Which of the following statement / statements is/are valid regarding the prevailing scenarios and issues in connection with the World Trade Organisation (WTO)?

I. The 'Peace Clause' under the Bali Agreement reiterates that developing nations must not exceed the 10% ceiling limit for Public Stockholding schemes initiatives.

II. The Green Box' prohibits the use of direct payments to producers which are not linked to production decisions.

III. The Reduction Commitments' are expressed in terms of a "Total Aggregate Measurement of Support" which includes all product-specific support and non-product-specific support in one single figure.

IV. Any support that would normally be placed in the 'Amber Box', is not to be placed in the 'Blue Box' even if the support mandates farmers to limit production.

Select the correct answer using the codes given below:

This question was previously asked in
APPSC Group-1 (Prelims) Exam Official Paper-I (Held On: 17 Mar, 2024)
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  1. III and IV
  2. I, II and IV
  3. Only III
  4. I and II

Answer (Detailed Solution Below)

Option 3 : Only III
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Detailed Solution

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The correct answer is Only III.

Key Points

  • Total Aggregate Measurement of Support (AMS): The Reduction Commitments are expressed in terms of Total AMS, which includes all product-specific and non-product-specific support in one single figure.
  • Peace Clause: The Peace Clause under the Bali Agreement allows developing nations to exceed the 10% ceiling limit for public stockholding schemes without facing legal action from other WTO members, contrary to statement I.
  • Green Box: The Green Box includes subsidies that cause minimal or no trade distortion, and it does not prohibit direct payments to producers which are not linked to production decisions, contrary to statement II.
  • Blue Box: The Blue Box includes support linked to production-limiting programs, and it allows measures that would otherwise be in the Amber Box if they require farmers to limit production, contrary to statement IV.

Additional Information

  • Peace Clause: This clause was agreed upon during the Bali Ministerial Conference in 2013. It provides temporary protection to developing countries' public stockholding programs for food security purposes from being challenged under the WTO dispute settlement process.
  • Green Box: The Green Box measures are subsidies that are allowed under WTO rules as they do not distort trade, or at most cause minimal distortion. These can include government services such as research, disease control, infrastructure, and food security stockholding.
  • Total Aggregate Measurement of Support (AMS): This is the total level of support provided to agriculture, calculated by adding up all the product-specific and non-product-specific subsidies provided by a country.
  • Amber Box: This box includes all domestic support measures considered to distort production and trade (with some exceptions). These measures are subject to reduction commitments.
  • Blue Box: The Blue Box is an exemption from the general rule that all subsidies linked to production must be reduced or kept within defined limits. It includes payments directly linked to acreage or animal numbers, but under schemes that also require farmers to limit production.
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