Deck 9: Gatt Law and the World Trade Organization: Basic Principles

Question 1

The most common device for regulating imports is the quota.

Answer 1

False

Question 2

Nontariff barriers are any restrictions,interference,or disincentive to trade other than tariffs.

Answer 2

True

Question 3

The 1947 GATT provided stiff penalties for the misuse of intellectual property.

Answer 3

False

Question 4

In a tariff concession,one country promises not to levy a tariff on a given product at a level higher than agreed upon.

Question 5

GATT envisages a process of tariff bargaining,and this is accomplished through a hit-and-miss process of tariff reductions and increases called "rounds."

Question 6

The Uruguay round of tariff negotiations was the first major multilateral trade negotiating session since World War II.

Question 7

The General Agreement on Tariffs and Trade is today the most important instrument for regulating international trade.

Question 8

An embargo only applies to imports from a particular nation.

Question 9

Normal trade relations provides that a nation cannot negotiate a preferential trade agreement with another nation.

Question 10

Tariff concessions under GATT are recorded in tariff schedules,which are detailed product-by-product listings of all tariff obligations for that nation.

Question 11

Although the 1947 GATT was never ratified by the U.S.Congress,it was considered legally binding in the United States under international law.

Question 12

Other examples of nontariff trade barriers include exchange control on currencies,performance standards,and foreign customs procedures.

Question 13

Usually,import restrictions that protect one sector of a country's economy will result in foreign retaliation against another sector.

Question 14

An embargo is a complete ban on trade with a foreign nation.

Question 15

Quotas serve to increase the amount of imports of a product.

Question 16

Under normal trade relations,when a nation extends some privilege or right to one of its trading partners,that privilege automatically becomes applicable to all other trading partners.

Question 17

In the dispute regarding the European Union's importation of Latin American bananas,the dispute panel found no disparity in tariffs on the European Union's part.

Question 18

A "free trade" nation has no barriers to trade.

Question 19

When a nation's import regulations or procedures are transparent,it is difficult for foreign firms to gain entrance to its markets.

Question 20

When import regulations are readily available to importers and exporters,they are considered to be transparent.

Question 21

An embargo can be:
I) A limit on the amount charged for items imported.
II) Government red tape administered by entrenched bureaucrats.

A) I only.
B) II only.
C) Both I and II.
D) Neither I nor II.

Question 22

Under GATT,charges may be imposed upon the movement of imported goods,such as port fees and inspection fees.

Question 23

WTO DSU reports carry precedential value for future panels by providing definitive interpretations of GATT provisions.

Question 24

Tariffs serve all of the following purposes except:

A) Collection of revenue.
B) Enhancement of flow of commerce.
C) Regulation of import competition.
D) Protection of the national defense.

Question 25

In order to make a prima facie case of nullification and impairment,a claimant must prove that the action has trade effects.

Question 26

For the most part,trade in textiles and services are not regulated by the GATT system.

Question 27

Almost all products are subject to some technical standards set by government regulations or by private standard-setting groups.

Question 28

Tariffication is the process in which quotes,licensing schemes,and other nontariff barriers to trade are "converted" to tariffs.

Question 29

The principle of nondiscrimination is central to the GATT and is evident in the following areas:

A) Normal trade relations.
B) National treatment.
C) Elimination of quotas and quantitative restrictions.
D) All of the above.

Question 30

Which of the following may not be a reliable criterion for determining whether import and domestic goods are "like products"?

A) Consumers' tastes and habits.
B) The product's end uses.
C) The product's uniform tariff classification.
D) Consumers' tastes and habits.

Question 31

In order to convene a WTO panel,the complaining country must prove it has a "legal interest" in the case.

Question 32

The Trade Agreements Act of 1979 contains a provision allowing standard-setting by the U.S.government on private U.S.firms.

Question 33

A tariff is:

A) An import duty.
B) A tax levied on goods being brought into a country.
C) A ban on trade with a foreign nation.
D) Both A and B.

Question 34

The GATT dispute panel found the continuing use of quotas on beef in Korea was justified.

Question 35

One of the primary objectives of GATT is the elimination of all quotas and quantitative restraints.

Question 36

Due to GATT's prohibition of quotas,a nation may not impose quotas to safeguard its external financial position and its balance of payments.

Question 37

Tariffs are computed:
I) As a percentage of value (ad valorem).
II) On the basis of physical units (specific).

A) I only.
B) II only.
C) Both I and II.
D) Neither I nor II.

Question 38

Under the "national treatment" provisions of GATT,imported products may be regulated and taxed differently than domestic goods after they pass the border and enter a nation's stream of commerce.

Question 39

While WTO reports carry no weight as precedent,subsequent panels often consider them,and they can create legitimate expectations as to the interpretation of the treaty by WTO members.

Question 40

The U.S.textile industry has had difficulty competing with foreign imports in the past.If the textile industry lobbies through the president and Congress for quota protection:

A) The U.S. government would have difficulty setting such quotas due to GATT.
B) The textile industry would have to petition directly to the Fiber Institute for such quotas.
C) The U.S. government would have to consider the Multifiber Arrangement.
D) None of the above.

Question 41

In the decision involving tariffs on Latin American bananas,the panel:

A) Recommended the tariffs be brought in line with the EEC's obligations under GATT.
B) Said the Latin American countries were authorized to impose sanctions on the EEC.
C) Found the EEC's tariffs to be within GATT guidelines.
D) Dismissed the case after the EEC agreed to adopt tariffs that were more in line with its GATT obligations.

Question 42

Compare and contrast unconditional and conditional MFN trade.

Question 43

What are the similarities and differences between the GATT and WTO dispute resolution procedures?

Question 44

When a nation that belongs to WTO imposes a tariff or quota on imported products,it is supposed to do so within the guidelines established by GATT.If it does not do so within GATT's guidelines:

A) The offending nation may suffer military retaliation by the other GATT members.
B) The offending nation may be subject to a proceeding pursuant to the WTO's Dispute Settlement Understanding.
C) The offending nation may end up in the World Court being sued for breach of its GATT contract.
D) None of the above.

Question 45

The term used to describe some action taken by a GATT member country in violation of the GATT agreement is:

A) Null and void.
B) Unfair and inequitable.
C) Persona non grata.
D) Nullification and impairment.

Question 46

According to GATT,quotas are considered acceptable devises for regulating trade only where:

A) A nation is imposing a temporary safeguard to protect its balance of payments.
B) They are enacted into law by a nation's legislative body.
C) Nations are engaged in a trade war.
D) A nation has first petitioned the United Nations for permission to do so.

Question 47

Compare and contrast Japan's former Large-Scale Retail Stores Law with its present Large-Scale Retail Store Location Law.

Question 48

The phrase to describe when a foreign government's import regulations are not made readily available to the public or are hidden or disguised in bureaucratic rules or practices is:

A) Not transparent.
B) Unfair trade practices.
C) Bureaucratic procrastination.
D) Limited access.

Question 49

Countries A and B both produce coffee.Both countries belong to GATT.Country A imports coffee from B.Once B's coffee enters A's stream of commerce,under the national treatment provisions of GATT:

A) Country A cannot subject B's coffee to higher internal taxes or charges than its domestic coffee.
B) Country A may now charge higher internal taxes or charges on B's coffee in order to discourage coffee drinking since the goods have already passed the border.
C) Country A cannot subject B's coffee to any internal taxes or charges, even if it does so to domestic coffee.
D) None of the above is correct.

Question 50

Describe the benefits and detriments of enacting a quota?

Question 51

The U.S.Department of Defense needs to buy several million dollars worth of tires for its armored personnel carriers.An American manufacturer can supply the tires for $20 million.A foreign supplier can provide the tires for $15 million.Under these facts:

A) GATT requires that the tires be bought from the foreign supplier.
B) A U.S. statute requires that the government buy from the U.S. supplier.
C) Since the foreign supplier is cheaper, the government must buy from the foreign supplier to save money.
D) None of the above is correct.

Question 52

Assess the relative value of a reported U.S.appellate (or trial)decision and a WTO panel report in a trade dispute.

Question 53

All of the following are basic principles of GATT except:

A) Commitment to normal trade relations.
B) Elimination of import quotas.
C) Non-reciprocal tariff increases.
D) Non-discrimination against imported goods.

Question 54

The GATT Agreement on Technical Barriers to Trade is a code that has as its purpose:

A) To allow free movement of technical equipment among nations.
B) To establish technical data for computer applications.
C) To harmonize standards and standard-setting techniques.
D) None of the above.

Question 55

In what ways are GATT and the WTO similar? Different?

Question 56

The concept that runs throughout the GATT requires that the products of all nations be treated equally and without discrimination by importing nations.This is the principal behind:

A) Nullification and impairment.
B) Most-favored-nation trade.
C) Ad valorem tariffs.
D) Nontariff trade barriers.

Question 57

Countries A,B,and C belong to GATT.Countries X and Y do not.A has a 7% tariff on televisions from B.C,X,and Y also export televisions.Under unconditional most-favored-nation trade of GATT:

A) Countries C, X, and Y are entitled to a 7% tariff on televisions.
B) Countries X and Y are entitled to a 7% tariff on televisions.
C) Country C must petition A under GATT to get a 7% tariff on televisions.
D) Country C gets an automatic 7% tariff rate on televisions.

Question 58

Virtually all nations provide import protection for domestic agricultural interests:
I) And the GATT Agreement specifically prohibits such protection with no exceptions.
II) And this problem exists because nations try to provide market stability and protection for farmers.

A) I only.
B) II only.
C) Both I and II.
D) Neither I nor II.

Question 59

Which of the following are not true regarding WTO dispute settlement procedures?

A) A complaining party can request consultations to seek a solution.
B) Even if a solution is not reached, the panel has no authority to authorize trade sanctions.
C) Other member nations with a "substantial interest" in the case may make written submissions and oral arguments before the panel.
D) An appellate body of three people will hear appeals from a panel case.
E) All of the above are untrue.

Question 60

Compare and contrast direct and indirect nontariff barriers.

Question 61

Guador,a small country in South America,is a member of the WTO.American fruit producers recently succeeded in persuading several members of Congress to introduce a bill to remedy Guador's alleged unfair trade practices in the citrus fruit industry.The bill provides for a unilateral threefold increase in the tariff solely applicable to citrus fruits originating in Guador.Furthermore,the bill imposes periodic testing procedures upon Guadorian citrus fruits from which American producers are exempt.Finally,the bill caps imports of Guadorian citrus fruits into the United States at $20 million in value annually.If enacted,would the bill violate American obligations pursuant to the GATT? Why or why not?

Question 62

Draft a document advocating for the elimination of normal trade relations status against countries involved in human rights abuses.

Question 63

Draft a document advocating the unilateral elimination of normal trade relations status for countries that do not abide by their WTO commitments.

Question 64

Explain the similarities and differences between "like products" and "directly competitive products."