Question 4: International Trade (Lecture 18; Workshop 11; Text, Ch. 12) The following extract was published on 22 September 2021 by ORE MINAL BURCHARDKAI Source: NDTV, 26 October 2022 India and the United Kingdom aim to launch the negotiations on Free Trade Agreement (FTA) on 1 November 2021, with both parties to establish selective gains in commodities and services. agreeing to an Early Harvest Agreement by March 2022. Trade Secretary Liz Truss has today kicked off preparations for a trade deal with India, launching a 14-week consultation to seek the views of the public and business. The UK wants a deal that slashes barriers to doing business and trading with India's f2 trillion economy and market of 1.4 billion consumers. This includes removing tariffs of up to 150% on whisky and 125% on British-made cars. Wide input from consumers and businesses across all sectors will help the UK craft a deal that includes closer cooperation in future-focused industries such as science, technology, and services, creating high- value jobs across the country. Formal negotiations are expected to begin later this year.The UK also aims to make it easier for services firms to operate in the Indian market, boosting the UK's status as an international services hub. India's growing middle-income population and highly connected youth will be the target consumers for the type of goods and services the UK excels in. International Trade Secretary Liz Truss said: We're firing the starting gun on a free trade deal with India the world's largest democracy, fifth biggest economy, a nation of 1.4 billion people and a huge market for British goods like whisky, cars, and services. We want an agreement that pushes new frontiers in industries of the future and helps us build a greener, more innovative and more servicesled economy that will deliver higherpayingjobs across the country. International Trade Minister, Ranil Jayawardena said: India is one of the world's fastestgrowing economies and we share much in common, so we're natural partners. A trade deal will break down barriers, making it easier for British businesses to sell their wares in India and secure more investment, betterjobs, higher wages, more choice and lower prices here at home. Before negotiations start, the UK and India must complete a pro-negotiation scoping phase a period of engagement with businesses and the public. The public consultation includes a questionnaire that will gather information from participants about their experiences and priorities when doing business with India. You can access the consultation questionnaire online here. Background - Trade between the UK and India was around 23bn in 2019, both countries want to double by 2030. - Nearly half a million jobs are supported across India and the UK through investments in each other's economies. I The Enhanced Trade Partnership creates immediate opportunities for British businesses in India across industries such as food and drink and life sciences by improving market access. Nontariff barriers on fruit and medical devices will be reduced, allowing businesses to export more of their products to India. I DIT consults widely across a network of businesses, representative bodies, and trade associations, working with partners as well as members of all the Department's Trade Advisory Groups, to seek the broadest possible range of views to inform our negotiating position ahead of launching trade talks. According to the latest report, 26 October 2022, both UK and India are ready to sign off the deal. Questions: a] With reference to the extract, identifv the main beneciaries of the trade deal between the UK and India. {20 marks] b) Using relevant examples, brieflv explain what you understand by the term \"comparative advantage'. (10 marks] c] With reference to each countrv's comparative advantage, discuss how the removal of trade barriers will benefit the economies of the UK and India. {20 marks}