Question

Read the following text carefully and answer the questions given below:
“This organisation replaced General Agreement on Trade and Tariff (GATT) as global trade organisation.”

• [(i)] Identify the organisation which is known as the successor of GATT.
• [(ii)] In which year was this new organisation established?
• [(iii)] Explain any two objectives of the new organisation.

OR Read the following text carefully and answer the questions given below:
“It is an arrangement in which a firm hires some specialized firm(s) to carry out some of its activities (which were earlier being performed by itself). These service hirings could be from local / international markets.”

• [(i)] Identify the indicated outcome of the globalisation process.
• [(ii)] State any two factors responsible for making India as an important source of these activities.
• [(iii)] Explain examples of services that have expanded due to advancements in information technology.

Hint:

WTO → global trade body (1995)
Outsourcing → key outcome of globalisation

Answer 1

Step 1: Understanding the Concept:
The shift from GATT to WTO marked a more comprehensive approach to global trade, including services and intellectual property.
Step 2: Detailed Explanation:
(i) Identification: The organisation is the World Trade Organisation (WTO).
(ii) Establishment Year: It was established on January 1, 1995.
(iii) Objectives:
1. Liberalisation of Trade: To facilitate international trade through removal of tariffs as well as non-tariff barriers.
2. Rules-Based System: To provide a platform for member countries to negotiate and resolve trade disputes through a set of mutually agreed rules.
Step 3: Final Answer:
WTO is the successor of GATT, established in 1995 to ensure free and fair global trade.
II
Step 1: Understanding the Concept:
Globalization has led to the fragmentation of production processes across the globe based on cost efficiency.
Step 2: Detailed Explanation:
(i) Outcome: The process described is Outsourcing. It is a major outcome of globalization where business processes are shifted to third-party providers.
(ii) Factors for India's Success:
1. Low Wage Rates: The cost of labor in India is significantly lower than in developed countries.
2. Availability of Skilled Manpower: India has a vast pool of English-speaking, technically proficient youth.
(iii) Examples of Services:
1. Voice-based services: Like call centers providing customer support.
2. Knowledge-based services: Like medical transcription, legal advice, accountancy, and film editing.
Step 3: Final Answer:
Outsourcing has flourished in India due to cheap, skilled labor and advanced IT infrastructure.