1.5 Barriers to International Trade

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1.5 Barriers to International Trade

• International Business Project

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Tariffs
Tariff- is a tax imposed by the local government
on goods or services coming into a country
(imports). They increase the prices of the
imported product or services in the local market.
Governments use this to protect local businesses
from low-priced competitive products from other
countries.
Canada places a tariff of 22 percent on imported
shirts in order to protect Canadian shirt
manufactures
Canada has a free trade agreement that reduce
tariffs with the US Mexico Chile and Israel
among others.
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Currency Fluctuations
Currency Exchange Rate the rate given by one
country for another countrys currency. Internatio
nal banks exchange with other international banks
the large volumes of foreign currency hey receive
from international business transactions. I.e..
Canadian dollar is worth 0.449752 of a British
pound British pound is worth 2.22345 Canadian
dollars.
The fluctuating value of currency on
international market can be a major barrier to
trade . When a countrys currency is devalued in
relation to another countrys currency the
country with the devalued currency can sell more
to the other country.
I.e.. Cross-border shoppers
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Investments Regulations
Investment Canada Act (ICA)- A Canadian federal
act to provide for the review of significant
investments in Canada by non-Canadians. Investors
who are non-Canadians must comply with the
provisions of the ICA which requires them to
file a notification when they commence a new
business activity in Canada or each time they
acquire reviewed if both the investor and he
vendor are from a country that is not a World
Trade Organization (WTO) member and if the value
of the business being acquired in Canada is over
5 million.

• Produce uranium and owns an interest in a uranium
  property

• Provide any transportation

• Provides any financial service

• Is culture business involved in the publication
  distribution production recordings audio and
  video music recording music in print
  television general public etc.

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Investments Regulations Cont
If the investment involves the acquisition of a
company with produces uranium and owns an
interest in a uranium property or engages in
financial services transportation or culture
and is worth over 5 million a review must take
place.
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Environmental Restrictions
Canada protects its environment with a number of
regulations. Canadas economy depends on its
natural resources. Restrictions on imports are in
place to protect Canadian crops and livestock
and fish and forests from contamination and
products brought into Canada must comply with
Canadian standards. Canadian Food Inspection
Agency are in charge of the process at
international arrival point. Canada also is in
the International Trade in Endangered Species of
Wild Fauna and Flora. This prohibits trade on
some 30 000 wild animals and plant species from
whales to parrots and from coral to cacti.
Products that do not meet to Canadian
environmental standards are not allowed to enter
Canada. I.e.. Toxins and hazardous chemicals.
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Foreign Relations and Trade Sanctions
Canada uses trade sanctions to influence the
policies or actions of other nations. Canada
attempts to stop human rights abuses war
revolution terrorism smuggling slavery or
piracy in other countries by imposing sanctions
instead of using force. Sanctions can include
placing limitations on official and diplomatic
contacts travel seizing or freezing assets in
Canada that belong to the offending nations
government its leaders or its people or
businesses and legally restricting trade between
Canada and the target state. Canada only joins
with other nation who share our views to
implement to sanctions jointly. Special Economic
Measures Act- the law of Canada that apply
economic sanction in response to a serious threat
to international peace and security. Export and
Import Permits Act- Canadian law that is used to
impose sanction on goods by mean of Area Control
List The Export Control List and the Import
Control List. United Nation Act- Canadian Act
that incorporates into Canadian law decisions
passed by the UN Security Council
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Safety Regulations
The federal government of Canada makes law
primarily to protect Canadians. The government
regulates and administers commerce and trade in
specific good under the following acts
Food and Drug Act Meat inspection Act Consumer
Packaging and Labelling Act Health of Animals
Act Seeds Act Fertilizers Act Plant Breeder
Right Act Hazardous Product Act
Canada Agricultural Product Act Fish Inspection
Act Plant Protection Act Administrative Monetary
Penalties Act Feeds Act Canadian Food Inspection
Act Customs Act Weights and Measures Act
Each of these Acts affect both domestic companies
and foreign imports. Each Act set numerous
regulations and could act as barriers to trade
for foreign exporters who may need to make costly
changes in their manufacturing procedures to
conform to Canadian standards
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Immigration Policies

• The Canadian economy benefits from their
  skills and financial investments. Immigrants and
  refugees become consumers the moment they arrive
  and as Canadas population is declining they
  help maintain the size of the Canadian market.
  They create demand for imports and contribute to
  trade between Canada and their home countries and
  they make Canada more culturally diverse.
• Visitors
  People coming to Canada for short stays such as
  tourist students or foreign workers always
  spend money either on goods and services or on
  products they purchase to take home.
• Canadian Tourism Commission state Canadas
  tourism industry generates 15.3 billion from
  foreign visitors in 1999.
• Many international companies wish to transfer
  key managers and specialists to Canada for a
  period of time. The individual may apply for a
  work permit if granted later on apply for
  Permanent Resident Status in Canada.

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Immigration Policies Cont
Immigrant under Family Class an individual must
be supported by a close family member (spouse
parent grandparents etc.) who is a Canadian
citizen or permanent resident already living in
Canada and who promises to support the new
arrival.
2. Refugees Refugees are people who have fled
their country to escape persecution or war.
Persecution may be reasons for race religion
gender nationality political opinion or
membership in particular social group. Asylum-
somewhere one can go to find safety. Grant asylum
means to offer protection in a safe country to
people who are in danger in their own country.
Sometimes refugees flee to countries where they
are still not safe or where they cannot stay.
These people can resettled in Canada as
permanent residents. All refugees in Canada are
allowed to participate fully in Canadian society
to seek work and to go to school. Both adults
and children can come to Canada. They help make
Canada the richly diverse country.
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Immigration Policies Cont
3.Immigrants You must have a Canadian
Immigrant Visa if in order to relocate to Canada.
A person can live and work anywhere in Canada
and receive benefits of a Canadian citizenship
they are permitted to apply for Canadian
citizenship after three years and may sponsor
family member for Canadian Permanent Resident
Status. Two ways to qualify for Canadian
Permanent Resident Status as an Independent
Immigrant or as a member of a the Family Class.
Independent Immigrants are divided into two
categories Skilled Worker Category Relies on a
point system its designed to indicate the
likelihood of success in Canada. Points are
gathered based on criteria including age
education skills occupation language ability
certain demographic factors and personal
suitability. Business Category Investors
entrepreneurs and self-employed people are
selected based on their abilities to make a
contribution to the economy or in certain cases
the cultural and artistic life of Canada.
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Dealing with the Trade Barriers

• There are still major political debates
  concerning trade
• Is freer trade good or bad
• Ties with UK
• The Asia-Pacific Economic Cooperation (APEC)
• Fluctuation in the value of the Canadian dollar
• Canadas immigration policies

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Canadas Trading Partners Focus on Cuba

• 1959 Cuban revolution
• The Toricelli Act
• The Helms-Burton Act
• Trading with Cuba
• Fall of USSR