The impacts of tariffication on Canadian milk producers were estimated via supply, price and trade flow parameters using a spatial price equilibrium model applied to milk production regions of Canada and the United States. / Two price scenarios were put forward because of supply management in Canada. The first incorporated producer prices while the second used shadow prices for Canadian producers, defined as the producer price less a reduction in price which accounts for the value of production quota. The hypothesis that tariffication reduces milk production in Canada to the extent that U.S. producers increase their exports to Canada was partly supported in scenario one but not in scenario two. Specific tariffs of $11.00/hl prevented U.S. imports to reach Qu 'ebec and Ontario. However, the rest of Canada increased its imports from Great Lakes to the detriment of Quebec and Ontario. Consequently, production decreased slightly in Qu 'ebec and increased in Ontario, whereas prices decreased significantly in both provinces. Scenario two showed ability of Qu 'ebec and Ontario to withstand American competition. Prices and production level remained unchanged while export flows to the rest of Canada increased to the detriment of the Great Lakes. / The present study investigated only a specific aspect of the tariffication proposal in the GATT and does not intend not to reflect the very complex aspects of GATT negotiations. The findings of this analysis must be interpreted with this caveat. Further studies considering other plausible tariffication scenarios or effective tariffs on an individual dairy product basis would broaden our understanding of the potential implications of tariffication.

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