International Trade Regulation
Exam Questions
Course Introduction
International Trade Regulation explores the legal frameworks, institutions, and policies that govern the flow of goods, services, and capital across national borders. The course examines the development and functioning of international economic organizations such as the World Trade Organization (WTO), as well as regional agreements like NAFTA and the European Union. Topics include trade liberalization, tariffs and non-tariff barriers, dispute settlement mechanisms, and the intersection of trade with issues such as intellectual property, labor rights, and the environment. Students will analyze significant treaties, case law, and current challenges to the global trading system, gaining a comprehensive understanding of how international trade rules impact business, governments, and global economic relations.
Recommended Textbook
International Business Law and Its Environment 8th Edition by Richard Schaffer
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21 Chapters
1385 Verified Questions
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Page 2
Chapter 1: Introduction to International Business
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Sample Questions
Q1) The premise that suggests nations should concentrate their efforts on producing those goods that they can make most efficiently and with minimal effort and waste is:
A) Specialization.
B) Absolute advantage.
C) Competitive trade.
D) None of the above.
Answer: B
Q2) Foreign investment refers to the ownership and active control of ongoing business concerns.
A)True
B)False
Answer: True
Q3) A host country refers to the country under whose laws the investing corporation was created or is headquartered.
A)True
B)False
Answer: False
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Page 3
Chapter 2: International Law and the Worlds Legal Systems
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Sample Questions
Q1) The IMF assists member countries that are having balance of payment difficulties.
A)True
B)False
Answer: True
Q2) The World Court is a major force in settling world disputes.
A)True
B)False Answer: False
Q3) The World Bank and IMF are the same organization.
A)True
B)False
Answer: False
Q4) The U.N.has recently sponsored a "supranational" set of laws that transcends national boundaries; most industrialized nations have adopted it.
A)True
B)False
Answer: False
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4
Chapter 3: Resolving International Commercial Disputes
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Sample Questions
Q1) In a California lawsuit between a U.S.resident and a manufacturer based in Taiwan,what might limit the jurisdiction of the California court?
A) The Due Process Clause of the Fourteenth Amendment.
B) Sovereign immunity.
C) The Hague Convention on Taking Evidence Abroad.
D) Comity.
E) All of the above.
Answer: A
Q2) There are several reasons that a court will not enforce an arbitration agreement.All of the following are reasons for not enforcing except:
A) No notice was given.
B) Arbitration was obtained in the incorrect venue.
C) The judgment violates public policy.
D) The arbitration did not follow the agreement.
Answer: B
Q3) Settlement of a dispute by arbitration never makes the decision binding.
A)True
B)False
Answer: False
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Page 5
Chapter 4: Sales Contracts and Excuses for
Nonperformance
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Sample Questions
Q1) Price reduction is not available as a buyer's remedy for the seller's breach under the CISG if:
A) The seller has already delivered conforming substitute goods.
B) The buyer has refused to accept the seller's attempt to cure the breach.
C) The buyer has avoided the contract and refused delivery.
D) All of the above.
Q2) A,a New York firm,sends a purchase order to B in Sweden.A standard clause on the purchase order states that "All disputes are to be heard in the courts of New York." B confirms using its standard form,which states that "all disputes are to be resolved in arbitration before the ICC,Sweden." Under the CISG:
A) A contract exists on A's terms because B's terms were a material alteration and do not become a part of the contract.
B) A contract exists on B's terms because the modification is immaterial.
C) No contract exists because B's terms were a counteroffer that was not accepted by A.
D) A contract exists because A did not promptly object to the new terms.
Q3) Compare and contrast the mailbox rule with the receipt theory.What implications might these different rules have?
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Page 6
Chapter 5: The Documentary Sale and Terms of Trade
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Sample Questions
Q1) The Bolero project is a cross-industry system for worldwide electronic transfer of commercial trade information.
A)True
B)False
Q2) The difference between terms "CFR" and "CIF" is that under "CIF" term of sale,the buyer must procure his own marine insurance coverage on the goods.
A)True
B)False
Q3) The risk of loss in a ____ contract passes to the buyer when the goods are tendered to the buyer at that place; and the risk of loss in a(n)____ contract passes to the buyer when the goods are delivered to the carrier at the port or place of origin.
A) Shipment; destination.
B) Point of import; point of export.
C) Destination; origination.
D) Destination; shipment.
Q4) Compare and contrast the risk of loss and expenses associated with "C" and "F" terms.
Q5) What are the benefits and possible detriments of using an inspection firm?
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Chapter 6: The Carriage of Goods and the Liability of Air and Sea Carriers
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Sample Questions
Q1) An ocean carrier is liable for its failure to use due diligence in providing a seaworthy ship at the beginning of the voyage.
A)True
B)False
Q2) A clean bill of lading establishes a rebuttable presumption that the goods delivered to an ocean carrier were in good condition.
A)True
B)False
Q3) Ocean carriers are exempted from liability for which of the following:
A) Insufficiency of packing.
B) Errors in the navigation or management of the ship.
C) Acts of God.
D) All of the above.
Q4) In the United States,ocean carriers are not liable in amounts in excess of $500 per shipment.
A)True
B)False
Q5) Revise an insurance policy for carriage to make it more beneficial to the insured.
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Chapter 7: Bank Collections, Trade Finance, and Letters of Credit
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Sample Questions
Q1) In what ways is the strict compliance rule of documents similar to and dissimilar to the contractual rule of perfect tender?
Q2) The Convention on Bills of Exchange as well as U.S.and English domestic laws require the language "bill of exchange" to appear clearly and prominently on the face of the instrument.
A)True
B)False
Q3) As a seller to a foreign market,assess whether you would prefer to use a documentary sale than a sale on open account terms.
Q4) How are a red clause and a revolving letter of credit similar as compared to a red clause and a back-to-back letter of credit?
Q5) Most documentary discrepancies that occur in a letter of credit transaction are:
A) A result of fraud and misrepresentation.
B) A result of the desire to profit from the transaction.
C) A result of incomplete or inconsistent information.
D) Banking errors.
Q6) Draft a letter of credit.
Page 9
Q7) Weigh the benefits and detriments of counterpurchase,barter,and buy-back agreements.
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Chapter 8: National Lawmaking Powers and the Regulation
of Ustrade
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Sample Questions
Q1) Compare and contrast the Treaty Clause and the Commerce Clause (and the powers that flow from each).
Q2) A self-executing treaty is one that requires further presidential or legislative action for it to become binding law.
A)True
B)False
Q3) The negative implication doctrine means that state governments may not enact laws that impose a substantial burden on foreign commerce.
A)True
B)False
Q4) Identify an existing FCN Treaty between the U.S.and a foreign trading partner.Update this FCN Treaty as though it were being drafting today,under present political and economic conditions.
Q5) While the Commerce Clause restricts what states may do as to imports,it places no restrictions on state actions as to exports.
A)True
B)False
Q6) Weigh the relative merits and detriments of FCN treaties.
Page 10
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Chapter 9: Gatt Law and the World Trade Organization:
Basic Principles
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Sample Questions
Q1) The 1947 GATT provided stiff penalties for the misuse of intellectual property.
A)True
B)False
Q2) An embargo only applies to imports from a particular nation.
A)True
B)False
Q3) Usually,import restrictions that protect one sector of a country's economy will result in foreign retaliation against another sector.
A)True
B)False
Q4) Under normal trade relations,when a nation extends some privilege or right to one of its trading partners,that privilege automatically becomes applicable to all other trading partners.
A)True
B)False
Q5) Although the 1947 GATT was never ratified by the U.S.Congress,it was considered legally binding in the United States under international law.
A)True
B)False
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Chapter 10: Laws Governing Access to Foreign Markets
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Sample Questions
Q1) A law or regulation affecting a product's characteristics that must be met before a product can enter a country is a:
A) Product standard.
B) Technical regulation.
C) Product limitation.
D) Government procurement law.
Q2) Compare and contrast the actions of foreign countries regarding cigarettes (as seen in the text)with recent attempts within the U.S.to regulate cigarettes.
Q3) Trade-related investment measures are those restrictions a nation places or foreign investment that adversely affect trade in goods or services.
A)True
B)False
Q4) The Agreement on Government Procurement reverses the general GATT rules that allow government agencies to favor domestic products.
A)True
B)False
Q5) Compare and contrast unilateralism with bilateralism.
Q6) Compare and contrast some of the remedies and sanctions under Section 301.
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Chapter 11: Regulating Import Competition and Unfair Trade
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Sample Questions
Q1) Dumping does not occur when there is no market for the product in the home country.
A)True
B)False
Q2) Assess the various legal "tools" available to the president to gain freer access to foreign markets for U.S.products.
Q3) In response to the petition for relief filed by Harley-Davidson Motor Company:
A) A ban on imported motorcycles above 700 cubic cent. was implemented.
B) The commission recommended that declining incremental duties on imported motorcycles be imposed for five years.
C) Honda agreed to stop the export of its larger motorcycles for five years.
D) The president threatened severe trade sanctions on Japan if they did not stop their dumping of motorcycles on the American market.
Q4) In non-market economy countries,the determination of foreign market value is usually based on:
A) The use of "constructed value."
B) Home market sales.
C) Third country sales.
D) Both A and C.
Page 13
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Chapter 12: Imports, Customs, and Tariff Law
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Q1) What are the differences and similarities between the substantial transformation and the value-added test? What categories of countries are likely to favor which?
Q2) Comparing the U.S.and the EU,in what ways are U.S.businesses at a disadvantage in customs valuations/assessment of duties? In what ways are EU businesses?
Q3) A protest of entry is filed by the importer against the Customs Service when:
A) A dispute arises regarding liquidation.
B) A dispute arises regarding the port at which the goods were received.
C) The importer wishes to refuse delivery and possession of the goods.
D) All of the above.
Q4) In what ways might valuation methods implicate dumping and dumping remedies? Subsidies?
Q5) Under the Harmonized Tariff Schedule,all countries charge the same rate of duty upon the import of the same or similar products.
A)True
B)False
Q6) Compare and contrast the way that textiles are treated under NAFTA with the way that they are treated under the WTO.What justifies these different choices?
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Page 14
Chapter 13: The Regulation of Exports
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Sample Questions
Q1) When the president decides to impose export controls for national security or foreign policy reasons,the following businesses may be adversely affected:
A) Farmers whose crops are in short supply.
B) Businesses who cooperate with Arab nations in boycotting Israel.
C) Subsidiaries of U.S. companies having contracts with nations targeted by U.S. foreign policy.
D) B and C only.
E) A, B, and C.
Q2) K&L Chemicals is a U.S.-based manufacturer of agricultural chemicals.K&L recently sold two thousand gallons of its most toxic pesticide to Sahara Traders,a company headquartered in the North African desert nation of Chad.Sahara Traders refused to disclose the use that it intended to make of the product and paid cash upon its delivery.Sahara ultimately shipped the pesticide to the North Korean government for use in its chemical weapons program.Is K&L liable for the ultimate transshipment of its pesticide to North Korea? Please explain your answer.
Q3) Formulas,blueprints,and technical data are subject to controls when exported.
A)True
B)False
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Chapter 14: North American Free Trade Law
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Sample Questions
Q1) The NAFTA Binational Panel found that the sale of U.S.twine in Canada at unfairly low prices caused past injury to Canadian twine producers.
A)True
B)False
Q2) What are the arguments for and against granting reciprocity of professional licenses where domestic rules regarding the initial grant of those licenses differ (for example,the rules for becoming a doctor or lawyer and being admitted to the practice are different in each country)?
Q3) The passage of NAFTA engendered the greatest debate in Mexico.
A)True
B)False
Q4) NAFTA sets environmental standards for all three countries that were met in 2004. A)True B)False
Q5) NAFTA raises tariffs on non-North American products in order to stimulate trade between the U.S.,Canada,and Mexico.
A)True B)False
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Chapter 15: The European Union and Other Regional Trade Areas
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Sample Questions
Q1) The signing of the European Economic Community Act officially formed the European Community.
A)True
B)False
Q2) Qualified voting allows a country to vote yes but to withdraw their vote.
A)True
B)False
Q3) Write a memorandum advocating for or against the entrance of the MERCOSUR countries into NAFTA.
Q4) Describe the similarities between and among customs unions,free trade areas,and common markets (giving examples of each).
Q5) After the passage of the Single European Act,the EU went from qualified voting to the requirement of unanimous consent.
A)True
B)False
Q6) Because no dissenting opinions are issued,no ruling is made by the Court of Justice until all judges are in agreement.
A)True
B)False
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Chapter 16: International Marketing Law: Sales Representatives,
Advertising, and Ethical
Issues
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Q1) Which of the following is prohibited in more countries?
A) False advertising.
B) Advertising to children.
C) Sexually explicit advertising.
D) Advertising in a foreign language.
Q2) A principal who hires an independent agent within a host country is viewed as having opened an office and is then subject to the host country's tax laws.
A)True
B)False
Q3) Under EC Directive 86/653,an evergreen contract occurs when the agency relationship has:
A) Lasted for three or more years.
B) Been continued beyond the original fixed term with no formal renewal.
C) Been terminated by giving a three-month written notice.
D) All of the above.
Q4) In what ways are advertising regulations pertaining to "sin" products in the U.S.more or less liberal than those in Europe (and/ or other regions)?
Q5) Compare and contrast U.S.and European regulations aimed at advertising to children.
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Chapter 17: Licensing Agreements and the Protection of Intellectual Property Rights
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Q1) Licensors of IPRs are generally wary of offering licensees exclusive rights in a certain geographic area.
A)True
B)False
Q2) Transfer of technology laws are U.S.statutes that require U.S.companies to share their technology and research with firms in the developing countries.
A)True
B)False
Q3) The great advantage of the International Convention for the Protection of Industrial Property is that by filing a trademark with this international body,the trademark owner achieves virtually worldwide trademark protection.
A)True
B)False
Q4) Under U.S.copyright law,an author's moral rights are not protected.
A)True
B)False
Q5) Develop a document that proposes international standards for trademark licensing or use by a subsidiary (or sale to a third party)of copyrighted material.
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Chapter 18: Takings and National Controls on Foreign Direct Investment
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Q1) If a U.S.firm creates a foreign subsidiary corporation,it:
A) Fully subjects it to income taxation in the foreign country.
B) Fully avoids taxation in the United States on income repatriated from the foreign subsidiary.
C) Will significantly reduce its taxable income.
D) None of the above.
Q2) Developing countries usually welcome foreign investment in which of the following cases:
A) Companies producing quality consumer goods because these firms bring a variety of needed products at reasonable prices for consumers.
B) Companies producing goods for export.
C) Companies investing in telecommunications and transportation industries.
D) Companies investing in the oil and gas industry and other natural resources.
Q3) Insurance is available from the U.S.government to U.S.firms against the expropriation of their property by a foreign government.
A)True
B)False
Q4) Write a treaty provision regarding the taxation of e-commerce.
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Q5) Compare and contrast the traditional and modern traditional theory of takings.
Chapter 19: Labor and Employment Discrimination Law
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Q1) With regard to global working conditions of child labor and prison labor,which of the following statements is true?
A) Efforts to develop WTO trade rules that tie labor standards to international trade have borne fruit in the new GATT understandings between industrialized and developing nations.
B) Section 301 of the U.S Trade Act of 1974 has been amended to impose tariffs on goods that are produced by child labor or prison labor.
C) A few companies, such as Levi-Strauss & Co., have adopted global sourcing guidelines to use only suppliers who do not make use of child or prison labor.
D) Since NAFTA, Mexico has made great strides in making sure that children below the age of 14 are kept in school and not used in manufacturing operations.
Q2) Compare and contrast the employee discharge laws in the U.S.with those in Germany.
Q3) In the Civil Rights Act of 1991,Congress extended Title VII to all U.S.firms operating outside the United States.
A)True
B)False
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Chapter 20: Environmental Law
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Q1) There is no U.S.law forbidding the export of pesticides banned in the U.S.to foreign countries.
A)True
B)False
Q2) Before a U.S.firm can export hazardous waste to a foreign country,they must have written consent from that government delivered to the U.S.Environmental Protection Agency.
A)True
B)False
Q3) The Arias v.Dyncorp case involved a question of:
A) Whether Dyncorp was required to notify Ecuadorians of the chemical spraying in advance.
B) Whether the indiscriminate spraying of chemicals violates international law.
C) Whether the country of Ecuador had a claim against a U.S. corporation.
D) Whether the plaintiffs' claims pursuant to the Alien Tort Claims Act should be dismissed.
Q4) Draft a memo enumerating and discussing the "environmental risk" facing companies wishing to invest in foreign states.
Q5) Reflecting on the "Circle of Poison," draft a bill regarding pesticide exports.
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Chapter 21: Regulating the Competitive Environment
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Sample Questions
Q1) The substance of many countries' antitrust law is very similar in focusing on two types of activity.The two types of activities are:
A) Prohibitions against price cutting and resale price agreements.
B) Prohibitions against agreements attempting to restrict competition and the abuse of a dominant market position.
C) Prohibitions against economizing to achieve greater market share and lack of marginal return.
D) Both A and B.
Q2) A clawback provision allows a foreign company to sue in their own country to recover against local American assets all or part of an antitrust judgment rendered in the U.S.
A)True
B)False
Q3) Patent licenses are not covered by the Commission of the European Union block exemptions.
A)True
B)False
Q4) Write an argument that clawback provisions violate international law.
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