Answer to Question 1
b
Answer to Question 2
A screwdriver plant is one in which very little transformation of a product takes place. NAFTA negotiators developed detailed rules of origin that defined whether a good was North American in origin and thus qualified for preferential tariff status. In the automobile industry, for example, U.S. and Canadian labor unions worried that European and Asian automakers would exploit the treaty by producing major components elsewhere and then establishing a North American factory merely to assemble motor vehicles, thereby causing the loss of jobs at Canadian and U.S. parts-producing factories. To diminish this problem, NAFTA specifies that for an automobile to qualify as a North American product, 62.5 percent of its value must be produced in Canada, Mexico, or the United States. Similarly, to protect textile industry jobs, clothing and other textile products must use North American-produced fibers to benefit from NAFTA's preferential tariff treatment.
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