Tutorial Questions on Chap.

9:- NTBs

1. What are import quotas? Why do some

governments use them instead of just using
tariffs to restrict imports by the same amount?
Is it because quotas bring a bigger national
gain than tariffs?

2. What are voluntary export restrain (VER)

agreement? Why do some governments force
foreign exporters into them instead of just
using quotas or tariffs to restrict imports by
the same amounts? Is it because VERs bring
the importing country a bigger gain than
quotas and tariffs?

4. Define each of the following import policies

and describe its likely effects on the well
being of the importing country as a whole:

(a) Product standards

(b) Domestic content requirements.
5. To protect American jobs, the US government
may decide to cut US imports of bulldozer
imports by 60 %. It could do so by

(a) imposing a tariff high enough to cut

bulldozer imports by 60% or
(b) persuading Komatsu and other foreign
bulldozer makers to set up a VER
agreement to cut their exports of
bulldozers to US by 60 %.
Which of these two policies would be less
damaging to the US? Which would be less
damaging to the world as a whole?
Explain.

6. The US is considering adopting a regulation

that foreign apples can be imported only if
they are grown and harvested using the same
techniques that are used in the US. These
methods are used in the US to meet various
government standards about worker safety and
product quality.

(a) As a representative of the US

government, you are asked to defend the
new import regulation before the WTO.
What will you say?

(b) As a representative of foreign apple

growers, you are asked to present the
case that this regulation is an unfair
restriction on trade. What will you say?