Ch 29 Flashcards
(29 cards)
What are exports
Products or services produced in one country and for sale in another
What is bilateral trade
Trade between two countries
What is a trade surplus
When exports are larger than imports
What is a trade deficit
When imports are imports are larger than exports
What are imports?
Products or services that are brought into a country from another.
What are the four main sections of Canada’s imports?
1) industrial & high tech technology
2) Motor vehicle parts
3) goods produced in warmer climate
4) low cost goods
Explain the 1st section of Canada’s imports: Industrial and high tech technology.
- computers, factory equipment
- –from USA, Japan, Germany, Taiwan
explain the 2nd section of Canadian imports: (Motor Vehicle Parts)
Motor Vehicle Parts:
–Canadians assembly plants use parts from usa, mexico, japan
explain the 3rd section of Canadian imports: (goods produced in warmer climates)
Citrus fruits, sugar, coffee, tea, spices, chocolate, tropical wood.
explain the 4th section of Canadian imports (Low Cost Goods)
- made cheaper in foreign countries
- -labour costs low= lower prices
- –clothing, footwear, plastics, books
- —made in china, india, thailand, mexico
Why reduce imports?
Because with imports, the money leaves the city, province or country (Canada)
Substitution to importation. What’s an advantage to limiting imports?
Replace foreign produced goods with Canadian made goods.
–it supports Canadian business.
Why does Canada have a large amount of exports (regarding natural resources)?
- what do they mainly consist of?
- -where are they often processed?
- –what are the #1, 2, and 3 exports in Canada?
low population and large nation.
- mainly raw materials
- -processed in other countries
- –1) crude oil
- –2) motor vehicles
- –3)metals and alloys
Importance of exportation:
Keep economy healthy
- lower prices of Canadian made goods
- -lower number of exports = more unemployment
If a product is made in USA, the money would go to or stay in _____
USA
What is protectionism
Policy of tariff’s to limit imports
What is a tariff
Tax on imports
What is the main purpose of tariff’s (in Canada).
-what is a common result of tariffs?
To make it more costly to buy foreign goods
- to give Canadian companies an advantage
- -tariff wars
What is free trade
Policy of eliminating tariff’s
–enhance trade among nations
What is GATT an acronym for?
- what year was it created?
- what does it do?
General Agreement on Tariff’s and Trade
- created in 1947
- -set of rules governing trade
What is WTO
- what does it do
- -what is its primary purpose
World trade organization
- resolves disputes under laws of GATT
- -primary purpose is to open trade for the benefit of all.
What is NAFTA?
- what is it
- -What date was it put into effect?
- –what does it do?
North American free trade agreement
- 1993 agreement amount Canada, U.S., and Mexico
- -January 1st 1994
- –phase out (get rid of) tariff’s over a span of 14 years
What are the 5 sections of pro’s and con’s of NAFTA/free trade?
1) Efficiency
2) jobs
3) competitiveness
4) environment
5) cultural protection
List the 5 sections of pro’s and con’s of NAFTA/free trade and explain the pro and cons of each.
1) Efficiency
In support: helps protect inefficient producers which pushes prices up (helps smaller businesses)
In opposition: not as efficient as cheap foreign (Mexican) ones.
2)Jobs
In support: low skilled jobs replaced with high skill jobs
In opposition: jobs will move to lower wage areas of Mexico & s. U.S.
3) competitiveness
In support: Canada can compete b/c of good transport and cheap power.
In opposition: Canada will have to cut wages and benefits to compete
4) environment
In support: overall quality will improve since Mexico must meet new standards
In opposition: standards in Canada will be relaxed to allow companies to compete
5)cultural protection:
In support: not a threat to Canadian culture
In opposition: if we buy more American, we become more American. Many businesses go out of business
