Question

Consider the following statements.
$1$. Blue Box contains those subsidies that tend to distort the international trade by making products of a country cheaper in the international market.
$2$. Green Box contains those subsidies that do not distort trade nor cause any distortion are classified under this box.
Which of the given statements is/are correct?

• A. $1$ only
• B. $2$ only
• C. Both $1$ and $2$
• D. None of the above

Answer 1

The correct option is B $2$ only

Green box contains subsidies that do not distort trade nor cause any distortion.Some of the examples include environmental and conservation programs, research funding, domestic food aid, disaster relief, farmer training programs and others.

Those subsidies that tend to distort the international trade by making products of a country cheaper in the international market as compared a similar product from a different country are categorized under Amber Box.

Subsidies that ideally would qualify as Amber Box, however do not lead to trade distortion are categorized into Blue Box.