BLAW 3363 Final Test

4 parts of escape clause

1.As a result of unforeseen developments 2. Due to the effect of a tariff concession or obligation under a trade agreement 3. Increased quantities of an imported product 4. Are causing or threaten to cause serious injury to domestic producers of like or directly competitive products.

Safeguards may be used for no longer than

4 years

Subsidies definition

A financial contribution, including any form of income or price support, made by a government that confers to benefit on a specific domestic enterprise or industry

All nations have ___ status

AD

GATT

General Agreement on Tariffs and Trade

Example of Unconditional MFN Trade

If country A agrees to reduce its tariff rate to 5% on a particular product imported from WTO country B, that rate becomes applicable to like products imported from all other WTO member countries. If country A agreed to reduce it down to 3% at a later time on like products from Country C, then the like products originating in country B will automatically be entitled to the lower 3% rate.

During Pres. Obama's 2 terms, his administration brought 23 complaints against foreign countries at the WTO and ______ unilateral Section 301 actions were taken.

NO

Ex. of Discretionary

President could use this statute against a country who fails to stop its companies from hacking American computer networks or stealing trade secrets of US firms

ISO 9000

Standard for ensuring product quality through the product design and manufacturing process.

Unilateralism

The policy that a nation should retaliate unilaterally against another country that discriminates against its products or firms rather than relying on an established international or multilateral framework for resolving trade disputes

In the following case, WTO Report on United States—Sections 301-310 of the Trade Act of 1974 (1999), a dispute settlement panel held that Section 301 does NOT violate

U.S. obligations under GATT if it is applied in accordance with WTO dispute settlement provisions

In the 1990s, the EU argued that Section 301 violated

WTO dispute settlement procedures.

Unjustifiable

a violation of a broad range of international legal rights of the US

MFN given to all countries except those that...

abuse human rights support terrorism engage in acts of aggression towards their neighbors attempt to spread weapons of mass destruction or are otherwise in violation of international law

investigation must show that the increases in imports are the

actual cause of the domestic industry's decline.

Those OPPOSED to unilateralism believe that a nations self-interest is best

furthered by gaining support from other nations

USTR is required to act against a foreign country that is found to...

have violated its trade agreements with the US (Ex: raising the tariffs above its bound limits or denial of MFN status) or whose policies are unjustifiable and burdens or restricts US Commerce

Standards make it _______ and _______ to design and build products that comply with international law vs. products designed to comply with dozens of local standards.

easier; cheaper

ISO standards are... (exception)

enforceable in countries where they have been incorporated into a treaty or into international law

Goal of ISO

ensure product quality, safety, efficiency, and interchangeability

All countries that are members of the WTO should automatically be...

entitled to MFN trading status with other WTO countries

The U.S. uses so-called Special 301 to assure that American-owned intellectual property rights

are adequately protected in foreign countries.

How do companies become ISO 9000 certified?

companies become certified through costly and rigorous inspection of their facilities and documentation of their quality control system

Unfair trade practice: in the form of export price discrimination causes

injury to domestic producers through artificially low prices against which they cannot compete at a profitable level

Safeguard limits

may not be greater or more restrictive than necessary to prevent injury, and must be gradually lifted when conditions warrant.

EU law requires certification for ________ and ___________.

medical devices; construction equipment

In the U.S "most favored nation" is referred to as

normal trade relations

ISO 14000

provides guidelines for environmental management

If another country unreasonable restricts access of US goods or services to their markets in violation of the trade agreement they could face...

punitive US tariffs or risk losing access to the US market

Selling at unfairly low prices in a foreign market is often intended to drive local firms out of business so that the foreign dumping firms will ultimately be free to

raise their prices to monopoly levels.

Unconditional MFN Trade

requires that if a nation negotiates a reduced tariff rate on a certain product imported from one WTO member, that rate of duty automatically becomes applicable to like products imported from any and all other WTO members

Safeguards applicable to WTO member countries must be in the form of global safeguards

safeguard measures placed on imports of specific "like" products without discrimination as to their countries of origin

unreasonable

unfair or inequitable even if it does not break any international agreement

In the ISO standards are...

voluntary, NOT legally binding, and has no legal authority to enforce them.

ISO

International Organization for Standardization

Escape Clause

Permits a country to temporarily "escape" or be relieved from its tariff concessions under a temporary corrective action (emergency action) to safeguard its domestic industry where

Who is the USTR?

Robert E. Lighthizer

GATT Hatters fur case

The US lowered tariff rates on fur hats because at the time the hats were at the peak of fashion. When the sales of hates lowered and dropped off the charts due to an unexpected change in fashion, the US used the Escape clause.

Dumping

The selling of products in a foreign country for less than the price charged for "like" or comparable products in the exporter's or producers home market.

antidumping duties

These are special import tariffs assessed in addition to normal tariffs imposed for the purpose of offsetting unfairly low prices of dumped goods.

Most Favored-Nation Trade

When one country grants this status to another country, it is agreeing to accord items imported from that country the most favorable treatment or the lowest tariff rates that it gives to like products imported from other MFN trading nations

ISO 14000 requires

a firm establish a management system for setting its own environment objectives, complying with local or national environmental laws, and continuing to improve its environmental performance

Trade sanction serve as a purpose to ending

an illegal foreign practice

After the creation of the WTO in 1995, the U.S.

became obligated to seek consultations at the WTO and approval from the WTO Dispute Settlement Body before imposing retaliatory measures

No ________ accrue directly to the petitioning firm

benefits

Each year, the USTR must ID and report on those PRIORITY FOREIGN COUNTRIES that continue to

deny adequate protection to American IPRs

An overall decline ______, or _________ by domestic competitors, are not reasons to impose safeguards

due to a recession; new technology breakthroughs

Original GATT agreement prohibited _________ since 1947

dumping

GATT 1994 Article VI and 1994 agreement

permits the imposition of AD duties only when dumping threatens or causes "material injury" to a domestic industry producing "like products"

Products effected by section 301 are

placed on the USTR's "retaliation list" or "hit list."

In the U.S:

status is granted to a foreign country by an act of Congress

The president has the authority to place additional ______ on imports from the offending nation in an amount ______ __ _______ to the burden placed on U.S. firms.

tariffs; Equal to Value

Escape clause may be used when

the increase is a result of "unexpected development" such as a sudden surge of imports resulting from an unexpected economic event.

Section 301 of the Trade Act of 1974

the primary statute that permits the United States Trade Representative (UTSR), on direction of the president, to take retaliatory trade action against other countries whose acts or trade policies toward the US (or its companies or products) are unreasonable or discriminatory, or in violation of a trade agreement

Unilateralism is in direct conflict with

the principles of the WTO system

hose who FAVOR unilateralism usually do so because

they believe it furthers a nation's self-interest

Discretionary power

to the President to retaliate against any foreign country whose acts or policies are unreasonable / discriminatory and burdens or restricts the US commerce