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University of Southern Maine

ECO 370 - Spring 2006
Instructor:
Prof. Bill Phillips

Term Project
Created by: John Bell

Home
- Introduction -
History
Statistics
Physical Infrastructure
Political Infrastructure
Legal Infrastructure
Infrastructure Costs
Conclusion
Last Update:  5/9/2006


The Infrastructure of US-Canada Trade

Introduction


As with all market economies, there must be a framework in place to allow the cross-border market economies to function.  The "free" term, in free trade, such as the North American Free Trade Agreement (NAFTA) simply means that government policies that limit trade, such as subsidies, tariffs and quotas, are eliminated or greatly reduced.  It does not mean that trade is free, as in not costing time, money, and effort. The purpose of this project is to explore the enormity of the infrastructure that is in place that enables the actual trade of goods and, to a smaller extent services, to take place. The infrastructure consists of the physical infrastructure: roads, railways, pipelines, etc. The infrastructure also consists of the political institutions that promote, support, regulate and administrate "free" trade.  With every agreement, such as NAFTA, there are differing opinions on the meaning of the agreement, intensional violators of the agreement, and disputes between stake holders in the agreement.  The legal institutions that judge disputes cases and interpret the agreements are part of the infrastructure as well. 

In the preamble to the NAFTA document, one of things that Canada, Mexico and the US resolve is to "ENSURE a predictable commercial framework for business planning and investment..." Trade between the United States and Canada requires substantial infrastructure cost.  A significant amount of this cost is public cost—paid for by citizens of both countries through taxes.  This web site will look at the various types of the transportation, political and legal underpinning that enables free trade between the United States and Canada to take place.  The extent, and some of the infrastructure costs, especially the public costs, are explored throughout this web site.

 
Note: The current trade agreement between the United States and Canada is the NAFTA.  This project looks at activities based on the NAFTA, which includes trade between Canada and Mexico, and to a larger extent, the US and Mexico.  Although this project is about the US and Canadian trade infrastructure, it is difficult at times to extract the Mexican component from the information.  This web site makes no attempt to analyze the Mexican portion of North American trade. Still, much of the information and related web sites associated with this topic have a large Mexican component to them.