Running Head: CANADIAN TARIFF AND NON-TARIF BARRIERS

CANADAN TARFF AND NON-TARFFS BARRERS TO TRADE

Clebson Costa
Omer Abdella
Reggie Longhua Zhang

Niagara College Canada
Concepts nternational Trade
Prof. Dr. Anjum Siddiqui












October 17, 2011
INTRODUCTION
That short paper makes a brief approach about Canadian tariff and non-tariff barriers for
imports entering the country, seeking to show how these trade barriers affect the
international trade of Canada. Whit this goal, we divided the paper in three parts: the first part
identifies and shows examples about some tariff and non-tariff barriers to trade in Canada;
the second part analyses the impact of these trade barriers for the economy, involving
government, industries and consumers; and the last part analyses the outcomes of the
application of these trade barriers to Canada through statistics about its trade balance during
the past four years. To finish we made simple conclusion about everything that was
explained here.
1 - IDENTIFYING CANADIAN BARRIERS TO INTERNATIONAL TRADE
n this part we are going to show a list of some tariff and non-tariff barriers that have been
found basically on the website of both the Canadian government, which addresses about the
nternational Trade Canada, and the World Trade Organization, which are referred on the
due place of that work.
1.1 - Tariff Barriers
First of all, is important to say that there is not only one type of tariff applied by Canada for
the imports, but there is a lot. According to the article referred on the PDF link from the
BraziIian Ministry of DeveIopment, Industry and InternationaI Trade, the tariff structure
of Canada is based on tariffs of the type Ad Valorem, actually; however, there are seven
types of tariffs in addition to the Ad Valorem, and we are going to show them just below.
Then we will present a chart with some examples of tariffs for specific products, following this
by the explanation about non-tariff barriers and go ahead with the due analysis about the
impacts of these tariff and non-tariff barriers both to Canada and for the countries which have
trade relationship with it.


Table 1 mports Tariff System Canada. Source: Authors.

Now that the types of tariff are shown, let's take a look in a list of some products that are
affected by one or many of these tariffs.

Table 2: mport Tariffs by product. Source: PDF file in the references.
1ype of 1ar|ff Lxp|anat|on
1 Ad valorem ercenLage above Lhe producL prlce
2 Speclflc llxed moneLary charge per unlL or speclfled quanLlLy of Lhe lmporLed
3 Compound 1arlff Ad valorem + Speclflc
4 CondlLlonal 1arlff (wlLh flve comblnaLlons) 1arlff applled dependlng on dlfferenLs facLors
Imports 1ar|ff System Canada
Descr|pt|on
Average
AV Duty
M|n|mum
AV Duty
Max|mum
AV Duty
1 Llve anlmals and anlmal producLs 363 0 341
2 lnd prod food beverages and Lobacco 21 0 293
3 rod lrom Lhe Chemlchal lndusLry 33 0 14
4 lasLlcs rubber and arLlcles Lhereof 31 0 173
3 1exLlles and LexLlle works 118 0 23
6 Shoes haLs and slmllar 12 0 21
7 8ase meLals and arLlcles Lhereof 32 0 11
8 Machlnery and elecLrlcal appllances 21 0 11
9 1ransporL equlpmenL 32 0 23
10 Weapons ammunlLlon and parLs 39 0 73
11 ArL ob[ecLs and anLlques 16 0 7
Import 1ar|ffs by product
1.2 - Non-tariff Barriers
Canada has many non-tariff barriers on exports in Canada. There are four types of non-tariff
barriers and they include licenses, import quotas, voluntary export restraints (VER) and local
content requirements. Licenses are granted to business by the government that allows them
to import a certain type of good into the country. mport quotas are restrictions placed on the
amount of a particular good to be imported. VER are usually imposed at the request of the
importing sometimes accompanied by reciprocal VER's. The chart below shows examples of
each one.


Table 3: Non-tariff barriers. Source: http://www.investopedia.com/articles/economics/08/tariff-trade-barrier-
basics.asp#axzz1ahWOEzc2

2 - BILATERAL IMPACT OF THESE CANADIAN TRADE BARRIERS
By adopting tariff barriers to international trade, Canada not only produces effects on its
economy, but also the economies of countries with which it markets products and services.
To make a simple analysis of the impact of the adoption of trade barriers is necessary to
individually analyze the impact on three main agents of the national economy, which are the
government, businesses/industries and consumers.
Bearing it in mind, the adoption of trade barriers in the Canadian economy is beneficial for
the government, because it will see increasing rates in proportion to the input of imports; for
Canadian industries the adoption of trade barriers is also beneficial, because this bring a
reduction in competition with the rest of the world due to the "artificial inflation in the price of
imported goods; however, the adoption of tariff barriers does not benefit Canadian
consumers, because high prices for imports means higher prices for goods. n short, tariffs
and trade barriers trend to be pro-producer and anti-consumer.

3 - HOW ABOUT THE OUTCOMES OF ADOPTING THESE TRADE BARRIERS?
By adopting trade barriers, nations have 5 main reasons, according to the article found on
the Investopedia website. With this, they are looking for protecting domestic employment,
protecting consumers, protecting infant industries, promote national security and as
retaliation for a trade partner for some reason.
However, we need to verify if the implementation of trade barriers is bringing to Canada also
good results in your trade balance, what would show that it is being applied efficiently. To do
that, we took the chart below from the Trading Economics website, which shows a sample
about the Canadian Balance of Trade since 2008.
Llcenses
a resLrlcLlon on lmporLed cheese and llcenses would be granLed Lo cerLaln companles allowlng Lhem Lo be Lhe
lmporLers
lmporL CuoLas
a counLry may place a quoLa on Lhe amounL of lmporLed clLrus frulL allowed
volunLary LxporL 8esLralnLs (vL8)
8razll could place a vL8 on Lhe exporLaLlon of sugar Lo Canada based on a requesL by Canada Canada could Lhen
place a vL8 on Lhe exporLaLlon of coal Lo 8razll 1hls lncreases Lhe prlce of boLh coal and sugar buL proLecLs Lhe
domesLlc lndusLrles
Local ConLenL 8equlremenL
a resLrlcLlon on Lhe lmporL of compuLers mlghL say LhaL 23 of Lhe pleces used Lo make Lhe compuLer are made
domesLlcally or can say LhaL 13 of Lhe value of Lhe good musL come from domesLlcally produced componenLs
-on 1ar|ff 8arr|ers

By analyzing the chart that shows the evolution of the trade balance of Canada during the
last four years, we can see that since 2009 it presents a deficit, what means that Canada is
importing more than exporting in the last years. We can understand also with this analysis
that Canada has not many barriers to trade neither tariff nor non-tariff, otherwise we could
notice an opposite situation instead of that we can look in the chart, where Canada is
importing more than exporting.

CONCLUSION
n conclusion, we can see that Canada still have some tariff and non-tariff barriers to trade as
do at least most of the countries that are involved in the international trade of goods and
services; however, based on the trade balance chart that was shown above, we can also
verify that Canada isn't applying so many barriers enough to have its trade balance with a
result of surplus, once it's presenting deficit since 4 years ago. t shows that, in our analysis
bearing in mind every topic we covered in this paper, Canada is following what advices the
World Trade Organization because it is, by applying less barriers to trade and compelling
their trade partners to do the same through the concept of reciprocity, helping the increase of
the free international trade.








REFERENCES:

Trade Barriers. 3 Exter3al barriers to Brazilia3 exports. Retrieved from
http://www.mdic.gov.br/arquivos/dwnl_1196772454.pdf

nternational Trade Canada. 3 Foreig3 Affairs a3d 3ter3atio3al Trade Ca3ada website.
Retrieved from: http://www.international.gc.ca/commerce/

World Trade Statistics. 3 World Trade Orga3izatio3 website. Retrieved from
http://www.wto.org

The Basics Of Tariffs And Trade Barriers. 3 3;estopedia website. Retrieved from
hLLp//wwwlnvesLopedlacom/arLlcles/economlcs/08/LarlffLradebarrlerbaslcsasp#axzz1Zv8nxo2?

Statistics of Trade. 3 Tradi3g Eco3omics. Retrieved from www.tradingeconomics.com