Starbucks Expansion To Canad Argumentative Analysis

Economic integration will provide a great gain for Starbucks expansion into Canada as it refers to the agreement between both countries that ultimately removes, tariff and non-tariff barriers to the free flow of goods or services and factors of production among each other. Economic integration is broken down into five different levels; free trade, custom union, common market, economic market, economic union, and political union (Paul, 2013). Free trade refers to the tariffs between two or more countries that are significantly reduced (Paul 2013). Each member’s country keeps its own tariffs regarding third countries. Free trade provides development for economies of scale and offers comparative advantages, which overall promotes economic efficiency. Custom union simply that the same tariffs are applied to third countries, or that a common trade regime is achieved. Custom unions are mainly useful to level the playing field (Paul 2013). Economic unions are referred to as single markets as they move all tariffs for trade between member countries, which in result creates a uniform market. It also allows free movements of labor, meaning that workers in a

Based on the concept of integration, trade diversion has always been the focal argument. As many feel that because third countries (those of which have lower opportunity cost than member countries) are excluded by the import tariffs, it causes consumer surplus to decrease because of integration. Others make the argument that the trade creation will exceed the trade diversion, Despite the economic and political arguments from both sides, integration has never been and will never be easy to achieve. The fact is that though economic integration benefits the majority, it has its costs. While expanding business in Canada might benefit from a regional free trade agreement, expanding in others could be