Trade Restrictions

Trade Restrictions February-26-09 8:53 AM

Case for Trade Restrictions • Protection of domestic employment ○ Protecting domestic industries • Retaliation ○ When trading partner export unemployment to other nations by reducing imports • Protection against dumping ○ Selling below market price • Diversification ○ Development of new domestic industries and exports • Protection of "vital" industries ○ Protection of critical industries • Protection of developing industries ○ Protection of infant industries • Improvement of terms of trade ○ Can control world supply • Protection of environmental and safety standards ○ Protect workers and environment • Protection from foreign influence and control ○ Lower foreign control

Impediments to Trade • Tariffs ○ Special taxes on imported goods • Subsidies ○ Government payments to producers to stimulate economic activity • Sanctions ○ Stop or curtail trade with offending nation • Embargo ○ A form of a trade sanction • Quotas ○ A limit on total quantity of imports

1. Exports provide income/jobs to Canadian workers since they are selling goods and services abroad, rather then just domestically where Canada can export at substantially lower opportunity costs. Imports help diversify the amount of goods and services available to consumers cheaper price, as well, provides us with goods that we cannot produce (ABSOLUTE ADVANTAGE). 2. Advancements of transportation, better trade relations, diversity, WTO. 3. Different resources thus higher/lower opportunity costs; labour, and geographical. Increases specializations, thus there is more products on global market.

CYU 1. a. b. c. d.

Payment Receipt Receipt Payment

2. a. lose, more exports b. More visitors to Canada, and less visitors to Britain Unit 5 - International Trade Page 1

b. More visitors to Canada, and less visitors to Britain 3. -

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a. Less exports, more imports b. Because there was more people hoping the border getting cheap goods. More import, less exports. Retail will support since they can do cheaper goods. a. Increase demand b. Decrease supply c. Increase demand d. Increase supply a. Buy US dollars (supply up, demand down) b. Sell US dollars (upwards) c. Buy US dollars a. Decrease b. Increase c. Increase d. Decrease

TLAE 1. a. 735.44 b. 768 2. a. 5x 2.24 = 11.2M b. 267 857 pounds 3. Lost money - 150 pounds / 0.445 =C337.08 150 pounds / 0.48 = C312.50 Difference = 337.08 - 312.50 $24.50 4. 1460 euros AMOU - 408 1. EU is much more comparable in size, and clout. They have a supranational parliament and common central bank. Social policies based on shared philosophy. Canada size and population and central bank are radically different. Keep own identity. 2. No, since there are still Medicare, pensions, and etc. - Pure opinion 3. Bad since we lose control on monetary policy since it would be based on America's interests, unemployment may rise. No meaningful representation in the decisions on interest rates or currency. 4. Yes since it would be more convenient for both parties. Easier trade, strongest currency. CYU 1. a. Receipt, current b. Payment, current c. Receipt, current d. Payment, and capital/financial e. Payment, financial/capital f. Receipt, financial/capital 2. Supply and demand, deficit meaning more Canadians investing abroad, when export greater, more foreign investment. NEGATED.

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