Why Is NAFTA a Free-Trade Area Requiring Rules of Origin

Multiple Choice

Why is NAFTA a free-trade area requiring rules of origin rather than a customs union?

A) A free-trade agreement allows politically sensitive tariffs of each nation to remain unchanged.
B) A customs union also requires rules of origin.
C) The overall level of U.S. tariffs was much higher than the overall level of tariffs in Mexico and Canada.
D) The overall levels of tariffs in Canada, Mexico, and the United States are similar, making rules of origin irrelevant.