PRODUCT VARIETIES, EXTENSIVE AND INTENSIVE MARGINS OF TRADE: EVIDENCE FROM CANADA ISLAM, Sadequl *

Transcription

1 PRODUCT VARIETIES, EXTENSIVE AND INTENSIVE MARGINS OF TRADE: EVIDENCE FROM CANADA ISLAM, Sadequl * Abstract Using disaggregated data at the HS ten-digit level, this paper computes Canada s intensive and extensive margins in the U.S. market with reference to the Rest of the World, the European Union, China, and Japan. The empirical findings for the period show that Canada s intensive margin declined with reference to the Rest of the World, the European Union, and China. The evidence also demonstrates that percentage changes in the intensive margin dominate percentage changes in Canada s relative market share in the United States, especially during the Great Recession. The paper also examines export varieties from Canada and selected countries. JEL Code: F1 Keywords: Intensive margin, extensive margin, export varieties 1. Introduction Canadian trade with the United States is one of the largest bilateral trade relationships in the world, induced by a high degree of economic integration under the NAFTA ( among others, Castillo Ponce and Ramirez Acosta, 2008). Two-way merchandise trade between the two countries increased from $ billion in 1992 to over $616.4 billion in Trade expansions can be associated with a) increased varieties of tradable goods, b) increased volumes of traditional goods,c) increased quality of traded goods, and d) increased efficiency of exporting firms. Traditional trade theories ( the Ricardian model and the Hecksher-Ohlin model) emphasized the role of productivity and factor endowments in determining a country s comparative advantage and highlighted the gains from specialization in exports. In the 1980s, several economists ( among others, Krugman, 1979, Helpman and Krugman, 1985) developed a New Trade Theory which incorporated consumers preference for product varieties and increasing returns to scale. This new theory explains how increasing returns to scale and product differentiation lead to intra-industry trade. More recently, research done by some economists, notably, Melitz (2003) and Bernard, Eaton, Jensen, and Kortum (2003) has led to a New New Trade Theory which highlights the role of heterogeneous firms in international trade. According to this theory globalization and trade liberalization lead to shifts of production from inefficient firms to efficient firms within an industry. There is now a large empirical literature on trade flows that directly or indirectly explores the relevance of the above theories. One strand of the empirical literature has investigated the effects of trade liberalization on firm productivity and product diversification ( among others, Baldwin and Gu, 2004, 2003). Another strand of the empirical literature has concentrated on assessing the extensive and intensive margins of trade ( Bernard, Jensen, Redding, and Schott, 2009; Hillberry and McDaniel, 2003; Hummels and Klenow, 2005). Growth of trade along the intensive margin can be defined as an increase in the value of * Sadequl Islam, Department of Economics, Laurentian University, Sudbury, Ontario, Canada P3E 2C6. sislam@laurentian.ca, sadequlislam@sympatico.ca

2 trade involving existing trade relationships. The intensive margin can be further decomposed into two components: a) changes in volumes and b) changes in unit prices. The extensive margin can be defined as growth of trade attributable to an increase in the number of product varieties. The relative contributions of the extensive margin and the two sub-components of the intensive margin have implications for trade theories and policies. Analysis of extensive and intensive margins of trade enhances our understanding of trade patterns and the relative efficiency with which economies allocate resources. The main objectives of this paper are the following: 1) To examine the relative contribution of extensive and intensive margins of Canada s trade. 2) To evaluate the role of new product varieties in the extensive margins of Canada s exports. 3) To explore the impact of the Great Recession of on extensive and intensive margins of Canada s exports. The paper contributes to the empirical literature in three ways: first, it measures the extensive and intensive margin of Canada s trade with the United States using the latest trade data at highly disaggregated level (the ten-digit level of the Harmonized System ). Second, it explores the role of new product varieties in Canada s exports to the United States. Third, it investigates the effects of the Great Recession on Canada s margins of exports. 2. Methodology and Data For availability of data, the paper follows the methodology of Hummels and Klenow ( 2005) in computing the extensive margin and the intensive margin. Following Hummels and Klenow (2005), the intensive margin of Canada with respect to, for example, the Rest of the World, in the U.S. market is defined as: Imrw = " i! Icu " i! Icu p p cui x x cui (1) where imrw = intensive margin of Canada with respect to the Rest of the World in the U.S. market. p = the price of the relevant product, x= quantity of export, c refers to Canada while r refers to the Rest of the World, and u is the basket of goods exported by Canada to the U.S.A. The intensive margin of Canada, accordingly, is Canada s value of exports relative to the value of exports from the Rest of the World in those categories in which Canada exports to the United States (I cu ). The extensive margin, Emrw, is defined as: Emrw= " i! Icu " i! I p p x x (2) I cu is the set of observable categories in which Canada has positive exports to the United States, that is, X cui > 0. 98

3 Islam, S. Product Varieties, Extensive And Intensive Margins Of Trade: Evidence From Canada The Rest of the World has positive exports to the United States in I categories. Accordingly, Emrw equals Canada s exports to the United States in I cu relative to the exports from the Rest of the World. The extensive margin ranges from 0 to 1. The value of the extensive margin can be interpreted as how much of the exports by a country, for example, Canada to the United States can be explained by export varieties. It can also be interpreted as a weighted count of Canada s export basket relative to the export basket of the Rest of the World. The ratio of Canada s exports to that of the Rest of the World to the United States equals the product of the intensive margin and extensive margin, that is: Csrw = Imrw. Emrw = " i! Icu " i! I p p cui x x cui The paper concentrates on Canada s trade with the United States for the period. It uses the trade database of the United States Department of Commerce. This database provides annual trade data involving Canada, other countries, and the United States. The paper also uses the database of profiles of Canada s exporters provided by Statistics Canada. The paper compares export varieties from Canada and selected countries including China. 3. Basic Statistics Before analyzing the intensive and extensive margins of Canada with respect to the Rest of the World and selected countries, it is useful to present some basic statistics. Table 1,Panel A, reports top ten export categories (at the two-digit HS code level) from Canada to the United States in Several points can be highlighted. First, the dominant product group is vehicles (HS 87) which accounted for 28.6% of Canada s exports to the United States and 36.8% of total imports of vehicles into the United States. Second, the next dominant product group is mineral fuel (HS 27) which accounts for 11 % of Canada s export basket and 19.5% of US import of mineral fuel. The third dominant product group in Canada s export basket to the United States is nuclear reactors and parts. Third, some product groups had very high shares in the US import market: wood pulp (84.2%), wood and wood articles ( 70.3%), and aluminum and aluminum articles (61.8%). However, in 1992, these product groups had low weights in Canada s export basket. Finally, electric machinery (HS 85) which can be considered a dynamic product group, accounted for only 5.1% of Canada s exports and 7.4% of US imports of the same product group. Panel B in Table 1 shows top ten export products ( at the two-digit level) from Canada to the United States in Several observations can be made. First, mineral fuel (HS 27) became the dominant product group in 2012 with higher shares in Canada s export basket and the US import basket, compared to Second, several product groups, vehicles, nuclear reactors, electrical machinery, aluminum, paper, and wood have lost market shares in the United States. Finally, plastics and plastic articles (HS 39) accounted for higher shares in Canada s export basket and US import basket in 2012, compared to (3)

4 Table 1. Top Ten Export Products ( two-digit level) from Canada to the U.S.A Panel A,1992 All Commodities SCX MSU 87 Vehicles, Except Railway Or Tramway, And Parts Etc Mineral Fuel, Oil Etc.; Bitumin Subst; Mineral Wax Nuclear Reactors, Boilers, Machinery Etc.; Parts Paper & Paperboard & Articles (inc Papr Pulp Artl) Electric Machinery Etc; Sound Equip; Tv Equip; Pts Wood And Articles Of Wood; Wood Charcoal Special Classification Provisions, Nesoi Aluminum And Articles Thereof Plastics And Articles Thereof Wood Pulp Etc; Recovd (waste & Scrap) ppr & pprbd Panel B, 2012 All Commodities 323,936,455 SCX MSU 27 Mineral Fuel, Oil Etc.; Bitumin Subst; Mineral Wax 103,371, Vehicles, Except Railway Or Tramway, And Parts Etc 57,581, Nuclear Reactors, Boilers, Machinery Etc.; Parts 20,648, Plastics And Articles Thereof 10,215, Special Classification Provisions, Nesoi 9,780, Electric Machinery Etc; Sound Equip; Tv Equip; Pts 8,255, Aluminum And Articles Thereof 6,831, Paper & Paperboard & Articles (inc Papr Pulp Artl) 6,719, Nat Etc Pearls, Prec Etc Stones, Pr Met Etc; Coin 6,522, Wood And Articles Of Wood; Wood Charcoal 6,318, Notes: 1. Figures are in thousands of US dollars. 2. SCX = Share (%) of the relevant commodity in Canada s total exports to the USA. 3. MSU= Market share (%) of Canada in total US imports for the relevant commodity. 4. Source of data: US Census Bureau, Department of Commerce. Table 2 presents data on Canada s exporting establishments and value of exports. It is evident from Table 2 that the number of exporting establishments in the manufacturing sector (NXM) increased from 17,689 in 1996 to 21,999 in 2006; however since 2006, the figure declined. The exporting establishments in the manufacturing sector as a percentage of total establishments shows a downward trend from 45.2% in 1996 to 41% in It is also evident from Table 2 that Canada s exports of manufactured products (VXM) fluctuated with a rising trend during ; however, since 2006, the figure shows absolute declines. Finally, it can be observed from Table 2 that the value of exports of manufactured products as a percentage of total exports shows a downward trend from 62.9% in 1996 to 52.3% in Table 3 shows the number of establishments by export destination. The number of establishments exporting to only the United States (NXUS) fluctuated with a declining trend during The number of these establishments as a percentage of the total number of establishments (PNXUS) also shows a downward trend. The number of establishments exporting to the United States as well as other countries (NXUSO) appears to show a rising trend. Table 3 also shows that the number of establishments exporting to only other countries (NXO) increased from 6,020 in 1996 to 9,845 in

5 Islam, S. Product Varieties, Extensive And Intensive Margins Of Trade: Evidence From Canada The number of these firms as a % of total establishments also increased from 15.4% in 1996 to 20.7% in Table 2. Number of Canada s Exporting Establishments and Value of Exports Year NXM VXM TNX TVX PNXM PVXM , ,631 39, , , ,948 41, , , ,870 42, , , ,647 44, , , ,641 46, , , ,097 47, , , ,029 49, , , ,552 50, , , ,290 52, , , ,231 53, , , ,892 53, , , ,566 52, , , ,027 51, , , ,997 47, , Notes: 1. NXM = Number of exporting establishments in the manufacturing sector. 2. VXM = Value of exports in millions of C $ from the manufacturing sector TNX = Total number of exporting establishments. 4. TVX = Total value of exports. 5. PNXM = NXM as a % of TNX. 6. PVXM = VXM as a % of TVX. 7. Source of Data: Statistics Canada, A profile of Canadian Exporters, Table 3. Number of Canada s Exporting Establishments by Export Destination. Year NXUS PNXUS NXUSO PNXUSO NXO PNXO TNX , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,637 Notes: 1. NXUS = Number of exporting establishments exporting to only United States. 2. TNX = total number of exporting establishments. 3. NXUSO= number of establishments exporting to the United States and other countries. 4. NXO= number of establishments exporting to other countries. 5. PNXUS = NXUS as a % of TNX. 6. PNXUSO = NXUSO as a % of TNX. 7. PNXO = NXO as a % of TNX. 8. Source: Statistics Canada, A profile of Canadian Exporters,

6 Table 4. Value of Canada s Exports by Export Destination Year VXUS PVXUS VXUSO PVXUSO VXO PVXO TVX , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,120 Notes: 1. VXUS = Value of exports (Millions of C$) by establishments which export only to the U.S.A. 2. VXUSO = Value of exports by establishments which export both to the U.S.A. and other countries. 3. VXO = Value of exports by establishments which export only to other countries.4. PVXUS = VXUS as a % of total value of exports (TVX). 5. PVXUSO = VXUSO as a % of TVX. 6. PVXO = VXO as a % of TVX. 7. Source: Statistics Canada, A profile of Canadian Exporters, Table 5. Number of Export Products (HS Ten-digit level) from Canada and Selected Countries to the U.S. A. Year Canada UK France Germany Italy ,174 9,121 8,168 9,382 8, ,389 9,374 8,418 9,470 8, ,954 9,816 8,937 9,959 8, ,370 9,995 9,119 10,087 9, ,600 10,352 9,378 10,312 9, ,142 10,867 9,852 10,807 10, ,854 10,665 9,685 10,557 9, ,921 10,444 9,699 10,545 9, ,007 10,543 9,861 10,725 10, ,827 10,318 9,820 10,619 10, ,101 10,379 9,780 10,835 10, ,995 10,285 9,801 10,773 10, ,914 10,353 9,775 10,832 10, ,919 10,169 9,701 10,737 10, ,874 10,139 9,735 10,809 10, ,761 9,862 9,555 10,593 10, ,505 9,666 9,273 10,424 10, ,093 9,246 8,943 10,067 9, ,105 9,475 9,005 10,217 10, ,160 9,682 9,192 10,454 10, ,206 9,787 9,154 10,449 10,549 Source: Census Bureau, US Department of Commerce. 102

7 Islam, S. Product Varieties, Extensive And Intensive Margins Of Trade: Evidence From Canada Table 6. Number of Export Products (HS Ten-digit level) from Selected Countries to the U.S. A. Year Japan Brazil India China Russia Mexico ,089 3,773 3,446 6, , ,091 3,860 3,872 7,002 1,542 6, ,438 4,145 4,296 7,591 1,805 6, ,433 3,954 4,603 7,918 1,853 7, ,617 3,967 4,873 8,283 1,763 8, ,009 3,989 5,425 9,043 1,924 8, ,765 3,923 5,610 9,254 1,956 8, ,765 4,199 5,740 9,671 2,087 8, ,752 4,700 6,163 10,206 2,282 8, ,535 4,752 6,346 10,310 2,242 8, ,640 5,221 6,734 11,068 2,297 8, ,671 5,602 6,997 11,472 2,355 8, ,695 5,856 7,306 11,995 2,239 8, ,839 5,990 7,827 12,702 2,125 8, ,938 6,055 8,177 13,114 2,085 8, ,791 5,840 8,286 13,161 1,897 8, ,868 5,577 8,302 13,090 1,764 8, ,400 5,110 8,017 13,053 1,658 8, ,518 5,129 8,301 13,236 1,673 8, ,667 5,119 8,577 13,467 1,738 8, ,727 5,180 8,770 13,614 1,745 8,929 Source: Census Bureau, US Department of Commerce. Table 4 presents data on value of exports by export destination. It is evident that value of exports by establishments which export only to the United States (VXUS) shows a rising trend until 2008.The value of exports by these establishments as a percentage of total exports shows a fluctuating pattern with 43.5% in 1996 and in The value of exports by establishments serving the United States and other countries as a % of total exports (PVXUSO) appears to show a declining trend. Finally, the value of exports by establishments serving other countries as a % of total exports (PVXO) seems to show an increasing trend, with 6.2% in 1996 and 11.6% in Table 5 and Table 6 reports the number of export products at the HS ten-digit level from Canada and selected countries to the United States. Several points from Table 5 and Table 6 can be highlighted. First, the number of export products from Canada fluctuated during the period; the figure stood at 11,206, lower than the peak year of 1997, when it was 12,142.The fall in export varieties during can be attributed to the recession in the United States. It appears that the number of export varieties has increased in recent years ( ) following the US recovery. Second, given Canada s geographical proximity, it is not surprising that Canada exports more varieties of goods compared to U.K., France, Germany, and Italy. The number of export varieties from these four countries also decreased during the US recession ( ) and increased during Third, it is evident from Table 6 that among the selected countries, China 103

8 exports the highest number of export products to the United States. The number of export varieties more than doubled from 6,602 in 1992 to 13,614 in Fourth, the number of export varieties also shows a significant upward trend for Brazil, India, Russia, and Mexico; however, Russia still export the fewest varieties of products to the United States Finally, the number of export products from Japan fluctuated with no clear trend. The figures on export varieties from the selected countries are consistent with the hypothesis that there is an inverted-u relationship between stage of industrial development and diversification of exports ( Imbs and Wacziarg, 2003): a country at a lower stage of development is likely to export fewer varieties compared to a country at an intermediate stage ( for example, China) while a country at an advanced stage of development ( for example, Germany and Japan) also export fewer varieties of products. 4. Intensive and Extensive Margins This section examines the intensive and extensive margins of Canada s exports to the United States with reference to the Rest of the World, the European Union, China and Japan. Table 7. Canada s Intensive and Extensive Margins in the US with Respect to the Rest of the World. Year Imrw Emrw csrw pccsrw pcimrw pcemrw Notes: Imrw= Intensive margin with respect the rest of the world, Emrw= extensive margin with respect to the rest of the world, csrw= Canada s exports relative to the exports from the rest of the world to the U.S.A., pccsrw= Percentage change in csrw, pcimrw = percentage change in Imrw, and pcemrw= percentage change in Emrw. Source: Computed from data available from the Census Bureau, US Department of Commerce. It is evident from Table 7 that Canada s intensive margin of exports appears to show a downward trend from in 1992 to in It is worthwhile to note that the intensive margin measures the ratio of Canada s exports to exports from the Rest of the 104

9 Islam, S. Product Varieties, Extensive And Intensive Margins Of Trade: Evidence From Canada World to the United States involving the same set of goods. The extensive margin (Emrw) was in 2012 with no clear trend during The figures on the extensive margin are higher than those found by the Office of Chief Economist, Department of Foreign Affairs and Trade, Canada (2013) involving Canada and Chile. It is evident from Table 7 that the Canada s exports relative to exports from the Rest of the World (csrw) reveals a downward trend from in 1992 to in It should be noted that csrw is the product of intensive and extensive margins. Table 7 also reports the values of percentage changes in intensive margin (pcimrw), percentage changes in extensive margins (pcemrw), and percentage changes in csrw (pccsrw); the sum of pcimrw and pcemrw equals pccsrw. It can be observed that during most of the years the percentage change in the intensive margin (pcimrw) dominated the percentage change in csrw ( pccsrw). For example, in 2009, a recession year, Canada s csrw declined by 12.2% This was associated with a value of for pcimrw; that is Canada s intensive margin declined by 12.6%. The decline in Canada s intensive margin could be interpreted as a reflection of Canada s loss of competitiveness with respect to the Rest of the World. Table 8. Canada s Intensive and Extensive Margins in the US with Respect to the European Union. Year Imeu Emeu cseu Pcimeu Pcemeu Pcseu Notes: Imeu= Intensive margin with respect the European Union, Emeu= extensive margin with respect to the European Union, cseu= Canada s exports relative to the exports from the European Union to the U.S.A., pcimeu= Percentage change in Imeu, pcemeu = percentage change in emeu, and pcseu= percentage change in cseu. Source: Computed from data available from the Census Bureau, US Department of Commerce. Table 8 presents Canada s intensive, extensive margins, and related variables with respect to the European Union. It is evident that Canada s intensive margin (Imeu) increased 105

10 during but declined since then. The extensive margin (Emeu) fluctuated with a value of in 1992 to in Canada s exports relative to exports from the European Union (cseu) also appears to show a downward trend. Table 8 also reports percentage changes in the three variables. As observed previously in Table 7, Table 8 also reveals that percentage changes in the intensive margin dominates the percentage change in cseu. For example, in 2009, pcseu was This was associated with a value of for pcimeu; this suggests that the intensive margin declined by 14.5 % outweighing a slight positive change ( 0.005) in pcemeu. Table 9 reports the intensive margin (Imch), extensive margin (Emch), the share of Canada s exports relative to China s exports to the United States (csch), and percentage changes in these three variables. It is striking to note that Canada s intensive margin with reference to China has steadily declined from 4.34 in 1992 to 0.8 in Table 9. Canada s Intensive and Extensive Margins in the US with Respect to China Year Imch Emch csch Pcimch Pcemch Pccsch Notes: Imch= Intensive margin with respect China, Emch= extensive margin with respect to China csch= Canada s exports relative to the exports from China to the U.S.A., pcimch= Percentage change in imch, pcemch= percentage change in Emch, and pccsch= percentage change in csch. Source: Computed from data available from the Census Bureau, US Department of Commerce. This suggests that while Canada exported to the United States more than four times compared to China, in 2012, Canada exported only four-fifths of China s exports involving the same set of goods. The evidence on Canada s intensive margin with respect to China suggests that competition between Canada and China in the U.S. market has increased; this is contrary to the findings of an earlier study by Boileau (2007). It appears from Table 9 that the extensive margin of Canada shows an upward trend, increasing from in 1992 to in Canada s exports relative to China s 106

11 Islam, S. Product Varieties, Extensive And Intensive Margins Of Trade: Evidence From Canada exports ( csch) also demonstrates a downward trend. It is also evident from Table 9 that the percentage change in the intensive margin (pcimch) dominates the percentage change in csch (pccsch). In 2009, for instance, the value of pccsch was This was associated with a value of for pcimch and a value of for pcemch. A similar scenario occurred in Finally, Table10 presents Canada s intensive, extensive margins, and related variables with reference to Japan. It is clearly evident that Canada s intensive margin (Imj) steadily increased from in 1992 to in This suggests that with respect to Japan Canada s competitive position improved during The value of the extensive margin (Emj) was in 2012 with no clear trend during The value of csj clearly shows an upward trend, implying a rising trend in Canada s exports relative to Japan s exports. It can be observed from Table 10 that the percentage change in the intensive margin (pcimj) dominates the percentage in Canada s exports relative to Japan s exports (pccsj). Table 10. Canada s Intensive and Extensive Margins in the US with Respect to Japan Year Imj Emj csj Pcimj Pcemj Pccsj Notes: Imj= Intensive margin with respect Japan, Emj= extensive margin with respect to Japan, csj= Canada s exports relative to the exports from Japan to the U.S.A., pcimj= Percentage change in Imj, pcemj= percentage change in Emj, and pccsj= percentage change in csj. Source: Computed from data available from the Census Bureau, US Department of Commerce. 5. Conclusion Induced by multilateral and regional trade liberalizations, bilateral trade between Canada and the United States has expanded in absolute terms. Canada s exports to the United States is still dominated by natural resource-based products and vehicles. 107

12 The empirical findings show that the number of Canadian manufacturing establishments exporting to only the United States as a percentage of total number of establishments has declined. Furthermore, the value of exports from establishments serving only the US market as a percentage of total exports has also declined. The data on export varieties show that Canada export more products than the selected countries; however, China export more varieties than Canada. The empirical findings reveal that Canada s intensive margin declined with reference to the Rest of the World, the European Union, and China. The decline was quite pronounced with reference to China. Canada s intensive margin however, increased with reference to Japan. Furthermore, the percentage change in Canada s exports relative to the selected regions/countries were dominated by percentage changes in the intensive margin rather than the extensive margin. The findings also show that during the Great Recession in the United States, Canada s share relative the shares of the selected regions/countries in the United States declined significantly. This was associated with a significant decline in Canada s intensive margin. Accordingly, the evidence suggests that Canada s competitive position in the U.S. market has weakened. References Baldwin,J.R.and Gu,W. (2004). Trade Liberalization: Export-market Participation,Productivity Growth, and Innovation. Oxford Review of Economic Policy, 20 (3), Baldwin,J.R. and Gu,W.(2003). Participation in Export Markets and Productivity Performance in Canadian Manufacturing. Canadian Journal of Economics, 36(3), Bernard,A., Jenson,J., Redding,S., and Schott,P. (2009). The Margins of US Trade. CEP Discussion Paper No. 906, Bernard,A.B.,Eaton,J., Jensen,J.B., and Kortum,S. (2003). Plants and Productivity in International Trade. American Economic Review, 93(4), Boileau,D. (2007). Competition from China is Not Largely responsible for Canada s Decline in Share of U.S. Imports, APS-004. Castillo Ponce,R.A. and Ramirez Acosta,R. (2008). Economic Integration in North America. Applied Econometrics and International Development, 8(2), July-December. Helpman,E. and Krugman,P. (1985). Market Structure and Foreign Trade. Cambridge, MIT Press. Hillberry,R. and McDaniel,C. (2003). A Decomposition of North American Trade Growth Since nafta. USITC Working Paper A. Hummels,D. and Klenow,P.J. ( 2005). The variety and Quality of a nation s Exports. American Economic Review, 95(3), Imbs,J. and R. Wacziarg (2003), Stages of Diversification. American Economic Review, Vol. 93(1), Krugman, P. (1979). Increasing Returns, Monopolistic Competition, and International Trade. Journal of International Economics, 9(4) Melitz,M. (2003). The Impact of Trade on Intra-Industry Reallocations and Aggregate Industry Productivity. Econometrica, 71(6), Office of the Chief Economist, Foreign Affairs and International Trade Canada. The Economic Impact of the Canada-Chile Free Trade Agreement, May Statistics Canada (2011). A Profile of Canadian Exporters, Journal published by the EAAEDS: 108