International Trade Policies and Organizations
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Questions and Answers

What is the focus of the current agenda of the WTO?

  • Continued high tariffs on nonagricultural goods and services in many nations (correct)
  • The rise of anti-dumping policies
  • The lack of strong protection for intellectual property rights in many nations
  • The high level of protectionism in agriculture

    • What does the TRIPS agreement oblige WTO members to grant and enforce?

  • Patents lasting 30 years
  • Copyrights lasting 20 years
  • Patents lasting at least 10 years
  • Patents lasting at least 20 years and copyrights lasting 50 years (correct)

    • What is the net effect of protectionism in agriculture according to the text?

  • Improvement in agricultural sector
  • No impact on consumer prices
  • Reduction in consumer prices
  • Increase in consumer prices (correct)

    • What is the goal of the WTO regarding tariff rates for nonagricultural goods and services?

    <p>Reduce tariff rates to zero</p> Signup and view all the answers

    What are the unresolved issues in the Doha Round according to the text?

    <p>All of the above</p> Signup and view all the answers

    What is a drawback to government intervention mentioned in the text?

    <p>It might invite retaliation and trigger a trade war</p> Signup and view all the answers

    What are concentrated sectors for antidumping actions according to the text?

    <p>Metal industries, chemicals, plastics, and machinery and electrical equipment</p> Signup and view all the answers

    What does the text suggest about market access for nonagricultural goods and services?

    <p>Tariffs are higher on industrial goods than on services</p> Signup and view all the answers

    What do multilateral and bilateral trade agreements aim to capture beyond WTO treaties according to the text?

    <p>They aim to capture gains from trade beyond WTO treaties</p> Signup and view all the answers

    What has challenged the belief of global consensus to embrace free trade according to the text?

    <p>Both British withdrawal from the European Union and election of Donald Trump as U.S. President</p> Signup and view all the answers

    What is the goal of an export tariff?

    <p>To discriminate against exporting to ensure sufficient domestic supply</p> Signup and view all the answers

    What is the economic impact of import tariffs?

    <p>They are pro-producer and anti-consumer</p> Signup and view all the answers

    What is the basis of the modern international trading system?

    <p>General Agreement on Tariffs and Trade (GATT) and World Trade Organization (WTO)</p> Signup and view all the answers

    What are ad valorem tariffs based on?

    <p>Proportion of the value of an imported good</p> Signup and view all the answers

    What do governments gain from import tariffs?

    <p>Increase in revenue</p> Signup and view all the answers

    What is the purpose of an export ban?

    <p>To partially or entirely restrict the export of a good</p> Signup and view all the answers

    What does free trade entail?

    <p>Governments do not attempt to restrict what citizens can buy from or sell to another country</p> Signup and view all the answers

    What is the main basis for specific tariffs?

    <p>A fixed charge for each unit of imported goods</p> Signup and view all the answers

    How do consumers generally fare under import tariffs?

    <p>Pay more for certain imports</p> Signup and view all the answers

    What do nations nominally committed to free trade sometimes do?

    <p>Intervene to protect interests of politically important groups</p> Signup and view all the answers

    What is an example of a crude oil export subsidy?

    <p>Low-interest loans</p> Signup and view all the answers

    What is an extra profit for producers resulting from import quotas, tariff rate quotas, and voluntary export restraints (VER)?

    <p>Quota rent</p> Signup and view all the answers

    What do local content requirements (LCR) aim to achieve?

    <p>Protect domestic producers</p> Signup and view all the answers

    What can administrative policies, including bureaucratic rules and antidumping policies, do?

    <p>Limit imports and protect domestic producers</p> Signup and view all the answers

    What are the economic arguments for intervention in international trade policies?

    <p>Infant industry and strategic trade policy</p> Signup and view all the answers

    What are the risks associated with strategic trade policies?

    <p>Retaliation and trade war risks</p> Signup and view all the answers

    What may influence domestic policies in international trade?

    <p>Special interest groups</p> Signup and view all the answers

    What do strong economic arguments support in international trade?

    <p>Unrestricted free trade</p> Signup and view all the answers

    What are the aims of the General Agreement on Tariffs and Trade (GATT) and World Trade Organization (WTO)?

    <p>Promote free trade and resolve trade disputes</p> Signup and view all the answers

    What challenges did the World Trade Organization face post-1990s according to the text?

    <p>Challenges in further reducing barriers post-1990s and amidst global events like financial crisis, Brexit, and shifts towards protectionism.</p> Signup and view all the answers

    Study Notes

    International Trade Policies and Organizations

    • Crude oil exports subsidies include government payments, cash grants, low-interest loans, tax breaks, and equity participation to help domestic producers compete and gain export markets.
    • Import quotas, tariff rate quotas, and voluntary export restraints (VER) limit imports, with quota rent as an extra profit for producers.
    • Local content requirements (LCR) mandate a fraction of a good to be produced locally, protecting domestic producers but leading to higher consumer prices.
    • Administrative policies, including bureaucratic rules and antidumping policies, can limit imports, protect domestic producers, and address political and economic arguments for intervention.
    • Political arguments for intervention include protecting jobs and industries, national security, retaliating, protecting consumers, furthering foreign policy objectives, and protecting human rights.
    • Economic arguments for intervention include the infant industry and strategic trade policy, aiming to raise national income and support domestic firms.
    • Retaliation and trade war risks are associated with strategic trade policies, which may provoke retaliation and lead to trade-distorting subsidies.
    • Domestic policies may be influenced by special interest groups, potentially distorting strategic trade policy to their own ends.
    • Strong economic arguments support unrestricted free trade, but governments may fear unilateral trade barrier reductions without reciprocal actions.
    • The General Agreement on Tariffs and Trade (GATT) and World Trade Organization (WTO) aim to promote free trade and resolve trade disputes.
    • Historical context includes the case for free trade, protectionist trends, and the Uruguay Round's efforts to extend GATT rules, reduce agriculture subsidies, and strengthen monitoring and enforcement.
    • The World Trade Organization, encompassing GATT, GATS, and TRIPS, has 164 members and experienced early success, but faced challenges in further reducing barriers post-1990s and amidst global events like the financial crisis, Brexit, and shifts towards protectionism.

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    Test your knowledge of international trade policies, including subsidies, import limitations, administrative policies, and the arguments for intervention. Explore the role of organizations like the GATT and WTO in promoting free trade and resolving disputes.

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