Welfare effects of agricultural trading blocs: The simulation of a North American customs union

Document Type

Article

Publication Date

7-1-1998

Abstract

Agricultural trade liberalization among the three North American Free Trade Agreement (NAFTA) signatories is modeled using a political preference function. The model distinguishes among Canada, Mexico, the United States, and a politically passive rest of the world. Through the use of intracountry compensation, the analysis shows that, from an agricultural perspective, economic integration is in the best interest of the group as a whole, although not in the best interest of individual countries. More specifically, of the agricultural production sectors, Canadian dairy, Mexican corn, and U.S. beef producers suffer the greatest losses from the formation of a North American customs union.

Publication Source (Journal or Book title)

Journal of Agricultural and Resource Economics

First Page

99

Last Page

109

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