1. Manufacturing in Canada is facing challenges with globalization and growing p
ID: 2074004 • Letter: 1
Question
1. Manufacturing in Canada is facing challenges with globalization and growing protectionist policies. a. List 5 potential effects of cancelling the NAFTA Trade agreement on the Auto-manufacturing sector and the reason. b. List 5 specific strategies / policies that the Government of Canada should implement to help mitigate their effects in this important sector. 2. The 2017-18 Global Competitiveness Index Rankings measure national competitiveness for 137 economies. a. Define productivity as it applies to countries. b. List the institutions, policies and factors that determine the level of productivity. C. Select one country from the top 50% and from the bottom 50%, include their competitiveness polar chart and briefly discuss the reason for their competitiveness ranking. There are enough countries ranked to avoid choices overlap. Ref.: The Global Competitiveness Report 2017-2018.Explanation / Answer
1. a) Cancelling NAFTA trade agreement will have many affects on auto manufacturing industries :
If Nafta is cancelled the taxes put on the auto manufactured goods will rise.
Also the tariffs on the goods will rise eventually. The tariffs of some of these goods could go as high as 150%.
This will also cause the prices to increase and the profits of some companies will increase.The supply chain network build by the auto manufacturing industry over the years to take advantage of differing costs will be shaken up. American automanufacturers are highly reliant on parts imported from other countries and their competitors would gain an upper hand. They will not be able to compete with other major auto manufacturing hubs in europe and asia.
The import and export of auto manufcturers are high, they import and export billions worth of vehicles. Cancellling the NAFTA agreement can have large affects on their side.
b) Canada can continue to work with Mexico adn could remain the members of NAFTA and continue trading on their terms.
They can also push ahead and have trade pacts with other countries to mitigate the effects on Auto manufacturing sector. They should complete the Trans-Pacific partership which gives Canada tariff free access to several lucrative markets like Japan. They can increase the supply chain to farther networks on other countries.They should provide more employment oppurtunities in the auto sector.
2.a) Productivity to countries is called National productivity. It is defined by living standards of citizens. Increasing national productivity raises living standards of citizens and provide more income and gives them ability to enjoy the goods and services of the country. This in term increases the production of the country.
b) Productivity level is given by the well functioning public and private institutions, giving proper infrastructure and stable economic framework for the people. providing them with primary and good healthcare and education.Giving higher standards of living also increases the level of productivity.. Efficient labour market, goods market, financial markets and being able to harness the available resources increases productivity.
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