Question 1

The GATT Agreement has an escape clause whereby member nations may levy increased duties on imported products where there are unforeseen circumstances that cause or threaten serious injury to domestic producers.

Accepted Answer

This statement is true. The General Agreement on Tariffs and Trade (GATT) does have an escape clause, known as Article XIX, that allows member nations to raise tariffs temporarily in order to protect domestic industries from unforeseen and serious injury caused by increased imports. This provision is often referred to as a safeguard measure.

Question 2

The GATT Agreement on Safeguards permits a member state to increase tariffs on an imported product in order to allow a domestic manufacturer to successfully introduce a competitive product in the domestic market.

Accepted Answer

The GATT Agreement on Safeguards allows a member to increase tariffs temporarily to protect a specific domestic industry from an unforeseen surge in imports, not specifically to allow for the introduction of a competitive domestic product.

Question 3

The GATT escape clause allows member nations to take drastic permanent measures to protect a domestic industry and thereby preserve jobs.

Accepted Answer

The GATT escape clause, also known as the General Exception Article or Article XX, allows member nations to take temporary measures to protect a domestic industry during times of crisis, but such measures must be consistent with the objectives of GATT and only last for a limited period of time. It does not allow for permanent measures.

Question 4

Dumping does not occur when there is no market for the product in the home country.

Accepted Answer

Dumping can occur even when there is no market for the product in the home country. Dumping refers to selling a product in another country at a lower price than the selling price in the domestic market, which can be done to gain a foothold in the foreign market or to clear a surplus of stock.

Question 5

Dumping does not require that the product be sold in the home country for less than the cost to produce it.

Accepted Answer

Dumping refers to the practice of exporting goods to another country at a price lower than the normal value of the product in the exporting country. This price can be below the cost of production or even lower than the price charged in the home country, but it is not a necessary condition. Dumping can occur even if the product is sold at a profit in the exporting country.

Question 6

A provisional measure is a tariff imposed by a country in order to ensure that dumping does not take place.

Accepted Answer

A provisional measure is a temporary action, such as a tariff, taken by a country to protect its domestic industry from injury while an investigation is ongoing into unfair trade practices like dumping, but it is not solely defined as a tariff for preventing dumping.

Question 7

Global quotas are quantitative import restrictions on a particular product regardless of its country of origin.

Accepted Answer

Global quotas limit the total quantity of a particular product that can be imported, regardless of the country of origin.

Question 8

An upstream subsidy is granted by a government to a company that is based in another country,but has substantial business operations in the home country.

Accepted Answer

An upstream subsidy is granted by a government to a company that is based in the home country but has substantial business operations in another country.

Question 9

In the Pesquera Mares Australes v.United States case,the court found that the Chilean salmon exporter had not violated U.S.antidumping laws.

Accepted Answer

The court found that the Chilean salmon exporter had violated U.S. antidumping laws, resulting in the imposition of duties.

Question 10

In the Bulk Aspirin from China case,the ITA decided to treat the private exporters the same as the government-owned exporters.

Accepted Answer

In the Bulk Aspirin from China case, the International Trade Administration (ITA) differentiated between private exporters and government-owned exporters, applying different dumping margins based on their ownership and control.

Question 11

Dumping is the unfair trade practice of selling products in one country for less than the price charged for comparable goods in the producer's home market.

Accepted Answer

Dumping is the practice of selling goods in a foreign market at a lower price than those charged in the producer's home market. This can create an unfair advantage for the producer and can harm local businesses and industries.

Question 12

The WTO frequently impose regulatory methods to control imports into their markets.

Accepted Answer

The World Trade Organization (WTO) does not impose regulatory methods to control imports; rather, it provides a framework for negotiating trade agreements and a dispute resolution process aimed at enforcing participants' adherence to WTO agreements, which are negotiated and signed by the bulk of the world's trading nations and ratified in their parliaments.

Question 13

If the International Trade Commission reaches an affirmative decision in an escape clause action,workers,firms,and communities may be eligible for federal adjustment assistance.

Accepted Answer

If the International Trade Commission (ITC) reaches an affirmative decision in an escape clause action, it means that imports are causing or threatening to cause serious injury to a domestic industry. In this case, affected workers, firms, and communities may be eligible for federal adjustment assistance programs. These programs provide various forms of assistance, such as job training, relocation, and income support, to help them adjust to the economic disruption caused by import competition.

Question 14

If domestic workers are damaged by foreign competition,they may be entitled to two (2)years of state unemployment benefits and federal trade adjustment assistance.

Accepted Answer

The answer of If domestic workers are damaged by foreign...

Question 15

Under U.S.law,a petition for import relief may be filed with the International Trade Commission by any firm,trade association,union,or group of workers.

Accepted Answer

This statement is true. Per the Trade Act of 1974, any domestic industry may file a petition with the International Trade Commission requesting import relief if they have been injured, or are threatened with injury, as a result of increased imports of competing products. This can be done by individual firms, trade associations, unions, or groups of workers.

Question 16

The International Trade Commission is the U.S.agency that investigates and after reviewing all the evidence makes the final determination whether or not import relief will be granted to a domestic firm.

Accepted Answer

The answer of The International Trade Commission is the U.S.agency...

Question 17

Quotas are not permitted under GATT or under U.S.law as a method of protecting domestic industries,unless a trade compensation is provided as a form of compensation.

Accepted Answer

Quotas can be used under certain conditions in both GATT (General Agreement on Tariffs and Trade) and U.S. law to protect domestic industries, even without providing trade compensation. These measures are typically subject to specific rules and exceptions, such as for national security or emergency situations.

Question 18

The President of the United States can by executive order provide import relief in the form of temporary tariff increases or quotas without having to consulting any other organization.

Accepted Answer

The President must consult with the International Trade Commission (ITC) before providing import relief through executive orders.

Question 19

To obtain import relief under U.S.law,the domestic industry must prove that the foreign producer or government has undertaken an illegal or unfair action in its export policy.

Accepted Answer

To obtain import relief under U.S. law, the domestic industry must prove that it has been seriously injured or is threatened with serious injury, primarily due to increased imports. The law does not require proving illegal or unfair actions by foreign producers or governments.

Question 20

The United States International Trade Commission investigated the Harley-Davidson complaint.It found that imports of competitive motorcycles were damaging the domestic industry,however the argument for protection was baseless.

Accepted Answer

The United States International Trade Commission did investigate the Harley-Davidson complaint and found that imports of competitive motorcycles were damaging the domestic industry, leading to the implementation of temporary tariffs to protect Harley-Davidson, thus indicating the argument for protection was not considered baseless.

Quiz 11: Regulating Import Competition and Unfair Trade