Class 8: Wine. Agenda. The Canadian and Ontario Wine Industry International Trade NAFTA Trade and Wine (Case). Ontario Wine. Ontario Icewine. Ontario Wine.
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The Canadian and Ontario Wine Industry
Trade and Wine (Case)
Ontario's wine regions are right in the middle of the northern grape-growing belt – between 41° and 44° north. You may find it hard to believe, but that puts southern Ontario just south of the famous Bordeaux Region in France, and parallel with northern California wine regions.
Lambrusco grapes grow well in cold climates
* The grape and wine sector generates approximately 14,000 jobs in Ontario.
* It generates more than $100 million in direct wages and salaries.
* In 2010, the total number of grape vines in Ontario exceeded 15 million.
* In 2007, the wine industry generated $602 million in tax revenues for the province and $3.3B in economic impacts
Exports and Imports of Wine, 1997 - 2007
33. Canada 50,000,000 litres
John Stuart Mill
First developed in 1947 as a means to reduce trade barriers.
The countries who signed GATT negotiated new trade agreements that all would enter into.
Each such set of agreements was called a "round".
Each of these agreements bound the members to reduce certain tariffs, with special-case treatments of individual products, and with exceptions and modifications for each country.
Goal was to minimize new existing trade barriers.
Reduce import tariffs and quotas.
To abolish preferential trade agreements between member countries.
Tariff concessions were negotiated on the principle of reciprocity (you scratch my back I’ll scratch yours).
NAFTA is an agreement between the United States of America, Mexico and Canada, coming into effect on January 1, 1994.
NAFTA called for immediately eliminating duties on half of all U.S. goods shipped to Mexico and gradually phasing out other tariffs over a period of about 14 years.
An expansion of the earlier Canada-U.S. Free Trade Agreement of 1989.
Created the world's largest free trade zone
• Brings together an estimated number of 450 million consumers producing $17 trillion worth of goods and services
Year Billions of $ (Value in 2009)
1950 $3.16 $31.9
1960 $5.39 $39.3
1980 $64.3 $162.3
1996 $275.82 $353.9
2006 $458.16 $481.7
2008 $483.6 $484.2
Wine is one of the areas in which we had a huge trade deficit.
If trade allows a country to specialize in what it does best, should Canada be producing wine?
If trade is meant to enlarge the potential market for goods in an economy, has the Canadian wine industry been helped by international trade?
Canada is currently negotiating Free Trade Agreements with:
The European Union
Trans-Pacific Partnership (TPP): Pacific Rim countries including the US, Japan, Australia, Malaysia, Singapore, NZ, Thailand…
•Free trade area—no internal tariffs.
• Customs union—no internal tariffs plus common external tariffs.
• Common market—customs union plus factor mobility.
To sustain this collective identity that sets their
citizens apart from those in other nations,
countries limit foreign products and services in certain sectors.
Influenced by immigration patters.
Market access for products. Tonoto vs. Niagara
Natural Resources – Inherently Volatile
Occupational mobility, fishing and mining
Spatial immobility “I like it here!”
Claim to capital, i.e.. Bank Loans
Industrial Incentive Programs
Infrastructure Assistance Programs
Social adjustment and rural development programs.
Make viable industries attractive in slow growth regions.
Tax credits, seed money, consulting services.
Oil and Gas in Newfoundland.
Assist in providing capital for sewers, water, road improvement, hospitals and universities.
Example. Toronto to Montreal high-speed rail proposal.
Try to develop industries in areas where there is little or no productive employment.
Example: The soap stone carving industry in Nunavut.
Primary goal is job creation.
To strengthen power of Federal authority.
Reduce equalization payments.
Criticism - These programs may support inefficient economic activities at the expense of viable economic activities. Discuss.
Marketing and promotion.