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Abstract

This paper examines the behavior of transportation costs associated with U.S. imports from Canada. In particular, it evaluates whether transportation costs for U.S. imports from Canada increased in the post-9/11 period, thereby contributing to a “thickening” of the Canada-U.S. border. It also identifies whether changes in transportation costs varied across U.S. customs districts encompassing land ports along the Canada-U.S. border. The evidence indicates that an earlier declining trend in transportation costs noticeably decelerated in the post-2001 period. Furthermore, there was substantial variation in the rate of deceleration across the sample customs districts. The variation seems to be related to differential impacts of government policies across regions, such as “Trusted Trade” programs, rather than to changes in commodity import mixes or susceptibility of commodity import mixes to border disruptions.

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