CE CE Free Trade Agreements & Preferential Programs 2

Question 1

Under USMCA, what is 'regional value content' (RVC) and how is it calculated?

Accepted Answer

The percentage of a product's value that must originate in the USMCA region, calculated using either the transaction value or net cost method

Answer

The total revenue generated from USMCA trade

Answer

The percentage of workers employed in North America

Answer

The ratio of U.S. content to total product weight

Question 2

What is the African Growth and Opportunity Act (AGOA) and how does it affect U.S. exporters?

Accepted Answer

A U.S. law granting eligible sub-Saharan African countries duty-free access to the U.S. market, not directly a benefit for U.S. exporters but creates commercial relationships

Answer

A U.S. export subsidy program targeting African markets

Answer

A bilateral FTA between the U.S. and the African Union

Answer

A loan program for U.S. companies investing in Africa

Question 3

What is 'cumulation' in FTA rules of origin and how can it benefit exporters?

Accepted Answer

It allows producers to count inputs from other FTA partner countries toward the origin content requirement, making it easier to qualify for preferences

Answer

It permits accumulating multiple shipments to reach a tariff threshold

Answer

It is a method of averaging tariff rates across multiple product codes

Answer

It allows combining export quota allocations from different years

Question 4

What is the U.S.-Korea Free Trade Agreement (KORUS FTA) and which sectors benefit most for U.S. exporters?

Accepted Answer

A bilateral FTA between the U.S. and South Korea eliminating most tariffs; U.S. agricultural, automotive, and manufactured goods exporters benefit significantly

Answer

A technology sharing agreement focused on semiconductor manufacturing

Answer

A joint defense spending arrangement reducing military procurement costs

Answer

A cultural exchange program promoting U.S. educational exports

Question 5

What is 'tariff engineering' and is it legal under U.S. trade law?

Accepted Answer

Legally modifying a product's design or composition to achieve a lower tariff classification; it is legal if the changes are genuine

Answer

Fraudulently mislabeling goods to avoid tariffs; it is illegal

Answer

Negotiating tariff reductions through lobbying; it is legal if disclosed

Answer

Splitting shipments to stay under de minimis thresholds; it is conditionally legal

Question 6

What is the purpose of the U.S.-Israel Free Trade Agreement, and what makes it historically significant?

Accepted Answer

It was the first FTA the United States ever signed (1985), and it eliminates tariffs on virtually all goods traded between the two countries

Answer

It is the largest FTA by trade volume in U.S. history

Answer

It covers services but not goods

Answer

It was the first FTA to include environmental and labor chapters