If country lsquo A rsquo gives Market economy status to country lsquo B rsquo which of the following...........

Economic Affairs Foreign Trade - Trends and Policy

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If country ‘A’ gives Market economy status to country ‘B’, which of the following is/are correct about it?

1.Country ‘A’ has to lower the anti- dumping duties on the country ‘B’ product.

2.Market economy status is given to the country ‘B’ under the article 15 of the UNCTAD accession agreement.

Select the correct answer using the code given below.

1 only

2 only

Both 1 and 2

Neither 1 nor 2

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Explanation:

When a country 'A' grants Market Economy Status (MES) to country 'B', the implications include:

"Country ‘A’ has to lower the anti-dumping duties on the country ‘B’ product."

This is correct. Granting MES to a country means that country 'A' acknowledges that country 'B' operates under market economy conditions. This affects how anti-dumping investigations are conducted. In a market economy, domestic prices in the exporting country are considered a reliable basis for determining whether dumping has occurred. As a result, anti-dumping duties may be lower compared to a non-market economy, where alternative methods for calculating dumping margins are used.

"Market economy status is given to the country ‘B’ under the article 15 of the UNCTAD accession agreement."

This statement is incorrect. Market Economy Status is not specifically granted under Article 15 of the UNCTAD accession agreement. MES is a status used in trade relations and anti-dumping investigations, and its granting is not typically under the purview of a specific article of UNCTAD.

Based on these clarifications, the correct answer is:

1 only.