Question 1

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:

Accepted Answer

According to the national treatment provisions of GATT, once B's coffee enters A's stream of commerce, country A cannot subject it to higher internal taxes or charges than its domestic coffee. This is to ensure that imported goods are treated equally to domestic goods in order to prevent discrimination against foreign products.

Question 2

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

Accepted Answer

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Question 3

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

Accepted Answer

The panel recommended that the tariffs be adjusted to comply with the European Economic Community's (EEC) obligations under the General Agreement on Tariffs and Trade (GATT), indicating that the existing tariffs were not in line with those obligations.

Question 4

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:

Accepted Answer

The principle of most-favored-nation trade requires that all products of all nations be treated equally and without discrimination by importing nations. This means that a country cannot give preferential treatment to one trading partner over another.

Question 5

Within the structure of the World Trade Organization, the three important groups under the Ministerial Conference are:

Accepted Answer

The three important groups under the Ministerial Conference within the structure of the World Trade Organization are the Dispute Settlement Body, the General Council, and the Trade Policy Review Body. These groups are responsible for handling trade disputes, conducting regular trade policy reviews, and overseeing the overall functioning of the WTO.

Question 6

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

Accepted Answer

Nullification and impairment are the terms used to describe any action taken by a GATT member country that violates the GATT agreement. This could be anything that impairs the benefits that another member country should receive under the GATT agreement. When a member country takes such an action, the affected country can seek redress through the dispute settlement mechanism of the GATT/WTO.

Question 7

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

Accepted Answer

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Question 8

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.

Accepted Answer

While virtually all nations do provide import protection for domestic agricultural interests, the GATT Agreement does not specifically prohibit such protection with no exceptions. In fact, the General Agreement on Tariffs and Trade (GATT) includes provisions that allow countries to protect domestic agricultural industries through measures such as import quotas and tariffs. The problem of import protection for domestic agriculture exists because nations try to provide market stability and protection for farmers, as stated in option II.

Question 9

Which of the following is an example of an ad valorem tariff?

Accepted Answer

An ad valorem tariff is a tax on the value of a product, usually a percentage of the price. Choice A states a 15% tariff on the value of a shipment of t-shirts, making it the only example listed that fits the definition of an ad valorem tariff. Choice B is a specific amount per unit and not a percentage of the value. Choice C is a discount, not a tariff. Therefore, the correct answer is A.

Question 10

The WTO is overseen by the Ministerial Conference, which is made up of:

Accepted Answer

The Ministerial Conference is made up of high-ranking representatives from all WTO member nations.

Question 11

All of the following are basic principles of GATT except :

Accepted Answer

GATT is committed to promoting free trade through the elimination of trade barriers, such as import quotas and non-discrimination against imported goods. However, reciprocal tariff increases may be allowed in certain circumstances. Therefore, non-reciprocal tariff increases are not a basic principle of GATT.

Question 12

_________ quotas are imposed on a particular product regardless of origin, while ________ quotas spread the total limit across several specific countries.

Accepted Answer

Global quotas are imposed on a particular product regardless of origin, while allocated quotas spread the total limit across several specific countries.

Question 13

Which of the following is NOT an example of a commonly used trade barrier?

Accepted Answer

A convention on imported children's toys is not a commonly used trade barrier. It is not a specific policy or measure that restricts trade, but rather a general agreement or understanding between countries. Tariffs, taxes, and national standards, on the other hand, are all examples of commonly used trade barriers.

Question 14

Compare and contrast direct and indirect nontariff barriers.

Accepted Answer

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Question 15

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:

Accepted Answer

The principle of the Most-Favored-Nation (MFN) under GATT (General Agreement on Tariffs and Trade) ensures that any trade advantage, like a lower tariff rate, given by one member country to another must be extended to all other member countries. Since countries A, B, and C are members of GATT, country C automatically gets the same 7% tariff rate on televisions that country A has given to country B. Countries X and Y, not being members of GATT, do not automatically benefit from this arrangement.

Question 16

Many countries grant preferential tariff treatment to select countries to help those countries' economic development. For example, the United States grants preferential tariff treatment to:

Accepted Answer

The United States grants preferential tariff treatment to Haiti and many sub-Saharan African nations through the African Growth and Opportunity Act (AGOA) in order to promote economic development in those countries.

Question 17

Describe the benefits and detriments of enacting a quota?

Accepted Answer

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Question 18

Under the WTO's dispute-settlement procedures, who can bring a complaint for nullification and impairment?

Accepted Answer

Only governments can bring a complaint for nullification and impairment under the WTO's dispute-settlement procedures.

Question 19

When a nation's import regulations or procedures lack ________, foreign firms cannot easily gain entrance to its markets.

Accepted Answer

Transparency refers to the openness and availability of information regarding a nation's import regulations and procedures. When these are not transparent, foreign firms may find it difficult to understand and navigate the requirements for entry into the market. As a result, they may be discouraged from attempting to do business in the country.

Question 20

Which of the following is an example of a specific or flat tariff?

Accepted Answer

A specific or flat tariff is a fixed amount of tax applied per unit of goods imported or exported. Option B is an example of a specific tariff as it applies a flat fee of $10 on each barrel of petroleum. Option A is an example of an ad-valorem tariff as it applies a percentage of the value of the goods imported. Option C is an example of a seasonal discount, not a tariff.

Quiz 9: The World Trade Organization: Basic Principles