Question 1

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:

Accepted Answer

If a nation imposes tariffs or quotas in violation of GATT guidelines, other members of the WTO can file a complaint and initiate proceedings under the WTO's Dispute Settlement Understanding (DSU). The DSU provides a mechanism for resolving trade disputes between nations, including the possibility of economic sanctions. However, military retaliation or legal action in the World Court are not options available under WTO rules.

Question 2

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

Accepted Answer

The WTO Dispute Settlement Understanding does not require a complaining country to prove it has a "legal interest" in the case; it only needs to demonstrate that it has a trade concern or that its benefits under the WTO agreements are being impaired.

Question 3

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

Accepted Answer

Tariffication is a process by which nontariff barriers to trade are converted into tariffs. This is typically done as part of trade negotiations, either bilaterally or through multilateral organizations like the World Trade Organization (WTO). By converting non-tariff barriers into tariffs, countries are able to follow the agreed-upon rules for free and fair trade, while still maintaining some level of protection for domestic industries and markets.

Question 4

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

Accepted Answer

WTO DSU reports do not carry formal precedential value as each panel and Appellate Body is free to interpret the covered agreements anew, though past reports may be considered persuasive.

Question 5

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

Accepted Answer

Tariffs can be calculated based on both the value of the goods (ad valorem) and the physical units (specific), hence both I and II are correct.

Question 6

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.

Accepted Answer

The answer of While WTO reports carry no weight as...

Question 7

The GATT 1994 established rules for regulating trade in goods and services and creation of the WTO.

Accepted Answer

The General Agreement on Tariffs and Trade (GATT) 1994 did establish rules for regulating trade in goods and services and also created the World Trade Organization (WTO).

Question 8

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

Accepted Answer

According to GATT (General Agreement on Tariffs and Trade), quotas are only acceptable as devices for regulating trade where a nation is imposing a temporary safeguard to protect its balance of payments. This means that quotas can only be used as a measure to address a temporary crisis such as a sudden surge of imports causing a trade imbalance. GATT does not allow the use of quotas for protectionist purposes or as a measure to restrict fair competition.

Question 9

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

Accepted Answer

Trade in textiles and services are regulated by GATT, with the exception of certain provisions like the Agreement on Textiles and Clothing which expired in 2005 and the General Agreement on Trade in Services. However, these sectors are now covered by the World Trade Organization agreements.

Question 10

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

Accepted Answer

This objective was included in the original GATT agreement and has been continued in the World Trade Organization (WTO) agreements. However, there are some exceptions and restrictions that allow for the protection of certain industries or products.

Question 11

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

Accepted Answer

GATT's prohibition of quotas does not restrict a nation's ability to impose quotas for the purpose of safeguarding its external financial position and balance of payments. However, such measures must be temporary and in accordance with the rules of the World Trade Organization (WTO).

Question 12

Each nation has the right to impose import schemes and customs procedures as a means to protect its citizen's public health,safety,and morals.

Accepted Answer

According to Article XX of the General Agreement on Tariffs and Trade (GATT), each nation is allowed to impose import schemes and customs procedures as a means to protect its citizen's public health, safety, and morals, provided that these measures do not arbitrarily or unjustifiably discriminate against foreign products or are a disguised restriction on international trade. This provision has been carried forward in the World Trade Organization (WTO) agreements.

Question 13

An example of the GATT/WTO dispute settlement mechanism,Apple can file a complaint against Niger's government non-tariff barrier to limit the importation of iPads to the WTO's Dispute Settlement Body.

Accepted Answer

The answer of An example of the GATT/WTO dispute settlement...

Question 14

Under the MFN rates the United States can grant lower tariff rates to a less developed country in order to stimulate economic growth?

Accepted Answer

MFN (Most Favored Nation) rates refer to the trade status in which each country extends its best trade terms to all of its trading partners. Under this principle, a country cannot discriminate against its trading partners by giving preferential treatment to one country and not to others. However, MFN rates do not prohibit a country from granting lower tariff rates to a less developed country as a means of promoting economic growth and development. This practice is often referred to as "preferential trade treatment" and is allowed under the rules of the World Trade Organization.

Question 15

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

Accepted Answer

This statement is not true as the panel does have the authority to authorize trade sanctions if a respondent fails to comply with its recommendations.

Question 16

A tariff is:

Accepted Answer

A tariff is both an import duty and a tax levied on goods being brought into a country.

Question 17

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:

Accepted Answer

The phrase "not made readily available to the public or are hidden or disguised in bureaucratic rules or practices" indicates a lack of transparency, which is reflected in option A).

Question 18

In which of the following areas is the principle of nondiscrimination being central to the GATT evident?

Accepted Answer

The principle of nondiscrimination is central to the GATT in all three areas mentioned. Normal trade relations and national treatment refer to ensuring that imported goods are treated no less favorably than domestic products. The elimination of quotas and quantitative restrictions aims to prevent discrimination against imports by limiting their quantity or value. Therefore, all three options reflect how the GATT promotes nondiscrimination in trade.

Question 19

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

Accepted Answer

The product's uniform tariff classification may not always be a reliable criterion for determining whether import and domestic goods are "like products" because it is based on broad categories that might not reflect the specific characteristics, quality, or consumer perceptions of the products in question.

Question 20

Tariffs serve all of the following purposes except:

Accepted Answer

Tariffs are generally imposed to achieve revenue collection, regulation of import competition, and protection of national defense industries. However, they can hinder the flow of commerce by making imports more expensive and reducing trade between countries. Therefore, enhancing the flow of commerce is not a typical purpose of tariffs.

Quiz 9: The World Trade Organization: Basic Legal Principles