Chapter 21: Globalization and Protectionism

There are nontariff barriers in the form of _______________ regulations, in which certain textiles are made in the United States, shipped to other countries, combined in making apparel with textiles made in those other countries—and then re-exported back to the United States at a lower tariff rate.

"rules of origin"

The membership of the WTO includes about __________ nations.

150

Despite interlocking import quotas, tariffs, and nontariff barriers, the share of apparel sold in the United States that is imported rose from about _________ in 1999 to about ________ today.

50%; 75%

The race to the bottom scenario of global environmental degradation is explained roughly like this:

Profit-seeking multinational companies shift their production from countries with strong environmental standards to countries with weak standards, thus reducing their costs and increasing their profits.

________________________ is theoretically possible, even sensible: give an industry a short-term indirect subsidy through protection, and then reap the long-term economic benefits of having a vibrant healthy industry.

The infant industry argument

Which of the following would be expected if the tariff on foreign-produced automobiles were increased?

The supply of foreign automobiles to the domestic market would be reduced, causing auto prices to rise.

A rule that every imported product must be opened by hand and inspected with a magnifying glass, by one of just three government inspectors available at any given time might be referred to as __________________.

a non-tariff barrier

A tariff differs from a quota in that a tariff is:

a tax imposed on imports, whereas a quota is an absolute limit to the number of units of a good that can be imported.

The infant industry argument for protectionism suggests that an industry must be protected in the early stages of its development so that:

domestic producers can attain the economies of scale to allow them to compete in world markets.

____________ means selling goods below their cost of production.

dumping

Which of the following is not a short-run impact of imposing quotas on the American industries they seek to protect?

government tax revenues increase

An import quota or tariff on French wine that raises the prices for wine will probably:

hurt domestic wine drinkers but help domestic wineries, which will gain from the higher prices.

_____________ are numerical limitations on the quantity of products that can be imported.

import quotas

Tariffs are taxes imposed on _________________.

imported products

After the USA introduces a tariff in the market for gigastraps, the price of gigastraps in the USA will:

increase

Raising an existing tariff on grapes from Argentina will:

increase American consumption of domestically produced grapes.

Import tariffs generally ________ the output of domestic producers of the affected products and also _________ the output of domestic exporters.

increase;decrease

__________________ are ways that a nation can draw up regulations, inspections, and paperwork to make it more costly or difficult to import products

non tariff barriers

Low-wage U.S. workers suffer from protectionism in all the industries that they don't work in, because:

protectionism forces them to pay higher prices for basic necessities like clothing and food.

International trade is fundamentally a ________________________.

win-win situation