We examine the qualitative and quantitative predictions of a heterogeneous firm model à la Melitz (2003) in the context of the Canada - US Free Trade Agreement (CUSFTA) of 1989. We calibrate our model to the pre-trade liberalization stage, simulate the trade liberalization, and compute the...

This paper analyses the political economy of trade liberalization by the European Community towards Eastern nations. We identify the sectors that are both sensitive and politically effective. We find that Eastern nations may have a comparative advantage in industries that use capital and...