IDEAS home Printed from https://ideas.repec.org/a/fip/fedbne/y1996ijanp3-21.html
   My bibliography  Save this article

U.S. regional trade with Canada during the transition to free trade

Author

Listed:
  • Jane Sneddon Little

Abstract

This article examines the U.S. and Canadian responses to the early years of the U.S.-Canada Free Trade Agreement from a U.S. regional perspective. It draws on a highly detailed data base from Statistics Canada. Although the article discusses which regions enjoyed the fastest growth in trade with Canada over this period, and why, the major focus of the study is the impact of increased integration on the nature of trade and investment flows between the two countries. The author explores, for example, whether trade has expanded on the basis of comparative resource endowments or has taken the form of increased intra-industry trade, two-way trade in similar products, which largely reflects economies of large-scale production and specialization.> The author finds that, to date, U.S. and Canadian firms are emphasizing trade rather than direct investment as a means of serving the integrating market. However, the results concerning the foundations for this trade expansion are mixed. At the national level, trade has grown on the basis of comparative advantage, and the share of two-way trade is little changed. However, national data conceal a variety of regional experiences: The share of two-way trade has grown in over half the regions, and changes in the industrial composition of trade are greater within regions than the national data would suggest. Contrary to conventional wisdom, moreover, structural change was greatest where two-way trade grew most. Thus, the author ends by suggesting that the nature of the intra-firm--rather than the intra-industry--response may be the key to determining how smoothly economies adjust to increased integration.

Suggested Citation

  • Jane Sneddon Little, 1996. "U.S. regional trade with Canada during the transition to free trade," New England Economic Review, Federal Reserve Bank of Boston, issue Jan, pages 3-21.
  • Handle: RePEc:fip:fedbne:y:1996:i:jan:p:3-21
    as

    Download full text from publisher

    File URL: http://www.bostonfed.org/economic/neer/neer1996/neer196a.htm
    Download Restriction: no

    File URL: http://www.bostonfed.org/economic/neer/neer1996/neer196a.pdf
    Download Restriction: no
    ---><---

    More about this item

    Keywords

    Canada; Free trade;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:fip:fedbne:y:1996:i:jan:p:3-21. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Spozio (email available below). General contact details of provider: https://edirc.repec.org/data/frbbous.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.