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Import Tariffs in Canada Could Boomerang

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VANCOUVER, Canada (Jan 6) – China’s clout as an economic superpower has roused protectionist sentiment around the world, including among some Canadian manufacturers. But analysts warn safeguard measures could do Canadian businesses more harm than good. Although Canadian manufacturers are finding it increasingly difficult to compete against China’s low labour costs, imposing protective tariffs on […]

VANCOUVER, Canada (Jan 6) – China’s clout as an economic superpower has roused protectionist sentiment around the world, including among some Canadian manufacturers. But analysts warn safeguard measures could do Canadian businesses more harm than good.

Although Canadian manufacturers are finding it increasingly difficult to compete against China’s low labour costs, imposing protective tariffs on Chinese imports could hinder the gains Canada has made to open up trade between the two countries, said Kenny Zhang, analyst for the Asia Pacific Foundation.

“I don’t think it is a politically and economically wise decision” to impose protective trade barriers, Zhang said.

British Columbia, in particular, has experienced robust economic growth in recent years, supported to a large degree by China’s massive demand for industrial commodities. And the provincial and federal governments are spending hundreds of millions of dollars to improve B.C.’s port system and transportation links to encourage cross-Pacific trade.

But faced with a deluge of cheaper Chinese-made goods, some manufacturers are seeking government help.

In September, after receiving a complaint from a group of bicycle manufacturers, the Canadian International Trade Tribunal responded by recommending Ottawa introduce a 30 % surtax on foreign-made bicycles.

Domestic bicycle production plunged 35 %between 2000 and 2004, while imports jumped 98 % during the same period, the tribunal found.
(Source: CanWest News Service)

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