Question 1

Under U.S. law, the foreign market value for antidumping duty determination is calculated as either home market sales price, sales of like products in third countries, or "normal value at the retail level."

Accepted Answer

Under U.S. law, the foreign market value for antidumping duty determination is calculated as either the home market sales price, sales of like products in third countries, or constructed value, not "normal value at the retail level."

Question 2

The GATT Agreement authorizes countervailing duties to offset the effect of subsidies on imports that cause or threaten material injury to a domestic industry.

Accepted Answer

The GATT Agreement does authorize countervailing duties to offset the effect of subsidies on imports that cause or threaten material injury to a domestic industry.

Question 3

When a petition for import relief is filed with the International Trade Commission, the ITC conducts an investigation and must consider all the following factors except :

Accepted Answer

The ITC must consider the idling of productive facilities in the industry, unemployment in the industry, and increase in imports when conducting an investigation for import relief. However, the ability of the industry to shift to the production of other products is not a factor that the ITC must consider.

Question 4

Quotas are often favored over tariffs as import restrictions because:
I. They are more flexible tools for regulating imports.
II. It is easier for government policy makers to assess the potential impact of a quota.

Accepted Answer

The answer of Quotas are often favored over tariffs as...

Question 5

The U.S. countervailing duty statute requires that the International Trade Commission determine the fair market price of the imported product in the country of origin.

Accepted Answer

The U.S. countervailing duty statute requires that the International Trade Administration determine the fair market price of the imported product in the country of origin, not the International Trade Commission.

Question 6

The U.S. law that protects against "fairly traded" imported products is:

Accepted Answer

The answer of The U.S. law that protects against "fairly...

Question 7

Under the law of the European Union, a country may only bring an antidumping action against a non-EU member country.

Accepted Answer

EU law allows both actions against non-EU countries and against member states if they violate EU trade rules, although antidumping typically targets practices from outside the EU.

Question 8

The "escape clause" of the GATT agreement derives its name from the fact that:

Accepted Answer

The "escape clause" of the GATT agreement allows a country to deviate from its previously negotiated tariff obligations under certain circumstances, such as protecting domestic industries from import surges or sudden increases in imports. This deviation is temporary and subject to review and approval by the GATT.

Question 9

Antidumping and countervailing duty cases may be appealed to the U.S. Court of International Trade in all of the following situations except :

Accepted Answer

The answer of Antidumping and countervailing duty cases may be...

Question 10

The U.S. law dealing with import relief is:

Accepted Answer

The Trade Act of 1974 contains Section 201, which gives the President authority to provide import relief measures, such as tariffs or quotas, in cases where imports have caused or threatened to cause serious injury to a domestic industry. This law is commonly known as the "safeguard" provision.

Question 11

To be eligible for adjustment assistance due to import competition, the Secretary of Labor must certify all of the following except :

Accepted Answer

The eligibility for adjustment assistance does not require that the workers/jobs lost cannot be relocated to other industries. The focus is on job loss due to import competition, not on the potential for job relocation.

Question 12

The antidumping duty imposed under U.S. law is based on the amount by which the foreign market value exceeds the cost of production by at least 10%.

Accepted Answer

The antidumping duty imposed under U.S. law is based on the amount by which the foreign market value (i.e., export price to the United States) is less than the normal value (i.e., price in the home market or third-country market) by at least 2% for most countries, or by at least 6% for non-market economies (e.g., China). This is known as the "dumping margin." There is no direct reference to the cost of production in the calculation of the dumping margin, although it may be one of several factors considered in determining the normal value.

Question 13

The "material injury" requirement under the U.S. unfair import statutes requires a finding of less harm than does the "serious injury" requirement in the U.S. escape clause.

Accepted Answer

The "material injury" standard is a lower threshold of harm that must be proven under U.S. unfair import statutes, such as antidumping and countervailing duty laws, compared to the "serious injury" standard required under the U.S. escape clause provisions for safeguard measures.

Question 14

A subsidy is some advantage or favor granted by a government to its firms upon the manufacture, production, or export of a product, and such actions are beneficial to the international economy.

Accepted Answer

Subsidies can distort international trade by giving domestic firms an unfair advantage over foreign competitors, potentially leading to trade disputes and inefficiencies in the global market.

Question 15

The requirements for import relief under U.S. law include all of the following except :

Accepted Answer

All of the options except for D are requirements for import relief under U.S. law. The circumstances causing the situation to arise must be unforeseen, as it is not intended to be used as a tool for protectionism, but rather to provide relief in situations where the domestic industry is severely impacted by unforeseen circumstances such as a surge in imports.

Question 16

If a country is not a member of GATT, under U.S. law a countervailing duty can be imposed without regard to whether a U.S. firm is injured or not.

Accepted Answer

Under U.S. law, if a country is not a member of GATT, countervailing duty can be imposed without the need to demonstrate injury to a U.S. firm. This is because non-GATT members do not have the same trade obligations as GATT members.

Question 17

Dumping has become a fairly persistent problem in international trade and is often practiced by firms wishing to sell their excess production capacity at bargain prices to cover fixed costs.

Accepted Answer

Dumping refers to the practice of selling goods at below-normal prices in an export market. It is often done by firms to increase their market share or to get rid of excess production capacity. However, it can harm domestic industries and lead to unfair competition.

Question 18

Section 201 of the Trade Act of 1974 provides authority for the president to do what, if barriers to U.S. trade are not lifted?

Accepted Answer

Section 201 of the Trade Act of 1974 allows the president to use retaliation in the form of duties or quotas if barriers to U.S. trade are not lifted. This means that the U.S. can impose tariffs on imports from the country that is creating barriers to trade. This is meant to pressure the country to remove its barriers and improve trade relations with the U.S.

Question 19

Subsidies including domestic subsidies are regulated under the GATT Agreement.

Accepted Answer

The answer of Subsidies including domestic subsidies are regulated under...

Question 20

All subsidies are even those that are beneficial to domestic, economic, and social objectives are considered damaging to the international economy.

Accepted Answer

While some subsidies may be considered damaging to the international economy, not all subsidies are inherently harmful. In fact, some subsidies may promote fair trade and support the development of less developed countries. It ultimately depends on the specific context and objectives of the subsidy.

Quiz 11: Regulating Import Competition and Unfair Trade