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Consider the following statements with respect to Trade agreements:
A free trade agreement is more comprehensive than a preferential trade agreement.
  • Tariffs may be reduced to zero for some products in a preferential trade agreement (PTA).
  • India has not signed a PTA with any country.
  • Partnership agreements or cooperation agreements are more comprehensive than an FTA.
    Which of the above statements is/are correct?
    • a)
      1, 2 and 3 only
    • b)
      2, 3 and 4 only
    • c)
      1, 2 and 4 only
    • d)
      All of the above
    Correct answer is option 'C'. Can you explain this answer?
    Most Upvoted Answer
    Consider the following statements with respect to Trade agreements: ...
    • Free Trade Agreement: A free trade agreement is an agreement in which two or more countries agree to provide preferential trade terms, tariff concession etc. to the partner country. Here a negative list of products and services is maintained by the negotiating countries on which the terms of FTA are not applicable hence it is more comprehensive than a preferential trade agreement. India has negotiated FTA with many countries e.g. Sri Lanka and various trading blocs as well e.g. ASEAN. Hence, statement 1 is correct.
    • Preferential Trade Agreement: In this type of agreement, two or more partners give preferential right of entry to certain products. This is done by reducing duties on an agreed number of tariff lines. Here a positive list is maintained i.e. the list of the products to which the two partners have agreed to provide preferential access. Tariffs may even be reduced to zero for some products even in a PTA. Hence, statement 2 is correct. India signed a PTA with Afghanistan. Hence, statement 3 is incorrect
    • Comprehensive Economic Partnership Agreement: A partnership agreement or cooperation agreement is more comprehensive than an FTA. CECA/CEPA also looks into the regulatory aspect of trade and encompasses an agreement covering the regulatory issues. CEPA covers negotiation on the trade in services and investment and other areas of economic partnership. It may even consider negotiation in areas such as trade facilitation and customs cooperation, competition, and IPR. India has signed CEPAs with South Korea and Japan. Hence, statement 4 is correct.
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    Community Answer
    Consider the following statements with respect to Trade agreements: ...
    The correct answer is option 'C': 1, 2, and 4 only. Let's understand each statement:

    1. A free trade agreement is more comprehensive than a preferential trade agreement.
    - This statement is correct. A free trade agreement (FTA) is a type of trade agreement between two or more countries that aims to eliminate or reduce barriers to trade, such as tariffs, quotas, and other restrictions. FTAs cover a wider range of economic sectors and trade-related issues compared to preferential trade agreements (PTAs). FTAs typically include provisions related to trade in goods, services, investment, intellectual property rights, government procurement, competition policy, dispute settlement mechanisms, and more.

    2. Tariffs may be reduced to zero for some products in a preferential trade agreement (PTA).
    - This statement is correct. In a preferential trade agreement (PTA), participating countries agree to reduce or eliminate tariffs on certain products traded between them. The level of tariff reduction varies depending on the specific PTA. In some cases, tariffs may be reduced to zero for certain products, allowing for duty-free trade between the participating countries for those specific goods.

    3. India has not signed a PTA with any country.
    - This statement is incorrect. India has signed several preferential trade agreements with different countries and regional blocs. For example, India has PTAs with countries like Sri Lanka, Nepal, Afghanistan, Thailand, and others. India is also part of regional trade blocs like the South Asian Free Trade Area (SAFTA) and the Asia-Pacific Trade Agreement (APTA).

    4. Partnership agreements or cooperation agreements are more comprehensive than an FTA.
    - This statement is correct. Partnership agreements or cooperation agreements are typically broader and more comprehensive in scope compared to free trade agreements. These agreements go beyond trade and cover various aspects of cooperation between countries, such as political, economic, social, and cultural dimensions. Partnership agreements often include provisions related to trade, investment, development cooperation, strategic partnerships, and more.

    In conclusion, statements 1, 2, and 4 are correct, while statement 3 is incorrect. Therefore, the correct answer is option 'C': 1, 2, and 4 only.
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    Consider the following statements with respect to Trade agreements: A free trade agreement is more comprehensive than a preferential trade agreement. Tariffs may be reduced to zero for some products in a preferential trade agreement (PTA). India has not signed a PTA with any country. Partnership agreements or cooperation agreements are more comprehensive than an FTA. Which of the above statements is/are correct?a)1, 2 and 3 onlyb)2, 3 and 4 onlyc)1, 2 and 4 onlyd)All of the aboveCorrect answer is option 'C'. Can you explain this answer?
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    Consider the following statements with respect to Trade agreements: A free trade agreement is more comprehensive than a preferential trade agreement. Tariffs may be reduced to zero for some products in a preferential trade agreement (PTA). India has not signed a PTA with any country. Partnership agreements or cooperation agreements are more comprehensive than an FTA. Which of the above statements is/are correct?a)1, 2 and 3 onlyb)2, 3 and 4 onlyc)1, 2 and 4 onlyd)All of the aboveCorrect answer is option 'C'. Can you explain this answer? for UPSC 2024 is part of UPSC preparation. The Question and answers have been prepared according to the UPSC exam syllabus. Information about Consider the following statements with respect to Trade agreements: A free trade agreement is more comprehensive than a preferential trade agreement. Tariffs may be reduced to zero for some products in a preferential trade agreement (PTA). India has not signed a PTA with any country. Partnership agreements or cooperation agreements are more comprehensive than an FTA. Which of the above statements is/are correct?a)1, 2 and 3 onlyb)2, 3 and 4 onlyc)1, 2 and 4 onlyd)All of the aboveCorrect answer is option 'C'. Can you explain this answer? covers all topics & solutions for UPSC 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Consider the following statements with respect to Trade agreements: A free trade agreement is more comprehensive than a preferential trade agreement. Tariffs may be reduced to zero for some products in a preferential trade agreement (PTA). India has not signed a PTA with any country. Partnership agreements or cooperation agreements are more comprehensive than an FTA. Which of the above statements is/are correct?a)1, 2 and 3 onlyb)2, 3 and 4 onlyc)1, 2 and 4 onlyd)All of the aboveCorrect answer is option 'C'. Can you explain this answer?.
    Solutions for Consider the following statements with respect to Trade agreements: A free trade agreement is more comprehensive than a preferential trade agreement. Tariffs may be reduced to zero for some products in a preferential trade agreement (PTA). India has not signed a PTA with any country. Partnership agreements or cooperation agreements are more comprehensive than an FTA. Which of the above statements is/are correct?a)1, 2 and 3 onlyb)2, 3 and 4 onlyc)1, 2 and 4 onlyd)All of the aboveCorrect answer is option 'C'. Can you explain this answer? in English & in Hindi are available as part of our courses for UPSC. Download more important topics, notes, lectures and mock test series for UPSC Exam by signing up for free.
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