Question 1

The Chevron doctrine places the burden of proving the reasonableness of a regulation or order on the government agency that issued the regulation or order.

Accepted Answer

The Chevron doctrine actually defers to a government agency's interpretation of an ambiguous law that the agency administers, assuming the interpretation is reasonable, thus not placing the burden of proving reasonableness on the agency.

Question 2

T-TIP refers to the free trade negotiations between the United States and more than a dozen African countries.

Accepted Answer

T-TIP (Transatlantic Trade and Investment Partnership) refers to the free trade negotiations between the United States and the European Union, not African countries.

Question 3

Sanitary & Phytosanitary Measures (SMS) is a type of non-tariff trade barrier (NTB).

Accepted Answer

Sanitary & Phytosanitary Measures are a type of non-tariff trade barrier that involves regulations on food safety and plant health, aimed at protecting human, animal, or plant life or health. SMS measures can include requirements for certificates of origin, inspection of goods, and quarantine of animals or plants.

Question 4

Bilateral Investment Treaties (BITs) focus on only one type of international business-foreign direct investment.

Accepted Answer

Bilateral Investment Treaties (BITs) are agreements between two countries that focus on promoting and protecting foreign direct investment into the host country. Therefore, BITs specifically target international business through foreign direct investment only.

Question 5

State-owned or controlled enterprises, which are common in some counties, are not covered under Bilateral Investment Treaties.

Accepted Answer

Bilateral Investment Treaties (BITs) can include provisions for state-owned or controlled enterprises, although the specific terms may vary.

Question 6

BITs also prohibit or require fair and equitable treatment in cases of "creeping expropriation" (change in regulations and taxation.

Accepted Answer

BITs often include provisions on fair and equitable treatment that can apply in cases of "creeping expropriation," which refers to situations where a state indirectly expropriates foreign investments through regulatory or taxation measures. These provisions aim to protect foreign investors from arbitrary or discriminatory actions by the host state.

Question 7

Most foreign investment disputes are heard at the Center for International Bilateral Investment Disputes (CIBID).

Accepted Answer

Most foreign investment disputes are actually heard through ad hoc arbitration or through other international arbitration institutions such as the International Chamber of Commerce (ICC) or the London Court of International Arbitration (LCIA). While CIBID does exist as an option for investment dispute resolution, it is not the most commonly used forum.

Question 8

The requirement of reciprocity allows a country to deny access to a foreign company to a sector of its domestic economy when such access is being denied to American companies by the country of the foreign company.

Accepted Answer

The requirement of reciprocity means that a country can deny access to a foreign company to a sector of its domestic economy if American companies are being denied access to that same sector by the foreign country.

Question 9

A Trade and Investment Framework Agreement (TIFA) is a form of Cooperation Agreement.

Accepted Answer

A TIFA is a type of Cooperation Agreement specifically focused on enhancing trade and investment between countries.

Question 10

American Free Trade Zones (FTZs) are supervised by the Internal Revenue Service (IRS).

Accepted Answer

American Free Trade Zones (FTZs) are supervised by the Foreign-Trade Zones Board, which is a part of the Department of Commerce, not the Internal Revenue Service (IRS).

Question 11

A drawback is a refund of tariff duties paid for goods imported but are then later transferred into a Free Trade Zone.

Accepted Answer

The answer of A drawback is a refund of tariff...

Question 12

Maquiladoras are assembly plants located along the Mexican American border in order to take advantage of lower labor costs.

Accepted Answer

Maquiladoras are known for their ability to produce products inexpensively due to low wages and weak environmental regulations. They typically assemble or manufacture products that are then exported to other countries.

Question 13

An "absolute quota" allows some goods of a certain type to be imported up to a fixed amount; above that amount of goods a higher tariff rate on subsequent imports.

Accepted Answer

An "absolute quota" limits the quantity of goods that can enter the commerce of a country for a specific period to a fixed amount, and no more of those goods are allowed in once that quota is met, regardless of the tariff rate.

Question 14

"Privileged Foreign Status" allows for a determination of tariff duties when items are entered into a FTZ, when the items are imported out of the FTZ the duty owed is based on the earlier determination even if the items were further processed or changed while in the FTZ.

Accepted Answer

This statement is true. "Privileged Foreign Status" is a designation granted to merchandise that is admitted to a Foreign Trade Zone (FTZ) and is exempted from customs duties while in the zone. The duty owed for the merchandise is determined at the time of admission to the zone, and any subsequent processing or alteration of the merchandise does not affect the duty rate owed upon its eventual release into the United States or transfer to another FTZ.

Question 15

Common methods of reducing trade barriers include:

Accepted Answer

All three methods, Free Trade Agreement, Customs Union, and Free Trade Zone, are commonly used to reduce trade barriers. A Free Trade Agreement eliminates tariffs and other trade barriers between the participating countries. A Customs Union goes further by not only eliminating tariffs but also establishing a common trade policy with countries outside the union. A Free Trade Zone is a designated area where goods can be imported, exported, and stored without being subject to certain trade barriers such as tariffs and quotas. By using all three methods, trade barriers can be significantly reduced, resulting in increased trade and economic growth.

Question 16

The core principles that govern FTAs, are the same that govern the WTO:

Accepted Answer

The core principles that govern FTAs are Most-Favored Nation (MFN), National Treatment, and Transparency. These same principles also govern the World Trade Organization (WTO), and they form the basis for promoting fair trade practices and reducing trade barriers. Therefore, the correct answer is D, all of the above.

Question 17

Goods qualify as USMCA regional goods in the following situations:

Accepted Answer

Goods qualify as USMCA regional goods if they are wholly produced in USMCA territory (A) or if they undergo a substantial transformation in a USMCA country (C). Simply repackaging goods imported from outside the USMCA does not qualify them as regional goods under the agreement.

Question 18

USMCA Rules of Origins include a number of ways goods may be designated as USMCA goods:

Accepted Answer

The USMCA Rules of Origin include Change of Tariff Classification and Regional Value Content as methods for goods to qualify as USMCA goods. There is no "Special Request Procedure" in the rules.

Question 19

In order to win a case for the dumping of goods, a country must prove:

Accepted Answer

In order to win a case for the dumping of goods, a country must prove that the price of the goods is below the "normal value" and that there has been material injury to a Domestic Industry. The second option in choice B is not necessary, as the seller-exporter may still be making a profit overall, even if the price of the goods is below the normal value. Therefore, the correct choice is A & C Only.

Question 20

The Investigating Authorities for purposes of investigating violations of the USMCA Agreement include:

Accepted Answer

The Investigating Authorities for purposes of investigating violations of the USMCA Agreement include all of the above entities, which are the Canadian International Trade Tribunal, US International Trade Commission, and Mexican Secretaría de Economía.

Quiz 5: International National Trade Regulation