> economist think international trade is economically beneficial for both participants. > trade can make everyone better off (comparative advantage) > the canadian economy is one of the most open in the world, lots of imports and exports and financial exchanges. Canada depends on the us as a trade partner (75% of our exports go there) > trade flows have increased drastically as a percentage of gdp over past 40 years. > a strong increasing trend in the incidence of foreign trade net exports = trade balance. > theres lots of trades in assets and financial capital (bonds,stocks ) Net capital outflow (nco) = purchase of foreign assets by domestic residents minus the purchase of domestic assets by foreigners. +"ve = financial capital flows out, country invests outside more than the world invests in it. > we are buying up their securities more than they are buying ours.