Export Subsidies as Trade Protection

Steps:

• Identify trade protection as policies shielding domestic industries from foreign competition.
• Evaluate each option for restricting imports or boosting domestic producers.
• Eliminate options that liberalize trade (more imports or fewer barriers).
• Select the action that supports domestic exporters against international rivals.

Why D is correct:

• Export subsidies provide financial aid to domestic producers, lowering their costs and enhancing competitiveness abroad, which protects local industries per WTO definitions of trade-distorting measures.

Why the others are wrong:

• A: Increasing import quotas raises the allowed import volume, easing foreign access and reducing protection.
• B: Reducing import tariffs lowers barriers, making imports cheaper and promoting free trade.
• C: Removing exchange controls lifts currency restrictions, facilitating more international transactions and less protection.

Final answer: D