In the context of which of the following do you sometimes find the terms amber box, blue box and gre

Question

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

Accepted Answer

In WTO terminology, subsidies in general are identified by Boxes which are given the colours of traffic lights: green (permitted), amber (slow down — i.e. be reduced), red (forbidden). In agriculture, things are, as usual, more complicated. The Agriculture Agreement has no Red Box, although domestic support exceeding the reduction commitment levels in the Amber Box is prohibited; and there is a Blue Box for subsidies that are tied to programmes that limit production.The amber box: For agriculture, all domestic support measures considered to distort production and trade (with some exceptions) fall into the amber box.The green box: In order to qualify for the green box, a subsidy must not distort trade, or at most cause minimal distortion. These subsidies have to be government-funded (not by charging consumers higher prices) and must not involve price support.The blue box: The blue box is an exemption from the general rule that all subsidies linked to production must be reduced or kept within defined minimal (de minimis) levels. It covers payments directly linked to acreage or animal numbers, but under schemes which also limit production by imposing production quotas or requiring farmers to set aside part of their land. Countries using these subsidies - and there are only a handful - say they distort trade less than alternative amber box subsidies. Currently, the only members notifying the WTO that they are using or have used the blue box are: the EU, Iceland, Norway, Japan, the Slovak Republic, Slovenia, and the US (now no longer using the box).Source Citation: Economic Survey