Question

Oregon Olive is a U.S. company that manufactures and distributes several varieties of olive oil. The majority of Oregon Olive's sales are in the U.S. but it also exports its goods to several foreign countries, all of which are WTO signatories. Oregon Olive executives are outraged to learn that when their olive oil is sold in Italy, it is subject to a tax that is four times as high as that imposed on the olive oil produced in that country. Which principle (if any) does Italy's tax violate?

Answer 1

National treatment

Step-by-step explanation:

The World Trade Organization (WTO) is an international trade treaty aimed at providing trade liberalization to all countries. The WTO's main objective is to act as a forum for negotiations and agreements to reduce obstacles to international trade. Its work is to ensure stability, competition among all countries, and thus to ensure the economic development of nations.

So if Oregon Olive wants to export its products to Italy (which is a WTO signatory) and Italy imposes much higher taxes on Oregon Olive products than local products, we can conclude that Italy is putting obstacles to international trade, so we can say that Italy is violating the guidelines that were accepted when signing the WTO, so Italy is violating a national treaty.