Exam 2

Question 1

Sustainability

Answer 1

Integrates economic, political, environmental, and cultural dimensions to promote cooperation and solidarity among the people and generations in its supply chain

Question 2

Fair trade

Answer 2

Seeks greater equity in international trade

Question 3

Standards of fair trade address

Answer 3

Opportunities for economically disadvantaged producers, transparency and accountability, trading practices, payment of fair prices, child and forced labor, gender equity and freedom of association, working conditions, and the environment

Question 4

Rules of effective codes of conduct

Answer 4

Clearly stated and communicated, comes from leaders of organization, industry-wide document

Question 5

Corporate social responsibility

Answer 5

Encompasses human rights, the environment, abiding by the law; society’s obligation to a group of people or the general population of a city or state or country towards well-being

Question 6

Ethics

Answer 6

Includes your judgment that will protect the well-being of those who are involved in your organization

Question 7

Morals

Answer 7

Based on location, degree of conformity, prescribed standards

Question 8

Labor exploitation

Answer 8

Taking away the rights as a laborer that you should have

Question 9

Defining characteristics of labor exploitation

Answer 9

Gender, education, financial status, children, elderly

Question 10

Free trade

Answer 10

Self regulation of markets, consumers decide best product/service, no barriers to trade

Question 11

Capitalism

Answer 11

Entrepreneurial approach to business, for the benefit of individuals, can take an idea and resources and go into business

Question 12

Protectionism

Answer 12

Opposite of free trade, no global trade, exports are more important than imports, eliminates choice

Question 13

Mercantilism

Answer 13

Belief in generating wealth for the country, exports are most important

Question 14

10 presidents responsible for change in textile and apparel trade

Answer 14

FDR: protectionist, quota with Japan for cotton; Eisenhower: fabrications that were made from wool and cotton, protectionist; JFK: textile committee, STA, LTA; Nixon: MFA; Carter: MFA, first president to go to China; Reagan: MFA, import clauses removed; Bush: NAFTA; Clinton: NAFTA confirmed, WTO; GW Bush: DR-CAFTA, lower tariff; Obama: free trade with Peru, Colombia, bring production back to US

Question 15

STA

Answer 15

Short Term Agreement; covers natural fibers, limit quota of imports, one year, JFK

Question 16

LTA

Answer 16

Long Term Agreement; protectionist, limits amount of natural fiber imports, JFK

Question 17

MFA

Answer 17

Multi-Fiber Arrangement; limited importation of natural and synthetic fibers, Nixon, Carter, Reagan, became ATC (Agreement on Textiles and Clothing)

Question 18

GATT

Answer 18

General Agreement on Tariffs and Trade; Truman 1948, removal of tariffs and quotas, avoid war with countries we trade with, only for tangible items, stable basis of trade, no quotas except for textiles

Question 19

Textile Monitoring Body

Answer 19

Oversees ATC

Question 20

WTO

Answer 20

World Trade Organization; replaced/extended GATT, relax trade regulations in the US

Question 21

Counterfeiting

Answer 21

The making or selling of look-alike goods or services bearing fake trademarks

Question 22

Gray market goods

Answer 22

Original goods (not knockoffs) sold by unauthorized vendors

Question 23

Knockoff

Answer 23

Imitation of the original using lower cost fabric and production methods; not counterfeit unless passed off as the original

Question 24

Licensing contract

Answer 24

Legal transfer of intellectual property rights from the owner to another legal user; licensee pays licensor a royalty

Question 25

Ways to circumvent import quotas

Answer 25

Transshipment, outward processing, fraud

Question 26

Transshipment

Answer 26

When a country with limited quota for a particular country and on a specific product ships this product through another country to take advantage of the 2nd country’s unused quota

Question 27

Outward processing

Answer 27

Shipment of cut, unassembled parts of a garment to a third country for assembly

Question 28

Fraud

Answer 28

Use of fraudulent shipping documents and marks of origin to disguise the true country of origin

Question 29

Criteria to determine real or counterfeit

Answer 29

Price, place, product