In the context of which of the following do you sometimes find the terms ‘amber box, blue box, and green box’ in the news? [2016]

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

WTO affairs
SAARC affairs
UNFCCC affairs
India-EU negotiations on FTA

Explanation

Option (a) is correct

The terms Amber Box, Blue Box, and Green Box are used in the World Trade Organization framework, specifically under the Agreement on Agriculture (AoA). These terms classify domestic agricultural subsidies based on their level of trade distortion

Agreement on Agriculture (AoA): It was negotiated during the Uruguay Round of trade talks and was formally ratified in 1994 at Marrakesh. It came into force in 1995 with the establishment of the World Trade Organisation. The AoA aims to promote fair competition in global agricultural trade by reducing trade-distorting subsidies and improving market access for agricultural products. To achieve these objectives, the agreement includes commitments in three key areas: domestic support, export subsidies, and market access. Countries agreed to gradually reduce support and protection in these areas. Among these, the reduction in domestic food subsidies has been the most controversial, particularly for developing countries. This is a major concern for India, where a large section of the population depends on agriculture for livelihood and food security. At the same time, the agreement also recognizes non-trade concerns such as food security, rural development, and environmental protection, and therefore provides special and differential treatment for developing countries

Diagram illustrating "Three Pillars" of Agreement on Agriculture, focusing on Market Access, Domestic Support, and Export Subsidies. Each pillar is highlighted with a red border and lists key components such as tariff reduction and special safeguard under Market Access, AMS reduction and Green Box under Domestic Support, and reduction and prohibition of new subsidies under Export Subsidies.

Additional Information

The AoA categorises domestic support measures into three boxes—green, blue, and amber based on their trade-distorting nature.

Green box

Subsidies that do not distort trade or, at most, cause minimal distortion are in this box. Usually, these subsidies are not directed at specific products.
There is no limit on governments for giving this kind of subsidies to their farmers.

Amber Box

The subsidies that distort international trade by making products of a particular country cheaper as compared to similar products from another country are slotted under this box.
Example – Input subsidies such as subsidies on electricity, seeds, fertilisers, irrigation, etc. Market support price (MSP) subsidies also fall under this box.
To measure ‘amber box’ support, WTO member countries are required to compute the aggregate measure of support (AMS).
The AMS means the annual level of support (subsidies) expressed in monetary terms provided for an agricultural product. It includes both product-specific & non-product-specific support.
The fixed external reference price is used to calculate the AMS to determine compliance with subsidy limits.
The fixed external reference price shall be based on the years 1986 to 1988.
WTO limits this subsidy by capping it at 5% for developed countries & 10% for developing countries of their total agriculture production. (de minimis).

Blue Box Subsidies

According to the WTO, the Blue Box is the “amber box subsidy with conditions” attached.
The Blue Box subsidies aim towards limiting production by imposing production quotas or requiring farmers to set aside part of their land.
Blue Box subsidies are also exempted from the calculation of AMS.

Option (b) is incorrect

The South Asian Association for Regional Cooperation (SAARC) was established with the signing of the SAARC Charter in Dhaka on 8 December 1985.

Infographic detailing South Asian Association for Regional Cooperation (SAARC), including formation date, member countries, objectives, and key centers. Features a color-coded map highlighting member nations, headquarters in Kathmandu, and significant institutions like SAARC Energy Centre and Disaster Management Centre, along with founding members and current observers.

Option (c) is incorrect

UNFCCC is an international environmental treaty that came into existence under the aegis of the UN.
It was negotiated at the Earth Summit 1992.
Role: UNFCCC provides a framework for negotiating specific international treaties (called “protocols”) that aim to set binding limits on greenhouse gases.
Objective of UNFCCC: Stabilize greenhouse gas concentrations in the atmosphere at a level that would prevent dangerous consequences.
Legal Effect: Treaty is considered legally non-binding.

Option (d) is incorrect

India and the European Union concluded negotiations for a comprehensive Free Trade Agreement (FTA) in January 2026.

Answer: (a) WTO affairs; Difficulty Level: Easy

2016, PYQs