1.4 – Advantages and Disadvantag es of Internation al Trade

BBB Advantages and Disadvantages of Int. Trade 2 ADVANTAGES

BBB Advantages and Disadvantages of Int. Trade 3 1. Meeting Our Needs Trade with foreign nations to meet the needs of Canadian businesses and consumers Trade our surplus of inventory of goods and services for goods and services we want or need

BBB Advantages and Disadvantages of Int. Trade 4 2. Job Creation Foreign businesses buy Canadian products and services, which leads to more jobs for Canadians Jobs lead to salaries and wages to employees who: –pay taxes (allows the government to provide services thus creating more jobs), –save (capital markets can lend money to others) and –spend (on consumer goods and services which create more jobs)

BBB Advantages and Disadvantages of Int. Trade 5 Exports are critical to the Canadian economy (1/3 of jobs depend on exports) –More than 40% of everything Canadians produce is exported –More than 50% of everything Ontarians produce is exported Every $1 billion in exports means 6000 jobs for Canadians

BBB Advantages and Disadvantages of Int. Trade 6 3. Attracting Investment Investment follows trade because foreign companies will invest in an office, factory or distribution warehouse in a country where there is consistently high demand for their products (simplifies their trade and reduces costs) Their capital investment creates jobs

BBB Advantages and Disadvantages of Int. Trade 7 4. New Technology and Materials New technology may allow business to produce a more competitive product for both national and international markets –if a business can create a machine that works faster, better or cheaper, they can sell the rights to the patents to foreign companies, collecting an annual fee, royalty percentage, or one-time payment

BBB Advantages and Disadvantages of Int. Trade 8 5. Diverse Products and Services Foreign trade opens up the world as a market, delivering a wide range of –Foods, –Fashions, and –New inventions to the Canadian markets Competition is no longer in the same city but anywhere in the world.

BBB Advantages and Disadvantages of Int. Trade 9 DISADVANTAGES

BBB Advantages and Disadvantages of Int. Trade 10 Disadvantages of International Trade 1. Support of Non-Democratic Systems: When a Canadian consumer purchases toys made in China, or vacations in Cuba, he/she is indirectly supporting nations that do not provide their citizens with the same rights and freedoms we, as Canadians, take for granted.

BBB Advantages and Disadvantages of Int. Trade 11 2.Cultural Identity Issues: Culture is a major export of the United States. American movies, music, TV. programs, magazines, and books are very popular world wide. Each of these promotes American values and lifestyles. Are Canadians “overwhelmed” by this fascination with American culture?????

BBB Advantages and Disadvantages of Int. Trade 12 3.Social Welfare Issues: Maintaining safety standards, minimum wages, worker’s compensation, and health benefits cost Canadian businesses and taxpayers a lot of money. Countries that do NOT maintain these high standards can make products less expensively. Supporting trade with these countries by buying their products perpetuates the problem.

BBB Advantages and Disadvantages of Int. Trade 13 4.Environmental Issues: –Many countries that Canada trades with do NOT treat the air, the land, and the water with care and respect. –Pollution controls, recycling laws, and emission controls may be non-existent in some countries around the world.

BBB Advantages and Disadvantages of Int. Trade 14 5.Political Issues: Wars often occur because of the struggle to control natural resources. Thousands of people have been killed for control of furs, fish, oil, diamonds, or farmland. The “blood diamond” trade in Sierra Leone is a good example of this issues. People are killed or maimed to mine diamonds, and the profits made from the mining operations goes to fund civil war!!!