Mineral fuels, mineral oils and products of their distillation including products like coal and oil accounted for 16.92% of the total percentage share of India’s exports. These are date for FY 2010-11. Natural or cultured pearls, precious or semiprecious stones, and jewellery clad with precious metals and also coins accounted for 15.95% of total exports Vehicles other than railway or tramway rolling stock, and their parts and accessories accounted for 4.5%. Electrical machinery and their equipment and parts including products like televisions and sound recorders had a total share of 4.31% of the export basket

Explanation:

 

Transfer payments are the receipts which the residents of a country get for ‘free’, without having to provide any goods or services in return.They consist of gifts, remittances and grants.They could be given by the government or by private citizens living abroad.

Statement 1: All domestic support measures considered to distort production and trade (with some exceptions) fall into the amber box, which is defined as all domestic supports except those in the blue and green boxes.These include measures to support prices, or subsidies directly related to production quantities.These supports are subject to limits: “de minimis” minimal supports are allowed (5% of agricultural production for developed countries, 10% for developing countries) Statement 2: In order to qualify, green box subsidies must not distort trade, or at most cause minimal distortion. They have to be government-funded (not by charging consumers higher prices) and must not involve price support. Statement 3: Blue Box is the “amber box with conditions” — conditions designed to reduce distortion. Any support that would normally be in the amber box, is placed in the blue box if the support also requires farmers to limit production.At present there are no limits on spending on blue box subsidies. In the current negotiations, some countries want to keep the blue box as it is because they see it as a crucial means of moving away from distorting amber box subsidies without causing too much hardship.

Explanation:

 

Trade-Related Aspects of Intellectual Property Rights (TRIPS) regime was promoted by the World Trade Organization in 1995 for uniform global IPR rules. TRIPS is founded on the principle of “product patents”.TRIPS does have a provision to enable governments to enforce ‘compulsory licensing’. They can demand that an innovator company must allow domestic, lower cost, producers to increase the supply of the drug in an emergency, with compensation to the inventor of course.

 

Explanation:

 

The Openness Index is an economic metric calculated as the ratio of country’s total trade, the sum of exports plus imports, to the country’s gross domestic product = (Exports Imports) / (Gross Domestic Product).The interpretation of the Openness Index is: the higher the index the larger the influence of trade on domestic activities, and the stronger that country’s economy.Ease of doing business index is a passive indicator of openness, and openness as such is not measured by it.

Explanation:

 

When an increase in one form of net exports drives up a country’s exchange rate, it is called the Dutch Disease. Such instances make other exports non-competitive in the world market and impair the ability of domestic products to compete with imports. The term originated from the supposed effect of natural gas discoveries on the Netherlands economy. As gas started to be exported, it lead to appreciation of their currency and rendered other exports noncompetitive thereby harming the economy.

Explanation:

 

The country’s demand for dollars (foreign exchange) is usually greater than the supply. This leads to a steadily weakening home currency. Hence, statement 2 is correct.A high trade deficit also forces a country to constantly look to foreign investors to make up the gap between its export earnings and its import payouts. Hence, statement 1 is correct.In a slow-growing world, a rising trade deficit could be an indication that domestically produced goods are unable to compete against imports. If local factories shut down, that leads to job losses. Hence, statement 3 is correct.

Sanitary and phytosanitary (SPS) measures are measures to protect humans, animals, and plants from diseases, pests, or contaminants. So, B is correct.The Agreement on the Application of Sanitary and Phytosanitary Measures is one of the final documents approved at the conclusion of the Uruguay Round of the Multilateral Trade Negotiations. So, A is correct.It applies to all sanitary (relating to animals) and phytosanitary (relating to plants) (SPS) measures that may have a direct or indirect impact on international trade.

Explanation:

 

Countries carry out anti-dumping probes to determine whether their domestic industries have been hurt because of a surge in cheap imports. Hence, statement 1 is correct.As a counter measure, they impose duties under the multilateral regime of the World Trade Organization (WTO). Hence, statement 2 is not correct.Dumping is a process wherein a company exports a product at a price that is significantly lower than the price it normally charges in its home (or its domestic) market.Directorate General of Trade Remedies (DGTR) conducts anti-dumping investigations, under the Customs Tariff Act, 1975 and the rules made thereunder, on the basis of a duly substantiated application filed by the domestic industry alleging dumping of goods into the country causing injury to the domestic industry. The basic intent of anti-dumping measures is to eliminate injury caused to the domestic industry by the unfair trade practice of dumping and to create a level playing field for the domestic industry. Hence, statement 3 is correct.

Exchange rates in the market depend not only on the demand and supply of exports and imports, and investment in assets, but also on foreign exchange speculation where foreign exchange is demanded for the possible gains from appreciation of the currency.

It comes under some of the crucial development-related issues in WTO which also include establishment of a Development Box, special and differential treatment (S&D) for developing countries, single commodity producers treatment, and the status of small island developing states (SIDS).S&D box gives the developing countries required flexibility in several WTO agreements to adapt to changed rules so as to create a level playing field with developed countries.

Explanation:

 

The Generalized System of Preferences, or GSP, is a preferential tariff system which provides tariff reduction on various products. The concept of GSP is very different from the concept of “most favored nation” (MFN). MFN status provides equal treatment in the case of tariff being imposed by a nation but in case of GSP differential tariff could be imposed by a nation on various countries depending upon factors such as whether it is a developed country or a developing country. Hence, statement 1 is correct.Both the rules comes under the purview of WTO. Hence, statement 2 is not correct.GSP provides tariff reduction for least developed countries but MFN is only for not discriminating among WTO members.

Explanation:

 

Option 1: An import quota is a type of protectionist trade restriction that sets a physical limit on the quantity of a good that can be imported into a country in a given period of time. So, A is correct.

Option 2: FDI is related to the capital sector and overall investment policy of the nation. FDI is not considered a trade component. So, B is wrong.

Option 3: Such standards can effectively clog imports from competitor nations, for e.g. China in case of India.

Option 4: A barrier to trade is a government-imposed restraint on the flow of international goods or services. The most common barrier to trade is a tariff—a tax on imports. Tariffs raise the price of imported goods relative to domestic goods (goods produced at home). So, D is correct.

The current account records exports and imports in goods and services and transfer payments. Trade in services denoted as invisible trade (because they are not seen to cross national borders) includes both factor income (payment for inputs-investment income, that is, the interest, profits and dividends on our assets abroad minus the income foreigners earn on assets they own in India) and non-factor income (shipping, banking, insurance, tourism, software services, etc.). Transfer payments are receipts which the residents of a country receive ‘for free’, without having to make any present or future payments in return. They consist of remittances, gifts and grants. They could be official or private.

Explanation:

 

Bound rate is the maximum rate of duty (tariff) that can be imposed by the importing country on an imported commodity. Here, each country commits itself to a ceiling on customs duties (tariff) on a certain number of products. Hence, statement 1 is correct.These rates vary from country to country and commodity to commodity. But no country can raise duties above the bound rate it has committed, and the rate of customs duty actually applied may be lower than the bound rate. Hence, statement 2 is not correct.

The degree of economic integration can be categorized into the following seven stages:1-Preferential trading area 2-Free-trade area 3-Customs union 4-Single market 5-Economic union 6-Economic and monetary union 7-Complete economic integration

Explanation:

 

Non-tariff measure (NTMs) are defined as policy measures, other than ordinary customs tariffs, that can potentially have an economic effect on international trade in goods, changing quantities traded, or prices or both.As a result, NTMs cover a broad range of policies including traditional trade policy instruments, such as quotas or price controls.However, they also comprise technical regulatory measures that pursue important non-trade objectives that relate to health and environmental protection, such as Sanitary and Phytosanitary (SPS) measures and Technical Barriers to Trade (TBT).

Explanation:

 

Trade between India and China from January to December 2020 stood at $77.67 billion. Though lower than the $85.47 billion traded between the countries in the 2019 calendar year, this figure was still higher than the $75.95 billion traded between India and the US last year.

Explanation:

 

Inverted duty structure is a situation where import duty on finished goods is low compared to the import duty on raw materials that are used in the production of such finished goods.When the import duty on raw materials is high, it will be more difficult to produce the concerned good domestically at a competitive price. Several industries depend on imported raw materials and components. High tax on the raw materials compels them to raise price.The disadvantage of the inverted duty structure increases with the increased use of imported raw materials. An inverted duty structure discourages domestic value addition.On the other hand, foreign finished goods will be coming at a reduced price because of low tax advantage. In conclusion, manufactured goods by the domestic industry becomes uncompetitive against imported finished goods. In such a case, even foreign investors would not be interested in setting up a firm for production in the country.Statement 3: It will be just the opposite.

Explanation:

 

Statement 1 and 2: Protection of undisclosed information (or trade secrets) is any information that has been intentionally treated as secret and is capable of commercial application with an economic interest.It protects information that confers a competitive advantage to those who possess such information, provided such information is not readily available with or discernible by the competitors (for e.g. unique psychological marketing techniques not known to all). It is different from patents, which is a recognized innovation.Statement 3: TRIPS Agreement is, by its coverage, the most comprehensive international instrument on IPRs, dealing with all types of IPRs, with the sole exception of breeders’ rights. IPRs covered under the TRIPS agreement are: copyrights, trade secrets, patents, GIs, industrial designs etc.