the data. Exploring the determinants of Canada's tariff cuts at the 8 digit HS product level, we find that CUSFTA acted as …

, the home government uses tariffs to extract rents and therefore implements a policy of discriminatory tariffs entailing … higher tariffs on more efficient firms. By contrast if the government is incompletely informed about costs, we show that … is higher under a policy of uniform tariffs than under one of discriminatory tariffs. Our results suggest that trade …