The intent of the FAR seems pretty clear. "If the foreign state gives you a licence that entitles you to fly that type in their airspace then we're happy to allow you to fly the same type in the same airspace if it has an "N" painted on the side and is therefore subject to our laws." This is nothing to do with ICAO.
If the foreign state wants to disallow this then they can do so. To do so would however be perverse. They would be restricting your ability to fly a particular type based solely on the fact that it is N reg. The only possible justification would be an implication that there is something deficient in the US airworthiness regime. Anything else would be a protectionist restriction of free trade.
Last edited by Mike Cross; 7th Sep 2013 at 06:51.