Final answer:
The changes mandated by local product and service standards are described as Product Homologation. It involves adapting products to local regulations such as safety and environmental standards and is a result of the need for products to comply with globalization pressures. The correct answer is E.
Step-by-step explanation:
The term used to describe the changes mandated by local product and service standards is Product Homologation. This process involves adapting products to meet the specific regulations and standards set by a local market. As part of globalization, companies often need to modify their products to comply with various local requirements, which include safety, environmental, and health regulations. Product homologation ensures that a product is not only legally permitted to be sold in a market but also meets the societal and consumer expectations of that locale.
Non-tariff barriers, such as specific regulations, can serve as informal trade barriers, making it expensive or challenging to sell imported goods in a country. Moreover, the concept of protectionism, which is the governmental policy to restrict imports to shield domestic industries, can contribute to these barriers. However, when countries adopt standards that are globally recognized and scientifically based, like those from the World Trade Organization (WTO), they mitigate arbitrary discrimination against foreign products and support fair trade.
Protectionism and the race to the bottom are phenomena occurring when countries attempt to attract or retain economic activity by undercutting standards, potentially leading to lower environmental, wage, or safety standards globally. The WTO strives to reduce these barriers by ensuring that all countries adhere to fair and scientifically grounded trade regulations, thereby avoiding arbitrary or unjustifiable discrimination.