These terms are used by the World Trade Organization (WTO) to classify agricultural subsidies. The 'amber box' includes trade-distorting subsidies, the 'blue box' covers production-limiting subsidies, and the 'green box' includes subsidies that have minimal or no trade-distorting effects, which are permitted under WTO rules.
82
Match the following international trade and finance institutions with their respective headquarters locations.
The World Trade Organization (WTO) is headquartered in Geneva, Switzerland. The International Monetary Fund (IMF) is based in Washington, D.C., USA. The Food and Agriculture Organization (FAO) has its headquarters in Rome, Italy. Finally, the European Union (EU) administrative center is located in Brussels, Belgium. Matching these correctly results in a-2, b-3, c-4, and d-1, which corresponds to option A.
83
What is the standard term length for an Executive Director appointed to the Board of the International Monetary Fund (IMF)?
Executive Directors of the IMF are elected by member countries or groups of countries for a term of two years. This period allows for periodic rotation and representation of the diverse interests of the IMF's member nations within the executive board structure.
84
Match the international organizations in List-I with their primary features in List-II.
SAARC (a-2) is dedicated to economic, technological, social, and cultural development in South Asia. ASEAN (b-3) is characterized by the principle of non-interference in the internal affairs of member nations. NAFTA (c-1) established procedures for the resolution of trade disputes between the US, Canada, and Mexico.
85
Which of the following is NOT a primary function of the World Trade Organization (WTO)?
The WTO focuses on trade policy, rule-making, and dispute resolution. It does not act as a financial institution for providing capital or loans; that role is typically fulfilled by the International Monetary Fund (IMF) or the World Bank. Therefore, providing short-term capital is outside the scope of the WTO's mandate.
86
Which of the following functions does not fall under the jurisdiction of the Monopolies and Restrictive Trade Practices (MRTP) Commission?
The MRTP Act was designed to prevent monopolistic, restrictive, and unfair trade practices. While the Commission had powers to inquire into these, the regulation of combinations was historically handled under different provisions or later frameworks, making it the outlier in this specific context of the Act's primary enforcement scope.
87
What are the primary economic effects associated with the formation of a customs union?
A customs union involves member countries eliminating internal trade barriers and establishing a common external tariff. This leads to trade creation, where inefficient domestic production is replaced by cheaper imports from member countries, and trade diversion, where imports are shifted from more efficient non-member countries to less efficient member countries due to the preferential tariff structure. Both effects typically occur simultaneously.
88
Which of the following statements accurately describes the governance and decision-making structure of the World Trade Organization (WTO)?
The WTO is a member-driven organization. The Ministerial Conference, which meets biennially, is the top-level authority. Day-to-day operations and routine decision-making are handled by the General Council, consisting of ambassadors and heads of delegation based in Geneva. Thus, all provided statements correctly reflect the organizational structure of the WTO.
89
What areas of international commerce fall under the regulatory scope of the WTO?
The World Trade Organization (WTO) has a broad mandate that extends beyond the traditional trade in physical goods. It encompasses the General Agreement on Trade in Services (GATS) and the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS). By covering these diverse areas, the WTO provides a comprehensive legal framework for international trade, ensuring transparency and dispute resolution across multiple sectors.
90
Evaluate the following statements regarding international trade and investment: Statement (I): The WTO is the primary international organization governing trade rules between nations. Statement (II): Foreign institutional investor (FII) holding limits in a company have been increased from 5% to 10% for individuals, and the aggregate limit has been raised from 24% to 34%.
The World Trade Organization (WTO) serves as the global body regulating trade rules between member countries. Statement (II) reflects specific regulatory adjustments regarding Foreign Institutional Investment (FII) caps, which are periodically updated by financial regulators to encourage capital inflows. Both statements are factually accurate within the context of international trade governance and investment policy frameworks.
