State Z’s automobile manufacturing industry is one of the largest and most highl

Question

State Z’s automobile manufacturing industry is one of the largest and most highly regarded in the world. The industry is concerned that it may lose some of its domestic market share to inexpensive, low-quality cars manufactured in newly industrialized countries. To avoid this, the industry lobbies the State Z government until it enacts new standards for the sale of cars in the country. The standards are set in such a way that only cars manufactured in the State Z can meet them. Assuming that State Z is a member of the WTO, can the governments of those newly industrialized countries (also members of the WTO) do anything to get State Z to rescind its new standards? Explain.

Explanation / Answer

WTO does not deals or regulate with the automobile company or any other companies directly but only the concerned governments takes actions against such dumping. Dumping is explained as if a company exports a product at a price lower than the price it normally charges on its own home market. WTO allows the governments to take action on dumping to defend their domestic industries. In the case of the domestic industry is severely injured, then a WTO member may restrict the imports of a product for a period of time. WTO says that Companies or Industries may request the government to provide safety measures by national authorities incase of serious injury, from a sudden increase in the quantity of an imported product. After an official investigation to determine that the product is being imported into its territory to the industry that produce competitive products, a , From a sudden increase in the quantity of an imported product, a member state may apply safeguard measures.

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