Q. In the context of Free Trade Agreements (FTAs), the ‘Utilization Rate’ refers to –

[A] The gradual or immediate removal of tariffs on certain goods as stipulated in the FTA, promoting free trade and reducing barriers.

[B] The degree to which businesses can enter and compete in foreign markets under the FTA.

[C] The percentage of trade between FTA partners that is eligible for preferential treatment under the FTA, compared to the total trade between the partners

[D] The measures aimed at simplifying and streamlining customs procedures and documentation to enhance the smooth flow of goods between countries.

Answer: C
Notes:

Explanation – The ‘Utilization Rate’ in the context of FTAs refers to the extent to which countries involved in the agreement actually use or take advantage of the preferential trade conditions outlined in the FTA. It is the percentage of eligible trade that utilizes the benefits offered by the agreement compared to the total trade between the FTA partners. Recently, Indian exporters have benefitted from the India-Australia ECTA. For the first nine months, the utilization rate was 77%.

Source: ForumIAS

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