1. International Trade Agreements and Organizations

2. Globalizations Strategies used by International Businesses Today
Global Strategy, the business see the world as one big similar market. Business operations tend to be centralized ex Levi Jeans
Multidomestic Strategy, the business tries to customize products/services and marketing to the local culture. Business operations and decisions are decentralized. Ex McDonald’s
Transnational Strategy, a combination of Global and Multidomestic. Production are manufactured at the least expensive source, while human resource and marketing are achieved at the local level. Ex CocaCola

3. The Pros and Cons of Globalization
Outsourcing
Lower Prices
Improved human rights
Increased productivity
Innovation
Better jobs
Increased capital flow
Cons
Lost Canadian jobs
Anxiety of job security
Loss of Canadian productivity
Exploitation of cheap labor
Increased pollution
Unhealthy/unsafe products
Spread of diseases
Increase in income gap
Influence of multinational corporations (MNCs) on governments

4. The Outcome
Although, there are some glitches along the way to globalization such as
Anti globalization movements
Fundamentalists governments in some countries
Economic downturns which gives rise to isolationist and protectionist attitudes
However, since WWII the prevailing attitude has been an embracing, by most countries and governments, towards globalization.
As such, there has been a significant increase in international and regional trade agreements and organizations.

5. Trade Agreements Bretton Woods Conference
July 1944, just a couple of weeks after the Normandy invasion, the Western Allies' leading politicians got together at a resort in northern New Hampshire to set forth their notions of how to reorganize the world economy. For the first time in human history almost universal institutions - the International Monetary Fund (IMF), the World Bank and the General Agreement on Tariffs and Trade (GATT) - were established to solve global economic problems. By setting up a system of rules, institutions, and procedures to regulate the international monetary system.
The common view at the Conference was that the depression of the 1930s and the rise of fascism could be traced to the collapse of international trade and isolationist economic policies. The results of the Conference are the global system we know today featuring the free movement of capital and goods with the US dollar as the international currency.
The Conference rejected proposals by the British economist, John Maynard Keynes that would have established a world reserve currency administered by a single central bank. The United States did not believe that this system would serve its interests.
It set the foundation for a variety of other international trade organizations

6. Canada’s Trade Agreements
A trade agreement is an enforceable treaty between two or more countries that addresses the movement of goods and services
Canada’s Trade Agreements
Country
Agreement Name
United States, Mexico
North American Free Trade Agreement (NAFTA)
Iceland, Liechtenstein, Norway, Switzerland
European Free Trade Association (EFTA)
Chile
Canada- Chile Free Trade Agreement
Israel
Canada- Israel Free Trade Agreement
Costa Rica
Canada- Costa Rica Free Trade Agreement
Jordan
Canada- Jordan Free Trade Agreement
Colombia
Canada- Colombia Free Trade Agreement
Peru
Canada- Peru Free Trade Agreement

7. North American Free Trade Agreement (NAFTA)
January 1994, Canada, US, and Mexico
Worlds largest free trade area at the time.
An agreement to eliminate tariffs and barriers, and promote fair competition among the NAFTA countries
Protection of property rights, including patents, copyrights, trademarks, and technical designs

8. NAFTA Advantages and Disadvantages
Freer flow of goods and services - Trade has tripled since its inception
Access to better raw materials, talent, capital, and technology
Improvements in productivity resulting in lower consumer prices
Increase in employment

9. NAFTA Advantages and Disadvantages
Loss of manufacturing jobs to Mexico – lower labor costs
As manufacturing increases in Mexico, higher pollution
Inefficient farmers - Mexico, can no longer compete
Continued concern of Americanization of Canadian culture
Canadian companies being bought and controlled by Americans

10. The European Union (EU)
Is an economic and political union of 27 European member states. More being negotiated
A common market which includes agreements for
Free trade of goods and services
Free movement of capital and labor
The imposition of common set of trade restrictions on non-members
Common currency (Euro) for most state members and establishment of the European Central Bank

11. EU Advantages and Disadvantages
Easy movement of labor
Eliminating the risk of exchange rate fluctuation among members using the Euro
Price transparency – consumer can compare prices
Elimination of transaction costs
Easy billing process
Increased markets
Economic, political, social stability

12. EU Advantages and Disadvantages
Initial costs – must convert everything to new currency ex accounting software, vending machines, signs, etc
Lack of national control over their economy – you can not devalue currency or adjust interest rates alone. Ex. look at what is happening in Greece, Ireland, and Portugal.
Loss of tradition - nostalgia ex. a currency is part of a country’s culture and history

13. Canada’s Trade Organizations
A trade organization are groups established to help with the free flow of goods and services. They may be global, regional, or national in their scope.
Trade Organization in which Canada Participates
Organization
Purpose
World trade Organization (WTO)
Sets trading rules and settles disputes
Asia-Pacific Economic Co-operation (APEC)
Promotes trade in the Pacific Rim countries
Group of Eight (G8)
Discuss macroeconomic issues such as trade, economic growth, and poverty
Group of Twenty (G20)
Discuss financial stability and the growth of developing countries
Organization for Economic Development and Co-operation (OECD)
Promote democracy and market economies
The World Bank
Provide monetary support for developing countries
International Monetary Fund
Tracks and analyzes economic trends

14. World Trade Organization (WTO)
Promotes trade liberalization and ease of trade restrictions throughout the world
153 member states
Foster economic prosperity and social development among the countries of the world.
The three main purposes are
Forum for trade negotiations
Set the rules for trade
Settle disputes

15. The World Bank 186 member countries
Composed of two separate institutions, International Bank for Reconstruction and Development (IBRD) and the International Development Association
Provided monetary (loans and grants) and technical support (development assistance) for developing countries

16. International Monetary Fund (IMF)
The purpose of the IMF is to promote financial stability, prevent and solve economic crisis, encourage growth, and assuage poverty. It accomplishes this by
Encouraging countries to adopt responsible economic policies
Lending money to emerging and developing countries
Providing technical training in areas such as banking regulations and exchange rate policies

17. Canada’s Place in International Organizations
Canadians high standard of living is contingent on trade
Being the US neighbors does have its disadvantages, however, it does provide us with a more significant international role than we would otherwise have had.
We are a small but internationally respected country.
Canada will have to continue to work hard to ensure that we maintain our presence, voice, and image in the international arena.