Export-oriented economy

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 2008, the most trade-dependent OECD member was Luxembourg, where trade was worth 313.08% of GDP, while the least trade-dependent was the United States, where trade made up 30.41% of GDP.

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 Canadian news columnist Andrew Coyne described countries with free trade with both the EU 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 that rivaled 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 EU, Japan, China and Mexico—but not with India or Korea. Singapore has agreements with the United States, Japan, India, China, and Korea—and is in negotiations with the European Union. Coyne argued that if Canada is able to successfully complete agreements with the EU, China, and India, around 90% of Canada's trade would be tariff-free, at which point it would make sense to unilaterally abolish any remaining tariffs.

Small countries or city-states that are extremely reliant on international trade are sometimes called entrepôts, which typically engaged in the re-export of products produced elsewhere, or finance and services (see offshore financial centre). Modern-day examples include Hong Kong, Singapore, and Dubai.

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