Q.1 What is the primary purpose of the World Trade Organization (WTO)?
To regulate international banking
To promote free trade and resolve trade disputes
To manage global oil prices
To oversee immigration policies
Explanation - The WTO aims to facilitate smooth international trade by reducing barriers and providing a platform for dispute resolution.
Correct answer is: To promote free trade and resolve trade disputes
Q.2 Which agreement primarily governs international sales of goods?
CISG (United Nations Convention on Contracts for the International Sale of Goods)
NAFTA
GATT
Paris Convention
Explanation - The CISG provides a uniform legal framework for international sale of goods between parties from different countries.
Correct answer is: CISG (United Nations Convention on Contracts for the International Sale of Goods)
Q.3 A tariff is best described as:
A tax on imported goods
A type of export license
A trade agreement
A form of currency exchange
Explanation - Tariffs are imposed by governments on imported goods to protect domestic industries or generate revenue.
Correct answer is: A tax on imported goods
Q.4 Which principle prohibits unfair discrimination against foreign goods?
National Treatment
Most-Favored-Nation (MFN)
Trade Facilitation
Countervailing Measures
Explanation - The National Treatment principle requires that imported and locally-produced goods be treated equally after entering the market.
Correct answer is: National Treatment
Q.5 Which international document primarily deals with trade-related intellectual property rights?
TRIPS Agreement
GATT
UNCITRAL Model Law
Kyoto Protocol
Explanation - TRIPS (Trade-Related Aspects of Intellectual Property Rights) sets minimum standards for the protection of IP in international trade.
Correct answer is: TRIPS Agreement
Q.6 A quota in international trade refers to:
A limit on the amount of goods that can be imported or exported
A tax on domestic products
A trade agreement between two countries
A type of shipping method
Explanation - Quotas are used by governments to restrict the quantity of certain imports or exports to protect domestic industries.
Correct answer is: A limit on the amount of goods that can be imported or exported
Q.7 Which of the following is a major function of the International Chamber of Commerce (ICC)?
Arbitration of international commercial disputes
Setting national tax policies
Managing central banks
Regulating local labor laws
Explanation - The ICC provides arbitration services and establishes rules for international trade to resolve disputes outside courts.
Correct answer is: Arbitration of international commercial disputes
Q.8 Dumping in international trade refers to:
Selling products abroad at a price lower than domestic market or cost of production
Exporting products with extra taxes
Importing goods with no tariffs
Setting production quotas
Explanation - Dumping is considered unfair competition and may lead to anti-dumping measures by the importing country.
Correct answer is: Selling products abroad at a price lower than domestic market or cost of production
Q.9 What is the main goal of Free Trade Agreements (FTAs)?
To reduce or eliminate trade barriers between member countries
To impose tariffs on all foreign goods
To regulate foreign exchange rates
To enforce domestic labor laws abroad
Explanation - FTAs aim to promote trade among member countries by lowering tariffs, quotas, and other restrictions.
Correct answer is: To reduce or eliminate trade barriers between member countries
Q.10 Which dispute resolution mechanism is commonly used in international trade contracts?
Arbitration
Criminal court
Family court
Small claims court
Explanation - Arbitration is a private dispute resolution process widely used in international trade for its efficiency and enforceability.
Correct answer is: Arbitration
Q.11 Which principle requires WTO members to treat all trading partners equally?
Most-Favored-Nation (MFN)
National Treatment
Dispute Settlement
Fair Trade
Explanation - MFN ensures that a WTO member does not discriminate between trading partners and gives all equal trade advantages.
Correct answer is: Most-Favored-Nation (MFN)
Q.12 Which of the following is NOT a type of trade barrier?
Subsidies
Quotas
Tariffs
Arbitration
Explanation - Arbitration is a dispute resolution method, not a trade barrier. Barriers include tariffs, quotas, and subsidies.
Correct answer is: Arbitration
Q.13 The principle of 'freedom of transit' in international trade means:
Goods should pass through countries without undue restrictions
All goods must pay tariffs
Foreign goods can be banned at will
Imports must be stored for 6 months before sale
Explanation - Freedom of transit ensures smooth movement of goods across countries, especially landlocked nations, without excessive barriers.
Correct answer is: Goods should pass through countries without undue restrictions
Q.14 Which international convention governs letters of credit and banking in trade finance?
UCP 600 (Uniform Customs and Practice for Documentary Credits)
CISG
TRIPS
GATT
Explanation - UCP 600 provides standardized rules for letters of credit to ensure smooth international payment and finance.
Correct answer is: UCP 600 (Uniform Customs and Practice for Documentary Credits)
Q.15 Countervailing duties are imposed to:
Offset subsidies given by foreign governments to their exporters
Promote dumping
Encourage foreign investment
Reduce domestic tariffs
Explanation - Countervailing duties neutralize the advantage exporters get from government subsidies to ensure fair competition.
Correct answer is: Offset subsidies given by foreign governments to their exporters
Q.16 Which document provides a framework for international commercial contracts?
UNCITRAL Model Law
TRIPS Agreement
GATT
Hague Convention on Child Protection
Explanation - The UNCITRAL Model Law guides nations in enacting laws on international commercial transactions and dispute resolution.
Correct answer is: UNCITRAL Model Law
Q.17 Which of the following is a form of non-tariff barrier?
Import licensing requirements
Export subsidies
Anti-dumping duties
All of the above
Explanation - Non-tariff barriers include quotas, licensing requirements, subsidies, and anti-dumping measures, which restrict trade without imposing tariffs.
Correct answer is: All of the above
Q.18 Which type of trade is regulated under bilateral agreements?
Trade between two countries
Trade among all WTO members
Domestic trade
Regional trade within continents
Explanation - Bilateral agreements are signed by two countries to facilitate trade by reducing barriers and setting mutual standards.
Correct answer is: Trade between two countries
Q.19 What is the role of a Free Trade Zone (FTZ)?
To encourage exports by offering tax exemptions and relaxed regulations
To impose high tariffs on imported goods
To regulate domestic labor laws
To enforce international IP rights
Explanation - FTZs are designed to attract businesses by reducing taxes and bureaucracy to promote trade and investment.
Correct answer is: To encourage exports by offering tax exemptions and relaxed regulations
Q.20 Which of the following is a key principle of GATT?
Reduction of tariffs and trade barriers
Strict immigration control
Nationalization of industries
Exclusive trade with allies
Explanation - GATT promotes international trade by encouraging countries to lower tariffs and remove trade barriers.
Correct answer is: Reduction of tariffs and trade barriers
Q.21 In international trade law, an embargo refers to:
A government-imposed ban on trade with a specific country
A temporary tax reduction
A dispute resolution mechanism
A type of letter of credit
Explanation - Embargoes are political tools used to pressure countries by restricting trade and economic relations.
Correct answer is: A government-imposed ban on trade with a specific country
Q.22 Which institution settles trade disputes between WTO members?
WTO Dispute Settlement Body
International Monetary Fund
World Bank
ICC
Explanation - The WTO’s Dispute Settlement Body handles conflicts between members regarding trade violations or disagreements.
Correct answer is: WTO Dispute Settlement Body
Q.23 Which of the following is an example of preferential trade agreement?
NAFTA
CISG
TRIPS
UCP 600
Explanation - NAFTA (North American Free Trade Agreement) is a preferential trade agreement that reduces tariffs among member countries.
Correct answer is: NAFTA
Q.24 Which factor is NOT directly covered under international trade law?
Criminal offenses unrelated to trade
Tariffs and quotas
Dispute settlement between traders
Trade-related intellectual property
Explanation - International trade law deals with trade rules, IP rights, tariffs, and dispute settlements, not general criminal law.
Correct answer is: Criminal offenses unrelated to trade