The Effect of Changing Canada–United States Border Costs on North American Trade Patterns and Expenditures
Articles and reports: 11-626-X2019010
This article in the Economic Insights series examines the impact of the Canada–United States border and the potential effects of changing the trade costs it imposes between and within the two countries at a fine geographical scale. The analysis is based on a structural gravity model of trade estimated using Statistics Canada’s Surface Transportation File and the United States Census Bureau’s Commodity Flow Survey. The model estimates the general equilibrium effects that Canada–United States border costs have on trade patterns and welfare, which can be illustrated at a fine regional scale. Maps are used to depict how increases and decreases in border frictions affect not only Canada–United States trade, but also domestic trade flows. The maps show considerable regional variation in both types of trade when conditions at the border change.
Main Product: Economic Insights