We Need Consumer/Retail Free Trade


dumpthemonarchy
#1
This article purports to discuss the risks of shopping south of the border. It's really about how there is no consumer/retail free trade, only corporate free trade. National free trade deals are for big corporations, not small business nor consumers.

Personnally, I don't understand why there is any duty to pay at a border for a product a consumer buys. From anywhere in the world. So we don't really have free trade if we can't cross a border and buy what we want and not pay duty on it.

I had a small business a few years ago and the red tape to get products from the US was a holy hassle and a half. That is, expensive, with duties to pay.

http://www.vancouversun.com/business/Buyer+beware+when+shopping+south+border/2361557/story.html (external - login to view)
Buyer beware when shopping south of the border


By Don Cayo, Vancouver SunDecember 19, 2009


The good news for cross-border shoppers is that prices -- on average, although not necessarily for every single thing you buy -- are quite a bit lower in the U.S. than in Canada.

But a UBC prof who tracks not only international currency fluctuations but also how much each currency can buy at home says there's bad news as well for Canadian cross-border shoppers: A lower sticker price won't always save you money.
You can assume some additional costs when you shop in the U.S., whether in person or online, says Werner Antweiler of the Sauder School of Business. And there may be surprises.

"So it's buyer beware."

The value of Canada's dollar compared to the U.S. greenback is just one factor if you're thinking about heading south to shop. Purchasing power parity (PPP) -- a comparison of what two countries' currencies can actually buy -- is as important as the official exchange rate.

And Antweiler's data shows that, while the exchange rate has been volatile in recent years, PPP has been remarkably stable. It's currently about 85 cents -- just one or two cents more than a few years ago when our dollar was very weak.
Thus when the Canadian dollar dipped to not much more than 60 cents in the early part of this decade, it was sorely under-valued. That meant U.S. prices were high in comparison to ours.

Now the tables have turned. For more than two years our buck has hovered not far short of parity -- on Friday it was almost 94 cents US -- yet price comparisons say it should be just 85 cents. This means it can buy more than the "real" value of goods on U.S. store shelves.

A couple of years ago, this effect was exaggerated on many products with nationwide prices -- things like cars or electronics -- that are set well in advance and heavily advertised. The prices at that time were set when our dollar was low. So when it suddenly caught up to, and even briefly surpassed, the American dollar, these prices were way out of line.

The difference isn't so great today. As the value of the Canadian and U.S. dollars moved much closer together, so did the manufacturer's suggested retail prices on most products.

On the cost side, however, you either must travel to the U.S. or pay shipping charges to buy online. Depending on what you buy and how much, those costs can eat up any savings.

And then there are duties, which can be surprisingly steep, even in this era of free trade.

Canada Border Services Agency notes there is no exemption for same-day shopping trips. And you can bring back only $50 worth of exempt goods after 24 hours, $400 after 48, and $750 after seven days.

When they say 24 or 48 hours, by the way, they mean it. A couple of years ago I spent two days in the New England states. I picked up a bottle of very good, very well-priced scotch. But it turns out I'd spent only 45 hours abroad, and thus it cost more than $40 extra in duty. Suddenly, the bottle wasn't such a bargain.
Antweiler has a couple of similar cautionary tales. When he bought a sweater online, for example, he was unexpectedly dinged with 18-per-cent duty because it turned out to have been manufactured offshore, even though it was sold by a U.S. retailer.
And duty was also an issue when he and his wife had a pricey stroller shipped home from Europe. Despite their exemption for having been away on an extended holiday, they had to pay the duty to take delivery. They are eligible for a refund, to be sure, but several weeks later they're still waiting.

"So there are some cheaper prices," Antweiler says. "But often you have to put a very low value on your time to make it worthwhile."

dcayo@vancouversun.com (external - login to view) Visit Don Cayo's blogs, one on taxation issues and one on globalization, at www.vancouversun.com/blogs (external - login to view) Copyright (c) The Vancouver Sun
 
TenPenny
#2
The duty rate depends on where the goods are manufactured, not where they are purchased.

It doesn't matter if you're a consumer or a retailer.
 
Liberalman
#3
you should buy Canadian made goods keep the money in Canada
 
dumpthemonarchy
#4
It matters where goods are manufactured? Why?

Free trade means there is less and less gov't interference in the free market. That's the philosophy, not the practice. We can more products from farther and farther away due to the internet.

Isn't the customer supposed to be king? Don't we live in a consumer economy?

And what if you want to buy coffee or pineapples? Or a German car?
 
AnnaG
#5
Try buying a Canadian banana or a Canadian llama wool blanket.
 
Kakato
#6
Quote: Originally Posted by AnnaGView Post

Try buying a Canadian banana or a Canadian llama wool blanket.

Thousands of lammas here in Alberta,they make excellent pack animals and pets but I dont know if they make blankets from their fur.

EDIT-the college in olds has a course on making the blankets,i learn something new every day.

home (alpacablanketproject) (external - login to view)
Last edited by Kakato; Dec 28th, 2009 at 03:49 PM..
 
AnnaG
#7
Quote: Originally Posted by KakatoView Post

Thousands of lammas here in Alberta,they make excellent pack animals and pets but I dont know if they make blankets from their fur.

Yeah, alpacas and llamas are being farmed here in the past decade or so. The products are bloody expensive, though.
No Canadian bananas? Pineapples? A Canadian bloodwood jewelry box?
 
TenPenny
#8
Quote: Originally Posted by dumpthemonarchyView Post

It matters where goods are manufactured? Why?

We have free trade with countries that we have agreements with that create a level field. Due to the autopact and NAFTA, cars built in Canada/US/Mexico can be bought duty free, but cars from Japan carry duty. We don't allow stuff in duty free from places where they don't allow our stuff in duty free.
 
Cliffy
#9
Quote: Originally Posted by AnnaGView Post

Yeah, alpacas and llamas are being farmed here in the past decade or so. The products are bloody expensive, though.
No Canadian bananas? Pineapples? A Canadian bloodwood jewelry box?

I remember seeing a sign years ago (in Osoyoos?) saying they grew bananas in green houses.
 
AnnaG
#10
Quote: Originally Posted by CliffyView Post

I remember seeing a sign years ago (in Osoyoos?) saying they grew bananas in green houses.

Really? I suppose if you spend the money getting the greenhouse conditions just right; with full-spectrum lights, humidity, temperature, and all that stuff just right. Not quite sure they'd be cheap to produce or buy, though. Same with oranges, mangoes, and any other relatively tropical fruits. Acres and acres of banana trees in greenhouses instead of apple trees out in the weather? hhmmm
 
Cliffy
#11
Yes, I think the bananas were just a novelty item. Probably just a few trees. Something for the touri to gawk at.
 
damngrumpy
#12
It does matter where the goods are made. It also matters what we as
citizens are doing supporting other economies in a large way that
deprive our nation of taxes. America is a prime example of backward
thinking when it comes to medicare for example. Our tax dollars are
supporting medicare, education, and other programs, many the US
citizens still lack. I'm not saying you can't pick up good deals on a
holiday in another nation, it becomes a problem only when we chose to
do all our shopping outside the country. We should not be seeking
free trade deals we should be seeking fair trade deals so people on both
sides of the boarder can benefit. Here is an example we pay for auto's and
appliances way more than we should. The Americans pay for prescription
drugs way more than we do, even though the drugs are manufactured in the
States and are the same materials we use here. Fair trade would see all
consumers paying roughly the same for comparable products in the market
place.
 
SirJosephPorter
#13
Those who live on the border would many times cross the border to fill up gas, gas is cheaper in USA. And of course there is no duty on it. You could save substantial change on a tankful of gas.

As to purchases, again it depends upon what you buy. If you buy a few groceries, milk, bread etc. and bring it back, I was told the Custom officials usually won’t bother you, they will just let you through.

Alcohol or expensive items may be a different story.
 
Ron in Regina
#14
Books are my Hang-up. I read a lot. Mostly pocketbooks that use to have the
dual American/Canadian prices on them. When the Canadian dollar hit $1.10
USD a couple years back....pocketbooks still cost several dollars more in
Canada without even taking the exchange into account.

To remove that bias, at the time it was claimed that the books are purchased
months in advance and that's why the prices where fixed, but very quickly the
American prices where dropped off the book jackets leaving only the Canadian
prices. The American prices can still be looked up online, and those prices are
still several dollars less than the Canadian prices, regardless of the exchange
rates. Very uncool....even with the Canadian & American currencies being so
close to each other for a couple of years now.
 
SirJosephPorter
#15
Books are my hang up too, Ron. But I prefer to borrow books from public library (where they are free) rather than buy them.
 
Ron in Regina
#16
I'm tough on books. I tend to read until I fall asleep, and I've woke up with books
stuck in the middle of my back (not good for the books). By the time I get through
a book, due to the way I hold them, I tend to also break the spines. A book almost
doubles in size (the none spine side) by the time I finish most books. Libraries
don't seem to like that. I buy or trade for my books.
 
Cliffy
#17
I don't tend to read much fiction. Most of my books are reference books so I like to keep them. Since I self publish my own books and have them printed in the states, I don't have a two price policy. I don't even put a price on them as price of printing fluctuates with the dollar too.
 
dumpthemonarchy
#18
Quote: Originally Posted by damngrumpyView Post

It does matter where the goods are made. It also matters what we as
citizens are doing supporting other economies in a large way that
deprive our nation of taxes. America is a prime example of backward
thinking when it comes to medicare for example. Our tax dollars are
supporting medicare, education, and other programs, many the US
citizens still lack. I'm not saying you can't pick up good deals on a
holiday in another nation, it becomes a problem only when we chose to
do all our shopping outside the country. We should not be seeking
free trade deals we should be seeking fair trade deals so people on both
sides of the boarder can benefit. Here is an example we pay for auto's and
appliances way more than we should. The Americans pay for prescription
drugs way more than we do, even though the drugs are manufactured in the
States and are the same materials we use here. Fair trade would see all
consumers paying roughly the same for comparable products in the market
place.

We can't do all our shopping outside Canada. Shipping costs add to the price of a product to prevent it. And groceries, most people buy locally.

We had a complex protection system for autos and look what happened. And we have lost so many other manufacturing jobs over the decades despite complex rules.

Capital can flow across borders with impunity, but not goods. I would wager most of the people here consume goods every day than trade capital. Business gets what it wants, but not the consumer. The reek of capitalist lackeyism is getting odious.
 
VanIsle
#19
Quote: Originally Posted by Ron in ReginaView Post

Books are my Hang-up. I read a lot. Mostly pocketbooks that use to have the
dual American/Canadian prices on them. When the Canadian dollar hit $1.10
USD a couple years back....pocketbooks still cost several dollars more in
Canada without even taking the exchange into account.

To remove that bias, at the time it was claimed that the books are purchased
months in advance and that's why the prices where fixed, but very quickly the
American prices where dropped off the book jackets leaving only the Canadian
prices. The American prices can still be looked up online, and those prices are
still several dollars less than the Canadian prices, regardless of the exchange
rates. Very uncool....even with the Canadian & American currencies being so
close to each other for a couple of years now.

The store I work in sells a lot of books. There was a brief time where the books held only the Canadian price. Now (unless they are from Britain) the books once again have both prices on them. The Canadian price as always, is higher. Books from Britain have USA prices and British pounds but no Canadian prices. Kind of odd really. The way the store handles that is by putting our own sticker onto the front of the book. Actually, we sell British magazines more than we do books. For the most part, we sell books for less $ then Chapters which is right across the street from us.
 
VanIsle
#20
In regard to shopping outside of Canada, I was taken back when a number of customers said they did their Christmas shopping months ago in the USA because everything is so much cheaper there. We just never go there for any reason.
 
dumpthemonarchy
#21
Quote: Originally Posted by VanIsleView Post

In regard to shopping outside of Canada, I was taken back when a number of customers said they did their Christmas shopping months ago in the USA because everything is so much cheaper there. We just never go there for any reason.

I used to think things were cheaper in the US too, but with all the extra costs and regulations iinvolved, it's not. Not for consumers or small business people.

It leads me to conclude,

People don't think about the economic system were in, the capitalist system, as long as they have a job to buy what they want. Canadians are willing to pay the price of being Canadian, which is understood to be more, but corporations are not, and far more aggressively are willing to pursue their interests through politics.

Consumers just want the lowest price which works more in the interest of big corporations and against small business. Reducing tariffs and duties on consumers supports consumer/small retail free trade in a simple way. Maybe it would produce anarchy, but I think not.
 
YukonJack
#22
American gasoline is SURE cheaper than Canadian. Even after conversion. And as an added bonus, American gas, being cleaner, gives you a MUCH, MUCH better milage per tank.
 
dumpthemonarchy
#23
Quote: Originally Posted by YukonJackView Post

American gasoline is SURE cheaper than Canadian. Even after conversion. And as an added bonus, American gas, being cleaner, gives you a MUCH, MUCH better milage per tank.

Some things are definitely cheaper in the US like gas, and that would change our tax structure, which is different in every country. But now, as many people who want to get gas in the US because there is no way for the govt to check. Those things it can check, it does. Seems inconsistent.
 
AnnaG
#24
Lots of people from around here go south and do shopping. Gas is cheaper, dairy products are cheaper, booze, cigarettes, clothes ($20 for a pair of Levi's in the States and $6 for a turtleneck top. Canada? $60 for Levi's and $20 for the turtleneck. Um, that's women's wear anyway). There's probably a whole lot of cheaper stuff that people hop across the border for, too.
 
TenPenny
#25
Quote: Originally Posted by YukonJackView Post

American gasoline is SURE cheaper than Canadian. Even after conversion. And as an added bonus, American gas, being cleaner, gives you a MUCH, MUCH better milage per tank.

American gas is no cleaner than Canadian gas, but much of it does have ethanol in it, which gives you less mpg when you burn it.
 
AnnaG
#26
Quote: Originally Posted by TenPennyView Post

American gas is no cleaner than Canadian gas, but much of it does have ethanol in it, which gives you less mpg when you burn it.

Um, if there's more ethanol in US gas then it is actually cleaner because ethanol gas burns cleaner than regular gasoline.
 
TenPenny
#27
Quote: Originally Posted by AnnaGView Post

Um, if there's more ethanol in US gas then it is actually cleaner because ethanol gas burns cleaner than regular gasoline.

No, it's not 'cleaner', it's a blend of gas and something else. That doesn't make it cleaner, it makes it less pure.

Fortunately Canada hasn't gotten on the foolish ethanol kick that the US has; the only people who benefit are ADM, Monsanto, and the farmers raking in subsidies.
 
YukonJack
#28
Beg to disagree. I travelled thru the United States from Boston to San Diego, from Seattle to Los Angeles, from Miami to Portland, from Jacksonville to New York, and I can tell you that I got far better milage on the American Interstate highways than I ever did travelling on the 401 or the QEW.
 
YukonJack
#29
"Fortunately Canada hasn't gotten on the foolish ethanol kick that the US has; the only people who benefit are ADM, Monsanto, and the farmers raking in subsidies." (external - login to view)

How about the farmers who grow the corn?
 
SirJosephPorter
#30
Quote: Originally Posted by dumpthemonarchyView Post

Some things are definitely cheaper in the US like gas, and that would change our tax structure, which is different in every country. But now, as many people who want to get gas in the US because there is no way for the govt to check. Those things it can check, it does. Seems inconsistent.

Gas prices are almost exclusively determined by how much tax the government takes. Gas in UK is roughly twice as expensive as here (it costs roughly the same number of pence there as it costs number of cents here), that is because UK government takes in more taxes. Same applies to Europe.

As far as gas prices are concerned, we are not badly off at all.
 

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