International Institutions and Trade Implications-1


SKU: AMSEQ-131 Category:

Assignment A
1. How International Monetary Funds helps its member countries in their economic development?
2. What is the role of World Bank in promoting International Trade? What are the functions of IDA and IRDB?
3. How has formation of European Countries helped the members countries in further improving their trade relations?
4. What is the role of WTO in promoting International Trade among member countries?
5. African Development bank have played a very important role is economic development of the African nations. Comment.

Assignment B
1. Critically examine the role of the following organization in promoting International trade
b) International Trade Centre (ITC ), Geneva
c) Centre for Promotion of Imports from Developing Countries
2. Briefly evaluate the main features of African Union? Analyze the impact of formation of this union on International Trade.
3. What is the aim and objective of COMES A? How does it function> Critically examine the role of COMESA in economic development of the member countries.

Case Study
NAFTA: A Strong Record of Success
Trade and Investment Flows Substantially Increased:
o From 1993 to 2005, trade among the NAFTA nations climbed 173 percent, from $297 billion to $810 billion. Each day the NAFTA countries conduct nearly $2.2 billion in trilateral trade.
o U.S. merchandise exports to NAFTA partners grew more rapidly – at 133 percent – than our exports to the rest of the world, at 77 percent.
o Canada and Mexico are our first and second largest markets; last year accounting for 36 percent of our export growth to the world.
o For agriculture, Canada and Mexico alone account for 55 percent of the increase in U.S. agricultural exports to the world since the NAFTA since 1993.
o NAFTA has been good for Mexican agriculture. Trade growth has been remarkably balanced with U.S.
agricultural exports to Mexico increasing $5.7 billion and U.S. agricultural imports from Mexico increasing
$5.6 billion during the last twelve years.
Real GDP Growth for NAFTA Partners (1993 to 2005):
U.S. Growth: 48% Mexico’s Growth: 40% Canada’s Growth: 49% U.S. Economic Growth Stronger in 12 years of NAFTA:
o Jobs. U.S. employment rose from 112.2 million in December 1993 to 134.8 million in Feb 2006, an increase of 22.6 million jobs, or 20.1%. The average unemployment rate was 5.1% in the period 1994-2005, compared to 7.1% during the period 1982-1993.
o Manufacturing. U.S. industrial production – 78% of which is manufacturing – rose by 49% between 1993 and 2005, exceeding the 28% increase achieved between 1981 and 1993.
o Compensation. Growth in real compensation for manufacturing workers improved dramatically. Average real compensation grew at an average annual rate of 2.3% from 1993 to 2005, compared to just 0.4% annually between 1987 (earliest data available) and 1993.
o Productivity. U.S. business sector productivity rose by 2.6% year between 1993 and 2005, or by a total of 36.2% over the full period. Between 1981 and 1993 the annual rate of productivity growth was 1.8%, or 24.3% over the full 12 year period.
o Investment. Productive investment, central to rising living standards, has increased. Even excluding housing, U.S. non-residential fixed, or business, investment has risen by 104%> since 1993, compared to a 37% rise between 1981 and 1993

1. Considering the above facts do your think that formation of NAFTA was beneficial for Mexico and Canada.
2. What are the advantages of forming regional trade blocks. Which are the major trading blocks in Africa. Do you think these trading blocks have contributed towards the economic development of the member countries?

Assignment C
1. A situation where any advantage given by one member of the WTO to another member must be extended to all WTO members.
A) The excessive invoicing principle
B) The comparative advantage principle
C) The intra-regional principle
D) The most favoured nation principle
2.” Millennium Development Goals ” are introduced by ?
A) United Nations Organization
B) World Bank
3. Which of the following is not the role of IMF?
A) Country Surveillance
B) Financial Assistance to members to correct balance of payments problems
C) Technical assistance in its areas of expertise
D) Dispute Settlement
4. Which of the following best describes the primary function of the International
Monetary Fund?
A) It acts as the Secretary of Treasury.
B) It provides relief to needy counties in the United States.
C) It provides assistance to needy contries.
D) It assists in banking affairs to keep foreign currency exchange balanced.
5. The EU treaty creates open borders for trade by providing for the free flow of all of the
following EXCEPT
A) capital.
B) goods.
C) services
D) custom duties.
6. A dispute among members of the WTO is first heard by
A) the director of foreign affairs.
B) the WTO’s appellate body.
C) a three-member panel of the WTO.
D) leaders from their respective countries.
7. The Maastricht Treaty included provisions in which of the following areas?
A) justice and home affairs
B) monetary union
C) military integration
D) political integration
E) All these answers are correct.

8. The African Union is an example of integration.
A) regional
B) relative
C) global
D) bilateral
9. Regional trade groups in Africa.
A) are more concerned about political than economic issues
B) often overlap in terms of membership
C) have not been implemented due to trade barriers
D) have resulted in countries relying more on each other than on former colonial powers for trading relationships
10. The WTO Agreement on Trade-Related Aspects of Intellectual Property Rights
A) allows rich countries to produce generic versions of patented drugs without having to pay royalties to the patent holder
B) permits developing countries to import generic products from other countries if they don’t have the capacity to produce generic drugs
C) requires tiered pricing for most drugs
D) deals with vaccines, such as for malaria, but does not cover drugs such as those used to treat HIV/AIDS
11. The NAFTA side agreements include.
A) labor standards only
B) internal tariff laws
C) environmental standards only
D) environmental and labor standards
12. Labor and environmental standards were included in the NAFTA agreement
A) to protect U.S. consumers from receiving environmentally damaging products from abroad
B) because of rules required by the WTO
C) to help opponents of NAFTA concerned about labor and environmental problems in Mexico
D) in order to convince the Mexican Congress that U.S. investors would not damage Mexico.
13. Rules of origin ensure that.
A) only goods that were produced mostly within the member country are eligible for the more liberal tariff conditions created by FTA
B) only African products may be shipped to member countries
C) the members of FTA may import products from only neighboring members
D) all members have the same external tariffs

14. The euro, the currency of the European Union,.
A) was adopted by all 15 existing members when it was first initiated
B) must be adopted by countries as a precondition to joining the European Union
C) is open to countries that are not members of the EU as long as they use the European Central Bank to set interest rates
D) was designed to help eliminate currency as a barrier to trade in the EU
15. Which of the original 15 members of the European Union did not adopt the euro
when it was first implemented?
A) the U.K.
B) France
C) Germany
D) Malta
16. Assume that U.S. companies are importing the same product from Mexico and
Taiwan. The United States enters into an FTA with Mexico but not with Taiwan.
Consequently, the United States begins to import more goods from Mexico (due to
lower tariffs) than from Taiwan, even though the Mexican products may not be any
better or cheaper. This is an example of.
A) trade specialization
B) trade internalization
C) trade creation
D) trade diversion
17. The set steps to accomplish monetary union in the European Union, which
included the creation of the euro.
A) Single European Act
B) Treaty of Maastricht
C) European Monetary Union
D) European Central Bank
18. The is the common currency of the European Union.
A) franc
B) pound
C) euro
D) mark
19. The three major responsibilities of the are legislative power, control over
the budget, and supervision of executive decisions.
A) European Commission
B) European Council
C) European Parliament
D) European Court of Justice

20. The EU organization that provides political leadership, drafts laws, and runs the daily
programs of the EU is the.
A) European Commission
B) Council of Ministers
C) European Parliament
D) European Central Bureaucracy
21. The EU organization that ensures consistent interpretation and application of EU
treaties is the.
A) European Commission
B) Council of Ministers
C) Court of Justice
D) Council of Treaties and Laws
22. The is the European Union’s ultimate decision-making body and is
composed of the different ministers of the member countries.
A) European Commission
B) Council of the European Union
C) European Parliament
D) European Court of Justice
23. Trade shifting to countries in a group at the expense of trade with countries not in the
group, even though the nonmember companies might be more efficient in the absence
of trade barriers, is known as.
A) trade specialization
B) trade diversion
C) trade creation
D) trade internalization
24. The goal of a is to abolish all tariffs among member countries.
A) customs union
B) common market
C) free trade agreement
D) Common internal tariff
25. The European Union is an example of a.
A) customs union
B) free trade agreement only
C) regional trade agreement with no internal barriers but with individual external tariffs
D) common language agreement

26. A results when free mobility of factors of product is added to a customs
A) customs union
B) common market
C) free trade agreement
D) regional trade agreement
27. A trade agreement where the member countries have a common external tariff is a
A) free trade agreement
B) customs union
C) regional free trade zone
D) NAFTA-style agreement
28. Geographic proximity is an important factor in establishing trading blocs because
A) countries next to each other rarely have trade barriers
B) neighboring countries typically use the same language
C) good trading relationships often exist, so it is easier to reduce barriers and increase trade for countries that are close geographically
D) the WTO gives preference to trading blocs that involve two or more countries that share a common border
29. Most trade groups contain countries in the same area of the world. Why is this so?
A) The distances that goods need to travel between such countries are short.
B) Distribution channels are not easily established in adjacent countries.
C) Adjacent countries are reluctant to coordinate policies.
D) Neighboring countries usually lack a common history and interests.
30. Trade agreements, whether regional, bilateral, or global, help companies.
A) by opening up markets in countries that are part of the agreements
B) to invest more abroad but not necessarily export more
C) to export products to countries that are part of the agreements but not necessarily import more
D) make export and import decisions, but they do not help with investment decisions
31. The clause embodied the fundamental principle of GATT-trade without
A) most-favored-nation
B) nontariff barriers
C) free rider
D) normal trade relations

32. is a WTO principle that allows member nations to extend tariff cuts to WTO
A) Most-favored-nation
B) Nontariff barrier relations
C) The free rider policy
D) Normal trade relations
33. Under the WTO agreement,.
A) Baa a dispute resolution mechanism allows countries to bring grievances to the WTO against countries that levy inappropriate trade discrimination measures
B) there there ithere is no dispute resolution mechanism except for trade involving environmental products
C) countries are countries are allowed to place trade barriers on member countries with no particular justification, because the WTO has no enforcement mechanism, just like GATT
D) tariffs are nottariffs are permitted to be levied by developed countries against developing countries but not against each other
34. A major problem with the Doha Round is that.
A) developing countries want developed countries to better protect their intellectual property
B) developed countries want a reduction in agricultural subsidies by the developing countries
C) the WTO does not want the developing countries to liberalize their investment rules
D) because of security issues, not all countries were able to attend the meetings, so it was impossible to get a consensus vote
35. integration is the political and economic agreements among countries that give
preference to member countries to the agreement.
A) Global
B) Economic
C) Bilateral
D) Regional
36. Which of the following countries are members of NAFTA?
A) the United States, Canada, and Mexico
B) North America and Latin America
C) the United Kingdom, the United States, and Canada
D) the United States, Canada, and Australia
37. Which of the following country is not a member of SADC?
A) Angola
B) Nigeria
C) Zambia
D) South Africa

38. Member countries of the African Union are planning to establish a Court of Justice
for which the statutes defining the composition and functions of the Court of Justice will
be submitted to the Assembly in
A) Maputo
B) Durban
C) Lome
D) Lusaka
39. Treaty to establishing the African Economic Community (AEC) was signed in
A) 1993
B) 1991
C) 1990
D) 1998
40. Which of the following country is not a member of SAARC?
A) Bangladesh
B) Bhutan
C) India
D) China


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