Shape of the day Learning Intentions

- Reading - I will be able to explain the pros and cons

- Quiz to globalization
- Notes - I will understand the pros and cons to
- Debate prep NAFTA
- Debate
PLEASE READ P. 302 308H

We will play Kahoot so be sure understand what

youre reading
QUIZ ON P. 302 308

Kahoot!
 SECTORAL FREE TRADE & THE AUTO PACT
Sectoral (belonging to a distinct area of economic activity) Free Trade was popular
economic policy 1960s, when Canada & the U.S. entered into numerous trade
agreements
Ex. Of sectoral free trade is Canada U.S. Auto Pact
Canadas car manufacturing industry struggling
Assembly plants produced limited quantities of cars & trucks for the Canadian
markets - production costs high and Cdn consumers paid the price they needed
change
Auto Pact guaranteed freer trade between 2 countries in auto parts and vehicles
Clause in agreement ruled that North- American- based manufacturers, Ex. Ford,
had to assemble one automobile in Canada for each new car brought in Canada
--> Auto Pact was an ex of managed trade (a trade relationship that has built in
protection if one partner does not meet negotiated terms) so Cdn production rose and
branch plants began to build models for entire NA market.
1968 70% of vehicles made in Canada were being exported to U.S & auto industry
became a leader in Cdn economy
But branch plants were still owned by American Co.s --> effected Cdn
manufacturing sector during economic crisis of 2008-2009
 CRITIQUES
Some Canadians worried about long term consequences of branch-
plant economy and dependence on the U.S. as a trade partner
Many Americans sent American managers to run branch- plants in
Canada rather than hire Cdns
They also tended to spend little $ on research and development in
Canada
Brain drain: emigration of ppl with tech skills & knowledge to a
country with greater employment opportunities
many educated Cdns migrated to the U.S. where they could work
in research and development or move up on the corporate ladder
Profits from branch plants tended to flow back to U.S. To be used to
finance companys projects in other countries
 FREER TRADE
Many trade barriers in North America were removed under freer trade agreements (a
trade relationship that has reduced its protective measures, but not entirely)
Mulroney & Reagan (U.S. President) arranged a free trade agreement between Canada &
the U.S
U.S. Free Trade Agreement (FTA) approved in 1989:
No export subsidies were permitted
Canadas restrictions on foreign ownership reduced
All restrictions on energy exports and imports removed
The Auto Pact & Canadas agricultural marketing boards (an association of food producers
that control the marketing and pricing of their product) were maintained
Canadas cultural industries- publishing, TV, cable, satellite broadcasting, movies, music,
and radio were exempt
Trade barriers reduced but both nations imposed measures if they felt trading was unfair
FTA CRITIQUES

Canada: size and power of American economy

compared to Canadas. They complained that because
American lobby groups were so powerful, the U.S.
was favoured in trade disputes
Americans complained that Cdn industry was unfairly
subsidized by CDN govt programs
These disputes ongoing and not easily resolved
THE NORTH AMERICAN FREE TRADE
AGREEMENT

1994 NAFTA expanded the existing agreement to include Mexico and set
out a schedule to reduce tariffs over a 10 year period
TASK
Please use P. 314 to 318 to gather information on the PROs
and CONs of NAFTA
Should we cancel NAFTA?

Support NAFTA Cancel NAFTA