Question :
111) What potentially an important argument against regional trade agreements? : 1384537
111) What is potentially an important argument against regional trade agreements?
A) The benefits of trade creation may be outweighed by the costs of trade diversion.
B) They are more difficult to negotiate than multilateral agreements at the WTO.
C) The gains from trade can only be realized with global trade agreements.
D) Regional trade agreements lead to more volatile swings in national income.
E) Regional trade agreements are not legally enforceable.
112) Refer to Table 34-1. Assume there is free trade in cheddar cheese and Canada imports the lowest price cheese from the United States. If a 40% tariff is then imposed on U.S. imports, Canada would be likely to purchase its cheese from ________. This situation would be one of ________.
A) United States; trade creation
B) United Kingdom; trade diversion
C) United Kingdom; trade creation
D) United States; trade diversion
E) United States; free trade
113) An agreement among a group of countries to eliminate trade barriers among themselves, to present a common trading front to the rest of the world in terms of common tariffs, but which does not permit free movement of factors of production among member countries, is called a
A) confederation.
B) common market.
C) customs union.
D) free-trade area.
E) reciprocity association.
114) Suppose Canada entered into a free-trade arrangement with China and, as a result, Canadian imports from India were replaced with imports from China. This would be an example of
A) trade diversion.
B) trade creation.
C) dumping.
D) trade expansion.
E) countervailing trade.
115) Suppose five countries in Central America agree that products are to be freely traded across their borders, they will share a common set of import duties, and that the flow of people will continue to be restricted. This is an example of a
A) common market.
B) political union.
C) customs union.
D) free-trade area.
E) trade association.
116) The final round of GATT talks, called the Uruguay Round, established GATT’s successor, known as the
A) European Union (EU).
B) North American Free Trade Agreement (NAFTA).
C) Second General Agreement on Trade and Tariffs (GATT 2).
D) World Trade Organization (WTO).
E) United Nations Council for Free and Fair Trade (UNCFFT).
117) Canadian governments (provincial and federal) currently provide enormous protection (through tariffs) to which of the following domestic industries?
A) textile
B) steel
C) lumber
D) dairy
E) electronic gaming
118) Canada and the United States had a prolonged dispute about alleged government subsidies to the softwood lumber industry in Canada. Who loses and who gains from the situation in which Canadian governments impose taxes on Canadian exports of softwood lumber to the United States?
A) U.S. users of lumber lose and U.S. producers of lumber gain.
B) U.S. producers of lumber lose and U.S. users of lumber gain.
C) Canadian users of lumber lose and Canadian producers of lumber gain.
D) Canadian users of lumber lose and U.S. producers of lumber lose.
E) U.S. users of lumber gain and U.S. producers of lumber gain.
119) The North American Free Trade Agreement (NAFTA) is guided by the principle of
A) countervailing duties.
B) most-favoured-nation status.
C) national treatment.
D) protectionism.
E) strategic trade policy.
120) According to the principle of “national treatment” in the North American Free Trade Agreement (NAFTA), member countries
A) have complete autonomy over their own laws and the way in which they are applied to any firm, domestic or foreign, operating on their soil.
B) can establish new laws as they wish, as long as these laws apply equally to domestic and foreign-owned firms.
C) must submit any new laws being considered to a cross-border judicial panel before the laws are enacted.
D) cannot establish new laws which harm the domestic environment.
E) can establish specific subsidies to favour their own national firms over international firms, as long as it applies only to domestic operations.
