International Business Law – The GATT Essay

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The taxes on alcoholic beverages were increased in Japan due to various reasons. Japan is a small-developed country, which is conscious of its people’s welfare, economy, and social lives. This was a positive step in the country through various perspectives. The increased taxes on alcoholic beverages discouraged the consumption of alcohol, as a way of promoting the health of the citizens. Another important reason for raising the alcoholic beverages taxes was to improve the economic growth of the country (August, Bixby, & Mayer, 2008). A decline in tax revenue, which is directly related to the Gross Domestic Product of the country, leads to weak economic growth. Earlier on, the total public debt of Japan was increasing at an extremely high rate. The ruling of increasing the alcohol taxes was particularly crucial. The government used it to assist in bringing down Japan’s increased level of public debt. The Japanese citizens took the issue of increased taxes negatively, but they later realized the importance.

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Although most of the citizens considered this ruling being oppressive, it was meant for the goodness and well fare of the entire nation. In the past, Japan’s consumption taxes were among the lowest globally (August, Bixby, & Mayer, 2008). The increased rates of alcoholic beverages acted as a new source of the nation’s revenues. The government had limited sources of their revenues, and the act of raising the taxes was recognized to be an increased source of the government’s money. The revenue from taxes was obtained from the citizens and invested to assist the same citizens. Through this act, it was possible for the government to ensure equal distribution of resources in the whole nation.

The GATT principle of every member state to protect its domestic industries by the use of tariffs is applicable. It is a crucial aspect of every member country to make use of open and liberal trade rules. Through such follow-ups, it would be hard for any nation to use quantitative restrictions, except in special incidences. It is a complex way for member states to adhere to, but through the application of a few basic and clear rules, GATT manages to control member states (August, Bixby, & Mayer, 2008). The principle offers some exceptions to the countries that have difficulties in their balance of payment. Such countries are advised to minimize their levels of imports and manage their external financial status. This exception offers greater adjustment allowances in developing nations than in developed nations.

The developing nations are offered options and flexibilities of using quantitative restrictions to monitor their import levels. Member countries would manage their monetary reserves, and avoid future serious declines that may arise. Although this principle seems to be applicable, some sectors were not favored. The agricultural sectors in the developed nations could not avoid using the quantitative measures, which went beyond the GATT restrictions (August, Bixby, & Mayer, 2008). The same case applied to some countries that belong to European Unions by using variable levies while importing agricultural products. The variable levies were unavoidable and were used to ensure reasonable earnings to farmers. The same levies were used to differentiate what farmers earned, and what industrial workers earned. Developing nations were also imposing high tariffs and quantitative restrictions in both agricultural and industrial segments. The GATT principles were in line with the legal point of view, and that is why they were favorable to the majority.

Reference

August, K., Bixby, M., & Mayer, D. (2008). International Business Law. New York: Prentice-Hall.

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