UPSC Prelims Practice Questions — ‘Any further concessions on U.S. deal very difficult’

Q1. With reference to the most-favoured-nation (MFN) principle of the WTO and the exceptions to it, consider the following statements: Which of the statements given above is/are correct?

1. The MFN principle forbids a WTO member from giving developing countries lower tariffs than it charges developed countries.
2. When two WTO members form a free-trade area, the duties each applies to non-members must not end up higher or more restrictive than they were before the area was formed.
3. An agreement liberalising trade in services between some WTO members can depart from the MFN obligation of GATS only if it has substantial sectoral coverage.

• A. 1 and 3 only
• B. 1, 2 and 3
• C. 2 and 3 only
• D. 1 and 2 only

Q2. Consider the following statements: Which of the following is correct in respect of the above statements?

1. Under a free trade agreement, India may charge lower duties on goods from the European Union than on the same goods from the United States without breaching its WTO obligations, provided the agreement meets the conditions of GATT Article XXIV.
2. The WTO's most-favoured-nation obligation applies only to trade in goods and does not extend to trade in services.

• 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

Q3. With reference to India's constitutional framework for international agreements such as trade deals, consider the following statements: Which of the statements given above are 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. Parliament's power to legislate for implementing international commitments covers decisions made at international conferences or bodies, and not only treaties with other countries.
3. A trade agreement signed by the Union Government comes into force for India only after both Houses of Parliament approve it by a special majority.
4. Parliament can legislate to implement a treaty only after the President has obtained the Supreme Court's advisory opinion on that treaty.

• A. 1, 3 and 4 only
• B. 1 and 2 only
• C. 1, 2 and 3 only
• D. 2 and 4 only

Q4. Suppose India signs a trade agreement that requires it to adopt uniform national rules on a subject that falls in the State List of the Seventh Schedule. Which of the following correctly describes Parliament's power to make a law implementing this commitment?

• A. Parliament may not make the law, because only the State Legislatures can legislate to implement such a commitment on a State List subject.
• B. Parliament may make the law only for those States whose Legislatures have first passed resolutions asking Parliament to legislate on that subject.
• C. Parliament may make the law only after the Rajya Sabha has passed a resolution by a two-thirds majority declaring this to be in the national interest.
• D. Parliament may make the law for the whole or any part of India, even though the subject is in the State List, without needing any State's consent.

Q5. Consider the following statements about how tariff commitments that India makes in a free trade agreement are implemented: Which of the statements given above is/are correct?

1. A State Legislature cannot impose its own duty on goods imported into India from the partner country, because duties of customs are a Union List subject.
2. Because trade with foreign countries affects the States, an agreement on import tariffs takes effect only after the Legislatures of at least half the States ratify it.

• A. 1 only
• B. 2 only
• C. Both 1 and 2
• D. Neither 1 nor 2

Q6. Consider the following statements: Which of the following is correct in respect of the above statements?

1. A free trade agreement between India and the European Union would not require India to apply the EU's import duties to goods coming from the United States.
2. To qualify under GATT Article XXIV, a free-trade area must eliminate duties on substantially all the trade between its members.

• 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

Q7. Consider the following assertion: Diversifying the sources from which India buys crude oil strengthens its energy security. Which of the statements given above support the assertion?

1. India meets most of its crude oil requirement through imports rather than through domestic production.
2. Buying heavily from a single supplier exposes India to disruptions arising from that supplier's political or supply decisions.
3. Spreading purchases across more suppliers reduces the share of imports in India's crude oil consumption.
4. Sourcing crude from several regions reduces the effect on India of a disruption along any single shipping route.

• A. 1, 2 and 4 only
• B. 1, 2, 3 and 4
• C. 2, 3 and 4 only
• D. 1 and 3 only

Q8. With reference to how sanctions operate under the UN Charter, consider the following statements: Which of the statements given above is/are correct?

1. The Security Council may decide on measures not involving the use of armed force, and these may include the complete or partial interruption of economic relations with a country.
2. A General Assembly resolution calling for a trade embargo on a country binds UN Members in the same way as a decision of the Security Council.
3. If a Member's obligations under the UN Charter conflict with its obligations under a trade agreement, the Charter obligations prevail.

• A. 1, 2 and 3
• B. 1 and 3 only
• C. 2 and 3 only
• D. 1 only