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ACCA Applied Skills · Corporate and Business Law (Global) · International trade, international legal regulation and conflict of laws

Country P imports goods already subject to its tariff. After the goods clear customs and are sold domestically, Country P imposes an extra internal tax only on the imported goods, not on identical domestic goods. Which WTO principle does this most directly contravene?

This contravenes national treatment. Once imported goods have cleared customs, a WTO member must treat them no less favourably than like domestic goods, including for internal taxes. Taxing only imports discriminates against foreign goods compared with local ones.

  1. AMost favoured nation treatment
  2. BNational treatmentCorrect
  3. CThe prohibition on export subsidies
  4. DThe safeguard rule

Explanation

National treatment requires imported goods, once they have entered the market, to be treated no less favourably than identical domestic goods in matters such as internal taxes. The discrimination here is between imports and domestic goods, not between different foreign countries, so MFN is not the best answer.

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