Trade barriers

Question 1

Why do governments set up trade barriers?

Answer 1

• To protect local businesses
• To protect local jobs
• Generate revenue
• Protect citizens from harmful products

Question 2

Tariffs

Answer 2

• Are taxes or duties put on imported products or services.
• They raise the cost of imported goods.
• Canada has a free trade agreement with the United States and Mexico (CUSMA).

Question 3

Winners of tariffs

Answer 3

1. Domestic governments
   (they collect the additional taxes)
2. Local producers
   (their goods are more competitively priced)
3. Local employees
   (they keep their jobs)

Question 4

Losers of tariffs

Answer 4

1. Foreign Producers
   (their goods are now more expensive)
2. Consumers
   (the price of the products go up and are forced to pay higher prices)
3. Foreign employees
   (the people working overseas lose out on opportunities)

Question 5

Trade quotas

Answer 5

Is a government imposed limit on the amount of product that can be imported in a certain time period.

Question 6

Trade Embargos

Answer 6

• Imposed by the government.
• Bans trade on a specific product or with a specific country.
• Often done to put pressure on foreign governments to change their policies or to protest human rights violations.

Question 7

What happens when Canada emposes a trade embrago?

Answer 7

• There is an increased need on domestic products.
• May cause the price of a product to increase, because the supply has decreased.

Question 8

What happens when another country imposes a trade embargo on Canada

Answer 8

• There is a surplus domestic supply.
• Canadian companies need to find alternative markets to buy their products.
• If not, they need to decrease production or close factories.

Question 9

Trade sanctions

Answer 9

Done to influence the policies or actions of other nations such as:
- Human rights issues
- War or revolution
- Terrorism
- Slavery
- Piracy
- Smuggling

Question 10

Trade sanctions can include

Answer 10

• Placing limitations on official and diplomatic contacts and travel
• Seizing or freezing assets in Canada to the offending country
• Legally restricting trade

Question 11

Safety regulations

Answer 11

The government regulates and administers commerce and trade in specific goods under many acts.
- Packaging and Labelling Act
- Food and Drugs Act
- Hazardous Products Act

Question 12

Foreign investment restrictions

Answer 12

Investment Canada Act
Is to ensure that all foreign investments are reviewed to determine how they will benefit Canada.
- The Broadcasting Act, Telecommunications Act, The Bank Act, The Transportation Act
E.g. Transportation Act limits foreign ownership of a Canadian airline to 25%

Question 13

Environmental restrictions

Answer 13

Import restrictions are in place to protect Canadian crops and livestock, fish, and animals.
Must comply with Canadian standards.
- Certain toxins
- Hazardous chemicals
- Waste products
- Vehicles without proper emission controls