ADMS 1000 â Fall 2013 Final Exam
ADMS 1000 – Fall 2013 Final Exam Professor:Indira Somwaru
Canada, EU unveil ‘historic' free-trade agreement Canadian Prime Minister Stephen Harper hailed the Canada-European Union trade agreement as an historic opportunity for Canada even though the deal has yet to be finalized. Mr. Harper and EU President Jose Manuel Barroso announced the agreement Friday at a joint press conference in Brussels. “This is a big deal,” Mr. Harper said at a news conference. “Indeed it is the biggest deal our country has ever made. This is a historic win for Canada.” Added Mr. Barroso: “Today is the beginning of a new era for the European Union and Canada.” The Comprehensive Economic and Trade Agreement, CETA, goes far beyond the North American Free Trade Agreement and is designed to eliminate thousands of tariffs, encourage foreign investment and promote movement of labour. Once implemented, 98 per cent of EU and Canadian tariffs will be eliminated immediately. That includes 95 per cent of EU tariffs on agriculture products such as grains, Canola and fruit. Other tariffs and restrictions will be phased out over seven years. But the text of the deal has yet to be released, mainly because it has to be translated into the EU’s 24 languages. It must also be approved by all 28 EU members as well as Canada’s provinces and territories. That process could take two years. Mr. Barroso expressed confidence the deal would be in place by 2015, although some countries have raised concerns. He said the agreement can be adopted provisionally while the ratification process is underway. “I expect the European Union member states to agree on this agreement because we kept them informed,” he said, adding that it has been well received. “I don’t see any reason to have doubts about its effective implementation. If I saw it, I would say it.” Mr. Harper too played down the approval process saying the provinces are on side and that he expects the deal to be in place by the next election in 2015. “The agreement as it now stands is not going to change,” he said. “I am certainly confident of its adoption in Canada. I think anyone who opposes it will lose and will make a big historic mistake in so doing.” The deal will have far reaching impacts, touching just about every sector of the Canadian economy as well as millions of workers and consumers. The final result could see Canadians paying less for thousands of products made in Europe, such as cars, which are currently subject to a 6 per cent tariff. European companies will also be able to bid on large provincial and municipal government contracts. Canadian companies
and farmers will gain open access to the EU for hundreds of products, some of which now face tariffs as high as 12 per cent. Canada has been eager to reach the trade deal, believing access to the EU’s $17-trillion economy will boost gross domestic product by $12-billion and create 80,000 jobs. The EU is Canada’s second largest trading partner, far behind the United States. However, some sectors of the Canadian economy will feel the effects. The EU has gained a much larger share of the Canadian cheese market, with a quota on imports increasing to around 30,000 tonnes from the current level of 13,000. Federal officials said they are working with provincial governments on a compensation program for dairy farmers. Drug companies will get longer protection, of about two years, for their patents, meaning lower cost generics won’t be available as early in Canada. A compensation program for generic firms is also under consideration, federal officials said. And Canadian auto manufacturers, while gaining larger access to the EU market, will still face some restrictions going forward. EU companies will also have an easier time taking over Canadian businesses. The threshold for the government to launch a review of a takeover by EU companies will be set at $1.5-billion, as opposed to $1-billion for other takeovers. Mr. Harper acknowledged that some Canadians will be hurt by the deal, but he said compensation is being considered and that the overall benefits of the pact outweigh any problems. “This agreement is vastly positive for the Canadian economy across the board,” he said. “There are some negative effects on a few sectors in the very short term … this is not just a big deal, it is a very, very positive deal for Canada.”
PART I 3 case questions (15 marks) Question 1 a) Explain benefits to Canada of entering into this free trade agreement with Europe (both reducing on European imports to Canada and Canadian imports to Europe) Discuss potential impact on the consumer’s employment, competitiveness and culture in the Canadian context. Trade accounts for more than 60 percent of Canada’s annual GDP and one in five Canadian jobs. A trade agreement with EU has the potential to benefit Canada significantly: a boost in bilateral trade and a high annual increase to Canada’s economy which will provide an increase to the average Canadian family’s income and provide many more job opportunities. Canada and Europe also share similar cultures along with similar forms of government. Gaining privileged access to this profitable market secures a key competitive edge for Canadian workers and businesses across several key economic sectors, covering all regions of the country. b) What are the potential negative consequences of removing tariffs on European imports to Canada? Discuss potential impact on the consumer’s employment, competitiveness and culture in the Canadian context. This agreement threatens nearly every aspect of Canada's social, economic and environmental policy framework, including: threatening privatization of key crown corporations; granting private corporations full access to bid (and possibly sue) on Canadian public procurement decisions at both federal AND provincial levels; killing manufacturing jobs by increasing exports of natural resources and importing valueadded goods (including autos). Question 2 The article states that the Canadian government has assured the provinces it will be compensating to cheese producers and that it will set up a marketing campaign for local cheese. This is essentially a government subsidy to dairy farms. a) Explain why the Canadian government should play the role of guardian of business in this way. Since it was the government’s idea to go through with the Canada-Europe free trade agreement thus any damage to any industry should be compensated by the government. Also, the government was aware of the pressure it would put on dairy farmers yet they still allowed Europe to increase their cheese exports.
b) Explain why the Canadian government should not play the role of guardian of business in this way. Even though cheese makers are highly at risk due to Canada-EU free trade agreement but the compensating should go to anyone, including farmers, who suffer losses as a result of the comprehensive economic and trade agreement. Market decisions should be made by investors not politicians. Also, since farmers do not own quota, they only get to buy the use of it and you cannot get compensation on something you do not own. Question 3 This agreement could allow for more foreign ownership of Canadian businesses. Discuss why foreign ownership maybe bad for Canada. Through foreign ownership, Foreign direct investors will take advantage of this crucial inside information and be inclined to retain high-productivity firms under their ownership and control and sell low-productivity firms to the uninformed savers. Foreign ownership inflates market prices, centralizes cities, exports the profits and promotes borrowing from Canadian financial institutions and government programs which might otherwise go to creditworthy Canadian interests.
Multiple Choice 1. If a country specializes in goods that it can produce most readily and cheaply and
trades those goods for the goods that another country can produce more readily and cheaply then both countries are exercising the principle of a. absolute advantage b. diversification advantage c. comparative advantage d. mercantilism 2. Personal reductions, performance bonuses, and sales of described as a. theory O changes b. theory E changes c. labour market changes d. precarious workers
3. ___________ are mental pictures usually unconscious serve to organize
knowledge in some systematic fashion a. cognitive learning b. conscious scripts c. cognitive scripts d. institutionalization 4. single a. b. c. d.
loop learning requires correcting errors ignoring root causes of problems maintaining the status quo all of the above
5. One of the potential risks of deregulation is a. increased competition b. lack of foreign direct investment c. high barriers to entry d. exploitation of consumers 6. Double loop learning a. results in incremental improvements to organizational systems b. deals with the root causes of problems c. maintains the status quo d. always requires a paradigm shift 7. transitional change involves a. departure from old methods of operating b. improving on existing skills and processes c. involves uncertain future outcomes d. impacts employees at the personal level of behavior 8. When a. b. c. d.
U.S. based target opens stores in Canada, this is an example of outsourcing foreign direct investment licensing mercantilism
Short Answers 1. Four reasons for the existence of crown corporations and provide specific
examples for two of them. The government establishes Crown Corporations: 1. to implement public policy that includes protecting national
interest i.e. Air Canada and Petro Canada 2. to protect industries deemed to be vital to the economy
i.e. Canadian Radio Broadcasting Commission 3. to provide special services that could not otherwise be made
available by private business 4. to nationalize industries that were considered to be natural
monopolies including the generation and distribution of electricity
5. allows more government control for safety and health
2. Provide two benefits that occurred from deregulating the trucking industry in
Canada. Provide two potential negative consequences of deregulating the electricity industry in Ontario. Define deregulation in your answer. Benefits of deregulating the trucking industry: 1. more competition plus demand for truckers increased 2. many major technological changes occurred i.e. GPS
Potential negative consequences of deregulating the electricity industry 1.
new investment was discouraged since there was an increase in costs and a decline in reliability
2.
Since deregulation, a major shift has occurred in the qualifications of those controlling electric power policy and managing electric power activities. The emphasis shifted from technical knowledge and competence to marketing and financial knowledge
Deregulation is to reduce or eliminate government power in an industry. Discuss which of the four perspectives regarding the nature and governess of work in Canada currently dominates in Canada and explain why. 3.
Explain the connection between paradigms and transformational change in organizations. Give an example to illustrate. 4.
Explain the neo-classical perspective regarding the nature and governess of work. 5.
Describe the shift in Canada to non-standard employment and SE relationships and its impact on Canadian workers. 6.
Canada, EU unveil ‘historic' free-trade agreement Canadian Prime Minister Stephen Harper hailed the Canada-European Union trade agreement as an historic opportunity for Canada even though the deal has yet to be finalized. Mr. Harper and EU President Jose Manuel Barroso announced the agreement Friday at a joint press conference in Brussels. “This is a big deal,” Mr. Harper said at a news conference. “Indeed it is the biggest deal our country has ever made. This is a historic win for Canada.” Added Mr. Barroso: “Today is the beginning of a new era for the European Union and Canada.” The Comprehensive Economic and Trade Agreement, CETA, goes far beyond the North American Free Trade Agreement and is designed to eliminate thousands of tariffs, encourage foreign investment and promote movement of labour. Once implemented, 98 per cent of EU and Canadian tariffs will be eliminated immediately. That includes 95 per cent of EU tariffs on agriculture products such as grains, Canola and fruit. Other tariffs and restrictions will be phased out over seven years. But the text of the deal has yet to be released, mainly because it has to be translated into the EU’s 24 languages. It must also be approved by all 28 EU members as well as Canada’s provinces and territories. That process could take two years. Mr. Barroso expressed confidence the deal would be in place by 2015, although some countries have raised concerns. He said the agreement can be adopted provisionally while the ratification process is underway. “I expect the European Union member states to agree on this agreement because we kept them informed,” he said, adding that it has been well received. “I don’t see any reason to have doubts about its effective implementation. If I saw it, I would say it.” Mr. Harper too played down the approval process saying the provinces are on side and that he expects the deal to be in place by the next election in 2015. “The agreement as it now stands is not going to change,” he said. “I am certainly confident of its adoption in Canada. I think anyone who opposes it will lose and will make a big historic mistake in so doing.” The deal will have far reaching impacts, touching just about every sector of the Canadian economy as well as millions of workers and consumers. The final result could see Canadians paying less for thousands of products made in Europe, such as cars, which are currently subject to a 6 per cent tariff. European companies will also be able to bid on large provincial and municipal government contracts. Canadian companies
and farmers will gain open access to the EU for hundreds of products, some of which now face tariffs as high as 12 per cent. Canada has been eager to reach the trade deal, believing access to the EU’s $17-trillion economy will boost gross domestic product by $12-billion and create 80,000 jobs. The EU is Canada’s second largest trading partner, far behind the United States. However, some sectors of the Canadian economy will feel the effects. The EU has gained a much larger share of the Canadian cheese market, with a quota on imports increasing to around 30,000 tonnes from the current level of 13,000. Federal officials said they are working with provincial governments on a compensation program for dairy farmers. Drug companies will get longer protection, of about two years, for their patents, meaning lower cost generics won’t be available as early in Canada. A compensation program for generic firms is also under consideration, federal officials said. And Canadian auto manufacturers, while gaining larger access to the EU market, will still face some restrictions going forward. EU companies will also have an easier time taking over Canadian businesses. The threshold for the government to launch a review of a takeover by EU companies will be set at $1.5-billion, as opposed to $1-billion for other takeovers. Mr. Harper acknowledged that some Canadians will be hurt by the deal, but he said compensation is being considered and that the overall benefits of the pact outweigh any problems. “This agreement is vastly positive for the Canadian economy across the board,” he said. “There are some negative effects on a few sectors in the very short term … this is not just a big deal, it is a very, very positive deal for Canada.”
PART I 3 case questions (15 marks) Question 1 a) Explain benefits to Canada of entering into this free trade agreement with Europe (both reducing on European imports to Canada and Canadian imports to Europe) Discuss potential impact on the consumer’s employment, competitiveness and culture in the Canadian context. Trade accounts for more than 60 percent of Canada’s annual GDP and one in five Canadian jobs. A trade agreement with EU has the potential to benefit Canada significantly: a boost in bilateral trade and a high annual increase to Canada’s economy which will provide an increase to the average Canadian family’s income and provide many more job opportunities. Canada and Europe also share similar cultures along with similar forms of government. Gaining privileged access to this profitable market secures a key competitive edge for Canadian workers and businesses across several key economic sectors, covering all regions of the country. b) What are the potential negative consequences of removing tariffs on European imports to Canada? Discuss potential impact on the consumer’s employment, competitiveness and culture in the Canadian context. This agreement threatens nearly every aspect of Canada's social, economic and environmental policy framework, including: threatening privatization of key crown corporations; granting private corporations full access to bid (and possibly sue) on Canadian public procurement decisions at both federal AND provincial levels; killing manufacturing jobs by increasing exports of natural resources and importing valueadded goods (including autos). Question 2 The article states that the Canadian government has assured the provinces it will be compensating to cheese producers and that it will set up a marketing campaign for local cheese. This is essentially a government subsidy to dairy farms. a) Explain why the Canadian government should play the role of guardian of business in this way. Since it was the government’s idea to go through with the Canada-Europe free trade agreement thus any damage to any industry should be compensated by the government. Also, the government was aware of the pressure it would put on dairy farmers yet they still allowed Europe to increase their cheese exports.
b) Explain why the Canadian government should not play the role of guardian of business in this way. Even though cheese makers are highly at risk due to Canada-EU free trade agreement but the compensating should go to anyone, including farmers, who suffer losses as a result of the comprehensive economic and trade agreement. Market decisions should be made by investors not politicians. Also, since farmers do not own quota, they only get to buy the use of it and you cannot get compensation on something you do not own. Question 3 This agreement could allow for more foreign ownership of Canadian businesses. Discuss why foreign ownership maybe bad for Canada. Through foreign ownership, Foreign direct investors will take advantage of this crucial inside information and be inclined to retain high-productivity firms under their ownership and control and sell low-productivity firms to the uninformed savers. Foreign ownership inflates market prices, centralizes cities, exports the profits and promotes borrowing from Canadian financial institutions and government programs which might otherwise go to creditworthy Canadian interests.
Multiple Choice 1. If a country specializes in goods that it can produce most readily and cheaply and
trades those goods for the goods that another country can produce more readily and cheaply then both countries are exercising the principle of a. absolute advantage b. diversification advantage c. comparative advantage d. mercantilism 2. Personal reductions, performance bonuses, and sales of described as a. theory O changes b. theory E changes c. labour market changes d. precarious workers
3. ___________ are mental pictures usually unconscious serve to organize
knowledge in some systematic fashion a. cognitive learning b. conscious scripts c. cognitive scripts d. institutionalization 4. single a. b. c. d.
loop learning requires correcting errors ignoring root causes of problems maintaining the status quo all of the above
5. One of the potential risks of deregulation is a. increased competition b. lack of foreign direct investment c. high barriers to entry d. exploitation of consumers 6. Double loop learning a. results in incremental improvements to organizational systems b. deals with the root causes of problems c. maintains the status quo d. always requires a paradigm shift 7. transitional change involves a. departure from old methods of operating b. improving on existing skills and processes c. involves uncertain future outcomes d. impacts employees at the personal level of behavior 8. When a. b. c. d.
U.S. based target opens stores in Canada, this is an example of outsourcing foreign direct investment licensing mercantilism
Short Answers 1. Four reasons for the existence of crown corporations and provide specific
examples for two of them. The government establishes Crown Corporations: 1. to implement public policy that includes protecting national
interest i.e. Air Canada and Petro Canada 2. to protect industries deemed to be vital to the economy
i.e. Canadian Radio Broadcasting Commission 3. to provide special services that could not otherwise be made
available by private business 4. to nationalize industries that were considered to be natural
monopolies including the generation and distribution of electricity
5. allows more government control for safety and health
2. Provide two benefits that occurred from deregulating the trucking industry in
Canada. Provide two potential negative consequences of deregulating the electricity industry in Ontario. Define deregulation in your answer. Benefits of deregulating the trucking industry: 1. more competition plus demand for truckers increased 2. many major technological changes occurred i.e. GPS
Potential negative consequences of deregulating the electricity industry 1.
new investment was discouraged since there was an increase in costs and a decline in reliability
2.
Since deregulation, a major shift has occurred in the qualifications of those controlling electric power policy and managing electric power activities. The emphasis shifted from technical knowledge and competence to marketing and financial knowledge
Deregulation is to reduce or eliminate government power in an industry. Discuss which of the four perspectives regarding the nature and governess of work in Canada currently dominates in Canada and explain why. 3.
Explain the connection between paradigms and transformational change in organizations. Give an example to illustrate. 4.
Explain the neo-classical perspective regarding the nature and governess of work. 5.
Describe the shift in Canada to non-standard employment and SE relationships and its impact on Canadian workers. 6.
