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Unformatted text preview: When a group of countries form a preferential trade agreement (ex. NAFTA, European Union)-WTO (and GATT) prohibits certain behaviors o Members cannot subsidize exports o No need for domestic injury o Dumping when a firm exports a product to another country at a price lower than the cost of production-WTO requires 2-track procedure in response to dumping o Fact Finding o Demonstration that dumping causes injury to domestic economy o If both confirmed, U.S. levies an anti-dumping duty-Since trade shocks can cause adjustment cost the WTO allows a country to implement safeguard provisions. These are explicitly temporary policies that are designed to ease the transition from one equilibrium to another...
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This note was uploaded on 10/04/2011 for the course EC 340 taught by Professor Ballie during the Spring '10 term at Michigan State University.
- Spring '10
- International Economics