Quantifying a Canada-China Free Trade Agreement
38 Pages Posted: 22 Jan 2016 Last revised: 23 Jan 2016
Date Written: January 19, 2016
The possibility of a Canada-China Free Trade Agreement has been under discussion for some time. China has reportedly offered to negotiate an FTA with Canada, although this has not been officially confirmed by the Canadian Government. A tentative step towards a negotiation was taken in the 2012 Canada-China Complementarities Study. This note seeks to quantify the impact of such an agreement on Canada and China. We deploy a dynamic computable general equilibrium model that incorporates foreign direct investment and develop a realistic scenario based on the recently concluded China-Australia FTA. We find the main gains from a Canada-China FTA would come from tariff reductions and the binding of services commitments.
Keywords: Canada, China, FTA, CGE
JEL Classification: F13
Suggested Citation: Suggested Citation