lesson 12- solutions to trade barriers

Question 1

what is a special differential treatment
+example

Answer 1

put in place by the WTO for LDCs, includes support measures to overcome specific disadvantages
-gives LDCs preferential access to market
-incentives for export diversification away from primary products
e.g. EUs ‘everything but arms’ agreement- accept access of all non-military products from LDCs on a duty reduced, quota free basis

Question 2

what is a trade quota

Answer 2

government-imposed trade restriction that limits the number or value of goods that a country can import or export during a particular period.

Question 3

what is a tariff?

Answer 3

a tax on imports

Question 4

what is an import license?

Answer 4

issued by a government authorising the importation of goods from a specific source.
-needed for military goods, plants and animals, medicine

Question 5

what is a voluntary export restraint?

Answer 5

a trade restriction on the quantity of a good that is exported to another country
-usually due to the importing country requesting, so they can provide protectionism to its domestic businesses

Question 6

what is an embargo?

Answer 6

a government order which restricts exchange/trade with a specific country
-usually due to political conflict/tension

Question 7

what is protectionism?

Answer 7

the practice of shielding a country’s domestic industries from foreign competition by taxing imports

Question 8

what are subsidies?

Answer 8

grants awarded to domestic producers to reduce their costs and make them more competitive against imported goods