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Explanation : Green Box, subsidies that do not distort trade fall in this box. According to WTO, green box subsidies should not distort trade, or at most cause minimal distortion. Thus, there is no limit on them. These green box subsidies must be government funded not by charging consumers higher prices, and they must not involve price support. Usually these subsidies are not directed at specific products and are not targeting subsidies and they may include direct income supports for farmers who are distressed due to crop loss or market breakdown. Blue Box, these are basically Amber Box subsidies but they tend to limit the production. Any support that would normally be in the amber box, is placed in the blue box if the support also requires farmers to limit their production. Amber box subsidies that distort the international trade by making products of a particular country cheaper as compared to same or similar product from another country is slotted under this box. They distort trade balance because they encourage excessive production, therefore given country’s product becomes cheaper than others, in the international market.
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