ENROLLMENT NUMBER

Amity University Haryana

BBA (G) / BBA – 3C / BBA (B&F)
Fifth Semester End Term Examinations– December, 2017
Course Title – International Business Management

Course Code: MGT2501 / MBF2502

Exam Dept. Ref.: BVG435
Time: 3 Hours Maximum Marks: 70
Note: This Question Paper has three sections : Section A, Section B and Section C.
Attempt (i) Any FIVE from Sec.-A.
(ii) Any TWO from Sec.-B.
(iii) Section-C is compulsory.

Section –A (Attempt any five questions) 30 Marks

(Each question carries 6 marks)

1. State and explain the various measures adopted by the 10th Ministerial Conference convened
by the World Trade Organization.
2. Describe the Comparative Cost theory of international trade.
3. Critically analyze the different steps taken in processing an Export Order.
4. Comment on the effectiveness of regional trade agreements? Explain briefly the salient
features of NAFTA.
5. What do you mean by Letter of Credit? Discuss its significance.
6. Explain what is EXIM Bank? State its functions.
Section – B (Attempt any two Questions)20 Marks
(Each question carries 10 marks)

7. What do you mean by Exchange Rate System? Distinguish the various exchange rate
systems clearly stating their merits and demerits.

8. What is GATT? How was it evolved? Discuss the sequence of events that led to the
formation of World Trade Organization (WTO). Also relate your answer with the video that
was shown in class. (Special points will be given by citing examples from the video).

9. Discuss the various documentations that are required to be complied with in shipment of
products as part of foreign trade. Explain their significance in the process.

Section C (Compulsory) 20 Marks

10. Read the case below and answer the questions:

WTO – Dispute Settlement Board
In 1997, against this background, Korea brought its first case to the WTO DSB. The case
concerned anti-dumping duties on Korean-manufactured colour television receivers. Korea

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had previously participated in the DSM as a third party, but this case was the first where
Korea was the complainant.

There were three major players in this case: Samsung Electronics, producer of various
electronic goods including colour televisions and one of the firms facing the anti-dumping
measure; the Korean government, which brought the case to the WTO on behalf of Samsung;
and the US government, specifically the Department of Commerce, which had the
responsibility of reviewing the anti-dumping measure. Other players included US labour
unions, which had filed an anti-circumvention suit against Samsung, and the governments of
Mexico and Thailand, which became involved in the case due to the anti-circumvention suit.
The Korean public was also an important, though passive, observer in the case. The
background of the specific case is as follows.

In 1983 the United States initiated an anti-dumping action against six Korean colour
television producers, and on 30 April 1984 it imposed anti-dumping duties on colour
televisions from four of those producers, including Samsung. Investigation covered the
period from April 1982 to March 1983, and while the preliminary decision showed that the
dumping margins ranged between 0 and 5.31%, the final decision showed the dumping
margins to be between 0 and 15.95%.

From April 1985 to March 1991, exports of Korean colour televisions to the United States
fell substantially and their price in the United States rose. In subsequent reviews, the United
States found that dumping margins for colour television receivers produced by Samsung
were below the de minimismargin of 0.5%. Further, Korean electronic manufacturers,
including Samsung, moved much of their production abroad to Mexico and Thailand to lower
production costs. Thus, from April 1991, Samsung did not export any colour television
receivers from Korea. It made periodic requests for the revocation of the anti-dumping order,
but the United States still maintained its anti-dumping measures on Samsung colour
television receivers, arguing that there was a potential for resumed dumping. In 1996 the
United States expanded, of its own accord, the anti-dumping measure to include combination
television-video cassette recorder (VCR) units and high definition (HD) televisions, which
were typically considered distinct from colour television receivers in terms of goods and
tariff classifications.

By 1995 Samsung had made five applications for the revocation of the anti-dumping
measure. Four applications were rejected on procedural grounds concerning the timing of
applications. The fifth application, filed on 20 July 1995, was not acted on for eleven months.
In August 1995 the United States had received a petition from several US labour unions,
including the International Brotherhood of Electrical Workers, the International Union of
Electronic, Electrical, Salaried, Machine and Furniture Workers, and the Industrial Union
Department, which accused Korean firms of using the production facilities in Mexico and
Thailand to disguise Korean exports and circumvent the anti-dumping measure.

In response, the United States had initiated an anti-circumvention investigation in January

1996. While the United States decided to initiate a review of the anti-dumping measure on 24
June 1996, a year elapsed without any definite results. The US government explained that the
review for revocation had to await the outcome of an anti-circumvention proceeding which
had begun in January 1996.

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 According to Han-Soo Kim, currently a senior official in the Korean Ministry of Foreign
Affairs and Trade (MOFAT), who had been involved in the colour television case, in the mid
1980s Korea, along with Japan and Taiwan, had been the most frequent target of US anti-
dumping measures. Small and medium-sized firms often could not afford to fight the anti-
dumping decisions because of the costs involved, and were forced to stop exporting. Thus the
Korean government considered the anti-dumping measures to be serious trade barriers. When
the 1984 anti-dumping measure was announced it generated much shock in Korea since
colour televisions were one of its strongest export items.

While Samsung managed an exclusion from paying anti-dumping duties, the anti-dumping
order remained, and Samsung had to undergo a review process every year. While Samsung,
and subsequently the Korean government, believed that Samsung was eligible for revocation
of the anti-dumping order, the US Department of Commerce maintained it. Frustrated with a
lack of result, a consensus emerged that this case was suitable for Korea’s first WTO DSM
case.

According to Kim, the modifications in the dispute settlement procedures made during the
UR negotiations played an important part in Korea’s bringing the colour television case to
the WTO DSB. Under the pre-WTO GATT, winning a case in the DSB required positive
consensus where all members had explicitly to accept the panel decision, and it would have
been difficult at that time for Korea to get a decision accepted by all GATT members.
However, the DSM under the WTO operated under a negative consensus, which requires that
all GATT members explicitly refuse the panel decision in order not to accept it. Thus the
Korean government felt that the United States could not block a favourable panel decision,
and felt confident enough to proceed with the DSM.

On Samsung’s side, while it had moved much of its production to Mexico, it felt that the
continuing use of the US anti-dumping measure was unfair, and it was also concerned with
potential future exports of HD televisions. It therefore encouraged the government to bring
the case, and worked closely with the government to prepare it.

Questions:

A. Do you think the WTO DSB has sufficient capability to settle the dispute? Explain your
answer. 7 Marks

B. What functions of WTO can be related to the case presented here. Justify your answer.
6 Marks

C. As a student of Business Environment, comment on the efficacy of WTO in mitigating

the problem on a long term basis. 7 Marks

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