Some critics of the North American Free Trade Agreement (NAFTA) suggest that firms outside NAFTA nations sometimes shift unassembled inputs to Mexico, assemble the inputs into final goods there, and then export the final product to the United States in order to take advantage of Mexican trade preferences. What term describes what these critics are claiming is occurring with regard to U.S.-Mexican trade as a result of NAFTA? Explain your reasoning.

Short Answer

Expert verified

M acquires flat pack components outside of the trade agreement yet exports goods customs duties to Nation U and some other member nations

Step by step solution

01

Introduction

Agreement is really a framework for Africa's revolutionary progress, more or less a a substantial unlimited accord. From it's own multiple frameworks, this could enable citizens including jobs, commerce, trade, but also copyright laws can travel.

02

Given Information

Due minimize market misdirection, origination regulations were adopted. The provenance of export markets will just be regarded rather than with the exporting here under the regulation.

03

Explanation

These real economy bender is really a practice whereby the firm offers the business on the outside the metropolitan bloc ships unopened commodities to just an individual country so that if the country can ship the product towards tariff barriers for all other regions organizations

As in context of NAFTA, Company M acquires flat pack components outside of the although that bilateral agreement, imports form Kingdom U and certain other countries involved taxes payments might well be imposed. Member M and semi nations equally receive from tariffs reductions.

Unlock Step-by-Step Solutions & Ace Your Exams!

  • Full Textbook Solutions

    Get detailed explanations and key concepts

  • Unlimited Al creation

    Al flashcards, explanations, exams and more...

  • Ads-free access

    To over 500 millions flashcards

  • Money-back guarantee

    We refund you if you fail your exam.

Over 30 million students worldwide already upgrade their learning with Vaia!

One App. One Place for Learning.

All the tools & learning materials you need for study success - in one app.

Get started for free

Most popular questions from this chapter

Explain why nations can gain from specializing in production and engaging in international trade

Residents of the nation of Border Kingdom can forgo production of digital televisions and utilize all available resources to produce 300bottles of high-quality wine per hour. Alternatively, they can forgo producing wine and instead produce 60digital TVs per hour. In the neighboring country of Coastal Realm, residents can forgo production of digital TVs and use all resources to produce 150bottles of high-quality wine per hour, or they can forgo wine production and produce 50digital TVs per hour. In both nations, the opportunity costs of producing the two goods are constant.

a. What is the opportunity cost of producing digital TVs in Border Kingdom? Of producing bottles of wine in Border Kingdom?

b. What is the opportunity cost of producing digital TVs in Coastal Realm? Of producing bottles of wine in Coastal Realm?

Critics of the North American Free Trade Agreement (NAFTA) suggest that much of the increase in exports from Mexico to the United States now involves goods that Mexico otherwise would have exported to other nations. Mexican firms choose to export the goods to the United States, the critics argue, solely because the items receive preferential treatment under NAFTA tariff rules. What term describes what these critics are claiming is occurring with regard to U.S.-Mexican trade as a result of NAFTA? Explain your reasoning.

Why do you suppose that infant-industry firms that have developed from novel products imports their governments to exact policies aimed at restraining parallel imports.

Based on your answer to Problem 32-16, what are the total tariff revenues of the U.S. government? What percentage do U.S. consumers ultimately pay because of a higher price generated by the tariff?

See all solutions

What do you think about this solution?

We value your feedback to improve our textbook solutions.

Study anywhere. Anytime. Across all devices.

Sign-up for free