Q. With reference to the Peace Clause of the World Trade Organization (WTO), consider the following statements:
Select the correct answer using the codes given below:
Q. With reference to the Peace Clause of the World Trade Organization (WTO), consider the following statements:
Select the correct answer using the codes given below:
The correct option is A 1 and 3
Explanation:
Statement 1 is correct: The peace clause protects India’s food procurement programmes against action from WTO members in case the subsidy ceilings are breached.
Statement 2 is incorrect: Subsidies over and above the prescribed ceiling are seen as trade-distorting. The limit is fixed at 10 per cent of the value of food production for developing countries like India. For developed countries, it is 5%.
Statement 3 is correct: India had additionally invoked the peace clause for 2018-19. This had made India the first country to exercise its peace clause rights. Earlier, India’s minimum support programme (MSP) for rice was under scrutiny at the World Trade Organization, where the US and the EU had challenged the increase in subsidies beyond ceiling limits in the marketing year 2018-19.
Statement 4 is incorrect: India has again invoked the peace clause at the World Trade Organization (WTO), for exceeding the 10 per cent ceiling on the support it offered its rice farmers. India informed the WTO that it exceeded its subsidy ceiling as the value of its rice production in the year 2019-20 stood at $46.07 billion. It stated that it gave subsidies worth $6.31 billion which amount to 13.7 per cent as against the permitted 10 per cent.
Explanation:
Statement 1 is correct: The peace clause protects India’s food procurement programmes against action from WTO members in case the subsidy ceilings are breached.
Statement 2 is incorrect: Subsidies over and above the prescribed ceiling are seen as trade-distorting. The limit is fixed at 10 per cent of the value of food production for developing countries like India. For developed countries, it is 5%.
Statement 3 is correct: India had additionally invoked the peace clause for 2018-19. This had made India the first country to exercise its peace clause rights. Earlier, India’s minimum support programme (MSP) for rice was under scrutiny at the World Trade Organization, where the US and the EU had challenged the increase in subsidies beyond ceiling limits in the marketing year 2018-19.
Statement 4 is incorrect: India has again invoked the peace clause at the World Trade Organization (WTO), for exceeding the 10 per cent ceiling on the support it offered its rice farmers. India informed the WTO that it exceeded its subsidy ceiling as the value of its rice production in the year 2019-20 stood at $46.07 billion. It stated that it gave subsidies worth $6.31 billion which amount to 13.7 per cent as against the permitted 10 per cent.
