Question 1

According to the fast-track provision of U.S. trade law, once the President has completed trade negotiations, their outcome is subject to a vote (without amendment) in Congress within 90 legislative days of submission.

Accepted Answer

This is a correct description of the fast-track provision, also known as trade promotion authority. Once the President notifies Congress that negotiations have been completed, the text of the trade agreement is made public and Congress has 90 legislative days to vote on it without amendment.

Question 2

Economic theory suggests that if France is a net importer of automobiles, whose production is subsidized by the Korean government, the overall welfare of France decreases because of the Korean subsidy.

Accepted Answer

Economic theory suggests that when a country is a net importer, they benefit from lower prices due to foreign subsidies. Therefore, the overall welfare of France would not decrease because of the Korean subsidy.

Question 3

Copyrights, trademarks, and patents are used to protect the intellectual property of a nation from foreign imitators.

Accepted Answer

Copyrights, trademarks, and patents are legal means of safeguarding intellectual property, and they are used to protect creativity and innovation from infringement by others, including foreign competitors. Each type of safeguard has its own specific guidelines and requirements that must be followed, but they are all designed to encourage and reward creativity and invention while also preventing unauthorized copying and theft.

Question 4

According to the escape clause, temporary trade restrictions may be imposed in industries where domestic producers are substantially being harmed by surging imports.

Accepted Answer

The escape clause, also known as the safeguard provision, allows for temporary trade restrictions to be imposed if domestic producers are substantially harmed by imports.

Question 5

Under the government procurement policy of the World Trade Organization, federal-state-local governments are prevented from discriminating in favor of the products of domestic suppliers on contracts valued at $1 million and more.

Accepted Answer

The World Trade Organization's Agreement on Government Procurement (GPA) aims to ensure open, fair, and transparent conditions of competition in government procurement. However, it applies only to the countries that have agreed to be parties to the GPA and does not universally prevent all federal, state, or local governments from favoring domestic products, nor does it specify a $1 million threshold for such conditions.

Question 6

Industrial policy attempts to foster the development of industries that offer long-run comparative disadvantages and which are insulated from other sectors of the economy.

Accepted Answer

Industrial policy attempts to foster the development of industries that offer long-run comparative advantages, not disadvantages. Additionally, successful industrial policy should aim to promote linkages between targeted industries and other sectors of the economy, rather than insulating them.

Question 7

The purpose of "countervailing duties," as levied by the domestic government, is to neutralize import tariffs imposed by foreign governments.

Accepted Answer

Countervailing duties are imposed to offset subsidies provided by foreign governments to their exporters, not to neutralize import tariffs.

Question 8

Unlike the Tokyo Round of multilateral trade negotiations, the Uruguay Round addressed the issues of intellectual property protection, trade barriers in services, and agricultural subsidies.

Accepted Answer

The statement is correct. The Tokyo Round did not cover these issues while the Uruguay Round did address them.

Question 9

Under the trade adjustment assistance program, a domestic firm or worker can file for governmental assistance only if it demonstrates that it suffered economic hardship due to imports of foreign-subsidized goods.

Accepted Answer

The answer of Under the trade adjustment assistance program, a...

Question 10

An antidumping duty levied on imports of foreign-produced steel leads to an increase in consumer surplus in the home country.

Accepted Answer

An antidumping duty is a tariff or tax imposed on imported goods that are being sold at below fair market value in the producing country. This increased cost to importers can lead to higher prices for consumers in the home country, resulting in a decrease in consumer surplus. Additionally, a tariff can lead to retaliation from the exporting country, which can harm industries and the overall economy.

Question 11

According to U.S. trade law, the escape clause provides relief to U.S. firms due to unfair foreign competition.

Accepted Answer

The answer of According to U.S. trade law, the escape...

Question 12

Although the Uruguay Round of multilateral trade negotiations succeeded in reducing nontariff trade barriers, it could not achieve reductions in tariff trade barriers.

Accepted Answer

The Uruguay Round of multilateral trade negotiations did in fact succeed in reducing both nontariff trade barriers and tariff trade barriers.

Question 13

Intellectual property refers to holdings of rare books and pieces of art that are traded on the world market.

Accepted Answer

Intellectual property refers to creations of the mind, such as inventions, literary and artistic works, and symbols, names, and images used in commerce, that are protected by law and can be owned and traded. It does not necessarily refer to rare books and pieces of art.

Question 14

Under the provisions of the World Trade Organization, Canada would have the right to impose countervailing duties on imports of South Korean steel when the South Korean government provides export subsidies to its steelmakers.

Accepted Answer

Countervailing duties are tariffs imposed on imported goods to offset subsidies given to producers in the exporting country. Under the World Trade Organization rules, countries have the right to impose countervailing duties when a subsidy is provided, which can be detrimental to the domestic industries of the importing country. Therefore, Canada would have the right to impose countervailing duties on imports of South Korean steel when the South Korean government provides export subsidies to its steelmakers.

Question 15

The main focus of the Uruguay Round of multilateral trade negotiations was on tariff barriers rather than nontariff trade barriers.

Accepted Answer

The Uruguay Round of multilateral trade negotiations, which took place from 1986 to 1994, focused significantly on both tariff and non-tariff barriers, aiming to extend the trading system into several new areas, including services and intellectual property, and to reform trade in the sensitive sectors of agriculture and textiles.

Question 16

The fast-track provision of U.S. trade law has the affect of speeding up the timetable during which the President negotiates trade agreements with foreign governments.

Accepted Answer

The fast-track provision allows the President to negotiate trade agreements with foreign governments and speeds up the process by limiting congressional debate and amendment.

Question 17

Among the codes of conduct addressed at the Tokyo Round of multilateral trade negotiations were customs valuation, product standards, subsidies and countervailing duties, government procurement policies, and import licensing procedures.

Accepted Answer

This statement is correct. The Tokyo Round negotiations, which took place from 1973 to 1979, addressed these issues along with others related to international trade.

Question 18

The U.S. trade-remedy laws attempt to redress hardships for U.S. firms resulting from actions and policies of foreign firms and governments.

Accepted Answer

The U.S. trade-remedy laws are designed to provide relief to U.S. firms that are adversely affected by foreign unfair trade practices, such as dumping or subsidies, or by other harmful actions and policies of foreign governments. The goal is to create a fair and level playing field for American companies and workers in the global marketplace.

Question 19

The only members of the General Agreement on Tariffs and Trade and its successor, the World Trade Organization, are developing countries rather than developed countries.

Accepted Answer

This statement is false. Both developing and developed countries are members of the General Agreement on Tariffs and Trade and its successor, the World Trade Organization.

Question 20

U.S. antidumping duties are intended to neutralize exports to the United States at prices below average total cost or exports to the United States at prices lower than those charged in the exporter's home market.

Accepted Answer

U.S. antidumping duties are designed to offset the impact of imports sold at prices below fair market value or below the cost of production in the exporting country. This is done to prevent foreign producers from flooding the U.S. market with products sold at prices that undercut domestic producers, and to ensure a level playing field for all parties involved.

Quiz 6: Trade Regulations and Industrial Policies