Q1. With reference to Free Trade Agreements (FTAs) and Comprehensive Economic Partnership Agreements (CEPAs), consider the following statements:
- An FTA generally focuses on reducing or eliminating tariffs and other trade barriers between participating countries.
- A CEPA may cover areas such as services, investment, intellectual property and regulatory cooperation in addition to trade in goods.
- Every CEPA necessarily eliminates all tariffs on all goods traded between the participating countries.
- The distinction between an FTA and CEPA is primarily one of nomenclature, since both must have an identical scope of commitments.
Which of the statements given above is/are correct?
(a) 1 and 2 only
(b) 1 and 3 only
(c) 2 and 4 only
(d) 1, 2, 3 and 4
Answer: (a)
Explanation:
- Statement 1 is correct: FTAs primarily seek to reduce/eliminate tariffs and other trade barriers.
- Statement 2 is correct: CEPAs generally have broader coverage, potentially including services, investment, intellectual property and regulatory issues.
- Statement 3 is incorrect: A CEPA does not necessarily provide universal tariff elimination for every product.
- Statement 4 is incorrect: The scope of an agreement depends on its negotiated provisions; the terms FTA and CEPA do not imply identical commitments
