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ECON 488 UIU Canada Is Well Known for Its Rice Production Discussion Responses



I chose to research the imports and exports of distilled liquors. This would include alcohol such as whiskey, rum, vodka and tequila. I was surprised to see the United Kingdom was our largest source of imported liquors, coming in at $1,867,711,871. Number two was Mexico which was pretty close at $1.85 billion. I figured Ireland and Canada would have been quite high on the list with there being a big fan base of whiskeys and brandy. However they were both considerably less with imports of $793 million and $426 million respectively. Canada was our biggest export at just a little over $203 million, which is far less than our largest import. I suppose this could mean American’s like their alcohol.

A comparative advantage in the case of international trade is when one country can produce something more efficiently than another country. Consider the United State’s ideal farmland for growing soybeans and corn. Some other country’s do not have the climate or the land necessary for growing these crops. China for example imports a large amount of US soybeans because we have a comparative advantage over them on this product. Considering China’s demand for soybeans has quadrupled in the last two decades this advantage should continue to be a good one (Jiang, Hui). Both countries do benefit when goods are trade. The exporter receives payment for the goods while the importer receives a good they might otherwise not be able to provide their population.

There are a number of reasons a country might export and also import the same product. One reason could be due to seasonal differences. While the US might be in the middle of winter, on the other side of the world it might be prime growing/harvesting season and we might need to import things such as fresh fruit and vegetables. There are also variations in products that would cause countries to import and export the same products. Going back to my liquor example, we can obviously produce our own whiskeys and tequilas but there is a demand for the liquors that other countries produce. I think bilateral trade of the same good still fits within the concept of comparative advantage. A country can still hold a comparative advantage over another country even if it imports some of those same products.

Jiang, Hui. (September 29, 2020). “China: Evolving Demand in the World’s Largest Agricultural Import Market”.

I found out that China the number one source for glass and glass products that were imported to America. America had imported over $2 billion in glass and glass products from China. Mexico was another high number of being imported to America with over $1 billion. When thinking of countries that would a high number of imported glass and glass products, I would have thought it would be areas that have tons of sand that would be a higher number.

Comparative advantage is when a country is able to produce a good has its opportunity cost of producing is lower than within other countries. Comparative advantage can lead trade to between countries because there could be a benefit for each country. One country could have a comparative advantage in a good that another country does not. The countries could come to an agreement to trade for those goods. Only one country would really get benefits when trading goods with comparative advantage. Countries would have to think about their workers and their wages when trying to get ahead of having a comparative advantage. America both imports and export with the countries because it depends on productivity relative within the foreign industry but also with the domestic wage it has on the foreign wage (Krugmen, Obstfeld, Melitz, 2018). America exports over $350 million in China and over $540 million in Mexico, they do this because of productivity relative to wages over the different countries they trade with glass and glass products. Bilateral trade does fit with the idea because countries could decide to make a trade agreement for those products.


Krugman, P. R., Obstfeld, M., & Melitz, M. (2018). International economics: theory and policy. Pearson


The products I picked is rice. I found out that Mexico was the number one exporter of Rice in 2019. They exported over $226 million in 2019. Mexico is considered the largest export market for rice for the United States of America. Canada on the other hand is the number one importer for rice into the United States of America. The USA imported over a $100 thousand in Rice from Canada. I would have never thought that most of the rice in the United States was imported from Canada. I usually think it’s from some country in Asia. The United States did have some imports from China, India, and south Korea. I honestly wasn’t expecting Canada to be the number source for Rice imports.

Comparative advantage is where the cost of producing a good in a country that is lower than the cost in other countries. With comparative advantage, a country will engage in an export trade where they will export goods that they have a comparative advantage in. The textbook gives a perfect example of how both parties can benefit when they trade goods. One country produces for the other country what they have comparative advantage in and vice versa. So yes, both countries can benefit when they trade Goods. “Trade between two countries can benefit both countries if each country exports the goods in which it has a comparative advantage”. (Krugman et al.) The reason why the U.S. both import and export products with countries is so they can minimize their transportation cost. Bilateral trade is where two countries exchange goods while promoting trade and investment. Bilateral trade is a good fit with the idea of comparative advantage in the sense that countries are to come to an agreement concerning a trade.


Krugman, P. R., Obstfeld, M., & Melitz, M. (2018). International economics: theory and policy. Pearson.


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