The Special Safeguard Mechanism: Findings From A Simulation Exercise

Date period
1 October 2007

SummaryThis information note presents the findings of an ICTSD-commissioned simulation exercise which seeks to evaluate various proposals for a Special Safeguard Mechanism (SSM) that would allow developing countries to defend themselves from import surges and prices depressions. The study aims to analyse the proposal made by the G-33 developing country group at the WTO, and those of other trading partners, by examining how the imposition of different requirements might affect the use of the safeguard in six different country case studies.

The simulation exercise seeks to shed light on three particular issues: 1) the historical frequency and severity of import surges and price depressions in the countries studied; 2) the extent to which countries would be able to access the safeguard, by quantifying how often temporary tariff increases or ‘remedies’ could be applied under different conditions; and 3) the effectiveness of the safeguard in bridging the gaps between import and domestic prices through the imposition of additional safeguard duties.

The information note is based on a longer issue paper by Raul Montemayor, which was subsequently updated to take account of additional proposals on the SSM.