A trading nation (also known as a trade-dependent economy, or an export-oriented economy) is a country where
international trade
International trade is the exchange of capital, goods, and services across international borders or territories because there is a need or want of goods or services. (see: World economy)
In most countries, such trade represents a significant ...
makes up a large percentage of its economy.
Smaller nations (by population) tend to be more trade-dependent than larger ones. In 2008, the most trade-dependent
OECD
The Organisation for Economic Co-operation and Development (OECD; french: Organisation de coopération et de développement économiques, ''OCDE'') is an intergovernmental organisation with 38 member countries, founded in 1961 to stimulate e ...
member was
Luxembourg
Luxembourg ( ; lb, Lëtzebuerg ; french: link=no, Luxembourg; german: link=no, Luxemburg), officially the Grand Duchy of Luxembourg, ; french: link=no, Grand-Duché de Luxembourg ; german: link=no, Großherzogtum Luxemburg is a small lan ...
, where trade was worth 313.08% of
GDP
Gross domestic product (GDP) is a monetary measure of the market value of all the final goods and services produced and sold (not resold) in a specific time period by countries. Due to its complex and subjective nature this measure is ofte ...
, while the least trade-dependent was the
United States
The United States of America (U.S.A. or USA), commonly known as the United States (U.S. or US) or America, is a country primarily located in North America. It consists of 50 states, a federal district, five major unincorporated territori ...
, where trade made up 30.41% of GDP.
Free trade
Trading nations tend to favour
free trade
Free trade is a trade policy that does not restrict imports or exports. It can also be understood as the free market idea applied to international trade. In government, free trade is predominantly advocated by political parties that hold econ ...
and
economic integration
Economic integration is the unification of economic policies between different states, through the partial or full abolition of tariff and non-tariff restrictions on trade.
The trade-stimulation effects intended by means of economic integrati ...
, or at least seek
market access
In international trade, market access is a company's ability to enter a foreign market by selling its goods and services in another country. Market access is not the same as free trade, because market access is normally subject to conditions or req ...
for their products (they may also seek some form of
protectionism
Protectionism, sometimes referred to as trade protectionism, is the economic policy of restricting imports from other countries through methods such as tariffs on imported goods, import quotas, and a variety of other government regulatio ...
for their own industries). The most desired markets to access are the
largest ones.
In 2012, the Canadian news columnist
Andrew Coyne
James Andrew Coyne (born December 23, 1960) is a Canadian columnist with ''The Globe and Mail'' and a member of the ''At Issue'' panel on CBC's '' The National''. Previously, he has been national editor for ''Maclean's'' and a columnist with ''Na ...
described countries with free trade with both the
European Union
The European Union (EU) is a supranational political and economic union of member states that are located primarily in Europe. The union has a total area of and an estimated total population of about 447million. The EU has often been de ...
and the United States as a "select group" that includes
Colombia,
Israel
Israel (; he, יִשְׂרָאֵל, ; ar, إِسْرَائِيل, ), officially the State of Israel ( he, מְדִינַת יִשְׂרָאֵל, label=none, translit=Medīnat Yīsrāʾēl; ), is a country in Western Asia. It is situated ...
,
Jordan
Jordan ( ar, الأردن; tr. ' ), officially the Hashemite Kingdom of Jordan,; tr. ' is a country in Western Asia. It is situated at the crossroads of Asia, Africa, and Europe, within the Levant region, on the East Bank of the Jordan Rive ...
,
Mexico
Mexico (Spanish: México), officially the United Mexican States, is a country in the southern portion of North America. It is bordered to the north by the United States; to the south and west by the Pacific Ocean; to the southeast by Guatema ...
,
Morocco
Morocco (),, ) officially the Kingdom of Morocco, is the westernmost country in the Maghreb region of North Africa. It overlooks the Mediterranean Sea to the north and the Atlantic Ocean to the west, and has land borders with Algeria t ...
, and
Peru
, image_flag = Flag of Peru.svg
, image_coat = Escudo nacional del Perú.svg
, other_symbol = Great Seal of the State
, other_symbol_type = National seal
, national_motto = "Firm and Happy f ...
. He described
South Korea
South Korea, officially the Republic of Korea (ROK), is a country in East Asia, constituting the southern part of the Korean Peninsula and sharing a land border with North Korea. Its western border is formed by the Yellow Sea, while its eas ...
,
Chile
Chile, officially the Republic of Chile, is a country in the western part of South America. It is the southernmost country in the world, and the closest to Antarctica, occupying a long and narrow strip of land between the Andes to the east a ...
, and
Singapore
Singapore (), officially the Republic of Singapore, is a sovereign island country and city-state in maritime Southeast Asia. It lies about one degree of latitude () north of the equator, off the southern tip of the Malay Peninsula, bor ...
as "buccaneering free traders" and the only countries to rival
Canada
Canada is a country in North America. Its ten provinces and three territories extend from the Atlantic Ocean to the Pacific Ocean and northward into the Arctic Ocean, covering over , making it the world's second-largest country by tot ...
in "scale and scope of the trade agreements" that they had signed (roughly 75% of Canada's trade is tariff-free).
South Korea has a free trade agreement with the United States and India and is negotiating with
China and the European Union. Chile has free trade agreements with the United States, the European Union,
Japan, China and Mexico but not
India
India, officially the Republic of India (Hindi: ), is a country in South Asia. It is the seventh-largest country by area, the second-most populous country, and the most populous democracy in the world. Bounded by the Indian Ocean on the so ...
or South Korea. Singapore has agreements with the United States, Japan, India, China, and South Korea and is in negotiations with the European Union. Coyne argued that if Canada successfully completed agreements with the EU, China, and India, around 90% of Canada's trade would be tariff-free, and it would then make sense to unilaterally abolish any remaining tariffs.
Small countries or
city-states
A city-state is an independent sovereign city which serves as the center of political, economic, and cultural life over its contiguous territory. They have existed in many parts of the world since the dawn of history, including cities such as ...
that are extremely reliant on international trade are sometimes called
entrepôt
An ''entrepôt'' (; ) or transshipment port is a port, city, or trading post where merchandise may be imported, stored, or traded, usually to be exported again. Such cities often sprang up and such ports and trading posts often developed into c ...
s, which typically engaged in the
re-export
Re-exportation, also called entrepot trade, is a form of international trade in which a country exports goods which it previously imported without altering them. One such example could be when one member of a free trade agreement charges lower ...
of products produced elsewhere or finance and services (see
offshore financial centre
An offshore financial centre (OFC) is defined as a "country or jurisdiction that provides financial services to nonresidents on a scale that is incommensurate with the size and the financing of its domestic economy."
"Offshore" does not refer ...
). Modern examples include
Hong Kong
Hong Kong ( (US) or (UK); , ), officially the Hong Kong Special Administrative Region of the People's Republic of China (abbr. Hong Kong SAR or HKSAR), is a city and special administrative region of China on the eastern Pearl River Delta i ...
,
Singapore
Singapore (), officially the Republic of Singapore, is a sovereign island country and city-state in maritime Southeast Asia. It lies about one degree of latitude () north of the equator, off the southern tip of the Malay Peninsula, bor ...
, and
Dubai
Dubai (, ; ar, دبي, translit=Dubayy, , ) is the most populous city in the United Arab Emirates (UAE) and the capital of the Emirate of Dubai, the most populated of the 7 emirates of the United Arab Emirates.The Government and Politics of ...
.
Both developed and developing countries rely on trade. Many developing nations pursue a policy of
export-oriented industrialization
Export-oriented industrialization (EOI) sometimes called export substitution industrialization (ESI), export led industrialization (ELI) or export-led growth is a trade and economic policy aiming to speed up the industrialization process of a ...
, which they hope will lead to
export-led growth.
Types
There are three types of exporting economies:
commodity exporters, manufacturing exporters, and services exporters. Most countries, however, do not fall purely in one category.
Commodity exporters include countries with large deposits of
natural resource
Natural resources are resources that are drawn from nature and used with few modifications. This includes the sources of valued characteristics such as commercial and industrial use, aesthetic value, scientific interest and cultural value. ...
s or large amounts of
farmland
Agricultural land is typically land ''devoted to'' agriculture, the systematic and controlled use of other forms of lifeparticularly the rearing of livestock and production of cropsto produce food for humans. It is generally synonymous with bo ...
, with populations too small to use all their own resources. The trade of many commodity exporters is dominated by a single commodity. Most
least developed countries are reliant on agricultural exports. A 1998 statistical review by the
Food and Agriculture Organization
The Food and Agriculture Organization of the United Nations (FAO)french: link=no, Organisation des Nations unies pour l'alimentation et l'agriculture; it, Organizzazione delle Nazioni Unite per l'Alimentazione e l'Agricoltura is an intern ...
showed that 32 developing countries relied on a single commodity for more than half of their agricultural export earnings. Agricultural exporters are generally members of the
Cairns Group
The Cairns Group (Cairns Group of Fair Trading Nations) is an interest group of 19 agricultural exporting countries, composed of Argentina, Australia, Brazil, Canada, Chile, Colombia, Costa Rica, Guatemala, Indonesia, Malaysia, New Zealand, Pakist ...
, a coalition of 19 countries that
lobby
Lobby may refer to:
* Lobby (room), an entranceway or foyer in a building
* Lobbying, the action or the group used to influence a viewpoint to politicians
:* Lobbying in the United States, specific to the United States
* Lobby (food), a thick stew ...
for more market access.
Fossil fuel exporters Petroleum, natural gas, and coal are exported from various source countries to countries reliant on these fossil fuels.
Petroleum
This is a list of countries by oil exports mostly based on The World Factbook:
Natural gas
This is a list of cou ...
, such the
OPEC countries, are an important and influential subset of commodity exporters.
Manufacturing exporters include many
densely populated
Population density (in agriculture: standing stock or plant density) is a measurement of population per unit land area. It is mostly applied to humans, but sometimes to other living organisms too. It is a key geographical term.Matt RosenberPopul ...
countries where human labour is the most important resource. They include wealthy countries such as Germany and Japan, as well as developing nations like China and India.
Services-exporting countries include hubs of international
finance,
tourism
Tourism is travel for pleasure or business; also the theory and practice of touring, the business of attracting, accommodating, and entertaining tourists, and the business of operating tours. The World Tourism Organization defines tourism mor ...
,
healthcare, and
education
Education is a purposeful activity directed at achieving certain aims, such as transmitting knowledge or fostering skills and character traits. These aims may include the development of understanding, rationality, kindness, and honesty ...
. Many
highly developed countries export services.
Some countries export all of commodities, manufactures, and services. For example,
Canada
Canada is a country in North America. Its ten provinces and three territories extend from the Atlantic Ocean to the Pacific Ocean and northward into the Arctic Ocean, covering over , making it the world's second-largest country by tot ...
is regularly described as a trading nation as its total trade is worth more than two-thirds of its GDP (the second highest level in the
G7 after
Germany
Germany,, officially the Federal Republic of Germany, is a country in Central Europe. It is the second most populous country in Europe after Russia, and the most populous member state of the European Union. Germany is situated betwe ...
),
which includes all sectors of the economy.
See also
*
List of countries by total trade
*
List of countries by exports per capita
This is a list of countries by exports of goods and services per capita. Unless otherwise stated, all data is based on the information in the Economic Complexity Index.
References
Notes
{{DEFAULTSORT:Exports Per Capita
Lists of co ...
*
List of countries by exports
List of countries by merchandise exports
''The table initially ranks each country or territory with their latest available merchandise or goods export values, and can be reranked (sort by ascending or descending) by any of the sources.''
No ...
and
List of countries by imports
This is a list of countries by total imports, based on the International Trade Centre except for the European Union.
See also
* List of countries by exports
* List of countries by leading trade partners
* List of U.S. states and territo ...
References
External links
Evolution of the world's 25 top trading nations-
United Nations Conference on Trade and Development
The United Nations Conference on Trade and Development (UNCTAD) is an intergovernmental organization within the United Nations Secretariat that promotes the interests of developing countries in world trade. It was established in 1964 by the ...
{{DEFAULTSORT:Trading Nation
International trade