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Border Security and Canadian Exports to the United States: Evidence and Policy Implications

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  • Steven Globerman
  • Paul Storer

Abstract

Border security-related costs and delays incurred by shippers have been cited by some observers as a significant impediment to trade between Canada and the United States. In fact, there is relatively little empirical evidence evaluating this concern. While there is some evidence that costs of exporting from Canada have increased as a result of post-9/11 border security developments, available econometric trade models offer contradictory evidence on whether or not the higher costs have reduced Canadian exports below what would otherwise be expected. This paper identifies and evaluates the sources of divergent results found in existing studies. It also provides some new evidence of significant shortfalls in Canadian exports to the United States beginning in the third quarter of 2001 and continuing through the end of 2007.

Suggested Citation

  • Steven Globerman & Paul Storer, 2009. "Border Security and Canadian Exports to the United States: Evidence and Policy Implications," Canadian Public Policy, University of Toronto Press, vol. 35(2), pages 171-186, June.
    • Handle: RePEc:cpp:issued:v:35:y:2009:i:2:p:171-186
    DOI: 10.3138/cpp.35.2.171
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    References listed on IDEAS

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    1. Robert C. Feenstra & James R. Markusen & Andrew K. Rose, 2001. "Using the gravity equation to differentiate among alternative theories of trade," Canadian Journal of Economics, Canadian Economics Association, vol. 34(2), pages 430-447, May.
    2. Michael Burt, 2009. "Tighter Border Security and Its Effect on Canadian Exports," Canadian Public Policy, University of Toronto Press, vol. 35(2), pages 149-169, June.
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    Cited by:

    1. Marcel Mérette & Patrick Georges & Qi Zhang, 2011. "Foreign Direct Investment and Border Security Issues-- A Multi-Country, Multi-Sector Computable General Equilibrium Framework," EcoMod2011 3044, EcoMod.
    2. Chi, Junwook & Cheng, Seu Keow, 2016. "Do exchange rate volatility and income affect Australia’s maritime export flows to Asia?," Transport Policy, Elsevier, vol. 47(C), pages 13-21.
    3. Chi, Junwook, 2014. "Income and Exchange Rate Sensitivities of Cross-Border Freight Flows: Evidence from U.S.-Canada Exports and Imports by Truck, Rail, Air, and Pipeline," Journal of the Transportation Research Forum, Transportation Research Forum, vol. 53(2).
    4. Georges, Patrick & Mérette, Marcel, 2012. "Toward a North American Security Perimeter? Assessing the trade, FDI, and welfare impacts of liberalizing 9/11 security measures," Economic Modelling, Elsevier, vol. 29(6), pages 2514-2526.
    5. Maoh, Hanna F. & Khan, Shakil A. & Anderson, William P., 2016. "Truck movement across the Canada–US border: The effects of 9/11 and other factors," Journal of Transport Geography, Elsevier, vol. 53(C), pages 12-21.
    6. Sui Sui & Zhihao Yu, 2012. "The Pattern of Foreign Market Entry of Canadian Exporters," Canadian Public Policy, University of Toronto Press, vol. 38(3), pages 341-359, September.
    7. Zhiqi Chen & Horatiu A. Rus & Anindya Sen, 2016. "Border Effects Before and After 9/11: Panel Data Evidence Across Industries," The World Economy, Wiley Blackwell, vol. 39(10), pages 1456-1481, October.
    8. Carballo, Jerónimo & Schaur, Georg & Volpe Martincus, Christian, 2016. "Trust No One?: Security and International Trade," IDB Publications (Working Papers) 7684, Inter-American Development Bank.
    9. Patrick Georges & Marcel Mérette & Qi Zhang, 2012. "Toward a North American Security Perimeter? Assessing the Trade and FDI Impacts of Liberalizing 9/11 Security Measures," Working Papers 1204E, University of Ottawa, Department of Economics.
    10. Preckel, Paul V. & Verma, Monika & Hertel, Thomas W. & Martin, Will, 2011. "Implications of Broader Gaussian Quadrature Sampling Strategy in the Contest of the Special Safeguard Mechanism," Conference papers 332127, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    11. Anderson, William P. & Maoh, Hanna F. & Burke, Charles M., 2014. "Passenger car flows across the Canada–US border: The effect of 9/11," Transport Policy, Elsevier, vol. 35(C), pages 50-56.
    12. Jerónimo Carballo & Georg Schaur & Christian Volpe Martincus, 2016. "Trust No One?: Security and International Trade," IDB Publications (Working Papers) 94636, Inter-American Development Bank.
    13. Globerman, Steven & Storer, Paul, 2011. "Regional and Temporal Variations in Transportation Costs for U.S. Imports from Canada," Journal of Regional Analysis and Policy, Mid-Continent Regional Science Association, vol. 41(2), pages 1-18.
    14. Mark Brown, W. & Anderson, William P., 2015. "How thick is the border: the relative cost of Canadian domestic and cross-border truck-borne trade, 2004–2009," Journal of Transport Geography, Elsevier, vol. 42(C), pages 10-21.
    15. Brian M. Mills & Mark S. Rosentraub, 2014. "The National Hockey League and Cross-Border Fandom," Journal of Sports Economics, , vol. 15(5), pages 497-518, October.
    16. Patrick Georges, 2017. "Canada’s Trade Policy Options under Donald Trump: NAFTA’s rules of origin, Canada-U.S. security perimeter, and Canada’s geographical trade diversification opportunities," Working Papers 1707E, University of Ottawa, Department of Economics.
    17. Benoit Dostie & Rajshri Jayaraman, 2013. "Do Higher Costs Spur Process Innovations and Managerial Incentives? Evidence from a Natural Experiment," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 22(3), pages 529-550, September.
    18. Smith, Matthew J. & Ray, Sayan Basu & Raymond, Aaron & Sienna, Micah & Lilly, Meredith B., 2018. "Long-term lessons on the effects of post-9/11 border thickening on cross-border trade between Canada and the United States: A systematic review," Transport Policy, Elsevier, vol. 72(C), pages 198-207.
    19. Sui Sui & Zhihao Yu, 2013. "Special Issue. Guest Editor: Zhihao Yu," Review of Development Economics, Wiley Blackwell, vol. 17(3), pages 510-522, August.

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