...Canada: A Small Open Economy INTRODUCTION Canada has a small economy, which should translate into weaker economic growth projections. Canada relies intensely on its trade for enhancement and maintenance of standard of living. Recent expansion and growth of trade and prospects of business in developing market provided Canada with the prospect of trade with China and other similar markets. Market moderation resulted in the reduction of growth in Canadian international trade. Canadian traders needed to find newer grounds and solutions outside the natural reserves. The solution was found in international trade and free trade agreements. CANADIAN TRADING HISTORY Initially, Canada was in no shape to manufacture goods, the natives hunted and bought their needs by supplying fish and furs for trade. This basically established the link between Canada and Europe, and was the initial face of free trade. The connection of Canada and America trade established quite late, but USA became the most significant partner of trade with Canada. After WWII, the face of trading changed for entire world. Canada established strong connections with Japan, and with Pacific Rim Connection the Japanese industrialisation started, international trade with many countries of pacific region. In 1993, Canada signed NAFTA (North American Free Trade Agreement), with America and Mexico to remove trading hurdles. This agreement was basically devised by Americans, who already had a strong business tie with Mexico...
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...Americans believe that the best economic system is the “dog eat dog world” market system. I believe the best economic system in the world is the mixed also known as the Cradle-to-Grave Welfare. The question is Should Canada and the United States have a common economic system with little government involvement? I will talk about mixed and market economic system and my opinions on both as well as which one is more beneficial for Canada. Market system, This economic system has become less and less popular through the years for numerous reasons. For an example in a market economy there is a huge gap between the rich and the poor, this is because when you are at the top of the market it is easy to control what is happening and what to do with what you have. When you are at the bottom it is difficult to get going and you will most likely be getting scammed by the people at the top. Another reason why a most of the world has gone away from this style is because there is no government to help you out if needed. For example in the united states they have no health care, this is a problem for the lower paid...
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...Analyzing Current Economic Issues Summary: Canada’s Exports Need to Be Reoriented to the New Global Economy, Says Bank of Canada Governor Mark Carney (Source: Bank of Canada) This article focuses on the reasons behind the downturn of the Canadian economy. Mark Carney believes that the combination of overexposure to the U.S. market and underexposure to faster-growing emerging markets is almost entirely responsible for Canada’s further loss in world market share over the last several years. The article also talks about what actions Canada can take in order to bring our economy back up, and how we should invest in our greatest resource, which are our people Summary: Canada GDP: July 2012 Saw 0.2 Per Cent Jump, Decline in Mining, Oil and Gas (Source: HuffPost Business) During the month of July, 2012 Canada has seen a 0.2 percent decline in its mining, oil and gas extraction. When looking at the different types of sectors, the manufacturing sector performed well with a 6.9% increase along with wholesale trade increase by 0.2%. Although Canada’s output has increased by 1.9%, its weakness still lies in the export sector with a $2.9 billion trade deficit for the month July. Summary: Unemployment rate holds steady at 7.4% (Source: CBC NEWS) According to Statistics Canada, Canada’s unemployment rate remained at 7.4% in October. In addition, October’s unemployment in 7/12 provinces and territories has increased especially in P.E.I with the highest unemployment rate increase...
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...Name: Course: Professor: Date: Executive summery As per the 2010 agreement between president of china Hu Jintao and Canadian Prime Minister Stephen Harper, expert officials from both china and Canada carried out a study to give an analytical foundation to evaluate possible bilateral economic complementarities in some specific sectors (Metz, 2001). Each and every state globally has specific interest in various sectors of economy that promotes trade with the other country of interest depending with its capacity to supply to that country. The research completion assists to set the base for the two countries to start investigative discussions on matters of trade and economic promotion, as discussed by the leaders in the 2012 presidential meeting between the president of Canada and china. Both china and Canada are big trading countries. Both countries have a past history of integral trade as well as future potential economic growth. Research indicates that china is currently Canada’s second largest trading partner, whereas on the other hand, Canada is placed thirteenth among china’s top trading partners globally (Zhang, 2009). As a matter of fact from research, there is increase in two-way trade in goods, services and investments among the two countries. However, people to people relationship between the two countries have never been strong though there is an indication that there are students who visit to each other’s country. Government to government cooperation...
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...Global Assessment of Japan Bobbi Rieger, Chelsea Bergman, Sanam Amid-Hozour, Shirabe Yoshida University of British Columbia Okanagan In order to expand Webster Incorporated into the global market we have to consider which market would permit Webster Inc. to enter while allowing them room to grow as the competition is fierce within the faux wood industry. Our team believes the most profitable option for a global market in regards to expansion would be Japan. There are many reasons as to why this would be beneficial to Webster Incorporated. Historically, Japan and Canada have had high levels of exchanges, all the while maintaining a stable relationship. Trade between the Japanese-Canadian markets has been approximately equal in terms of importation and exportation. The most important factor of this being that one of Canada's major exports to Japan is lumber. Currently, there is a trade agreement between the two; the “Innovative Japan-Canada Economic Framework” was launched in 2005 to maximize the Japan-Canada economic relations and cooperation (Ministry of Foreign Affairs of Japan, 2011). More recently, in June of 2010 the customs administrations of Japan and Canada have signed the Mutual Recognition Agreement on Authorized Economic Operator programs. This program has allowed simplified and fast-tracked customs proceedings (Ministry of Foreign Affairs of Japan, 2011). These proceedings will contribute to furthering secure and facilitated trade...
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... International Market Expansion Proposal Submitted by – Shazma Farooqui Student ID - 10000 Word Count - 2000 Executive Summary The proposal is for Jason products which is a family owned business, the company deals in high quality dining accessories and table protection solutions. The company products are innovative, beautiful, & practical to use, in the last 5 decades the company has grown to become one of the world leader in cork backed placemat manufacture and design. The company is headquartered and based in Auckland with subsidiaries in UK, USA & Australia. (www.jason.co.nz, 2013) This proposal is for exporting the company products to four new countries along with detailed explanation that why these potential markets will be beneficial for the organization to start exporting company products, the proposal will cover the economic, financial & cultural factors prevailing in the countries being recommended in this report. The environment, competition and the market trends in domestic & international market & the developments have a direct impact on success. It is imperative to have a better understanding of the prevailing market scenario, which will help us to plan well and take good decisions. Target Countries for Expansion * Japan * Canada * Brazil * France JAPAN Japan is one of the most developed countries in the world and the economy of the japan is the third largest...
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...PART-I US-Canada: Since many years, US-Canada trade has been the cornerstone for Canada’s economic development. Canada began its trade with the US in 1920s when rapid urbanization in the US led to huge demand in wood and other forestry products. In the 1920s and 1930s, pulp production increased steadily with over 90% of the produce being exported to the US. In 1925, the opening of the Panama Canal increased the exports of lumber from British Columbia to eastern U.S. markets, which dramatically increased the netbacks received for lumber produced in British Columbia (Statistics, Canada, 2012). Post world war, rapid expansion in the US industrial capacity was accompanied with rapid growth in the Canadian economy as well. Growth in the demand for newspapers led to the growth of pulp and paper industry. By1950, over half of the world’s newsprint was supplied by Canada. By 1954, pulp and paper exports accounted for 24% of Canada’s total exports, of which, 33% of those exports were to the United States (Statistics, Canada, 2012). Post 1960, the new staple in the resource landscape for Canada was Energy. Until this time, though some local sources were available on the Prairies and in Nova Scotia, Canada had relied on coal imports. In 1957, there was a major oil discovery in Alberta at Leduc, which lead to a major and dramatic expansion of crude oil and natural gas industry, the effects of which are still evident till date. The North American Free Trade Agreement (NAFTA) removed most...
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...adopt the Political Economy Analysis to discuss the benefits, risks and costs from Canadian political, economical and legal systems for FDI. It is stated that Canadian democratic systems prevent government from abusing power; market-oriented economic systems advocate innovation and property rights protection and its legal systems provide safeguards to property rights protection. Therefore, it believes that investing in Canada is a good choice. Since Canada is rich in natural resources and has rich human resources, it is recommended that Canada is appealing for firms which are doing business in the field of natural resources or high-technology. Table of Content Executive Summary 1 1. Introduction 4 2. Political Economy Analysis 5 2.1. Political System 5 2.2. Economical System 6 2.3. Legal System 8 3. Recommendation 9 4. Conclusion 9 References 10 Appendix 12 Table of Figures Figure 1 FDI Index 4 Figure 2 Protection Years 7 Figure 3 Net government debt as percent of GDP 8 1. Introduction Canada, with a population approximately 34 million people, is the second largest country in size after Russia (CIA, 2013). Canada is also one of the largest advanced economies in the world. In the respect to attracting FDI, it jumps 16 spots into 4th place (ATKearney, 2013). Figure 1 FDI Index Source: (ATKearney, 2013) The aim of this report is to assess Canadian attractiveness as a destination for foreign direct investment. Firstly it gives an overview of Canada. Then it will adopt...
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...investing in BRIC (Brazil, Russia, India, China) but they are least concerned in investing with the N-11. In my research i have shown that investing in N-11 can prove out to be very profitable. I have particularly focused the trade and investment relationship between Canada and one of the Next Eleven countries that is Vietnam. In my research you can see the raw and products that Canada is exporting to Vietnam. The GDP of Vietnam is increasing rapidly year by year. Canada export business with Vietnam is rising up as the time is passing by. Canada is exporting the products that Vietnam needs. I have attached my research project paper along with this cover letter. I hope that my project will provide some value and knowledge about the subject though it being my first research project. Thanking You Yours sincerely Canada Exporting and Investing in N-11 (Vietnam) Abstract: - In this research project, I would like to show how Canada is investing in the Next Eleven countries particularly Vietnam. There are many sectors in which Canada is investing in these countries. Some of the major sectors in which Canada is investing are agro food trade and industry. I would like to discus about the possibility of Canada...
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...Canada is Dependent on the Economy of the United States Canada’s economy relies heavily upon the U.S economy when it comes to international trade, foreign investment, and jobs. They share the biggest trading relationship in the world with almost 2 billion dollars’ worth of products crossing the border every single day. The stock market consists mostly from the companies located in the U.S. Who obtain natural resources from Canada. Our southern neighbor is the biggest foreign investor in Canada; in addition 1 out of 5 jobs in Canada are linked to international trade. In conclusion if anything were to happen to the economy of the United States it would affect our economy as well. Canada is a member of the G8 and has the 7th largest economy in the world. U.S is very important to us, considering the fact that about 70 percent of the population lives 200 Miles away from the boarder. Trade is essential; Canada is blessed with a huge oil resource, the second largest after Saudi Arabia (Canada’s economic overview, Par4). We are also the second largest country after Russia. We are known worldwide as a very diverse country, top when it comes to economics and occupies a lot of land. Trade of natural resources and different products is very important to keep Canada at the top. The United States of America and Canada share the biggest trade relationship in the world. U.S accounts for 73% of all exports and 63% of all imports in Canada. When NAFTA (North American Free Trade Agreement)...
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...Question B It has been argued by some authors that there are principle economic weaknesses that prevent Canada from responding to a rapidly changing economic environment. Discuss what the weaknesses are and how they have hampered Canadian competitiveness. Finally, offer your own assessment, drawing on course materials, of this argument. There are numerous economic weaknesses that the author has argued. This essay mainly focuses on these flaws and how they are hampering Canadian competitiveness. Firstly majority of the companies in Canada are foreign owned or foreign controlled. From manufacturing sector including auto, chemical, and electronics to giant retail stores such as Wal-mart, Costco, Sears, Hudson Bay, etc are all foreign owned. In automobile sector GM, Ford, Chrysler, Toyota, Honda, etc dominates the auto industry in Canada. The automotive industry employs 158,302 people in automotive assembly and component manufacturing, and another 336,212 in distribution and aftermarket sales and service[1]. These foreign operated companies are extremely aggressive in nature, tough for domestic companies to compete and have monopoly over Canadian market. In addition they are usually productive than domestically controlled companies. Equally important it seems that foreign industry has assisted Canadian economy to become stronger and employ Canadian, however Government studies revealed that foreign enterprises had generally employed Canadian capital to expand...
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...Agreement (FTA), Canada and the European Union have established an agreement that will further help the trade deals and investment ties between Canada and the European Union. Opening up the trade with CETA will eliminate 98% tariffs between both countries. This means Canada and the European Union will be able to import and export goods to each other at a more frequent and cheaper rate as well as opening up the market for more sales/trade opportunities. This deal will supposable outdo the North American Free Trade agreement that involved Canada, the United States and Mexico if approved by the European Union Parliament. In the article “Canada, EU agree...
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...The Relationship between Financial Markets and Economic Growth: Implications for Canada Research Study Prepared for the Wise Persons’ Committee Gordon Boissonneault Senior Economist, WPC Staff October 24, 2003 The Relationship between Financial Markets and Economic Growth: Implications for Canada Executive Summary The financial sector has experienced significant change over recent decades, driven by advances in information and communications technology and widespread reductions in international barriers to trade and investment. International integration is advancing rapidly, reflecting in part the development of global production chains and the rapid growth of emerging market economies. As a result of the forces of integration, international competition has become more fierce and firms are under increasing pressure to cut costs and differentiate their products to survive. Canada’s economy has numerous linkages beyond its borders, particularly with the United States. The future improvement of Canadians’ standard of living will depend in large part on foreign investment in Canada and the ability of Canadians to invest abroad. In this regard, a thriving financial sector will be a key component of our success. Canada has a small share of the global capital market. Thus, to be competitive, the Canadian capital market must be efficient and offer a low cost of capital. As much as possible, the policies and institutions that govern the Canadian financial...
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...LEARNING OBJECTIVES LO15.1 Discuss how the equilibrium interest rate is determined in the market for money. LO15.2 List and explain the main functions of the Bank of Canada. LO15.3 List and explain the goals and tools of monetary policy. LO15.4 Describe the overnight lending rate and how the Bank of Canada directly influences it. LO15.5 Identify the mechanisms by which monetary policy affects GDP and the price level. LO15.6 Explain the effectiveness of monetary policy and its shortcomings. LO15.7 Describe the effects of the international economy on the operation of monetary policy. 2 15.1 The Market for Money and the Determination of Interest Rates 3 KEY GRAPH - The Demand for Money, the Supply of Money, and the Equilibrium Interest Rate FIGURE 15-1 (a) Transactions demand for money, Dt (c) Total demand for money, Dm and supply (b) Asset demand for money, Da Rate of interest, i percent 10 7.5 Sm 5 + 2.5 = 5 0 Dt 50 100 150 Da 200 Amount of money demanded (billions of dollars) 50 100 150 200 Amount of money demanded (billions of dollars) Dm 50 100 150 200 250 300 Amount of money demanded and supplied (billions of dollars) 4 15.1 The Market for Money and the Determination of Interest Rates The Equilibrium Interest...
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...investment involving a long-term relationship and reflecting a lasting interest in and control by a resident entity in one economy of an enterprise resident in a different economy (UNCTAD). There are two types of FDI, inflows and outflows, which can be used to help determine the investment strategies and economies of countries engaged in FDI. North America has been the source of nearly one-half of all investment and almost three-quarters of the jobs created throughout the globe (Huggins, 442). North America is probably the most important continent when it comes to dealing with FDI. The three main countries of North America, the United States, Canada, and Mexico, all rank in the top 15 of world economies, proving them to be desirable partners in FDI transactions. The trends of FDI discussed in this report will be unparalleled to this information and can lead to some predictions on how future trends of the countries of North America will continue to be superior to that of the other continents of the world. Keywords: Foreign Direct Investment, FDI Inflow, FDI Outflow Foreign Direct Investment is investment of a company located in a different country either by buying a company in the country or expanding its business into the country. FDI can be done for many purposes. Companies may have tax incentives abroad, cheaper labor, abundant resources, target-specific markets or other reasons to enter into direct investment with a foreign country. Three components of FDI include equity capital...
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