The "Peace Clause" and the "Permanent Clause" are terms associated with the agreements under the World Trade Organization (WTO) that pertain to agricultural subsidies.
PEACE CLAUSE
The Peace Clause is a temporary provision that was part of the Agreement on Agriculture (AoA) under the WTO.
It was introduced during the Uruguay Round of negotiations (1986–1994) and was meant to address concerns about the reduction commitments for agricultural subsidies.
The Peace Clause protected developing countries against legal challenges for exceeding their commitments on domestic support to agriculture, as long as certain conditions were met.
The main condition was that the total value of subsidies should not exceed the commitment levels specified in the AoA.
The peace clause in the WTO has certain conditions that must be met by developing countries to avoid legal challenges under the Agreement on Agriculture. The conditions include avoiding distorting trade or impacting other countries' food security, and providing information to show that they are meeting those conditions.
The peace clause remains in effect until a permanent solution is agreed upon, even if it means going beyond the initially set deadlines.
The ‘peace clause’ said that no country would be legally barred from food security programs even if the subsidy breached the limits specified in the WTO agreement on agriculture.
It protects India’s food procurement programs against action from WTO members in case the subsidy ceilings – 10 percent of the value of food production in the case of India and other developing countries – are breached.
India had earlier invoked the clause for 2018-19 when it became the first country to do so. India informed the WTO that the value of its rice production in 2019-20 was $46.07 billion while it gave subsidies worth $6.31 billion, or 13.7 percent as against the permitted 10 percent.
PERMANENT CLAUSE
The Permanent Clause, formally known as the "Special and Differential Treatment" provision for developing countries, is a part of the AoA that allows certain flexibility in implementing reduction commitments on domestic support.
Unlike the Peace Clause, the Permanent Clause is a continuous provision and not time-limited.
It recognizes the need for developing countries to provide support to their agricultural sectors to address issues such as food security, rural development, and the livelihoods of farmers.
Developing countries can maintain higher levels of trade-distorting domestic support compared to developed countries, as long as they meet the criteria outlined in the WTO agreements.
Recently, India has asked WTO members to fast-track talks on finding a permanent solution on the public stockholding for food security issue at the 13th Ministerial Conference (MC13) of the WTO in February, but some countries differ on this.
India has earlier informed the World Trade Organisation that it has used the peace clause to provide excess support measures to rice farmers for the marketing year 2020-21, to meet the domestic food security needs of its poor population.
The AoA is one of the key agreements within the WTO framework, and discussions and negotiations on agricultural issues continue as part of the broader trade negotiations.
The Peace Clause and the Permanent Clause are mechanisms designed to address concerns related to the balance of interests between developed and developing countries in the context of agricultural trade.
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