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.
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.
31 What are the chief purposes of charging duties on imports?
B To guarantee the greatest part of income for a government.
D To support domestic production and increase a countrys income.
A no matter what countries the goods are from.
C no matter how highly developed the import countries are.
33 The example in the third paragraph concerning Canada and Janpan best illustrates the statement that
B contracting nations give to each other the same rights or concessions as to a third party.
D Canada must treat Japan fairly by granting it the same benefits as to Korea.
A the unconditional form of most-favored-nation treatment grants any rights and concessions to another party that demands them.
C The two forms of most-favored-nation treatment exist side by side in international trade practices.
35 Which of the following titles can best replace the original one?
B Import Duties:the Most Important Source of National Income
D Mutual Benefit in International Trade Treaties
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