International Business and the Tradeducing of Canada’s Export Edge
A trading nation, also known as a trading hub, is a nation where international commerce makes up a big percentage of its Gross Domestic Product. The United States of America, Canada, Mexico, Japan, and South Korea are just a few nations that have a trading hub status. Many nations with a high trading interest are beginning to look at the advantages of a trading nation status. The United States of America is currently working on ways to increase our share of the global trade pie. Currently, the United States has about forty percent of the world’s total GDP.
There are many reasons why a trading nation would want to increase its exports. One reason would be to take advantage of cheaper imported goods. Another reason would be to take advantage of higher foreign investment. Some nations have an interest in importing goods in order to increase their own production capabilities. Canada is an example of such a nation.
Canada is one of the largest exporting countries in the world. Right now, it has a ten-year trade deficit with the United States, though this can change depending on how things turn out between these two countries. If Canada wants to increase its international trade share and get more business from the United States, then it must increase its exports. While this might sound like a good idea, another important issue is the way in which this would affect international trade.
Right now, about sixty-five percent of all goods sold between the United States and Canada come from the United States. China is the second largest trading nation in the world, and it accounts for about twenty-five percent of all goods sold between the two nations. China does not have a huge surplus when it comes to its exported goods. As a matter of fact, China is importing so much because it needs to make up for the goods that it has bought in the past. China’s main focus right now is to make its own domestically produced goods, which means that its imports will always be balanced.
On the other hand, Canada has an obvious surplus, because it purchases so much from the United States. By allowing more goods to come into the country, Canada is helping itself out with its international trade problems. By increasing its imports from the United States, Canada will become more competitive with other countries and eventually have a surplus that it can use to either buy more American goods or just help itself out of the trade deficit. This is something that the United States has been working very hard to accomplish lately.
The fact of the matter is that a trading nation like Canada, which relies so much on exports, must increase its imports if it wants to stay competitive. As long as it continues to have a low import price and keeps dumping its products, there will be no increase in its exports. Instead of getting richer through international trade, Canadians will start getting poorer because they will be importing far more from the United States than they are exporting to it. For a trading nation, that is a very dangerous path to take. Indeed, I hope you will please consider all this.