UPSC Prelims 1996 · General Studies

Question 37: Economy and Social Development

The emerging trading blocs in the world, such as NAFTA, ASEAN and the like, are expected to

aact as constrictions in free trade across the world

bpromote free trade on the lines laid down by the WTO

cpermit transfer of technology between member countries

dpromote trade in agricultural commodities between countries of the North and South

AnswerThe answer is (b).

Regional trading blocs such as NAFTA and ASEAN lower trade barriers among members, and WTO rules (GATT Article XXIV) allow free-trade areas and customs unions that meet conditions, so they are taken as steps towards the freer trade the WTO seeks. Critics warn that they can discriminate against outsiders, but the key reads them as consistent with the WTO's liberalising aim. Remember: blocs liberalise within, and the WTO tolerates them.

Why each option is right or wrong

(a) Blocs can divert trade, but the key does not read them as a constriction on free trade.
(b) Right: blocs are expected to promote free trade along WTO lines.
(c) Technology transfer is not the main purpose of trading blocs.
(d) NAFTA and ASEAN are regional groups, not North-South agricultural trade arrangements.

Explanation: written by UPSC Grade, not by UPSC.

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Source: UPSC, Civil Services (Preliminary) Examination 1996, General Studies. UPSC's own paper isn't online; the words are from a published compilation. The paper on upsc.gov.in.