These firms are scattered around the region geographically, but they are all interconnected. The interconnectedness of firms in this industry can be seen through the ways in which they interact and support one another. In the export markets, the trade industry supports the resource extraction industries that are the backbone of the regional economy. Goods coming into port are cleared through customs by brokers, and shipped to the rest of Canada and to the U.S. via trucks and trains. For any given set of goods passing through the port, multiple companies are involved in the shipping or in the processing of the paperwork relating to the shipments. The government also becomes involved on several fronts, from trade promotion to customs to the management of the main ports (border, airport and sea port), creating more jobs. The economy becomes self-sustaining because trade brings people from around the world together. In this situation in particular, trade with Asia and the west coast of the United States brings improved exposure to Vancouver, thereby resulting in two-way trade markets. While other West Coast ports such as Los Angeles are heavily oriented towards importation, Vancouver's trade business works strongly in both directions, the sign of a sustainable, integrated trade center.

3. At present, there is little evidence of agglomeration diseconomies with regards to the trade industry in Vancouver. There are, however, some potential problems that can arise from the further development of trade in the area. Historically, trade worked in concert with resource extraction industries in order to foster broader economic development. However, those industries have been essentially left behind by trade in terms of their contribution to the city's economy. As a result, trade has come to dominate what was once a symbiotic relationship. Two significant, negative, externalities could potentially result from this.

One is that government policy could shift in favor of trade, at the expense of resource-based industries. This could involve levels of government spending to support the different industries as well as seeing the government focus on promoting non-resource trade. Should this occur, the formerly...

This is the second potential negative externality. This would upend the nature of the Vancouver economy, and without the steady revenue streams from resource shipments, the trade industry could ultimately suffer if replacements for resource-based trade do not develop as quickly as intended.
However, that the trade element of the Vancouver economy has continued to improve despite the waning importance of the resource sector is evidence of creative destruction. The focus of trade has shifted to finished goods and gradually imports have become more important as well. As a consequence, the trade industry is much more diversified than it used to be. Furthermore, the demographics of the region have shifted to include a wider variety of Asia peoples. This has added further diversification to the trade industry, in particular with regards to the specialty products from a large number of different regions.

Ultimately, Vancouver has taken its place as one of the world's major trading cities. The trade business has led to booming ports, a strong transportation infrastructure and the creation of many companies both small and large. Global shipping firms all operate in the city and environs. Smaller companies handle logistics and warehousing, in addition to the outbound flow of goods to the U.S. And to the rest of Canada. These businesses all end up supporting one another. They facilitate the development of infrastructure, which in turn generates more trade. In addition, the existence of a vibrant trading industry attracts more trade, in particular because an established industry is more efficient than a nascent one, reducing costs and flow-through times for goods, two key drivers of global trade volumes. The trade cluster that has grown up around Vancouver has transcended its resource-exporting roots and has become a major component of the city's economy moving forward.

Works Cited:

Port of Vancouver economic impact study. (2008).

No author. (2010). Port facts. Port Metro Vancouver. Retrieved March 11, 2010 from http://www.portmetrovancouver.com/about/factsandstats.aspx