Pros and cons of NAFTA
NAFTA IMPACT ON TRADE
Increased trade (from 25% to 43% of GDP in years following NAFTA agreement
Canada still overreliant on exporting low valuedadded natural resources versus very
little hightech exports
Too dependent on trade with the US compared to other international trading partners.
NAFTA IMPACT ON CANADIAN CONSUMERS
Canadian consumers are given more choice and exposed to competitive products with
If big U.S. firms come to dominate retail, then we could end up with monopolies
(reduced competition) which might harm the consumer in terms of prices and quality of
NAFTA Impact on Canadian employment
Canadian companies that require inputs/resources from US can obtain them more
cheaply & pass these savings on to consumers.
Canadians gets more access to US markets & can generate more sales.
More employment as a result of increase growth in sales.
Competition may be too strong – forcing bankruptcy, job losses.
Job losses could also arise from US companies deciding to shut down their Canadian
subsidiaries & exporting their tarifffree goods to Canada.
NAFTA – Impact on Canadian culture
Doesn’t impact Canadian culture, cultural exports $4.5 billion and big market in royalties
Increasing foreign domination of the Canadian economy will transform Canada into a
pure economic subsidiary of the US
so May destroy Canadian culture, Canada may become a ‘subsidiary of USA
NAFTA – IMPACT ON CANADIAN COMPETITVENESS Pros
One of the central objectives was to encourage Canadian business to become more
competitive through exposure to greater competition from US
Foreign competition forces domestic businesses to improve their operations and their
products or services.
NAFTA did not result in increase in productivity of Canadian business – U.S.
productivity rates have increased at about twice the rate of Canadian productivity
The success that Canada has experienced in international trade has been achieved largely
through Canada’s relatively weak dollar e.g., Hollywood film industry coming to Canada.
Resistance to Change
The machine bureaucratic mentality stems from an irrational need for control. Any
preoccupation with control to the degree that it emphasizes the machine bureaucracy over
other forms tends to eventually become to rigid to adapt to change.
• Fear of the unknown
• Don’t see the need for change
• Threats to social relationships
• Economic insecurity
Forms of Change
Economic Changes: Is the economy strong or weak? Organizations must adapt to
changing economic conditions. Downsizings are more likely to occur in lean times.
Lifetime employment is a thing of the past. Temporary work arrangements have become much more common. Flattening of many organizations have substituted horizontal career
movement for the lateral vertical movement, so that you might move around an
organization into different areas rather than directly up.
Competitive: Competition both foreign and domestic has demanded acceleration in
innovation among firms. To compete effectively organizations must continually create
new and better methods of serving customers. Globalization has opened up larger markets
for businesses and facilitated much higher levels of competition.
Technological: Can be a doubleedged sword for members of the workforce bringing both
benefits and threats. Benefits include the ability to gain more flexibility in work
arrangements such as the practice of telework. Threats include the jobs technology has
rendered obsolete like bank tellers for bank machines.
Legal/Political: Deregulation and Privatization are very important in determining
business strategy. The legal environment of a business can dictate changes in how it
competes, as well as what services it offers and how they are to be offered. In the
workplace we have witnesses an increasing emphasis on organi