Do national borders matter for Quebec's trade?

Using a gravity model of 1988-90 merchandise trade flows among Canadian provinces and between Canadian provinces and U.S. states, this paper, building on earlier work by McCallum, shows that Quebec trades twenty times more with other provinces than it does with U.S. states of similar size and distance. Comparison with survey evidence shows that these internal trade linkages are far stronger than previously was thought. The possible implications for Quebec separation, and for international economics, are considerable. If more broadly confirmed, the results imply that the fabric of national economies is far tighter than that of the global trading system, even for countries operating without substantial trade barriers.