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Canada
Its land area is almost 3.6 million square miles
and it has 10 provinces and three territories. In 1973
its control was with British. It became a separate
nation in 1867. Its constitution was organized until
1982. Today it is a leading member of British
common wealth.

• Canada’s economy
Canada people have highest standard of living
in the world. Consumer taste and wealth are
similar to us. Approximately two third of
Canadian people have owned their homes.
Large number of people own durable goods
such as radio, refrigerator, telephone,
washing machine. Its GDP growth was in 3-
4%. Canada has positive balance of payment.
Canada trading partner is US. Canada has
64% of imports and 87% of exports. Canada
economic growth based on export of
agriculture grains and on production, and on
export of natural resources such as minerals,
oil, gas, and forest products. It’s the 10th largest
manufacturing nations in the world. The us
has more
FDI in Canada, since 1988 its investment has
doubled and Canada has invested up to $101
billion.

Differences in the business environment

• Canada’s industrial climate
Canada industry now moving toward
privatization. Some industry such as
broadcasting and public utilities are
government owned and under government
regulation. The federal minister allow
individual to sell companies that are no longer
meet public policy goals.

• Canada’s regulatory environment

Canada regulations are quite similar to us.
The government regulations are federal,
provincial, municipal.

• Competition

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Regulation of competition is under federal

parliament. Legislation in this area presented
in late 1980 to eliminate restrictive trade
policy to stimulate production and promote
international competitiveness of Canadian
business.

• Competition ACT
A Canadian federal law, which regulates
anticompetitive practices and prohibits
actions that will substantially lessen or
prevent competition; it is similar to US
antitrust laws

• Exports and imports

Exports are the shipment of goods across
border having value. It is necessary to have
international agreement like Canada. Its
exports are recorded at 87%. NAFTA opens a
path for international trade.
Import is receiving of goods across the border.
Import documentation required, as well as
payment of goods and sale tax (GST). GST set at
7%
Of the value of goods plus any import duties.
On imports tax collected by Canadian customs.

• Franchization in Quebec
• Banking and finance
Banks in Canada offers wide range of
services. Six large Canadian chartered banks
with extensive national branch networks.
There have maintained 90% of nation banking
industry assets. Smaller banks response to
action of central bank. This institution directly
responsible for nation’s monetary actions:
1) regulating credit and currency. 2)
Controlling and protecting value of Canadian
dollar. 3) Regulating general level of
production trade, price, and employment
within the scope of monetary policy. The bank
of Canada buys and sells foreign exchange
and sets the interest rate that is charge to
commercial bank. The Canadian banks are
also responsible for issuing country note and
coins and manage the federal debt.

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Canada labor code

A federal law that covers areas such as
wages, employment practices, work safety,
and conciliation of labor disputes

Labor relations
Labor relations are governed by federal and
provincial labor legislation. Canada federal
law covers areas such as wages, employment
practice, work safety, and labor dispute.
• Unions
In Canada approximately 30% of work force is
unionized while workers are free to accept or
reject the union membership but in some
cases they must accept membership in order
to keep their jobs.
• Working conditions
Through out all provinces specified wage rate
is adjusted. Wages and salaries are similar to
USA. Pension plans provide benefit for retired
people. Benefits include life insurance,
Medical insurance, and providing subsidy for
house and food. No gender differences in
Canada.
• Investments
The investment Canada act came into effect
from June 30, 1985. It is designed to create
welcome climate for foreign investment and
loosening previous restrictions but at the
same time some regulation remain in effect
that investment in certain area is restricted.
There are some provincial reasons that
restricted investment in particular areas like
individual should have Canadian residence
for at least one year.
Investment Canada ACT (ICA)
An act designed to create for foreign investment
by significantly loosening previous restrictions

Canada’s multinationals
Canada has multinationals company and they
have trade powers. Canada multinational
companies are Nortel network and Bombardier are
all well known in us. 20 Canadian owned
companies, their sale is near to $45 billion, and

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revenue is $24.5 billion. 20 foreign owned firms

exist in Canada these firms contribute in
performance of country, creating jobs and wealth
to the country. They must perform to benefit
Canadian.

Multilateral agreement on investment (MAI)

MAI based to support North American Free Trade
Agreement (NAFTA) while WTO supported MAI. It
includes principle of national treatment and equal
access was given to host country. Both Free
Trade Agreement (FTA) and NAFTA insist on
health care, education, social service, cultural
industries and transportation. The need for MAI
arises because foreign investment is important for
global economy. Now modern business is done
through services and investment.

Business opportunities in Canada

North American Free Trade agreement (NFTA)
Regional free trade agreement between Canada,
USA and Mexico.
 These agreements eliminate trade
restrictions among them.
 All tariffs on US. and Canadian goods
should be eliminated.
 Most imports and exports quotas should be
eliminated.
 Many restrictions on agricultural product
wine, auto part and energy goods sharply
reduced.
 Travel by business visitor, investor are
facilitated.
 Opportunity for investment is facilitated.

North American free trade agreement (NAFTA)

A regional free tree trade agreement between
canasta’ the us and Mexico
United states-Canada free arcade agreement (FTA):
a trade agreement that eliminates most trade
restrictions (such as tariffs) between these two
countries and extends national treatment to foreign
investment

Marketing in Canada

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Here distribution practices and promotional ways

considered. Companies doing business in Canada
should know about these things.

• Distribution practices
Canadian industrial characterized as short
marketing channel with direct producer to
user distribution. Canadian industry
dominated by few large scale enterprises. The
consumer goods are more diffused than
industrial market and use of marketing
intermediaries is often necessary. Consumer
market requires representation in number of
commercial centers.
Wholesale and retail trade are important forms
of distribution because of wide dispersion of
customers wholesale trade is necessary and
retail trade count for over $277 billion in sales
annually.

• Advertising and promotion

Media use for advertising in Canada include
television, radio, newspaper and magazine.
Television and radio is popular, 97%
household has at least one radio and
television. The Canadian broadcasting
corporation has two television networks, one
in English and the other in French. There are
1400 licensed AM and FM radio stations.

• Exporting
• Franchising
Canada is foreign dominant market for us
franchiser. Currently there are over 300
franchises operating and having 10,000
franchising units in Canada. Canadian banks
offering wide range of services to franchisers.

Mexico’s economy
Mexico with a land area of 760,000 square miles
.This country is divided into 31 states and federal
district. Earlier political constrain but since world
war two government become stable and during
presidency of Carlos Salinas and Ernest zedillo
relations with US have become more strong.

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 Currently Mexico’s Economy is

very flexible and they had new
agreements with the US. Country
has also promoted exports to the
US, which are nearly 25%.

• MNE investment
The climate for foreign investment in Mexico
has grown increasingly in recent years.
Although there were strict controls on foreign
investment during the 1970, regulation
introduced in 1989 reversed many of these
restrictions.
One of the major reasons for the increase in
FDI is the privatization campaign that began in
1982 and which has picked up speed since
then.

• Labor
Labor is plentiful, inexpensive, which is
carefully utilized.
Approximately 40% work force is unionized.
In industrial operations almost 80% work
force is unionized.

Mexico and the North American free trade

agreement
There is an agreement between Mexico and
North America for free trade. Latin American
Integration Association is playing an integral
part in it.

Latin America inter regional association (LAIA)

A free trade group formed to reduce
intraregional trade barriers and to promote
regional economic cooperation. Argentina,
Bolivia Brazil, Chile, Colombia, Ecuador,
Peru, Uruguay, and Venezuela are all
members

Regional trade agreements

Marcusor
A sub regional free trade group formed to
promote economic cooperation; the group
consists of Argentina, Brazil, Paraguay, and
Uruguay

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Andean common market (ancom)

A sub regional free trade compact designed
to promote economic and social integration
and cooperation; Bolivia, Colombia, Ecuador,
Peru, and Venezuela are all members
Enterprise for the Americas
An idea launched by president bush; the aim
of this effort is to create the free trade area
from Alaska to argentine Antarctica
Free trade area of the Americas (FTAA);
A regional trade agreement that is exacted to
succeed NAFTA and include 34 countries
across north, central, and South America

Doing business in Mexico

Four common approaches in Mexico
Doing business in Mexico can take a number of
different forms four strategies have been proven
particularly profitable.
1. One is to establish a wholly-owned
subsidiary. This can be an expensive
strategy, but it gives the company total
control and allows management to make
decision quickly and efficiently. Quite often
local managers of the management team are
locals’ However headquarters exercise key
control.
2. Become a part of the maquiladora program.
3. Shelter programs: - local contractors assume
responsibility for all aspects of the
manufacturing operations.
4. Joint venture with local partner.

Mexico and the double diamond

In order to maintain its economic growth, Mexico
must continue developing international competitive
strength.

• 1-developing innovative new products and

services that simultaneously meet the Needs of

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Mexican customers, recognizing that and US

close relationship with demanding.

• 2-drawing on the support industries and

infrastructure of both the US and Mexican
Diamonds, realizing that the US diamond is
likely to possess deeper and more efficient
markets for such industries.

• 3-making free and full use of the physical and

human resources in both counties.

• Petroleum cluster
Mexico’s petroleum industry accented a 10
per cent of all exports in 2000. The country
has the second largest proven oil reserves
after Venezuela and is the word’s fifth largest
producer.
The largest firm is state-owned petroleum
Mexicans (premix) which is the world’s largest
crude oil producer and 81st largest firm.
It has work force of 135000 employees and
assets of nearly 60 billion. Including pipelines,
refineries, tankers, aircraft and rail cars.

The potential of this cluster looks promising even

though in recent years Mexico own reserves have
fallen slightly and the international benchmark price
for crude oil has dropped to the 16 to 30 per barrel
range.

Mexico with an export base, for improving

economies of scale and generating fund for
reinvestment in drilling and exploration activities.

• Automotive cluster
The global auto industry is currently
undergoing worldwide restructuring.
In this process Mexico is emerging as a major
car and truck producer.
Mexico has a strong rich resource base
supporting its automotive cluster.
There are also strong supporting industries
and a well-developed infrastructure in the
automotive cluster.

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The market potential of the automotive cluster

is extremely high, there are two problems,
however, and that will have to be dealt with if
the country is to continue increasing its
competitions.

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