Economics 252 – Supplemental Review Questions Chapter 20 – International Trade

Questions based upon the article by C. Fred Bergsten "A Renaissance for US Trade Policy?"

(1) On page 2, it is stated that one of President Clinton's greatest frustrations was his inability to convince the country to support globalization despite enormous contributions to improved economic performance of the US during the 1990s. What does the article state as one factor that may have been behind such a lack of support?

(a) The gains from international trade and improved economic performance were not obvious to the US public.

(b) Concerns about national defense prevented support for trade liberalization.

(c) Congress failed to enact training and transition (income support) programs to help those who lose their jobs due to increased trade.

(d) None of the above.

(2) On pages 3 and 4, the Bush Administration's approach to US trade policy could be described as:

(a) unilateralist, increasing trade barriers to protect American industry.

(b) opening world markets, lowering US trade barriers, and increasing social safety net provisions and retraining for dislocated workers.

(c) "close the borders", especially after September 11, and protect American industry from imports.

(d) None of the above.

(3) On pages 4 and 5, recent protectionism measures by the US government (for example, steel, lumber, and textiles) are an indicator of what circumstances?

(a) Every President, who wants authority to conduct new international trade negotiations has to make concessions at home.

(b) A major shift towards protectionism by the US, and shoring up of US industry weakened by imports.

(c) A major shift toward free trade, disregarding negative impacts on US industry affected by imports.

(d) None of the above.

(4) What are the primary secrets of success in seeking international agreement to lower trade barriers from a US perspective?

(a) The US must be willing to place its most sensitive industries (that could be hurt by free trade) on the negotiating table, in order for other countries to come forward and do the same.

(b) Aggressive US demands for other countries to reduce trade barriers.

(c) Leadership by the United Nations.

(d) None of the above.