Deck 5: International National Trade Regulation

Question 1

GATT has led to the lowering of average tariff rates in industrial countries to less than 10%.

Answer 1

True

Question 2

Most economists believe that the high tariff rates enacted under the Smoot-Hawley Act of 1930 contributed to the Great Depression.

Answer 2

True

Question 3

Under GATT, when countries agree to open their markets, they are required to place ceilings on tariff rates.

Answer 3

True

Question 4

The WTO was established as a permanent body in 1947 to oversee the implementation of GATT principles and agreements.

Question 5

The WTO agreements on trade in services is known as TRIPS.

Question 6

In general, the national treatment principle of GATT requires member states of the WTO to offer their most favorable tariff rates to all other WTO members.

Question 7

Dumping is when a government grants a domestic industry some benefit in violation of the national treatment principle.

Question 8

Countries within a free trade area such as USMCA or the EU are provided an exception to the most favored nation principle and may reduce barriers among themselves without having to grant lower barriers to other WTO members.

Question 9

A country that enacts punitive barriers to the importation of goods from countries that have violated GATT principles must seek the permission of the WTO before acting.

Question 10

Charging import duties is a violation of the national treatment principle of GATT.

Question 11

If a country challenges an importer's valuation of goods, the burden of proof falls on the country to provide additional evidence of valuation.

Question 12

The GATT Agreement on the Application of Sanitary and Phytosanitary Measures (SPS) was designed to reduce tariffs on agricultural products from countries that used pesticides.

Question 13

Before taking any formal action with the Dispute Settlement Body, countries involved in a trade dispute must first consult with each other in an attempt to settle the dispute.

Question 14

Under the WTO dispute settlement procedures, countries that are not direct parties to a case, but have a substantial interest in the case, may make written and oral arguments.

Question 15

The WTO Dispute Settlement Understanding (DSU) provides for the resolution of all trade disputes within 3 months.

Question 16

The WTO Dispute Settlement Panel found that the U.S. tax treatment of Foreign Sales Corporations did not constitute an illegal export subsidy.

Question 17

The Dispute Settlement Body is the sole authority to appoint the panel of experts that decide cases.

Question 18

The final report of the Dispute Settlement Panel can be reversed only by a unanimous vote of the Dispute Settlement Body.

Question 19

Countervailing duties are charges countries place on imported goods to offset subsidies granted to the exporters by their home countries.

Question 20

Antidumping duties are assessed on an entry-by-entry basis in an amount equal to the difference between the U.S. price of the good and the exporters cost of production.

Question 21

Section 301 of the Trade Act of 1974 grants the U.S. Trade Representative investigative, but not retaliatory, powers in trade disputes.

Question 22

In 2000, the WTO Dispute Settlement Body held that the unilateral nature of Section 301 of the Trade Act of 1974 violated the WTO Dispute Settlement Understanding.

Question 23

Section 337 of the Tariff Act of 1930 provides the International Trade Commission the power to grant damage awards to U.S. companies or industries affected by foreign exporters' infringement of intellectual property rights.

Question 24

The United States-Mexico-Canada Agreement (USMCA) established a regional trading bloc among the United States, Canada, Mexico, and the nations of the Caribbean.

Question 25

The long-term goal of USMCA is the elimination of all tariffs.

Question 26

USMCA is unlikely to have any long-term impact on non-tariff trade barriers.

Question 27

The initial guiding principle behind the formation of GATT was:

A) Freer trade through the reduction of tariffs worldwide
B) Freer trade through the establishment of regional trading groups
C) Freer trade through the harmonization of laws in the industrial countries
D) Freer trade through the development of the less industrialized nations

Question 28

The three foundational principles of GATT are:

A) Most favored nation; national treatment principle; principle of transparency
B) Most favored nation; non-discrimination principle; principle of transparency
C) National treatment principle; non-discrimination principle; principle of transparency
D) Most favored nation; non-discrimination principle; national treatment principle

Question 29

A tariff is:

A) A complete ban on trade with a nation
B) A ban on the importation of certain products from a nation
C) An import duty
D) A tax on goods being imported into a country
E) C & D

Question 30

In the area of tariffs, binding commitments amount to:

A) Treating the products of all countries equally
B) Placing ceilings upon customs tariff rates
C) Agreeing to lower tariff rates at a specified future date
D) None of the above

Question 31

The Uruguay round of GATT marked the first time that GATT:

A) Dealt with trade in services
B) Expanded into intellectual property issues
C) Dealt with agricultural tariffs
D) Both A & B
E) All of the above

Question 32

When a foreign company exports and sells below the market price, it is known as:

A) Subsidies
B) Countervailing measures
C) Dumping
D) Punitive barriers
E) None of the above

Question 33

A country that does not make public its import practices and constantly changes those practices without notice would most likely be in violation of which GATT principle:

A) Non-discrimination principle
B) Most favored nation principle
C) National treatment principle
D) Transparency principle

Question 34

Countries A, B, and C belong to GATT. Countries A and B are also members of a regional trading group. Country A imposes a 5% tariff rate on semi-conductors from country B and a 10% tariff rate on semi-conductors from country C. Country A is in violation of:

A) Most favored nation principle
B) National treatment principle
C) Transparency principle
D) None of the above

Question 35

Countries A, B, and C belong to GATT. Countries A and B are also members of a regional trading group. Country A imposes the same 5% tariff on radios from countries B and C. However, once the radios enter country's A stream of commerce, radios from Country C are charged a higher internal tax. Country A is in violation of:

A) Most favored nation principle
B) National treatment principle
C) Transparency principle
D) None of the above.

Question 36

The Agreement on Pre-Shipment Inspection gives an importing country the right to pre-inspect goods for quality, quantity, and value when:

A) The goods are coming from a developing country
B) An importing country always has the right to pre-inspect goods
C) The right to pre-inspect goods is afforded only to developing countries
D) The right to pre-inspect goods is afforded only if the goods are agricultural products.

Question 37

The GATT Agreement on Technical Barriers to Trade requires an importing country to:

A) Allow importers access to its testing and certification standards and procedure
B) Reduce tariff barriers on technical products such as computers and electronics
C) Establish national certification bodies
D) None of the above

Question 38

International trade disputes are handled by the WTO under the auspices of the:

A) International Court of Justice
B) Dispute Settlement Body
C) International Chamber of Commerce Arbitration Panel
D) World Court

Question 39

In instances where cases use the maximum amount of time or a case is appealed, the WTO dispute resolution process must be settled within:

A) 60 days
B) 90 days
C) 120 days
D) 15 months

Question 40

When a foreign exporter sells goods at a price below what it sells them in its home country or below the cost of production, it is known as:

A) Countervailing
B) Dumping
C) Price discrimination
D) B & C

Question 41

In the U.S., antidumping duties can be:

A) As high as 400% of the value of the goods being imported and assessed for periods of up to 20 years
B) As high as 200% of the value of the goods being imported and assessed for periods of up to 20 years
C) As high as 400% of the value of the goods being imported and assessed for periods of up to 40 years
D) As high as 200% of the value of the goods being imported and assessed for periods of up to 40 years

Question 42

In order to successfully petition for the imposition of countervailing duties on imported goods, a U.S. company or industry must show that:

A) Foreign exporters are selling their goods on the U.S. market for less than fair value
B) The dumping causes material injury to U.S. industry
C) A & B
D) None of the above

Question 43

The ___________ is authorized by statute to retaliate against activities of other countries that are deemed to violate U.S. rights under international trade agreements.

A) Department of Commerce
B) International Trade Commission
C) Office of the U.S. Trade Representative
D) World Trade Organization

Question 44

Under Section 301, acts or policies engaged in by U.S. trading partners that violate a trade agreement, or are found to be unjustifiable, unreasonable or discriminatory, and burden or restrict U.S. commerce are known as:

A) Trade violation practices
B) Actionable practices
C) Dumping practices
D) Trade restrictive practices

Question 45

_________ is most commonly used by the U.S. government to prevent the importation of pirated or counterfeited gray market goods.

A) Section 301
B) Trade Act of 1974
C) Section 337
D) None of the above

Question 46

Protestors at the Millennium Round of trade talks in Seattle were primarily concerned with:

A) Labor issues
B) Environmental issues
C) Consumer interest issues
D) All of the above

Question 47

Provisions contained within the North American Free Trade Agreement that allow for the reinstitution of previous tariff levels at times in order to alleviate short-term negative impacts on industry and business are known as:

A) Jump-back provisions
B) Snapback provision
C) Revert provisions
D) Domestic protection provisions

Question 48

The enumerated goals of USMCA are:

A) The elimination of trade barriers
B) To promote conditions of fair competition
C) To provide adequate protection of intellectual property rights
D) A & B only
E) All of the above

Question 49

In order to freely cross USMCA borders, goods must be certified as:

A) Regional goods
B) Substantially transformed goods
C) Cost tested goods
D) National goods

Question 50

In order to be considered for integration into the European Union, a country must:

A) Have a functioning market economy
B) Protect Human Rights
C) Guarantee democracy
D) All of the above

Question 51

Discuss the three foundational principles of GATT. Describe any exceptions to the principles and provide examples of violations.

Question 52

What are some of the benefits to international trade gained with the establishment of the World Trade Organization? According to its critics, what are the WTO's shortcomings?

Question 53

Discuss in detail the WTO dispute resolution process under which countries settle international trade disputes.

Question 54

What is Section 301 and what are considered 'actionable' practices under Section 301? What steps will the U.S. Trade Representative take when it finds unfair trade practices taking place?

Question 55

The generalized system of preferences is a framework under which developed countries give preferential tariff treatment to manufactured goods imported from developing countries.

Question 56

Manufacturing is not permitted on goods brought into a bonded warehouse under any circumstances.

Question 57

The HTS utilized in the United States is taken from an international classification scheme administered by the World Customs Organization (WCO).

Question 58

The general rule-making authority in customs classification and assessment of duties in the U.S. is vested in the International Trade Commission (ITC).

Question 59

The primary rule of interpretation in determining the appropriate HTS classification number is the essential character rule.

Question 60

The foreign affairs doctrine states that it is the exclusive domain of the federal government to enact laws regulating international trade.

Question 61

Ad Valorem duties are based on the weight or quantity of the good being imported.

Question 62

In order to obtain the duty exemption for off-shore assembly found in Section 9802, exported items must be ready for assembly without further fabrication.

Question 63

Foreign Trade Zones allow U.S. manufacturers to export goods without being subject to duties.

Question 64

An importer concerned about a classification issue can get an advanced ruling from the Commissioner of Customs before importing the good.

Question 65

Without exception, all goods imported into the U.S. must have a country of origin marking on them.

Question 66

Liquidation of goods by the Customs Service refers to the seizure of goods excluded from importation into the U.S.

Question 67

Anyone importing unmarked items into the U.S. is subject to civil penalties including an additional 10% ad valorem duty.

Question 68

Because a country of origin determination may vary under different statutes, it is possible for the same good to be considered from Country A for purposes of marking and from Country B for purposes of assessing a duty.

Question 69

When using the deductive value method of determining dutiable value, an importer may deduct foreign inland freight costs, but only if they are separately invoiced.

Question 70

In the U.S., the least preferred method of valuation for determining the dutiable value of a good is the computed value method.

Question 71

U.S. firms that import materials or components that they process or assemble for re-export may obtain refunds of all duties paid on the imported merchandise, less 5 percent to cover customs costs.

Question 72

The Agreement on Customs Valuation makes the deductive value of a good the internationally preferred means of calculating dutiable value.

Question 73

U.S. law makes substantial transformation the primary test for determining a goods country of origin.

Question 74

The primary consequence of the Customs Modernization Act is an increase in the amount of goods being imported into U.S.

Question 75

The Origin Agreement of GATT has led to an international harmonization in marking requirements for imported goods.

Question 76

Generally, the value-added method of determining country of origin benefits less- developed countries because of their low-cost labor and materials.

Question 77

USMCA regulations define a good as being made in a USMCA country if at least 55% of the labor and component parts of that good were supplied in a USMCA country.

Question 78

The legal responsibility for classifying and valuing imported goods falls to the custom broker.

Question 79

Country specific standards requirements may act as technical barriers to trade.

Question 80

An eco-label is a voluntary mark awarded by USMCA countries to producers who can show that their products are significantly less harmful to the environment than similar products.