Read the following passage carefully and answer the questions given below it. Certain words/ phrases have been printed in bold to help you locate them while answering some of the questions.
The great recession hasn’t been great for free trade. As unemployment has risen throughout the world, governments have become more focused on protecting their own industries than on promoting international commerce. The U.S., though typically an enthusiastic supporter of open markets, included “buy American” clauses in its stimulus package and propped, up its flailing auto industry with handouts.
But according to the Asian Development Bank (ADB), in the part of the world that was hit hardest by the trade crash-Asia -, the number of Free-Trade Agreements (FTAs) signed by Asian countries has grown from just three in 2000 to 56 by the end of August 2009. Nineteen of those FTAs are among 16 Asian economies, a trend that could help the region Become a powerful trading bloc.
The drive lower trade barriers has taken on fresh urgency amid the recession. As Asian manufacturing networks become more intertwined – and as Asian consumers become wealthier- regional commerce is becoming critical to future economic expansion. Intraregional trade last year made up 57% of total Asia trade, up from 37% in 1980. In the past Asia produced for America and Europe, now Asia is producing for Asia.
Of course, Asia is still dependent on sales to the West. But FTAs could reduce the region’s exposure to the U.S. by giving Asian companies preferential treatment in selling to Asian companies and consumers. These benefits could come with downsides, however. According to experts, FTAs create a “non-level playing field with advantages for Asian countries”. If the most dynamically growing part of the global economy gives the U.S. restricted acess it will impact global balance. Companies in countries like the U.S. left out of the trade pacts could face disadvantages when trying to tap fast-growing Asian markets. This’ in turn, could have a negative impact on efforts to rebalance excessive debt in the U.S. and excessive savings in Asia. Still, the benefits of greater regional integration could prove powerful enough to overcome the roadblocks. An Asia, the only thing everyone agrees upon is business. If it does, the world economy may never be the same.
QUESTIONS:
1. What do the Asian Development Bank statistics indicate?
(A) Asian economies are financially more sound than those of the developed world
(B) The financial crisis impacted the West far more than it did Asia
(C) Asian countries have aligned themselves on lines similar to the European Union
(D) Western countries are skeptical about trading with developing countries
(E) Asian countries have been actively opening their markets to one another
2. What has given rise to the large number of trade agreements between Asian countries?
(A) The need to insulate Asian economies from over exposure to the American economy
(B) Angry reaction among Asian countries owing to America’s protectionist policy
(C) The aim of empowering the poorer Asian economies and bring them on par with Western economies
(D) The desire to achieve conditions conductive to global consensus on trade regulations and trait
(E) Widespread panic in Europe and Asia as Asian economies are yet to recover from the recession
3. Which of the following is NOT TRUE in the context of the passage?
(A) Political and economic rivalries between Asian countries are non-existent today.
(B) Asian countries hold America responsible for the recession and have imposed economic sanctions against the U.S.
(C) America has adopted a protectionist strategy after the recession.
(A) Only (A)
(B) Only (B) & (C)
(C) Only (A) & (B)
(D) Only (C)
(E) None of these
4. Which of the following describes expert predictions about trade pacts between Asian countries
(A) These will be beneficial and are likely to give rise to a common Asian currency
(B) Tariffs will be lowered and bureaucratic regulations will become transparent
(C) Widening of differences between participant and non-participant countries will hamper glob stability
(D) Regional conflicts will increases as competition and inequities between Asian nations will intensify
(E) They are likely to be short-lived as it will be difficult to get participating nations to arrive a consensus
5. Which of the following has/ have not been (an) impact(s) of the recession?
(A) Various trade agreements signed between developed and Asian countries have not been honoured.
(B) The U.. government has restructured the automobile industry.
(C) Regional conflict in Asia have substantially reduced.
(A) Only (C)
(B) Only (A)
(C) Only (A) & (B)
(D) All (A), (B) & (C)
(E) None of these
6. According to the author what danger does creating an Asian trading bloc pose?
(A) Political instability in Asia will rise as some countries are wealthier than others
(B) American consumers have ceased their demand for Asian goods
(C) Unemployment in Asian countries will rise as many plant will be forced to close down
(D) It will alter the balance of power in the World with small Asian countries becoming most dominant
(E) None of these
7. What is the author trying to convey through the phrase “In the past Asia produced for America and Europe, now Asia is producing for Asia”?
(A) The number of wealthy consumers in Asia outnumber those in America and Europe together
(B) Asian countries do not support free trade and continue to trade among themselves despite the recession
(C) Goods manufactured in Asian countries often fail to meet the standards set by developed counties
(D) Asian countries no longer export to Western markets alone and now cater to Asian markets as well
(E) Interregional trade barriers between Europe and Asia have weakened considerably
(Source: Allahabad Bank P.O Exam-2010)
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