1. AP/ECON 3430 3.0 A MONETARY ECONOMICS I: FINANCIAL MARKETS AND INSTITUTIONS Fall 2016
Topic 4: Foreign Exchange/Session 4B
Course Director:
Prof. Brenda Spotton Visano
© Brenda Spotton Visano 2016

2. © Brenda Spotton Visano 2016
Session 4B - Agenda
Is it better for Canada to join a Monetary Union with China?
Small Group Preparation
Large Group Speed Debate
Assessment of Arguments and Decision
© Brenda Spotton Visano 2016

3. 1 more Policy Option – Monetary (Currency) Union
Why do Ontario and British Columbia share the same currency but not Canada and China?
Advantages of a Monetary Union = benefits of a standard unit of account and common medium of exchange, and…?
Disadvantages of a Monetary Union = loss of national control over policies, financial markets and institutions, and…?
© Brenda Spotton Visano 2016

4. Changing Trade Patterns
Currency
CERI Weights based on trade data
2015 Trade Data (Country Imports as % Total Imports)
U.S. dollar
0.7618
0.6628
Euro
0.0931
0.0968
Japanese yen
0.0527
0.0158
Chinese yuan
0.0329
0.0710
Mexican peso
0.0324
0.0335
U.K. pound
0.0271
0.0199
2015 Trade Data from Statistics Canada
E.g., Canada’s imports from the US (in $millions) was or 66.28% of Canada’s total imports from all countries in 2015.
© Brenda Spotton Visano 2016

5. © Brenda Spotton Visano 2016
Canada – China Trade
Government of Canada – Fact Sheet on China
Canada-China Foreign Investment Promotion and Protection Agreement (FIPA) in force October 1, 2014 and in place for a minimum of 31 years (to at least 2045)
Hupacasath First Nation led coalition to oppose the Canada’s FIPA with China citing environmental and native rights concerns around land use and energy (coal, tar sands production; pipeline construction) (Council for Canadians
The Canada-China Business Council founding members were Barrick Gold, BMO Financial Group, Bombardier, Power Corporation of Canada, Manulife Financial, and SNC-Lavalin.
The Hupacasath First Nation is a First Nations government based in the Alberni Valley on the west coast of Vancouver Island in British Columbia, Canada. It is a member of the Nuu-chah-nulth Tribal Council. Hupacasath First Nation consists of approximately 300 members across five reserves. In September 2012, the Government of Canada Foreign Investment Promotion and Protection Agreement signed a trade agreement with Chinese investors giving them control over major assets such as coal on its 232,000-hectare territory. It comes into effect when it has been ratified by both sides. Source:
© Brenda Spotton Visano 2016

6. BIRT Canada should create a Monetary Union with China
Negative Teams (oppose resolution)
N1 Group prepare primary supporting arguments
N2 Group anticipates opposing arguments and prepares rebuttals
Affirmative Teams (agree with resolution)
A1 Group prepare primary supporting arguments
A2 Group anticipates opposing arguments and prepares rebuttals
Judging Team (neither supports nor opposes resolution) assesses merits of evidence presented
© Brenda Spotton Visano 2016