Printer Friendly

Rocky Mountain trade corridor.

Implications for Transportation Planning in Montana and the Rocky Mountain West

Fundamental changes now underway may dramatically redefine economic life in Montana and usher in a new economic era for the state and region. These changes are tied to expanding cross-border trade and commerce between Canada and the United States under the Canada-U.S. Free Trade Agreement adopted in January 1989. Under an expanded "North American economic community," as outlined under the proposed North American Free Trade Agreement (or NAFTA), this relationship would include Mexico as well.

Growing north-south, cross-border economic interchange in North America will have its greatest effects in border regions. And Montana is the only state that shares a border with three Canadian provinces. Furthermore, since adoption of the U.S.-Canada FTA, trade between the two countries has expanded most between western states and provinces. This trade expansion has been focused in a few regional "corridors" linking major suppliers and their cross-border markets. One of these is the "Rocky Mountain Trade Corridor."(1)

Besides the "border-opening" initiatives contained in these trade agreements, another new federal policy initiative is helping to expand business relations across North American borders. The Intermodal Surface Transportation Efficiency Act of 1991 (ISTEA) is focusing increased attention on transportation infrastructure needs in border regions and on transportation systems used in moving goods and people involved in cross border trade. If the United States and its neighboring trading partners are to contend in an increasingly competitive worldwide economy, trading within North America must be done efficiently. Under ISTEA, up to $160 billion will be spent nationwide on transportation infrastructure (if fully funded), with transportation deficiencies in continental trading corridors receiving considerable attention.

Economic Internationalization

The driving force of economic change in the past two decades has been "internationalization"--and its impact is only intensifying. The economic spheres in which businesses operate are expanding outward and regional marketplaces are growing. This is reshaping markets of retailers and service providers and altering location needs of manufacturers, processors, and handlers of goods and commodities.

While this process of internationalization is often confusing (if not mysterious), it does have certain patterns and characteristics. Nations are finding it more workable to expand their economic horizons incrementally, negotiating trade arrangements with one country at a time or with a few close neighbors. This is apparent in the formation of continental or multination trading blocs around the world, including the European Economic Community (EEC), the Association for Southeast Asian Nations (ASEAN), and others. North America's version of this tendency is outlined under NAFTA.

In the midst of movement toward economic internationalization and regionalization, there's no single trading relationship in the world larger or more important than the one between Canada and the United States. The bar chart in Figure 1 shows U.S. "goods trade" (commercial shipments of goods and commodities between countries) with other nations. While U.S. business executives and international trade policymakers are often fixated on trade with Japan, U.S.-Canada trade is actually more than 25 percent greater. And, looking at exports only, U.S. exports to Canada exceed exports to Japan by over 70 percent.

U.S.-Canada trade is not only large, but growing-up about 35 percent since 1987 (an increase of over $45 billion). The United States' third-largest trading partner is Mexico--our other North American neighbor--and U.S.-Mexico trade has increased 85 percent in the last five years (an increase of nearly $30 billion).

Under NAFTA, a continentally-based economy will slowly take shape, just as in Europe under the EEC. As it does, economic activity in North America will take on new and different forms, particularly in border regions. New patterns of north-south economic and business relations will develop across national boundaries. The spatial forms these relations take will be particularly important for businesses and communities in border regions like Montana.

Settlement and development of both Canada and the United States largely occurred in an east-to-west fashion. And, the national economies of both countries remain heavily-oriented for east-to-west and west-to-east movement of goods and people involved in interregional trade and commerce. However, under NAFTA, a North American economy will gradually emerge, largely "north-south" in its orientation.

Montana has a vastly different geoeconomic position within a continentally-based economy than its historical role within a largely east-west oriented national economy. In the latter, as a Northern Tier state on the periphery of most interregional trade and commerce, it has played the role of a sort of end-point supplier of raw materials and commodities. The most obvious effect of making the U.S.-Canada border more economically "invisible" is that Montana will no longer be on the economy's periphery--it will be internal to it. What's more, the provinces to the north that become part of our regional marketplace (as we become part of theirs) include Alberta, British Columbia, and Saskatchewan. Much of this region of Canada has a relatively affluent and fast-growing population. It also has several world-class cities.

Current Patterns of U.S.-Canada Trade

What form are these emerging north-south patterns of cross-border economic interchange likely to take in the West? In examining the current composition of U.S.-Canada goods trade, we find a heavy concentration in manufactured items, particularly motor vehicles and parts, moving in both directions. This reflects the longstanding U.S.-Canada "Auto Pact" and the presence of a large, regionally-focused, transborder auto industry in Ontario and the Great Lakes region. Traditionally, this has served to focus much of U.S.-Canada trading in the East.

The map in Figure 4 generally illustrates where goods traded by Canada and the United States cross the border. In 1990 about 85 percent of U.S. exports to Canada and 80 percent of Canada's exports to the United States moved across the border in the East in both countries. This is also where the major corridors of U.S.-Canada trade traffic are focused, including the Toronto-Detroit corridor, the Montreal-New York corridor, and the Toronto-Buffalo corridor. Local economies can derive immense benefit from being in the traffic of trade. In spite of near-depression conditions in certain areas of the Northeast in recent years, Buffalo has continued to fare well.

U.S.-Canada trade in the West is considerably lighter, but still significant. In 1990 two-way trade (U.S. exports to Canada combined with Canadian exports to the United States) across the U.S.-B.C. border totaled $15.5 billion (in Canadian dollars), with about 57 percent of this in Canadian exports. Manitoba cross-border trade totaled $7.8 billion (63 percent Canadian exports) and Saskatchewan cross-border trade totaled $3.2 billion (59 percent Canadian exports). Two-way trade across the Alberta border totaled $6.6 billion, with about 55 percent of this in U.S. exports to Canada. However, there are indications that U.S.-Canada trade is shifting to the West in both countries.

Recent Trade Shifts

In the first two years after FTA adoption, seventeen states experienced export gains greater than 15 percent. Twelve of these states are west of the Mississippi River. Conversely, while cross-border trade remained static in eastern states, imports or purchases of Canadian products by western states rose over 28 percent--more than $5 billion. A similar shift also is occurring in Canada During the same two-year period, the four western provinces of British Columbia, Alberta, Saskatchewan, and Manitoba increased their production of exports to U.S. markets by 12 percent, compared to a 6 percent gain for the rest of Canada. Alberta had the greatest gain, led by higher energy exports, but it also made significant gains in other export categories, particularly telecommunications equipment.

Approximately 22 percent of all Canadian exports to the United States originate in (or are produced in) these four western provinces--around $23 billion worth. About half of this total originates in Alberta, and about 70 percent of its share is represented by exports of crude oil and natural gas.

Trade shifts also occurred in the areas where goods actually move north or south across the border. Two-way trade clearing customs in western ports of clearance increased by 11 percent, while eastern ports showed only a 4 percent gain. The biggest gains by far were across the Alberta and B.C. borders.

Because many forms of trade flow to and from growing regions, this westward trade shift should continue. The map in Figure 5 shows current and emerging population trends in both countries--population change that actually occurred in the 1980s, and as projected to occur in the 1990s. The two fastest-growing Canadian provinces are British Columbia and Alberta (two of the three provinces sharing a border with Montana). Alberta's population is expected to climb from 2.2 million in 1980 to 2.9 million by the year 2000.

In the U.S., the fastest-growing Census Bureau regions are the Pacific and Mountain regions, both expected to increase their populations by over 30 percent during the same period. The most rapid growth is projected in a broad band from California to Texas. In effect, north-south trade should continue to expand between these growing regions in western Canada and the western United States. These growing regions also should increase their trading with other regions.

U.S.-Canada Trade in the West

Some current features of U.S.-Canada trade across western borders are illustrated in Figure 6. In 1990, Canadian exports to the U.S. totaled $18.7 billion in Canadian dollars (or about $16 billion U.S.), while U.S. exports to Canada totaled $14.4 billion (about $12.3 billion U.S.). The pie charts indicate the general composition of this trade and the relative use of various modes of transport. About 40 percent of Canada's western exports are energy items (crude oil, natural gas, and hydro-generated electricity). This explains the heavy reliance on pipelines and transmission lines by Canadian traders in the West (about 35 percent of the total trade value).

Canada also exports significant amounts of other commodities in the West, including wood and paper products, metals, nonfuel minerals, chemicals, and some agricultural products. Manufactured goods--like machines, vehicles, equipment, electronics, and instruments--account for only 16 percent of these western Canadian exports. In sharp contrast, manufactured goods make up about 64 percent of U.S. exports in the West.

Differences in the composition of these goods largely explain differences in the various transport modes used in moving them. The type of transport perhaps most significant to the development of regional trade corridors is overland transportation, either by motor carrier or rail. As specific highway and rail routes and systems are selected by carriers, some routine traffic patterns emerge.

Analysis of two-way trade by motor carrier provides some indication of the configuration of regional trade in the West. Moving goods by truck accounts for almost 70 percent of U.S. trade into western Canada (about $9.9 billion in goods) and 36 percent of Canada's western trade (about $6.7 billion). There are about 50 individual highway border crossings along the 49th Parallel from Minnesota to the Pacific Ocean. In 1990, only eight of these had at least $150 million in two-way trade passing through by truck. They are shown in Figure 7.

The largest concentration of trade is on the Pacific Highway (interstate 5), which links Vancouver, B.C., with Seattle and Portland. Annually, almost $5 billion in traded goods moves along this route by motor carrier, reflecting growing cross-border economic integration in the fast-growing Pacific Northwest region.

The next largest concentration of trade by motor carrier in the West is through the Emerson crossing (the Interstate 29/Highway 75 crossing, south of Winnipeg). This crossing area is the heart of what is already known as the "Red River Trade Corridor."

The third busiest border crossing is Coutts/Sweetgrass, where Alberta's "Export Highway" meets Interstate 15 in Montana. Major construction is underway in Alberta on this route, with the eventual goal of a four-lane highway all the way from Edmonton to Montana. Next busiest is North Portal/Portal on the Saskatchewan-North Dakota border, followed by Kingsgate/Eastport, on Highway 95 in the Idaho Panhandle.

Existing and Emerging Cross-Border Trade Corridors in the West

The pattern of cross-border trade between Canada and the United States is more like a series of funnels than a sieve. Trade is highly focused. In fact, the five busiest border crossings in the West account for 85 percent of Canada's western export trade by truck and 65 percent of comparable U.S. trade. The regional pattern of these trade flows is illustrated in Figures 8 and 9. The maps are constructed by linking trade from origins (where goods are loaded) through border crossings, to destinations (or where goods are unloaded). Only motor-carriered trade through these five busiest border crossings has been considered in constructing these maps.

Figure 8 shows flows of Canadian exports to the United States, with circular areas north of the border sized in relation to the value of goods originating in different Canadian provinces. Circular areas south of the border are sized according to the value of imports received in multi-state U.S. market areas. The width of the lines linking origin provinces and destination states reflects the volume of these trade flows, with the wider ones indicating trade in excess of $100 million annually.

Figure 9 shows flows in the other direction--U.S. exports to Canada by motor carrier through these five western border crossings. Here, the circular areas in the United States show where goods originate, while the circular areas in Canada generally represent where these shipments are destined by province.

The pattern of trade reveals three major cross-border trading subregions in the West: the Pacific region along the coast (which also has significant trade links to the Northeast); the Upper Midwest or Upper Plains region (largely oriented northwest-by-southeast, linking central Canada and the Upper Midwest and Great Lakes regions); and, between these two, the Rocky Mountain West (flows indicated by the lighter color in Figures 8 and 9).

In the Rocky Mountain subregion, trade from Canada to the United States is most heavily focused between Alberta and Southern California, the Central Mountain region, and the Texas Gulf. A very similar pattern emerges in examining trade from the United States to Canada through the Rocky Mountain region. However, this trade also includes significant linkages between the Midwest and Great Lakes regions and Alberta.

Analyses of trade flows in these subregions suggest that three major north-south trade corridors are emerging in the West: the Pacific corridor, the Upper Plains corridor (focused in the Red River Trade Corridor), and the Rocky Mountain trade corridor. The spatial configuration of these trade corridors is depicted in Figure 10. As discussed earlier, these are the north-south regional patterns of economic relationships that a North American economy may follow as it expands.

Montana occupies a central position within the Rocky Mountain trade corridor, with a growing region of Canada to the north--including the cities of Edmonton and Calgary--and growing regions of the United States to the South. This places the state at the crossroads of growing north-south trade and commerce. One longstanding impediment to more diverse economic development in Montana has been the state's relative geographic isolation. Growing north-south trade and accompanying transportation improvements in the region could significantly reduce this isolation, enlarging the region's range of economic possibilities.

Proposed Highway Routes for the Rocky Mountain Trade Corridor

Two separate proposals have been advanced for highways spanning the Rocky Mountain trade corridor. (It's important to note that these proposals consider only possible highway routes for the corridor, not systems using other modes of transport.) One links Edmonton and Calgary with Denver and other regions further south, including Mexico. Known as CAMREAL (short for Camino Real), it has been advocated primarily by the Colorado Department of Transportation, but also has support from a coalition of three Canadian provinces, seven U.S. states, and the Mexican national government.

The other proposal, referred to as CANAMEX, links Alberta to Salt Lake City, Southern California, the American Southwest, and Mexico. Uniform trucking regulations are proposed for this highway corridor through cooperation by six U.S. states, the province of Alberta, and the Mexican government.

North-south trade and traffic through Montana are central to both CAMREAL and CANAMEX. In fact, the two northern segments of the Rocky Mountain trade corridor--a sort of inverted "Y"-meet at Great Falls. In addition to these highway routes, north-south, cross-border rail links also may develop in the region Only one currently exists along Montana's border with Canada: the Burlington Northern line from Sweetgrass to Shelby, where a major, transloader facility is developing. The closest direct link to the Union Pacific rail system is presently at Butte.

Other Cross-Border Transportation & Economic Development Potentials

While there's growing potential for a commercial trading corridor in the Rocky Mountain West, there's also potential for expanded development of another type of north-south, cross-border corridor in the region. The map in Figure 12 shows the locations of major national parks and federally-designated recreation areas in the United States and Canada. In both countries, these are most heavily concentrated in the West, with several of the more significant and spectacular parks in the Rocky Mountain region. Figure 13 more closely reveals the range of scenic and recreation resources present in the Rocky Mountain West, including national parks and recreation areas, major state and provincial parks, and national and provincial forests.

As the region's economy operates increasingly on a north-south basis and the regional marketplace expands, we have the additional opportunity of developing a north-south, cross-border "tourism and recreation" corridor. This corridor could be anchored by Yellowstone and Grand Teton national parks in the south and Jasper and Banff parks in the north, with Waterton-Glacier International Peace Park as its centerpiece. In developing such a large, cross-border tourism corridor, one strategy might be to keep tourists and recreationalists in the region longer. Major entry and exit routes using a variety of transportation options could be developed--including not only automobile traffic, but strategic rail and air access. Currently, this concept is being promoted as the "Trail of the Great Bear": "an international scenic touring corridor that links the world's first national park, Yellowstone, to the world's first international peace park, Waterton-Glacier, to Canada's first national park, Banff."(2)

In planning the region's future transportation system, it will be important not to mix the transportation propositions contained in these two separate, but interrelated, cross-border corridors. Both have their own particular transportation needs, and options chosen for one could easily affect the viability of the other. Whereas the transportation objectives in a commercial trade corridor are to concentrate traffic onto large trucks and rail cars (or combinations of both) and to move goods quickly and directly, the objectives in a tourism and recreation corridor are to disperse or diffuse traffic and permit travelers to move at their leisure. This approach reduces concentrated demand at given locations, and helps avoid inundating the very environmental attractions that bring tourists and recreationalists to the region in the first place. It also may provide greater economic benefits. There's evidence that local labor income received per tourist dollar is greater when such expenditures are geographically dispersed, rather than spent at a few large trade centers with franchise lodging facilities and other often externally-owned commercial establishments.

Figure 14 shows some possible elements of these two cross-border regional corridors and identifies specific highways that could serve as strategic commercial trading routes. Future plans for these routes and others should be considered within an overall transportation strategy for the region. Included is Interstate 15 from the border to Great Fails and Butte then on to Salt Lake City. Also included is the interstate highway from Denver to Billings, with a possible interstate highway upgrade from Billings to Great Falls (in this case, through Lewistown). Highway 87/200 east from Lewistown to Glendive (connecting with Interstate 94) and limited strategic cross-border highway links along the Montana "High Line" (Highway 2 north from Malta to Swift Current and south from Malta to Lewistown, and, Highway 16 north from Culbertson to the border and south from Culbertson to Sidney and Glendive) could provide improved access to the Rocky Mountain trade corridor from Saskatchewan and further east in Canada. An upgraded Highway 395/195 could link eastern and central B.C. traffic with the Rocky Mountain trade corridor through Spokane.

The main north-south highway on the Canadian side of the border is the Alberta Export Highway, running north to Calgary and on to Edmonton. Canada doesn't have a federal highway system comparable to the United States'. Canadian highway planning and funding is primarily relegated to provincial governments. However, a national system has been proposed.(3) Figure 14 shows routes included in that proposal, as well as Highway 4 which extends north toward Saskatoon, and connects south to Malta, Montana. The area encompassing the region's most significant recreation resources and tourist attractions (those that draw visitors from great distances) is screened on the map. It contains Jasper Park in the North and Yellowstone Park in the South.

ISTEA Transportation Initiatives

If these cross-border trade and tourism corridor propositions are truly promising, the immediate question becomes, "How can they be pursued?" Thanks to the new Intermodal Surface Transportation Efficiency Act, the region's decision-makers aren't empty-handed. In fact, ISTEA offers quite a large "tool kit" for pursuing these types of transportation and economic development objectives.(4)

Under ISTEA the structure of the federally-assisted highway program has been changed. A new National Highway System (NHS) will be designated to include interstate and other "primary highways" most important to interstate travel and national defense. The NHS also will include highways important to international commerce, such as those in major cross-border trade corridors. The Montana Department of Transportation (DOT) submits its recommendations for NHS routes in Montana to the U.S. Transportation Department in April 1993. A Surface Transportation Program (or STP) establishing block grants for other major roads not included in the NHS system also is being developed. Federal funding formulas for both the NHS and the STP will be developed between 1995 and 1997. If fully funded, ISTEA will direct $160 billion to the nation's transportation infrastructure needs.

Transportation systems important to international trade in North America would receive special consideration. In fact, one ISTEA provision instructs the U.S. Secretary of Transportation to investigate these needs and report back to Congress later this year. Section 6015 of ISTEA states: "The Secretary, in cooperation with other appropriate Federal agencies, shall identify existing and emerging trade corridors and transportation subsystems that facilitate trade between the United States, Canada, and Mexico." Major border crossings and "transportation subsystems" affecting identified trade corridors will be evaluated, assessing their ability to accommodate increased commerce and tourism-related traffic. The Secretary will then report to Congress on "transportation infrastructure needs, associated costs, and economic impacts" for these routes and systems.

The Section 6015 study is currently underway through the Federal Highway Administration. Work in the East is being coordinated by the Volpe Transportation Services Center of Cambridge, Massachusetts, and work in the West is underway by a study team organized by the Center for the New West (CNW), headquartered in Denver. The University of Montana is a member of the CNW study team.(5)

ISTEA also contains a variety of tourism-related initiatives. Under the continuous planning process used to identify specific transportation projects, states may consider access to national parks, scenic and recreation areas, monuments, and other tourist attractions as factors in project selection and funding. Section 1025 requires a long-term transportation strategy for state and local roads adjoining federal lands that considers recreation, tourism, and rural economic development needs. Section 1032 qualifies travel and tourism needs for transportation funds authorized for national forests, Indian reservations, and other public lands. Section 1007(a) sets aside $2.4 billion over six years for other "transportation enhancements," including bikeway/walkway facilities, scenic/historic easements, and landscaping and renovation of historic transportation buildings.(4)

Section 1047 establishes an $80-million, state-administered program for "scenic byways." The Montana DOT received a federal grant of $164,500 to assist in planning such a program within the state. A strategy aimed at developing a cross-border, internationally-significant tourism and recreation corridor in the region could focus the scenic byways system within this corridor and along major entry and exit routes to the corridor. Besides providing access to, from, and through the corridor, a well-designed scenic byways system would diffuse tourist traffic--a desirable objective for both environmental and economic reasons.

Sections 1302 and 8003 create a National Recreational Trails Program that's financed by non-highway recreational fuel use ($180 million over six years). Projects under this program must be identified through the Statewide Comprehensive Outdoor Recreation Plan required under the Federal Land and Water Conservation Fund.


As the internationalization process continues and the world becomes smaller, regions of important economic interchange become larger. In Montana, our regional marketplace is expanding, becoming potentially more vital and offering a broader range of economic opportunities. As mentioned earlier, one of the state's principal impediments to economic maturation and development has been its geographic isolation. This same obstacle has impeded the development of Alberta and other areas in the Rocky Mountain West. Aggressively pursuing cross-border trade and transportation opportunities might be the single most important thing regional policymakers could do to advance the region's economic future. This will require a carefully considered, regionally-based transportation strategy, that looks across the border in both directions and into the future.


1 For an earlier discussion of the Rocky Mountain trade corridor, see: Swanson, Larry, "The Potential Development of a Rocky Mountain Trade Corridor," Lethbridge conference proceedings, published by the Local Government Center, Montana State University, 1991.

2 "Trail of the Great Bear Study," prepared by Pannell Kerr Forster (in association with Carson McCulloch Associates Ltd., Dr. Brian Reeves, Cottonwood Consultants, and Dr. Charles Jonkel), Alberta Tourism & Travel Montana, November 1990. (Contact: Beth Russell, Trail of the Great Bear, Waterton, Alberta.)

3 "National Highway Policy Study for Canada: Steering Committee Report on Phase 2," Council of Ministers Responsible for Transportation and Highway Safety, November 1989.

4 For a discussion of ISTEA transportation initiatives and their potential application in Montana, see: Hansen, Paulette, "U.S. Transportation Law: Support for the RMTC," Proceedings of the Rocky Mountain Trade Summit, published by the Local Government Center, Montana State University, 1992.

5 The Center for the New West 6015 study team includes Barton-Aschman Associates and the Alliance for Transportation Research (Sandia and Los Alamos National Labs in New Mexico, New Mexico State University, and University of New Mexico) studying trade, traffic and transportation in the U.S.-Mexico border region, and the University of Montana and the Leeper, Cambridge and Campbell consulting firm of Alexandria, Virginia, studying trade and transportation in the western U.S.-Canada border region. Many individual subcontractors also are assisting in the study.

Larry Swanson is director of economic analysis, Bureau of Business and Economic Research, and associate professor, Management, The University of Montana, Missoula. He was assisted in this work by Neil Moisey, adjunct instructor, Management, who created the geographical materials.
COPYRIGHT 1993 University of Montana
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1993 Gale, Cengage Learning. All rights reserved.

Article Details
Printer friendly Cite/link Email Feedback
Title Annotation:Rocky Mountain States
Author:Swanson, Larry D.
Publication:Montana Business Quarterly
Date:Mar 22, 1993
Previous Article:Good news at last for Montana's economy?
Next Article:Health care issues among Montanans.

Related Articles
From Hamilton to Siberia: Montana log home business forms Russian partnership.
Alberta's peaceable school.
Chapter events.
Artsy business: integrating arts and culture with international trade.

Terms of use | Copyright © 2017 Farlex, Inc. | Feedback | For webmasters