Exam 6: Trade Regulations and Industrial Policies

Responding to Russia's annexation of Crimea in 2014,the United States and its allies imposed economic sanctions against Russia.

The United States has often regarded China as a major violator of intellectual property laws.

The only members of the General Agreement on Tariffs and Trade and its successor,the World Trade Organization,are developing countries rather than developed countries.

Successful international economic sanctions imposed against a target country are likely to be more successful when there is a small number of countries imposing the sanctions.

The implicit industrial policies of the U.S.government have included:

Figure 6.4Japanese Market for Jetliners -Consider the Japanese market for jetliners as depicted in Figure 6.4.Suppose lone producer of jetliners in the world is Boeing and Boeing faces a constant marginal cost of $20 million per jetliner.What price will Boeing charge for jetliners in the Japanese market and how many will they sell?

____ attempt to produce a fair and free-trading environment in which there exists a level playing field.

About how many nations are members of the World Trade Organization?

Export embargoes induce greater losses in consumer surplus for the target country:

Copyrights,trademarks,and patents are used to protect the intellectual property of a nation from foreign imitators.

Some environmentalists in industrial countries fear that the rules of international trade under the World Trade Organization

In the early 1800s,southern states pressed for free trade so that they could buy cheaper foreign manufactured goods in exchange for their agricultural goods.

The Uruguay Round of multilateral trade negotiations succeeded in establishing the World Trade Organization.

The World Trade Organization

Major beneficiaries of export-credit subsidies,granted by the Export-Import Bank,have included U.S.producers of aircraft,telecommunications,and power-generating equipment.

Figure 6.5 Japanese Market for Jetliners -Consider the Japanese market for jetliners as depicted in Figure 6.5.Suppose lone producer of jetliners in the world is Boeing and Boeing faces a constant marginal cost of $20 million per jetliner but now a European manufacturer,Airbus,begins production.Airbus faces the same marginal cost as Boeing but the European government provides Airbus with a subsidy of $8 million per jetliner produced.As a result of the competition,Boeing leaves the Japanese market leaving Airbus as a monopoly.As a result of the entery of the subsidized producer what will happen to the consumer surplus gained by Japanese airlines from buying jetliners?

According to the fast-track provision of U.S.trade law,once the President has completed trade negotiations,their outcome is subject to a vote (without amendment) in Congress within 90 legislative days of submission.

The fast-track provision of U.S.trade law has the affect of speeding up the timetable during which the President negotiates trade agreements with foreign governments.

According to the normal-trade-relations (most-favored-nation) principle,if the United States extends MFN treatment to China and then grants a low tariff on imports of shirts from South Korea,the United States is obligated to provide the identical low-tariff on imports of shirts from China.

Critics of the U.S.Trade Adjustment Assistance Program argue that