Canada's International Trade, Government Policy, and Currency Systems

A complete set of vocabulary flashcards based on the international trade study guide covering business concepts, Canadian trade history, protectionism, government tools, currency effects, and China's dual currency system.

Business

The production and/or sale of goods and services to satisfy consumers' needs and wants to make a profit.

Transaction

An exchange of things of value.

Domestic business

A business that conducts most of its transactions within the country where it is based.

Domestic market

Customers who live in the country where a business operates.

Foreign market

Customers who live in a different country from where the business operates.

International business

The buying, selling and trading of goods, services, ideas and capital across national borders.

Trading partner

A country with which businesses establish international trade relationships.

National Policy (1879)

A trade policy where tariffs were used to protect Canadian industries and encourage domestic production.

Auto Pact (1965)

An agreement that encouraged an integrated Canada–U.S. automotive industry and cross-border supply chains.

CUSFTA (1989)

An agreement that reduced trade barriers between Canada and the U.S.

NAFTA (1994)

An agreement that expanded free trade across Canada, the U.S. and Mexico.

CUSMA (2020)

An agreement that replaced NAFTA, maintaining the North American trade framework with updated rules.

Protectionism

An economic approach that uses tariffs and other trade barriers to protect domestic industries from foreign competition.

Free trade

An economic policy that reduces or removes barriers to international trade.

Economic resilience

Being able to experience a major economic disruption without suffering severe economic damage.

Tariffs (Government Tool)

A government tool designed to protect domestic industries and make imported products more expensive, with the drawback of higher costs for consumers and manufacturers using imported inputs.

Financial support (Government Tool)

A policy tool meant to help businesses and workers manage economic disruptions, carrying the risk of cost to taxpayers and supporting uncompetitive businesses.

Government procurement

The use of public spending to support domestic suppliers, which potentially leads to higher costs and reduced competition.

Strategic industries (Government Tool)

Encouraging domestic production of important goods, which requires high production costs and substantial investment requirements.

Competitiveness (Government Tool)

Improving productivity through R&D, infrastructure, training, technology and financing, requiring time, resources and investment.

Trade diversification

Helping businesses enter new international markets, which requires new customers, distribution networks, certifications and financing.

Internal trade reform

Reducing trade barriers between Canadian provinces, where different regulations and administrative systems may be difficult to harmonize.

Strong currency

A currency status that makes imports and foreign travel cheaper, but can make exports more expensive for foreign buyers and put pressure on exporters.

Weak currency

A currency status that makes imports and foreign travel more expensive, but can make exports cheaper for foreign buyers and contribute to domestic inflation.

Currency manipulation

Deliberate government or central-bank actions to influence a currency's value, potentially to gain a trade advantage.

RMB (Renminbi)

The official name of China's currency.

Yuan

The basic unit of the RMB.

CNY

The onshore yuan, traded within mainland China.

CNH

The offshore yuan, traded outside mainland China, including Hong Kong.

Managed float

An exchange-rate system in which market forces influence currency value while the central bank intervenes to manage movements.