Question

Which of the followings are true or false.

a. Under regional trade agreements, several countries eliminate tariffs among themselves and lower tariffs against all other countries.
b. Regional trade agreements contradict GATTâs most favored nation principle.
c. Each NAFTA member country keeps its own tariffs with the countries outside NAFTA.
d. A good imported into Mexico from China will not be granted duty-free access to the U.S. market if no value is added to this good in Mexico.
e. Rules of origin specify the types of goods that can be shipped duty-free within a free trade area.
f. Rules of origin specify the types of goods that can be shipped duty-free within a customs union.

Answer 1

a. true

b. false

c. true

d. true

e. false

f. true

Step-by-step explanation:

a. Regional trade agreements encourage free movement of goods and services across the borders of regional bodies.

b. The General Agreements on Tariffs and Trade (GATT) were concluded in Geneva by 23 countries in 1947. The GATT minimized international trade barriers through tariffs and trade regulations.

c. NAFTA means the North American Free Trade Agreement for Canada, Mexico, and the United States. NAFTA eliminated most of the trade tariffs among these three countries. In 2020, it was replaced by the United States-Mexico-Canada Agreement (USMCA).

d. Rules of Origin determines the source of a product because trade duties and restrictions depend on the country of origin of a product.