KSLU Solved Question Papers
International Trade Economics
Previous Year Question Paper with Solution
B.A. LL.B. (Five Years) · Sem 10
2012 Jun Examination
munotes.in
Mumbai
B.A. LL.B. (Five Years) Sem 10 International Trade Economics 2012 Jun Question Paper with Solutions
First published on munotes.in on 21 October 2026.
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Contents
The questions below are the paper as Karnataka State Law University set it at the 2012 Jun examination, in the order it was set.
MarksPage
MarksPage
The Paper as Set
The questions in this volume are the questions asked at the 2012 Jun examination, reproduced as Karnataka State Law University set them, in the order it set them. Long reading passages are shortened to their first and last lines and our summary; the original paper prints them in full. Only the answers are ours. See the original question paper.
Duration 3 hours · Total marks 100 · 20 questions answered
How to use this volume
Solve the paper first, under exam conditions and against the clock. Then read the answers here and mark your own. Reading a solution before attempting the question feels productive and teaches very little, because recognising an answer is not the same as being able to write one.
Q1
Unit I
(a)What are the objectives of WTO ? Do you consider that the structure and powers of WTO are suitable for achieving its objectives.[15]
Answer
For full marks, cover: the WTO's objectives (the Marrakesh Preamble: welfare, growth of trade in goods and services, sustainable development, a share for developing countries, and an integrated, durable system), and the means it names; its structure (Article IV: Ministerial Conference, General Council, DSB and TPRB, Councils, committees, Secretariat; decision-making under Article IX; amendment under Article X); its powers (forum for negotiation, rule-making and interpretation, dispute settlement, policy review, accession, cooperation with the IMF and World Bank); then the question asked: whether these suit the objectives, weighing the strengths (legitimacy of member-driven consensus, the single undertaking, binding dispute settlement, transparency; India: Quantitative Restrictions, European Communities: Bananas III) against the weaknesses (slow consensus and the unfinished Doha Round, the Appellate Body's paralysis since 2019, weak notification, a small Secretariat, enforcement that favours large members, the blocked plurilaterals); reform proposals; a reasoned verdict; a conclusion.
The objectives
The Preamble to the Marrakesh Agreement sets the WTO's objectives. Trade relations should aim at raising living standards, ensuring full employment and a growing volume of real income and effective demand. They should expand the production of and trade in goods and services. Growth must allow optimal use of the world's resources in line with sustainable development. Positive efforts are needed so that developing countries, especially the least developed, share in the growth of trade. Finally, members resolve to build an integrated, more viable and durable multilateral trading system.
The means are reciprocal arrangements to reduce tariffs and other barriers, and the elimination of discrimination.
The structure
- The Ministerial Conference, of all members, meets at least every two years and may decide on all matters (Article IV:1).
- The General Council acts between conferences (Article IV:2). It also sits as the Dispute Settlement Body and the Trade Policy Review Body (Article IV:3 and 4).
- The Councils for Trade in Goods, Trade in Services and TRIPS oversee their agreements (Article IV:5), with committees under them.
- The Secretariat, headed by the Director-General appointed by the Ministerial Conference, serves the members (Article VI). Its staff are international civil servants.
Decision-making (Article IX). The WTO continues GATT's practice of consensus. Where voting is needed, each member has one vote and a majority of votes cast decides, unless otherwise provided. An authoritative interpretation needs three-fourths of the members (Article IX:2), as does a waiver (Article IX:3). Amendments follow Article X; core provisions such as MFN can be amended only with every member's acceptance.
The powers
- A forum for negotiation on existing and new matters (Article III:2).
- Rule-making: amendment of the agreements, adoption of new agreements, interpretations and waivers.
- Dispute settlement under the DSU, binding on all members.
- Trade policy review of every member under the TPRM.
- Accession of new members on agreed terms (Article XII).
- Cooperation with the IMF and the World Bank for coherent economic policy (Article III:5).
Are the structure and powers suitable for the objectives?
A. Strengths.
1. Legitimacy through consensus. Every member, large or small, has a voice and a vote. Rules agreed by all are more likely to be accepted and applied.
2. The single undertaking. All members accept all the multilateral agreements together. This ended "GATT a la carte" and gave the system unity, matching the aim of an integrated system.
3. Binding dispute settlement. Panels and appeals, with reports adopted by reverse consensus, give the rules teeth. Small members can win against large ones.
India: Quantitative Restrictions (WT/DS90/AB/R, adopted 22 September 1999). India defended import licensing on 2,714 tariff lines as a balance of payments measure. The Appellate Body held that a panel could review that defence, and India's reserves no longer justified it. India removed the licensing by 1 April 2001. The case shows the dispute system reaching even sensitive national policy.
European Communities: Bananas III (WT/DS27/AB/R, adopted 25 September 1997). Ecuador, a small economy, won against the EC. Unable to retaliate usefully in goods, it was authorised in 2000 to suspend TRIPS concessions, the first cross-retaliation ever authorised. The case shows that the system can give weaker members leverage.
4. Transparency. Trade policy reviews and notification duties expose members' measures to scrutiny, helping predictability.
5. Real results. The WTO has added the Trade Facilitation Agreement (in force 22 February 2017) and the Agreement on Fisheries Subsidies (in force 15 September 2025). The Nairobi decision of 2015 required farm export subsidies to be eliminated.
B. Weaknesses.
1. Consensus is slow. With 166 members, any one can block agreement. The Doha Round, launched in 2001 with development at its centre, has never been concluded. The development objective is therefore only partly met.
2. Dispute settlement is paralysed at the top. Appointments to the Appellate Body need ordinary consensus, and they have been blocked. The body lost its quorum on 11 December 2019. A loser can now appeal "into the void", undermining the aim of security and predictability.
3. Enforcement favours the large. The only sanction is retaliation by the winning member. A small economy can rarely hurt a large one by raising its own tariffs.
4. Weak notification. Many members notify subsidies and other measures late or not at all, so surveillance is incomplete.
5. A member-driven Secretariat. The Secretariat and Director-General have little power of initiative, so the WTO depends on members to propose and agree.
6. New issues are hard to add. Groups of members have negotiated new texts, such as the Investment Facilitation for Development Agreement. At the Fourteenth Ministerial Conference in March 2026 it still could not be added to Annex 4, because consensus was lacking.
Matching each objective to the machinery
| Objective | Machinery that serves it | How well |
|---|---|---|
| Open, non-discriminatory trade | Agreements; MFN and national treatment; dispute settlement | Well, though appeals are blocked |
| Predictability | Bindings; transparency; trade policy review | Well, weakened by poor notification |
| Objective | Machinery that serves it | How well |
|---|---|---|
| Development | Special and differential treatment; Doha mandate | Partly; Doha unfinished |
| Sustainable development | Exceptions read in light of the Preamble; fisheries rules | Improving slowly |
| A durable system | Single undertaking; permanent organisation | Strained by the consensus rule |
Reform proposals
Members have discussed restoring a working appeal system, and some use an interim appeal arbitration arrangement under Article 25 of the DSU. Others propose wider use of plurilateral agreements among willing members, better notification, and a clearer approach to special treatment for developing members. Each proposal tests the balance between consensus and effectiveness. Developing members, India among them, generally defend consensus, because it protects their voice against pressure from larger economies.
Verdict
The WTO's structure and powers are broadly suitable for its objectives of open, predictable and non-discriminatory trade. Consensus gives legitimacy, the single undertaking gives unity, and dispute settlement gives the rules force. They are less suitable for its newer and harder objectives: concluding development-oriented negotiations, adding new rules and keeping dispute settlement fully working. The same consensus that gives the WTO legitimacy has made it slow to change. The structure is therefore sound in design but strained in operation, and its future depends on members' willingness to reform it.
Conclusion. The WTO aims at higher living standards and expanding trade in goods and services. It also seeks sustainable development and a fair share for developing countries, within a durable system. Its Ministerial Conference, General Council, Councils and Secretariat, deciding mostly by consensus, hold strong powers of negotiation, rule-making, dispute settlement and review. Binding dispute settlement, as India: Quantitative Restrictions and Bananas III show, makes it unusually effective. But slow consensus, the stalled Doha Round and the Appellate Body's paralysis since 2019 show that its structure needs reform to meet its objectives fully.
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