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Chapter 20: Q. 30 (page 490)

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

Short Answer

Expert verified

Not necessarily.

Step by step solution

01

Step1. Introduction

Globally, through WTO, after deliberations and discussions, consumer safety standards on products are set in order to ensure the quality and safety of the products.

02

Step2. Explanation

The WTO allows nations to impose their own safety standards on the imports, but the basis of the differing standards must be backed by scientific logic and data. This is done to ensure that the products of certain countries are not specifically discriminated against to discourage the imports from those countries. A country hence can neither have different safety standards for different countries, nor can it have varying standards for domestic production and imported products.

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Most popular questions from this chapter

Does international trade, taken as a whole, increase the total number of jobs, decrease the total number of jobs, or leave the total number of jobs about the same?

Assume two countries, Thailand (T) and Japan (J),

have one good: cameras. The demand (d) and supply (s) for cameras in Thailand and Japan is described by the following functions: QdT

= 60 – P

QsT = –5 + 14 P

QdJ = 80 – P

QsJ = –10 + 12P

P is the price measured in a common currency used in both countries, such as the Thai Baht.

a. Compute the equilibrium price (P) and quantities

(Q) in each country without trade.

b. Now assume that free trade occurs. The free-

trade price goes to 56.36 Baht. Who exports and

imports cameras and in what quantities?

Explain how trade barriers save jobs in protected industries, but only by costing jobs in other industries.

In principle, the benefits of international trade to a country exceed the costs, no matter whether the country is importing or exporting. In practice, it is not always possible to compensate the losers in a country, for example, workers who lose their jobs due to foreign imports. In your opinion, does that mean that trade should be inhibited to prevent losses?

How can governments identify good candidates for infant industry protection? Can you suggest some key characteristics of good candidates? Why are industries like computers not good candidates for infant industry protection?
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