Is Canada a Trading Nation?
A trading nation is basically a nation that makes up most of its gross domestic product. A country with a great trading nation has a high standard of living, good standard of health, and a standard of education that is above the norm. A trading nation also has a low inflation rate and low total tax burden. For example, if you are living in France, and you take out a loan from a French bank, the French government will not tax that money. This is how a nation forms a strong trading nation.
There are many ways to classify a nation as a good trading nation. One way is to look at the overall economic performance of the nation. For instance, Canada exports far more than it imports. Because Canada has so many resources, and because it has managed to become a solid middle-income country, Canada’s exports have always outperformed its imports. Also, Canada is continually building new ships, airports, and roads. This all adds up to a strong trading nation.
Another way to classify a trading nation is to look at the trading partners of that nation. In the case of Canada, its trading partners are the United States and China. Canada has had relatively successful relationships with the United States over the years, though China is no friend. In fact, in recent years, China has been seeking ways to expand its presence in the western hemisphere, most notably in Central America. And although the relationship with the United States isn’t quite as strong as it used to be, Canada has had relatively successful relationships with Mexico and with Germany, their two biggest trading partners in the western hemisphere. These relationships have helped to keep Canada in step with its neighbors and allowed it to continue to grow as an exporting nation.
In order for a nation to be classified as a trading nation, it must be able to export more than it imports. The last few years, Canada has been able to build up its exports to take it past even the United States, which has been the world’s largest exporter of goods and services over the last couple of decades. While Canada hasn’t been able to surpass the United States in overall exports, it has come close in some instances. For example, in recent years, Canada has surpassed the United States in both exported automobiles and in shipped goods in the construction sector.
Growth and success as a trading nation require the ability to expand our goods and services and to do so quickly. As a consequence, Canada is always trying to take advantage of new markets, even when its neighbors are reluctant to welcome new trade opportunities. For example, in the last ten years or so, Canada has been willing to open up its doors to the European Union. Though the United States was skeptical at first about welcoming a large new trading partner like Canada into the Global Marketplace, recent increases in trade have convinced both the United States and Canada that being a good friend means trading freely and not just with our neighbors.
As a result of these developments, Canadians have increasingly become a much sought after trading partner internationally. However, there are still many challenges that the Government of Canada has to face as it pursues increased trade. For example, most recently Canada has signed an agreement with South Korea, but the talks have yet to produce results. As a result, trade between Canada and South Korea has actually decreased over time. But because the Agreement was reached so quickly, there really isn’t a lot that the United States can do to stop it.