FREC 410
HW Assignments #3
Trade Barriers and Liberalizations
NOTE: Carefully review and provide detailed responses to the following questions. These questions are
mostly based on materials covered in our class lectures and the assigned readings from the textbook.
1) Briefly explain the following terms
a) Nontariff barriers (NTBs)
b) Voluntary Export Restraint
c) Tariff Rate Quota (TRQ)
d) Infant industry argument
e) Predatory dumping
f) Countervailing duty
g) Custom union and Trade diversion
2) Distortion effect of Tariff
a) Explain: What is the production effect of a tariff?
b) Explain: What is the consumption effect of a tariff?
c) Graphically show the location of both production and consumption effects?
d) How will you compute the value of both effects?
3) Specific Import Tariff – see class lecture note
Two countries U.S. (importer) and Philippines (exporter) initially had free trade in rice.
Then, Tm is a specific import tariff imposed on rice by the U.S.
a) Graphically illustrate and discuss the effects of the import tariff on the:
 i) supply, ii) demand, and iii) price in both countries and
 iv) the world price and v) world trade volume
b) Discuss the welfare effects in terms of producer and consumer surpluses and
government revenue in:
 i) the importing country
 ii) the exporting country
4) Identify and LIST three (or more) websites with information that focus on the Doha Round of
WTO trade negotiations. Then, use information from the websites to answer these questions:
a) Write a brief (one or two) paragraph summary of information on agricultural trade found at
these websites
b) What is the Doha Round?
c) What are some of the agricultural trade issues discussed?
d) What was the agreement reached at the WTO meetings in Cancun, Mexico?
e) List each of the websites you used and send the URL links via email to the instructor
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