U.S. automakers have an interest to make it more difficult for European competitors to locate assembly plants in Canada or Mexico and thereby ship finished automobiles to the United States duty-free. This is an example of
A) trade deflection.
B) trade diversion.
C) quotas.
D) rules of origin.

Question

Quizplus · Accepted Answer

This is an example of "rules of origin," which are regulations that determine the national source of a product. By making it difficult for European competitors to ship finished automobiles to the U.S. duty-free through assembly plants in Canada or Mexico, U.S. automakers are influencing the rules of origin to protect their market.

US Automakers Have an Interest to Make It More Difficult