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The Effects of Canadian Trade & Investment on U.S. Employment

Peter Dixon's study on the dependence of U.S. jobs on trade and investment with Canada uses an economic model to look at how employment in the United States would be affected by a cessation of bilateral trade. In doing so, Dixon and his colleagues conclude that nearly 9 million jobs in the United States, in every state and congressional district, are supported by trade and investment with Canada.

Date & Time

Tuesday
Dec. 9, 2014
12:00pm – 2:00pm ET

Location

4th Floor, Woodrow Wilson Center
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Overview

The Wilson Center, Embassy of Canada, and Trade Policy Experts Group convened a lunchtime discussion of Peter Dixon's study on the dependence of U.S. jobs on trade and investment with Canada. 

Dixon and his colleagues developed the U.S. Applied General Equilibrium (USAGE) model to simulate the effects of a complete cessation of trade between Canada and the United States on U.S. employment and the economy. Dixon’s team found that trade between the United States and Canada supports 8.27 million jobs, constitutes 6.5% of GDP, and has a positive effect on 437 out of the 533 industries identified in the simulation. Furthermore, Canadian-owned businesses in the United States employ 570,000 U.S. residents.

In industry, only those who face strong import competition from Canada and those with exports to countries other than Canada would benefit from a cessation of trade. In that vein, industries with large exports to Canada would largely lose out, as would industry overall, with the tangential contraction of the U.S. economy.

Dixon’s study also looked at the results of a cessation of trade from the state and congressional district level. His methodology accounted for the industrial composition of employment in each state, interstate trade, and local multiplier, port, and tourism effects.

At the state and congressional district (CD) level, Dixon found that employment in most states and CDs would shrink by three to six percent, despite the perceived differences between states and CDs, because of the broadly similar industrial structures in each. End-products differ state-by-state and CD-by-CD, but overall structure remains the same.

Dixon's powerpoint and results are below.

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Canada Institute

The mission of the Wilson Center's Canada Institute is to raise the level of knowledge of Canada in the United States, particularly within the Washington, DC policy community.  Research projects, initiatives, podcasts, and publications cover contemporary Canada, US-Canadian relations, North American political economy, and Canada's global role as it intersects with US national interests.  Read more

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