Nearly Two Decades Of US-Canada Trade Balance Data

There seems to be some confusion regarding the distinction between trade balance in goods and services (a typical macro variable of interest) and trade balance in goods (more commonly reported, but less and less relevant on its own as countries become more service intensive).

Figure 1: US-Canada bilateral trade balance (bold blue), and merchandise trade balance (red). NBER defined recession dates shaded gray. Source: BEA/BuCensus(Tables 3 and 6), NBER.

The Canadian estimate of the US-Canada deficit differs from the US along a variety of dimensions (definitions, coverage, etc.). A detailed discussion and reconciliation for 2010-2011 is provided in this 2013 BEA article, which deals (among other things) with re-exports. (Dean Baker deals discusses re-exports but not other aspects of reconciliation.)

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