The founding documents of the WTO comprise more than 20 different agreements: countries are free to accede to all or a part of the list as suits their own domestic trade policy. Members of the WTO are free to develop their own AD and CVD duty law, free from any rules developed by multilateral organizations. Which of the following statements is correct? (pp. Free trade areas and customs unions do not conflict with either the most-favoured-nation or national treatment principles of the GATT. Free trade areas and customs unions are a violation of the national treatment principle, but were permitted by the contracting parties to the GATT so long as they created trade. Free trade areas and customs unions are a violation of the most-favoured-nation principle, but were permitted by the contracting parties to the GATT so long as they created trade. The WTO anti-dumping (AD) rules allow individual governments to act against dumped imports where there is dumping and material injury to the competing domestic industry. There is normally no necessity for countries acceding to the WTO to amend their domestic legislation, as all provisions of the WTO agreements automatically apply to the citizens of member countries. There are no exceptions in the WTO rules to the most-favoured-nation (MFN) principle. Which of the following statements is correct? (p. None of the above statements is correct.ģ. Under the national treatment rule, once a good or a service is legally present in a country, it must receive the same treatment as a domestic good or service. The most-favoured-nation rule requires that tariffs be applied equally to all member countries without exception. The concept of bound tariffs is a cornerstone for the world trading system and was first applied after the WTO was formed in 1995. A customs union imposes common policies for the internal operation and integration of the combined market between the participating countries. A customs union imposes a common external tariff on goods imported into the customs union and eliminates tariffs on the exchange of goods between participating countries. A customs union imposes a common external tariff on goods imported into the customs union while maintaining tariffs on the exchange of goods between participating countries. In a WTO dispute between Canada and France over asbestos and asbestos products, the WTO Appellate Body held that France was entitled to prohibit these products on the grounds of sufficient scientific evidence that the products posed a risk to human health. Once the WTO Appellate Body has issued a decision in a dispute, the disputing governments must immediately conform to the decision with no further discussions on settlement. There is no international superstructure to punish countries that do not adhere to WTO rules. Countervailing duties may be imposed by an importing country provided there is proof of a financial or commercial benefit given to a producer, manufacturer, or grower by a government, even where there is no domestic industry in the importing country. There are no provisions in the WTO that allow a country to protect its domestic producers from a surge in imports unless it can be proved that such imports are either dumped or subsidized. The chief rule-making body of the WTO is the Dispute Settlement Body. The panels of the WTO Dispute Settlement Body are not empowered to make any new rules they may simply apply the existing rules to a given set of facts. The General Agreement on Trade in Services (GATS) requires member countries to open up all their service sectors to all other members of the WTO on a most-favoured-nation (MFN) basis. The rules of the GATT are of no importance to us today, as these rules have been completely changed by its successor organization, the WTO. A country that joins the WTO is required to increase its international trade with other member countries.
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