Source: BTS, U.S.-North American Trade and Freight Transportation Highlights, June 2005

Value of U.S. Merchandise Trade with Canada and Mexico, 1990-2004

The setting of the North American Free Trade Agreement (NAFTA) in 1994 can be seen as an outcome of a long standing trade liberalization process in North America, particularly between the United States and Canada. Between 1994 and 2000, NAFTA trade doubled. However, American international trade grew at a rate faster than NAFTA trade, an indication that comparative advantages elsewhere tended to be more attractive than the benefits conferred by regional integration. This is particularly the case after 2000 when NAFTA trade leveled while international trade surged. Thus, the North American transportation system was shaped both by latitudinal (NAFTA) and longitudinal (mainly transpacific) forces.