US President Trump has threatened to leave the North American Free Trade Agreement. How much would each member country gain or lose if this threat were carried out? Would trade imbalances within the region diminish? What would the transition to new production and consumption patterns look like? I provide quantitative answers to these questions using a dynamic general equilibrium model with a multi-sector input–output production structure, heterogeneous firms that make forward-looking export participation decisions, and adjustment frictions in trade and factor markets. Regional trade flows would fall dramatically, and while the US trade deficit with Canada would decline, the deficit with Mexico would grow. Welfare would fall by 0.04%, 0.12%, and 0.2% in the United States, Canada, and Mexico, respectively, and transition dynamics would significantly affect welfare in both the short run and the long run.

Résumé

Fin de l’ALÉNA : l’impact macroéconomique. Le président des États-Unis Donald Trump a menacé de quitter l’accord de libre-échange nord-américain (ALÉNA). Si cette menace était mise à exécution, qu’auraient à gagner les membres signataires? Que pourraient-ils perdre? Les déséquilibres commerciaux se résorberaient-ils dans la région? Comment se caractériseraient les nouveaux types de dépenses et de production? Dans cet article, j’apporte à ces questions des réponses quantitatives grâce à un modèle dynamique d’équilibre général s’appuyant sur une structure de production multisectorielle type entrées-sorties, des entreprises hétérogènes prévoyant des décisions en matière d’exportation et des frictions d’ajustement sur les marchés de facteurs et commerciaux. Les flux commerciaux diminueraient drastiquement dans la région, et bien que le déficit commercial des États-Unis avec le Canada se résorberait, celui avec le Mexique augmenterait. Le bien-être reculerait de 0,04 % aux États-Unis, 0,12 % au Canada et 0,2 % au Mexique, tandis que les dynamiques de transition pèseraient négativement et significativement sur ce même bien-être à court comme à long terme.

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Volume53, Issue2

May / Mai 2020

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The macroeconomic impact of NAFTA termination

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