9.1.1 A Trading Nation

Trade has shaped Canada from the very beginning. Buying and selling with other countries is what drives the economy forward. Canadians could not keep their present standard of living if the country stopped trading abroad. Commerce is the engine behind growth. That is why trade agreements and good relations with partner countries matter so much. Canada sells goods and services to the world, and buys from the world in return. This exchange touches almost every industry and almost every region of the country.

Canada brought in free trade with the United States in 1988. Mexico joined the arrangement in 1994, and the three countries together formed the North American Free Trade Agreement, usually called NAFTA. This created one very large market across the continent. In 2008 that market held more than 444 million people, and merchandise trade inside it passed $1 trillion. Free trade means goods can move between the member countries with fewer barriers and fewer costs. NAFTA made North America one of the biggest trading blocs anywhere.

Canada's economy ranks among the ten biggest on earth. In 2012, Canada was a member of the G8, a club of leading industrialized nations. Its partners in that group were the United States, the United Kingdom, France, Germany, Italy, Japan and Russia. Belonging to such a group shows how large and how developed the Canadian economy is. It also gives Canada a place at the table when the world's major economic questions are discussed by the biggest industrial powers.