Suppose a free-trade agreement with Central America eliminates all tariffs on imported textiles from those countries.Which type of unemployment will be affected in Canada?

Question

Quizplus · Accepted Answer

Structural unemployment. 
This is because the elimination of tariffs on imported textiles will make it easier for Canadian firms to import textiles from Central America, which may cause a decline in demand for domestically produced textiles. This could lead to a shift in employment away from the domestic textile industry towards other sectors, resulting in structural unemployment.

Suppose a Free-Trade Agreement with Central America Eliminates All Tariffs