Suppose the U.S. government is about to ban the importation of Nicaraguan steel. The reason cited is that the production of steel contributes to substantial environmental pollution. At the same time, the U.S. government offers subsidies to domestic steel producers. Under such a situation WTO rules permit the U.S. government to implement the ban on the import of Nicaraguan steel

Question

Quizplus · Accepted Answer

WTO rules generally prohibit import bans based on the production methods of goods (in this case, environmental pollution from steel production). The U.S. would need to justify the ban under specific exceptions, such as measures necessary to protect human, animal, or plant life or health, and even then, the measure must not be a disguised restriction on international trade. Offering subsidies to domestic producers does not provide a basis under WTO rules to justify a ban on imports.