Author Question: Kunming Amusement Company (KAC) is a toy manufacturer located in Yunnan province in southern China. ... (Read 46 times)

vicotolentino · **on:** Jun 24, 2018

Kunming Amusement Company (KAC) is a toy manufacturer located in Yunnan province in southern China. KAC routinely dumps industrial waste from its manufacturing operations in the nearby Mekong River. The Chinese government is aware of this practice but has failed to take any action to prevent to occurrence or inform neighboring states. Two months ago, there was an industrial accident at KAC's manufacturing facility, which resulted in the significant discharge of numerous toxins (including lead-based paint) into the Mekong River. KAC informed the Chinese government of this accident, but the Chinese government failed to inform downstream states of the accident. As a result, people in Laos, Thailand, Cambodia and Vietnam unknowingly utilized tainted water for numerous domestic purposes, including drinking bathing, irrigation and watering of livestock. The accident was only discovered after numerous downstream users became ill and there were massive fish kills, which resulted in subsequent testing of the water and discovery of the contamination. If the United States responded to these events by increasing surveillance of KAC's toys for lead content, would such a ban be consistent with its obligations pursuant to GATT? Why or why not? If the United States responded to these events by banning importation of all Chinese toys manufactured in an environmentally unsound manner, would such a ban be consistent with its obligations pursuant to GATT? Why or why not?

Question 2

All of the following situations reflect a possible conflict of interest except:
A) A CEO offers a contract to a friend without checking competing bids.
B) A CEO hires a relative for a company position although another candidate is more qualified.
C) A manager buys a piece of realty that would be suitable for a planned company project.
D) A CEO takes a cut in pay to decrease company overhead.

bubulittle310@msn.cn · **Reply #1 on:** Jun 24, 2018

Answer to Question 1

The increased scrutiny of KAC's toys for lead does not violate U.S. GATT obligations. Article XX(b) of GATT permits states to adopt measures necessary to safeguard the life and health of people, animals and plants within their jurisdiction. However, the ban on importation of all Chinese toys manufactured in an environmentally unsound manner would violate U.S. obligations pursuant to the GATT. As a general rule, states cannot exclude goods made in other states in an environmentally unsound manner. In this case, the ban does not protect U.S. citizens from harmful products and is unlikely to prevent the environmental harm from continuing in the future.

Answer to Question 2

D