International Trade & Organisations — PPSC previous year questions

The General Agreement on Tariffs and Trade (GATT, 1947) was replaced by the World Trade Organisation on 1 January 1995 following the Marrakesh Agreement that concluded the Uruguay Round. Unlike GATT, which was a provisional multilateral agreement covering only goods, the WTO is a permanent institution with a dispute settlement body and also covers services (GATS) and intellectual property (TRIPS). NAFTA and SAFTA are regional free-trade arrangements.

The New Development Bank (NDB) was earlier called the BRICS Development Bank. Brazil, Russia, India, China and South Africa set it up under the 2014 Fortaleza Agreement. It began operations in 2015. Its head office is in Shanghai, China. K.V. Kamath of India was its first president. It has regional offices in Johannesburg, Sao Paulo, Moscow and GIFT City (Gujarat). It has since admitted Bangladesh, the UAE, Egypt and Algeria as members.

In economic terms, globalisation means national economies joining up more closely. This happens through trade in goods and services, movement of capital (foreign direct and portfolio investment) and flows of finance. Movement of people and technology adds to it. All three channels listed work together. So the correct code is 1, 2 and 3. In India the 1991 reforms of liberalisation and privatisation opened these channels.

Special Drawing Rights (SDRs) are called 'paper gold'. The IMF created them in 1969 as an international reserve asset, to supplement members' official reserves. They were first defined in terms of gold, yet they exist only as book entries. The value of an SDR is fixed daily from a basket of major currencies: US dollar, euro, Chinese yuan, Japanese yen and pound sterling. Eurodollars are dollar deposits held outside the USA. Petrodollars are oil-export earnings. A GDR is a bank certificate representing shares of a foreign company.

The Bretton Woods Conference met in July 1944 in New Hampshire, USA. It created the International Monetary Fund and the International Bank for Reconstruction and Development, now the World Bank. The two are called the Bretton Woods twins. The Asian Development Bank (1966) and ASEAN (1967) are regional Asian bodies. The UN and NATO are political-security organisations.

The World Trade Organisation (WTO) is the global body dealing with the rules of trade between nations. It was established on 1 January 1995 as the successor to GATT (1948) after the Uruguay Round, is headquartered in Geneva, and India is a founding member. The IMF (Washington D.C.) handles international monetary stability and balance-of-payments support, not trade rules.

The current account of the balance of payments records trade in goods and services, income flows (profits, interest, remittances repatriated) and transfers, so items 1 and 2 belong to it. Foreign portfolio investment and external lending/borrowing are movements of capital and appear in the capital (financial) account, so 3 and 4 are excluded.

All three pairs are correct. The IMF publishes the Global Financial Stability Report, UNCTAD publishes the Technology and Innovation Report, and UNESCO uses the Gender Parity Index to compare girls' and boys' enrolment in education (not to be confused with the Global Gender Gap Index of the World Economic Forum).

When the Millennium Development Goals ended in 2015 the UN adopted the 17 Sustainable Development Goals (Agenda 2030) to run until 2030.

The New Development Bank was earlier called the BRICS Development Bank. Brazil, Russia, India, China and South Africa set it up under the 2014 Fortaleza Declaration. It began work in 2015, with headquarters in Shanghai. K. V. Kamath was its first president.