Trading nation

A trading nation (also known as a trade-dependent economy, or an export-oriented economy) is a country where international trade makes up a large percentage of its economy.

Smaller nations (by population) tend to be more trade-dependent than larger ones. In 2022, the most trade-dependent OECD member was Luxembourg, where international trade was worth 384% of GDP, while the least trade-dependent was the United States, where international trade made up 26% of GDP.

Free trade

Trading nations tend to favour free trade and economic integration, or at least seek market access for their products (they may also seek some form of protectionism for their own industries). The most desired markets to access are the largest ones.

In 2012, the Canadian news columnist Andrew Coyne described countries with free trade with both the European Union and the United States as a "select group" that includes Colombia, Israel, Jordan, Mexico, Morocco, and Peru. He described South Korea, Chile, and Singapore as "buccaneering free traders" and the only countries to rival Canada in "scale and scope of the trade agreements" that they had signed (roughly 75% of Canada's trade is tariff-free).

South Korea has a free trade agreement with the United States and India and is negotiating with China and the European Union. Chile has free trade agreements with the United States, the European Union, Japan, China and Mexico but not India or South Korea. Singapore has agreements with the United States, Japan, India, China, and South Korea and is in negotiations with the European Union. Coyne argued that if Canada successfully completed agreements with the EU, China, and India, around 90% of Canada's trade would be tariff-free, and it would then make sense to unilaterally abolish any remaining tariffs.