Analysis of Canadian Trade Partners: Trade Policies and Impacts

This report analyzes Canadian trade partners, focusing on the impact of trade policies and international trade dynamics. The report begins by defining international trade and highlighting the current trend of decreasing international trade due to protectionist policies and trade barriers like tariffs. It then explores the implications of these policies, including microeconomic distortions and the potential for increased costs due to retaliation. The report examines the Canadian context, mentioning strained international relations and the perspective of imposing strong foreign policies. It cites relevant sources and concludes by emphasizing the challenges facing Canadian international trade in the current global environment. The report uses the views of various authors to justify the claims made.

Running head: CANADIAN TRADE PARTNERS 1
Canadian Trade Partners
Student’s Name
Institutional Affiliation

CANADIAN TRADE PARTNERS 2
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 PARTNERS 3
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, from https://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