Nontariff barries
Case Study #1: Non-tariff Barriers to International Trade
1. In the Xia case, if the WTO were to rule in favor of Brazil, which of the WTO trade agreements would contain the justification and why?
Answer:
Brazil banned imports of Xia goods from China because there was allegations and unconfirmed speculation pertaining to China’s use of hazardous materials (for example, lead paint and potentially carcinogenic plastic and rubbers) to manufacture toys cheaply, which sparked consumer panic around the globe. The imports of Xia goods were banned until the test was performed to guarantee that these goods do not possess any health risk. The Chinese government completely refuted this claim and fearing that other country might follow the similar pattern, took the matter before WTO for resolution.
If WTO were to rule in favor of Brazil, it would justify it on the basis of “Technical Barriers to Trade Agreement (TBT)”. This agreement is intended that technical regulations, standards and procedures of conformity assessment do not unnecessarily international trade barriers, while recognizing the right of Members to take regulatory measures to achieve its legitimate objectives, including: the imperatives of national security, the requirements in terms of quality, the protection of human health or safety and the life or health of animals, plant life, environmental protection and prevention practices likely to mislead. (Fliess and Schonfeld, 2011)
TBT Agreement applies to:
• Technical regulations: These are measures that establish the features of a product and the processes and production methods which compliance is mandatory.
• Standards: These are measures approved by a recognized body that provide, for common and repeated use, rules, guidelines or characteristics for products and processes and production methods which compliance is voluntary.
• The procedures for conformity assessment: procedures that are used, directly or indirectly, to determine that
1. In the Xia case, if the WTO were to rule in favor of Brazil, which of the WTO trade agreements would contain the justification and why?
Answer:
Brazil banned imports of Xia goods from China because there was allegations and unconfirmed speculation pertaining to China’s use of hazardous materials (for example, lead paint and potentially carcinogenic plastic and rubbers) to manufacture toys cheaply, which sparked consumer panic around the globe. The imports of Xia goods were banned until the test was performed to guarantee that these goods do not possess any health risk. The Chinese government completely refuted this claim and fearing that other country might follow the similar pattern, took the matter before WTO for resolution.
If WTO were to rule in favor of Brazil, it would justify it on the basis of “Technical Barriers to Trade Agreement (TBT)”. This agreement is intended that technical regulations, standards and procedures of conformity assessment do not unnecessarily international trade barriers, while recognizing the right of Members to take regulatory measures to achieve its legitimate objectives, including: the imperatives of national security, the requirements in terms of quality, the protection of human health or safety and the life or health of animals, plant life, environmental protection and prevention practices likely to mislead. (Fliess and Schonfeld, 2011)
TBT Agreement applies to:
• Technical regulations: These are measures that establish the features of a product and the processes and production methods which compliance is mandatory.
• Standards: These are measures approved by a recognized body that provide, for common and repeated use, rules, guidelines or characteristics for products and processes and production methods which compliance is voluntary.
• The procedures for conformity assessment: procedures that are used, directly or indirectly, to determine that
References: Raghavan, Chakravarthi (2000). The World Trade Organization and its Dispute Settlement System. Retrieved from: http://www.twnside.org.sg/title/tilting.htm Kassai Lucia, Colitt Raymond. (2013). Brazil Soy Boom Bottlenecked as China Left Waiting: Commodities. Retrieved from http://www.bloomberg.com/ Busch, Marc L. Eric Reinhardt (2003), “Developing Countries and GATT/WTO Dispute Settlement”, Journal of World Trade 37(4) Filess Barbara, Schonfeld Raymond, (2011). Using International Standards in Regulations. OECD Provides a New Tool for Governments. Retrieved from: http://www.astm.org/SNEWS/MJ_2011/perspective_mj11.html World Trade Organization. (2014). Technical barriers to trade. Retrieved from: http://www.wto.org World Trade Organization. (2014). Agreement on Safeguards. Retrieved from: http://www.wto.org