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Most-Favored-Nation Treatment
A tax placed on products because they go from one nation to another is called a tariff. Import duties are the most significant, most common, and most controversial of tariffs. They are used to raise money for a government, to protect domestic manufactures and agriculture, or to achieve a combination of both. The list of countrys import duties is called a tariff schedule. A single tariff schedule applies to all goods, no matter what their country of origin. A double or multicolumnedschedule provides for differing rates depending on the country of origin. Most modern trade agreements are made on the basis of what is called most-favored-nation treatment.
A most-favored-nation treatment guarantees that any rights or concessions in trade made by either of the contracting nations to a third nation are also granted to the other party to the treaty. The clause is also a guarantee against discriminatorytrade practices. Because these clauses are included in international trade treaties, they have become a principle of international law as well as instruments of economic policy.
The primary application of most-favored-nation status has always concerned the duties charged on imports. If, for example, Canada and Japan deal with each other on most-favored-nation terms, Canada could not place higher duties on Japanese television sets than it does on those imported from Korea. And, of course, any benefit granted to Korean imports would be given to Japan as well.
There have traditionally been two forms of most-favored-nation treatment, conditional and unconditional. Under the conditional form, the contracting parties do not grant all the concessions made to a third country, only those concessions specifically bargained for. In the unconditional form, any tariff concession granted to a third party is also granted to the other party to the treaty.
31 What are the chief purposes of charging duties on imports?
A To put taxes on any products that to in and out of a country.
B To guarantee the greatest part of income for a government.
C To stop foreign goods from entering ones country.
D To support domestic production and increase a countrys income.
32 The phrase no matter what their country of origin in the first paragraph means
A no matter what countries the goods are from.
B no matter how highly developed the export countries are.
C no matter how highly developed the import countries are.
D no matter where the country is located.
33 The example in the third paragraph concerning Canada and Janpan best illustrates the statement that
A a most-favored-nation clause is included in every international trade treaty.
B contracting nations give to each other the same rights or concessions as to a third party.
C the most-favored-nation status is just applicable to import duties.
D Canada must treat Japan fairly by granting it the same benefits as to Korea.
34 Concerning the two forms of most-favored-nation treatment, we can see that
A the unconditional form of most-favored-nation treatment grants any rights and concessions to another party that demands them.
B the conditional form of most-favored-nation treatment is not in any sense desirable in international trade.
C The two forms of most-favored-nation treatment exist side by side in international trade practices.
D the author is obviously in favor of the unconditional form of most-favored-nation treatment.
35 Which of the following titles can best replace the original one?
A Decisive and Controversial Tariffs
B Import Duties:the Most Important Source of National Income
C Protection of Domestic Manufactures
D Mutual Benefit in International Trade Treaties
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