Reference no: EM133338654
The country of Patria is concerned about recent increases in shoe imports. It has decided to take action to at least monitor these imports and has approach you with a series of proposed measures that it is considering. You are asked to give an opinion on the legality of each of the following measures with respect to Article XI of the GATT.
1. Patria could establish a licensing system for imports. This would allow it to monitor the rate of importation and the domestic parties that are engaged in importing shoes. The proposal has prompted objections form both the dementing and foreign parties to import transactions who complaint that the licensing requirement created unnecessary uncertainty in their market.
2. In place of a licensing system, Patria could put in place a minimum price requirements. The current proposal is to prohibit the importation of shoes priced at less than $10. This is appealing to local industry because many of the imported shoes are low price and low quality. A legislative bill entitled the "Quality Shoe Protection Act" is already being drafted to implement this idea.
3. The largest exporter of shoes in Patria is the country of tramontana. To protect its domestic shoe producers, the government of Patria asks Tramontana's Shoe Manufacturers' Association (TSMA) to ensure that shoe exports to Patria be limited to 200,000 pairs annually. The TSMA responds by forming an export cartel that limits exports as requested by Patria.
4. The two dominant political parties in patria are the Patria Democratic Front (PDF) and the Patria Revolutionary Party (PRP). The PDF has strong allies int he business community and consistently enjoys their support. This is so because the PDF has a pro-business ideology. When the PDF is in power, business groups fight o curry favor with the government in an effort to get legislation favorable to their particular industry passed. The PRP, on the other hand, is much more suspicious of large business and is more populist in orientation. These divisions have been part of the political landscape in Patria for decades. In response to the increase in the importation of shoes, the Patria government (with the PDF in power) requests that shoe importers had all importation of shoes in order to assist local shoe producers.
5. Suppose that all importers of shoes in Patria are members of the Shoe Trader's Association (STA). A majority of them are also shoe manufacturers. In response to an oversupply of shoes, the STA recommends to its members that they not import any shoes for the next 12 months.
6. Because most of the importers of shoes are also manufacturers and exporters, Patria is considering a measure that would require domestic manufacturers of shoes to export shoes in an amount to equal at least 80% fo the imports by that same firm.