Economics 0455 · IGCSE · Globalisation, free trade and protection

Globalisation, free trade and protection — practice question

Sunburn-preventing skin creams produced in the European Union (EU) are more effective than those made in the United States (US). When US tourists travel to Europe, they often buy large quantities of these creams. Production of such creams is prohibited in the US because of the chemicals they contain. In 2013, talks started to lift this prohibition so that production could take place in the US. What effect is this freer trade likely to have on 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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