True / False
1. Production sharing is intended to create U.S. jobs by encouraging the use of U.S.-made components when assembly
of a product takes place in a foreign country.
a. True
b. False
2. In Samsonite Corporation v. United States, the Court ruled that the luggage handles were assembled in Mexico
and therefore not subject to duties and reversed the lower court’s decision.
a. True
b. False
3. Canada and the United States are each other’s largest trading partners.
a. True
b. False
4. A free trade area is a group of two or more sovereign countries in which import duties and other trade barriers are
reduced or eliminated.
a. True
b. False
5. NAFTA has evolved into a political union similar to the European Union because it is a economic union.
a. True
b. False
6. NAFTA was built on the Mexico-Canada Free Trade Agreement.
a. True
b. False
7. The passage of NAFTA is unpopular with private sector of the economy in Mexico.
a. True
b. False
8. A criticism raised against NAFTA is that it serves to divide the world into regional trading blocks.
a. True
b. False
9. Two U.S. groups that have tended to oppose NAFTA are labor unions and the Free Enterprise Institute.
a. True
b. False
10. NAFTA has had a modest positive effect on U.S. net exports, income, investment, and jobs.
a. True
b. False
11. Since NAFTA was signed, Mexico has reduced its average applied tariffs on U.S. imports by slightly more than 1%.
a. True
b. False
12. NAFTA members have raised tariffs on non-North American products in order to stimulate trade between the U.S.,
Canada, and Mexico.
a. True
b. False
13. Under NAFTA, a customs broker must have an office or residence within the borders of a country in order to do
business in that country.
a. True
b. False
14. NAFTA tolerates the imposition of regulations when based on health regulations and safety standards which are not
implemented as non-tariff barrier.
a. True
b. False
15. Mexico‘s marking and labeling requirements are very easy to comply with and help promote trade with both the U.S.
and Canada.
a. True
b. False
16. Sectoral issues are issues of concern to a particular industrial, agricultural, or service sector of the economy.
a. True
b. False
17. Canada, Mexico, and the United States phased out, over a ten-year period, all tariffs on textile and apparel goods
that met the North American rules of origin.
a. True
b. False
18. Tariff-rate quotas are fixed-rate tariffs on agricultural goods.
a. True
b. False
19. NAFTA eliminated all tariffs on telephones, cellular phones, and trade in communicates equipment in 2004.
a. True
b. False
20. Under NAFTA, a country can make citizenship a requirement for intellectual property rights protection.
a. True
b. False
21. NAFTA sets environmental standards for all three countries that were met in 2004.
a. True
b. False
22. A customs union is a free trade area with a common external tariff.
a. True
b. False
23. NAFTA‘s national treatment principle states that differing standards for North American products must be justified.
a. True
b. False
24. No other trade sector is as complex or as highly regulated as trade in textiles.
a. True
b. False
25. For most products undergoing a transformation in North America, the rule of origin is based on its tariff
classification.
a. True
b. False
26. U.S. businesspeople complain that the quality of manufactured goods in the Mexican maguiladoras plants are below
industry standards.
a. True
b. False
27. The Free Trade Area of the Americas (FTAA) was successfully passed by the United States, Canada, Mexico and
all the southern neighbors.
a. True
b. False
28. Trademarks are not protected under NAFTA and the owner of the trademark must register with the United States,
Canada, and Mexico.
a. True
b. False
29. NAFTA requires that each country enforce its Intellectual Property Rights laws, both internally and at the border.
a. True
b. False
30. Under NAFTA as a common market for labor and workers have the freedom of movement within the United States,
Canada, and Mexico.
a. True
b. False
31. The maquiladoras along the U.S. and Mexican border are regulated under NAFTA.
a. True
b. False
32. In Samsonite v. United States, the court found that:
a. Samsonite luggage was causing serious injury to the Canadian luggage market.
b. Processing of the metal strips was a fabrication, and therefore not qualified for duty-free treatment.
c. The processing of the metal strips was a mere assembly and therefore qualified for duty-free treatment.
d. Samsonite luggage did not cause serious injury to the Mexican luggage industry.
33. A free trade area is:
a. Two countries that have a common external tariff.
b. A geographic area between two countries where there are no tariffs.
c. A group of two or more countries in which import duties and other trade barriers are reduced or eliminated.
d. A geographic area between two countries where tariffs are reduced, but not necessarily eliminated.
34. NAFTA was based on:
a. The U.S.-Canada Free Trade Agreement.
b. The General Agreement on Tariffs and Trade.
c. The Generalized System of Preferences.
d. The North American Agreement on Labor Cooperation.
e. None of the above.
35. Harmonized tariff schedules break down product classifications into:
a. 6 digits.
b. 8 digits.
c. 10 digits.
d. 12 digits.