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)
(5) has received about 280 complaints alleging damage
from imports that benefit from subsidies by foreign
governments. Another 340 charge that foreign compa-
nies “dumped” their products in the United States at
“less than fair value.” Even when no unfair practices
(10) 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
(15) develop an intricate web of marketing, production, and
research relationships, The complexity of these relation-
ships makes it unlikely that a system of import relief
laws will meet the strategic needs of all the units under
the same parent company.
(20) 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
(25) 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 uncompeti-
(30) tive 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
(35) 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 claiming injury was a subsidiary of a
(40) Dutch conglomerate, while the “Canadian” companies
included a subsidiary of a Chicago firm that was the
second-largest domestic producer of rock salt.
1. The passage is chiefly concerned with
(A) arguing against the increased internationalization of
United States corporations
(B) warning that the application of laws affecting trade
frequently has unintended consequences
(C) demonstrating that foreign-based firms receive more
subsidies from their governments than United States
firms receive from the United States government
(D) advocating the use of trade restrictions for
“dumped” products but not for other imports
(E) recommending a uniform method for handling
claims of unfair trade practices
2. It can be inferred from the passage that the minimal
basis for a complaint to the International Trade
Commission is which of the following?
(A) A foreign competitor has received a subsidy from a
foreign government.
(B) A foreign competitor has substantially increased the
volume of products shipped to the United States.
(C) A foreign competitor is selling products in the
United States at less than fair market value.
(D) The company requesting import relief has been
injured by the sale of imports in the United States.
(E) The company requesting import relief has been
barred from exporting products to the country of its
foreign competitor.
3. The last paragraph performs which of the following
functions in the passage?
(A) It summarizes the discussion thus far and suggests
additional areas of research.
(B) It presents a recommendation based on the evidence
presented earlier.
(C) It discusses an exceptional case in which the results
expected by the author of the passage were not
obtained.
(D) It introduces an additional area of concern not
mentioned earlier.
(E) It cites a specific case that illustrates a problem
presented more generally in the previous paragraph.
4. The passage warns of which of the following dangers?
(A) Companies in the United States may receive no
protection from imports unless they actively seek
protection from import competition.
(B) Companies that seek legal protection from import
competition may incur legal costs that far exceed
any possible gain.
(C) Companies that are United States-owned but operate
internationally may not be eligible for protection
from import competition under the laws of the
countries in which their plants operate.
(D) Companies that are not United States-owned may
seek legal protection from import competition under
United States import relief laws.
(E) Companies in the United States that import raw
materials may have to pay duties on those materials.
5. The passage suggests that which of the following is
most likely to be true of United States trade laws?
(A) They will eliminate the practice of “dumping”
products in the United States.
(B) They will enable manufacturers in the United
States to compete more profitably outside the
United States.
(C) They will affect United States trade with Canada
more negatively than trade with other nations.
(D) Those that help one unit within a parent company
will not necessarily help other units in the company.
(E) Those that are applied to international companies
will accomplish their intended result.
6. It can be inferred from the passage that the author
believes which of the following about the complaint
mentioned in the last paragraph?
(A) The ITC acted unfairly toward the complainant
in its investigation.
(B) The complaint violated the intent of import relief
laws.
(C) The response of the ITC to the complaint provided
suitable relief from unfair trade practices to the
complainant.
(D) The ITC did not have access to appropriate
information concerning the case.
(E) Each of the companies involved in the complaint
acted in its own best interest.
7. According to the passage, companies have the general
impression that International Trade Commission import
relief practices have
(A) caused unpredictable fluctuations in volumes of
imports and exports
(B) achieved their desired effect only under unusual
circumstances
(C) actually helped companies that have requested
import relief
(D) been opposed by the business community
(E) had less impact on international companies than the
business community expected
8. According to the passage, the International Trade
Commission is involved in which of the following?
(A) Investigating allegations of unfair import
competition
(B) Granting subsidies to companies in the United States
that have been injured by import competition
(C) Recommending legislation to ensure fair
(D) Identifying international corporations that wish to
build plants in the United States
(E) Assisting corporations in the United States that wish
to compete globally