Why is the baseball draft limited to residents of the U.S. or Canada? Other pro sports include prospects from other countries in their drafts. Limiting the baseball draft in this manner negates the attempts of the league to create more parity among the teams. After all, only the very wealthy teams can afford to shell out tens of millions of dollars just to negotiate for the rights of someone like Daisuke Matsuzaka. I don't think you'll be seeing the Pirates, Twins or Royals doing that anytime soon.
Why don't they make the draft a worldwide one? I can't see why the players' union would be opposed to this. As Boras said during the Strasburg negotiations, overseas players benefit from this system far more than U.S. prospects do. Not that I'm agreeing with everything Boras says, but I think the loophole should be closed. The current system limits the process of signing top foreign players to just a handful of teams, the usual suspects of the Yankees, the Red Sox, the Cubs, and a few others.