International Trade

Advantages and Disadvantages

Reasons for International

Trade

Sell something we dont need or have made

for trade and buy something that we need
Many benefits
Trade creates jobs, attracts investment,
attracts new technology and materials, and
offers Canadian a wider choice in products
and services

Reasons for International

Trade

Range of choice provides more

competition in the marketplace
Result competitive pricing, technological
advances, improved services including
the education and training of Canadian
employees

Advantages
Meeting our Needs
Allows Canadians to have access to many
goods that we are unable to produce
ourselves (pineapple, motor vehicles.)
Trading Partners get something they need
by trading something that they do not
need

Advantages
Job Creation
Foreign businesses buy Canadian products and
services, which leads to more jobs for Canadians
Exports are critical to the Canadian economy
One out of three Canadian jobs depends on
exports
More than 40% of everything Canada produces is
exported (50% for Ontario)
Every $1 billion in exports means over 6000 jobs
for Canadian

Advantages
Attracting Investment
Investment follows trade
Many foreign companies, when demand is
proven through trade, will invest in an
office, factory or distribution warehouse in
Canada to simplify their trade and reduce
costs
This investment creates other jobs in
construction, sales and office management

Advantages
New Technology and Material
Development of new technology promotes
competitiveness and profitability
Newly developed technology sold through
patents to foreign companies collecting
annual fees, royalty percentage or a onetime payment, outlined very specifically in
a contract

Advantages
New Technology and Material
E.g. Reliability Software, Asset
performance Management Software
Capital Intensive Industries metals,
mining, steel, utilities, power generation,
oil and gas
Sell software maintenance and support,
and services (professional ,
implementation, technical services)

Advantages
Diverse Products and Services
Foreign trade opens up the world as a market,
delivering a wide range of foods, high fashions, and
new inventions to the Canadian market
Foreign travel, banking, consultation and other
services are also available to the Canadian consumer
Businesses must consider that their competition for
similar products and services is no longer just in the
same city but anywhere in the world.

Disadvantages
Support of Non-Democratic Systems
Great hardship on people who have no
choice but to grow a profitable cash crop
(e.g. coffee beans)
Local farmers wishes to grow food for their
families are ignored

Disadvantages
Cultural Identity Issues
Culture is exported with the products
sold internationally
Symbols of American culture include
products like Coca-Cola, McDonalds and
Nike.

Disadvantages
Social Welfare Issues
Maintaining safety standards, minimum
wages, workers compensation, and health
benefits cost Canadian businesses and
Canadian taxpayers a great deal of money
Countries that do not maintain these high
standards can make products less
expensively

Disadvantages
Environmental Issues
Canada has highly regulated environmental
protection laws
Many businesses may chose to do business
elsewhere if the pollution controls,
recycling laws and emission controls are
not too stringent or expensive for them to
meet

Disadvantages
Political Issues
Ware and strife often occur because of
natural resources.
Thousands of people have been killed for
control of oil, others for control of the
diamond trade or even farmland.
Trade in precious commodities can cause
political alliances that do not help the local
people

Your task (select one):

Research a recent
environmental
issue that directly
affected a Canadian
business that sells
its products
internationally

Give a specific example of

a cultural message carried
by three different
American-made products.
Discuss the impact and
whether you believe it is a
positive or negative
influence