Question 1

The goals of the World Trade Organization were to create a "customs union" that would do away with internal tariffs among the member states and to create a uniform external tariff to be applied to all nonmembers.

Accepted Answer

The stated goals of the World Trade Organization regarding tariffs are incorrect. The primary goal of the World Trade Organization is to promote free trade and reduce barriers to trade among member states. It also provides a forum for members to negotiate and settle trade disputes. It does not seek to create a customs union or impose a uniform external tariff on nonmembers.

Question 2

Which of the following statements is true of the arbitration of disputes?

Accepted Answer

Arbitration can come about through treaties, as countries may agree to resolve disputes through arbitration rather than litigation.

Question 3

Arbitration clauses in contracts involving international business transactions should include all but which of the following?

Accepted Answer

The clause should include details on the law that will govern the arbitration, the location and timeline for the arbitration, and how the expenses will be shared. However, it should not include the question of whether a judge or jury will render a verdict in the arbitration; that decision should be made beforehand and included in the contract.

Question 4

The Council of Ministers of the European Union (EU) consists of 20 members who represent the EU, not national concerns.

Accepted Answer

The Council of Ministers of the European Union (EU) consists of one representative of each EU member state who represents their national government's interests.

Question 5

Discuss arbitration as a method of dispute resolution.

Accepted Answer

The answer of Discuss arbitration as a method of dispute...

Question 6

The International Chamber of Commerce offers a permanent tribunal.

Accepted Answer

The International Chamber of Commerce offers a permanent tribunal for arbitration, which is a private and legally binding way to resolve commercial disputes without the need for court proceedings. Mediation is a non-binding process, while summary jury and mock jury trials are used in the United States and not offered by the International Chamber of Commerce.

Question 7

Litigation can be used to resolve a dispute between parties when .

Accepted Answer

Litigation can be used as a means of dispute resolution when contracts do not contain arbitration clauses.

Question 8

There exists a single international court and legal system capable of resolving all commercial disputes between private parties.

Accepted Answer

While there are a number of international courts and legal systems that handle commercial disputes between private parties, there is no single court or system that is capable of resolving all such disputes. The choice of forum will depend on various factors, including the type of dispute and the jurisdictions involved. Some of the most well-known international courts and tribunals include the International Chamber of Commerce (ICC), the International Court of Arbitration (ICA), and the World Trade Organization's Dispute Settlement Body (WTO DSB).

Question 9

Because there is no single international court or legal system capable of resolving all commercial disputes between private parties, a choice-of- clause should be negotiated in all agreements involving major transactions.

Accepted Answer

A choice-of-forum clause specifies which court or jurisdiction will hear any disputes that may arise between parties in a commercial transaction.

Question 10

Which of the following is a dispute resolution process that goes through the judicial system?

Accepted Answer

Litigation involves resolving a dispute through the court system, with a judge or jury making a final decision. Arbitration, mediation, and conciliation are alternative dispute resolution processes that aim to resolve disputes outside of the court system.

Question 11

is a dispute resolution process whereby parties submit their disagreements to a private individual decision maker they have agreed on or to a panel of decision makers whose selection has been provided for in the contract the parties signed.

Accepted Answer

The description best matches the definition of arbitration. The parties agree to submit their dispute to a neutral third party, and the decision made by the arbitrator(s) is binding.

Question 12

Private international business contracts include a(n) clause so that the parties know which family of law is to be applied in case of a dispute and what nation's courts will be used.

Accepted Answer

A choice-of-forum clause specifies the jurisdiction (which court or arbitration tribunal) that will adjudicate the case, in case of a dispute. It also specifies the governing law that will be used to decide the case. This clause allows the parties to avoid ambiguity and possible disputes about jurisdiction and applicable law.

Question 13

The World Trade Organization pact makes it more risky for multinationals to have parts built in cheap-labor countries and then brought back to the multinational's home country for use in making a product.

Accepted Answer

The World Trade Organization (WTO) pact generally aims to reduce trade barriers and facilitate international trade, making it less risky for multinationals to source parts from cheap-labor countries.

Question 14

's Commercial Court, established in 1895, is the most popular neutral forum for resolving commercial litigation.

Accepted Answer

The statement specifically mentions "Commercial Court" which is a division of the High Court in London, making London the correct choice.

Question 15

Members of the World Trade Organization can veto the findings of an arbitration panel.

Accepted Answer

WTO members can appeal the findings of an arbitration panel to the Appellate Body, but they cannot veto them.

Question 16

The North American Free Trade Agreement (NAFTA), ratified in 1994, sought to eliminate barriers to the flow of goods, services, and investments among Canada, the United States, and Mexico over a 15-year period.

Accepted Answer

NAFTA was ratified in 1994 with the aim of reducing barriers to trade among Canada, the United States, and Mexico over a period of 15 years.

Question 17

The European Central Bank and the European Monetary Union perform the functions of arbiter and final decision maker in conflicts between European Union law and individual member states.

Accepted Answer

The European Court of Justice, not the European Central Bank or the European Monetary Union, serves as the arbiter and final decision maker in conflicts between EU law and member states.

Question 18

What impact has the World Trade Organization (WTO) had on corporate investment decision making?

Accepted Answer

The answer of What impact has the World Trade Organization...

Question 19

Which of the following is the ultimate goal of the North American Free Trade Agreement (NAFTA)?

Accepted Answer

The ultimate goal of the North American Free Trade Agreement (NAFTA) is the creation of a totally free trade zone among the three member states (Canada, Mexico, and the United States). This involves the elimination or reduction of trade barriers, tariffs, and quotas between the member states, and the establishment of rules governing trade and investment among them. The agreement also includes provisions on intellectual property rights, dispute resolution, and environmental and labor standards, but these are intended to support and facilitate the goal of free trade rather than create a "social dimension" or establish a monetary union or common prices for goods.

Quiz 8: The International Legal Environment of Business