Canada's Foreign Trade Pages 421 to 431
Import: product that is brought into the country from another country
Export: product or service produced in one country for sale in another country
Trade Surplus: amount brought in from exports exceeds the amount brought in from imports
Trade Deficit: amount brought in from imports exceeds the amount brought in from exports
Canada’s Imports
North American Free Trade Agreement (NAFTA): agreement that was created in 1988 between Canada and the US to promote trading between the two countries, while limiting tariffs
Page 429 fig. 32-9 outlines support arguments and opposition arguments for NAFTA
Export: product or service produced in one country for sale in another country
Trade Surplus: amount brought in from exports exceeds the amount brought in from imports
Trade Deficit: amount brought in from imports exceeds the amount brought in from exports
Canada’s Imports
- Net Imports and Net Exports: the difference between how much we import of a particular product and how much we export of the same product (5 million dollars of raspberries imported, 7 million dollars of raspberries exported, there would be a net export of 2 million dollars)
- Canada’s major net imports fall into 4 main categories:
- High-Technology Products: largest group of Canadian imports (computers, communications equipment, photographic equipment, TVs, video games etc.)
- Motor Vehicle Parts: second largest group, with Canada making many of the cars sold in the US (GM, Ford, Chrysler, Toyota, Honda)
- Goods Produced Only in Warmer Climates: Canada is a northern country, and therefore must import goods that can only be produced in warmer climates (citrus fruits, most fresh vegetables during winter, sugar, coffee, tea, chocolate, spices, tropical woods etc.)
- Low-Cost Goods: goods that can be produced more cheaply in other countries are purchased by Canada and imported in (clothing, footwear, plastics, books etc.)
- Should We Reduce Our Imports?
- Buying things that come from other countries causes money to leave Canada
- Import Substitution: process of replacing foreign produced goods with Canadian ones, to support Canadian business
- Canada’s exports fall under 2 main categories, with a third minor category:
- Products Based on our Natural Resources: Canada has huge amounts of land and water, with a relatively low population, so we are able to sell off a lot our natural resources that we don’t need/that other countries desire
- Motor Vehicles: Canada has agreements with the US and Mexico, that allows motor vehicle parts and motor vehicles to be traded without tariffs having to be paid
- Specialized Manufactured Goods: other manufactured goods besides motor vehicles, that Canada exports (airplanes)
- Importance of Exports: why must Canada export? (pg. 426)
- To pay for things we import
- To keep our economy healthy
- To lower the prices of Canadian-made goods for Canadians
- Protectionism: government’s policy of using tariffs and having rules that limit imports, to give Canadian companies an advantage over foreign competitors
- Free Trade: government policy of eliminating tariffs and other laws that are designed to restrict trade, as it is believed that enhanced trade among nations is good for everyone
North American Free Trade Agreement (NAFTA): agreement that was created in 1988 between Canada and the US to promote trading between the two countries, while limiting tariffs
- Now includes Mexico as well
- Very controversial
Page 429 fig. 32-9 outlines support arguments and opposition arguments for NAFTA