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A Decomposition of North American Trade Growth since NAFTA

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  • Hillberry, Russell H.
  • McDaniel, Christine A.

Abstract

Total U.S. trade with NAFTA partners has increased 78 percent in real terms since 1993-U.S.-Mexico trade alone is up 141 percent- compared to a 43 percent increase in U.S. trade with the rest of the world. In this article we compare the nature of U.S. trade growth with Canada and Mexico to growth in U.S. trade with non-NAFTA partners. We apply a simple decomposition of trade growth offered by Hummels and Klenow (2002) that provides insights into whether the United States is trading more of the same goods with NAFTA partners since 1993, or trading new products. The results provide evidence of both. A sizeable component of U.S. trade growth since 1993 can be explained by increases in the variety of products the U.S. imports from Mexico.

Suggested Citation

  • Hillberry, Russell H. & McDaniel, Christine A., 2002. "A Decomposition of North American Trade Growth since NAFTA," Working Papers 15866, United States International Trade Commission, Office of Economics.
    • Handle: RePEc:ags:uitcoe:15866
    DOI: 10.22004/ag.econ.15866
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    References listed on IDEAS

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    1. Kimberly A. Clausing, 2001. "Trade creation and trade diversion in the Canada - United States Free Trade Agreement," Canadian Journal of Economics, Canadian Economics Association, vol. 34(3), pages 677-696, August.
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    More about this item

    Keywords

    International Relations/Trade;

    JEL classification:

    • F1 - International Economics - - Trade
    • F2 - International Economics - - International Factor Movements and International Business

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