Deck 11: Regulating Import Competition and Unfair Trade

Question 1

The president can provide import relief in the form of temporary tariff increases or quotas without having to consult any other organization.

Answer 1

False

Question 2

The GATT Agreement on Safeguards permits a member state to increase tariffs on an imported product in order to allow a domestic manufacturer to successfully introduce a competitive product in the domestic market.

Answer 2

False

Question 3

An upstream subsidy is granted by a government to a company that is based in another country,but has substantial business operations in the home country.

Answer 3

False

Question 4

Global quotas are quantitative import restrictions on a particular product regardless of its country of origin.

Question 5

The GATT Agreement has an escape clause whereby member nations may levy increased duties on imported products where there are unforeseen circumstances that cause or threaten serious injury to domestic producers.

Question 6

Quotas are not permitted under GATT or under U.S.law as a method of protecting domestic industries.

Question 7

If domestic workers are damaged by foreign competition,they may be entitled to federal worker adjustment assistance.

Question 8

Governments frequently impose regulatory methods to control imports into their markets.

Question 9

Under U.S.law,a petition for import relief may be filed with the International Trade Commission by any firm,trade association,union,or group of workers.

Question 10

Dumping is the unfair trade practice of selling products in one country for less than the price charged for comparable goods in the producer's home market.

Question 11

The International Trade Commission is the U.S.agency that makes the final determination whether or not import relief will be granted to a domestic firm.

Question 12

Dumping does not require that the product be sold in the home country for less than the cost to produce it.

Question 13

A provisional measure is a tariff imposed by a country in order to ensure that dumping does not take place.

Question 14

In the case regarding the importation of motorcycles into the United States,it was found that the imports posed no serious threat to domestic motorcycle sales.

Question 15

In the Bulk Aspirin from China case,the ITA decided to treat the private exporters the same as the government-owned exporters.

Question 16

To obtain import relief under U.S.law,the domestic industry must prove that the foreign producer or government has undertaken an illegal or unfair action in its export policy.

Question 17

The GATT escape clause allows member nations to take temporary measures to protect a domestic industry.

Question 18

In the Pesquera Mares Australes v.United States case,the court found that the Chilean salmon exporter had not violated U.S.antidumping laws.

Question 19

If the International Trade Commission reaches an affirmative decision in an escape clause action,workers,firms,and communities may be eligible for federal adjustment assistance.

Question 20

Dumping does not occur when there is no market for the product in the home country.

Question 21

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.

Question 22

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.

Question 23

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.

Question 24

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

Question 25

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

A) Countervailing duty.
B) Antidumping statute.
C) Escape clause.
D) Import relief.

Question 26

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.

Question 27

Subsidies are regulated under the GATT Agreement.

Question 28

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

Question 29

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

A) It allows a country to escape from having trade disputes settled by GATT guidelines.
B) It permits a country to escape from its previously negotiated tariff obligations.
C) It permits a country to be relieved of having to make its balance of payments obligations for a short period of time.
D) None of the above.

Question 30

The "Super 301" law concerning unfair barriers to U.S.trade was not in violation of GATT because it allowed a unilateral approach to trade problems.

Question 31

Section 301 of the Trade Act of 1974 provides authority for the president to do what,if barriers to U.S.trade are not lifted?

A) Petition Congress to intervene in the situation.
B) Threaten military action if the barriers are not lifted.
C) Use retaliation in the form of duties or quotas.
D) Pay the U.S. company a subsidy.

Question 32

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

A) Increased imports.
B) Imports are substantial cause of serious injury or threaten injury.
C) Domestic industry produces a product that is like or directly competitive with the import.
D) Circumstances causing this situation were unforeseen.

Question 33

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

A) A decision by the International Trade Association not to conduct an investigation.
B) From a decision by the ITA to conduct an investigation.
C) From a final decision by the International Trade Association (ITA).
D) From a decision by the ITA to suspend an investigation.

Question 34

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

A) Art. 8, Sec. 1, U.S. Constitution.
B) Sec. 333, U.S. Import Relief Act.
C) Sec. 201, Trade Act of 1974.
D) GATT, Art. XIX.

Question 35

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

Question 36

An appeal to the appropriate federal court may be had from a decision by the International Trade Administration not to conduct an investigation concerning the dumping of a product.

Question 37

The 1988 Omnibus Act establishes a preference for computing foreign market value in non-market economy countries on the basis of the best information on the costs of production of the same articles had they been manufactured in a market economy.

Question 38

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:

A) Idling of productive facilities in the industry.
B) Unemployment in the industry.
C) Ability of industry to shift to production of other products.
D) Increase in imports.

Question 39

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.

Question 40

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 "constructed value."

Question 41

Which of the following does not characterize a difference between U.S.and EU antidumping laws?

A) The duration of an antidumping duty has no time limit under U.S. law, but EU law imposes a five-year maximum duration.
B) Under U.S. law, the duty equals the dumping margin, whereas under EU law, it may vary based on the injury.
C) Under U.S. law, a duty is imposed retrospectively, while under EU law, it may be imposed prospectively.
D) All of the above.
E) None of the above.

Question 42

You work for a major manufacturer of sports equipment in the U.S.Your company is having difficulty breaking into the market in Germany due to government barriers.The barriers include trade restrictions and import quotas to protect the German domestic companies prohibited by GATT.If the U.S.Trade Representative cannot get these barriers removed,then:

A) The USTR is required to take whatever steps are necessary to combat these restrictions.
B) The USTR, at his discretion, can take whatever steps are necessary to combat these restrictions.
C) The USTR must not impose duties or quotas on imports from Germany but use political channels to remove these barriers.
D) None of the above.

Question 43

In response to the petition for relief filed by Harley-Davidson Motor Company:

A) A ban on imported motorcycles above 700 cubic cent. was implemented.
B) The commission recommended that declining incremental duties on imported motorcycles be imposed for five years.
C) Honda agreed to stop the export of its larger motorcycles for five years.
D) The president threatened severe trade sanctions on Japan if they did not stop their dumping of motorcycles on the American market.

Question 44

U.S.firms facing unreasonable or unfair trade barriers to the introduction of their products in foreign markets would find which of the following to be the most helpful:

A) The U.S. escape clause.
B) An appeal to the U.S. Congress to take statutory action against the offending country.
C) Petitioning the U.S. Trade Representative to intervene.
D) Asking for a countervailing duty to be imposed.

Question 45

In determining if a sale is less than fair value,the International Trade Administration:

A) Determines if the dumped product is being sold below its cost of production.
B) Determines the fixed and variable overhead costs of the dumped product to see what profit the dumping company should expect.
C) Compares the foreign market value of the imported product with the U.S. price.
D) None of the above.

Question 46

The GATT escape clause:

A) Allows a country to take temporary corrective action to protect a domestic industry.
B) Allows members who no longer wish to be a part of the WTO to quit.
C) Allows a country to impose tariffs on countries that are engaging in dumping.
D) Allows a country to disaffirm any previous tariffs they have imposed on another GATT member.

Question 47

The president's options for import relief under the 1988 Omnibus Act include all of the following except:

A) Resale price maintenance.
B) Orderly marketing agreements.
C) Tariff increases.
D) Absolute quotas.

Question 48

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

A) Significant number of workers lost jobs.
B) Sales/production of the firm has decreased.
C) Increases in imports of articles like or directly competitive with those made by petitioner contributed importantly to the loss of jobs.
D) The workers/jobs lost because of the increase in imports cannot be relocated to other industries.

Question 49

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.

A) I only.
B) II only.
C) Both I and II.
D) Neither I nor II.

Question 50

There are two types of import protection regulations in the U.S.:
I) Laws that provide relief to protect developing U.S. domestic companies.
II) Laws that allow non-market economy nations a financial break.

A) I only.
B) II only.
C) Both I and II.
D) Neither I nor II.

Question 51

Available forms of import relief include:

A) Absolute quotas.
B) Auctioned quotas.
C) Tariff increases (up to 50 percent).
D) Negotiated agreements.
E) All of the above.

Question 52

An informal agreement between the U.S.president and suppliers wherein they agree to hold back the number of exports to the U.S.market is called a:

A) Voluntary restraint agreement.
B) Negotiated trade balance agreement.
C) Import/export limitation agreement.
D) Voluntary trade adjustment agreement.

Question 53

In determining whether increased imports are a substantial cause of serious injury,the ITC does not consider:

A) Unemployment or underemployment in the industry.
B) Growing inventories.
C) Overall economic trends.
D) An actual increase in imports or in market share held by imports.
E) All of the above are considerations.

Question 54

Which of the following statements best describes the Information Technology Agreement?

A) It has succeeded in eliminating tariffs on information technology products.
B) It eliminates tariffs on information technology products.
C) It has succeeded in eliminating non-tariff barriers that impede market access for information technology products.
D) The agreement was sponsored by WIPO.

Question 55

U.S. countervailing duty statutes:
I) Countervail all export subsidies.
II) Countervail all domestic subsidies.

A) I only.
B) II only.
C) Both I and II.
D) Neither I nor II.

Question 56

If country A gives favorable tax treatment to XYZ,Inc.a corporation in country A,because XYZ,Inc.exports a large number of widgets,this tax break is referred to as a(an):

A) Consortium.
B) Export Subsidy.
C) Export Rebate.
D) Tariff Supports.

Question 57

In non-market economy countries,the determination of foreign market value is usually based on:

A) The use of "constructed value."
B) Home market sales.
C) Third country sales.
D) Both A and C.

Question 58

Subsidies in non-market economy countries are difficult to determine because:

A) Their countries are secretive and do not allow economic information to escape.
B) Foreign trade is limited and there are no comparative situations.
C) These countries have few subsidies and the ones they have are very small.
D) Foreign trade decisions are made by the state trading organization and exports benefit from many economic advantages designed to meet an overall plan.

Question 59

Managed trade is:

A) A principle under which a government sets trade goals for an industry and then uses a system of government incentives and controls to guide trade toward those goals.
B) Illegal under U.S. law.
C) Used when arbitrators are called in to settle a trade dispute.
D) A set of laws passed by the U.S. Congress in 1994 to protect the U.S. semiconductor industry from Japanese imports.

Question 60

Under U.S. law, antidumping duties can be imposed where:
I) It is determined that a class of foreign merchandise is being, or likely to be, sold in the U.S. at less than fair value, and a domestic industry is injured as a result.
II) A domestic industry needs protection to update its technology to compete with the dumped product.

A) I only.
B) II only.
C) Both I and II.
D) Neither I nor II.

Question 61

Consider the differential domestic and foreign political ramifications of the following U.S.trade laws:
Section 201 escape clause,the antidumping statute,the countervailing duty statute,and Section 301 retaliation.

Question 62

The President of the United States is concerned about the declining number of American companies engaged in the manufacture of computer chips.In order to reinvigorate U.S.computer chip manufacturers,the President has proposed that the United States unilaterally impose an absolute ban upon the importation of computer chips from Japan for an indefinite period of time to be determined in his complete discretion.The President has asked you whether his proposal is legal pursuant to the GATT.What is your response? Please explain the basis for your conclusions.

Question 63

Weigh the strengths and weaknesses of all possible actions a country can take to protect its market against unfair trade.

Question 64

Compare and contrast the "generally available benefits" test with the "specificity test." How will they affect case outcomes?

Question 65

Identify and evaluate the importance of the several factors taken into account in an ITC proceeding to impose import restrictions.

Question 66

What are the similarities and differences between unfair trade and fair,but economically damaging trade?

Question 67

Describe the ways in which U.S.trade legislation is and is not based upon GATT legal principles.Give several examples.

Question 68

Consider the relative merits of including debt expenses in the calculation of the fair market value of an imported product.Consider this both in terms of the business exporting the good and the business importing the good.

Question 69

Scenario
An across-the-board reduction by the United States in the corporate tax rate.

Question 70

Draft a statute or treaty defining a non-market or state-controlled economy OR identifying which factors should be considered in making such a determination and how they should be applied.

Question 71

Draft a statue defining a domestic industry.Draft statutes from the perspective of Westernized,developed nations and from developing nations.

Question 72

Scenario
Loan guarantees by the French government to French filmmakers who utilize French equipment in the making of their movies.

Question 73

Scenario
Tax credits extended by the Japanese government to Japanese computer chip manufacturers on the basis of the volume of their chip sales in the United States.

Question 74

Scenario
Tax credits extended by the government of India to Indian companies in order to assist in the reduction of greenhouse gases emitted during the manufacturing process.

Question 75

Scenario
Reduced rate loans offered by U.S.banks to U.S.businesses willing to relocate their operations to economically depressed inner cities.

Question 76

Assess the various legal "tools" available to the president to gain freer access to foreign markets for U.S.products.