MAR4156 Int'l Marketing Ch. 3 Midterm Bank

Custom unions or a common market does not create a free trade area as compared to NAFTA due to: A) no common external tariffs. B) decreased production costs. C) reduced competition. D) ease of exporting commodities. E) creation of a continental demand.

A) no common external tariffs.

One of the most exciting projects in the Central American region in 2014 was: A) the enlargement of the Panama Canal. B) Central America's effort to revive its common market. C) the five original members' decision to reestablish the CACM. D) the establishment of Guatemala as region's headquarter. E) the Free Trade Agreement with the United States.

A) the enlargement of the Panama Canal.

The form of economic cooperation that calls for countries to eliminate all internal barriers to trade among themselves even while maintaining independent trade policies vis-à-vis third countries is known as a(n): A) Economic union. B) Customs union. C) Free trade area. D) Common market. E) None of the above

C) Free trade area.

Which member of the Central American Integration System has both the largest economy and the largest population? A) El Salvador B) Honduras C) Guatemala D) Nicaragua E) Costa Rica

C) Guatemala

The Secretariat for Central American Integration is headquartered in: A) El Salvador. B) Honduras. C) Guatemala City. D) Nicaragua. E) Costa Rica.

C) Guatemala City.

The original six members of the ASEAN (Association of Southeast Asian Nations) included all of the following countries except: A) Singapore. B) Thailand. C) India. D) Philippines. E) Brunei.

C) India.

Trade ministers representing the WTO member nations meet ________ to work on improving world trade. A) weekly B) monthly C) annually D) biannually E) fortnightly

C) annually

There are barriers in Japan for global marketers in terms of attitudes as well as laws. Barriers include all of the following except: A) any organization wishing to compete in Japan must be committed to providing top-quality products and services. B) repeat visits and extended socialization with distributors. C) goods marketed should have a semblance of western products and services. D) marketers must master the keiretsu system of tightly knit corporate alliances. E) trust has to be built before conducting successful business.

C) goods marketed should have a semblance of western products and services.

The English-speaking CARICOM members in the eastern Caribbean are concerned with defending their privileged trading position with: A) Russia. B) China. C) the United States. D) the United Kingdom. E) Australia.

C) the United States.

Which form of regional cooperation agreement, when fully implemented, entails creation of a unified central bank, the use of a single currency, and common policies on agriculture, social services, and welfare? A) Free trade area B) Customs union C) Common market D) Economic union E) Dispute settlement body

D) Economic union

Implementation of the Central American Free Trade Agreement with the United States created a free trade area known as DR-CAFTA that includes all SICA members except: A) Honduras. B) Guatemala. C) Nicaragua. D) Panama. E) Costa Rica.

D) Panama

In 2014, the EU filed a complaint that the government of Washington state violated international trade rules by: A) charging that cotton subsidies depressed prices and disadvantaged producers in emerging markets. B) prohibiting Internet gambling, the United States was violating global trade agreements. C) imposing 30 percent tariffs on a range of steel imports for a period of three years. D) imposing tariffs on a range of products imported from Brazil. E) extending tax incentives to Boeing for in-state manufacture of the 777x jetliner.

E) extending tax incentives to Boeing for in-state manufacture of the 777x jetliner.

T/F. A Customs Union represents the most fully developed form of preferential trade agreement among nations.

False

T/F. A free trade area represents the most fully developed form of preferential trade agreement among nations.

False

T/F. A preferential trade agreement is a mechanism that confirms special treatment on select trading partners, thereby at times discriminating against other trading partners.

False

T/F. Chile decided to become only an associate member of Mercosur and hence participates in the free trade area aspect of Mercosur as well as the customs union.

False

T/F. Competing ideologies in South America help explain why intraregional trade is yielding more benefits.

False

T/F. Implementation of the Central American Free Trade Agreement with the United States created a free trade area known as DR-CAFTA.

False

T/F. It is mandatory for countries to notify the WTO when they enter into preferential trade agreements.

False

T/F. Mercosur or the Common Market of the South resulted from a treaty signed by four countries: Argentina, Brazil, Paraguay, and Venezuela.

False

T/F. The five original members of the Central American Common Market (CACM) are El Salvador, Honduras, Guatemala, Panama, and Cost Rica.

False

T/F. The ultimate goal of a free trade agreement is to have standardized duties on goods that cross borders between the partners.

False

T/F. Anxious to retain control of a valuable agricultural export, officials at Peru's National Commission Against Biopiracy have ramped up efforts to prevent maca seeds from being smuggled out of the country for cultivation elsewhere.

True

T/F. CARICOM's main objective has been to achieve a deepening of economic integration by means of a Caribbean common market.

True

T/F. Despite trade agreements, attempts to achieve integration in Central America have been described as uncoordinated, inefficient, and costly. There are still tariffs on imports of sugar, coffee, and alcoholic beverages.

True

T/F. GATT (General Agreement on Tariffs and Trade) agreement had no enforcement power since the losing party in a dispute was entitled to ignore the ruling.

True

T/F. In October 2011, the U.S. Congress finally ratified the long-delayed free trade areas with South Korea, Panama, and Colombia.

True

T/F. In a Common Market there are no internal barriers to trade, and it allows for free movement of factors of production such as labor and capital.

True

T/F. In addition to eliminating internal barriers to trade, members of a customs union agree to the establishment of common external tariffs.

True

T/F. Some companies choose not to produce in Mexico since a lack of checkpoints means that cargo sits on trucks at bottleneck points such as Tijuana, a key hub for manufacturing.

True

T/F. The United States and the EU have the world's largest trading relationship.

True

T/F. The WTO's neutral trade experts also serve as mediators in global trade disputes.

True

T/F. Under Economic Union, a doctor or lawyer qualified in one country can practice in another member country.

True

A Canadian-built Caterpillar grader tractor imported into Chile would not be subject to duty because: A) Chile and Canada established an FTA. B) tractors made in Canada are more durable. C) tractors made in Canada do not require certification. D) locally made tractors are more expensive in Chile.

A) Chile and Canada established an FTA.

________ is gaining a reputation as a manufacturing center as well as the world's number one producer of flat-screen TV sets. A) Mexico B) Canada C) Brazil D) Panama E) Argentina

A) Mexico

Which one of the ASEAN members has the World's second-largest container port? A) Singapore B) Thailand C) India D) Philippines E) Brunei

A) Singapore

Argentina was allowed to break from the CET and raise duties on consumer goods. This crisis had a silver lining, which is evident from all of the following points except: A) Argentina's wine exports to the United States were worth four times more when dollar revenues were converted into pesos. B) Argentina became known for the world's most expensive wines. C) the currency devaluation made Argentine vineyard property cheaper for foreign buyers. D) low prices for land, inexpensive labor, and ideal growing conditions for the Malbec grape have combined to make Argentina's wine industry a major player in world markets. E) Argentina can make better wine locally for less money than anywhere in the world.

B) Argentina became known for the world's most expensive wines.

________ builds upon the elimination of internal tariff barriers, the establishment of common external barriers, and the free flow of factors. A) European Union B) Economic union C) Customs union D) Free trade area E) Common market

C) Customs union

Argentina provides a good example of how a country can emerge from an economic crisis as a stronger global competitor as per the following statement: A) Argentina reduced the duties on consumer goods. B) Argentina devalued its currency for exports and capital transactions. C) Argentina added tariffs on imported wines. D) Argentina adopted the U.S. dollar as official currency. E) Argentina added tariffs on wine produced within the country.

B) Argentina devalued its currency for exports and capital transactions.

Blackberry (formerly known as Research in Motion), the smartphone marketer, is based in: A) Mexico. B) Canada. C) Brazil. D) Argentina. E) The Netherlands.

B) Canada

The country that withdrew from the original members of the Andean Community is: A) Bolivia. B) Chile. C) Ecuador. D) Peru. E) Venezuela.

B) Chile.

The World Trade Organization, which came into existence on January 1, 1995, is the successor of another organization with the abbreviation: A) DSB. B) GATT. C) FTAA. D) NAFTA. E) ASEAN.

B) GATT.

The "Common Market of the South" in Latin America is used to describe: A) SICA. B) Mercosur. C) Andean Community. D) CARICOM. E) FTAA.

B) Mercosur.

The allure of the Latin American market has been its: A) lack of inflation. B) considerable size. C) rapid economic growth. D) low foreign debt. E) protectionism.

B) considerable size.

NAFTA creates a free trade area, as opposed to a customs union or a common market, due to the fact that: A) the agreement does not leave the door open for discretionary protectionism. B) the governments of all three nations decided to eliminate tariffs. C) the issue of illegal immigration from Mexico to the United States is resolved. D) restrictions are imposed on the use of goods, services, and investments. E) restrictions are imposed on labor movements among members.

B) the governments of all three nations decided to eliminate tariffs.

The form of economic cooperation that calls for 1) eliminating internal barriers to trade and 2) establishing common external barriers is known as a(n): A) European Union. B) Economic union. C) Customs union. D) Free trade area. E) Common market.

C) Customs union

Arrange the following in order from lowest to highest level of economic integration. A) customs union→economic union→free trade area→common market B) economic union→customs union→common market→free trade area C) common market→free trade area→economic union→customs union D) free trade area→customs union→common market→economic union E) common market→economic union→customs union→free trade area

D) free trade area→customs union→common market→economic union

The five original members of the Central American Integration System did not include: A) El Salvador. B) Honduras. C) Guatemala. D) Nicaragua. E) Venezuela.

E) Venezuela.

There are several preferred trading arrangements in Latin America which include all of the following except: A) SICA. B) the Andean Community. C) CARICOM. D) Mercosur. E) BRIC.

E) BRIC.