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Welfare effects of economic integration are often studied with aggregate data, and as such provide limited insights about the effects of trade pacts to individual economic agents in the free trade area. In this study a three-digit disaggregated commodity/industry data grouped under the Standard International Trade Classification is used to empirically assess the economic benefits of the North American Free Trade Agreement (NAFTA). Import demand elasticities from a dynamic demand model were used to estimate both trade creation and trade diversion effects of removing all tariff barriers from among NAFTA countries — US, Canada and Mexico. Results show that US imports of crude oil and petroleum products from Canada and most US imports from Mexico are more sensitive to domestic prices than to bilateral import prices. Further, results indicate that US will benefit the most from the initial trade effects of NAFTA …