This is the first honest thing you've said in this thread.
But we need to balance both so that we have a sustainable economy.
Free Trade - Good or Bad?
- Thread starter mentalfloss
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This is the first honest thing you've said in this thread.
But we need to balance both so that we have a sustainable economy.
That sounds pretty familiar to what is going on down here.
I think Canada does have a sustainable economy. Look how they fared when all the other western nations were/are falling apart.
That mostly had to do with some strong federal banking regulation during the subprime mortgage lending crisis. The real estate industry had some heart burn again last month when CIBC shut down loans with low down payments.
Which was smart. As I way saying, Canada managed it better than the US and many others. I could be wrong but I bet they were in good shape before the crisis. They gave loans to people who could afford them. Whereas our banks sold mortgages and bundled them all up and sold them again. I saw it happen all around me.
Heartburn is better than total collapse.
The only resource shortage Canada has is a human resources. Our manufacturing days are over and we've gone full circle right back to being resource based which we should have remained all along.
Resource based industry? Like cod fisheries off the east coast?
Free trade benefits like when the best of BC timber goes overseas leaving poorer quality stuff here?
Selling off public assets to foreign interests? Like Bill Gates owning most of CN Rail?
Free trade benefits like when the best of BC timber goes overseas leaving poorer quality stuff here?
Selling off public assets to foreign interests? Like Bill Gates owning most of CN Rail?
Free trade between nations is always accompanied by a few problems. Theoretically free trad allows the trading partners to maximize what each nation does best. In Canada's case, for example, free trade with nations that produce tropical or subtropical crops makes good sense as Canada is at a distinct disadvantage when it comes to growing bananas. However, Canada leads the world in the efficiency of its grain farmers who could export their crops in return for warm weather crops.
The trade does not only have to be in the form of raw materials either. Nations that see themselves only as hewers of wood and drawers of water will find that they are trading cheap raw materials for expensive manufactured goods. In the long term this is a trading strategy that will ultimately backfire. Until the recent increase in oil prices Canada's most important exports were manufactured goods. Long term focusing on manufactured goods and technological innovations is a much better strategy than relying on the export of raw materials; especially as raw material exports tend to fluctuate with demand and tend to take care of themselves anyway.
Canada's greatest mistake in terms of trade has been the policy that has encouraged foreign multinationals to develop Canada's most important resources. This has led to a situation in which there are very few large Canadian companies engaged in extractive industries and has resulted in huge amounts of money being transferred out of the country in the form of profits to foreign shareholders.
It is interesting to note that in the free trade agreement negotiated with the Americans in the 1980s, the Americans were very careful to make sure that they had unimpeded access to Canada's raw materials. This has not worked out all that well so far as Canada is concerned, resulting in a level of foreign ownership that few other modern nations would tolerate.
The trade does not only have to be in the form of raw materials either. Nations that see themselves only as hewers of wood and drawers of water will find that they are trading cheap raw materials for expensive manufactured goods. In the long term this is a trading strategy that will ultimately backfire. Until the recent increase in oil prices Canada's most important exports were manufactured goods. Long term focusing on manufactured goods and technological innovations is a much better strategy than relying on the export of raw materials; especially as raw material exports tend to fluctuate with demand and tend to take care of themselves anyway.
Canada's greatest mistake in terms of trade has been the policy that has encouraged foreign multinationals to develop Canada's most important resources. This has led to a situation in which there are very few large Canadian companies engaged in extractive industries and has resulted in huge amounts of money being transferred out of the country in the form of profits to foreign shareholders.
It is interesting to note that in the free trade agreement negotiated with the Americans in the 1980s, the Americans were very careful to make sure that they had unimpeded access to Canada's raw materials. This has not worked out all that well so far as Canada is concerned, resulting in a level of foreign ownership that few other modern nations would tolerate.
I've been hearing this as well.
It appears that shipping out raw materials is a decent short term strategy, but if we want to have a sustainable economy, we're better off exporting manufactured goods.
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