UPSC Prelims Practice Questions — India and Mexico launch Negotiations for Preferential Trade Agreement, Sign Terms of Reference

Q1. With reference to rules of origin in international trade, consider the following statements: Which of the statements given above is/are correct?

  1. Rules of origin matter only for preferential trade; trade conducted on a most-favoured-nation basis requires no determination of origin.
  2. Under a preferential trade agreement, the concessional tariff applies only to goods that qualify as originating in the partner country, not to every good shipped from it.
  3. Under a 'change in tariff classification' test, a good is treated as originating in the country where processing shifts it into a different tariff heading.
  • A. 1 and 3 only
  • B. 1 and 2 only
  • C. 1, 2 and 3
  • D. 2 and 3 only

Q2. Under WTO disciplines, a measure is classified as a Sanitary and Phytosanitary (SPS) measure or a Technical Barrier to Trade (TBT) according to its purpose. Consider the following import requirements: Which of the above would fall under the SPS Agreement?

  1. A maximum residue limit for a pesticide in imported mangoes
  2. A mandatory crash-test specification for imported cars to protect occupants
  3. Mandatory fumigation of wooden packaging material to prevent the spread of plant pests
  4. A ban on poultry imports from a region reporting an avian influenza outbreak
  • A. 1, 2, 3 and 4
  • B. 1 and 3 only
  • C. 1, 3 and 4 only
  • D. 2 and 4 only

Q3. Consider the following statements: Which of the following is correct in respect of the above statements?

  1. Under WTO rules, a member may adopt a sanitary or phytosanitary measure that gives a higher level of protection than the relevant international standard.
  2. The WTO SPS Agreement exempts sanitary and phytosanitary measures from any requirement of scientific justification, provided they apply equally to domestic producers.
  • 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

Q4. With reference to trade agreements and the WTO framework, consider the following statements: Which of the statements given above is/are correct?

  1. A preferential trade agreement, by definition, must eliminate tariffs on substantially all trade between the partner countries.
  2. The WTO's Enabling Clause provides legal cover for preferential arrangements in trade in goods between developing country members.
  3. Regional agreements liberalising trade in services among WTO members are governed by Article XXIV of the GATT.
  • A. 2 only
  • B. 1 only
  • C. 2 and 3 only
  • D. 1 and 3 only

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

  1. Under WTO rules, a safeguard measure can be applied even to imports that involve no dumping or subsidisation.
  2. Under WTO rules, safeguard measures must be temporary.
  • 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. Consider the following facts: Mexico is a party to the USMCA along with the United States and Canada. India and Mexico have signed Terms of Reference to launch negotiations on a Preferential Trade Agreement that includes a rules-of-origin chapter. Mexico is not a member of Mercosur, with which India has a separate preferential trade agreement. Which of the following inferences can validly be drawn from the above?

  1. Tariff concessions India grants Mexico under the proposed agreement would not automatically extend to Mercosur members.
  2. With the signing of the Terms of Reference, Indian goods now enter Mexico at preferential rates of duty.
  3. Indian goods entering Mexico under the proposed agreement would automatically obtain preferential access to the United States under the USMCA.
  • A. 1, 2 and 3
  • B. 1 only
  • C. 2 and 3 only
  • D. 1 and 2 only