• April 26th, 2016

World trade law- year 2 assessment

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Since 2008, Nana Motors, Newland’s largest car manufacturer, has been selling the Tato, a four passenger rear-engined city car. The Tato is the cheapest car in the world. It is sold for £3000 in Richland, one of its export markets. This is well below the price of other city cars such as the Taif 500, a front engine city car produced by Taif Motors of Richland.


In response to the strong sales of the Tato in Richland and pressure from the domestic industry, Richland has adopted an amendment to its car safety legislation. The amendment requires rear-engined city cars to be equipped with side airbags in addition to frontal airbags. Front-engined city cars do not have to be equipped with side airbags. The Tato Plus has no side airbags but could be equipped with them at a cost of £300 per car. In justification of the side airbag requirement for rear-engined city cars, Richland argues that rear-engined city cars pose a greater risk to the safety of their driver and passengers than front-engined city cars. Crash tests confirm that front-engined cars are safer than rear-engined cars in the case of a head-on collision which is a rare event compared to a side collision.


A recent survey showed that people in Richland generally consider front-engined cars to be much safer than rear-engined cars, although that does not seem to stop them from buying rear-engined cars. Nana Motors questions whether the increased safety, if any, resulting from side airbags is proportionate to the significant additional cost.


The side airbag requirement entered into force two months after its publication in the Official Gazette of Richland. Rear-engined city cars produced in, and imported, from Rockland will be exempted from the side airbag requirement for two years. This should allow RockCar, Rockland’s struggling manufacturer of city cars, to adapt to this new requirement. Under the terms of the Richland – Rockland bilateral free trade agreement, such grace period of two years is mandatory.


Contemporaneous with the adoption of the amendment to Richland’s car safety legislation, the Richland Committee for Standardization, a non-governmental standardizing body approved a new standard, Standard No. 412 on ‘Side Impact Protection – Rear-Engined City Cars. This standard specifies performance requirements for protection of occupants of city cars in side impact crashes. The purpose is to reduce the risk of serious and fatal injury to occupants of rear-engined city cars. While Standard No. 412 is not mandatory, Nana Motors is very concerned about this standard, as the Tato would not currently meet the performance requirements. Nana Motors points out that the performance requirements set out in Standard No. 412 are much higher than the performance requirements set out in the standard approved by the International Car Manufacturer’s Association in 1970.

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