North American Border Trade in a Heightened Security Regime

Donn R. Pescatrice, Xavier University - Cincinnati
Shakil Quayes, Southeastern Louisiana University


This study focuses on the impact of more stringent border security measures implemented in the aftermath of the September 11, 2001, terrorist attacks on the U.S. border trade with Canada and Mexico. Utilizing trade model based on a simple gravity equation, the impact of this heightened border security regime on merchandise trade is quantitatively analyzed. The results confirm the initial hypotheses: trade with Canada was more negatively impacted than trade with Mexico; imports experienced a sharper decline than exports; trade via trucks was more severely affected than rail traffic; and inherently dangerous commodities and goods conducive to housing destructive devices experienced greater downturns in trade volume.