demand and production for exports of differentiated products.

Suggested Citation

  • John M. Curtis & Shenjie Chen, 2003. "Trade Costs and Changes in Canada's Trade Pattern," The World Economy, Wiley Blackwell, vol. 26(7), pages 975-991, July.
    • Handle: RePEc:bla:worlde:v:26:y:2003:i:7:p:975-991
    DOI: 10.1111/1467-9701.00559
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    References listed on IDEAS

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    11. James H. Anderson, 2002. "The Distribution Sector and the Development Process: are there Patterns? Yes," Economic Inquiry, Western Economic Association International, vol. 40(2), pages 166-176, April.
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    Cited by:

    1. Guillaume Daudin, 2005. "Les transactions de la mondialisation," Revue de l'OFCE, Presses de Sciences-Po, vol. 92(1), pages 221-262.
    2. repec:hal:spmain:info:hdl:2441/686 is not listed on IDEAS
    3. repec:spo:wpmain:info:hdl:2441/686 is not listed on IDEAS
    4. Love, James H. & Mansury, Mica Ariana, 2009. "Exporting and productivity in business services: Evidence from the United States," International Business Review, Elsevier, vol. 18(6), pages 630-642, December.

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