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Peace clause in WTO

Facts for Prelims (FFP)

 

Source: Business Standard

 Context: India has invoked the peace clause at the WTO for the fifth consecutive time for the marketing year 2022-23, as it breached the prescribed subsidy limit for rice.

  • Despite breaching the 10% domestic support ceiling, there are no immediate repercussions due to the peace clause, which provides immunity until a permanent solution is found.
  • India justifies its actions as necessary to meet domestic food security needs.

 

The peace clause in the World Trade Organization (WTO) refers to an agreement that temporarily shields developing countries from legal challenges for breaching the domestic support limits on agricultural subsidies.

 

It was established during the WTO’s Bali Ministerial Conference in 2013.

This clause allows developing countries to provide subsidies beyond the prescribed limits for certain agricultural products, such as rice and wheat, without facing immediate repercussions.

The peace clause provides immunity until a permanent solution is found, allowing developing countries to support their domestic agricultural sectors while negotiations continue on more permanent subsidy rules.