Trading nation
Encyclopedia
A trading nation is a country where international trade
makes up a large percentage of the total economy. Trading nations also tend to favour free-trade policies, or at least seek market access
for their products.
To some extent all countries rely on trade
, but the importance of trade varies substantially between countries. In 2008, the most trade-dependent OECD member was Luxembourg
, where trade was worth 313.08% of GDP, while the least trade-dependent was the United States
, where trade made up 30.41% of GDP.
Both developed and developing countries may rely on trade. Many developing nations pursue a policy of export-oriented industrialization
, which they hope will lead to export-led growth
. Roughly speaking, there are three types of exporting economies: commodity exporters, manufacturing exporters, and services exporters, although most countries are not purely one or the other.
Commodity exporters include countries with large deposits of natural resource
s or large amounts of farmland
, 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 FAO
showed that 32 developing countries were relied on a single commodity for more than half of their agricultural export earnings. Agricultural exporters are generally members of the Cairns Group
which lobbies for more market access. Fossil fuel exporters
, such the OPEC
countries, are a important and influential, sub-set of the commodity exporters group.
Manufacturing exporters include many densely populated 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.
Services exporting countries include hubs of international finance
, tourism
, healthcare, education
, and so on. Many highly developed countries
export services.
Some countries export all of commodities, manufactures, and services. For example, Canada
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
), which includes all sectors of the economy.
International trade
International trade is the exchange of capital, goods, and services across international borders or territories. In most countries, such trade represents a significant share of gross domestic product...
makes up a large percentage of the total economy. Trading nations also tend to favour free-trade policies, or at least seek market access
Market access
Market access for goods in the WTO means the conditions, tariff and non-tariff measures, agreed by members for the entry of specific goods into their markets. Tariff commitments for goods are set out in each member's schedules of concessions on goods. The schedules represent commitments not to...
for their products.
To some extent all countries rely on trade
Interdependence
Interdependence is a relation between its members such that each is mutually dependent on the others. This concept differs from a simple dependence relation, which implies that one member of the relationship can function or survive apart from the other....
, but the importance of trade varies substantially between countries. In 2008, the most trade-dependent OECD member was Luxembourg
Luxembourg
Luxembourg , officially the Grand Duchy of Luxembourg , is a landlocked country in western Europe, bordered by Belgium, France, and Germany. It has two principal regions: the Oesling in the North as part of the Ardennes massif, and the Gutland in the south...
, where trade was worth 313.08% of GDP, while the least trade-dependent was the United States
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
, where trade made up 30.41% of GDP.
Both developed and developing countries may rely on trade. Many developing nations pursue a policy of export-oriented industrialization
Export-oriented industrialization
Export-oriented Industrialization sometimes called export substitution industrialization or export led industrialization is a trade and economic policy aiming to speed up the industrialization process of a country by exporting goods for which the nation has a comparative advantage...
, which they hope will lead to export-led growth
Export-led growth
Export-led growth is an economic strategy used by some developing countries. This strategy seeks to find a niche in the world economy for a certain type of export. Industries producing this export may receive governmental subsidies and better access to the local markets...
. Roughly speaking, there are three types of exporting economies: commodity exporters, manufacturing exporters, and services exporters, although most countries are not purely one or the other.
Commodity exporters include countries with large deposits of natural resource
Natural resource
Natural resources occur naturally within environments that exist relatively undisturbed by mankind, in a natural form. A natural resource is often characterized by amounts of biodiversity and geodiversity existent in various ecosystems....
s or large amounts of farmland
Arable land
In geography and agriculture, arable land is land that can be used for growing crops. It includes all land under temporary crops , temporary meadows for mowing or pasture, land under market and kitchen gardens and land temporarily fallow...
, 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 FAO
Fão
Fão is a town in Esposende Municipality in Portugal....
showed that 32 developing countries were relied on a single commodity for more than half of their agricultural export earnings. Agricultural exporters are generally members of the Cairns Group
Cairns Group
The Cairns Group is an interest group of 19 agricultural exporting countries, composed of Argentina, Australia, Bolivia, Brazil, Canada, Chile, Colombia, Costa Rica, Guatemala, Indonesia, Malaysia, New Zealand, Pakistan, Paraguay, Peru, the Philippines, South Africa, Thailand, and Uruguay.-History...
which lobbies for more market access. Fossil fuel exporters
Fossil fuel exporters
Petroleum, natural gas, and coal are exported from various source countries to countries reliant on these fossil fuels.-Petroleum:Saudi Arabia is the largest exporter of petroleum in the world....
, such the OPEC
OPEC
OPEC is an intergovernmental organization of twelve developing countries made up of Algeria, Angola, Ecuador, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, the United Arab Emirates, and Venezuela. OPEC has maintained its headquarters in Vienna since 1965, and hosts regular meetings...
countries, are a important and influential, sub-set of the commodity exporters group.
Manufacturing exporters include many densely populated 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.
Services exporting countries include hubs of international finance
Finance
"Finance" is often defined simply as the management of money or “funds” management Modern finance, however, is a family of business activity that includes the origination, marketing, and management of cash and money surrogates through a variety of capital accounts, instruments, and markets created...
, tourism
Tourism
Tourism is travel for recreational, leisure or business purposes. The World Tourism Organization defines tourists as people "traveling to and staying in places outside their usual environment for not more than one consecutive year for leisure, business and other purposes".Tourism has become a...
, healthcare, education
Education
Education in its broadest, general sense is the means through which the aims and habits of a group of people lives on from one generation to the next. Generally, it occurs through any experience that has a formative effect on the way one thinks, feels, or acts...
, and so on. Many highly developed countries
Developed country
A developed country is a country that has a high level of development according to some criteria. Which criteria, and which countries are classified as being developed, is a contentious issue...
export services.
Some countries export all of commodities, manufactures, and services. For example, Canada
Canada
Canada is a North American country consisting of ten provinces and three territories. Located in the northern part of the continent, it extends from the Atlantic Ocean in the east to the Pacific Ocean in the west, and northward into the Arctic Ocean...
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
Germany , officially the Federal Republic of Germany , is a federal parliamentary republic in Europe. The country consists of 16 states while the capital and largest city is Berlin. Germany covers an area of 357,021 km2 and has a largely temperate seasonal climate...
), which includes all sectors of the economy.
See also
- List of countries by total trade
- List of countries by exports per capita
- List of countries by exports and List of countries by imports