Question

Over the years, the WTO has increasingly found itself adjudicating trade disputes that involve not just tariffs or quota restrictions but also restrictions based on quality, health, and environmental considerations. Why do you think this has occurred? What method would you, as a WTO official, use to decide whether a quality, health, or environmental restriction is in violation of a free-trade agreement?

Short answer

• Countries tend to protect their domestic producers through restrictions but do not want to violate the free trade agreements of the WTO. Therefore, they put restrictions on imports claiming quality concerns.
• A WTO official should crosscheck the claims made by the importing country and check whether the claim is legitimate or not.

Step-by-step solution

Reason behind countries restricting imports based on quality, health, and environmental concerns

The WTO is an international organization that advocates free trade between member countries. It is also responsible for settling trade disputes between nations. Many countries try to implement trade-restrictive policies to protect their domestic producers, citing quality, health, or environmental concerns.

Suppose a country is in a free trade agreement with another country. It wants to implement a restrictive trade policy on a good from that country, but it cannot do so because it will violate the trade agreements with that country. Thus, the country will try to restrict the import of the good indirectly based on quality, health, and environmental concerns.

Step to be taken by a WTO official

A WTO official should crosscheck the claims made by the import restricting country for good. It should do a quality check of the imported good and find out whether the claim made by importing country is true or not.

If the claim comes out to be true, then the provided reasons are legitimate and will not come under any trade violations. But if the claims are false, then the officer will take necessary actions against it for violating the trade agreement.