Scenario - The Audrey Firm
The Audrey Firm is an international trade consulting firm currently providing its services in eight foreign nations.The primary goal of this company is to prevent trade missteps from taking place between foreign nations conducting business with each other.The participating nations prefer to seek counsel with this firm before any of their actions result in major international involvement or World Trade Organization intervention.
In the past,the Audrey Firm's team of experts has handled international situations having the potential to create serious unrest between neighboring countries.Their guidance and expertise have been successful in keeping trade operating freely in several areas of the globe.The Audrey Firm is receiving an award for their exemplary service later this year in Washington D.C.
-Which one of the following would be the least restrictive way in which India and China could impede sales of Power Trip's products within their borders despite the agreement to allow free operations of the company within their nations' boundaries?

Question

Quizplus · Accepted Answer

The least restrictive way would be to establish a generalized system of preferences (GSP). GSP is a program that allows developing countries to pay lower import duties on certain goods imported from other countries. This would not directly target Power Trip's products but may still result in a decrease in sales. Placing a tariff, establishing an ad valorem tariff, or imposing very high specific tariffs would all directly target Power Trip's products and make it more difficult for them to operate in India and China. Establishing stringent custom duties could also be effective in impeding sales, but it is more restrictive than establishing a GSP.

Scenario - the Audrey Firm