Agreement on Agriculture

Context:

WTO’s member questioned India’s farm input subsidies

Agreement on Agriculture:

• Genesis – Negotiated at the Uruguay round and ratified in Marrakesh (Morocco) in 1994.
• Provisions –
  • Market Access – Includes tariffication, tariff reduction and access opportunities.
    • Tariffication – All non-tariff barriers such as quotas, variable levies etc need to be abolished and converted into an equivalent tariff.
  • Domestic Access – Deals with subsidies and other support programmes that directly stimulate production and distort trade.
    • It has various kinds of boxes based on the type of subsidies provided
  • Export Subsidies – Deals with methods which makes exports artificially competitive.
    • Developed Members and developing countries eliminated export subsidies as per the Nairobi Ministerial Decision 2015.
• Public stockholding programmes of developing countries are covered under the peace clause as an interim solution.
  • Members would not challenge these programmes legally under the Agriculture Agreement

Different Types of Boxes:

• In WTO terminology, subsidies in general are identified by “boxes”
• Amber Box – Trade distorting subsidies
  • WTO calls members for committing to reduce their trade-distorting domestic supports that fall into the amber box.
• Blue Box – Support that would normally be in the amber box, is placed in the blue box if it also requires farmers to limit production.
• Green Box – Includes government funded subsidies which do not distort trade or cause minimal distortion.

Source: Times of India

Previous Year Question

Consider the following statements:
1. India has ratified the Trade Facilitation Agreement (TFA) of WTO.
2. TFA is a part of WTO’s Bali Ministerial Package of 2013.
3. TFA came into force in January 2016.
Which of the statements given above are correct?

[UPSC Civil Service Exam – 2017 Prelims]

(a) 1 and 2 only
(b) 1 and 3 only
(c) 2 and 3 only
(d) 1, 2 and 3

Answer: (a)
Explanation:
Statement 3 is not correct. TFA came into force in February 2017 and not in 2016.