1. Assume that all the following facts in the case are fictional. Do not make any

additional factual assumptions. All countries are WTO members.

- Vega imposes an excise tax of 10% on sales of energy drinks but 5% on sales of soft drinks. The

excise tax aims to discourage the consumption of energy drinks by the young population. In addition,

Vega requires that all energy drinks should be sold exclusively in pharmacies. Energy drinks cannot be

sold online or in any other stores, including convenient stores. Vega justifies the restriction based on the

assessment that high caffeine content in energy drinks would harm consumers' health. There is scientific

evidence that one serving of any drinks, including soft drinks and energy drinks, in size of 12 oz that

contains less than 50 mg of caffeine is not harmful to human health. However, more than one serving

with caffein consumption exceeding 50 mg for three hours is harmful to human health. Vega prohibits

pharmacies from selling more than one energy drink to a customer within three hours.