Post-nafta U.S. imports and carbon content of trade : a sectoral analysis

Abstract

This thesis examines the changes in the carbon dioxide content of international trade following a multilateral free trade agreement. In this study, the focus is centered on the e ects of the North American Free Trade Agreement on the U.S. import ows and the carbon dioxide content of U.S. imports with its major trade partners. In the light of the recent decline in the carbon dioxide emissions generated by the U.S. manufacturing industry, we analyze the value and the carbon content of the U.S. imports from its NAFTA and non-NAFTA importing partners for the implementation period of NAFTA. Using a gravity model of international trade, U.S. imports and carbon dioxide content of U.S. imports are examined for the post-NAFTA period, i.e. 1995-2010, within a panel data framework. With the sectoral trade data and input-output analysis, the direct and indirect carbon dioxide content of trade is computed for the disaggregated imports of U.S. from its NAFTA and non-NAFTA trade partners. The carbon dioxide content of imports is calculated by using the sectoral data of direct carbon dioxide emission coe cients, Leontief inverse matrices and real trade data at a sectoral level. The estimation results indicate that, both the value and the carbon dioxide content of the U.S. imports from NAFTA partners are signi cantly greater compared to the value and the carbon dioxide content of the U.S. imports from other major non-NAFTA U.S. importing partners within the period 1995-2010.