UPSC Prelims 2017 Q83: Indian Economy – International Trade
Consider the following statements:
1. India has ratified the Trade Facilitation Agreement (TFA) of WTO.
2. TFA is a part of WTO's Bali Ministerial Package of 2013.
3. TFA came into force in January 2016.
Which of the statements given above is/are correct?
- (a) 1 and 2 only
- (b) 1 and 3 only
- (c) 2 and 3 only
- (d) 1, 2 and 3
Answer: (a) 1 and 2 only
Explanation
Trade Facilitation Agreement (TFA) of the WTO
The TFA aims to cut red tape at borders and speed up the movement of goods.
| Statement | Verdict | Fact |
|---|---|---|
| 1. India has ratified the Trade Facilitation Agreement | Correct | India ratified it in April 2016 |
| 2. TFA is a part of WTO's Bali Ministerial Package of 2013 | Correct | Agreed at the Ninth Ministerial Conference, Bali |
| 3. TFA came into force in January 2016 | Incorrect | It came into force on 22 February 2017, after two-thirds of WTO members ratified it |
Timeline:
| Year | Event |
|---|---|
| 2013 | Agreed at Bali |
| 2016 | India ratifies; sets up the National Committee on Trade Facilitation |
| 2017 | Enters into force |
Answer: (a) 1 and 2 only.
Why each option is right or wrong
- (a) CORRECT. India has ratified the TFA, and it is part of the Bali Package of 2013.
- (b) Incorrect. Statement 3 is false; the TFA came into force in February 2017.
- (c) Incorrect. Statement 3 is false and statement 1, on India's ratification, is true.
- (d) Incorrect. The TFA did not come into force in January 2016, so statement 3 fails.
Key point
TFA: part of the Bali Package (2013); India ratified in April 2016; in force from 22 February 2017 after two-thirds of WTO members ratified.
Remember
TFA: Bali 2013, India 2016, in force 2017.
Common mistakes
- Confusing the year India ratified (2016) with the year the TFA came into force (2017).
- Placing the TFA in the Nairobi (2015) package instead of Bali.
- Thinking the TFA is about tariff cuts; it is about customs procedures.
Exam tip
A WTO agreement comes into force only when two-thirds of members ratify it. Check the date.
Sources
- World Trade Organization — Trade Facilitation Agreement
- Press Information Bureau — India ratifies the WTO Trade Facilitation Agreement (April 2016)