Question.2. Answer the following questions in about 30 words:

(i) What is the basic function of the World Trade Organisation?
Answer.

1. WTO is the only international organisation dealing with the global rules of trade between nations.
2. It sets the rules for the global trading system and resolves disputes between its member nations
3. WTO also covers trade in services, such as telecommunication and banking, and others issues such as intellectual rights

(ii) Why is it detrimental for a nation to have negative balance of payments?
Answer. A negative balance of payment would mean that the country spends more on buying goods than it can earn by selling its goods. This would ultimately lead to exhaustion of its financial reserves

(iii) What benefits do nations get by forming trading blocs?
Answer. The main benefits of developing regional blocs are:

1. It increases more easy flow of goods and services between countries belong to same regional bloc.
2. It not only develops better political relationship but also help countries to have a greater power in internal market.

Question.3. Answer the following questions in not more than 150 words:

(i) How are ports helpful for trade? Give a classification of ports on the basis of their location.
Answer. The chief gateways of the world of international trade are the harbours and ports. Cargoes and travellers pass from one part of the world to another through these ports. The ports provide facilities of docking, loading, unloading and the storage facilities for cargo.

Types of port on the basis of location:

1. Inland Ports: These ports are located away from the sea coast. They are linked to the sea through a river or a canal. Such ports are accessible to flat bottom ships or barges. For example, Manchester is linked with a canal; Memphis is located on the river Mississippi; Rhine has several ports like Mannheim and Duisburg; and Kolkata is located on the river Hooghly, a branch of the river Ganga.
2. Out Ports: These are deep water ports built away from the actual ports. These serve the parent ports by receiving those ships which are unable to approach them due to their large size. Classic combination, for example, is Athens and its out-port Piraeus in Greece.

(ii) How do nations gain from International Trade?
Answer. Trade is the basis of the world’s economic organisation and is related to the foreign policy of nations. With well-developed transportation and communication systems, no country is willing to forego the benefits derived from participation in international trade.

1. International trade helps countries to rise in their production system and compete in the international market.
2. With more international trade, people in a country get better options of each product.
3. The market area to sell the specialised product increases with easy international trade.
4. International trade demands development of tertiary sector specially transports and communication.
5. In case of more exports countries gain lot of wealth. Hence leads to better economic development.