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An Analysis of the Special Safeguard Mechanism with Particular Reference to India

Author

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  • Donald MacLaren

    (The author is at the Department of Economics, University of Melbourne, VIC 3010 Australia; email: d.maclaren@unimelb.edu.au)

Abstract

The Special Safeguard Mechanism (SSM) is intended to provide contingent protection to poor farmers in developing countries from negative shocks to import prices or from surges in imports. The effects of stochastic import prices and volumes are analysed in a partial equilibrium framework to illustrate the issues involved. The simplicity of the mechanisms for contingent protection illustrated through geometry are contrasted with the modalities that were proposed in July 2008. These are the choice between an import price trigger or an import quantity trigger. The triggers have been incorporated into a computable general equilibrium (CGE) model by Hertel et al. (2010) and stochastic simulations conducted in order to compare their effects on the levels and volatility of key variables. The conclusion is that the quantity trigger is less effective in achieving the principal objective of the SSM.

Suggested Citation

  • Donald MacLaren, 2011. "An Analysis of the Special Safeguard Mechanism with Particular Reference to India," Margin: The Journal of Applied Economic Research, National Council of Applied Economic Research, vol. 5(1), pages 47-64, February.
    • Handle: RePEc:sae:mareco:v:5:y:2011:i:1:p:47-64
    DOI: 10.1177/097380101000500104
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    References listed on IDEAS

    as
    1. Hertel, Thomas W. & Martin, William J. & Leister, Amanda M., 2010. "Potential Implications of a Special Safeguard Mechanism in the WTO: the Case of Wheat," 2010 Annual Meeting, July 25-27, 2010, Denver, Colorado 61000, Agricultural and Applied Economics Association.
    2. Thomas W. Hertel & Will Martin & Amanda M. Leister, 2010. "Potential Implications of a Special Safeguard Mechanism in the World Trade Organization: the Case of Wheat," The World Bank Economic Review, World Bank, vol. 24(2), pages 330-359, August.
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    Cited by:

    1. Countryman, Amanda M. & Narayanan, Badri G., 2017. "Price volatility, tariff structure and the special safeguard mechanism," Economic Modelling, Elsevier, vol. 64(C), pages 399-408.
    2. Countryman, Amanda & Ufer, Danielle, 2016. "Potential Poverty Effects of the Special Safeguard Mechanism: the Case of Wheat," 2016 Annual Meeting, July 31-August 2, Boston, Massachusetts 236023, Agricultural and Applied Economics Association.

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    More about this item

    Keywords

    India; Special Safeguard Mechanism; Stochastic Prices; WTO; JEL Classification: F13; JEL Classification: F14; JEL Classification: F53; JEL Classification: Q17; JEL Classification: Q18;
    All these keywords.

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F53 - International Economics - - International Relations, National Security, and International Political Economy - - - International Agreements and Observance; International Organizations
    • Q17 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agriculture in International Trade
    • Q18 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Policy; Food Policy; Animal Welfare Policy

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