Question 22 from UPSC CSE 2016 - Economy

Question

In the context of which of the following do you sometimes find the terms 'amber box, blue box and green box' in the news?

IASCODEX · Accepted Answer

Correct Option: A. WTO affairs

Strategy: Identify the WTO as the correct organization by recognizing the specific 'amber box,' 'blue box,' and 'green box' subsidy classification terms and eliminating irrelevant options.

Key Info: The terms 'amber box,' 'blue box,' and 'green box' are classifications used within the World Trade Organization (WTO)'s Agreement on Agriculture to categorize and regulate domestic support (subsidies) provided by member countries to their agricultural sectors.

*   **Green Box:** These subsidies are considered to cause minimal or no distortion to trade and production. To qualify, they must be government-funded (not consumer price-driven) and not involve price support. Examples include agricultural research, pest and disease control, food security stocks, domestic food aid, decoupled income support, and environmental protection programs.

*   **Amber Box:** This category covers domestic support measures that are considered to distort production and trade. These subsidies are subject to reduction commitments (Aggregate Measurement of Support - AMS). Examples often include price support measures like Minimum Support Prices (MSPs) for crops, and subsidies for inputs like fertilizers, seeds, and irrigation if they exceed de minimis levels.

*   **Blue Box:** This is an exemption category for certain trade-distorting subsidies that are directly linked to acreage or animal numbers, but crucially, are tied to programs that limit production. They are considered less trade-distorting than Amber Box subsidies because of their production-limiting nature. Currently, only a few WTO members like the EU, Iceland, Norway, and Japan notify the use of blue box subsidies. The U.S. no longer utilizes it.

*   **WTO (World Trade Organization):** An intergovernmental organization that regulates and facilitates international trade. It was established in 1995, succeeding the General Agreement on Tariffs and Trade (GATT). The Agreement on Agriculture, a key outcome of the Uruguay Round of GATT negotiations, aims to reform agricultural trade and reduce trade-distorting subsidies.

*   **SAARC (South Asian Association for Regional Cooperation):** A regional intergovernmental organization and geopolitical union of states in South Asia. Its focus is on regional cooperation, not global trade subsidy regulation.

*   **UNFCCC (United Nations Framework Convention on Climate Change):** An international environmental treaty established in 1992 to combat 'dangerous human interference with the climate system.' It deals with climate change, not agricultural trade subsidies.

*   **India-EU negotiations on FTA:** Refers to bilateral Free Trade Agreement negotiations between India and the European Union. While trade negotiations involve subsidies, these specific 'box' terms are part of the multilateral WTO framework, not typically used for bilateral agreements.

IASCODEX · Answer

Option B: SAARC affairs

IASCODEX · Answer

Option C: UNFCCC affairs

IASCODEX · Answer

Option D: India-EU negotiations on FTA