Question 1

Describe the ways in which U.S.trade legislation is and is not based upon GATT legal principles.Give several examples.

Accepted Answer

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Question 2

Which of the following might be considered a sign of market disruption within domestic firms due to increased imports of foreign goods?

Accepted Answer

Increased imports of foreign goods can disrupt domestic firms in several ways. Decreased sales volume occurs when consumers prefer the foreign goods over domestic options, leading to reduced demand and revenue for domestic firms. Price suppression occurs when foreign competitors can offer their goods at a lower price due to advantages such as lower production costs, leading domestic firms to lower their prices as well. Lower wages may occur if domestic firms must reduce labor costs to remain competitive with foreign imports. These factors, individually or collectively, can result in market disruption for domestic firms.

Question 3

In determining whether increased imports are a substantial cause of serious injury,the ITC does not consider:

Accepted Answer

The ITC only considers the impact of imports on the domestic industry, not overall economic trends, such as inflation or interest rates. A, B, and D are all factors that the ITC considers when determining whether increased imports have caused serious injury to a domestic industry.

Question 4

An actionable subsidy is one that:

Accepted Answer

An actionable subsidy can be defined as a subsidy provided by a foreign government that violates a trade agreement or causes material injury to domestic producers of like products in the complaining country or serious prejudice to the interests of the complaining country. Therefore, all the given options are correct.

Question 5

Subsidies in non-market economy countries are difficult to determine because:

Accepted Answer

In non-market economy countries, foreign trade decisions are made by the state trading organization and exports benefit from many economic advantages designed to meet an overall plan. As a result, it is difficult to determine the exact value and nature of subsidies provided by these countries. Option A may also be true to some extent, but option D specifically addresses the challenge of determining subsidies in non-market economy countries. Options B and C are incorrect as they falsely assume that non-market economy countries have limited subsidies.

Question 6

Which of the following does not characterize a difference between U.S.and EU antidumping laws?

Accepted Answer

All of these statements are correct and characterize differences between U.S. and EU antidumping laws.

Question 7

A subsidy exists where the government has conferred a benefit to a domestic firm or industry,except:

Accepted Answer

Grants to research universities are not considered a direct subsidy to a domestic firm or industry. These grants are typically aimed at supporting education and research, which can indirectly benefit industries through innovation and workforce development, but they do not directly confer a benefit to specific firms or industries in the way that lower tax rates, guaranteed low-interest loans, or purchasing goods at above-market prices do.

Question 8

Available forms of import relief include:

Accepted Answer

All three options, including absolute quotas, auctioned quotas, and tariff increases, can provide import relief. Absolute quotas limit the amount of a particular item that can be imported, while auctioned quotas allow for a set amount of the item to be imported with the quota being sold to the highest bidder. Tariff increases make imports more expensive, making domestic products more attractive. The combination of these three options can provide effective relief to domestic industries struggling to compete with imports. Domestic subsidies, on the other hand, are not a form of import relief and can be seen as unfair to foreign competitors.

Question 9

U.S.countervailing duty statutes:
I.Countervail all export subsidies.
II.Countervail all domestic subsidies.

Accepted Answer

U.S. countervailing duty statutes only countervail against all export subsidies, not domestic subsidies. Therefore, only statement I is correct.

Question 10

Assess the various legal "tools" available to the president to gain freer access to foreign markets for U.S.products.

Accepted Answer

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Question 11

What are the similarities and differences between unfair trade and fair,but economically damaging trade?

Accepted Answer

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Question 12

In non-market economy countries,the determination of foreign market value is usually based on:

Accepted Answer

In non-market economy countries, the determination of foreign market value is often not straightforward due to the lack of market-determined prices. Therefore, authorities may use "constructed value" (a method involving the calculation of production costs, profit, and expenses) or look at sales in a third country with a similar level of economic development to estimate what the market value would be under normal market conditions.

Question 13

If country A gives favorable tax treatment to XYZ,Inc.a corporation in country A,because XYZ,Inc.exports a large number of widgets,this tax break is referred to as a(n):

Accepted Answer

This tax break is referred to as an export subsidy because it is a government policy to encourage export of goods and services through direct payments, tax relief for exporters, or other financial means.

Question 14

There are two types of import protection regulations in the U.S.:
I.Laws that provide relief to protect developing U.S.domestic companies.
II.Laws that allow non-market economy nations a financial break.

Accepted Answer

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Question 15

The GATT escape clause:

Accepted Answer

The GATT escape clause, also known as the General Exception or Article XXI, allows a country to take temporary corrective action to protect a domestic industry. This can include imposing tariffs or other measures to address a surge in imports that is causing serious harm to a domestic industry. However, such actions must be temporary and not discriminate against other GATT members.

Question 16

In determining if a sale is less than fair value,the International Trade Administration:

Accepted Answer

The International Trade Administration compares the foreign market value of the imported product with the U.S. price to determine if a sale is less than fair value. Option A refers to determining if the product is being sold below its cost of production, which may be a factor in determining whether a product is being dumped but is not the sole determining factor. Option B refers to determining the overhead costs of the product, which is also not the sole determining factor in whether a sale is less than fair value. Option D is incorrect as at least one of the options is correct.

Question 17

In response to the petition for relief filed by Harley-Davidson Motor Company:

Accepted Answer

The commission recommended that declining incremental duties on imported motorcycles be imposed for five years. This was the action taken by the US government in response to the petition filed by Harley-Davidson Motor Company. Option A is incorrect because there was no ban on imported motorcycles above 700 cubic cent. Option C is also incorrect as there was no mention of Honda agreeing to stop the export of larger motorcycles. Option D is incorrect because there was no mention of the president threatening trade sanctions on Japan.

Question 18

Consider the differential domestic and foreign political ramifications of the following U.S.trade laws: Section 201 escape clause,the antidumping statute,and the countervailing duty statute.

Accepted Answer

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Question 19

Under U.S.law,antidumping duties can be imposed where:
I.It is determined that a class of foreign merchandise is being,or likely to be,sold in the U.S.at less than fair value,and a domestic industry is injured as a result.
II.A domestic industry needs protection to update its technology to compete with the dumped product.

Accepted Answer

According to U.S. law, antidumping duties can be imposed only when it is determined that a class of foreign merchandise is being or likely to be sold in the U.S. at less than fair value, causing injury to a domestic industry. The second statement about the need for protection to update technology is incorrect and not a valid reason for imposing antidumping duties.

Question 20

Which of the following factors is used to determine whether dumped imports have caused material injury to an industry?

Accepted Answer

All of the factors (volume of imports, effect on prices, and impact on domestic industry) are considered when determining whether dumped imports have caused material injury to an industry.

Quiz 11: Regulating Import Competition and Unfair Trade