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The United States of America

The United States of America

The United States of America remains the most significant country in the world when dealing with international trade. This is because, for decades, the nation has been leading in the number of imports while at the same time remaining as one of the top three world exporters. As the main epicenter of global trade, the United States enjoys advantage that most of the other countries do not enjoy. First, since the United States is the world’s leading consumer, it automatically qualifies as the number one customer for global companies. Canada, on the other hand, does not have major business across the world, but majorly trades with the United States, United Kingdom and Japan as its major international trading partners. This position allows the United States to leap more benefits from the international trade than Canada.

One major advantage of international trade that the United States enjoys over Canada is its ability to export not just physical products, but services as well. Exports of services from the United States are booming and it surpassed $500 billion in 2010. This led to the nation having a surplus of more than $ 100 million in 2010 according to statistics from the U.s department of commerce. Currently, the United States is the single largest exporter of services and the service industries are very competitive globally. These service industries include express delivery, telecommunication and insurance and they profit enormously from the opportunities abroad.

Canada, on the hand, specializes on the export of products, which range from machinery and equipment, to automobiles and other consumers goods comprising of 46% of the total exports and products based on its natural resources like energy, agriculture, forestry, fishing and mining, which make up the remaining 54% of the exports. This means that the country misses the opportunities available from the servie industry. Its reliance on the natural resources is also disadvantageous from to the nation since some of the resources are not renewable. This means that if the nation does not diversify its exporting to other services, then the imports are likely to continue escalating while exports diminish with time.

The other advantage that the United States enjoys over Canada is that the latter relies heavily on United States as its main market. The United States purchases approximately 82% of the Canadian export merchandise and supplies more than 76% of all Canadian imports and it’s thus, Canada’s most significant trading partner. Reliance on United States as the main market started over 100years back. This means that the United States enjoys the benefit of dictating the terms of business for their benefit. A volatile market in the US would, therefore, greatly affect trade balances in Canada. The United States, on other hand, has market all over the world and does not rely on Canada in any way. While the market in Canada becomes volatile, the United States does not suffer since it has a diversified market all over the globe.

America cannot grow its economy or raise the wages and incomes of its citizens without reaching beyond its borders and sell its products and services to over 95% of the global population living outside the United States. Exports support thousands and thousands of American jobs with more than 50 million citizens working for companies that engage in international trade. The United States started its international trade centuries ago and established companies all around the world. This makes it very easy for the country to export products to other countries and easily distribute the goods and services. The manufacturing industry is the strongest exporter in the United States and enjoys the benefits of technological developments, which ensures that US companies produce nothing butt quality goods and services. It then uses its available multinational companies located all around the globe to distribute these goods and services.  

Canada, on the other hand, has been experiencing challenges in providing value for products and delivering of goods and services to other nations. Canada does not have many multinational companies through which it can distribute and deliver goods and services on its behalf making it to miss the entire world market share. Moreover, the nation has to compete with nations that have already established contacts and markets around the world, which makes exports from Canada more expensive than products from the United States.

It is important to note that the United States continues to enjoy benefits of international trade largely that Canada. This can be attributed to the fact the united states has improved technological advances which ensures efficiency in production and thus reduced prices on its commodities. This means that America’s products remain competitive in the market as compared to Canadian products, whose products are still costly because of inefficiency in production. In addition, unites states has a wider market all across the world while Canada mainly depends on the united states for markets of its exports. This makes it vulnerable to market volatility of the United States market. The united states have also diversified its exports to services, which is currently fetching a lot of income for the country. Canada, on the other hand, mainly depends on physical products as the only source of their exports. These exports are mainly from natural resources, which are prone to depletion. This means that if Canada does not diversify its export portfolio to service exports, then it will soon become a net importer rather than a net exporter. This will further benefit the United States, which supplies more than 76% of Canadian imports.



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