38. Tariffs are computed:
I. As a percentage of value (ad valorem).
II. On the basis of physical units (specific).
a. I only.
b. II only.
c. Both I and II.
d. Neither I nor II.
39. Tariffs serve all of the following purposes except:
a. Collection of revenue.
b. Enhancement of flow of commerce.
c. Regulation of import competition.
d. Protection of the national defense.
40. The phrase to describe when a foreign government’s import regulations are not made readily available to the public
or are hidden or disguised in bureaucratic rules or practices is:
a. Not transparent.
b. Unfair trade practices.
c. Bureaucratic procrastination.
d. Limited access.
41. Which of the following is not true regarding WTO dispute settlement procedures?
a. A complaining party can request consultations to seek a solution.
b. Even if a solution is not reached, the panel has no authority to authorize trade sanctions.
c. Other member nations with a “substantial interest” in the case may make written submissions and oral
arguments before the panel.
d. An appellate body of three people will hear appeals from a panel case.
e. All of the above are untrue.
42. When a nation that belongs to WTO imposes a tariff or quota on imported products, it is supposed to do so within the
guidelines established by GATT. If it does not do so within GATT’s guidelines:
a. The offending nation may suffer military retaliation by the other GATT members.
b. The offending nation may be subject to a proceeding pursuant to the WTO‘s Dispute Settlement
Understanding.
c. The offending nation may end up in the World Court being sued for breach of its GATT contract.
d. None of the above.
43. According to GATT, quotas are considered acceptable devises for regulating trade only where:
a. A nation is imposing a temporary safeguard to protect its balance of payments.
b. They are enacted into law by a nation‘s legislative body.
c. Nations are engaged in a trade war.
d. A nation has first petitioned the United Nations for permission to do so.
44. The term used to describe some action taken by a GATT member country in violation of the GATT agreement is:
a. Null and void.
b. Unfair and inequitable.
c. Persona non grata.
d. Nullification and impairment.
45. In the decision involving tariffs on Latin American bananas, the panel:
a. Recommended the tariffs be brought in line with the EEC’s obligations under GATT.
b. Said the Latin American countries were authorized to impose sanctions on the EEC.
c. Found the EEC’s tariffs to be within GATT guidelines.
d. Dismissed the case after the EEC agreed to adopt tariffs that were more in line with its GATT obligations.
46. All of the following are basic principles of GATT except:
a. Commitment to normal trade relations.
b. Elimination of import quotas.
c. Non-reciprocal tariff increases.
d. Non-discrimination against imported goods.
47. The concept that runs throughout the GATT requires that the products of all nations be treated equally and without
discrimination by importing nations. This is the principal behind:
a. Nullification and impairment.
b. Most-favored-nation trade.
c. Ad valorem tariffs.
d. Nontariff trade barriers.
48. Countries A, B, and C belong to GATT. Countries X and Y do not. A has a 7% tariff on televisions from B. C, X,
and Y also export televisions. Under unconditional most-favored-nation trade of GATT:
a. Countries C, X, and Y are entitled to a 7% tariff on televisions.
b. Countries X and Y are entitled to a 7% tariff on televisions.
c. Country C must petition A under GATT to get a 7% tariff on televisions.
d. Country C gets an automatic 7% tariff rate on televisions.
49. Countries A and B both produce coffee. Both countries belong to GATT. Country A imports coffee from B. Once
B’s coffee enters A’s stream of commerce, under the national treatment provisions of GATT:
a. Country A cannot subject B’s coffee to higher internal taxes or charges than its domestic coffee.
b. Country A may now charge higher internal taxes or charges on B’s coffee in order to discourage coffee
drinking since the goods have already passed the border.
c. Country A cannot subject B’s coffee to any internal taxes or charges, even if it does so to domestic coffee.
d. None of the above is correct.
50. Virtually all nations provide import protection for domestic agricultural interests:
I. And the GATT Agreement specifically prohibits such protection with no exceptions.
II. And this problem exists because nations try to provide market stability and protection for
farmers.
a. I only.
b. II only.
c. Both I and II.
d. Neither I nor II.
51. The Tokyo Round was successful in reducing trade obstacles.
a. Kyoto Protocol
b. Lowered the ad valorem tariffs approximately 35%
c. Cut tariffs to an average to 5%
d. None of the above
52. Which of the following is NOT an example of a commonly used trade barrier?
a. a convention on imported children’s toys
b. a tariff on imported oil
c. a tax on imported clothing
d. a national industrial standard that drives up the cost of imported televisions
53. Which of the following is an example of an ad valorem tariff?
a. a 15% tariff on the value of a shipment of t-shirts
b. a $10 tariff on each barrel of petroleum
c. a 20% discount on the value of peaches delivered in October, November, or December
d. None of the above
54. Which of the following is an example of a specific or flat tariff?
a. a 15% tariff on the value of a shipment of t-shirts
b. a $10 tariff on each barrel of petroleum
c. a 20% discount on the value of peaches delivered in October, November, or December
d. None of the above
55. The WTO is overseen by the Ministerial Conference, which is made up of:
a. the presidents, prime ministers, and royalty from all WTO member nations.
b. high–ranking representatives from all WTO member nations.
c. high-ranking representatives from a select group of wealthy WTO member nations.
d. five representatives from each of the WTO member nations.
56. Within the structure of the World Trade Organization, the three important groups under the Ministerial Conference
are:
a. the General Council, the Secretariat, and the Trade Policy Review Body.
b. the Committee on Budget, the General Council, and Trade Policy Review Body.
c. the Dispute Settlement Body, the General Council, and the International Court of Justice.
d. the Dispute Settlement Body, the General Council, and the Trade Policy Review Body.
57. When a nation’s import regulations or procedures lack , foreign firms cannot easily gain entrance to its
markets.
a. incentives
b. transparency
c. documentation
d. none of the above
58. quotas are imposed on a particular product regardless of origin, while quotas spread the total
limit across several specific countries.
a. Absolute; qualified
b. Global; specified
c. Absolute; allocated
d. Global; allocated
59. Under the WTO’s dispute-settlement procedures, who can bring a complaint for nullification and impairment?
a. a corporation
b. a group of corporations within an industry
c. a government
d. All of the above
60. Many countries grant preferential tariff treatment to select countries to help those countries’ economic development.
For example, the United States grants preferential tariff treatment to:
a. Haiti and many sub-Saharan African nations.
b. the EU.
c. China.
d. all Asian nations.
61. Compare and contrast direct and indirect nontariff barriers.
62. In what ways are GATT and the WTO similar? Different?
63. Describe the benefits and detriments of enacting a quota?
64. What are the similarities and differences between the GATT and WTO dispute resolution procedures?
65. Compare and contrast unconditional and conditional MFN trade.
66. Assess the relative value of a reported U.S. appellate (or trial) decision and a WTO panel report in a trade dispute.
67. Explain the similarities and differences between “like products” and “directly competitive products.”
68. Draft a document advocating for the elimination of normal trade relations status against countries involved in human
rights abuses.
69. Draft a document advocating the unilateral elimination of normal trade relations status for countries that do not abide
by their WTO commitments.
Essay
70. Guador, a small country in South America, is a member of the WTO. American fruit producers recently succeeded
in persuading several members of Congress to introduce a bill to remedy Guador’s alleged unfair trade practices in
the citrus fruit industry. The bill provides for a unilateral threefold increase in the tariff solely applicable to citrus
fruits originating in Guador. Furthermore, the bill imposes periodic testing procedures upon Guadorian citrus fruits
from which American producers are exempt. Finally, the bill caps imports of Guadorian citrus fruits into the United
States at $20 million in value annually. If enacted, would the bill violate American obligations pursuant to the GATT?
Why or why not?