Question 1

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

Accepted Answer

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Question 2

Discuss arbitration as a method of dispute resolution.

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Question 3

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 goal of promoting free trade between Canada, the United States, and Mexico. It aimed to eliminate barriers to the flow of goods, services, and investments among the three countries over a period of time.

Question 4

Explain export and import controls.

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Question 5

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 representatives from each member state, meaning that they do bring national concerns to the table.

Question 6

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

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Question 7

Compare and contrast the common-law system and the civil-law system.

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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 international courts and legal systems that handle commercial disputes between private parties, there is not a single court or system that has universal jurisdiction. Instead, there are multiple options available for parties to choose from, such as the International Court of Justice, the International Chamber of Commerce, and various arbitration forums. Additionally, some countries have their own domestic courts and legal systems that may be utilized for resolving disputes.

Question 9

How are the licensing and franchising methods of engaging in international trade different from one another?

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Question 10

Explain how the sovereign immunity doctrine is a risk for companies engaged in international business.

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Question 11

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 Court of Justice of the European Union (CJEU) performs the role of arbiter and final decision maker in conflicts between European Union law and individual member states, not the European Central Bank or the European Monetary Union.

Question 12

Tariffs and quotas are examples of export controls.

Accepted Answer

Tariffs and quotas are examples of import controls, used by countries to regulate the volume and price of goods coming into the country, not the goods being exported.

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) aims to promote free trade by reducing tariffs and other trade barriers. This generally makes it less risky and more cost-effective for multinationals to outsource production to countries with cheaper labor, as it facilitates the import of these parts back into the multinational's home country.

Question 14

Discuss the cultural dimensions of the international environment of business.

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Question 15

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 goals of the World Trade Organization were to promote free trade, reduce barriers to trade, and provide a platform for member states to negotiate trade agreements. The organization does not aim to create a customs union or establish a uniform external tariff for nonmembers.

Question 16

Joint ventures are used in host countries with fewer restrictions on foreign investment.

Accepted Answer

Joint ventures are often utilized in host countries where there are fewer limitations on foreign investment. This allows foreign companies to enter the market while sharing risks and costs with a local partner.

Question 17

Under the sovereign immunity doctrine, a company whose property has been expropriated cannot press its claims in its own country's courts.

Accepted Answer

Sovereign immunity doctrine provides immunity to foreign governments from being sued in the courts of another country. Therefore, a company whose property has been expropriated by a foreign government may not be able to pursue its claims in its own country's courts.

Quiz 8: The International Legal Environment of Business