Question

A WTO member country produces passenger vehicles that are sedans, but it does not produce SUVs. SUVs are entirely imported by the country. Lately, its passenger car industry has been in decline. In order to give support to the industry, the government reduced the internal taxes on all sedans from 10% to 5%. However, it maintains 10% internal tax on SUVs. The government also raised applied tariffs on sedans and SUVs from 5% to 10%, which is the bound tariff level under the GATT. SUVs and sedans belong to different Harmonized System tariff classification at 6-digit level. Consumers tend to buy sedans instead of SUVs when SUV prices go up.

Analyze the facts above for the country’s possible violation of WTO law.

Answer 1

The following factors need to consider for Possible voilation of Law by WTO member :---

1. World Trade organisation provides a common platform to all of their member countries to Exchnage trades for better competitive markets

2. When imported SUV prices will go up, consumer will purchase home made cars due to less price..

As per WTO import is also necessary for competitiors wealth and economy..that's why export and import balances by trade

3. Here WTO law is voilated to forming a closed economy where no trade happens

4. The General Agreement on Tariffs and Trade (GATT) is a legal agreement between many countries, whose overall purpose was to promote international trade by reducing or eliminating trade barriers such as tariffs or quotas.

Overlooking of GATT is also their