Question 1

The Republic of Garbino is a signatory to the General Agreement on Tariffs and Trade and a member of the WTO. Article III:2 of GATT says that a government must accord the same or better tax treatment to imported goods as it does to domestic products. Garbino imposed a tax on imported lumber of 13 cents per board foot while its own lumber is taxed at 5 cents per board foot. Its own lumber industry is small and very inefficient. It exports a variety of manufactured goods to Canada.

Accepted Answer

This answer reflects the correct understanding of GATT rules and the likely consequence of Garbino's actions. Option A is incorrect because countervailing duties are a legitimate response to violations of GATT rules. Option B is partially correct, but it does not mention the potential consequences of violating GATT rules. Option C is a correct statement, but it does not address the consequences of Garbino's violation of GATT rules. Option D is incorrect because countervailing duties are a legitimate response to violations of GATT rules.

Question 2

The risk attached to international operations lies on a spectrum from fairly low through extremely high. Where would "export operations" sit on this spectrum?

Accepted Answer

Export operations typically involve less risk compared to other international operations such as direct investment, joint ventures or mergers and acquisitions. Export operations involve simply shipping products to customers in foreign countries, whereas other international operations may involve significant investments and financial commitments, political risks, cultural differences, and legal complexities. Therefore, export operations would be categorized as fairly low risk on the spectrum.

Question 3

The bill of lading in an international commercial transaction is a contract between the _________________ and the ___________________. It serves as a _____________________ and a __________________.

Accepted Answer

The bill of lading in international trade acts as a contract of carriage between the shipper (the party who sends the goods) and the carrier (the party responsible for the transportation of goods). It also serves as a title document, indicating ownership of the goods being transported.

Question 4

Canada would like to increase its exports to the Eastern European country of Estavia, but there is still a great deal of political uncertainty there. Your firm makes small consumer appliances. You would like to find out if there is a market in Estavia for your goods and, if there is, how you can market your goods there most effectively. You are also worried about whether or not, in a country as politically unstable as Estavia, you can protect your own interests if you do trade there. Which of the following institutions would be of help to you?
i. A customs brokerage firm.
ii. The Export Development Corporation.
iii. The Auto-pact.
iv. The Department of External Affairs.
v. The Canadian International Development Agency.
vi. The merchants' guilds.

Accepted Answer

i. A customs brokerage firm may be helpful in navigating the customs procedures, but may not provide assistance with market research or political instability concerns.
ii. The Export Development Corporation can provide market research and risk management services for Canadian exporters, which would be useful in determining the viability and risks associated with exporting to Estavia.
iii. The Auto-pact is a trade agreement between Canada and the United States and would not be relevant in Canada's exports to Estavia.
iv. The Department of External Affairs can provide political risk analysis and assistance in protecting Canadian interests abroad, which would be useful in mitigating concerns about political instability in Estavia.
v. The Canadian International Development Agency focuses on providing support for development projects in developing countries and would not be directly relevant for an exporter.
vi. The merchants' guilds are industry associations and trade unions, and may not be directly relevant for a small consumer appliances exporter looking to enter the Estavian market.

Question 5

Gift Importers Ltd. has a contract with a Philippine government exporting agency for the purchase of numerous handmade artifacts. Since neither party was comfortable having the courts of the other party's country adjudicate any disputes between them, the contract contains a clause which identifies the procedure by which a third party acceptable to both would settle any disputes. If a dispute resolution procedure is not part of the original contract, neither the Philippine government nor Gift Importers can impose it on the other at a later date.

Accepted Answer

The answer of Gift Importers Ltd. has a contract with...

Question 6

As the result of a complaint by the Society of Canadian Slide Fastener Manufacturers, it was determined by the Deputy Minister of National Revenue for Customs and Excise that Toshima Kogyo K.K., Tokyo had exported zippers to Canada that had been produced with subsidies from the Japanese government, and which permitted Toshima to sell them at a much cheaper price than Canadian manufacturers could sell their zippers. A duty designed to offset that advantage was imposed against such goods of Toshima's, under the

Accepted Answer

The answer of As the result of a complaint by...

Question 7

How may an ongoing relationship for the foreign distribution of goods be structured?

Accepted Answer

An ongoing relationship for the foreign distribution of goods can be structured through any of the given ways - foreign distribution agreement, creation of a foreign branch plant or sales office, joint venture agreement, or licensing of patents. The choice of the best structure would depend on factors such as the level of control and risk desired by the company, the size and scope of the market, and the legal and regulatory requirements in the foreign country. Therefore, all of the ways listed should be considered when structuring an ongoing relationship for foreign distribution of goods.

Question 8

What Canadian legislation has the direct effect of protecting Canadian manufacturers; as illustrated by the Canadian International Trade Tribunal ruling regarding appliances?

Accepted Answer

The Special Measures Import Act (SMIA) allows the government to impose temporary safeguards, such as tariffs or quotas, to protect Canadian industries from a surge of imported goods that are causing, or threaten to cause, serious injury to domestic producers. The ruling by the Canadian International Trade Tribunal (CITT) in the appliance case determined that Chinese manufacturers were "dumping" refrigerators into the Canadian market at unfair prices, causing injury to the Canadian industry. As a result, the Canadian government implemented temporary safeguards under the SMIA to protect Canadian manufacturers.

Question 9

Which country asserts the right to apply its laws outside of that country (extra-territoriality)?

Accepted Answer

The answer of Which country asserts the right to apply...

Question 10

International business transactions significantly increase risk. What new elements are introduced that result in increased risk?

Accepted Answer

All the choices are applicable and introduce new elements that increase risk in international business transactions. Contractual relations with a foreign party pose risks such as language barriers, cultural differences, and legal systems that may differ from that of the home country. Another legal jurisdiction introduces risks associated with unfamiliar legal systems, laws, and regulations. International rules also increase risk as they may conflict with domestic laws and regulations, making it difficult to comply with both. All these elements combined make international business transactions inherently riskier than domestic transactions.

Question 11

Memorial Stone Carvers Ltd. makes special imports of marble from Italy. It has just found out that it may have been overpaying customs duties because the wrong rate may have been applied. Under which of the following statutes would it be able to appeal the Customs duty rate decision?

Accepted Answer

The answer of Memorial Stone Carvers Ltd. makes special imports...

Question 12

You are the world's leading manufacturer of computerized range-finding equipment, and you want to export your products to Libya and North Korea. With which of the following might you need to concern yourself?
i. The Customs Act.
ii. The Export and Import Permits Act.
iii. A foreign distribution agreement with your foreign contact
iv. A force majeure clause in a distribution contract.
v. Bills of lading.
vi. Political risk insurance.

Accepted Answer

The answer of You are the world's leading manufacturer of...

Question 13

Gift Importers Ltd. has a contract with a Philippine government exporting agency for the purchase of numerous handmade artifacts. Since neither party was comfortable having the courts of the other party's country adjudicate any disputes between them, the contract contains a clause which identifies the procedure by which a third party acceptable to both would settle any disputes. The two parties in this case chose a German, Holtz, as their arbitrator. The contract is silent as to the language of an arbitration. Though neither party to the dispute has German as their native tongue, it would by custom probably be the language of this arbitration.

Accepted Answer

Since the arbitrator chosen by the parties is German, it is likely that the language of the arbitration would be in German due to custom. The contract does not specify the language, so it is not determinative.

Question 14

Merchandise of all kinds is a profitable spin-off of its movies, but Disney has no interest or ability in operating a thousand factories to turn out these products. What is the perfect solution for Disney?

Accepted Answer

The perfect solution for Disney to handle the production of merchandise from its movies is licensing. This allows Disney to grant other companies the right to produce and distribute products with their intellectual property, while still retaining control over the use of their brand and receiving royalties from the sales of these products. This way, Disney can focus on its core competencies of creating movies and storytelling while still benefitting from the profits of merchandise sales.

Question 15

Gift Importers Ltd. has a contract with a Philippine government exporting agency for the purchase of numerous handmade artifacts. Since neither party was comfortable having the courts of the other party's country adjudicate any disputes between them, the contract contains a clause which identifies the procedure by which a third party acceptable to both would settle any disputes. In order to protect itself from an after-the-fact application of Philippine law, which, for example, would remove or alter some of the protections for Gift Importers in the contract, Gift Importers should insist on a clause by which the third party who is to resolve disputes would operate in a country other than Canada or the Philippines and under internationally recognized rules.

Accepted Answer

By requiring the third party to operate in a country other than Canada or the Philippines, Gift Importers can ensure that the dispute resolution process is not subject to the laws of either country, which may be biased towards one of the parties. Additionally, by using internationally recognized rules, the parties can ensure that the dispute resolution process is fair and impartial, and that the outcome is enforceable in multiple jurisdictions. Overall, these protections can help Gift Importers to avoid any potential legal challenges or disputes that may arise from their contract with the Philippine government exporting agency.

Question 16

What is the test to determine if goods qualify for preferential NAFTA treatment?

Accepted Answer

The test to determine if goods qualify for preferential NAFTA treatment is through rules-of-origin, which specify the minimum regional content and other requirements that goods must meet to be considered originating within the NAFTA region.

Question 17

Gift Importers Ltd. has a contract with a Philippine government exporting agency for the purchase of numerous handmade artifacts. Since neither party was comfortable having the courts of the other party's country adjudicate any disputes between them, the contract contains a clause which identifies the procedure by which a third party acceptable to both would settle any disputes. The contract identifies the UNCITRAL rules as being the procedure to be used in the arbitration. Holtz may choose to follow that or to follow the relevant law of the country in which the contract was formed, that is, the country of the party accepting the contract.

Accepted Answer

The contract specifies that disputes will be settled according to the UNCITRAL rules, which means both parties have agreed to follow an international arbitration procedure rather than defaulting to the laws of the country where the contract was formed or any other national legal system.

Question 18

Gift Importers Ltd. has a contract with a Philippine government exporting agency for the purchase of numerous handmade artifacts. Since neither party was comfortable having the courts of the other party's country adjudicate any disputes between them, the contract contains a clause that identifies the procedure by which a third party acceptable to both would settle any disputes. This procedure is known as commercial arbitration.

Accepted Answer

The passage clearly mentions that the contract contains a clause for the settlement of disputes through commercial arbitration, which is a procedure involving a third party acceptable to both parties.

Question 19

Of the following, the most important document(s) in an international contract for the sale of goods between a raw material supplier in Nova Scotia and a factory in Spain would be

Accepted Answer

The answer of Of the following, the most important document(s)...

Question 20

Which of the following is not part of the mandate of the Export Development Corporation?

Accepted Answer

The organization of trade missions and support of Canadian exporters who wish to travel and attend international trade shows abroad is not explicitly mentioned as a part of the mandate of the Export Development Corporation. However, it is possible that this falls within their general mandate to support Canadian exporters in expanding their international market presence. The other options, including the provision of security for payment, loan guarantees, and insurance against risks, are explicitly stated as part of the EDC's mandate.

Quiz 33: Intellectual Property, Patents, Trademarks, Copyrights and Franchising