Economics 0455 · IGCSE · Globalisation, free trade and protection

Globalisation, free trade and protection — practice question

Skin creams that help to prevent sunburn and are produced in the European Union (EU) are more effective than those produced in the United States (US). US tourists buy large quantities of these creams while travelling in Europe. Production of such creams is banned in the US because of the chemicals they contain. In 2013, talks started to end this ban so that production in the US could be permitted. How is this free trade likely to affect manufacturers of skin creams in the US and the EU?

  • Amanufacturers in the US: gain; manufacturers in the EU: gain
  • Bmanufacturers in the US: gain; manufacturers in the EU: lose
  • Cmanufacturers in the US: lose; manufacturers in the EU: gain
  • Dmanufacturers in the US: lose; manufacturers in the EU: lose

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