Question

2- In what ways are tariffs and quota similar in the effects? In what ways do the differ?

4-  What is WTO? What services does it perform? Explain

Answer 1

Similarities between Tariffs and Quota

• Tariffs and quotas are both imposed on import and export products by the government of a country.
• Tariffs and quotas both serve the purpose of protecting the domestic industry of a country in restricting the quantity of products imported or exported and also earn revenue for the government.

Difference between Tariffs and Quotas

• Tariffs are taxes on imported goods, quotas are limit on quantity of goods that can be imported.
• Tariff earn revenue & increase GDP,quota neutralizes GDP.
• Tariff revenue brings gains, quotas are beneficial for traders in foreign countries.

Answer 4

WTO refers to World Trade Organization.WTO deals with the rules of trade between nations at a global level.It is:

• An organization for liberalizing trade.
• Forum for governments to negotiate trade agreement.
• A place where member governments go, to try to sort out trade problems they face with each other.
• Born out of negotiations, and everything the WTO does is the result of negotiations.

Main Services of WTO are to:

• Help trade flow as freely as possible - so long as there are no undesirable side-effects.
• To serve as a forum for trade negotiations and dispute settlement.
• Monitor national trade policies.
• Help poor countries increase their trading opportunities, and provide support to help them build their trade capacity , handle disputes and implement technical standards.
• Maintain regular dialogues with NGO, legislatures, the media and other international organization.