Deck 3: The Global Trade Environment

Question 1

The World Trade Organization,which came into existence on January 1,1995,is the successor of another organization known as:

A)DSB.
B)GATT.
C)FTAA.
D)NAFTA.
E)ASEAN.

Answer 1

B

Question 2

"Euro-skeptics" and other members of the Leave movement were convinced that their country could thrive economically outside of the EU framework.

Answer 2

True

Question 3

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

Answer 3

True

Question 4

The GATT had no enforcement power since the losing party in a dispute was entitled to ignore the ruling.

Question 5

Why do some critics refer to GATT as the "General Agreement to Talk and Talk" and how does its successor,the WTO,provide a better forum for trade agreements?

Question 6

What are the possible benefits or drawbacks if a customs union is formed between Great Britain and the EU?

Question 7

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

Question 8

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

Question 9

In a common market there are no internal barriers to trade,and it allows free movement of factors of production such as labor and capital.

Question 10

________ 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

Question 11

Select the best answer that represents the lowest to the 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

Question 12

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

Question 13

A laptop manufactured in Canada and imported by Chile would not be subjected to duty.If the same laptop was manufactured in the United States and exported to Chile,it will have to pay duty.In order to avoid duty,can the manufacturer in the United States send the computer via Canada?

Question 14

Which of the following statements related to Brexit is not accurate?

A)Disillusionment was evident among members of the Tory party who had opposed Britain's initial inclusion in the European Union (EU).
B)In 2013,Prime Minister Cameron was convinced that,after sufficient public debate,most U.K.citizens would opt for the status quo.
C)When the final votes were tallied,the "Exit" camp prevailed.
D)U)K.business community was firmly against the "Remain" camp.
E)As a member of the EU,U.K.has access to a free,open market of nearly 500 million people.

Question 15

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

Question 16

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.

Question 17

President Trump's administration has blocked the process for filling vacancies on the WTO's Appellate Body.

Question 18

In 2016,the United States filed a complaint with the WTO stating that Indian export duties on a range of extractive commodities gave its manufacturers access to key materials at market-distorting prices.

Question 19

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

Question 20

The form of economic cooperation that calls for establishing common external tariffs is known as a(n):

A)European Union.
B)economic union.
C)customs union.
D)free trade area.
E)common market.

Question 21

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

Question 22

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

Question 23

Blackberry (formerly known as Research in Motion),the smartphone marketer,is based in:

A)Mexico.
B)Canada.
C)Brazil.
D)Argentina.
E)the Netherlands.

Question 24

The form of economic cooperation that calls for countries to eliminate all internal barriers to trade among themselves even while maintaining independent trade policies with 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

Question 25

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.

Question 26

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)they promote economic growth through tariff elimination.
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.

Question 27

There are several preferred trade arrangements in Latin America which include all of the following except:

A)SICA.
B)the Andean Community.
C)CARICOM.
D)Mercosur.
E)BRIC.

Question 28

The five original members of the Central American Integration System did not include:

A)El Salvador.
B)Honduras.
C)Guatemala.
D)Nicaragua.
E)Venezuela.

Question 29

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.

Question 30

What are the two key issues that became the reason for the Trump administration to focus on NAFTA?

Question 31

A customs union 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.

Question 32

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 the region's headquarters.
E)the Free Trade Agreement with the United States.

Question 33

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.

Question 34

________ 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

Question 35

Why does NAFTA create a free trade area as opposed to a customs union or a common market? Explain the difference by giving examples.

Question 36

The "Common Market of the South" in Latin America is used to describe:

A)SICA.
B)Mercosur.
C)Andean Community.
D)CARICOM.
E)FTAA.

Question 37

The country that withdrew from the original members of the Andean Community is:

A)Bolivia.
B)Chile.
C)Ecuador.
D)Peru.
E)Columbia

Question 38

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.

Question 39

In an economic union,a doctor or lawyer qualified in one country can practice in another member country.

Question 40

The Secretariat for Central American Integration is headquartered in:

A)El Salvador.
B)Honduras.
C)Guatemala City.
D)Nicaragua.
E)Costa Rica.

Question 41

The original six members of the ASEAN (Association of Southeast Asian Nations)included all of the following countries except:

A)Singapore.
B)Thailand.
C)Sri Lanka.
D)Philippines.
E)Brunei.

Question 42

Historically,most of the Latin American nations have witnessed decades of slow or no growth,crippling inflation,increasing foreign debt,protectionism,the bloated government payrolls,money laundering problems,and currency fluctuations.What measures are now being taken by countries in that region that will begin the process of economic transformations?

Question 43

One of the reasons why Bhutan is called the "forbidden kingdom" is that the country's leaders limit tourism.

Question 44

When the ASEAN countries expanded to include Australia,New Zealand,and India,it was dubbed as "ASEAN + 6."

Question 45

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

Question 46

Although the ASEAN member countries are geographically close,they have historically been divided in many respects.

Question 47

The Asia-Pacific Economic Cooperation (APEC)launched an economic bloc called the ASEAN Economic Community (AEC).

Question 48

Bhutan has relied on a measure besides economic growth,namely,gross national happiness (GNH).The GNH Index includes all of the following indicators except:

A)psychological well-being.
B)community vitality.
C)economic vitality.
D)environmental diversity.
E)living standards.

Question 49

Brazil has ramped up efforts to prevent maca seeds from being smuggled out of the country for cultivation elsewhere.

Question 50

Chile became only an associate member of Mercosur and participates in the free trade area aspect of Mercosur.

Question 51

Competing ideologies in South America help explain why intraregional trade is not yielding more benefits.

Question 52

Despite trade agreements,attempts to achieve integration in Central America have been described as uncoordinated,inefficient,and costly.Tariffs still exist on imports of sugar,coffee,and alcoholic beverages.

Question 53

Which of the following ASEAN countries alone accounts for more than one-third of 2014 two-way trade exports with the United States?

A)Brunei
B)Malaysia
C)Singapore
D)Thailand
E)Vietnam

Question 54

When the roster of ASEAN members expanded to include Japan,Korea,and India,it was dubbed "ASEAN + 3."

Question 55

For more than 40 years,Bhutan,a kingdom of 754,000 people in the Himalaya mountains,has relied on the following measure:

A)GNI.
B)GDP.
C)GNH.
D)GNP.
E)GTE.

Question 56

Which one of the ASEAN members has the World's second-largest container port?

A)Singapore
B)Thailand
C)India
D)Philippines
E)Brunei

Question 57

CARICOM's main objective has been to achieve a deepening of economic integration by means of a Caribbean common market.

Question 58

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

Question 59

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

Question 60

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.

Question 61

________ is a key word(s)in conducting business in the Middle East.

A)Arab Spring
B)Connection
C)Discrimination
D)Male dominance
E)Haggling

Question 62

The markets of Central and Eastern Europe present interesting opportunities and challenges for low-cost manufacturing due to:

A)their location being close to the sea.
B)the cultural similarities.
C)wage rates being lower than in Spain,Portugal and Greece.
D)strict laws and regulations.
E)prohibitive tariffs and export restrictions.

Question 63

The enlargement of the EU has affected marketing strategies in the Euro zone countries by:

A)making it difficult to export food products from one country to another.
B)increasing the cost of production since the euro replaced local currency.
C)shifting products from one market to another in the event of shortages.
D)reduced tariffs and quotas for products imported from non-EU members.
E)having less flexibility in the placement of factories.

Question 64

According to EU regulations,Kraft parmesan cheese cannot be sold in Europe because:

A)it is expensive when compared to local products.
B)it is considered genetically modified agricultural product.
C)terms such as "Parmesan" are used on the package labels.
D)it does not contain salt and an enzyme.
E)it contains synthetic cellulose powder.

Question 65

The new country,which joined the EU at the beginning of 2015,is:

A)Slovakia.
B)Lithuania.
C)Latvia.
D)Slovenia.
E)Cyprus.

Question 66

European countries would benefit by having an FTA with the United States.However,there are some sticky points,which need resolution.All of the following points need consideration except:

A)that the EU restricts the import of most genetically modified crops,which are common in the United States.
B)further reduction of tariffs,which now average between 2 and 3 percent.
C)a variety of regulations that hamper cross-border investment and purchasing.
D)the U.S.government would like easing of restrictions for purchasing European goods.
E)the name "Parmesan" applied to the "cows-milk" cheese.

Question 67

Because they are in transition,the markets of Central and Eastern Europe present interesting opportunities and challenges,which include:

A)new sources of growth.
B)first mover advantage.
C)exporting as an entry mode.
D)lower wage rate.
E)all of the above

Question 68

There are several issues related to labeling of products exported to the EU.Explain giving an example of one such issue.

Question 69

The business environment in Europe has undergone considerable transformation since 1992 with significant implications for all elements of the marketing mix except:

A)product.
B)process.
C)price.
D)promotion.
E)distribution.

Question 70

Political and social instability in the Middle Eastern region can primarily be attributed to:

A)desert conditions and lack of agricultural land.
B)cultural differences among nations.
C)a wide gap between rich and poor nations due to oil revenues.
D)lack of water purification facilities.
E)the "Arab Spring."

Question 71

"Although the ASEAN countries are geographically close,they have historically been divided in many respects." Elaborate on this statement and highlight the important economic development of member countries within ASEAN.How does Singapore represent a special case within the ASEAN nations?

Question 72

What are some of the concerns if the European Union decides to sign a free trade agreement with the United States?

Question 73

Coca-Cola had to delay launching its Powerade sports drink in Europe due to the lack of uniform food safety laws in the European Union.

Question 74

The Gulf Cooperation Council (GCC)includes all of the following countries except:

A)Kuwait.
B)Saudi Arabia.
C)Iraq.
D)Bahrain.
E)Oman.

Question 75

The introduction of the euro by the EU resulted in multifaceted advantages,which include:

A)elimination of costs associated with currency conversion.
B)fixed exchange rate worldwide.
C)elimination of paper currency and coins.
D)withdrawal of French Francs from circulation.
E)a choice for using local or European currency.

Question 76

Management strategic options pertaining to products that are facilitated by a single European market include:

A)standardized packaging and labeling.
B)consolidated production.
C)shift from brand to benefit segmentation.
D)seeking marketing economies.
E)all of the above

Question 77

Markets of Central and Eastern Europe present interesting opportunities and challenges.Companies such as 3M International,Philips Electronics,and Henkel are moving into the region for all of the following reasons except:

A)that region is an important new source of growth.
B)that the first company to penetrate a country market often emerges as leader.
C)wage rates are much lower than those in Spain,Portugal,and Greece.
D)that region offers attractive locations for low-cost manufacturing.
E)core products and Western brand names need changes that are appropriate for business.

Question 78

In spite of forming an economic bloc,the 10 ASEAN nations have many problems that need to be resolved.Describe any two problems?

Question 79

The formation and enlargement of the European Union has a wide everlasting impact on marketing strategies and marketing mix.Discuss this giving example from member nations.

Question 80

According to experts,mastering the Japanese market is considered a very difficult task.However,with the lucrative market in Japan,it is imperative to understand the intricacies in order to be successful in business.What are some of the factors that need to be considered by corporations that would like to conduct business in Japan?