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Peyton M Ferrier and Amanda M Leister
''Trigger Points of the Special Safeguard Mechanism''
( 2011, Vol. 31 No.4 )
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.
Keywords: Doha Development Agenda, World Trade Organization, Special Safeguard Mechanism, wheat, maize
JEL: F1 - Trade: General
O1 - Economic Development: General
Manuscript Received : Sep 30 2011 Manuscript Accepted : Nov 23 2011

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