Could the proposed WTO Special Safeguard Mechanism protect farmers from low international prices?

Jayanthi Thennakoon and Kym Anderson

Departmental Working Papers from The Australian National University, Arndt-Corden Department of Economics

Abstract: This paper offers an empirical analysis of the proposal by some developing countries for an agricultural Special Safeguard Mechanism (SSM) in the World Trade Organization. It draws on political economy and market theory to demonstrate that the loss-averting domestic producer benefits that proponents believe the SSM would offer agricultural-importing developing countries may be illusory, insofar as agricultural-exporting countries also seek to avert producer losses. By way of illustration, the paper then uses time series data to analyse past government responses to fluctuations in the world's rice markets. The results suggest that the proposed SSM would deliver at most only a small fraction of the loss-averting benefits that have been advertised by the proponents of the SSM. Since the analysis applies to upward as well as downward spikes in international prices, it underscores the importance of strengthening multilateral disciplines on both import and export trade interventions to reduce beggar-thy-neighbor unilateral trade policy responses to food price fluctuations.

Keywords: WTO safeguards; SSM; food security; rice market volatility (search for similar items in EconPapers)
JEL-codes: F13 F15 F17 Q17 (search for similar items in EconPapers)
Pages: 25 pages
Date: 2014
New Economics Papers: this item is included in nep-agr and nep-int
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Citations: View citations in EconPapers (2)

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Journal Article: Could the proposed WTO Special Safeguard Mechanism protect farmers from low international prices? (2015)
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Persistent link: https://EconPapers.repec.org/RePEc:pas:papers:2014-23

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