With reference to WTO’s Agreement on Agriculture (AOA) consider the following statements:
1. It aims to reduce subsidies that distort trade, like export subsidies and domestic support.
2. It classifies subsidies under three categories, Amber, Blue, and Green Box.
3. Developing countries and least developed countries are exempted from tariff reduction.
4. Under the Amber box, the subsidy limit for both developed and developing countries is capped at 5% of their total production.

Which of the statements given above is/are correct?
(a) 2 and 3 only
(b) 1 and 2 only
(c) 2, 3, and 4 only
(d) 1, 2, and 4 only

Question

With reference to WTO&rsquo;s Agreement on Agriculture (AOA) consider the following statements:
1. It aims to reduce subsidies that distort trade, like export subsidies and domestic support.
2. It classifies subsidies under three categories, Amber, Blue, and Green Box.
3. Developing countries and least developed countries are exempted from tariff reduction.
4. Under the Amber box, the subsidy limit for both developed and developing countries is capped at 5% of their total production.

Which of the statements given above is/are correct?
(a) 2 and 3 only
(b) 1 and 2 only
(c) 2, 3, and 4 only
(d) 1, 2, and 4 only

ONLiNE UPSC · Accepted Answer

Statement 1 is correct: AoA was negotiated during the Uruguay Round of trade talks (1986). It was formally ratified in 1994 at Marrakesh, Morocco, and came into effect in 1995. The AoA aims to promote fair competition, reduce trade-distorting subsidies, and ensure market access for agricultural products. To achieve this, the AoA includes explicit commitments to decrease support and protection in domestic support, export subsidies, and increased market access.

Statement 2 is correct: It includes the classification of subsidies by "boxes" depending on the consequences of production and trade. Amber (most directly linked to production levels), Blue (production-limiting programs that still distort trade), and Green (minimal distortion).

Statement 3 is not correct: The AoA consists of tariff reductions of:
36% average reduction for developed countries with a minimum of 15% per-tariff line reduction in the next six years. 24% average reduction for developing countries with a minimum of 10% per-tariff line reduction in the next ten years. Least developed countries (LDCs) were exempt from tariff reductions. But they either had to convert non-tariff barriers to tariffs or "bind" their tariffs, creating a ceiling that could not be increased in the future.

Statement 4 is not correct: Under the Amber Box category, WTO limits subsidy by capping it at 5% for developed countries & 10% for developing countries of their total agriculture production.

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With reference to WTO’s Agreement on Agriculture (AOA) consider the following statements: 1. It aims to reduce subsidies that distort trade, like export subsidies and domestic support. 2. It classifies subsidies under three categories, Amber, Blue, and Green Box. 3. Developing countries and least developed countries are exempted from tariff reduction. 4. Under the Amber box, the subsidy limit for both developed and developing countries is capped at 5% of their total production. Which of the statements given above is/are correct? (a) 2 and 3 only (b) 1 and 2 only (c) 2, 3, and 4 only (d) 1, 2, and 4 only