Trade Creation Occurs When Lower-Cost External Suppliers Are Replaced by Higher-Cost

question 52

True/False

Trade creation occurs when lower-cost external suppliers are replaced by higher-cost suppliers within the free trade area.

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Definitions:

Dumping

The selling abroad of goods at prices lower than the prices of the goods sold domestically in the country of origin.

Special Import Measures Act

Legislation designed to protect Canadian industries from unfair trade practices like dumping and subsidizing.

Customs Tariff Act

Legislation that outlines the taxes or duties to be paid on imported or exported goods.

Foreign Branch Plant

A subsidiary production or service facility of a company located in another country from the parent company.