Trade and transportation: The impact of the 1995 transborder air services accord Academic Article uri icon


  • This article examines the relationship between interregional trade flows and interregional air passenger transportation flows. It analyzes the impact of a natural experiment that occurred as a result of the 1966 air services accord that governed transborder airline services between the United States and Canada. This accord, which was highly restrictive, essentially froze the pattern of air services between the two countries between 1966 and 1995 despite major shifts in regional economic activity that were occurring in each country and the progressive elimination of trade barriers between the two neighbors during this time span. The study finds that, absent government constraints, there is a strong correlation between province-state trade flows and province-state air passenger flows. It also discovers that the failure to renegotiate a transborder air services accord over a thirty-year period caused this correlation to atrophy. Presumably this failure damaged the ability of parties in both countries to develop additional beneficial economic linkages. If so, it suggests the danger of freezing air transport linkages when a region is undergoing dramatic shifts in the location of economic activity.

author list (cited authors)

  • Baldwin, G., & Pustay, M. W.

complete list of authors

  • Baldwin, G||Pustay, MW

publication date

  • March 2004