In the past, the US and Kuwait had reasonable trade balance. Kuwaiti citizens bought a lot of consumer goods, automobiles, and intellectual property from the United States, and the US bought a lot of oil from Kuwait. As the US has reduced its dependence on foreign oil, through increased domestic drilling and converting to electric vehicles, this trade ledger has become increasingly imbalanced.

Because of this, Kuwait has announced three new policies. They have decided to create tariffs on all goods from the US. Additionally, they have put a quota of 10,000 US autos being imported each year, and is allowing Kuwaiti theaters to only release 50 US Films a year.

They hope these action will encourage the US to buy more Kuwaiti oil, but failing that, they believe it will allow domestic producers of films to be more competitive and shift imports on autos towards the EU, which has been a more willing trade partner for corresponding Kuwaiti goods in the past. In the EU, Kuwait has been able to actually increase their exports beyond oil because of the popularity of a Kuwaiti scooter popular with Europeans. The same scooter is too expensive in the US, because it is subject to a large tariff because it does not run on an engine that can process any ethanol.

The US is frustrated by these actions, and decides to challenge the policies at the WTO.

Please answer the following questions.

1. What is the WTO likely to think about Kuwait creating tariffs on US goods? What is the general rule and when are countries allowed to limit trade? Would any of the possible exceptions be applicable here?
2. What is the WTO likely to think about the Kuwaiti quotas on autos and films? Would Kuwait be better off giving Kuwaiti film makers money to subsidize their films to allow them to make bigger budget movies, on scale with US productions?
3. Kuwait was hoping to import the goods into Canada, where they are tariff free, and then have them sold to the US from Canada. NAFTA prohibits tariffs on goods coming from Canada. Kuwait believes this should be easy, because they currently only sell the scooters to Italy in the EU, but then they are distributed to all the other EU countries. Will this plan work? If not, why not? How are the EU agreement and NAFTA different in this area?
4. Ford, which currently manufactures cars in the US, wants to start shipping the cars to Canada to be painted and detailed. They could then have them shipped from Canada to Kuwait, avoiding the tariff because they hope they would be considered Canadian goods. Kuwait has the same process for determining the dutiable status of goods that the US has. Will Ford's plan work? Why or why not? If not, what could they do instead?