The impact of Canada/U.S. free trade on the B.C. food processing and beverage sector

This research was undertaken to provide a quantitative assessment of the impact of a Canada/U.S. free trade agreement on six B.C. food and beverage processing industries. The objective was achieved by building a partial equilibrium model simulating changes in trade policy. The six industries were modelled as oligopolists in which the degree of oligopolistic behaviour and the industries' characteristics were captured through specified parameters. Following the abolition of trade barriers the model allowed the industries to rationalize, where necessary, and the highest-cost firms in an industry left for the benefit of lower-cost ones. The final effect is measured for each industry through changes in output, employment, trade volume and prices. As different policy scenarios have been simulated for each industry, the results obtained are quite diverse but they generally follow the a priori expectations. In open industries such as meat, fruit and vegetable and flour mixes, results, however differents for each scenario, tend to leave the industries in a better off or no worse off situation. For heavily protected industries like dairy and poultry, very sensitive to the elimination or not of the quota system, the range of possible results between the scenarios is pronounced. It was concluded that the final effect of the abolition of trade barriers on each industry cannot be assessed specifically but in rather general terms.Land and Food Systems, Faculty ofGraduat