1. Unit 4 Canada’s Foreign Trade
Miss Warner
Geography 20F

2. Last Class Industry & Manufacturing:
What are the two types of manufacturing that occurs in Canada?
How does manufacturing help our country as well as our global economy?
Is manufacturing equally beneficial for all provinces and territories across Canada?
Why?

3. Canada’s Foreign Trade
In groups of 2-4, name 5-10 everyday items that are products of trade.
Answer the following questions:
Why does Canada Trade with other nations?
Would Canada or North America survive if we were to suddenly stop trading?
What are some negative impacts of Trading?

4. Canada & Trade
Canada Imports and Exports a large number of products, all of which fuel our economy, industries, consumerism & our natural resource development
The products we import are items we do not have available to us naturally
Our exports are the items we have an abundance of here naturally.

5. Canada & Trade
The relationship between a countries Imports and Exports is important to its economic well being.
Trade Surplus: when the number of exports exceeds the number of imports
Ie) more money is brought in then we spent
Trade Deficit: When the number of imports exceeds the number of exports.
Ie) more money is spent than is brought in

6. Be ready to explain your ideas & reasoning to the class
Canada & Trade
With your partner take 2-3 minutes to think about the following question
Does Canada produces a Trade Surplus or a Trade Deficit annually?
Be ready to explain your ideas & reasoning to the class

7. Canada: 2013

8. Canada & It’s Trading Partners
Who does Canada Trade with the most?
The USA far exceeds all other countries in the $ amount for both imports and exports.

11. Canadian Imports Net Imports & Net Exports
refer to the difference between how much we bring in of a particular product compared to how much we send out of that product.
Main Idea of Net Import & Export
Excess of a certain product  Export
Shortage of a certain product  Import

12. What trends do we notice by looking at this chart of
Canada’s Net Imports & Exports

13. October 8, 2013
OTTAWA — Canada’s trade deficit in August climbed to $1.31 billion as imports grew by 2.1% to set a new record and exports rose by 1.8%, Statistics Canada said on Tuesday.
The deficit — the 20th in a row — exceeded analysts’ forecast of a $700 million shortfall. Statscan revised July’s deficit to $1.19 billion from an initial $931 million.
Imports hit $41.08 billion in August on higher shipments of energy products, aircraft and motor vehicles as volumes rose 1.2% and prices increased by 0.9%. The previous high was the $40.89 billion recorded in April

14. Canada: 2013

15. Canada’s Major Net Imports
Our major Net Imports fall into 4 categories
High-Technology Products
Includes items as equipment for factories, mines, forestry industry etc.
Computers, TVs, Video games and CD players
Only a few countries in the world produce such item
USA, Germany, Japan, Taiwan & South Korea

16. Canada’s Major Net Imports
2. Motor Vehicle Parts
Canada makes most of the Cars sold to the USA by all of the North American Auto dealers.
Assembly plants receive car parts from the USA, Mexcio, Japan & other countries
3. Goods produced in warmer climates
Our northern climate prevents us from producing items that need a warm climate to grow.
Citrus fruits, fresh vegetables, sugar, coffee, tea, chocolate, spices & exotic wood species.

17. Canada’s Major Net Imports
4. Low-cost goods
Some items can be produced for less in other countries
Aka. it cost us less to import them then make them
Clothing, Footwear, plastic etc.
Made in China, India, Brazil, Thailand & Mexico

18. Canada’s Major Net Exports
Our major net exports fall into 3 categories
Products based on Natural Resources
We sell products from forests, fields, mines & water
Mostly energy products such as fossil fuels make their way to other countries.

19. Canada’s Major Net Exports
2. Vehicles
We export millions of dollars in vehicles every year mainly from Southern Ontario’s Car Manufacturing hub.
The export of these vehicles is sensitive to Trade Agreements with other countries & the presence of Tariffs.
Tariffs: tax that is paid when a product moved from on country to another
3. Specialized Manufactured Goods
Other specialized goods such as aircrafts, agricultural machinery etc.

20. Importance of Exports Why must Canada Export?
1. To pay for the things we import
We import necessary things as well as luxuries. We need to be able to pay for these “wants”
2. To keep our economy healthy
50% of the goods & services Canada produces is exported
3. To lower the prices of Canadian-goods for Canadians
The cost per unit is lower if we make 1 million pairs compared to if we make 1,000 pairs.

21. Softwood Lumber Dispute
The Canada–United States softwood lumber dispute is one of the most significant and long lasting trade disputes in modern history.
The dispute has had its biggest effect on BC, the major Canadian exporter of softwood lumber to the USA.
The USA sees Canadian lumber industry is unfairly subsidized by the federal and provincial governments.

22. Softwood Lumber
Most timber in Canada is owned by provincial governments.
The price charged to harvest the timber or the “stumpage fee" is set by the government rather than through a competitive market, as is done in the United States.
Under U.S. trade laws, foreign goods benefiting from subsidies can be subject to a duty tax to offset the subsidy and bring the price of the product back up to market rates.

23. Trade in Service
Trade between countries does not only encompass trade of goods.
Trade in Services such as business services, travel or transportation services and corporation services also occur.
Example of Trade in Service:
The Simpsons: Canadian Show, Produced in the USA
McDonalds Franchise: American company, in Canada
American advertisements for Pepsi on our TV

24. Free Trade vs. Protectionism
Tariffs: A tax that is paid when a product moves from one country to another
Protectionism: the government’s policy of using tariffs and having rules that limit imports.
Why do we impose Tariffs on foreign made items that we produce?
Protectionism & Tariffs allow for Canadian companies to have an advantage over foreign competitors that may be producing items more cheaply.

25. Tariffs Without Tariffs With Tariffs Cost in Local Store
Canadian Jeans $50
Foreign Jeans $45
Foreign Jeans $55
Results
Few Sold
Factory closes
Unemployment 
Money leaves Canada
B. Many Sold
Imports of Jeans higher
Balance of trade hurt
Canadian industries and jobs protected
Money stays in Canada
Imports of Jeans lower
Balance of trade improved

26. Free Trade
Free Trade: Free trade is the government policy of eliminating tariffs and other laws that are designed to restrict trade.
History of Free Trade
After WWII, majoring trading countries realized that they needs to avoid trade protection that had resulted in the The Great Depression
To prevent another Depression they agreed to the General Agreement on Tariffs & Trade or the GATT.

27. Free Trade
The GATT came into effect in 1947 and now includes more than 120 countries.
In 1995, the World Trade Organization (WTO) was formed which was designed to resolve disputes under the laws of the GATT.

28. North American Free Trade Agreement (NAFTA)
As we saw earlier in the unit, much of Canada’s trade occurs between the USA & Mexico.
This is because of the creation of the North American Free Trade Agreement or NAFTA.
NAFTA:
was originally started in 1988 between the USA & Canada
Revised in 1993 to included Mexico.

29. NAFTA
NAFTA was very and still remains a controversial topic.