The evolving quality of trade between Canada and the United States

This article examines the quality level of trade between Canada and the United States, 1979–2003, to investigate the relevance of staples theory for Canada. After disentangling the quality levels of trade, it is found that the pattern of quality-level trade changed significantly around the time free trade was established between Canada and the United States. Before free trade, Canada was moving into the lower end of quality, but after the establishment of free trade, Canada is now moving into the higher end of quality trade with the United States. This observation potentially means that Canada is moving out of the staples trap.