The Trading Nation – Trade and Foreign Trade
A trading nation is simply a nation where international trade constitutes a large portion of its Gross Domestic Product. In other words, if you trade with nations in the developing world, the trading nation becomes your trading partner, not that of your neighborhood. The rules of the game are not as simple as they are for trading with nations that already have advanced technological advances. Developed countries generally have lower gross domestic product than the emerging nations. To remain competitive in the global trading system, developed nations must lower their fees and reduce over-regulation to encourage trade.
The United Kingdom is one of the world’s most successful trading nations. It has been able to maintain a high level of competitiveness because of the foreign direct investment it receives. Most of the multinational banks in London are European based and the city houses the European Central Bank. Thus the services of the banking system in Britain are mostly European based.
A trading nation that has a centrally planned economy where money flows in and money flows out is the Swiss People’s Republic. The single market for Switzerland also acts as a protection for investors from offshore jurisdictions. While no special privileges are granted by the Swiss government to investors who place property in the country, capital gains tax is levied on anyone who does business in Switzerland. Thus, many wealthy investors have made investments in the Swiss government and have earned high returns on their investments.
One of the fastest growing trading nations in the world is Australia. However, it is an open market for both importers and exporters to bring in and sell goods. Australian exports are mainly agricultural products and the services that they provide are highly skilled and low priced. The main reason for Australia’s rapid rise in global prominence is its proximity to the largest ocean on earth – the Indian Ocean. Many commodities exporters from India and other eastern nations like China have set up their base in Australia.
China is the largest trading nation in the world and accounts for almost a quarter of the exports that are brought in by Australia. Exports to China account for almost 22 percent of the Australia’s total exports. While there are reports of Australian exports becoming scarce due to the falling prices of certain commodities in China, there has been an increase in the demand for Chinese imports. As a result, Australia has become China’s major buyer and has seen an increase in imports from China.
Despite China’s rising stature, there are still many challenges that the global economy faces. Australia is an open economy that allows both international trade and investment. The main reason for this is the open nature of the nation’s foreign trade. The main trading partner for Australia, the United States, has been trying hard to encourage economic globalization, but it has not been able to significantly improve its trading relationship with China. As long as Australia continues to maintain a free trade agreement with the United States and similar agreements with other trading nations, then there will be no need for any new trade barriers between the two nations.