Q4

State H provides general subsidies to all of its export manufacturers by means of lowcost loans, foreign currency exchange guarantees, and discounted prices for fuel and electricity purchased from the state's energy monopoly. HowdyDoo Company, a State H manufacturer of shampoos that has taken advantage of all of these subsidies, exports its goods to State I, where its products are in direct competition with those of several local manufacturers. State I's manufacturers have complained to their government, asking the government to impose a countervailing duty on HowdyDoo Company.

Both State H and State I are members of the WTO.

Should the countervailing duty be imposed?

Q5

State C is a major exporter of lumber products (especially plywood) to State U. State C's lumber companies are able to manufacture and sell their products in State U inexpensively because (unlike State U) State C's government charges only a nominal fee for cutting lumber in its national forest. In State U, on the other hand, the cutting fee is substantial, adding 15-20 percent to the cost of the finished lumber product. One of State U's plywood lumber companies, Multi-Ply Inc, has lost much of its market share in State U due to imports from State C. Multi-Ply Inc has complained to State U's government, arguing that State C is unfairly subsidising its lumber companies by charging such a low forest cutting fee. Multi-Ply Inc would like State U's government to impose a countervailing duty on imports of plywood from State C. May State U do so? Note that both State C and State U are members of the WTO

Q6

The Snicker Company, the largest manufacturer of Snickerdoodles in State F, decided about two years ago to enter the cookie market in State G. Several small companies in State G manufacture Snickerdoodles, but the market has traditionally been very small. When Snicker Company entered State G's market, Snicker Company undertook a widespread advertising campaign to promote Snickerdoodle consumption and to encourage consumers to try its product by publishing coupons in newspapers that allowed purchasers to buy Snicker's Snickerdoodles below their actual cost. As a consequence on this campaign, the sales of Snickerdoodles in State G have skyrocketed. In addition the sales of Snickerdoodles manufactured by State G firms have more than tripled. State G's Snickerdoodle manufacturers are, nonetheless, displeased because their market share has gone from 100 percent to 30 percent in two years. Concerned with this loss, State G firms have asked State G to impose anti-dumping duties on Snicker, since its Snickerdoodles are being sold below cost. Both State F and State G are members of the WTO. Should State G impose anti-dumping duties on Snicker?