Trade program reducing tariffs for developing countries?

Trade program reducing tariffs for developing countries?

• A. AfCFTA
• B. General System of Preferences (GSP)
• C. Trade Blocs (Africa)
• D. Fixed Costs

Answer: (B)

The concept tested is how tariff relief is extended to developing countries through a trade preference system. The General System of Preferences works by allowing importing countries, usually developed economies, to offer reduced or zero tariffs on a wide range of goods from developing nations. This non-reciprocal tariff relief aims to boost exports from those economies and support their development by making their products more competitive in wealthier markets. It’s a unilateral or country-specific program, not a mutual or regional agreement, and it covers many products with eligibility rules, origin requirements, and potential ceiling limits. The other options don’t fit as well. AfCFTA is an African regional trade agreement focused on eliminating tariffs among African member states, not a broad, country-level tariff-reduction program for developing economies globally. The notion of “Trade Blocs (Africa)” is too vague to describe a formal program that lowers tariffs for developing countries. Fixed costs are unrelated to tariff preferences or trade relief programs.

The concept tested is how tariff relief is extended to developing countries through a trade preference system. The General System of Preferences works by allowing importing countries, usually developed economies, to offer reduced or zero tariffs on a wide range of goods from developing nations. This non-reciprocal tariff relief aims to boost exports from those economies and support their development by making their products more competitive in wealthier markets. It’s a unilateral or country-specific program, not a mutual or regional agreement, and it covers many products with eligibility rules, origin requirements, and potential ceiling limits.

The other options don’t fit as well. AfCFTA is an African regional trade agreement focused on eliminating tariffs among African member states, not a broad, country-level tariff-reduction program for developing economies globally. The notion of “Trade Blocs (Africa)” is too vague to describe a formal program that lowers tariffs for developing countries. Fixed costs are unrelated to tariff preferences or trade relief programs.