Question 1 : (10 Points)

Agriculture is one of the main industries that most countries try to protect. The WTO's Agriculture Agreement aims to open up agricultural trade and make policies more market-oriented. The Agricultural Agreement does allow governments some flexibility to continue protecting their domestic agricultural industries with tariffs, quotas, and subsidies, but it limits the types of protectionist policies that can be used. Consider a WTO member country with high tariffs and subsidies to protect its domestic agricultural industry. What would happen if that country lowered its tariffs on imported agricultural goods and cut back its subsidies? Name one potential benefit for the country's domestic economy, and one potential drawback or loss.

Question 2 : (5 Points)

Textiles and apparel are anindustry that many countries tend to protect. Underdeveloped countries, especially in Asia, try to expand their textile industries to achieve development and economic growth. Why would lowered trade barriers on textiles around the world be helpful to these countries? How might lowered trade barriers be harmful to them?

Question 3 : (5 Points)

China has one of the fastest-growing economies in the world. China joined the WTO in 2001. How does WTO membership help China's booming economy? How might it also hinder future growth?

Question 4 : (10 Points)

The U.S. government has consumer-protection regulations that impose strict quality standards on food, drugs, and other consumer goods. Many countries in the rest of the world do not have such high standards, and WTO members have filed complaints against the United States, disputing the U.S. government's right to restrict imports that do not meet high standards. The claim is that these standards discriminate against foreign producers and constitute unfair trade restrictions. The WTO often agrees with these complaints. In 1996, the WTO ruled that an Environmental Protection Agency (EPA) regulation calling for cleaner gasoline was discriminatory against foreign producers and violated WTO agreements. The EPA was forced to rewrite the rule to allow for dirtier gasoline. Did this revision help world trade? Why or why not? Did the revision hurt the United States? Explain.