Assume that Denmark,a member of the European Union,is contemplating the enactment of a protective tariff for its fledgling CD industry due to domestic political and economic pressures.Assume further that the EU has a tariff that it has also enacted for all CD manufacturers within the EU that is considerably lower than the one that is being proposed in Denmark.The policy behind the lower EU tariff is to promote freer trade even at the risk of destroying some of the weaker manufacturers in that organization.In this situation:
A) Denmark could enact the higher tariff since EU members give up no authority to the organization in regulating trade and business practices.
B) Generally,when EU economic policies and rules conflict with the laws of member nations,EU law will prevail.Thus,Denmark's tariff may be illegal.
C) Denmark could petition the United Nations Council of Economic Policy and if it concurs with Denmark,the EU tariff policy would be overridden.
D) Assuming Denmark is a signatory to WTO,it could retain its higher tariff since the purpose of WTO is to protect domestic industries by promoting higher tariffs.
Correct Answer:
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