Question

1. A case study of NAFTA, with regard to the benefits for Canada from U.S. trade, found that:

   1. (A) Canada was not able to increase its exports due to barriers still remaining.

   2. (B) Canada had modest gains but was harmed by immigration into the United States from Mexico.

   3. (C) Canada had more trade diversion than trade creation and so was harmed overall.

   4. (D) Canada had more trade creation than trade diversion and so benefited overall.

Answer 1

A) a case study of NAFTA, with regard to the benefits for Canada from U.S. trade did not find that Canada was not able to increase its exports due to barriers still ramaining. Which is not a correct statement because NAFTA has had positive impact on Canada and its economy. Which has opened up new export opportunities to build international competitive businesses.

B) a case study of NAFTA, with regard to the benefits for Canada from U.S. trade did not find that Canada had modest gains but was harmed by immigration into the United states from Mexico. Because NAFTA created a free trade zone for Mexico, United states and Canada and that is the most important feature in the united states and Mexico bilateral commercial relationship.

C) a case study of NAFTA, with regard to the benfits for Canada from U.S. did not find that Canada had more trade diversion than trade creation and was harmed overall. Because NAFTA not only had more diversion but had more of trade creation, so NAFTA shifted high cost producer to a low cost producers therefore trade expands.

D) A case study of NAFTA, with regard to the benefits for Canada from U.S. trade found that Canada had more trade creation than trade diversion and so benefited overall. Because NAFTA had more trade creation than trade diversion. It is not like that trade shifts from a lower cost producer which is outside the union to a higher cost producer which is inside the union. Therefore tarde shifts from higher to lower cost producer.