Trigger Points of the Special Safeguard Mechanism
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.
Volume (Year): 31 (2011)
Issue (Month): 4 ()
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- 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.
- 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.
- 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.
- 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).
- 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 46627, Canadian Agricultural Trade Policy Research Network.
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