Yokahama Sports Equipment Ltd. is a successful manufacturer and distributor of sports equipment in the Far East, Australia, and Europe. Top management sees attractive opportunities in the U.S. market because of the stable economy and government. In addition, of course, Americans have disposable income to spend and are willing to buy imported goods. Yokahama executives realize, however, that entering the U.S. market can be difficult and that they’ll need a well-planned strategy.
-If Yokahama turns to the WTO for the resolution of a dumping dispute,it runs the risk of the offended nation being authorized to set up its own trade barriers.

Question

Quizplus · Accepted Answer

The World Trade Organization (WTO) provides a framework for trade agreements and a dispute resolution process that aims to enforce participants' adherence to WTO agreements. If a country is found to be dumping products (selling goods in a foreign market at a price lower than their normal value), the WTO dispute resolution process can authorize the offended nation to impose trade remedies, such as tariffs, against the dumping country to protect its domestic industry.