Title: Cat for Lesson 9 - Trade Liberalization and Regiona...
Course: 383-303-FD-55-01 • International Economics

Test info catégorie

True or false? Justify your answer.

Question

Between 1967 and 1996, the world GDP increased more quickly than world trade.

Sélectionnez la meilleure réponse puis justifiez votre choix.

Réponse | Choix de réponses
1 | True
2 | False

Justification
Feedback: La(es) bonne(s) réponse(s) est(sont): 2, During this period, world trade increased by more than 30 times, whereas the world GDP only increased by 13 times.
Feedback: La(es) bonne(s) réponse(s) est(sont): 2, During this period, world trade increased by more than 30 times, whereas the world GDP only increased by 13 times.

True or false? Justify your answer.

Question

World trade in services is almost as high as trade in goods.

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Réponse | Choix de réponses
1 | True
2 | False

Justification
Feedback: La(es) bonne(s) réponse(s) est(sont): 2, Trade in services accounts for nearly 20% of world trade, whereas trade in goods represents 80%.
Feedback: La(es) bonne(s) réponse(s) est(sont): 2, Trade in services accounts for nearly 20% of world trade, whereas trade in goods represents 80%.

True or false? Justify your answer.

Question

The GATT was created in 1947 to implement agreements to lower customs tariffs.

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Réponse | Choix de réponses
1 | True
2 | False

Justification
Feedback: La(es) bonne(s) réponse(s) est(sont): 1, Shortly after the war, the initial goal of the GATT was to implement agreements to lower customs tariffs. However, it was not an organization in the legal sense of the term, since it did not have permanent leaders or statutes.
Feedback: La(es) bonne(s) réponse(s) est(sont): 1, Shortly after the war, the initial goal of the GATT was to implement agreements to lower customs tariffs. However, it was not an organization in the legal sense of the term, since it did not have permanent leaders or statutes.

True or false? Justify your answer.

Question

When two countries bilaterally reduce their customs barriers, this concession must be automatically extended by the other member states of the GATT. This situation clearly illustrates the most-favoured-nation (MFN) clause.

Sélectionnez la meilleure réponse puis justifiez votre choix.

Réponse | Choix de réponses
1 | True
2 | False

Justification
Feedback: La(es) bonne(s) réponse(s) est(sont): 1, This is what the application of the MFN clause involves. The purpose of applying this clause is to prevent discrimination between member states of the GATT or the WTO.
Feedback: La(es) bonne(s) réponse(s) est(sont): 1, This is what the application of the MFN clause involves. The purpose of applying this clause is to prevent discrimination between member states of the GATT or the WTO.

True or false? Justify your answer.

Question

A member state of the GATT or the WTO cannot put a special tax that would apply only to the country's imports.

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Réponse | Choix de réponses
1 | True
2 | False

Justification
Feedback: La(es) bonne(s) réponse(s) est(sont): 1, According to the principle of national treatment, once customs duties are paid, imported products must be treated in the same way as local products. A country cannot levy a tax that would only apply to imports.
Feedback: La(es) bonne(s) réponse(s) est(sont): 1, According to the principle of national treatment, once customs duties are paid, imported products must be treated in the same way as local products. A country cannot levy a tax that would only apply to imports.

True or false? Justify your answer.

Question

According to the principles of the GATT, which were adopted by the WTO, a country must make its customs tariffs public and comply with them. Moreover, it cannot accept a tariff concession without offering one in return.

Sélectionnez la meilleure réponse puis justifiez votre choix.

Réponse | Choix de réponses
1 | True
2 | False

Justification
Feedback: La(es) bonne(s) réponse(s) est(sont): 1, This example concerns two principles. The first principle deals with the consolidation of customs duties and is summarized as follows: (Article II). Every country has to declare the maximum customs duty rate it will apply to each category of products. A country cannot apply a higher rate than the one it announced. These commitments are made for a period of three years, with automatic renewal if the country does not express its intention to change its maximum rates. The second principle concerns reciprocity and is summarized as follows: (Article XXVIII). Any country accepting a tariff concession must also offer one in return. However, certain developing countries use an exception clause accepted by the GATT, which does not oblige them to offer tariff concessions in return.
Feedback: La(es) bonne(s) réponse(s) est(sont): 1, This example concerns two principles. The first principle deals with the consolidation of customs duties and is summarized as follows: (Article II). Every country has to declare the maximum customs duty rate it will apply to each category of products. A country cannot apply a higher rate than the one it announced. These commitments are made for a period of three years, with automatic renewal if the country does not express its intention to change its maximum rates. The second principle concerns reciprocity and is summarized as follows: (Article XXVIII). Any country accepting a tariff concession must also offer one in return. However, certain developing countries use an exception clause accepted by the GATT, which does not oblige them to offer tariff concessions in return.

Question

Find the statement that is false and justify your answer.

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Réponse | Choix de réponses
1 | According to the GATT or the WTO, regional trade unions are prohibited. Certain trade restrictions can be applied and are tolerated by the GATT and the WTO.
2 | Certain trade restrictions can be applied and are tolerated by the GATT and the WTO.
3 | The main purpose of the eight negotiation rounds undertaken by the GATT was to lower tariff and non-tariff barriers.
4 | The WTO applies the same principles previously advocated by the GATT and seeks greater liberalization in world trade.

Justification
Feedback: La(es) bonne(s) réponse(s) est(sont): 1, Statement 1 is false. Exceptions to the application of the general principles of the GATT and the WTO were accepted to take these regional organizations into account. The signing of regional agreements under certain conditions was therefore authorized. Statement 2: In certain cases, quantitative restrictions and measures called safeguards are allowed if the imports seriously threaten local industries. Statement 3: The GATT was created to promote international trade and to eliminate trade barriers. Customs duties and other non-tariff barriers are thus discussed, with the goal of eliminating them. Statement 4: The WTO is a permanent organization that has replaced the GATT since 1995; it advocates the same principles.
Feedback: La(es) bonne(s) réponse(s) est(sont): 1, Statement 1 is false. Exceptions to the application of the general principles of the GATT and the WTO were accepted to take these regional organizations into account. The signing of regional agreements under certain conditions was therefore authorized. Statement 2: In certain cases, quantitative restrictions and measures called safeguards are allowed if the imports seriously threaten local industries. Statement 3: The GATT was created to promote international trade and to eliminate trade barriers. Customs duties and other non-tariff barriers are thus discussed, with the goal of eliminating them. Statement 4: The WTO is a permanent organization that has replaced the GATT since 1995; it advocates the same principles.

Question

What is one main criticism of the WTO?

Entrez votre réponse ci-dessous.
Feedback: One main criticism is that the WTO represents and defends the positions of rich countries. The numerous Third World countries, which are poorly organized and less comfortable with international negotiations, are not able to properly defend their interests. The small group of rich countries often meets and attempts to defend a single position, which makes it particularly strong. Third World countries, on the other hand, are not very familiar with procedures and usually have many different interests. In 1999, many demonstrators gathered in Seattle to express their opposition to these meetings; the WTO conference was a failure. Since then, whenever a conference is planned, demonstrators get organized and express anti-globalization viewpoints.
Feedback: One main criticism is that the WTO represents and defends the positions of rich countries. The numerous Third World countries, which are poorly organized and less comfortable with international negotiations, are not able to properly defend their interests. The small group of rich countries often meets and attempts to defend a single position, which makes it particularly strong. Third World countries, on the other hand, are not very familiar with procedures and usually have many different interests. In 1999, many demonstrators gathered in Seattle to express their opposition to these meetings; the WTO conference was a failure. Since then, whenever a conference is planned, demonstrators get organized and express anti-globalization viewpoints.

Q: Question

Various levels of trade integration can be arranged by type of restriction.

Arrange the terms below from least restrictive to most restrictive.
- Free trade | 1
- Customs union | 2
- Common market | 3
- Economic union | 4
- Monetary union | 5
If right: You arranged the items correctly. Free trade is indeed the least restrictive type of trade because it is limited to the member states lowering their customs tariffs reciprocally. Conversely, the monetary union involves the highly integrated implementation of similar economic, monetary, budgetary and trade policies for member states.
If partly right: Votre réponse est partiellement correcte.
If wrong: Pay attention to the order. Free trade is the least restrictive type of trade because it is limited to the member states lowering their customs tariffs reciprocally. Conversely, the monetary union involves the highly integrated implementation of similar economic, monetary, budgetary and trade policies for the member states.

Q: Question

Three major world trade areas have been formed; the first one encompasses Europe, the second one Asia, and the third one ____________.

Entrez votre réponse ci-dessous.

[...]
A: The Americas / North America Central America and South America

Question

Which of the three regions represents the largest percentage of total world trade?

Sélectionnez la meilleure réponse puis justifiez votre choix.

Réponse | Choix de réponses
1 | Europe
2 | Asia
3 | The Americas

Justification
Feedback: La(es) bonne(s) réponse(s) est(sont): 1, Europe accounted for 61% of total world trade in 1967. Even though its percentage decreased, Europe still accounted for 53.3% of total world trade in 1996. This data is presented in the two tables in the Appendix in Lesson 9 of the Textbook.
Feedback: La(es) bonne(s) réponse(s) est(sont): 1, Europe accounted for 61% of total world trade in 1967. Even though its percentage decreased, Europe still accounted for 53.3% of total world trade in 1996. This data is presented in the two tables in the Appendix in Lesson 9 of the Textbook.

Q: Question

Arrange the three regional trade areas from the most integrated to the least integrated.
- AFTA | 1
- European Union | 2
- NAFTA | 3
If right: That's correct. The European Union has the most integrated trade. This is followed by NAFTA, which has a higher level of integration than AFTA. The Asian countries included in this agreement have only started to seriously work on eliminating customs duties among member states. NAFTA was implemented in 2004, following the achievement of the objectives that the member states set out in the 1994 agreement.
If partly right: Votre réponse est partiellement correcte.
If wrong: The European Union has the most integrated trade. This is followed by NAFTA, which has a higher level of integration than AFTA. The Asian countries included in this agreement have only started to seriously work on eliminating customs duties among member states. NAFTA was implemented in 2004, following the achievement of the objectives that the member states set out in the 1994 agreement.

Question

What is the main difference between APEC and ASEM?

Entrez votre réponse ci-dessous.
Feedback: The difference is primarily in the composition of these two regional organizations. APEC is a regional organization that groups the rich countries of the Americas and puts pressure on Asian countries to increase trade in that flourishing region. ASEM was created mainly to counterbalance APEC and it includes mainly European Union countries and Asian countries.
Feedback: The difference is primarily in the composition of these two regional organizations. APEC is a regional organization that groups the rich countries of the Americas and puts pressure on Asian countries to increase trade in that flourishing region. ASEM was created mainly to counterbalance APEC and it includes mainly European Union countries and Asian countries.