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Business Administration QUESTION #9577
Question 1
A country imposes a requirement that all imported pharmaceutical products must undergo domestic re-testing, despite having been certified by internationally recognized bodies. This measure is best classified as which type of trade barrier, and what is its primary effect on LDCs?
  • A tariff-rate quota — raising the effective cost of imports through a two-tier price system
  • A technical barrier to trade (TBT) — imposing compliance costs that disproportionately harm LDC exporters who lack resources to meet redundant certification requirements✔️
  • An anti-dumping duty — protecting domestic pharmaceutical manufacturers from below-cost foreign competition
  • A voluntary export restraint — limiting LDC pharmaceutical export volumes through bilateral negotiation
Correct Answer Explanation
Redundant domestic re-testing is a classic technical barrier to trade (TBT) under WTO classification. Unlike tariffs, TBTs are non-transparent and selectively burdensome — LDC exporters typically cannot afford repeated certification cycles, effectively excluding them from export markets despite having internationally valid certifications.