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Abstract

CFTA/NAFTA is estimated annually to add $1,430 million of U.S. agricultural exports to Canada and $1,884 million of Canadian agricultural exports to the United States. Thus CFTA/NAFTA contributed an estimated 25 percent of the $5.8 billion of U.S. agricultural exports to Canada in 1995. Classical welfare analysis was used to estimate the implications of free trade in the dairy, poultry, sugar, and other industries that continue to be protected. In aggregate, consumers benefit from liberalization by nearly $1 billion per year in each country. Losses to Canadian producers are absolutely and relatively greater than to U.S. producers. Overall deadweight gains are positive to each country. The annual combined two-country addition to national income ($292 million) totals a present value of $5.8 billion when discounted in perpetuity at a 5 percent rate.

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