International Organizations (External Sector) Part-II

Total Questions: 50

1. The World Trade Organisation (WTO) is sometimes criticised for all of the following reasons except that: [Uttarakhand P.C.S. (Pre) 2021]

Correct Answer: (a) it has no way to solve trade disputes among member nations.
Solution:Disputes in the WTO are essentially about broken promises. WTO members have agreed that if they believe fellow. members are violating trade rules, they will use the multilateral system of settling disputes instead of taking action unilaterally. That means abiding by the agreed procedures, and respecting judgements. Settling disputes is the responsibility of the Dispute Settlement Body (the General Council in another guise), which consists of all WTO members.

The Dispute Settlement Body has the sole authority to establish 'panels' of experts to consider the case, and to accept or reject the panels' findings or the results of an appeal. It monitors the implementation of the rulings and recommendations, and has the power to authorize retaliation when a country does not comply with a ruling. Hence, the statement of option (a) is incorrect.

2. 'Broad-based Trade and Investment Agreement (BTIA) is sometimes seen in the news in the context of negotiations held between India and: [I.A.S. (Pre) 2017]

Correct Answer: (a) European Union
Solution:In June 2007, India and the European Union began negotiation on a 'Broad-based Bilateral Trade and Investment Agreement (BTIA)' in Brussels, Belgium. Both parties believe that a comprehensive and ambitious agreement that is consistent with WTO rules and principles would open new markets and would expand opportunities for Indian and EU, businesses.

Negotiations have been languishing since 2013 when the talks collapsed over certain demands from the EU, such as greater market access for automobiles, wine and spirits, and further opening up of the financial services sector such as banking, insurance and e-commerce.

Recently, the EU has expressed interest in exploring a separate 'Bilateral Investment Protection Agreement (BIPA)' with India that would be delinked from the proposed bilateral FTA (BTIA), where ongoing negotiations are in a state of limbo.

3. Consider the following statements about G20: [I.A.S. (Pre) 2023]

1. The G20 group was originally established as a platform for the Finance Ministers and Central Bank Governors to discuss the international economic and financial issues.

2. Digital public infrastructure is one of India's G20 priorities.

Which of the statements given above is/are correct?

Correct Answer: (c) Both 1 and 2
Solution:The G20 group was established in 1999 in response to several world economic crises, as a platform for Finance Ministers and Central Bank Governors to discuss international economic and financial issues.

In the wake of the global financial and economic crisis of 2007-08, the G20 was elevated to the level of Heads of State/Government and was named the premier forum for international economic cooperation." Digital Public Infrastructure is one of the key priorities during India's G20 Presidency.

It is a cross-cutting theme across various Working Groups including Digital Economy, Health, Education and Global Partnership for Financial inclusion. Hence, both given statements are correct.

4. The G20 members represent: [B.P.S.C. (Pre) 2023]

1. around 85% of the global GDP

2. about 50% of the global trade

3. about two-thirds of the world population

Which of the above statistics is/are correct?

Correct Answer: (b) Only 1 and 3
Solution:The Group of Twenty (G20) is the main forum for international economic cooperation. It plays an important role in defining and strengthening global architecture and governance on all major international economic issues.

The G20 is made up of 19 countries (Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, South Korea, Mexico, Saudi Arabia, South Africa, Russia, Turkiye, UK and USA) and two regional bodies: the African Union and the European Union. The members of the G20 represent around 85% of the global GDP, more than 75% of the global trade and around two-thirds of the world's population. Hence, statements 1 and 3 are correct, while statement 2 is incorrect.

5. In which one of the following groups are all the four countries members of G20? [I.A.S. (Pre) 2020]

Correct Answer: (a) Argentina, Mexico, South Africa and Turkey
Solution:The G20 (or Group of Twenty) is an international forum for the governments and central bank governors from 19 countries, the European Union (EU) and the African Union (AU). It was founded in 1999 with the aim to discuss policy related to global economics and finance.

The members of G20 are-Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, Republic of Korea, Mexico, Russia, Saudi Arabia, South Africa, Turkey (officially Turkiye'), The United Kingdom, The United States, The European Union and The African Union. Hence, option (a) is the correct answer.

6. What is/are not true in reference to G20? [Chhattisgarh P.C.S. (Pre) 2022]

(i) G20 is official group of European Union and other 19 countries.

(ii) G20 has its Headquarter in London.

(iii) In reference to groups made for electing President, India is part of Group-2 which has other members as Russia, South Africa and Turkey.

Correct Answer: (b) (i) and (ii)
Solution:The G20 is an intergovernmental forum comprising 19 countries, the European Union (EU), and the African Union (AU). Hence, statement (i) is not true.

G20 has not a permanent headquarter or secretriat. Hence, statement (ii) is also not true.

Statement (iii) is correct as with reference to groups made for electing G20 President, India is part of Group-2 with Russia, South Africa and Turkey (officially 'Turkiye'). Other four groups' members are as follows:

Group 1

Australia, Canada, Saudi Arabia, USA

Group 3

Argentina, Brazil, Mexico

Group 4

France, Germany, Italy, UK

Group 5 :

China, Indonesia, Japan, South Korea

7. Which year will India chair the prestigious G20 forum? [Uttarakhand P.C.S. (Pre) 2016]

Correct Answer: (e) 2003
Solution:The G20 (or Group of Twenty) is an intergovernmental forum comprising 19 countries, the European Union (EU) and the African Union (AU). It works to address major issues related to the global economy, such as international financial stability. climate change mitigation and sustainable development. It was founded in 1999 in response to several world economic crises. The first G20 Summit was held in 2008 in Washington DC (USA).

Each year in December, a different G20 member country assumes the presidency of the Group. The president is chosen through a system of rotation. To this end, the 19 member States of the G20 (the 20th and 21st members being the EU and the AU as a whole, which are not part of a country group) are divided into five groups.

Every year, the G20 selects a country from another group to be president. The principle was introduced in 2010, when South Korea held the G20 Presidency. For the 2018 presidency, Argentina was chosen.

In early 2016, India's Prime Minister Modi made a bid to host the 2018 Summit. But, in mid-2016, the Indian government had to withdraw its plans. Indonesia was the chair of G20 in 2022 (till 30 November). India chaired the prestigious G20 forum from 1 December, 2022 to 30 November, 2023 and convened the G20 Leaders' Summit for the first time in the country in September, 2023. Brazil now holds the chair of G20 in 2024 (till 30 November).

8. With reference to G20 (Group of 20), which of the following statements is/are correct? [Jharkhand P.C.S. (Pre) 2023]

I. India took over the G20 presidency from Australia on 1st December, 2022.

II. The first G20 Summit was held in Washington in 2008.

Select the correct answer using the options given below:

Correct Answer: (b) Only II
Solution:Statement I is incorrect as India took over the G20 presidency from Indonesia on 1st December, 2022. Statement II is correct as the first G20 Leaders' Summit was held in 2008 in Washington, D.C. (USA).

Note: In the question 'Washington' is used instead of 'Washington, D.C.' It is to be noted that Washington is a State in USA, while Washington, D.C. is the Capital city and federal district of the USA which is not part of any State.

9. With reference to the 'G20 Common Framework', consider the following statements: [I.A.S. (Pre) 2022]

1. It is an initiative endorsed by the G20 together with the Paris Club.

2. It is an initiative to support Low Income Countries with unsustainable debt.

Which of the statements given above is/are correct?

Correct Answer: (c) Both 1 and 2
Solution:The Common Framework for Debt Treatment beyond the DSSI (Debt Service Suspension Initiative) is an initiative endorsed by the G20, together with the Paris Club, in 2020 to support, in a structural manner, Low Income Countries (LICs) with unsustainable debt. The Common Framework considers debt treatment, on a case-by-case basis, driven by requests from eligible debtor countries. In response to a request for debt treatment, a Creditor Committee is convened.

Negotiations are supported by the IMF and the World Bank, including through their Debt Sustainability Analysis. The idea is that the debt treatment under the Common Framework should be accompanied by reforms ensuring the future sustainability of public debt, and consistent with the parameters of an Upper Credit Tranche (UCT) IMF- supported program.

10. The term 'Base Erosion and Profit Shifting' is sometimes seen in the news in the context of: [I.A.S. (Pre) 2016]

Correct Answer: (b) curbing of the tax evasion by multinational companies
Solution:Base Erosion and Profit Shifting (BEPS) refers to tax planning strategies used by multinational enterprises that exploit gaps and mismatches in tax rules to make profit 'disappear' for tax purpose or to shift profits to locations where there is little or no real activity but taxes are low, resulting in little or no overall corporate tax being paid.

Developing countries' higher reliance on corporate tax means they suffer from BEPS disproportionately. BEPS practices cost countries about USD 100-240 billion in lost revenue annually.

Working together within OECD/G20 Inclusive Framework on BEPS, over 145 countries and jurisdictions are collaborating on the implementation of 15 measures to tackle tax avoidance, improve the coherence of international tax rules and ensure a more transparent tax environment.