Toward a North American Security Perimeter? Assessing the Trade and FDI Impacts of Liberalizing 9/11 Security Measures
This paper examines, for the first time, the trade and FDI impacts of a North American Security Perimeter that would liberalize the post 9/11 security measures at the Canada-US border. First, the study estimates econometrically the impact of post 9/11 security measures on bilateral (US-Canada) trade flows using a gravity model. Second, using these econometric estimates together with a three-region nine-sector general equilibrium model, we compute sectoral tariff rates “equivalent” to the 9/11 security measures. Finally, we assess the (general equilibrium) impacts on trade and FDI of a change of security paradigm toward a North American Security Perimeter. The paper shows that the economic opportunity gains occurring to Canada and the US from the liberalization of the 9/11 security measures amount to US$20 billion annually. This figure, once added to the direct administrative costs of the post 9/11 security measures, warrants serious consideration in policy discussions of a North American Security Perimeter.
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- Patrick GEORGES & Marcel MERETTE & Yazid DISSOU, . "Liberalizing Foreign Direct Investment Restrictions in Canada: A Multi-Country Computable General Equilibrium Analysis," EcoMod2008 23800043, EcoMod.
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- Lakatos, Csilla & Terrie Walmsley, 2010. "A Global Multi-sector Multi-region Foreign Direct Investment Database for GTAP," GTAP Research Memoranda 3197, Center for Global Trade Analysis, Department of Agricultural Economics, Purdue University.
- Grady, Patrick, 2009. "Were Canadian Exports to the U.S. Curtailed by the Post-9/11 Thickening of the U.S. Border?," MPRA Paper 21047, University Library of Munich, Germany.
- Trien T. Nguyen & Randall M. Wigle, 2011. "Border Delays Re-Emerging Priority: Within-Country Dimensions for Canada," Canadian Public Policy, University of Toronto Press, vol. 37(1), pages 49-59, March.
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