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The Importance Of Trade Globally Canada In The Global Economy

2157 words - 9 pages

Contents

1. Introduction. 3

2. The importance of trade globally. 4-5

3. Gains from international trade in Canada.

• Trade and specialization. 6

• Trade domestic competition. 7-8

• Trade and productivity in Canada. 8-9

• Trade and prosperity in Canada. 9-10

• Trade and wages. ...view middle of the document...

700.000.

The importance of trade globally –
Canada in the global economy

In recent years, international trade has been developed rapidly. At the same time, due to developments in international trade, the global economy has changed enormously. The barriers to exports and imports among the countries have been declined significantly, technology has been progressed, transfers have been improved and now communications in the trade carried on an international scale.

Nowadays firms not only export their products around the world but create global value chains during their transport. This means that create partnerships with suppliers, distributors and other merchants and all of these have resulted in the continuing growth of world trade.

In addition, more and more economically very strong countries enter the international markets. China and Russia are just only two examples of the countries that have successfully entered the global competition. This situation naturally favors and Canadian companies, which monitor these developments in the world trade. Canada has significantly developed its commercial activities in recent years and industrialized countries such as China and Russia compete Canada for its market share and the value chains that have created globally.

Specifically for Canada trade has many benefits. Through trade have been created many vacancies and have been strengthened the existing ones. Also through trade Canadians have the opportunity to export their products taking as an exchange other goods they need. Canada exports its products at higher prices than that they would be sold in its domestic markets. This lowers the cost of the production of the products and its final price for the consumers. Businesses tend to produce products that have a competitive advantage and in this way they increase their productivity, increase the prosperity of the country and thus there is an increase in exports.

Canada is a small economy that uses only a small part of its production and exports the rest. Imports of the country are also numerous. Mobile phones, coffee and tea are only few examples of the goods imported. Characteristic example is the cars, of which approximately one third are manufactured abroad.

However, although imports do allow Canadians to choose from a wide variety of products, they also offer many other advantages in the domestic economy. First and foremost, they give a variety of inputs to the producers with which they could process and become more competitive. Moreover, they create jobs in both retail and wholesale sales. While jobs are offered in the banking sector too, where the transfer of payments and the exchange of currencies are very common procedures.

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