U.S.-CANADA TRANSPORTATION AND LOGISTICS: BORDER IMPACTS AND COSTS, CAUSES, AND POSSIBLE SOLUTIONS

Abstract

This article studies the levels of trade and transportation on the U.S.-Canadian border, as well as the effect of border and bilateral trade policies on costs of trade. The article identifies the causes of those costs and examines long term strategies to achieving trade cost reduction. In addition, long-term strategies, such as a North American external perimeter approach that would de-emphasize the physical Canada-U.S.. border, are discussed. The article puts a price on the cost of border and trade policies between the two countries at $10.3 billion per year, or 2.7 percent of total merchandise trade in 2001. The article identifies the major outflow of these costs toward staff and institutions