BBB 4M – Unit 3 Lesson 5 Handouts
Political Systems
Government laws, policies, and regulations play major roles in international trade. They
affect every aspect of importing and exporting goods and services. To conduct business
in international markets you need to be familiar with the laws of the countries you are
doing business in.
Many factors affect a country’s political and legal environment. International trade is
difficult with a country that discourages trade and commerce with foreign countries.
Some countries may view foreign businesses with suspicion. Countries that impose
strong quality and safety standards in the interest of consumer protection may also be
preventing foreign competitors from venturing into their domestic market. Countries that
promote private ownership and support foreign investment will be easier to enter.
Political considerations impact economic choices. Tax policies influence how
businesses invest. If a company can find jurisdictions where taxes are lower, they tend
to locate in those areas. Some countries have created enterprise zones to foster foreign
investment and job creation in less economically developed regions. Tax concessions in
these areas could include lower corporate income tax rates, wage and other subsidies,
more liberal write-offs, lower or no value added taxes, and lower payroll taxes.
An example of an enterprise zone is the Maquiladoras of Mexico and Latin America.
These are factories that import raw material and equipment on a duty-free and tariff-free
basis for assembly or manufacturing. They then re-export the assembled product,
usually back to the originating country. Maquiladoras may be foreign-owned or operated
as joint ventures with local partners.
There are no Maquiladoras in Canada, but there are depressed regions of the country
that receive special support. The Atlantic Canada Opportunities Agency (ACOA) is a
federal government department responsible for helping to build economic capacity in
the Atlantic Provinces by working with the people of the region – in their communities,
through their institutions and with their local and provincial governments and businesses
– to create jobs and enhance earned incomes.
ACOA seeks to provide people with encouragement, advice and information, and the
capital and technology they need to start and expand their own businesses. New
employment is the direct result of business growth, particularly among small and
medium enterprises (SMEs). While there have been changes made to its financial
support programs for SMEs since it was begun in 1987 its vision for Atlantic Canada in
terms of increased self-sufficiency and increased earned incomes is still central to its
operations.
Assignment 1: Atlantic Canada Opportunities Agency
Complete the following assignments and submit your work to your teacher.
The Atlantic Canada Opportunities Agency (ACOA) is a federal government department
responsible for helping to build economic capacity in the Atlantic Provinces. Use
websites, such as The Atlantic Canada Opportunities Agency, to learn more about the
ACOC. Answer the following questions based on your research:
1. Who is the Minister responsible for the Atlantic Canada Opportunities Agency?
2. What is one of the agency’s most recent projects?
3. How does the development of an Atlantic gateway help strengthen Canada’s
position in international commerce?
Resources:
The Atlantic Canada Opportunities Agency
http://www.acoa-apeca.gc.ca/Pages/welcome-bienvenue.aspx
Red Rock
New mill owner, new hope?
By Michael Lehan
When the paper mill in Red Rock, Ont., closed last November, many residents feared the
close-knit community on the north shore of Lake Superior would become a ghost town. But
recent job prospects and new faces are bringing cautious optimism to the community.
"There's hope where there was none before," says Red Rock's Lisa Cates.
Residents say new families have moved into town in recent months, drawn by a low cost of
living and affordable housing. School enrolment remains steady and residents are exploring
new sources of revenue, such as eco-tourism, for their livelihood.
Now the possibility of the mill reopening under new ownership has some in Red Rock
hopeful that a recovery may be around the corner.
At a press conference held at the Red Rock Inn on Sept. 7, Hubert Bolduc, vice-president of
communications and public affairs for Cascades Inc., announced the sale of Red Rock's
idled mill to Brampton Ont.– based shipping company, North American Logistics.
The Red Rock mill, which employed 450 people, was idled indefinitely in October 2006
because of economic conditions, including the rising Canadian dollar. The reopening
promises to bring 110 jobs back to the town, though according to North American Logistics
president Robert Van Patten that won't happen until October 2008.
North American Logistics is rumoured to be in talks with Nipigon-based Multiply Plywood
about manufacturing hardwood flooring products at the Red Rock mill.
While the announcement promises an economic lift for the troubled community, many
residents say they will remain sceptical until actual jobs start appearing. While he's been
outspoken about his confidence in the town's prospects in the past, Red Rock Mayor Sam
Sobush did not return calls requesting comment.
Shelley Boudreau, co-ordinator at the Red Rock Job Action Centre, says she has an "I'll
believe when I see it" attitude.
Leaving town
The economic decline of 2007 has already taken a toll on the town.
Boudreau says that after the Red Rock mill closed and the sawmill in neighbouring Nipigon
burned down several weeks later, many residents didn't wait for good news and instead
started seeking new employment opportunities immediately. According to the Job Action
Centre, at least 24 former mill workers and their families have packed up and left the area
so far this year.
Many of the smaller, cheaper homes in Red Rock sold quickly as younger people with fewer
ties to the region found work elsewhere. But almost half of those who moved either chose
not to sell their homes or couldn't find buyers.
Assignment 2: Red Rock
Complete the following assignments and submit your work to your teacher.
1. What problems does a small community face when the major industry closes?
2. What opportunities were there in Red Rock when the mill stopped operating?
3. Describe the factors that resulted in the economic problems in the Red Rock
area.
4. What impact do you think the current value of the Canadian dollar will have on
Red Rock’s recovery?
Assignment 3: Maquiladoras
Complete the following assignments and submit your work to your teacher.
Synonymous with Mexico manufacturing, Maquiladoras are Mexican assembly plants
that manufacture finished goods for export. Use websites, such as Maquila Solidarity
Network (http://en.maquilasolidarity.org/) to learn more about Maquiladoras. Create a
slideshow presentation of your research. Use the questions below as a guide to your
slide content.
1.
2.
3.
4.
5.
6.
How did the Maquiladoras get started?
Do you need a Mexican partner to operate a Maquiladora?
What are the benefits of Maquiladoras to foreign businesses?
What is transfer pricing?
Are Maquiladoras subject to tariffs?
Maquiladoras are sometimes described as sweatshops. How are they described
by the Maquila?
Rubric
Maquiladoras Rubric
Categories
Knowledge and
Understanding
Level 1
(50 - 59%)
The sequence of
information is
well organized.
Communication
Presentation
addresses slide
content
questions.
Level 3
(70 - 79%)
Level 4
(80 - 100%)
- subject
knowledge is
limited.
- there is some
evidence of
subject
knowledge.
- there is
considerable
evidence of
subject
knowledge.
- subject
knowledge is
evident to a high
degree.
- limited
organization of
the
information.
- some
organization of
the
information.
- considerable
organization of
the information.
- high degree of
information
organization.
- presentation
addresses
slide content
questions in
limited detail.
- presentation
addresses
slide content
questions in
some detail.
- presentation
addresses slide
content
questions in
considerable
detail.
- presentation
addresses slide
content
questions in
extensive and
thorough detail.
Subject
knowledge is
evident
throughout the
presentation.
Thinking
Level 2
(60 - 69%)