Q1. With reference to preferential trade arrangements, consider the following statements:
- Preferential market access involves granting selected trading partners more favourable trade conditions than those available to other countries.
- An interim trade agreement necessarily requires the elimination of tariffs on all goods traded between the participating countries.
- A country entering into a preferential trade arrangement may retain tariffs on products not covered by the negotiated concessions.
- Preferential trade arrangements can cover selected sectors without necessarily constituting a comprehensive Free Trade Agreement (FTA).
Which of the statements given above are correct?
(a) 1 and 2 only
(b) 1, 3 and 4 only
(c) 2 and 3 only
(d) 1, 2, 3 and 4
Answer: (b) 1, 3 and 4 only
Explanation:
- Statement 1 is Correct: Preferential market access provides selected trading partners with favourable tariff or other market-access conditions.
- Statement 2 is Incorrect: An interim agreement can provide limited concessions in selected sectors without eliminating all tariffs.
- Statement 3 is Correct: Tariff concessions are negotiated product-wise or sector-wise. Other tariffs may continue.
- Statement 4 is Correct: An interim arrangement can precede a comprehensive FTA and need not cover all aspects of bilateral trade.
