NAFTA is light on trade in services. But it is services that have dominated Canada’s export growth in the past decade. If U.S. President Donald Trump makes good on his election pledge to renegotiate NAFTA, reducing barriers to trading digitally delivered goods and services should be Canada’s priority.

a. What is NAFTA? What is its aim?

b. Explain how barriers to free trade in e-commerce—delivering services digitally—influence the quantity of these services produced, consumed, and traded. Illustrate your answer with an appropriate graphical analysis.

c. Explain why U.S. producers of e-commerce services would be expected to oppose free trade in these services with Canada.