Tariff Structure, Trade Expansion and Canadian Protectionism from 1870-1910

We employ the Anderson-Neary Trade Restrictiveness Index (TRI) to examine Canadian trade policy during the first wave of globalization (1870-1913). Our analysis is the first to examine two important features of this period using the TRI: 1) the shift to protectionist trade policies, and 2) the large expansion in the volume and variety of goods traded. Using customs data on imports at the article level, we show that Canadian trade policy during this period was at least 11% more restrictive than previously understood. We compute the first estimates of the static welfare losses associated with tariff policy at this time to be 0.7-1.5% of GDP. Moreover, we show how trade expansion along the extensive margin affects the restrictiveness and welfare cost associated with a given trade policy