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Chapter 6: Problem 5

What are trade remedy laws? How do they attempt to protect U.S. firms from unfairly (fairly) traded goods?

Short Answer

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Trade remedy laws refer to regulations enacted to protect domestic industries from unfair foreign trade practices including dumping, subsidies, or sudden import surges. They implement mechanisms like anti-dumping and countervailing duties to protect against unfairly traded goods, and safeguards, such as temporary import quotas or tariffs, to guard against fairly traded goods.

Step by step solution

01

Definition of Trade Remedy Laws

Trade remedy laws refer to the regulations enacted by a country to protect its industries from perceived injurious trade practices of foreign countries. These practices may include dumping, subsidies, and sudden surges in imports.
02

Protection against Unfairly Traded Goods

To protect against unfairly traded goods, an example could be goods that are unfairly subsidized or dumped, these laws impose mechanisms like anti-dumping duties and countervailing duties. Anti-dumping duties are additional tariffs imposed on goods presumed to be sold at substantially lower prices than their market value, while countervailing duties are fees placed to counter the adverse effects of subsidies. Both are designed to level the playing field for domestic industries.
03

Protection against Fairly Traded Goods

Trade remedy laws also protect against import surges of fairly traded goods which can harm domestic industries. They can do so through safeguards such as temporary import quotas or tariffs to prevent or remedy serious harm to domestic industries. These measures have to be transparent and be minimally trade-restrictive.

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Most popular questions from this chapter

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