Passage 22
Many United States companies have, unfortunately made the search for legal protection from import competition into a major line of work. Since 1980 the United States International Trade Commission (ITC)(5) has received about 280 complaints alleging damage from imports that benefit from subsidies by foreign governments. Another 340 charge that foreign companies “dumped” their products in the United States at “less than fair value.” Even when no unfair practices (10) are alleged, the simple claim that an industry has been injured by imports is sufficient grounds to seek relief.
Contrary to the general impression, this quest for import relief has hurt more companies than it has helped. As corporations begin to function globally, they (15) develop an intricate web of marketing, production, and research relationships, The complexity of these relationships makes it unlikely that a system of import relief laws will meet the strategic needs of all the units underthe same parent company.(20)Internationalization increases the danger that foreign companies will use import relief laws against the very companies the laws were designed to protect. Suppose a United States-owned company establishes an overseasplant to manufacture a product while its competitor (25) makes the same product in the United States. If thecompetitor can prove injury from the imports---andthat the United States company received a subsidy from a foreign government to build its plant abroad—theUnited States company’s products will be uncompeti(30) tive in the United States, since they would be subject to duties.
Perhaps the most brazen case occurred when the ITC investigated allegations that Canadian companies were injuring the United States salt industry by dumping(35)rock salt, used to de-ice roads. The bizarre aspect of thecomplaint was that a foreign conglomerate with United States operations was crying for help against a United States company with foreign operations. The “United States” company claiming injury was a subsidiary of a (40) Dutch conglomerate, while the “Canadian” companies included a subsidiary of a Chicago firm that was the second-largest domestic producer of rock salt.
1. The passage is chiefly concerned with
(A) arguing against the increased internationalization of United States corporations
(B) warning that the application of laws affecting trade frequently has unintended consequences
(C) demonstrating that foreign-based firms receive more subsidies from their governments than United States firms receive from the United States government
(D) advocating the use of trade restrictions for “dumped” products but not for other imports
(E) recommending a uniform method for handling claims of unfair trade practices
2. It can be inferred from the passage that the minimal basis for a complaint to the International Trade Commission is which of the following?
(A) A foreign competitor has received a subsidy
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