Comparative Advantage- a country should produce and sell to other countries those products that it produces most efficiently and effectively or vice versa. This theory causes international trade to evolve exponentially over the past century. .
Canada had identified itself as one of the top suppliers of lumber products, wheat, and numerous of seafood. A capital intensive country with a vast amount of natural resources creates many trade opportunities for Canada. In year 2000, Canada's exports are 32 billions more than imports which mean more money will flow into the country. In effect, Canadians are spending more, making the standards of living higher. This is one of the reason Canada has one of the highest standard of living in the world. Further more, exports are critical to Canada. One out of every three jobs in Canada is export-dependent. Trades bring better quality and quantities to products. More over it allow easier access when Canada needed outside help. For example if a storm passes through Canada's farmland and a few major crops are in short, they can simply import those crops from Mexico and U.S.
Comparative Advantage also brings disadvantages to Canada's trading. With most Canadian export are based on primary industries, some of the natural resources such as oil, minerals will eventually run out. As for fishery and lumber, they will decrease if the method of cutting and capturing are not use properly. Also with Canada's export mainly being resources-based, it creates an off balance where less secondary industries or manufacturing industries. In other words, skilled Canadian workers will leave the country since the country can't provide job opportunities. Over 80% of our exports are done with the U.S, by being so dependent on our major trading partner. Any conflicts with the U.S may cause an economic slow down. Also it creates a situation where U.S economy influences Canada economy directly.
