RC 15.10

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 companies
"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 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.
(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 uncompeti230
(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.


55. 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

56. 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.

57. 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.

58. 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 fro m 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.

59. 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.

60. 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.