This paper analyzes the effects of trade liberalization on productivity at the sector level. This is done with a multivariable regression of relative gross labour productivity on sector trade, between the U.S. and Canada, relative to total trade, between Canada and the world. A set of before and after treatment variables are used to distinguish the difference between the effect of trade openness before the NAFTA preferential trade agreement and after the agreement. The regression is done using business sector controls, a data set spanning a 20 year period, and 6 North American Industrial Classification System (NAICS) sectors. The results indicate a positive correlation between trade openness and productivity. More precisely, the percentage change in trade openness across the implementation of the North American Free Trade Agreement (NAFTA) was matched with a 2% change in average annual productivity

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