Spatial interaction and the North American Free Trade Agreement : An Assessment of Changes in the Geographic Structure of Trade (MA THESIS)

James J. Biles
Department of Geography
Michigan State University
East Lansing, MI 48824

STATEMENT OF PROBLEM

The North American Free Trade Agreement (NAFTA) was implemented in 1994 with the objective of eliminating trade barriers; facilitating cross border movement of goods and services; promoting conditions of fair competition; and increasing investment opportunities among the United States, Mexico and Canada  (Pastor, 1993; Huffbauer and Schott, 1992). Even before its inception, scholars debated the potential outcomes of NAFTA. Proponents and opponents of the agreement alike predicted that the pact would have a profound impact on the economies of participating nations (Krugman, 1993).

Patterns of trade since 1994, however, have corroborated the assessment of a relative minority of experts who asserted that NAFTA’s impact on the North American economy would be negligible (Lustig et al., 1992; Krugman, 1993). The consensus among economists is that NAFTA has not resulted in significant changes in the volume of trade nor the composition of trade among the United States, Mexico and Canada (Hinojosa-Ojeda, 1996). This thesis will assess the impact of NAFTA from a geographic perspective by examining changes in spatial interaction between the United States and Mexico since 1993. Trans-border trade between the two countries will be used to evaluate changes in the geographic structure of trade, as well as changes in the relative accessibility of places that generate and attract trade.