Potential Implications of a Special Safeguard Mechanism in the World Trade Organization: the Case of Wheat
Thomas Hertel,
Will Martin and
Amanda M. Leister
Authors registered in the RePEc Author Service: Amanda M. Countryman
The World Bank Economic Review, 2010, vol. 24, issue 2, 330-359
Abstract:
The special safeguard mechanism--both quantity- and price-based--was key in the July 2008 failure to reach agreement in the World Trade Organization negotiations under the Doha Development Agenda. A stochastic simulation model of the world wheat market is used to investigate the effects of the special safeguard mechanism. As expected, the quantity-based safeguard is found to reduce imports, raise domestic prices, and boost mean domestic production in the countries that implement it. However, rather than insulating developing countries in those regions from price volatility, the quantity-based safeguard increases domestic price volatility, largely by restricting imports when domestic output is low and prices are high. The quantity-based safeguard shrinks average wheat imports nearly 50 percent in some regions, and global wheat trade falls by 4.7 percent. The price-based safeguard discriminates against lower price exporters and contributes to producer price instability. Copyright The Author 2010. Published by Oxford University Press on behalf of the International Bank for Reconstruction and Development / the world bank . All rights reserved. For permissions, please e-mail: journals.permissions@oxfordjournals.org, Oxford University Press.
Date: 2010
References: Add references at CitEc
Citations: View citations in EconPapers (30)
Downloads: (external link)
http://hdl.handle.net/10.1093/wber/lhq010 (application/pdf)
Access to full text is restricted to subscribers.
Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
HTML/Text
Persistent link: https://EconPapers.repec.org/RePEc:oup:wbecrv:v:24:y:2010:i:2:p:330-359
Ordering information: This journal article can be ordered from
https://academic.oup.com/journals
Access Statistics for this article
The World Bank Economic Review is currently edited by Eric Edmonds and Nina Pavcnik
More articles in The World Bank Economic Review from World Bank Oxford University Press, Great Clarendon Street, Oxford OX2 6DP, UK. Contact information at EDIRC.
Bibliographic data for series maintained by Oxford University Press ().