Intra-NAFTA Trade in Mid-South Industries: A Gravity Model
Using a rich dataset on traffic between members of the North American Free Trade Agreement (NAFTA), this paper examines industry-level trade growth since the implementation of NAFTA for five Mid-South states. Gravity model results show significant disparities across states and industries. For exports within the NAFTA region, the results show large differences in growth rates both between states and between industries. For imports within the NAFTA region, the growth rates vary more between industries than between states. Our results also confirm the importance of intra-industry trade in the U.S.-Mexico trade relationship and suggest a considerable relocation of production linked to trade between NAFTA members.
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