A Need for Caution in Applying the Volume - Based Special Safeguard Mechanism

Type Conference Paper - Annual Conference of the Agricultural and Applied Economics Association
Title A Need for Caution in Applying the Volume - Based Special Safeguard Mechanism
Publication (Day/Month/Year) 2011
City Pittsburgh
Country/State USA, Pennsylvania
URL http://ageconsearch.umn.edu/bitstream/103969/2/ivanic_martin_volume SSM AAEA 2011_05_03.pdf
The proximate cause of the collapse of the Doha Agenda
negotiations in 2008 was disagreement
over the volume
based Special Safeguard Mechanism (SSM). This measure w
provide a
right, but not an obligation, for developing countries to impose a duty
when imports increase
While many simulations of its impact
on domestic prices are available, there appear to be no
analyses of its potential impacts on the welfare of poor households
. Whether such a safeguard
will increase or reduce poverty can only be determined empirically

if there are enough small,
poor farmers
who are net sellers of the commodity
when the
is imposed
, then imposition of
a safeguard duty may reduce poverty. If, by contrast, most small, poor farmers are net buyers of
the products subject to the duty, then it is likely that poverty will
Empirical analysis for
countries finds that poverty is
increased following the imposition of a
type measure
. The adverse
impact of the safeguard
induced increase in prices
is typically larger when the safeguard
be triggered, because the adverse output shocks
typically giving rise to import surges when import prices have not declined
the benefit to
poor producing households from higher prices.

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