THE UNITED-STATES CANADA FREE-TRADE AGREEMENT AND COMMODITY TRANSPORTATION SERVICES AMONG UNITED-STATES STATES

The Free Trade Agreement (FTA) implemented beginning in 1989 by the Un ited States and Canada will have significant impacts on bilateral trad ing patterns. In addition to its long-term, investment-related repercu ssions, the FTA will affect the volume, commodity composition, and spa tial distribution of trade and, consequently, the transportation servi ces required to move commodities between the two nations. This paper e xamines the changing spatial structure of U.S.-Canadian trade under th e FTA. It employs commodity-specific analyses of tariffs and non-tarif f barriers. as well as price and income elasticities of demand. to est imate sectoral and spatial changes among U.S. states in total, land, w ater, and airborne commodity flows since 1988 attributable to the FTA. The analysis details die assumptions and methodology used, elaborates upon the likely consequences for the nation's ten largest customs dis tricts, particularly New York, and concludes with some comments on oth er forces that may alter the expected results.