A trading nation is a nation where most domestic commerce makes up a high percentage of the gross domestic product. This means that almost every transaction you make and every money you spend in the nation, more than likely it will first make its way to some form of economic activity off of the nation’s shores. This is true of both import and export duties, tariffs, financial transactions, and any other similar things that are required for the nation to function properly and to be profitable. These things are typically collected by the U.S. Department of Treasury and distributed in order to benefit the nation as a whole.
When talking about a trading nation, this includes any nation that has a free trade agreement with other countries. The most popular and common of these agreements is the North American Free Trade Agreement (NAFTA). This brings together Canada, the United States, Mexico, and three other Latin American countries that all allow free trade between each other. While it doesn’t technically include China, the goods and services that come from China and other countries that are in the same area of the world as the US are, in fact, included in the NAFTA. Many economists believe that the numbers that are given in the statistics regarding the growth of exports, imports, and the deficit (how much the United States borrows from lending nations) are based on the data from this trading nation.
The second thing that we need to talk about when it comes to a trading nation, is international trade. In the past, international trade was pretty much strictly directed at enhancing trade with other countries. It was primarily designed to increase and strengthen relationships that the exporting nation had with the importing nation. Today, there seems to be a much bigger push towards outsourcing in international trade. This means that the United States is getting most of its exports from countries that are significantly poorer than us.
This means that while the United States is doing what it can to increase its overall share of the global economy, we are doing our best to decrease our share of the international trade pie. This is why China is considered such a threat. China has significantly more economic power than the United States, and in many regards, we are simply trying to catch up to that. There are many who think that we should mimic China and open our markets to foreign goods and services – the theory is that by doing this, the United States can increase its overall GDP and that in turn will create more jobs.
However, the problem with this theory is that we currently do not have an effective system for accepting the products that they send over to us. This means that the United States is in a position to lose out on a great deal of international trade whenever we try to implement a free trade agreement with China. If we were going to open our markets to Chinese goods, then we would have to have a very efficient system in place to actually allow those goods to enter into our markets. It is unlikely that there is anything like this currently in the United States, and even if there was, the advantages of opening up our markets to Chinese goods would be minimal.
Therefore, the best course of action for the United States is to continue to pursue free trade agreements with countries such as South Korea, Taiwan, India, and Vietnam, but to also develop our own internal system for allowing these exports to enter our markets. As we work to reduce our dependence on imported goods, we need to develop a system for importing these goods. For instance, the United States needs to develop a better way to allow trucks from Mexico to cross into the United States, as they currently have a huge trucking problem with drugs and illegal aliens. The best way to solve this problem is to allow trucks from Mexico to use an electronic track that will enable them to be traced, tracked, and inspected as they enter the country. Such a system would make it very hard for a drug lord to bring illegal drugs across the border, as their trucking companies would be constantly being checked as they entered the United States.