What Does a Trading Nation Mean?
A trading nation is a nation in which foreign trade constitutes a high percentage of its gross domestic product. A trading nation also freely acts as a market and has a stable economy. A trading nation’s currency is easily convertible into other nations’ currencies. A trading nation may not have a balanced budget. Trading nations may not be able to provide any form of public services such as health care or education. A trading nation is often a nation in which a large amount of wealth is generated by companies doing business offshore.
Canada is one such nation. In fact, Canada is so far the largest importer and exporter of goods in the entire world. It is estimated that over three hundred and fifty thousand car exports and imports are made from Canada every year. So it is not surprising that the Canadian Government is making efforts to encourage international trade and to reduce the volume of manufactured imports and exports to low-income countries such as the ones in the third world.
One of the most important objectives of the government of Canada is to promote international trade. The Minister of International Trade recently announced that he was going to increase the amount of manufacturing in developing countries such as India and China. He did this in order to create more jobs for Canada’s middle class. Canada has a free trade agreement with the European Union. Although it is not a member of the European Union, it is free to purchase European goods when visiting Europe.
The main reason behind this announcement by the minister of international trade is to improve the internal development of Canada as a trading nation. If Canada wants to increase its exports and reduce its imports, it will have to start opening up its borders to other countries. Currently it only has trading agreements with New Zealand, Mexico, and Australia. These four countries constitute almost ninety percent of Canada’s total exports and imports.
The United States has been Canada’s largest trading partner in recent years. The US has been promoting free trade around the world and has been doing this on an international scale with the European Union. Recently the European Union expanded its free trade area to include all of Asia and Australia. All these changes will greatly help Canada as it attempts to become a more open and welcoming country for international trade. If the United States and its president elect Obama, the United States will start looking to strengthen its ties with the rest of the world including Canada.
Another advantage that can be garnered from a closer trading relationship with Canada is that Canada is a major exporter of oil. Oil is a commodity that is very high value in comparison to other commodities. The price of crude oil is constantly fluctuating. If Canada were to begin trading with the United States or vice-versa, the two countries could form a formidable trading alliance that could offer much-needed assistance to Canadian businesses that are currently trying to increase their sales in the United States. By trading with the United States, Canada would also be able to lessen its dependence on the United States for its natural resources and reduce its dependence on the United States dollar. A closer trading relationship with the United States would allow Canada to receive much needed foreign money which could help stimulate the economy in Canada.