International Trade Policy - The World Trading System
40 Questions
2 Views

Choose a study mode

Play Quiz
Study Flashcards
Spaced Repetition
Chat to lesson

Podcast

Play an AI-generated podcast conversation about this lesson

Questions and Answers

What year did the GATT transform into the WTO with 123 nations as members?

  • 2001
  • 1948
  • 1995 (correct)
  • 2010

    • Which agreement focused on streamlining standards and giving firms legal rights to challenge government policies?

  • Doha Round
  • TTIP (correct)
  • TPP
  • NAFTA

    • What was the purpose of the Doha Round of WTO negotiations that began in 2001?

  • Introduce reciprocity
  • Increase tariffs
  • Reduce NTBs (correct)
  • Expand shallow integration

    • Which country is blamed for imposing high tariffs during the Great Depression, leading to a motivation for establishing formal trade rules?

    <p>United States</p> Signup and view all the answers

    What did the Trump administration refuse to do, concerning the WTO's Appellate Body?

    <p>Appoint new judges</p> Signup and view all the answers

    Which trade agreement was described as 'NAFTA on steroids' and had signatories like Japan and Australia?

    <p>TPP</p> Signup and view all the answers

    What is the main impact of Free Trade Agreements (FTAs) that do not follow the Most Favored Nation (MFN) rule according to the text?

    <p>Lead to trade diversion and inefficiencies for non-member countries</p> Signup and view all the answers

    In the context of FTAs, what does 'trade diversion' refer to?

    <p>Shifting trade patterns to favor non-member countries</p> Signup and view all the answers

    How does the text describe the impact of the EU-Turkey customs union on textile imports?

    <p>Increase in Turkish textile exports to the EU</p> Signup and view all the answers

    What was the consequence of NAFTA on US imports of auto parts from Mexico and China?

    <p>Rise in US imports from Mexico and decline from China</p> Signup and view all the answers

    What happens to tariff revenues when a country shifts from imposing tariffs to being part of a Free Trade Agreement (FTA) according to the text?

    <p>Tariff revenues decrease due to lower tariffs</p> Signup and view all the answers

    Which statement accurately summarizes the impact of FTAs that do not adhere to the MFN rule on global trade?

    <p>Create inefficiencies for non-member countries through trade diversion</p> Signup and view all the answers

    What is the key issue addressed in the text regarding trade agreements?

    <p>The role of terms-of-trade externalities in trade agreements</p> Signup and view all the answers

    Why might governments impose tariffs even in the absence of political objectives?

    <p>To secure terms-of-trade gains for large countries</p> Signup and view all the answers

    In the context of a large country imposing an import tariff, what is the effect on the welfare of the home country and the foreign country?

    <p>Welfare gain for the home country and welfare loss for the foreign country</p> Signup and view all the answers

    Why are Nash tariffs considered inefficient according to the text?

    <p>They result in a prisoner's dilemma situation</p> Signup and view all the answers

    What is the potential consequence of too many members and interests in the Doha Round, as per the text?

    <p>Termination of successful multilateral negotiations</p> Signup and view all the answers

    What happens to the US consumer surplus in the scenario where Mexico eliminates China from the US import market for auto parts?

    <p>It increases as Mexico provides cheaper auto parts than China.</p> Signup and view all the answers

    What do trade agreements enable countries to escape from, based on Bagwell and Staiger (2010)?

    <p>'Terms-of-trade-driven prisoners' dilemma'</p> Signup and view all the answers

    What is the impact of NAFTA causing the Mexican export supply curve to shift dramatically?

    <p>Elimination of China from the US import market for auto parts.</p> Signup and view all the answers

    How does the fear of authorized retaliation help in enforcing trade agreement rules according to the text?

    <p>By making sure that the agreement is self-enforcing through repeated-game perspective.</p> Signup and view all the answers

    What is a key difference between trade creation and trade diversion according to the text?

    <p>Trade creation can result in higher consumer surplus than trade diversion.</p> Signup and view all the answers

    How many disputes have been initiated within the WTO dispute settlement framework according to the text?

    <p>More than 600 disputes</p> Signup and view all the answers

    Why is it mentioned that there is no 'world-jail for offenders' with respect to enforcing trade agreements?

    <p>To emphasize the lack of effective enforcement mechanisms globally.</p> Signup and view all the answers

    In the context of trade agreements, which of the following is true about the most-favored nation (MFN) principle?

    <p>It requires all trading partners to have the same trade barrier.</p> Signup and view all the answers

    Which element is NOT a key component in the design of GATT/WTO?

    <p>Bilateral trade agreements</p> Signup and view all the answers

    Under Article XXIV of the GATT/WTO, what types of agreements are exempt from the MFN principle?

    <p>Free-trade areas and customs unions</p> Signup and view all the answers

    Which scenario is consistent with achieving reciprocity in trade agreements according to GATT/WTO principles?

    <p>Both countries reducing their trade barriers by equal amounts.</p> Signup and view all the answers

    Which statement accurately describes the relationship between free-trade agreements (FTAs) and customs unions (CUs)?

    <p>FTAs maintain a common external tariff while CUs eliminate tariffs within the area.</p> Signup and view all the answers

    If two countries are engaged in a Terms-of-trade-driven prisoners’ dilemma where e − b − d > 0, what is the only Nash equilibrium according to the text?

    <p>Both countries have negative payoffs.</p> Signup and view all the answers

    What was the purpose of the GATT signed in 1947?

    <p>To establish rules of international trade cooperatively</p> Signup and view all the answers

    How did the Uruguay Round differ from the previous GATT negotiations?

    <p>It expanded the number of signatories and reduced tariffs</p> Signup and view all the answers

    What was a key outcome of the Uruguay Round negotiations?

    <p>Establishment of WTO with new agreements on dispute settlement</p> Signup and view all the answers

    Which core tenets continued to be crucial in the WTO other than reciprocity and MFN?

    <p>Dispute Settlement Mechanism (DSM)</p> Signup and view all the answers

    What was the purpose of the Doha Round launched in 2001?

    <p>Liberalization of trade in agriculture</p> Signup and view all the answers

    Why did developing countries argue against the terms of the Doha Round?

    <p>They were offered more than what they could get from developed countries</p> Signup and view all the answers

    'Shallow integration' refers to what aspect of the WTO's success?

    <p>'Shallow integration' has been a general success for the WTO</p> Signup and view all the answers

    'Beggar-thy-neighbor' policies were criticized because they:

    <p>Left the world as a whole worse off due to cross-border externalities</p> Signup and view all the answers

    'Reciprocal reductions in tariffs (through bindings)' as mentioned in the text refer to:

    <p>'Reciprocal reductions' mean reducing tariffs collectively among signatories</p> Signup and view all the answers

    'NTBs' eliminated during the Uruguay Round stands for:

    <p>'Non-Tariff Barriers' that hindered free trade</p> Signup and view all the answers

    More Like This

    Use Quizgecko on...
    Browser
    Open
    Browser
    Browser