Chapter 5? Flashcards
absolute quota
A physical restriction on the quantity of goods that can be imported during a specific time period, normally a year; the quota generally limits imports to a level below what would occur under free-trade conditions.
import license
Permits importing the product to a limit, regardless of market demand.
global quota
Permits a specified number of goods to be imported each year, but does not specify from where the product is shipped or who is permitted to import.
selective quota
Import quotas allocated to specific countries.
tariff-rate quota
Allows a specified number of goods to be imported at a lower tariff rate (the within-quota rate). Imports above this have higher rate (Over-quota rate).
license on demand allocation
Licenses are required to import at the within-quota tariff (enforced by US Customs).
domestic content requirements
The minimum percentage of a product’s total value that must be produced domestically if the product is to qualify for zero tariff rates.
domestic production subsidy
Granted to producers of import-competing goods.
dumping
When foreign buyers are charged lower prices than domestic buyers for an identical product, after allowing for transportation costs and tariff duties.
Also, selling in foreign markets below cost of production.
sporadic dumping
When a firm disposes of excess inventories on foreign markets by selling abroad at lower prices than at home.
predatory dumping
A producer temporarily reduces the prices charged abroad to drive foreign competitors out of business.
persistent dumping
Goes on indefinitely, in a hope to maximize profits.
antidumping duty
Levied when US Department of Commerce determines that a class or kind of foreign merchandise is being sold at less than fair value (LTFV) and the International Trade Commission (ITC) determines that LTFV are causing or threatening material injury (e.g. employment, sales/profits) to a US industry.
margin of dumping
Amount by which foreign market value exceeds the US price.
price-based definition
Dumping occurs whenever a foreign company sells a product in the US market at a price below that for which the same product sells in the home market.
