Tuesday, June 5, 2012
Trade Deals Made by Canada
Who is Canada’s biggest EXPORT partner?
Who is Canada’s biggest IMPORT partner?
Trade Surplus vs. Trade Deficit
When the total value of our EXPORTS is greater than
the total value of our IMPORTS, we get a TRADE
When the total value of our IMPORTS is greater than
the total value of our EXPORTS, we get a TRADE
YEAR EXPORTS IMPORTS TRADE BALANCE DEFICIT /
2001 $11, 399 $19,458
2002 $6,799 0
2003 $12,356 -$9,530
2004 $21,950 $11,420
Trade Agreements with Canada
Trading is not always a simple exchange
International trade can be thought of as a family feud
FAMILY JEANS FAMILY JEANS
Why might jeans made by other
“families” be cheaper?
1. The people who make the jeans for the other “family”
don’t get paid as much as those in your “family’s” factory
2. Environmental laws where jeans are made are not
3. Cotton needed to make the jeans is domestic and not
4. The other “family” decides to take a loss on the cost of
the jeans but raises the cost of belts
In order to encourage citizens to “buy Canadian”,
foreign made products are taxed before entering
What effect does this have?
Canada has made special trade agreements with some
countries in order to avoid feuds and paying extra for
Read page 221 to answer the following questions in your
1. What does NAFTA stand for?
2. What is NAFTA?
3. What does the term “free trade” mean?
4. List all goods mentioned in your textbook that are traded
under this agreement.
What are some problems with NAFTA?
Dealing with the changing prices of raw materials
- Examples: softwood lumber, oil and gas
The sale of Canadian water
Whether Canada should be buying electric power from
the United States
You have made a deal with friends to sell them homegrown
potatoes at $0.25/kg in exchange for a good price on their radios.
The trade agreement works for a few years, but suddenly your
mother needs all the potatoes.
Which of the options below do you think should happen? Why?
a) Your mother should do without potatoes; a deal is a deal.
b) You can provide your mother with potatoes from another
friend, but she will have to pay a higher price.
c) You should try to break or change the original deal with your
friends; after all, she is your mother.