Commentator: The theory of trade retaliation states that countries

Question

Commentator: The theory of trade retaliation states that countries closed out of any of another country’s markets should close some of their own markets to the other country in order to pressure the other country to reopen its markets. If every country acted according to this theory, no country would trade with any other.

The commentator’s argument relies on which of the following assumptions?

(This question is from Official Guide. Therefore, because of copyrights, the complete question cannot be copied here. The question can be accessed at GMAT Club)

Difficulty: Medium

Accuracy: 74%

Based on: 8028 sessions

Solution

The Story

The commentator tells us about a theory – the theory of trade retaliation.

The theory talks about those countries that are blocked from any markets of another country. The theory recommends that such countries should reciprocate in the same way. I.e., they should close some of their own markets to the other country. The objective of this retaliation is to pressure the other country to reopen its markets.

(In this statement, the commentator does not share her own opinion. She simply tells us what the theory states.)

If every country acted according to this theory, no country would trade with any other.

The commentator believes that if every country retaliated to market closures by another country by closing some of its markets to that country, eventually no country would trade with any other.

(Something like ‘an eye for an eye will leave the whole world blind’. Essentially, the author believes that the act of retaliating by closing some markets would lead to further retaliation and eventual complete closure of markets for all pairs of countries.)

Gap(s) in logic

What if some pairs of countries have all their markets open to each other? In that case, the countries would not need to go down this rabbit hole, and so trade between countries would not stop. Basically, what if there isn’t even a trigger that leads the countries down this path?
Even if there are some markets of all countries that are closed to other countries, is it necessary that such retaliation will continue till all markets are closed? What if countries foresee such a loss-loss outcome and come to some mutual arrangement to prevent complete closure of markets? Basically, if the countries have started down this path, does it necessarily mean they will keep going down the rabbit hole all the way to the end?

Now, can one argue that in such a case, the countries are not acting according to the theory?
I don’t think so.

Say, country A has closed 5 markets to country B.
Then country B closes 3 of its markets to country A (from an earlier figure of 0).
Now, if country A is acting according to the theory, will it close some MORE of its markets to B?
Not necessarily.
Since the passage states: ”should close some of their own markets to the other country”. The passage doesn’t state that the countries should close some MORE of their own markets. Since country A has already closed some markets to the other country, it need not necessarily close more markets.

That’s why I believe the second point is also a gap in the argument.

Question Stem

The commentator’s argument relies on which of the following assumptions?

The commentator assumes that countries will have the initial trigger to go down this path.

And, once countries go down this path of retaliating by closing some of their markets, they will keep going down the rabbit home until no country would trade with any other.

Answer choice analysis

Answer Choice: A

Incorrect

Selected by: 16%

This answer choice has no impact on the argument. The main point is a conditional. If every country acted according to the theory, international trade would close.

Let’s say I tell you: If I go to Mars, I’ll be happy.

Does my statement tell you that I am going to Mars?
No, right? That’s merely an if condition.
Let’s say someone tells you that Anish is not going to Mars. Would that change your belief in my statement “If I go to Mars, I’ll be happy”?
My original statement is about what would happen if I go to Mars. Would I be happy or not?
It is not about whether I’ll go to Mars. So, even if you learn that I am not going to Mars, my original statement will not be impacted by that new information.

The argument is about what would happen if a certain situation occurs. Whether the certain situation actually occurs or not is irrelevant.

The author does not assume anything about how the countries would actually be dealing with the theory. The commentator’s conclusion is about what would happen IF all countries acted according to the theory. How they actually act is irrelevant, and not necessary for the argument.

Answer Choice: B

Incorrect

Selected by: 5%

Let’s start with a variation of this answer choice.

(B’) No country blocks any of its markets to foreign trade.

What impact does this variation have on the argument?

This one is in line with the first gap I mentioned above. If no country blocks any market to foreign trade, there would not be any need to retaliate by closing some markets, and probably countries will continue to trade with each other. So, this variation weakens the argument.

You might be wondering: But if countries don’t close their markets to others, wouldn’t that mean that the countries are not acting according to the trade retaliation theory?

The answer is no.

Countries acting according to the theory would retaliate if there is a need to retaliate.

If there isn’t even a need to retaliate, they probably won’t. The theory is: if some other country closes some markets, you also close some markets to that country. If no country closes its markets to you, then perhaps you don’t close any of your markets to them.

Now, back to the original answer choice.

If this option is true, there is a chance that the initial trigger will not happen – if countries should not block, maybe they don’t block. So, the statement weakens the argument. Albeit, since the statement talks about what countries should do and not what they actually do, the impact is very marginal.

Since the statement anyway impacts the argument negatively, it can’t be an assumption.

Answer Choice: C

Incorrect

Selected by: 1%

Who should settle trade disputes is irrelevant to the argument and has no impact.

The argument never gets into settling trade disputes. The author does not express any preference either way. The argument does not rely on who should settle trade disputes.

Answer Choice: D

Correct

Selected by: 74%

This one fits.

This answer choice strengthens the argument. It tackles the first gap related to ‘triggers’ I mentioned above.

What would happen if for some pairs of countries, neither has any market closed to the other (negation)? In that case, even if these countries acted according to the theory, they will not have that initial trigger to retaliate to the other country by closing some of its markets to the other. And thus, these pairs of countries will probably continue to trade with each other.

Even if every country acted according to the theory, for trade to actually stop, there has to be a need to retaliate. If there isn’t even a need to retaliate (i.e. if a pair of countries has all markets open to each other), even if in principle the countries follow the theory, the back and forth retaliation will not happen between the two countries, and thus international trade will not end.

Answer Choice: E

Incorrect

Selected by: 3%

This answer choice gives us a reason for why countries close their markets to foreigners – to protect domestic producers.

Why countries close their markets to others has no impact on the argument. The argument is about what would happen IF every country reacted to a closed international market by closing some of their own to the other country. The reasons behind the closures are irrelevant.

If you have any doubts regarding any part of this solution, please feel free to ask in the comments section.

Anish Passi

GMAT Coach

With over a decade of GMAT training experience, top 1 percentile scores on the CAT and GMAT, and a passion for teaching, I’d like to believe I am quite qualified to be a GMAT coach. GMAT is learnable, and I help students master the GMAT through a process-oriented approach based on logic and common sense. I offer private tutoring and live-online classroom courses. My sessions are often sprinkled with real-world examples, references to movies, and jokes that only I find funny. You’ve been warned 🙂