Read the following passage carefully:
Many United States companies have, unfortunately, made the search for legal protection from
import competition into a major line of work. Since 1980 the United States International Trade
Commission (ITC) has received about 280 complaints alleging damage from imports that benefit
from subsidies by foreign governments. Another 340 charge that foreign companies “dumped” their
products in the United States at “less than fair value.” Even when no unfair practices are alleged,
the simple claim that an industry has been injured by imports is sufficient grounds to seek relief.
Contrary to the general impression, this quest for import relief has hurt more companies than it has
helped. As corporations begin to function globally, they develop an intricate web of marketing,
production, and research relationships, The complexity of these relationships makes it unlikely that
a system of import relief laws will meet the strategic needs of all the units under the same parent
company.
Internationalization increases the danger that foreign companies will use import relief laws against
the very companies the laws were designed to protect. Suppose a United States-owned company
establishes an overseas plant to manufacture a product while its competitor makes the same
product in the United States. If the competitor can prove injury from the imports—and that the
United States company received a subsidy from a foreign government to build its plant abroad—the
United States company’s products will be uncompetitive in the United States, since they would be
subject to duties.
Perhaps the most brazen case occurred when the ITC investigated allegations that Canadian
companies were injuring the United States salt industry by dumping rock salt, used to de-ice roads.
The bizarre aspect of the complaint was that a foreign conglomerate with United States operations
was crying for help against a United States company with foreign operations. The “United States”
company claimed injury was a subsidiary of a Dutch conglomerate, while the “Canadian”
companies included a subsidiary of a Chicago firm that was the second-largest domestic producer
of rock salt.
a.
Which problem is highlighted in the above passage? What do you understand by the term ‘trade’?
b. How are different areas developed because of the emergence of corporate companies?
c. Write the disadvantages of Import relief laws.
d. How did Canadian companies affect the United States salt industry?
e. Describe the role of ITC and its benefits.
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Many United States companies have, unfortunately, made the search for legal protection from import competition into a major line of work. Since 1980 the United States International Trade Commission (ITC) has received about 280 complaints alleging damage from imports that benefit from subsidies by foreign governments. Another 340 charge that foreign companies “dumped” their products in the United States at “less than fair value.” Even when no unfair practices are alleged, the simple claim that an industry has been injured by imports is sufficient grounds to seek relief.
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