The Role of International Trade in Economic Growth of...

INTRODUCTION International trade plays a significant role in the economic growth of countries. It gives a country an opportunity to specialize in products and services that can be produced at a low cost compared to other nations, that is a comparative advantage. However gains from international trade is uneven between countries due to several country specific factors. These factors are complex and multidimensional; and include GDP, distance between countries, culture, population, import and export capacities etc. For example, the United States is a major trade partner with Canada. In fact both countries have the largest trade relationship in the world. This perhaps is driven majorly by the close proximity of the two nations. However Canada is at a crossroad in her international trade policy. For over a decade and half the Canadian economy has become more integrated with that of her neighbor the US more than ever; fostered by Canada-U.S. Free Trade Agreement (CUSTA) and the North American Free Trade Agreement (NAFTA). Calls for Canadian firms to look beyond North America has dominated commentary lately due to fear trade over dependency with the United States. Thus, the policy questions to ask are: Should the status quo remain and continue with the United States; or should Canada extend market diversify on a regional basis; or go after market diversification with other regions of the world? These calls was triggered in part amongst others by the trade collapseShow MoreRelatedThe Impact Of International Trade On The Development Process Of A Developing Economy1469 Words   |  6 PagesThe importance of international trade in the world has been widely studied and also examines the role of international trade in the various issues. 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