An evaluation of the Canada-U.S. wheat agreement of 1994

The U.S. government notified the GATT in 1994 that it intended to increase tariff rates on wheat and barley imported from Canada. This threat of increased permanent protection resulted in Canada voluntarily agreeing to restrict wheat sales to the United States. Why would Canada agree to this outcome...

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Bibliographic Details
Published in:American journal of agricultural economics 1997-08, Vol.79 (3), p.703-714
Main Authors: Carter, Colin A., MacLaren, Donald
Format: Article
Language:English
Subjects:
ACCORD COMMERCIAL
ACUERDOS COMERCIALES
Agricultural economics
Agriculture
ANALISIS DE COSTOS Y BENEFICIOS
ANALYSE COUT AVANTAGE
ARANCELES
ASOCIACIONES DE AGRICULTORES
ASSOCIATION D'AGRICULTEURS
Bargaining
bargaining game
Barley
BLE
CANADA
CANADIAN WHEAT BOARD
CANADIAN-UNITED STATES FREE TRADE AGREEMENT
COMERCIO
COMERCIO INTERNACIONAL
COMMERCE
COMMERCE INTERNATIONAL
Commodities
COST BENEFIT ANALYSIS
Costs
Crop economics
ETATS UNIS
EUA
F130
F140
Farm exports
FARMERS ASSOCIATIONS
Free trade
GATT
Grain trade
Grains
Imports
INTERNATIONAL TRADE
JUNTAS DE COMERCIALIZACION
MARKETING BOARDS
Meat packing industry
NORTH AMERICAN FREE TRADE AGREEMENT
OFFICE DE COMMERCIALISATION
POLITICA DE COMERCIO EXTERIOR
POLITIQUE DU COMMERCE INTERNATIONAL
Prices
Pricing policies
Q170
Shipments
Subsidies
TARIF DOUANIER
TARIFFS
TRADE
TRADE AGREEMENTS
Trade disputes
TRADE POLICIES
Trade policy
Trade relations
trade war
TRIGO
U.S. NATIONAL ASSOCIATION OF WHEAT GROWERS
U.S.A
United States
US exports
USA
Welfare
Wheat
WHEATS
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Summary:The U.S. government notified the GATT in 1994 that it intended to increase tariff rates on wheat and barley imported from Canada. This threat of increased permanent protection resulted in Canada voluntarily agreeing to restrict wheat sales to the United States. Why would Canada agree to this outcome which would lead to a welfare loss? The payoffs to each country associated with alternative trade war outcomes are estimated. We find that welfare, as measured by equivalent variation, falls in both countries, although Canada was better off limiting exports than becoming engaged in a trade war with the United States.
ISSN:0002-9092
1467-8276
DOI:10.2307/1244413