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Trigger Points of the Special Safeguard Mechanism

Author

Listed:
  • Peyton M Ferrier

    () (Economic Research Service, USDA)

  • Amanda M Leister

    () (Economic Research Service, USDA)

Abstract

Current negotiations of the WTO's Doha Development Agenda include proposals for an agricultural special safeguard policy. The Special Safeguard Mechanism (SSM) under consideration would allow developing countries to invoke additional duties if import quantities rise above or import prices fall below specific trigger levels. We show that a global excess supply shock for a given agricultural commodity is ambiguous in terms of triggering a quantity- or price-based SSM. Using wheat and maize trade data, we show that a global excess supply shock may trigger a Q-SSM for one country and a P-SSM for another. We also provide threshold levels for the magnitude of shocks that would cause the P-SSM or Q-SSM to bind for various countries.

Suggested Citation

  • Peyton M Ferrier & Amanda M Leister, 2011. "Trigger Points of the Special Safeguard Mechanism," Economics Bulletin, AccessEcon, vol. 31(4), pages 3211-3220.
  • Handle: RePEc:ebl:ecbull:eb-11-00694
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    File URL: http://www.accessecon.com/Pubs/EB/2011/Volume31/EB-11-V31-I4-P290.pdf
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    References listed on IDEAS

    as
    1. George C. Davis & Maria Cristina Espinoza, 1998. "A Unified Approach to Sensitivity Analysis in Equilibrium Displacement Models," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 80(4), pages 868-879.
    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," World Bank Economic Review, World Bank Group, vol. 24(2), pages 330-359, August.
    3. Ivanic, Maros & Martin, William J., 2011. "A Need for Caution in Applying the Volume-Based Special Safeguard Mechanism," 2011 Annual Meeting, July 24-26, 2011, Pittsburgh, Pennsylvania 103969, Agricultural and Applied Economics Association.
    4. Grant, Jason H. & Meilke, Karl D., 2009. "Triggers, Remedies, and Tariff Cuts: Assessing the Impact of a Special Safeguard Mechanism for Developing Countries," Estey Centre Journal of International Law and Trade Policy, Estey Centre for Law and Economics in International Trade, vol. 10(1).
    5. Finger, J Michael, 1981. "Policy Research," Journal of Political Economy, University of Chicago Press, vol. 89(6), pages 1270-1271, December.
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    Citations

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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, 2016, Boston, Massachusetts 236023, Agricultural and Applied Economics Association.

    More about this item

    Keywords

    Doha Development Agenda; World Trade Organization; Special Safeguard Mechanism; wheat; maize;

    JEL classification:

    • F1 - International Economics - - Trade
    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development

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