1. BBB4M
CHAPTER 1

2. 1.1 Evolution of Global Trade
Business - The manufacturing and/or sale of goods and/or services to satisfy the wants and needs of consumers to make a profit.
Transaction - An exchange of things of value. $

3. 1.1 Evolution of Global Trade
Domestic business - A business that makes most of its transactions within the borders of the country in which it is based.
A domestic business in Canada is: owned by Canadians, relies on Canadian products and services, sells products and services to Canadians
International business - The economic system of transactions conducted between businesses located in different countries.

4. 1.1 Evolution of Global Trade
Domestic transactions are made between two Canadian companies.
International transactions involve a Canadian company and a non-Canadian company.
Chapter 1:
WHAT IS TRADE?

5. 1.1 Evolution of Global Trade
Domestic market - The customers of a business who live in the country where the business operates.
Foreign market - The customers of a business who live in a different country than the one where the business operates.
Trading partner - When a business in Canada develops a relationship with a business in another country, that country becomes a trading partner with Canada
Chapter 1:
WHAT IS TRADE?

6. 1.1 Evolution of Global Trade
Five ways for a business to be considered
an international business:
Own a retail or distribution outlet in another country
Own a manufacturing plant in another country
Export to businesses in another country
Import from businesses in another country
Invest in businesses in another country
Chapter 1:
WHAT IS TRADE?

7. 1.1 Evolution of Global Trade
SELF-SUFFICIENCY – The abiity to provide for all your basic needs, such as food, clothing, shelter, and water, without relying on anyone else.
intentional communities, are set up to be somewhat self-sufficient.  There are over 500 in the world; they include Eco-villages, student co-ops, and urban housing cooperatives. They are often based on shared values or themes such as environmentally sustainable living.

8. 1.1 Evolution of Global Trade
Trade had been free for the most part
Guilds (associations of merchants and/or craftspeople) : they controlled the manufacturing and sale of the products made by the people of the town
No goods could be imported into town if they competed with local products and foreign merchants/traders had to pay a fee to trade un town

9. 1.2 History of Canadian Trade
Explorers from France and England landed in what is now Canada in the 1600s
Traded with First Nations people, especially the Ojibwa and the Cree, for fur and food, then sent goods back to Europe
The success of this international business led to the establishment of colonies and outposts in Canada, notably the Hudson’s Bay Company and the North West Company
Chapter 1:
WHAT IS TRADE?

10. 1.2 History of Canadian Trade
Trade with the United States
United States declared independence from Britain in late 1700s
Needed to become self-reliant
Invention of steam engine, cotton gin helped rapid growth of American industry
Canada supplied raw materials that were needed in the United States
United States became Canada’s largest trading partner—this remains true today
Chapter 1:
WHAT IS TRADE?

11. 1.2 History of Canadian Trade
Trade with Asia
Canada began trading with Japan after
World War II
Japan became known for high-quality
electronics and automobiles
China has more recently become a trading
partner
Chinese-made products are inexpensive and well made, and popular with North American retailers
Chapter 1:
WHAT IS TRADE?

12. History of Canadian Trade
Trade with Mexico
Developed since signing NAFTA in 1993
Goods made in Mexico and the United States now enter Canada duty-free
Mexico has become one of Canada’s top five trading partners since 2000
Chapter 1:
WHAT IS TRADE?

13. History of Canadian Trade
Trade with Emerging Markets
The Middle East
Has traditionally centred on oil, but this commodity is not sustainable
Political instability, lack of industrialization in much of the region has limited trade
United Arab Emirates (Dubai), Israel, and Egypt have established trading relationships with Canadian businesses that do not depend on oil
Chapter 1:
WHAT IS TRADE?

14. History of Canadian Trade
Trade with Emerging Markets
India
Population of over one billion people
Workforce generally young and well educated
Has become major centre of outsourcing and manufacturing
Lack of infrastructure and widespread corruption are persistent problems
Indian companies are aggressively expanding into international markets
Used under license from Shutterstock, Inc.
Chapter 1:
WHAT IS TRADE?

15. History of Canadian Trade
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Trade with Emerging Markets
Africa
African imports to Canada are very low
Business opportunities limited by unstable governments, lack of infrastructure, rural economies
Rich in primary resources
Some countries (Morocco, South Africa) are beginning to emerge as major trading partners
Chapter 1:
WHAT IS TRADE?

16. 1.3 Canada’s Economic Identity
Interdependence - The reliance of two or more nations on each other for products or services.
Three main areas of interdependence:
1. Primary/Extracting industries
2. Secondary/Manufacturing industries
3. Tertiary/Service industries

17. 1.3 Canada’s Economic Identity
Primary industries
The sector of the economy characterized by the extraction of natural resources from the earth or sea.
Five major primary industries:
agriculture
fishing, hunting, and trapping
forestry and logging
energy
Mining
In Canada, water is sometimes included in this list as well
Chapter 1:
WHAT IS TRADE?

18. 1.3 Canada’s Economic Identity
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Secondary Industries
Industries that create a finished, usable product.
Secondary manufacturing produces capital goods (products used by businesses) and consumer goods (products purchased by individuals).
Chapter 1:
WHAT IS TRADE?

19. 1.3 Canada’s Economic Identity
Tertiary industries (service sector)
Industries that do not make a product or extract resources from the earth, but provide necessary services to consumers and other businesses.
Examples include banking, construction, communications, transportation, and retail sales.
Chapter 1:
WHAT IS TRADE?

20. 1.4 Advantages of International Trade
Meeting Needs
Job Creation
Attracting Investment
New Technology & Materials
Diverse Products & Services
Chapter 1:
WHAT IS TRADE?

21. 1.4 Disadvantages of International trade
Support of Non-Democratic Systems
Cultural Identity Issues
Social Welfare Issues
Environmental Issues
Political Issues

22. 1.5 Barriers to International Trade
TARIFFS
CURRENCY FLUCTUATION
INVESTMENT REGULATIONS
ENVIRONMENTAL RESTRICTIONS
FOREIGN RELATIONS AND TRADE SANCTIONS

23. 1.5 Barriers to International Trade
SAFETY REGULATIONS
IMMIGRATION POLICIES