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1. Through this Padlet, I learned a lot about the specific policies that are used by Canada in order to promote free trade, and I was honestly surprised by the sheer number of countries that Canada has a Free Trade Agreement with. It outlined how much Canada relies on free trade to support our economy and businesses

2. This topic is vitally important in real life, especially today, considering the nationalistic view many nations are taking in regards to economic policy. This, combined with COVID-19, which will lay waste to the nation's economy if given the chance, means that it is more important than ever to understand trade policies and how countries are reacting to the events in the last few years, adn currently.

3. I believe the most important thing to pass on to someone else in this Padlet is the risk of protectionism. While looking good on paper, no single nation can provide all necessary resources to sustain itself, and grow as an economic powerhouse. A policy of protectionism in this international market leaves up starting with a broken leg, and it could prove to be a crippling disability.

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This image outlines the protectionism that exists within the provinces of Canada itself, outlining the fact that protectionism isn't just an international issue. Provincial protectionism is worse, as it results in very small amounts of business for all provinces making it impossible to grow as a nation

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This image clearly shows how much free trade Canada conducts with the rest of the world. It also shows the Canadian faith in Free Trade, considering the fact that agreemements exist in 5 of the 7 continents. This proves that free trade has positive benefits on the economy of the nation

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The Canadian Free Trade Agreement was the result of three years of negotiations between the provinces and territories of Canada, in order to  "...secure an ambitious, balanced and equitable agreement that would level the playing field for trade and investment in Canada. The article mentions the enhanced trade rules which promote free trade and apply to all area of economic activity in Canada. It also notes how all governments have made commitments to improve relations with business by promoting open procurement practices.

This article presents a very positive spin on the CFTA, praising how the new and improved trade policies will help bring extra business to domestic companies in Canada. It also clearly outlines government involvement in the entire process of the creation and implementation of the CFTA, but ensures that this involvement will yield positive results.

Website#2: The Canadian Free Trade Agreement

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Free Trade Agreements refers to an agreement made between two nations where all tariffs on products are eliminated in order to promote trade between the two nations.  This is a very effective method of rejuvenating a country's economy by giving them more options, both in import and in exports. This article has a concise history of Free Trade in Canada, beginning from 1968, culminating in the North American Free Trade Agreement (NAFTA).  It also explains the potential issues of free trade which include 'loss of sovereignty', which refers to idea that Canadian traditions and Canadian businesses will suffer due to the actions of larger, multi-national companies.

This article clearly outlines a history of free trade in Canada and the positives and negatives of encouraging free trade.  It also provides clear evidence to how free trade can improve a nation's economy, using NAFTA as the prime example.

Website#1: What is Free Trade

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A free trade area as defined by the General Agreement on Tariffs and Trade (GATT) is "a group of two or more customs territories in which duties and other restrictive regulations of commerce... are eliminated on substantially all the trade between the constituent territories in products originating in such territories."

North American Market

In May 1986 Canada and the US began negotiations for a bilateral free trade arrangement. A deal was reached in October 1987. It became the major Canadian election issue in the autumn of 1988. The Conservative government of Prime Minister Brian Mulroney backed the accord and won the election; the deal came into effect on 1 January 1989.

Subsequently, the US and Mexico announced their intention to pursue a trade and investment liberalization arrangement. Canada asked to be a party to the negotiations. As a result, the North American Free Trade Agreement (NAFTA) was signed and came into effect on 1 January 1994, creating a huge free trade zone of about 370 million people. It extended and superseded the Canada-US Agreement after which it was modeled.

NAFTA is technically a free trade area, but with some of the attributes of a customs union-where member nations maintain the same duties and regulations regarding non-member third countries-and also some attributes of a common market-which allows for the free flow of factors of production (labour and capital) among the member nations. Examples of such attributes are the pressure for Canada and Mexico to conform to US tariff levels; the detailed rules of origin requiring high North American content for a wide range of consumer goods; the liberalization of services trade, including financial services and capital flows generally; and enhanced international freedom of movement for service and business persons and many professionals. The resource-sharing arrangements (particularly between Canada and the US) also suggest a common market in the making.

Access to US

Traditionally, free trade negotiations have focused upon the elimination of tariffs and quantitative restrictions on merchandise trade. But for Canadians exporting to, or desiring to export to the US, tariffs were not the main concern. Even before the free trade agreement, 80 per cent of Canadian shipments entered tariff-free and less than 10 per cent of exports faced US tariffs in excess of 5 per cent. Many of these were clothing, textiles, footwear and some petrochemicals. (Some commodities continued to face such high tariffs that they were not sold to the US at all.)

More important for Canada was obtaining secure and stable access to the vast and lucrative US market, without constantly having to fight American countervailing and anti-dumping duties-tariffs placed on Canadian imports deemed to be unfairly subsidized by Canada, or priced in some way as to present unfair competition to American industry (see Protectionism). Canada wanted agreement on what Canadian industrial subsidies would be free from countervailing duties. Canada also wanted US government procurement to be opened up to Canadian firms, and an effective and binding dispute-settlement mechanism that did not rest entirely on decisions made in the US.

Canada's Energy Sector

The US in turn wanted all trade in services and intellectual property included in the agreement; unhindered access for investment in Canadian industries, particularly the energy sector, without Canadian federal government surveillance or restrictions; and limits on government policies generally that might reduce US exports.

It was the expectation of many Canadians that more secure access to the US market would stimulate a range of efficiency-improving measures by Canadian manufacturers and thereby narrow the productivity gap between US and Canadian firms. Although new economies of scale have undoubtedly been achieved through the rationalization of Canadian manufacturing, and new technology has been adopted in Canada at a fast pace, the productivity gap with the US of about 25 per cent has not been narrowed.

Exports Boom

The liberalization process has nevertheless greatly expanded Canadian exports to the US. Between 1990 and 1995 such shipments grew 12 per cent annually, nearly twice the rate of growth of Canadian exports to the rest of the world. The greatest gains were in those industries where US tariffs were reduced the most. Exports of non-resource products have grown twice as fast as resource-based commodities, particularly the technologically intensive products such as office equipment, telecommunications products, precision instruments and a variety of other equipment and machinery. Some resource-based products such as fine papers and chemicals grew quite rapidly too. The result has been that Canadian dependence upon the US as a market for exports increased from 74.5 per cent in 1988 to 82 per cent in 1996. In 2010, The US remained Canada's largest export trading partner, accounting for 74.9 per cent of total exports.

For service industries the removal of some non-tariff barriers, and the general stimulus of the free trade deal to Canadian firms to have a more export-oriented perspective, resulted in Canadian service exports to the US growing rapidly too, particularly financial services, consulting, communications and advertising.

Adding Mexico to the Canada-US agreement was not of great significance for Canadian exporters, since less than one-half of 1 per cent of Canadian foreign sales are to Mexico. The positive implications for the service industries, particularly financial services, are likely to be of more importance for the foreseeable future. In 2010, Mexico was Canada's fifth-largest export destination.

Canadian imports from the US grew rapidly too, both in high-technology products and a number of labour-intensive industries such as furniture, clothing, processed foods and various household items. The result has been that Canadian dependence upon the US as a source of supply, which had remained at about 69 per cent of imports for several decades, increased to 76 per cent by 1996. In 2012, Canada was the US's largest goods export market.

Imports from Mexico are somewhat more important for Canada than are exports to that nation. They amount to about 2.5 per cent of total imports, but are concentrated in relatively few sectors such as automotive parts, electrical machinery and equipment and some foodstuffs.

Canada Blocked From US Procurements

Canada was not successful in getting all government procurement liberalized. About 90 per cent of US government procurement is still not open to Canadian firms. On the other hand, although the US did not initially allow intellectual property included in the Canada-US agreement, during the negotiations to bring Mexico into the deal intellectual property was included.

No real progress has been made in defining what are acceptable subsidies, or in removing the applicability of anti-dumping and countervailing duty laws. Canada and the US had agreed to work more on these issues, but nothing came of this in the context of the free trade agreement. However, in the Uruguay Round of the worldwide GATT negotiations, stricter rules were developed on dumping, and permissible and non-permissible subsidies were defined.

A dispute-settlement mechanism was established so that bi-national panels review US and Canadian findings of dumping or subsidy, to ensure that each nation's laws are administered correctly. This has worked fairly effectively except in some cases such as with Softwood Lumber and durham wheat, where the US has found ways of circumventing the free trade rules to limit Canadian exports. (Unlike in Canada where the free trade agreement effectively takes precedence over other Canadian laws, in the US other legislation takes precedence over the free trade deal.)

Canadian rules on foreign direct investment were liberalized so that few restraints remain on US firms wishing to establish themselves in Canada. Thus, since the agreement, thousands more Canadian firms have been taken over by US investors, and much Canadian direct investment has gone into the US, so that in this way too the degree of integration of the economies has increased.

(COURTESY BERTELSMANN FOUNDATION)

Loss of Sovereignty?

Some Canadians believed a comprehensive free trade arrangement with the US would irreversibly erode Canadian economic, cultural and political sovereignty. Some would argue that this has not happened in that Canada has continued to protect its cultural industries (as provided for in the agreement), and to pursue an independent foreign policy in relation to nations such as Cuba.

Others say that even though Canada has become much more globalized in its orientation, it has increased its actual concentration of trade and investment with the US. It took the original European Common Market more than 30 years to move from a limited customs union to something now approaching complete economic and political integration under the leadership of Germany. Critics fear that over time, Canada could end up in a similar relationship with the US, which has a far more dominant role in North America than Germany has in Europe

Expanding Free Trade Networks

Canada is broadening its free trade relationships. The first of these is the bilateral free trade agreement struck with Chile in 1996. Essentially, the model of the NAFTA has been used for the Canada-Chile relationship. Canada negotiated a free trade arrangement with Israel in 1996 as well (something the US has had since 1985). However, both of these agreements have mostly symbolic significance at this stage, for Canada's trade with each of these nations is only about 1/7th of 1 per cent of the nation's total trade.

A more significant free trade agreement was reached with South Korea in March, 2014 -- Canada's first such agreement with an Asia-Pacific nation. South Korea and its 50-million people represent not only an important market for Canadian exporters, but the deal is expected to give Canada wider access to Asia through South Korean supply chains, particularly for agriculture, seafood and forestry producers. The agreement was criticized by Ford of Canada Ltd., which said South Korean auto makers will have cheaper access to the Canadian market, while being unfairly protected in South Korea through the use of non-tariff barriers and currency manipulation.

Canada has also entered free trade agreements with Costa Rica (2002), the European Free Trade Association (2009), Peru (2009), Colombia (2011), Jordan (2012) and Panama (2013). It remains in negotiations with more than a dozen other countries or free trade groups in Africa, Asia and the Caribbean.

See also Balance of Payments; Exports; Imports; International Trade; World Trade Organization.

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A free trade area as defined by the General Agreement on Tariffs and Trade (GATT) is "a group of two or more customs territories in which duties and other restrictive regulations of commerce... are eliminated on substantially all the trade between the constituent territories in products originating in such territories."

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Protectionism Maybe Getting Worse in Canada

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Protectionism Maybe Getting Worse in Canada

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Protectionism is a danger not only to businesses importing into the nation, but is also a danger to any business within Canada which exports products internationally. This  article outlines the issues with the new trade policies that have been passed in Canada which negatively affect business which are looking to export their good to other countries.

This video brings up a unique issue faced with the policy of protectionism. Most countries don't seem to realize that it works both ways; closing off your borders will mean lack of access to international resources. This results in Canadian businesses suffering losses while looking to trade internationally

Website#4: Protectionism policy worsening in Canada

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Ottawa - Trade confidence among Canada's exporters fell to its lowest level since the European debt crisis seven years ago, according to the latest Trade Confidence Index from Export Development Canada.

EDC surveys 1,000 Canadian exporters twice a year for the Trade Confidence Index. All five components of EDC's index were down again, continuing the decline seen in the 2018 year-end survey. The slide was broad-based, led by a weaker outlook for international business opportunities, but also reflects softer expectations for the Canadian and global economies.

"Disruptive international trade policies have clearly shaken the confidence of Canadian exporters," said Peter Hall, chief economist with EDC. "One third of respondents are already negatively impacted by protectionist measures now in place, and an overwhelming majority sees no resolution of major global trade issues within the next year."
Related:
Take the Export Insights 2019 Survey
Tariffs and trade barriers are the top concern reported by Canadian companies contemplating growing or maintaining their business outside of Canada. More than one third (34%) of the survey's respondents say protectionism is affecting their export and international investment strategies, while a similar share (31 %) say the U.S.-China trade dispute is negatively affecting their export and investment activities.

Looking ahead, few Canadian exporters said they expect any respite. In fact, more than 90 % of respondents either said they expect protectionism measures to worsen (47 %) or stay the same (45 %) over the next 12 months.

And although the push for diversification has waned since last year, Canadian exporters are still contemplating new markets, with many respondents saying they're looking to take advantage of Canada's new trade deals, according to the survey. To this end, 18 % said they're planning to expand their exports to the European Union, which is covered under the Comprehensive Economic and Trade Agreement (CETA); while 15% said they're looking at countries in the Asia-Pacific, which are covered under the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).

Respondents who said they were planning to export to new markets dropped to 50% from more than 60% a year ago, reports EDC. The share of those who said they plan to invest outside of Canada dropped to 11% from 20% a year ago.
Click here to access the survey.

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Majority of Canadian exporters expect protectionism measures to get worse - Canadian Manufacturing

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Ottawa - Trade confidence among Canada's exporters fell to its lowest level since the European debt crisis seven years ago, according to the latest Trade Confidence Index from Export Development Canada. EDC surveys 1,000 Canadian exporters twice a year for the Trade Confidence Index.

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Hello to all Readers!!!

Welcome to this Padlet, which will be an analysis of the Free Trade Agreement and Protectionism.

In this Padlet, you will be led through a general overview of the above-mentioned topics, and will hopefully leave this Padlet with a better understanding of the FTA and the role of Protectionism

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The North American Free Trade Agreement (NAFTA) is an economic free trade deal between Canada, USA, and Mexico. The video below is a brief history of the NAFTA; how it was created, and why.

This video is a good historical video regarding one of the largest Free Trade Agreement in the world. This Agreement, formed in 1993, when signed by President Bill Clinton, helped create increased jobs for the nation, and the trade between the three nations is now upwards of 1.1 TRILLION dollars.

Vid#1: Brief History of the NAFTA

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The Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) is a free trade agreement between Canada and 10 nations in the Asia-Pacific Region. This video outlines the benefits of the CPTPP for Canadians through an improved trading block, approx. 4.5 billion in extra funds, and reduced tariffs for various workers.

This video is a representation of the benefits of Free Trade and how Canada, and other nations can benefit from working internationally to improve economic trade.

Vid#2: Benefits of the CPTPP for Canadians

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"Protectionism refers to government policies that shield domestic production (and producers) from foreign competition. This is done through introducing a system of taxes on all foreign goods and products, to increase their overall price, to encourage customers to buy domestic. This website gives a clear definition to protectionism, with clear examples and anlysis.

This website was chosen as it is important to provide a thorough understanding of the basics of a topic, before looking at positives and negatives, for context purposes. This website introduces readers with no background in protectionism and gives clear definition and examples for greater understanding

Website#3: What is Protectionism

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Protectionism refers to government policies that shield domestic production (and producers) from foreign competition.

Protectionism

Protectionism refers to government policies that shield domestic production (and producers) from foreign competition. For example, a Canadian tariff of 15% on an automobile that costs $5000 in a foreign country means that a tax ( customs duty) of $750 will be levied on the car when it is imported to Canada. The Canadian price will be $5750, and Canadian producers of similar vehicles who can operate profitably at a price of $5750, but not $5000, will be able to compete with imports in the Canadian market. Producers dependent on protection cannot normally export, since their costs are above world prices, and they therefore depend almost entirely on the home market. (The effect of the 1965 Canada-US Automotive Products Agreement is that automobiles produced in Canada can be exported to the US, although the price in Canada is higher.)

Economic analysis shows that economic losses from a tariff exceed its benefits. Theoretically, a tariff is wasteful because it leads to a substitution of higher-cost home production for lower-cost imports; if tariffs were repealed, manpower and capital in protected industries would shift to other employments, at home or abroad, and everyone, in their role as consumers, would gain from lower prices. Owners having to change the employment of their resources would suffer losses: landowners and shareholders in the contracting industries would lose more as owners than they would gain as consumers; specialized workers in the contracting industries would probably face retraining or lower-paying jobs; and others would bear the "transitional" costs of reorganizing their economic lives. Probably the many net winners would each gain a relatively small amount, while the relatively few net losers would suffer fairly heavy losses. Nevertheless, in principle it should be possible for a government to compensate losers and still produce a net social "profit" by repealing tariffs.

The debate about protectionism has revolved around attempts to find an intellectually respectable rebuttal to the economic argument, but none has been found. Public discussion of protectionism would be better if its proponents would argue that, although it involves economic costs, these are outweighed by noneconomic benefits. The intriguing question is why virtually all governments have passed laws known to reduce their citizens' economic well-being.

Protectionist policies may confer benefits that cannot be bought in the marketplace, such as increased military security, a larger population and more diversified production, and a heightened sense of national identity. These vague contentions cannot be definitively refuted, but they seem not to fit the Canadian situation. The defence argument is largely irrelevant in countries of small populations. Belief in the virtues of size and diversification, although given no credence by economists, seems widely shared by politicians. Voters may view size and diversification as matters of national pride, in which case the "diversification" argument merges with the "national identity" argument. In Canada, arguments for protectionism are generally not supported by residents in 8 provinces who observe that the tariff diversifies production mainly in Ontario and Québec.

A second explanation may be that political dynamics almost ensure protectionist policies. Politicians are likely to support tariffs where the "protectionist" vote is concentrated, and ignore tariffs or pay lip service to "free trade" elsewhere. Even voters who would gain by repeal may vote against it in compassion for those "vested interests" whose lives would be disrupted. But this explanation is not fully satisfying. Practical techniques exist for compensating the losers from a change in government policies, so that the "compassion" argument loses force; and the "vote-getting" argument begs the question of why a political party could not promise both to raise the standard of living by phasing out tariffs and to adopt policies to ease the transition.

A third possible explanation for protectionism suggests some deep psychological or biological "imperative" compelling people to favour domestic producers and protect production in the "home territory."

Although the British North American colonies had relied upon relatively low tariffs on specific commodities for government revenues, the first coherent Canadian system of protection was established well after Confederation. Sir John A. Macdonald won the 1878 general election largely on the strength of the National Policy, a policy of Economic Nationalism designed to protect Canadian businesses against competition from lower-cost US firms. Since that time, although the 1911 general election was contested over the question of free trade with the US (see reciprocity), protectionism in some form has always been part of Canada's international economic relations.

After WWII Canada signed a General Agreement on Tariffs and Trade (GATT) that obligated member nations to reduce tariffs and other barriers to trade by multilateral negotiations. GATT has been effective in reducing tariff rates, but not in reducing "nontariff barriers." Indeed, the decline of tariffs has been accompanied by a growth of other barriers: import quotas; threats of quotas or other measures that induce foreigners to accept "voluntary export restraints" when shipping specific goods to Canada; administrative protection, by which customs officers restrict or impede the entry of imports; and many other policies ranging from exchange controls to health and safety regulations.

Canada can perhaps claim to have pioneered another form of protection: "content" provisions, which make it easier for firms to import when they produce in Canada a certain proportion of the content of the goods they sell. Content provisions have been applied to automobile firms since 1926 and are also used in the broadcasting industry.

Since WWII, several tariff substitutes have been adopted by Canadian provinces in a pronounced movement to "provincial protectionism." Marketing boards have been established to raise the incomes of certain farmers (notably milk, egg and poultry producers) by restricting provincial production, and by persuading the national government to apply tariffs to imports from abroad and "production quotas" to all provinces. Provincial governments also favour provincial producers in letting government contracts by accepting "domestic" bids even if they are higher than bids from other provinces. Recently some provinces have required firms bidding for contracts to abide by "provincial-content" rules, and some have required that particular industries give priority in hiring to applicants who reside (or perhaps were born) in the province.

The phenomenon of provincial protectionism, and the suspicion that there would also be municipal protectionism if it were feasible to restrict trade between cities - as it was in the Middle Ages when local protectionism flourished - suggests that protectionism is not simply a matter of national economic diversification or national identity.

See also Foreign Investment; Free Trade; International Trade.

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Protectionism refers to government policies that shield domestic production (and producers) from foreign competition. Protectionism refers to government policies that shield domestic production (and producers) from foreign competition. For example, a Canadian tariff of 15% on an automobile that costs $5000 in a foreign country means that a tax ( customs duty) of $750 will be levied on the car when it is imported to Canada.

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Protectionism is the practice of protecting a country's domestic industries from competition (through foreign companies) by including a tax on al imported products. This has the unfortunate effect of reducing international business, and can be very harmful in the international economic system in place today. This video outlines the risks of adopting a policy of Protectionism, with Ex-President Barack Obama firmly stating that "Protectionism will Fail".

This video is a clear example of the issues with protectionism. In today's economy, protectionism is not only a danger to a country's international interests, but will also hurt the country's domestic economy. With reduced business, there are reduced profits.

Vid#4: Barack Obama on Protectionism

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Barack Obama warns of the perils of protectionism

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Protectionism has historically been known as negative from an investing standpoint due to a lack of resources and availability of business to invest. However, in some cases (as demonstrated in the video) where protectionism can be seen as a positive tool in an investor's profile, depending on the efficiency of their profile in handling domestic clients

This video outlines a rarely seen opinion in Canadian economics regarding Protectionism. We see a potential method where protectionism becomes viable, and can be used to positively build up an investor's profile.

Vid#3: Benefits of Protectionism

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Can Protectionism Ever Be a Good Thing for Investors?