Chile has recently proposed amendments to its Food Health Regulations. The new r

Question

Chile has recently proposed amendments to its Food Health Regulations. The new regulations would require "STOP" sign labels on junk food to alert the consumer to stop and think before consuming the unhealthy food. Hershey's is a US producer of many different junk food products, and has been exporting these goods regularly to Chile. Discuss the reasons why Chile’s proposal to require “STOP” signs on junk food would be a topic for consideration by the WTO. Would it make a difference if Chile required the "STOP" sign warnings only on imported junk food and did not have the same requirements for junk food that was produced in Chile? What effect would this regulation have upon Hershey and upon the local and global economy?

Explanation / Answer

Ans.

Several delgations nade concerns regarding Chile's proposal to place STOP sign on junk food.It has been topic for consideration by WTO beacuse delegations are concerned that this proposed amendment was not based on relevant guidelines of Codex on nutrition labelling. As it will create obstacles to international trade unnecessarily and it had not been notified to trade to barrier (TBT) committee.Whereas Chille said that it was necessary to take measure against obesity among young people and give understandable warnings about the products consumed.

If Chile makes warning sign only on imported goods and not on domestic goods then it would be an obstacle in international trade as it is harmful for those countries whose products are being imported as there goods will be less consumed in Chile making them worse off in Chile .Since Chile is concerned about citizens to consume healthy goods so it must make warning signs on domestic junk food as well. In past 50 years back Chile was suffering problem from malnutrition.And with technology upliftment from 20 years there are more packaged food.So Chile is now concerned with consumption of nutritious food among young taking protectionist measures in international trade of food industry.So certainly it will make difference and hurt other economies if such discrimination is made by Chile. The safety standards must be followed in local economy as well . Moreover Hershey exporting junk food to Chile will have to put warning sign and bear labels such as hign in suar, high in calories .etc. It will effect Hershey as there will also be high tax on such products in Chile making restricted trade of there products.Hershey might also start producing those products with less calories so that it is able to earn profits and continues to increase its exports.However such regulation will make restiction on exporting junk food to Chile. It will effect global economy as there will be restrictions on trade flows, whereas for local economy it will be benficial as there will be less consumption of junk food and increase production domestically with high quality standard food.

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