ools 2. Basic facts about the WTO The World Trade Organization (WTO) was built on the basis of the General Agreement on

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Ools 2 Basic Facts About The Wto The World Trade Organization Wto Was Built On The Basis Of The General Agreement On 1 (190.2 KiB) Viewed 10 times

Ools 2 Basic Facts About The Wto The World Trade Organization Wto Was Built On The Basis Of The General Agreement On 2 (286.28 KiB) Viewed 10 times

ools 2. Basic facts about the WTO The World Trade Organization (WTO) was built on the basis of the General Agreement on Tariffs and Trade (GATT) and, thus, inherited many of its features. Still, the WTO proved to be a very distinct institution. Indicate whether each property in the following table is a unique property of the WTO compared to GATT Property Acts as a provisional treaty Acts as a membership organization Includes side agreements Administers a unified package of agreements Brings trade in services, intellectual property, and investment into the multilateral trading system According to GATT, regional trade agreements: Can be formed even if the duties with outside parties are more restrictive than prior to the formation O Cannot be formed O Can be formed if the duties with outside parties are not more restrictive than prior to the formation O Can be formed only as free-trade areas and not as customs unions High Tech High Tech Inobeshon Produce Not Produce Produce -2,-2 Not Produce 0,75 Fill in the cells of the following payoff matrix to reflect the $5 million subsidy Suppose that Japan considers electronics a strategic industry and gives Inobeshon a $5 million subsidy if it produces Produce Not Produce Homework (Ch 06) Suppose there are only two producers of electronics in the world, HighTech in the United States and Inobeshon in Japan. The following hypothetical payoff matrices show the profits (in millions of dollars) for each company. In the absence of subsidies, if only one company makes semiconductors, it receives a profit of $75 million. If both companies decide to produce, they each lose $2 million. When a company decides not to produce, it earns zero profit. 75,0 0,0 True False Produce Unique Property of WTO Yes No O O O Indbeshon With a $5 million subsidy, regardless of whether HighTech produces or not. Inabeshon O Not Produce O O O 110 0 Save & Continue True or False; Because Insbeshon will not enter the market if givell a 15 million subsidy, High Tech should also not produce in this industry. produce it wants to maximize its profit.
Homework (Ch 06) Indicate whether each property in the following table is a unique property of the WTO compared to GATT. Property Acts as a provisional treaty Acts as a membership organization Includes side agreements Administers a unified package of agreements Brings trade in services, intellectual property, and investment into the multilateral trading system According to GATT, regional trade agreements: O Can be formed even if the duties with outside parties are more restrictive than prior to the formation O Cannot be formed O Can be formed if the duties with outside parties are not more restrictive than pnor to the formation: O Can be formed only as free-trade areas and not as customs unions HighTech Homework (Ch 06) Inobeshon Produce Not Produce Produce -2-2 75,0 Not Produce 0,75 0,0 Fill in the cells of the following payoff matrix to reflect the $5 million subsidy. HighTech 4. Strategic trade policy Suppose there are only two producers of electronics in the world, HighTech in the United States and Inobeshon in Japan. The following hypothetica payoff matrices show the profits (in millions of dollars) for each company. In the absence of subsidies, if only one company makes semiconductors receives a profit of $75 million. If both companies decide to produce, they each lose $2 million. When a company decides not to produce, it earns a profit. Produce Not Produce Suppose that Japan considers electronics a strategic industry and gives Inobeshon a $5 million subsidy if it produces. True Unique Property of WTO Yes Produce O False OOOOO Inobeshon Grade It Now Not Produce With a $5 million subsidy, regardless of whether HighTech produces or not, Inobeshon 20000 O Save & Continue Continue without saving True or False: Because Inobeshon will not enter the market if given a $5 million subsidy, HighTech should also not produce in this industry. produce if it wants to maximize its profit. Grade It Now a Save & Continue Continue without saving