UPSC Prelims Practice Questions — More demands on U.S. deal ‘very difficult’: Sitharaman

Q1. With reference to the Most-Favoured-Nation (MFN) principle of the World Trade Organization (WTO), consider the following statements: Which of the statements given above is/are correct?

  1. If a WTO member grants a lower customs duty to a product of one WTO member, it must normally grant the same treatment to the like product of all other WTO members.
  2. A WTO member that joins a free-trade area must extend the tariff concessions given to its FTA partner to all other WTO members within ten years.
  3. Cutting the duty actually charged on one member's goods alone breaches MFN unless an exception applies, even if the reduced duty stays below the member's bound rate.
  • A. 2 and 3 only
  • B. 1 only
  • C. 1, 2 and 3
  • D. 1 and 3 only

Q2. Consider the following statements regarding a free-trade area and a customs union as understood under Article XXIV of the GATT: Which of the statements given above are correct?

  1. In both arrangements, duties and other restrictive regulations are to be eliminated on substantially all the trade between the constituent territories.
  2. Members of a free-trade area retain their own separate tariffs on imports from non-members.
  3. In a customs union, each member remains free to set its own tariff on goods coming from outside the union.
  4. An agreement that removes duties in phases can qualify if it includes a plan and schedule for forming the arrangement within a reasonable length of time.
  • A. 1 and 3 only
  • B. 2, 3 and 4 only
  • C. 1, 2 and 4 only
  • D. 1, 2, 3 and 4

Q3. With reference to the constitutional framework governing international agreements in India, consider the following statements: Which of the statements given above is/are NOT correct?

  1. The executive power of the Union extends to exercising the rights, authority and jurisdiction that the Government of India holds by virtue of a treaty or agreement.
  2. On matters on which both Parliament and State Legislatures can make laws, the Union's executive power does not ordinarily extend into a State unless the Constitution or a law made by Parliament expressly provides so.
  3. The Constitution requires every international trade agreement signed by the Union government to be approved by a special majority in both Houses of Parliament before it can take effect.
  • A. 1, 2 and 3
  • B. 3 only
  • C. 2 and 3 only
  • D. 1 only

Q4. Consider the following statements: Which of the following is correct in respect of the above statements?

  1. Parliament can enact a law to implement India's obligations under a trade agreement even if the subject matter falls within the State List.
  2. The executive power of the Union extends to the matters with respect to which Parliament has power to make laws.
  • A. Both Statement-I and Statement-II are correct and Statement-II explains Statement-I
  • B. Both Statement-I and Statement-II are correct, but Statement-II does not explain Statement-I
  • C. Statement-I is correct, but Statement-II is incorrect
  • D. Statement-I is incorrect, but Statement-II is correct

Q5. Consider the following statements: Which of the following is correct in respect of the above statements?

  1. A country running a deficit in merchandise trade can nevertheless record a surplus on its current account.
  2. Besides the balance of trade in goods, the current account includes trade in services, net factor income from abroad and transfers such as remittances.
  • A. Both Statement-I and Statement-II are correct and Statement-II explains Statement-I
  • B. Both Statement-I and Statement-II are correct, but Statement-II does not explain Statement-I
  • C. Statement-I is correct, but Statement-II is incorrect
  • D. Statement-I is incorrect, but Statement-II is correct

Q6. Which one of the following correctly distinguishes a WTO safeguard measure from an anti-dumping duty?

  • A. It requires no finding of unfair trade and is generally applied to imports from all sources.
  • B. It requires no finding of injury and may be applied selectively against any single country.
  • C. It requires proof of dumping by exporters and is applied only to the country found dumping.
  • D. It requires proof of foreign subsidies and is applied only to the country granting them.