Questions What is a trade agreement? A trade agreement is a legal agreement between two or more countries and provides benefits to all signatories. As well as reducing the rate of duty on goods traded between the signatories of the agreement, it may also include other provisions. 1. Raptolutions in Pole Garden, Hawaii, has sold 200 jars of petroleum jelly from their warehouse to Shadow Works in Tofty, Quebec. The petroleum jelly is manufactured in Ireland and is flown to Canada from the vendor in Hawaii. Each jar has a unit value of US$7.63 and the US exchange rate for the date of direct shipment is 1.296. The total value of the shipment is $1,526.00, including transportation charges of US$150.00 from the place of direct shipment to Canada.

1. List three items that may not be included in the cost of production. Any three of the following: a. any duties and taxes paid or payable on imported materials used to manufacture the finished good; b. outside packing and expenses related thereto, required for the transportation of the goods; c. gross profit of the manufacturer or exporter and the profit or remuneration of any person dealing in the article in its finished manufactured condition; d. royalties; e. customs or excise duty or tax paid or payable on imported materials, carriage, insurance, and other charges from the place of production or manufacture in the country of origin to the port of shipment; or f. any other costs or charges incurred or to be incurred subsequent to the completion of the manufacture of the goods.