Canadas Place in the World

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REVIEW Globalization is the movement of masses, the expansion of knowledge. Inevitable? Unavoidable? Can Globalization be stopped? What is going on in Europe that will change the pace of Globalization? European Union, the currency. What determines the value of a currency? Supply and demand. Why do people care about Greece? In terms of currency value. Investments made in Greece. Financed standard of living through borrowing, bonds. Etc. To allow spending in Greece. European banks, Greek Debt, Spain, Italy and so forth. What about the ripple effect? If Greece goes, they will bring their own currency back. The second thing, is not pay what they owe. Declare bankruptcy. Exposed banks. Countries that use the euro = Fiscal and Monetary policy (Fiscal is taxation When they join a currency union, give up the whole side of Monetary policy. Given up half their sovereignty) Pace of Globalization Concern of politicians is employment. Politicians attempt to preserve jobs. Enact protectionist measures. Passport control, restricted movement. EXTRA NOTES TO BE FOLLOWED WITH NOTES CHAPTER 2 Canadian Economy: Natural resources. Blessing and curses of N.R. Natural Resources are regulated, private companies are given permissions to do what they do through Government regulation. Advantage of the depreciated dollar. Natural Resources hold up the value of the currency, but do not create a lot of jobs in Natural Resources. Job Migration movement to the WEST; where Natural resources and Agriculture. Loss of manufacturing. Exporting nation. Canada is a trading nation. TRADE accounts for 70% of GDP and GNP. o Trade equals 76% of GDP

o of trade is with USA Barriers to trade that Canada has put up. o Wheat products. o What is causing a problem with trading partners. Supply management ( The very opposite of free market, controlled) Dairy (300% tax for any Dairy import) Pork Chicken Turkey o Asian trading block? You cannot have trade barriers and be

part of a free trading group. Who is doing the trade? Technology has enabled globalization, and small exporters to do well. Everyone benefits from technology and globalization. 1993 28,000 companies that exported 2004 44,000 companies that exported o Just that easy 2/3rds of all exporters (SME) What is standard of Living? GDP? HDI? GDP per Capita. What causes an increase in the standard of living? Productivity. Quality and Quantity of life. o In China, the standard of living is doubling every ten years. Rule of 72? What is it compounded? 7.2% compounded. As a country gets wealthier, the make up of the gross domestic product starts to change. Services become more important, the service industry. Why do services become more important? There are more services if there is more money to float around. As people loose jobs in manufacturing, they have to create jobs. Entrepreneurship. Creation of jobs Service job, not manufacturing. o Services in Canada are 75% of jobs. o 100 Years ago, 75% in Manufacturing. o Canada depends on trade for standard of living In our best interest to negotiate trade agreements with other countries.

TRADE AGREEMENTS NAFTA Multilateral (Replacement of the AUTO PACT) Regulations, enforcement of Job creation. o Overall effect of NAFTA in dollar terms + o Cost in Jobs o Cheaper labor? Consumers, and producers benefit from cheaper production. Producers that benefit to political parties in the USA. o Before 2008, hourly cost to make a car, was around 75.00 Hr. Including salaries and benefits. o MAQUILLADORA o As long as the product is produced within the three countries, it can go to the other countries DUTY FREE. EU - Multilateral o Currency. o What else does the EU offer, rather than an economic ordeal. MERCOSUR o Chile, Brazil and Argentina ASIA (ASEAN) Trade agreement in Asia o Japan, exporter, but blocks imports. Protection of RICE farmers. o South Korea Car barriers. Canada has a tariff on South Korean cars. 6%

Global Business Environment

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- Federal (National Level) - Provincial (Health Funded by the Federal Government, but administered by the Government) Subsidies available (free information, free money) - Municipal (Garbage Collection) - Politicians try to create jobs, in order to increase changes of re-election - Crown Corporation business owned by the Government, but it is run as a business. Profit setter. Post office, Canadian Government owns 100% of the shares, but it is autonomous Export Development Corporation (www.edc.ca) o Promotion of exports from Canada, and to make a profit from doing this o Access to money at a lower rate of interest Borrowing and then lending Funding large capital projects if there is a possibility of job creation Insuring

All three level of Canada promote business If youd like to set up a business in Hamilton, Toronto (Municipal) If you need some permits, if youre going to hire, there is something available that will subsidize costs (Provincial) Federal level TRADING BLOCS NAFTA Corporate money instigated political action for cheaper labor, and profitability. Right of Capital Seeks the best deal around the world The race to the bottom Minimum standards of everything. Low cost goods, low cost supplier, has to have cut corners somehow to get the lowest price somehow. Anyone who wants to compete with Wall mart has to do the exact same. Throwing away things that weve learned. Quality of life is thrown to the bottom. Democrat is protectionist refinements to things depending on the government. International minimum wage.

ASSIGNMENTS

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* www.canadabusiness.ca * www.tradecommissioner.ca - Offices in 40 countries overseas. Trade commissioners are there to fill the gaps, to fill the possible institutional voids. Trade commissioners will research for you the examination of credit ratings for customers. Market reports provide detailed analysis 600 Reports + Industry Sectors Reports Contacts Trends Facts & Figures KEY Specification in regards to questions asked about sectors, regulations, industry contacts, sales figures, ETC. * www.international.gc.ca Changes that are coming, those that have been made Affairs affecting international trade/business * www.edc.ca Export Development Corporation o 8,000 on going clients that are worked with in some sort of export import relationship o Analysts * www.intracen.org Examination of Market (X) for Product (Y) United Nations Web-site to promote international trade between countries. Non-denominational Assignment information www.canadabusiness.ca Grants and Financing Starting your business Checklist Employment standards in Canada How to hire of fire people ASSIGNMENT

The government of Canada has many excellent websites. There is one, in particular, that is very helpful for business. Your assignment is to familiarize yourself with www.canadabusiness.ca How would you use this website to start and / or run your own business? This assignment is worth 20%. Make at least 20 good points. Due June 5 in hard copy. The late penalty is 2% (out of 20%) per day late. This is a group assignment. Groups are 1 to 5 students. Andrew