How much do neighboring US states and Canadian provinces trade amongst themselves
How much do neighboring US states and Canadian provinces trade amongst themselves and what are the patterns of state-to-state, province-to-province, and state-to-province economic relationships? To shed light on these questions, CPCS’s Veiko Parming and Chelsea Gurr mapped the flow of goods between adjacent US states and Canadian provinces – in other words, only those states or provinces that share a border. They used publicly available data from the Freight Analysis Framework (FAF), Industry Canada and Statistics Canada. What they found: strong trade relationships bind the economies of neighboring states, provinces, and groups of states and provinces, with significant trade activity between Northeastern and Great Lakes states and provinces, and between large US states and their neighbors (e.g. Texas and California). Many of the trade flows span across international borders. For example, the province of Ontario is much more integrated into the continent’s largest trade cluster than most US states are with their closest neighbors.
- The analysis found clear patterns in trade flows across the continent, with several distinct concentrations of dense trade activity among neighboring states/provinces. The largest of these stretches from Wisconsin and Missouri in the west to Massachusetts in the east and includes the Canadian provinces of Ontario and Quebec. Other major trade relationships are also seen in the South and on the Pacific Coast, anchored by Texas-Louisiana-Oklahoma, Florida-Georgia, California-Arizona, and Washington-Oregon.
- The map shows trade between neighboring states and provinces, rather than the routes followed by cross-continent pass-through flows. Nonetheless, it is striking that many of the extended “chains” on the map seem to parallel key cross-country road and rail corridors. These findings may support the hypothesis that places that find themselves on key trade routes can leverage their strategic location for developing their own trade linkages – rather than merely facilitating pass-through flows.
- One of the more prominent features of the map is the extent to which Ontario is closely integrated into the Midwest/Northeast. Much of this is related to Ontario’s role in the integrated auto supply chain: of the $65 b. (USD) in trade between Ontario and Michigan in 2016, fully 2/3 or $43 b. were in the form of automobiles and parts. With the current level of uncertainty over North American trade agreements, the map serves as a reminder of how smooth borders help these interconnected clusters thrive.