UGC NET COMMERCE July 2018 Q41
| List-I | List-II |
| (a) Tariff | (i) A regulation specifying the proportion of a finished product’s components and labour that must be provided by importing country. |
| (b) Import Quota | (ii) Tax imposed on product entering a country and used to protect domestic producers and/or raise revenue. |
| (c) Local-content Law | (iii) A requirement that a product contain or exclude certain ingredients or that it be tested and certified as meeting certain restrictive standards. |
| (d) Local-operating Law | (iv) Limiting amount of a particular product that can be brought into a country, to protect domestic industry or broadening access to its markets. |
| (e) Standards and Certification | (v) A refusal to buy products from a particular company or country. |
| (f) Boycott | (vi) A constraint on how, when or where retailing can be conducted. |
CODES
| (a) | (b) | (c) | (d) | (e) | (f) | |
| 1 | (iii) | (iv) | (ii) | (i) | (vi) | (v) |
| 2 | (vi) | (ii) | (i) | (iv) | (iii) | (v) |
| 3 | (ii) | (iv) | (i) | (vi) | (iii) | (v) |
| 4 | (iv) | (vi) | (i) | (ii) | (iii) | (v) |
- Option : C
- Explanation : Trade Barriers: The most common legal forces affecting international marketers are barriers created by governments to restrict trade and protect domestic industries. Examples include the following:
∎ Tariff: A tax imposed on a product entering a country. Tariffs are used to protect domestic producers and/or raise revenue. To illustrate, for over 40 years the US has imposed a 25% tariff on imported pickup trucks, keeping brands such as Volkswagen and Hyundai out of the market and causing other foreign manufacturers such as Toyota and Nissan to build factories in the US.
∎ Import quota: A limit on the amount of a particular product that can be brought into a country. Like tariffs, quotas can protect a country’s domestic industry or can broaden access to its markets. For example, US textile manufacturers want stiff quotas placed on imports from China, while large retailers such as JC Penney, seeking low cost goods, are strongly opposed to such quotas.
∎ Local-content Law: A regulation specifying the proportion of a finished product’s components and labour that must be provided by the importing country. For example, to be sold in Taiwan, Japanese cars must be at least partially assembled there. To comply with a local-content law, a firm may import most of a product’s parts, buy some locally, and have the final product assembled locally. These laws are used to provide jobs and protect domestic businesses.
∎ Local Operating Laws: A constraint on how, when, or where retailing can be conducted. These regulations, many intended to protect small businesses, are having an impact on Internet shopping. For example, in some countries the retail price of a product has to be the same for everyone. As a result, a system like Priceline.com, where consumers propose a price for an airline seat, rental car, or hotel room and the seller decides if it is acceptable, is illegal.
∎ Standards and Certification: A requirement that a product contain or exclude certain ingredients or that it be tested and certified as meeting certain restrictive standards. European countries, for example, have restricted genetically altered corn and also beef that has been fed growth hormones.
∎ Boycott: A refusal to buy products from a particular company or country. Boycotts, also called embargoes, are used by a government to punish another country for what are perceived to be unfair importation rules.
