Hello aspirants, and welcome to our latest blog post! This article is part of our “10-Minute-A-Day” series dedicated to helping you prepare for the JAIIB exam, specifically focusing on the “International Banking & Finance (I&IFS)” module. Today, we’ll explore the critical topic of the World Trade Organization (WTO), discussing its relevance to your exam, key sub-topics frequently tested, and effective strategies to master this subject.
What is the World Trade Organization (WTO)?
The WTO, officially established in 1995, traces its roots back to 1948 through the General Agreement on Tariffs and Trade (GATT). India was among GATT’s founding members, demonstrating its longstanding role in international trade negotiations.
Purpose and Significance of GATT
GATT was initially formed to resolve international trade disputes effectively, facilitating smooth trade operations, streamlined financial transactions, and enhanced global economic integration. Ongoing negotiations adapted to evolving global trade requirements, ultimately leading to the creation of the WTO.
Establishment and Role of the WTO
The WTO was formally established after extensive discussions during the Uruguay Round (1986–1994). Headquartered in Geneva, Switzerland, its highest authority is the Governing Council, responsible for critical decision-making and trade-related deliberations.
Key Functions and Agreements of the WTO
Today, the WTO includes 164 member countries and manages agreements designed to resolve global trade disputes. Significant agreements include:
- Tariff and Non-Tariff Barriers: Addressing reduction in tariffs and tackling non-tariff barriers.
- Trade-Related Investment Measures (TRIMS): Guidelines for international trade investments.
- Trade-Related Intellectual Property Rights (TRIPS): Protecting intellectual property globally.
- Agreement on Agriculture: Handling agricultural trade and subsidy-related disputes.
- Sanitary and Phytosanitary (SPS) Measures: Ensuring international quality and safety standards to prevent trade conflicts.
Protective Measures in International Trade
Countries utilize WTO-defined measures to safeguard their economies, including:
- Tariffs: Taxes imposed on imported goods.
- Quotas: Restrictions on import quantities.
- Non-Tariff Barriers: Regulations aimed at preventing imports of inferior quality.
Insights from JAIIB Exam Questions
Understanding these protective methods is frequently tested. Here’s an example:
Sample Question: Which of these methods are used as economic protection in international trade?
- Tariffs
- Quotas
- Non-Tariff Barriers
Correct Answer: All of the above.
Optimize Your JAIIB Exam Preparation
To clear all four JAIIB exam components in your first attempt, enroll in our comprehensive master course. It includes concise concept explanations, detailed chapter-wise notes, practice MCQs, full-length mock tests, and live revision sessions.
Why Reviewing Previous Year Questions and MCQs is Crucial
Analyzing previous years’ questions, identifying commonly tested topics, and practicing MCQs are fundamental strategies for successful JAIIB exam preparation.
Best of luck in your exam preparation!