Advantages ofInternational TradeAdvantages ofInternational Trade
Why trade?Why trade?
To sell something we have so that we areable to buy something we need.To sell something we have so that we areable to buy something we need.
Trade, in turn:Trade, in turn:
–Creates jobs–Creates jobs
–Attracts investment–Attracts investment
–Leads to innovation–Leads to innovation
–Provides a wider choice of products andservices to Canadians!–Provides a wider choice of products andservices to Canadians!
Its like trading cards….Its like trading cards….
Say you buy a bunch of chocolate frogs(each of which comes with a collector’scard)Say you buy a bunch of chocolate frogs(each of which comes with a collector’scard)
You end up with all the witches andwizards except for Dumbledore. You DOhowever, have two McGonagalls!You end up with all the witches andwizards except for Dumbledore. You DOhowever, have two McGonagalls!
A friend has all the cards as well, exceptMcGonagal – but this friend also happensto have two Dumbledore cards.A friend has all the cards as well, exceptMcGonagal – but this friend also happensto have two Dumbledore cards.
In order for you to have all the cards youneed… and for your friend to have all thecards they need…. you trade!In order for you to have all the cards youneed… and for your friend to have all thecards they need…. you trade!
A friend has all the cards as well, exceptMcGonagal – but this friend also happensto have two Dumbledore cards.A friend has all the cards as well, exceptMcGonagal – but this friend also happensto have two Dumbledore cards.
In order for you to have all the cards youneed… and for your friend to have all thecards they need…. you trade!In order for you to have all the cards youneed… and for your friend to have all thecards they need…. you trade!
A friend has all the cards as well, exceptMcGonagal – but this friend also happensto have two Dumbledore cards.A friend has all the cards as well, exceptMcGonagal – but this friend also happensto have two Dumbledore cards.
In order for you to have all the cards youneed… and for your friend to have all thecards they need…. you trade!In order for you to have all the cards youneed… and for your friend to have all thecards they need…. you trade!
A friend has all the cards as well, exceptMcGonagal – but this friend also happensto have two Dumbledore cards.A friend has all the cards as well, exceptMcGonagal – but this friend also happensto have two Dumbledore cards.
In order for you to have all the cards youneed… and for your friend to have all thecards they need…. you trade!In order for you to have all the cards youneed… and for your friend to have all thecards they need…. you trade!
A friend has all the cards as well, exceptMcGonagal – but this friend also happensto have two Dumbledore cards.A friend has all the cards as well, exceptMcGonagal – but this friend also happensto have two Dumbledore cards.
In order for you to have all the cards youneed… and for your friend to have all thecards they need…. you trade!In order for you to have all the cards youneed… and for your friend to have all thecards they need…. you trade!
A friend has all the cards as well, exceptMcGonagal – but this friend also happensto have two Dumbledore cards.A friend has all the cards as well, exceptMcGonagal – but this friend also happensto have two Dumbledore cards.
In order for you to have all the cards youneed… and for your friend to have all thecards they need…. you trade!In order for you to have all the cards youneed… and for your friend to have all thecards they need…. you trade!
A friend has all the cards as well, exceptMcGonagal – but this friend also happensto have two Dumbledore cards.A friend has all the cards as well, exceptMcGonagal – but this friend also happensto have two Dumbledore cards.
In order for you to have all the cards youneed… and for your friend to have all thecards they need…. you trade!In order for you to have all the cards youneed… and for your friend to have all thecards they need…. you trade!
International TradeInternational Trade
Works in a similar wayWorks in a similar way
Canadian farms grow more corn and soybeans than Canadians can eat.Canadian farms grow more corn and soybeans than Canadians can eat.
Canada does not however, growpineapples or bananas.Canada does not however, growpineapples or bananas.
Through Trade, these a partnership willallow each country to get those things itdoesn’t have.Through Trade, these a partnership willallow each country to get those things itdoesn’t have.
Top Products Imported to CanadaTop Products Imported to Canada
Motor VehiclesMotor Vehicles
Electronic parts and componentsElectronic parts and components
Computing and peripheral equipmentComputing and peripheral equipment
Aircraft and aircraft partsAircraft and aircraft parts
Construction and mining machineryConstruction and mining machinery
Job CreationJob Creation
Exports are the goods we produce inCanada and sell to other countries.Exports are the goods we produce inCanada and sell to other countries.
–More than 50% of everything produced inOntario is exported.–More than 50% of everything produced inOntario is exported.
–One out of three Canadian jobs depends onexports.–One out of three Canadian jobs depends onexports.
–(The goods we ‘trade’ are sold for $$ on theinternational market.)–(The goods we ‘trade’ are sold for $$ on theinternational market.)
How are jobs created?How are jobs created?
Let’s say there are 20 people in a self-sufficientcommunity.Let’s say there are 20 people in a self-sufficientcommunity.
5 people grow food, 3 build houses, 2 knit woolclothing for everyone.5 people grow food, 3 build houses, 2 knit woolclothing for everyone.
People from another community see the woolclothing, and make a deal with the self-sufficientcommunity to supply them with knit woolclothing.People from another community see the woolclothing, and make a deal with the self-sufficientcommunity to supply them with knit woolclothing.
Now 2 more people are needed to work to makesure there is enough clothing for bothcommunities!Now 2 more people are needed to work to makesure there is enough clothing for bothcommunities!
Attracting InvestmentAttracting Investment
Foreign companies will invest money inCanada to simplify trade or reduce costs.Foreign companies will invest money inCanada to simplify trade or reduce costs.
(ie. They will set up an office that haspeople that speak their language.)(ie. They will set up an office that haspeople that speak their language.)
(…or they may build a warehouse to storeup goods for large shipments – instead ofimporting a bit at a time)(…or they may build a warehouse to storeup goods for large shipments – instead ofimporting a bit at a time)
- This requires construction workers,warehouse staff, accountants, etc.- This requires construction workers,warehouse staff, accountants, etc.
New TechnologiesNew Technologies
If a business can create a machine thatworks better, faster, or cheaper – then itwill be more competitive – and sell greaternumbers!If a business can create a machine thatworks better, faster, or cheaper – then itwill be more competitive – and sell greaternumbers!
Thus, there is a constant drive to improve,and create new technologies.Thus, there is a constant drive to improve,and create new technologies.
Diverse Products and ServicesDiverse Products and Services
A century ago, Canadian parents putoranges in their children’s stockings as arare and expensive treat.A century ago, Canadian parents putoranges in their children’s stockings as arare and expensive treat.
Fresh oranges are now a staple in grocerystores.Fresh oranges are now a staple in grocerystores.
Foreign trade opens up the world as amarket, delivering a wide range of foods,fashions, and new inventions.Foreign trade opens up the world as amarket, delivering a wide range of foods,fashions, and new inventions.
Benefits to the consumerBenefits to the consumer
Lower pricesLower prices
Better qualityBetter quality
Functional and innovativeFunctional and innovative
designs designs
Are there disadvantages toInternational Trade?Are there disadvantages toInternational Trade?
… definitely….… definitely….
DisadvantagesDisadvantages
Support of Non-Democratic SystemsSupport of Non-Democratic Systems
Great hardship onpeople who have nochoice but to grow aprofitable cash crop(e.g. coffee beans)Great hardship onpeople who have nochoice but to grow aprofitable cash crop(e.g. coffee beans)
Local farmers wishesto grow food for theirfamilies are ignoredLocal farmers wishesto grow food for theirfamilies are ignored
DisadvantagesDisadvantages
Cultural Identity IssuesCultural Identity Issues
Culture is “exported” with the productssold internationallyCulture is “exported” with the productssold internationally
Symbols of American culture includeproducts like Coca-Cola, McDonald’sand Nike.Symbols of American culture includeproducts like Coca-Cola, McDonald’sand Nike.
DisadvantagesDisadvantages
Social Welfare IssuesSocial Welfare Issues
Maintaining safety standards, minimumwages, worker’s compensation, andhealth benefits cost Canadianbusinesses and Canadian taxpayers agreat deal of moneyMaintaining safety standards, minimumwages, worker’s compensation, andhealth benefits cost Canadianbusinesses and Canadian taxpayers agreat deal of money
Countries that do not maintain thesehigh standards can make products lessexpensivelyCountries that do not maintain thesehigh standards can make products lessexpensively
DisadvantagesDisadvantages
Environmental IssuesEnvironmental Issues
Canada has highly regulatedenvironmental protection lawsCanada has highly regulatedenvironmental protection laws
Many businesses may chose to dobusiness elsewhere if the pollutioncontrols, recycling laws and emissioncontrols are not too stringent orexpensive for them to meetMany businesses may chose to dobusiness elsewhere if the pollutioncontrols, recycling laws and emissioncontrols are not too stringent orexpensive for them to meet
DisadvantagesDisadvantages
Political IssuesPolitical Issues
Ware and strife often occur because ofnatural resources.Ware and strife often occur because ofnatural resources.
Thousands of people have been killedfor control of oil, others for control ofthe diamond trade or even farmland.Thousands of people have been killedfor control of oil, others for control ofthe diamond trade or even farmland.
Trade in precious commodities cancause political alliances that do not helpthe local peopleTrade in precious commodities cancause political alliances that do not helpthe local people