In this paper, a novel distributed dynamic traffic engineering (Dynamic TE) mechanism is proposed. The mechanism periodically updates bandwidth reservation and selects the optimum path (resizing and rerouting) for each TE-LSP according to its computed traffic load, leading to path reoptimization and better network utilization. Different resizing policies are investigated and their effect on QoS is analyzed. Detailed performance analysis is then undertaken using simulations on conditions similar to an international transit network. A mixed load of voice and data traffic originating in different timezones is used on a realistic network where all the links have an independent probability of failure. The simulation results show significant performance improvement using Dynamic TE for several metrics of interest and give insight into several scenarios that could benefit from its deployment.