Question 1

Free Trade Agreement (FTA)

Accepted Answer

A pact between nations to reduce or eliminate trade barriers, encouraging trade between member countries.

Question 2

Balance of Trade

Accepted Answer

The difference in value between a country's imports and exports. A surplus indicates more exports than imports.

Question 3

Tariff Escalation

Accepted Answer

A situation where tariff rates increase according to the level of processing, affecting trade costs for goods

Question 4

Dumping

Accepted Answer

Selling goods in a foreign market below cost, potentially creating unfair competition and trade disputes.

Question 5

Certificate of Origin

Accepted Answer

A document declaring the country where a product was manufactured, often required for customs clearance.

Question 6

Force Majeure

Accepted Answer

A contract clause that frees parties from liability when extraordinary events prevent fulfillment of obligations.

Question 7

Supply Chain

Accepted Answer

The entire process of producing and delivering a product, from raw materials to the final customer.

Question 8

Non–Tariff Barrier

Accepted Answer

Regulations or policies that limit imports without imposing taxes, such as safety standards or quotas

Question 9

Tariff Barrier

Accepted Answer

A barrier to trade created by imposing taxes or duties on imports, often to protect domestic industries.

Question 10

Quota

Accepted Answer

A government–imposed restriction limiting the quantity or value of goods that can be imported or exported.

Question 11

HS Code (Harmonized System Code)

Accepted Answer

An internationally standardized system of codes used by customs to identify goods in global trade.

Question 12

Customs Broker

Accepted Answer

A professional who assists businesses in clearing goods through customs by ensuring compliance with regulations and duties.

Question 13

Export License

Accepted Answer

A government document authorizing the export of specific goods. Required for controlled or sensitive items.

Question 14

Tariff

Accepted Answer

A tax imposed by a government on imported or exported goods. Used to regulate trade and protect domestic industries.

Question 15

Freight Forwarder

Accepted Answer

A company or individual that arranges the logistics and paperwork for shipping goods from seller to buyer.

Question 16

Letter of Credit (LC)

Accepted Answer

A financial document issued by a bank guaranteeing payment to the seller. Ensures payment security in global trade.

Question 17

CIF (Cost, Insurance, and Freight)

Accepted Answer

The seller is responsible for covering cost, insurance, and freight to the destination port. Risk transfers at loading.

Question 18

FOB (Free on Board)

Accepted Answer

Indicates that the seller delivers goods on board a vessel chosen by the buyer. Buyer assumes responsibility thereafter.

Question 19

Incoterms

Accepted Answer

Standardized international trade terms defining responsibilities of buyers and sellers in global transactions.

Question 20

Bill of Lading (B/L)

Accepted Answer

A document issued by a carrier to acknowledge receipt of cargo for shipment. It serves as a receipt, title, and contract.

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