Question

In the context of the types of domestic middlemen, the WTO in 2003 ruled _____ to be in violation of international trade rules, thus starting a major trade dispute with the European Union.

1) foreign sales corporations
2) direct marketing partnerships
3) trading companies
4) export promotion companies
5) Webb-Pomerene export associations

Answer 1

The World Trade Organization (WTO) ruled that Foreign Sales Corporations by the U.S. violated international trade rules in 2003, causing a dispute with the European Union. The WTO's mandate is to oversee international trade and enforce non-discriminatory practices among its member states.

Step-by-step explanation:

In 2003, the World Trade Organization (WTO) ruled that the United States' Foreign Sales Corporations (FSCs) were in violation of international trade rules, sparking a significant trade dispute with the European Union. Foreign Sales Corporations were mechanisms through which U.S. companies could receive tax benefits on export income, an arrangement the WTO deemed as a prohibited subsidy and thus counter to its principles of non-discriminatory trade practices.

The WTO, established in 1995, serves as an international body to supervise and facilitate international trade, offering a platform for trade agreements negotiations and dispute resolutions. WTO decisions are considered critical because they have the ability to shape international policies and practices regarding trade, and often reflect global economic dynamics. This includes ensuring that trade flows as smoothly and freely as possible, while also taking into account the interests of all member states.

The WTO's role extends beyond simple trade agreements to include trade in services and intellectual property, as well as environmental considerations and anti-dumping cases—a reflection of its complex and multifaceted involvement in global trade dynamics.

Answer 2

The WTO ruled 'foreign sales corporations' to be in violation of international trade rules in 2003, initiating a trade dispute with the EU.

This correct answer 1

Step-by-step explanation:

In the context of the types of domestic middlemen, the WTO ruled foreign sales corporations to be in violation of international trade rules in 2003, thus starting a major trade dispute with the European Union.

The World Trade Organization (WTO), which was established to oversee and liberalize international trade, found that these entities violated the rules set forth for fair trade among nations.

This ruling reflects the organization's broader role in managing trade relations and addressing practices deemed unfair or discriminatory amongst its member states, which has been a significant aspect of economic globalization.

This correct answer 1) foreign sales corporations