Imports = products that are brought into a country from ...



1.Imports = products that are brought into a country from another country

Exports = products or services produced in one country for sale in another

2. Trade Surplus = If exports exceed imports

Trade Deficit = If imports exceed exports

3. One out of every 5 jobs is tied to exports, and with globalization, international trade will become even more important in the future

4. See page 435 bottom of the page for answers

5. Net Import and Net Export - refers to the difference between how much we import of a product and how much we export of that same product.

I.e. if we import $5 million in raspberries and export $7 million we have a net export of $2 million.

And vice versa, if we import more than we export = net import

6. Canada’s net imports: 4 categories = high-tech products, motor vehicle parts, products produced in warm climates, low-cost goods.

7. ----------- lack of labour laws in developing/ manufacturing countries

8. We export Industrial machinery and have a trade surplus with them

All others we are in a trade deficit b/c we import more than we export.

9. Import Substitution Defn: process of replacing foreign –produced goods with Canadian ones to support Canadian business.

When we decide to buy a banana made or grown in another country, we are making a decision that causes money to leave our country. If you chose to buy the Canadian grown banana instead you are practicing IMPORT SUBSTITUTION

10. Natural resources vehicles specialized manufacturing goods.

Oil motor vehicles pulp and paper

Coal aircraft and spacecraft lumber products

Natural gas mineral products

Minerals fish products

Grains/oil seeds

Live animals, meat, dairy, eggs

Fish

11.Canada is rich in resources and this allows us to sell /export(especially to the USA) many of our natural resources such as forests, fossil fuels, fields, mines, and waters. And because of our vast areas, rich resources and small population we benefit.

12. Vehicle Production has been very beneficial in Canada because of trade agreements with the United States and more recently, Mexico that allow motor vehicle parts and completed vehicles to move between countries without tariffs having to be paid.

With the Auto Pact in 1965 this agreement required that the number of vehicles built in Canada must be equal to or more than what is sold here. Therefore auto companies found plants were efficient and cheap to operate. As a result, auto assembly facilities here were expanded and in 2003 we exported just under a million more vehicles than were imported.

Part Duex

1. Tariff = a tax that is paid when a product moves from one country to another

2. Locational factors--- near water way—smelters to make steel, close to major markets, close to trade partner USA, waterway allow for easy transport on ships

3. “Specialized Manufactured goods” produced in Canada include Aircraft industry, $13 billion in computers, telecommunications, and related equipment.

4. We are so advanced in the aircraft industry b/c of Canada’s large landmass we were one of the first countries in the world to use them in large numbers…………a direct result of supply and demand

5. Canada must export to:

Pay for the things we import: we import both necessities and luxuries from other countries. If we want to continue to enjoy these products, we must be able to pay for them….by selling our products.

To keep our economy healthy: Almost 50% of the goods and services that Canadians produce are exported. With fewer exports, unemployment would be much higher and most of us would be poor.

To lower the prices of Canadian-made goods for Canadians: keep in mind that the cost per unit of something (ex. a pair of skates) is lower if you make 1 million pairs than if you make 10,000 pairs. A Canadian company that produces for export as well as for a Canadian market can keep the price lower for everyone.

Canada and exporting services (vs. goods)

6. Trade in goods is very good = we had a surplus o f$58 billion in 2002.

However trade in services are not so good, in 2003 we had a deficit of $11 billion.—mostly in the travel and transportation sector b/c many Canadians travel more to other than other foreign travelers come here.

We also give our $$ to USA services

(television) –every time you watch Simpsons.

(food and beverage) – every time you go to McDonalds

(advertisements in magazines) – Pepsi – another American company

7. Protectionism govt’s policy of using tariffs and having rules that limit imports. Done to give Canadian Companies advantage over foreign competitors which are often larger and can produce things more cheaply.

Free Trade – govt’s policy of eliminating tariffs and other laws that are designated to restrict trade. The basic idea is that enhanced trade among nations is good for everyone

8. Fig. 29-8

9. Opinion question

11. North American Free Trade Agreement (Canada, USA, Mexico)

Concerns = require us to share our resources with them even if they are needed here in Canada…..see figure 29-9

Concerns – helps resource exporters but hurt manufacturers that produce for the Canadian market

Jobs will move S to areas where wages are cheaper

We will have to cut wages in order to compete with S. American and Mexican companies

Environmental quality is likely to decline since standards in Canada will have to be relaxed to allow Canadian companies to be competitive

Threats to Canada’s cultural independence.

12. European Union

13. Fig. 29-9

14. Things we can do to encourage our exports of services = we can continue to increase our production and international sale of movies, television shows, and music or we can expand international service by Canadian Airlines

15. bilateral trade = trade between two countries

Good- it has increased our standard of living

Bad- we are easily harmed by the downturns in the American Economy or by the protectionist policies from the American Government.

If we could expand our trade with other countries, we would not have to depend so much on the USA.

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