CANADIAN TRADE PARTNERS2 Canadian Trade Partners International trade is described as the exchange of good and services across national boundaries. It is imperative to note that international trade is slowly decreasing. The trade barriers which are government-induced restrictions on trading on international levels are causing microeconomic distortions (Evenett & Fritz, 2015). With increased protective policies by different government international trading has become more restrictive hard to transact between nations. Protectionism imposes regulations on international trades for the proper functioning of the trade markets. Many argue that protectionism is beneficial since it increases macroeconomic gains such as stronger trade balance and increased jobs. The argument is based on the fact that trade barriers such as Tariffs reduce imports, increase net exports thus boosting the GDP (Ostry, 2019). However, the fact is that open, as well as competitive markets, maximize outputs since they direct resources more productively. The imposition of tariffs encourage smuggling as well as the conversion of trade to inefficient producers. Tariffs encourage smuggling. The consumers are losing more from the tariffs as compared to the gains by the producers hence the deadweight loss (Ostry, 2019). Furthermore, broad- based protectionism aggravates retaliation which increases costs in the market. Hard times lie ahead concerning Canada’s international trade. From the beginning of the year, Canada has had strained international relations with China. Based on these facts, Andrew Scheer believes that Canada should impose strong foreign policies that would be stronger, harder and tougher (The Star Editorial Board, 2019). This means moving towards a protectionism perspective which means reduced international trade since most traders, especially from China and Russia, would avoid Canadian markets.
CANADIAN TRADE PARTNERS3 References Evenett, S. J., & Fritz, J. (2015). The Tide Turns? Trade Protectionism, and Slowing Global Growth. The 18th GTA Report. Ostry, J. D. (2019). Why protectionism spells trouble for global economic growth. Retrieved May 10, 2019, fromhttps://www.weforum.org/agenda/2019/03/why-tariffs-spell- trouble-for-economic-growth/ The Star Editorial Board, (2019, May 07). Andrew Scheer says he'll be tougher, but it isn't clear how. Retrieved May 10, 2019, from https://www.thestar.com/opinion/editorials/2019/05/07/andrew-scheer-says-hell-be- tougher-but-it-isnt-clear-how.html