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International Trade in Services

Description: This quiz covers the topic of International Trade in Services, including its significance, modes of delivery, and key agreements.
Number of Questions: 15
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Tags: international trade services gats wto
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What is the primary objective of the General Agreement on Trade in Services (GATS)?

  1. To promote the liberalization of trade in goods.

  2. To establish a framework for the regulation of trade in services.

  3. To provide financial assistance to developing countries for trade development.

  4. To negotiate bilateral trade agreements between countries.


Correct Option: B
Explanation:

The GATS is an international agreement that aims to establish a framework for the regulation of trade in services, including the liberalization of trade in services, the promotion of economic development, and the expansion of trade opportunities for all countries.

Which of the following is NOT a mode of delivery for international trade in services?

  1. Cross-border supply

  2. Consumption abroad

  3. Commercial presence

  4. Foreign direct investment


Correct Option: D
Explanation:

Foreign direct investment is not a mode of delivery for international trade in services, but rather a form of investment where a company from one country establishes a presence in another country.

What is the significance of international trade in services in the global economy?

  1. It contributes to economic growth and development.

  2. It creates jobs and promotes innovation.

  3. It enhances productivity and competitiveness.

  4. All of the above.


Correct Option: D
Explanation:

International trade in services contributes to economic growth and development, creates jobs and promotes innovation, and enhances productivity and competitiveness.

Which of the following is an example of a service that is commonly traded internationally?

  1. Manufacturing goods

  2. Financial services

  3. Agricultural products

  4. Natural resources


Correct Option: B
Explanation:

Financial services, such as banking, insurance, and investment, are commonly traded internationally.

What is the role of the World Trade Organization (WTO) in international trade in services?

  1. To administer and enforce the GATS.

  2. To negotiate trade agreements between countries.

  3. To provide technical assistance to developing countries.

  4. All of the above.


Correct Option: D
Explanation:

The WTO administers and enforces the GATS, negotiates trade agreements between countries, and provides technical assistance to developing countries.

What is the concept of 'most-favored-nation' (MFN) treatment in international trade in services?

  1. All countries must be treated equally in terms of trade.

  2. Developing countries receive preferential treatment.

  3. Least developed countries receive preferential treatment.

  4. None of the above.


Correct Option: A
Explanation:

MFN treatment in international trade in services means that all countries must be treated equally in terms of trade, without discrimination.

Which of the following is a key principle of the GATS?

  1. Transparency

  2. Non-discrimination

  3. National treatment

  4. All of the above.


Correct Option: D
Explanation:

Transparency, non-discrimination, and national treatment are key principles of the GATS.

What is the purpose of the 'positive list' approach in international trade in services?

  1. To list all services that are subject to liberalization.

  2. To list all services that are excluded from liberalization.

  3. To list all services that are subject to regulation.

  4. None of the above.


Correct Option: A
Explanation:

The positive list approach in international trade in services involves listing all services that are subject to liberalization, while the negative list approach involves listing all services that are excluded from liberalization.

What is the significance of the 'reference paper' in the GATS?

  1. It provides guidance on the interpretation of the GATS.

  2. It contains a list of all services that are subject to liberalization.

  3. It provides a framework for negotiating trade agreements in services.

  4. None of the above.


Correct Option: A
Explanation:

The reference paper in the GATS provides guidance on the interpretation of the agreement and its provisions.

Which of the following is NOT a benefit of international trade in services?

  1. It promotes economic growth and development.

  2. It creates jobs and promotes innovation.

  3. It leads to higher prices for consumers.

  4. It enhances productivity and competitiveness.


Correct Option: C
Explanation:

International trade in services typically leads to lower prices for consumers due to increased competition and efficiency.

What is the concept of 'prudential regulations' in international trade in services?

  1. Regulations designed to protect the financial stability of a country.

  2. Regulations designed to protect the environment.

  3. Regulations designed to protect consumers.

  4. Regulations designed to protect national security.


Correct Option: A
Explanation:

Prudential regulations in international trade in services are designed to protect the financial stability of a country by ensuring that financial institutions are sound and well-managed.

Which of the following is an example of a 'horizontal' commitment in the GATS?

  1. A commitment to liberalize a specific service sector.

  2. A commitment to provide national treatment to foreign service providers.

  3. A commitment to reduce tariffs on imported goods.

  4. A commitment to provide technical assistance to developing countries.


Correct Option: B
Explanation:

Horizontal commitments in the GATS are general commitments that apply to all service sectors, such as a commitment to provide national treatment to foreign service providers.

What is the purpose of the 'most-favored-enterprise' (MFE) treatment in international trade in services?

  1. To ensure that all enterprises are treated equally.

  2. To ensure that foreign enterprises are treated more favorably than domestic enterprises.

  3. To ensure that domestic enterprises are treated more favorably than foreign enterprises.

  4. None of the above.


Correct Option: A
Explanation:

MFE treatment in international trade in services ensures that all enterprises, regardless of their nationality, are treated equally.

Which of the following is a key challenge in the negotiation of trade agreements in services?

  1. The complexity and diversity of services.

  2. The lack of transparency in services regulations.

  3. The resistance of governments to liberalize services sectors.

  4. All of the above.


Correct Option: D
Explanation:

The complexity and diversity of services, the lack of transparency in services regulations, and the resistance of governments to liberalize services sectors are all key challenges in the negotiation of trade agreements in services.

What is the role of the 'domestic regulation' annex in the GATS?

  1. It provides guidance on how to regulate services.

  2. It contains a list of all services that are subject to regulation.

  3. It provides a framework for negotiating trade agreements in services.

  4. None of the above.


Correct Option: A
Explanation:

The domestic regulation annex in the GATS provides guidance on how to regulate services in a manner that is consistent with the agreement's principles and objectives.

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