国际贸易双语教案问题答案

Chapter9

Nontariffbarrierstoimports

ObjectivesoftheChapter

Thischapternotesthenumerousotherwaystorestrictforeigntradewithoutusingatariff.Nontariffbarriers(NTBs)havegainedimportancesinceWorldWarIIasaresultofcontinuousmultilateralnegotiationstocuttariffs.Manyofthesebarriersreduceimportstoafixedamountbyeithersettinganimportquotaorcoercingtheexportingcountrytolimititsexportedquantity.Otherbarriersrestrictthequantityofimportsthroughdiscriminationbyqualityorcontent.

Importtariffs,importquotas,andvoluntaryexportrestraints(VERs)allhavethesameeffectsonthehomecountry’sproducersandconsumers:theproducerswinandtheconsumerslose.Themajordifferenceineconomicimpactcomesinwhoreceivestheprofitsfromhigher-pricedimports.Inthecaseofatariff,thegovernmentcollectstherevenueintheformoftheimporttax.Inthecaseofaquota,thegovernmentmayauctionrightstoimportthelimitedquotaamount(inwhichcasethequotalooksjustlikeatariff),orthegovernmentmayusesomealternativeformoflicensedistributionsuchasfavoritism(inwhichcasethecronieswhoreceivethelicensesgetthewindfall).WithaVER,thewindfallgoestotheagentsintheexportingcountrywhogettheprivilegeofsellingexpensiveimportstothecountry.

AfterstudyingChapter9youshouldknow

therationalebehindimposingnontarifftradebarriers.

theimportquotaandreasonsforusingit.

howatariffandaquotacanbeequivalent.

thewaystoallocateimportlicenses.

thecomparisonsbetweenimportquotasandVERs.

othercoststhatarisefromerectingimportbarriers,suchasforeignretaliation.

ImportantConcepts

Domesticcontentrequirements: Directsthataproductmadeorassembledinacountrymusthaveacertainamountof“domesticvalue,”intheformoflocalfactorsofproductionthatareusedin(orlocallymadecomponentsthatarepartof)thefinishedproduct.

Fixedfavoritism: Awayofallocatingimportlicensesinwhichthegovernmentsimplyassignsfixedsharestofirms,oftenbasedonthesharesofimportsthefirmshadbeforethequotawasimposed.

Importlicense: Alegalrighttoimportgoodssubjecttoquotasorothernontariffbarriers.Importlicensescanbeallocatedbygovernmentsusingcompetitiveauction,fixedfavoritism,orresourceusingapplicationprocedures.

Importquota: Alimitontotalquantityofimportsallowedintoacountryeachyear.Importquotasarethemostcommonnontarifftradebarrier.

MFN: Mostfavorednationstatus.Anagreementbetweentwonationstolevytariffsoneachotheratratesaslowasthoseleviedonanyothercountry.Ifoneofthesenationsreducestariffsonathirdcountry,allofthatnation’sMFNpartnersmustalsoreceivethatlowertariffrate.

Section301: PartoftheU.S.TradeActof1974.ItgivesthePresidentpowertoimposeimportbarriersagainstgoodsfromacountryusing“unfairtradepractices”tolimitimportsfromtheU.S.andothercountries.

VERs: Voluntaryexportrestraints.Nontariffbarrierstotradethatareequivalenttoquotas.Exportingcountriesarecoercedbytheimportingcountryintoallocatingalimitedquotaofexports.VERsarenotlegislatedandcanbeimposedwithorwithoutformalinternationalnegotiations.InternationaltradeintextilesandclothingissubjecttonumerousVERs.

WarmupQuestions

TrueorFalse?Explain.

1. T/F Quotasgivegovernmentofficialsgreateradministrativeflexibilitythantariffsdo.

2. T/F Aslongasquotalicensesareauctioned,thewelfareeffectsofaquotaareequivalenttothewelfareeffectsofatariff.

3. T/F Ifagovernmenthasasmalltaxbase,itmightprefertariffstoquotas.

4. T/F AVERisworsethanaquotaforthecountrythatimposesit.

5. T/F ThereisverylittlethatisvoluntaryaboutaVoluntaryExportRestraint.

MultipleChoice

1. Whichofthefollowingismostcorrect?

A. Importquotasusuallycreatemonopolyrents.

B. Aquotasystemismoreefficientthanatariffsystem.

C. Animportquotaismoresuitableforemergencyapplicationbygovernmentofficialsthanacomparabletariff.

D. Undercompetitiveconditions,animportquotaallowsimportcompetingproducerstoreapmoreprofitsthanatariff.

2. Quotasareoftenpreferredtotariffsbecause

A. quotasarearichersourceofgovernmentrevenues.

B. tariffchangesarestrictlycontrolledbyinternationaltradeagreements.

C. quotasdonothindercompetitioninthedomesticmarket.

D. quotascreatealessfertileenvironmentforcorruptgovernmentofficials.

3. UnderaVERregime,thetariffequivalentrevenueaccruestothe

A. importingcountrygovernment.

B. importingcountryconsumers.

C. exportingcountry.

D. import-competingindustries.

4. Adomesticmonopolistfacingimportcompetition

A. prefersatarifftoitsequivalentquota.

B. prefersaquotatoitsequivalenttariff.

C. isindifferentbetweenatariffandanequivalentquota.

D. lovesfreetrade.

5. Whichisthemostefficientmethodofallocatingimportlicenses?

A. Competitiveauctions.

B. Fixedfavoritismtowarddomesticimporters.

C. Resourceusingapplicationprocedures.

D. Fixedfavoritismtowardforeignexporters.

Problems

1. LeinsterbakershavepetitionedtheirgovernmentofficialsforprotectionagainstcompetitionfromimportedSaxonbread.Youhavebeenhiredbythegovernmenttodiscusstheoptionsavailable.TheMinisterofTradewantstoknowabouttheeaseofimplementationandthewelfareeffectsofthefollowing:

a. Animportquotaof40millionloaves.

b. AVERof40millionloaves.

2. Inresponsetoinformationreceivedfroma“mole”(spy)inLeinster’sMinistryofTrade,thePrimeMinisterofSaxonywantsaretaliatoryreductioninimportsoftelephones.Heisespeciallyinterestedintariffsandquotas.KeepinmindthatSaxonyisa“smallcountry”inthefollowing:

a. Illustratehowatariffandaquotacanhaveequivalenteffectsonthepriceandquantityofimportedtelephones.

b. Describetwodifferentwaysthatthequotalicensescanbeallocated,andexplainwhowouldgetthequotarentsineachcase.

3. TheBureauofNationalStatisticsinLeinsterhascalculatedthatGrossDomesticProductis,inrealterms,200milliontelephones.(Wedon’tyethaveacurrency,soallvaluesmustbemeasuredinunitsofgoods.)UsingyouranswersfromProblem1inChapter8,calculateaHarryG.JohnsonfigureforthecosttoLeinsterofprotectingitsdomesticbreadmarket.

4. Thediagrambelowdepictsanimportquotaof100,000camerasimposedbyasmallcountry.Thequotaraisesthedomesticpricefromthefreetradelevelof$100toalevelof$150.

Domesticprice

withquota

Worldprice

S

Cameras

(thousands)

150200300350

100

$100

Price

(dollarspercamera)

$150

D

Figure9.4

Usingtheinformationinthisdiagram,quantifythefollowing:

a. Therevenuegainedbythegovernmentbyauctioningimportlicensesat$50percamera.

b. Thevalueoftheincreaseinproducersurplusassociatedwiththeimpositionofthequota.

c. Thevalueofthedecreaseinconsumersurplusassociatedwiththeimpositionofthequota.

d. Theneteffectofthequotaonthecountry’swelfare.

5. Youaregiventhefollowingdatacomparingtheeffectsoffreetrade,aU.S.importquota,andaVoluntaryExportRestraintontheAmericanmarketforcompactdiscs(CDs):

Freetrade

Importquotaof8million

VERof8million

Priceof