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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
    as

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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. 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.
    2. 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), pages 1-24, May.
    3. 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.
    4. Finger, J. Michael, 2009. "A special safeguard mechanism for agricultural imports and the management of reform," Policy Research Working Paper Series 4927, The World Bank.
    5. J.M. Finger, 2002. "Policy Research," Chapters, in: Institutions and Trade Policy, chapter 18, pages 275-278, Edward Elgar Publishing.
    6. 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 & 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.
    2. 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.

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    More about this item

    Keywords

    Doha Development Agenda; World Trade Organization; Special Safeguard Mechanism; wheat; maize;
    All these keywords.

    JEL classification:

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

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