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  • Essay / Understanding International Trade: Costs, Benefits and...

    One of the reasons why Canada is very interested in this agreement is that it is the third largest pork exporter in the world. Japan, which is currently the world's largest pork importer, is also involved in the deal. The cost of producing pork in Japan is more than double that of producing pork in Canada. Japan therefore prefers to import pork and concentrates its production efforts on another industry, because the opportunity costs are far too high. However, Japan currently imposes very high tariffs on pork imports and has reached an agreement with the Australian government, which only has to pay half the tariff rate. Canada is involved in the deal because it wants Japan to lower tariffs on Canadian pork, so they (Canadians) can compete in Japan. The article reviews the effects of this agreement on certain local Canadian industries. For example, the author explained that this agreement could increase the amount of imported foreign auto parts and perhaps even dairy products, which could mean better selection as well as lower prices for consumers, but it would harm also to certain workers who operate locally in these companies. Currently, the absence of foreign products in the Canadian dairy market means that there is less choice for a higher price, but it also means that local farming communities can have stable incomes and can be