Trade intervention - Economic

Question 1

import restrictions?

Answer 1

1. tariffs
2. quota’s
3. licences
4. rules of origin
5. product requirements
6. procedures

Question 2

export promotions?

Answer 2

1. subsidies
   - cash payments
   - low interest rates
   - export credits
   - promotion agreements

Question 3

why might a country intervene in trading

Answer 3

1. national defence - protecting vital wartime industries
2. protect domestic industries - jobs from foreign comp
3. infant industries - small new businesses who cant co
4. political motives
5. to protect against over-dependence
6. prevent undesirables e.g. drugs

Question 4

what does GATT stand for?

Answer 4

• general agreement on trading and tariffs established in 1947

Question 5

what was GATT converted to ?

Answer 5

WTO - World trading organisation established in 1995

Question 6

what was WTO objectives?

Answer 6

1. reduce obstacles
2. regulate trade
3. remove disputes

Question 7

principles of WTO ?

Answer 7

• should be no discrimination when trading
• reciprocity = if members benefit from reduced tariffs this must apply to other members
• transparency = members trade regulations have to be published so trading restrictions can be seen
• predictability and stability = raising existing tariffs cannot be done without negotiation
• freeing of trade = general reduction of all barriers