Fixing the Potholes in North American Transportation Systems

Abstract

This paper looks at whether or not there are institutional barriers or rigidities in the transportation sector that inhibit the movement of goods across the Canada-U.S. border. The existence of barriers introduces inefficiencies into the system and raises transportation costs. Increases in transportation costs above the efficient level will reduce the volume of goods moving across the border and thus reduce trade flows. In this sense, transportation costs have effects similar to those of tariffs: they reduce trade opportunities and incomes. The analysis here is confined to the rail, truck and marine transportation modes.