UPSC Prelims Practice Questions — India and New Zealand sign Memorandum of Cooperation (MoC) on Electronic Origin Data Exchange to Facilitate Bilateral Trade Under the India-New Zealand Free Trade Agreement (FTA)

Q1. With reference to rules of origin in a Free Trade Agreement (FTA), consider the following statements: Which of the statements given above is/are correct?

  1. Rules of origin are meant to prevent goods made in a non-member country from getting preferential duty by being routed through a member country.
  2. Processing that consists only of minimal operations, such as repacking or labelling, in a member country does not by itself make the goods originate there.
  3. Where an FTA allows only bilateral cumulation, materials sourced from a third country cannot be counted towards the originating content of the final product.
  • A. 1 only
  • B. 2 and 3 only
  • C. 1 and 2 only
  • D. 1, 2 and 3

Q2. With reference to the Customs (Administration of Rules of Origin under Trade Agreements) Rules, 2020 (CAROTAR), consider the following statements: Which of the statements given above are correct?

  1. An importer claiming preferential duty must exercise due diligence that the goods meet the originating criteria, and is not absolved merely by producing a certificate of origin.
  2. CAROTAR replaced the operational certification procedures laid down in India's individual trade agreements with a single uniform procedure.
  3. The importer must enter origin-related details, as available in the certificate of origin, in the Bill of Entry.
  4. The Rules were framed against the background of goods being re-routed through countries with which India has trade agreements.
  • A. 1, 3 and 4 only
  • B. 2, 3 and 4 only
  • C. 1 and 2 only
  • D. 1, 2, 3 and 4

Q3. With reference to the WTO Trade Facilitation Agreement (TFA), consider the following statements: Which of the statements given above is/are correct?

  1. It entered into force only after acceptance by two-thirds of the WTO membership.
  2. It requires members to allow import documentation to be submitted so that processing can begin before the goods arrive.
  3. Its obligations bind all members uniformly, with no separate implementation schedules for developing and least-developed countries.
  • A. 1, 2 and 3
  • B. 1 and 2 only
  • C. 1 only
  • D. 2 and 3 only

Q4. Consider the following assertion: The electronic origin data exchange between the customs administrations of India and New Zealand is a trade facilitation measure. Which of the following statements support the above assertion?

  1. Origin data reaches the importing customs before the goods arrive, so release at the border can be quicker.
  2. It lowers the preferential tariff rates payable on goods traded under the FTA.
  3. It reduces the importing customs' reliance on paper certificates and manual checks to confirm that a certificate is authentic.
  4. It widens the range of goods eligible for preference by relaxing the FTA's origin criteria.
  • A. 2 and 4 only
  • B. 1 and 2 only
  • C. 1 and 3 only
  • D. 1, 3 and 4 only

Q5. With reference to the institutional handling of trade agreements in India, consider the following statements: Which of the statements given above is/are NOT correct?

  1. Applying a preferential FTA tariff to an import consignment at the border is a customs function, separate from negotiating that tariff concession.
  2. The board that administers customs in India was constituted under an Act of Parliament, not by an executive resolution.
  3. A Memorandum of Cooperation between two customs administrations to implement an FTA must be ratified as a separate treaty before it can operate.
  • A. 1, 2 and 3
  • B. 3 only
  • C. 1 and 3 only
  • D. 2 only

Q6. With reference to tariff commitments in a Free Trade Agreement, consider the following statements: Which of the statements given above is/are NOT correct?

  1. An exclusion list keeps the specified products entirely outside the agreement's tariff concessions.
  2. Under a phased tariff elimination, a product gets no tariff reduction until the full phase-out period ends.
  3. When one partner removes duties on all its tariff lines from entry into force, rules of origin no longer apply to goods exported to that partner.
  • A. 2 and 3 only
  • B. 1 only
  • C. 1 and 3 only
  • D. 1, 2 and 3

Q7. Suppose a Free Trade Agreement moves from certificates of origin issued by a designated agency to self-declaration of origin by approved exporters. Which of the following are likely consequences of this change?

  1. The time and transaction cost for exporters of obtaining origin documentation falls.
  2. Exporters no longer need to keep records showing that their inputs satisfy the origin criteria.
  3. The origin criteria that goods must satisfy to claim the preference become less stringent.
  4. The importing country's customs relies more on verification and on origin information received from the exporting side.
  • A. 2, 3 and 4 only
  • B. 1 and 2 only
  • C. 1, 3 and 4 only
  • D. 1 and 4 only