Teaching About the World’s Largest Trade Relationship (AKA: 10 Things You Should Know About the Canadian Economy) 2011 STUDY CANADA Summer Institute Dr. Paul A. Storer Source:http://sbadrinath.files.wordpress.com/2009/03/different26rqcu3.jpg?w=400&h=226
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Teaching About the World’s Largest Trade
Relationship (AKA: 10 Things You Should Know About the Canadian Economy)
2011 STUDY CANADA Summer Institute Dr. Paul A. Storer
7. Canada had a long history of protecting its economy from
U.S. competition
Source:Hart, M.A Trading Nation
The Tariff “Wall”
“Greedy”AmericanWolves
Happy Canadian Farmers AndManufacturers
Sir John A.Macdonald
Source: Hart, M. A Trading Nation
Source: Hart, M. A Trading Nation
8. Canadians and Americans fear the border – but for
different reasons
Trade, Culture, and Sovereignty
• Source: Aislin Cartoon
• Montreal Gazette
Source: Molson
“I Am Canadian” ad
•Canada: A Source of
“Vulnerabilities?”
Source: Bellingham Herald
• Source: ABC news • Source: International Border Commission
•Source: U.S. Customs and Border Protection
Delays and
Displacement:Just-in-time
orJust-in-case?
9. Canada’s economy has performed well under free trade
Unemployment Rates
2.0
4.0
6.0
8.0
10.0
12.0
14.0
Canada
United States
Unemployment Rates
2.0
4.0
6.0
8.0
10.0
12.0
14.0
Canada
United States
Unemployment Rates
2.0
4.0
6.0
8.0
10.0
12.0
14.0
Canada
United States
Unemployment Rates
2
3
4
5
6
7
8
9
10
11
Jan-
00
Jul-0
0
Jan-
01
Jul-0
1
Jan-
02
Jul-0
2
Jan-
03
Jul-0
3
Jan-
04
Jul-0
4
Jan-
05
Jul-0
5
Jan-
06
Jul-0
6
Jan-
07
Jul-0
7
Jan-
08
Jul-0
8
Jan-
09
Jul-0
9
Jan-
10
Jul-1
0
Canada
United States
December 2010 - Canada: 7.6%, United States: 9.4%
Total Employment(January 2007 = 100)
94
95
96
97
98
99
100
101
102
103
104
Canada
United States
Wall Street Journal, Monday January 3, 2011
10. NAFTA is much less ambitious than the European
Union (and isn’t even a complete free trade
agreement)
NAFTA and Rules of Origin
• Rules of origin grant access to NAFTA tariff preferences.
• Compliance costs are non-trivial.
• Rules limit a “perimeter” approach.
U.S. Commerce Department
Guide
Regional Value Content Example
U.S. – Canada Softwood Lumber Agreement 2006
•January 2007
Products Subject to SLA 2006• Softwood lumber products processed in Canada and
imported into the US and classified in Chapter 44 of the HTS
• 2007 HTSUS
• 4407.10.01
• 4409.10.05
• 4409.10.10
• 4409.10.20
• 4409.10.90
• *4418.90.2500
• *4418.90.4690
• *4421.90.7040
• *4421.90.9740
•* Lumber products classified in these tariff numbers that do not conform to the specifications of the exclusion in Annex 1A(4) are subject to SLA 2006