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 device 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 Dutch conglomerate, while the “Canadian” companies included a subsidiary of a Chicago firm that was the second-largest domestic producer of rock salt.
01. 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
02. 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.
03. 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 cites a s
pecific ease that illustrates a problem presented more generally in the previous paragraph.
D. It introduces an additional area of concern not
mentioned earlier.
04. 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.
05. 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 eompanies in the United States that have been injured by import competition
C. Recommending legislation to ensure fair trade
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