Triggers, Remedies, and Tariff Cuts: Assessing the Impact of a Special Safeguard Mechanism for Developing Countries

The WTO negotiations broke down on July 30th, 2008 because members could not bridge their differences over the operation of a Special Safeguard Mechanism (SSM). This article evaluates the latest SSM proposal using the world wheat market as our case study. Whether low-income WTO members should be allowed to breach their pre-Doha bound tariffs is a key element of our analysis. The SSM leads to sizeable additional duties but is not very trade distorting, even when pre-Doha bound rates are breached. Moreover, the extent to which low-income countries should be allowed to exceed pre-Doha bound rates depends heavily on the product under consideration, the ambition of the tariff cutting exercise, and the gap between members’ bound and applied tariffs.