Attempts: Keep the Highest: /10 1. Protectionism, GATT, and world trade Aa Aa In 1932, U.S. manufacturers, which used to enjoy steady relationships with their foreign distributors and export nearly 60% of their output, realized that their exports fell to only 20% of total output. Which of the following is the most likely reason for this decrease in exports? War between the United States and New Zealand The low quality of U.S. products Retaliatory tariffs by trading partners The signing of the General Agreement on Tariffs and Trade (GATT) in 1947 resulted in the adoption of several new trade policies. In the following table, identify the policies that were a result of the GATT. Check all that apply. Then, using the selection boxes in the last column, identify the means by which each policy was implemented. A GATT Policy? Implementation Policy Promotion of trade transparency Promotion of lower trade barriers Promotion of protectionism In the 1960s, multilateral negotiations called and caused resulted in in U.S. exports. QNA 3.16 2004-2016 Aplia. All rights reserved. 2013 Cengage Learning except as noted. All rights reserved. Grade It Now Save & Continue Attempts: Keep the Highest: /4 2. Winners and losers from tariff reductions Aa Aa Suppose that Australia imports coffee from Colombia. The free market price is $8.00 per pound. If the tariff on imports in Australia is 20.1%, Australians pay per pound. One of the accomplishments of the Uruguay Round that took place between 1986 and 1993 was significant across-the-board tariff cuts for industrial countries, as well as many developing countries. Suppose that as a result of the Uruguay Round, Australia reduces its import tariffs to 12.2%. Assuming the price of coffee is $8.00 per pound, consumers now pay the price of per pound. in Based on the calculations and the scenarios presented, the Uruguay Round most likely Australia and in Colombia. QNA 3.16 © 2004-2016 Aplia. All rights reserved. 2013 Cengage Learning except as noted. All rights reserved. Grade It Now Save & Continue 3. Basic facts about the WTO Aa Aa The World Trade Organization (WTO) was built on the basis of the General Agreement on Tariffs and Trade (GATT) and, thus, inherited many of its features. Still, the WTO proved to be a very distinct institution. Which of the following are the unique properties of the WTO? Check all that apply. Acts as a membership organization Acts as a provisional treaty Administers a unified package of agreements Includes side agreements Brings trade in services, intellectual property, and investment into the multilateral trading system According to the "most favored nation" clause (Article I of the GATT), which of the following is true? Tariffs on products imported from countries belonging to the WTO must be lower than tariffs on the same products imported from countries that are not members of the WTO. If a country imposes higher tariffs on one trading partner, then those high tariffs must be imposed on all its trading partners belonging to the WTO. O A country can lower tariffs on imports from countries with "most favored nation" trading status without changing tariffs on imports from other members of the WTO. If a country gives a trade advantage to one partner, then this advantage must be extended to all its trading partners belonging to the WTO. 4. Issues in trade liberalization and WTO policies Aa Aa The case of the European Union imposing a 5% tariff on U.S. exports of paper is an example of: An environmental issue A fair trade A retaliatory tariff Which of the following arguments can be used correctly to defend the WTO's position on retaliatory tariffs? Check all that apply. A countervailing duty protects import-competing producers. Convincing the government to impose antidumping duties is less costly than face fair competition. Accusing foreign firms of dumping is less costly than producing goods competitively. 5. Policy response to dumping Aa Aa Suppose the price of coated paper in China is $1,140 per ton. China exports coated paper to the United States at $1,020 per ton. The Chinese government does not subsidize domestic producers of paper. Assume that China is the only exporter of coated paper to the United States and that Chinese producers of coated paper act as one firm. Which of the following policies could the United States apply to China under the rules of the World Trade Organization (WTO)? Check all that apply. A countervailing duty An antidumping duty An export subsidy to U.S. producers of coated paper An import quota A safeguard tariff Suppose the U.S. Department of Commerce reverses its decades-old policy of not applying duties to imports from non-market economies and announces that it will apply an antidumping tariff against China to the full extent allowed under the WTO rules. In response to this announcement, Chinese producers of coated paper raise their export prices to avoid paying the duty. Suppose this graph shows the market for coated paper in the United States, where D is the demand curve, S is the domestic supply curve, and PM is the initial price of imported coated paper.
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