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Chapter 34: Q.10 (page 832)

Why do low-income countries like Brazil, Egypt, or Vietnam have lower environmental standards than high-income countries like the Germany, Japan, or the United States?

Short Answer

Expert verified

To attract foreign businesses.

Step by step solution

01

Step 1. Introduction

Different arguments are given to justify the imposition of trade barriers. Environmental protection is one such argument. Though it has been noted that high-income countries have stronger environmental standards than low-income and middle-income countries.

02

Step 2. Explanation

Low-income countries are more focused on meeting their immediate needs such as food supply, healthcare facilities, longer life expectancies, etc. For them, environmental standards are a luxury that they cannot afford currently. They would focus on environmental protection measures once their necessities are met. They may also keep environmental standards lower to attract foreign businesses.

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Most popular questions from this chapter

Explain how predatory pricing could be a motivation for dumping.

Do the rules of international trade require that all nations impose the same consumer safety standards?

What are the conditions under which a country may use the unsafe products argument to block imports?

What is the general trend of trade barriers over recent decades: higher, lower, or about the same?

How do trade barriers affect the average income level in an economy?
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