KSLU Solved Question Papers
International Trade Economics
Previous Year Question Paper with Solution
B.A. LL.B. (Five Years) · Sem 10
2020 Nov Examination
munotes.in
Mumbai
B.A. LL.B. (Five Years) Sem 10 International Trade Economics 2020 Nov Question Paper with Solutions
First published on munotes.in on 21 October 2026.
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The question paper reproduced here is the paper as set by Karnataka State Law University at the 2020 Nov examination.
Contents
The questions below are the paper as Karnataka State Law University set it at the 2020 Nov examination, in the order it was set.
MarksPage
The Paper as Set
The questions in this volume are the questions asked at the 2020 Nov 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 · 15 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.
Q1Discuss the historical evolution of emergence of WTO (World Trade Organisation).[16]
Answer
For full marks, cover: the trading world before 1944 (bilateral treaties, the tariff war after 1930); the Bretton Woods plan and the proposed International Trade Organization (ITO); the Havana Charter and why it failed; the birth of GATT in 1947 and its provisional character; GATT's evolution through eight rounds and its institutional growth; the weaknesses that built up by the 1980s; the Uruguay Round, step by step; the establishment of the WTO by the Marrakesh Agreement (functions, structure, legal personality, original members); the WTO's development since 1995 (ministerial conferences, membership, the dispute settlement crisis); India's place; a comparison table; a conclusion.
Introduction
The World Trade Organization (WTO) did not appear suddenly in 1995. It is the end point of fifty years of effort to place world trade under common rules. That effort began with the General Agreement on Tariffs and Trade (GATT) of 1947, a temporary bargain that lasted almost half a century. The story has four stages. They are the inter-war failure, the plan of 1944 to 1948, the GATT era and the founding of the WTO.
Stage 1: The world before the system
Before the Second World War, trade rested on thousands of bilateral treaties of friendship, commerce and navigation. There was no common text, no institution and no court. A broken promise could be answered only by retaliation.
The weakness showed after the Great Depression. In 1930 the United States raised its tariffs sharply under the Smoot-Hawley Act. Other countries retaliated. World trade fell by about two thirds in value between 1929 and 1934. Quotas and exchange controls then replaced tariffs. Britain built a system of imperial preference at Ottawa in 1932.
From this period the planners drew two lessons. Protection is contagious, and a trade promise that is not bound is worthless.
Stage 2: The plan of 1944 to 1948
Bretton Woods, 1944. The allied conference at Bretton Woods created the International Monetary Fund and the International Bank for Reconstruction and Development. A third body, for trade, was planned but left for later.
The Havana Charter. A United Nations Conference on Trade and Employment met at Havana. Its Final Act of 24 March 1948 contained the Charter for an International Trade Organization. The Charter was ambitious. It covered employment, development, commercial policy, restrictive business practices and commodity agreements.
Its failure. The Charter needed ratification, and the United States Congress was unwilling. In December 1950 the United States Administration announced that it would not resubmit the Charter. Without the largest trading nation, the ITO was dead.
Stage 3: GATT, the provisional agreement (1947 to 1994)
Birth. While the Charter was being drafted, 23 countries negotiated tariff cuts at Geneva. They signed the General Agreement on Tariffs and Trade on 30 October 1947. India was one of the 23. GATT was essentially the commercial policy chapter of the draft Charter. It applied from 1 January 1948 under a Protocol of Provisional Application.
A provisional character. Under the Protocol's grandfather clause, Part II of GATT applied only so far as it was consistent with existing laws. GATT was a contract, not an organisation. Its parties were "contracting parties", not members. A small secretariat was borrowed from the Interim Commission for the ITO. Yet the provisional agreement survived the Charter, because it needed no ratification.
Growth through rounds. GATT's main work was negotiation in rounds.
| Round | Years | Main result |
|---|---|---|
| Geneva | 1947 | The first tariff concessions |
| Annecy | 1949 | Tariff cuts; new contracting parties |
| Torquay | 1950 to 1951 | Tariff cuts |
| Geneva | 1955 to 1956 | Tariff cuts |
| Dillon | 1960 to 1962 | Tariff cuts; talks with the new European Community |
| Kennedy | 1964 to 1967 | Cuts of about a third; first Anti-Dumping Code |
| Round | Years | Main result |
|---|---|---|
| Tokyo | 1973 to 1979 | Cuts of about a third; nine codes on non-tariff barriers |
| Uruguay | 1986 to 1994 | The WTO and its agreements |
The early rounds bargained product by product. From the Kennedy Round, members agreed linear cuts across the board, which was faster.
Institutional growth. GATT slowly acted like an organisation. A Council, committees and a secretariat in Geneva developed. The title of Director-General was adopted in 1965. Part IV on trade and development was added in 1965. The Enabling Clause of 1979 gave a legal basis to tariff preferences for developing countries. Panels under Articles XXII and XXIII built a body of dispute practice.
Achievement. Developed countries' average industrial tariffs fell from roughly 40 per cent in 1947. By the end of the Uruguay Round they were under 5 per cent. The number of contracting parties grew from 23 to more than 120.
The weaknesses that built up
By the 1980s GATT showed serious gaps.
- Whole sectors escaped. Agriculture was largely outside the rules after a waiver given to the United States in 1955. Textiles were governed by bilateral quotas under the Multifibre Arrangement of 1974.
- Rules fragmented. The Tokyo Round codes bound only those who signed them. This was called "GATT a la carte".
- Disputes could be blocked. Decisions needed consensus, so the losing party could stop a panel report.
- New trade was not covered. Services, intellectual property and investment measures lay outside GATT.
- Grey-area measures spread. Voluntary export restraints and unilateral action, such as section 301 of the United States trade law, bypassed the rules.
Stage 4: The Uruguay Round and the establishment of the WTO
Launch. Ministers launched the Uruguay Round at Punta del Este, Uruguay, on 20 September 1986. There were fifteen negotiating groups. India and Brazil resisted bringing in services. The compromise put services on a separate track.
Crises. The Brussels meeting of 1990 collapsed over farm export subsidies. On 20 December 1991, Director-General Arthur Dunkel tabled a complete Draft Final Act, the "Dunkel Draft". The Blair House Accord of November 1992 between the United States and the European Community unlocked agriculture.
Conclusion of the Round. The Round ended on 15 December 1993. Ministers signed the Final Act and the Marrakesh Agreement Establishing the World Trade Organization on 15 April 1994. The WTO came into being on 1 January 1995.
What the Marrakesh Agreement created.
- An organisation (Article I) with legal personality (Article VIII).
- Five functions (Article III): it administers the agreements and is the forum for negotiations. It runs dispute settlement and trade policy review. It works with the IMF and the World Bank.
- A structure (Article IV): a Ministerial Conference at least every two years, a General Council, and Councils for goods, services and TRIPS.
- A single undertaking (Article II:2): the multilateral agreements bind every member.
- Continuity (Article XVI:1): the WTO is guided by GATT's decisions and customary practices.
- Original membership (Article XI): open to GATT contracting parties that accepted the Agreement with their schedules.
The package added GATS for services, TRIPS for intellectual property, TRIMs and the Agreement on Agriculture. It also brought the Dispute Settlement Understanding, with reverse consensus and an Appellate Body. Textiles were to return to normal rules over ten years.
A new legal text. GATT survives inside the WTO as GATT 1994, which is legally distinct from GATT 1947 (Article II:4).
Brazil: Desiccated Coconut (WT/DS22/AB/R, adopted 20 March 1997). A Brazilian duty rested on an investigation begun before the WTO Agreement applied. The Appellate Body held that the new Subsidies Agreement did not govern it. The WTO is a fresh legal package, not just GATT renamed.
The WTO's development since 1995
Ministerial conferences. Singapore (1996) added new issues to the agenda. Doha (2001) launched the Doha Development Agenda, which remains unfinished. Bali (2013) produced the Trade Facilitation Agreement, in force since 22 February 2017. Nairobi (2015) abolished farm export subsidies. Geneva (MC12, 2022) agreed on fisheries subsidies; that agreement entered into force on 15 September 2025. Abu Dhabi (MC13, 2024) and Yaounde (MC14, March 2026) made little progress; Yaounde closed without a declaration.
Membership. China joined on 11 December 2001. Membership reached 166 in August 2024, when Comoros and Timor-Leste joined.
The dispute settlement crisis. The United States blocked new appointments to the Appellate Body. It has had no members since 30 November 2020. Some members use an interim appeal arbitration arrangement instead.
India's place
India was a founding contracting party of GATT in 1947 and an original member of the WTO. It shaped the Uruguay Round on services. It also lost India: Quantitative Restrictions (WT/DS90/AB/R, adopted 22 September 1999), after which it removed its import quotas.
GATT and the WTO compared
| Point | GATT 1947 | WTO |
|---|---|---|
| Legal nature | Provisional contract | Permanent organisation with legal personality |
| Parties | Contracting parties | Members |
| Subject matter | Goods | Goods, services, intellectual property |
| Side agreements | Optional codes | Single undertaking |
| Old laws | Grandfather clause | Laws must conform |
| Disputes | Consensus, could be blocked | Reverse consensus, Appellate Body |
Conclusion. The WTO grew out of the failure of inter-war trade and the collapse of the ITO plan. GATT 1947, meant to be temporary, kept the post-war system alive and cut tariffs through eight rounds. Its gaps in agriculture, textiles, new subjects and disputes led to the Uruguay Round. The Marrakesh Agreement of 1994 turned GATT's practice into a permanent organisation from 1 January 1995. The WTO has since grown in membership and rules, but it now faces a stalled negotiating agenda and a paralysed appeal stage.
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