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The Special Safeguard Mechanism (SSM) and Tariffs: Price Behaviour with Imperfectly Competitive Market Intermediaries

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  • Donald MacLaren

Abstract

The SSM is a proposal from the G-33 Group in the Doha Round negotiations in which developing countries would be allowed to use contingent tariffs to control import surges of food commodities and/or downward spikes in their border prices. The principal objective is to safeguard the livelihood security of farm households in these countries. A stochastic partial equilibrium model of a typical importing country situation is specified in which there are either imperfectly competitive, domestic intermediaries or a parastatal. Using Monte Carlo simulation, it is found that the objective of the SSM is unlikely to be met.

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File URL: http://www.cesifo-group.de/portal/page/portal/DocBase_Content/WP/WP-CESifo_Working_Papers/wp-cesifo-2014/wp-cesifo-2014-01/cesifo1_wp4585.pdf
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Paper provided by CESifo Group Munich in its series CESifo Working Paper Series with number 4585.

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Date of creation: 2014
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Handle: RePEc:ces:ceswps:_4585

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  1. Grant, Jason H. & Meilke, Karl D., 2008. "Triggers, Remedies and Tariff Cuts: Assessing the Impact of a Special Safeguard Mechanism for Developing Countries," Working Papers, Canadian Agricultural Trade Policy Research Network 46627, Canadian Agricultural Trade Policy Research Network.
  2. Vousden,Neil, 1990. "The Economics of Trade Protection," Cambridge Books, Cambridge University Press, Cambridge University Press, number 9780521346696.
  3. Kym Anderson & Maros Ivanic & Will Martin, 2013. "Food Price Spikes, Price Insulation, and Poverty," Departmental Working Papers, The Australian National University, Arndt-Corden Department of Economics 2013-11, The Australian National University, Arndt-Corden Department of Economics.
  4. Sandmo, Agnar, 1971. "On the Theory of the Competitive Firm under Price Uncertainty," American Economic Review, American Economic Association, American Economic Association, vol. 61(1), pages 65-73, March.
  5. Wolfe, Robert, 2009. "The special safeguard fiasco in the WTO: the perils of inadequate analysis and negotiation," World Trade Review, Cambridge University Press, Cambridge University Press, vol. 8(04), pages 517-544, October.
  6. Falvey, Rodney E & Lloyd, P J, 1991. "Uncertainty and the Choice of Protective Instrument," Oxford Economic Papers, Oxford University Press, vol. 43(3), pages 463-78, July.
  7. McCorriston, Steve & MacLaren, Donald, 2005. "The trade distorting effect of state trading enterprises in importing countries," European Economic Review, Elsevier, Elsevier, vol. 49(7), pages 1693-1715, October.
  8. Christophe Gouel, 2012. "Agricultural Price Instability: A Survey Of Competing Explanations And Remedies," Journal of Economic Surveys, Wiley Blackwell, Wiley Blackwell, vol. 26(1), pages 129-156, 02.
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