Intra-industry trade (IIT) occurs when trading partners import and exportsimilar products. High volumes of IIT of horizontally differentiated goods implies a deeper level of regional integration, more stable regional trading patterns, and potentially more significant consequences from border delay. In this paper, trade between Washington and British Columbia (the Cascade Gateway) is compared to trade between Michigan and Ontario (the Great Lakes Gateway). The Grubel-Lloyd index, which measures IIT, is used to analyze trade in these distinct corridors. We show higher levels of intra-industry trade, and regional integration within the Great Lakes Gateway. The paper argues that cross-border supply chains most exposed to highercost from increasing border delays are composed of horizontally differentiated manufactured goods having high levels of IIT and which rely heavily on truck transportation. These are more common in the Great Lakes gateway, and this region may therefore experience greater economic impacts from long and unpredictable delays when compared to the same delay at the Cascade gateway.
Samenvatting