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Chapter 34: Q.12 (page 832)

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

Short Answer

Expert verified

When products being imported are harmful for the consumers.

Step by step solution

01

Step 1. Introduction

Trade barriers refer to the regulations imposed by the government to protect domestic producers and consumers. Several arguments are used by the government to support the imposition of these barriers. The unsafe products argument is one such reason.

02

Step 2. Explanation 

WTO does not impose the same safety standards on all countries. Countries are free to decide their health and safety standards on their own. But the standards should be the same for both domestic producers as well as imports from foreign countries. Countries cannot arbitrarily impose standards to discriminate against other countries. The standards should be based on scientific evidence.

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Most popular questions from this chapter

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

Explain the logic behind the “race to the bottom” argument and the likely reason it has not occurred.

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Explain how a tariff reduction causes an increase in the equilibrium quantity of imports and a decrease in the equilibrium price.

Hint: Consider the Work It Out "Effects of Trade Barriers."

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