IMPORT SAFEGUARDS: PROTECTIONIST MEASURES OR A LIBERALIZATION STRATEGY?

The Doha Trade Round maintains that a considerable effort will be given to take into account better the particular needs of developing nations. Many low-income countries argue that the flexibility to invoke a special safeguard mechanism when faced with volatile commodity markets is a necessary condition for further market access reform. The implications of a safeguard for developing agriculture as a trade-off for lowering their tariff rates, is an important empirical question. Two stochastic simulation experiments are developed using wheat as a case study to estimate the marginal effects of a safeguard in terms of domestic market stability and on developed exporting nations. The results reveal that a safeguard for developing agriculture is minimally trade distorting and in general, costs less than one percent of total world welfare that would be realized if low-income countries were not granted a safeguard. Furthermore, safeguards are an attractive policy tool because they are transparent, easy to use and are an automatic mechanism.


Issue Date:
2004
Publication Type:
Conference Paper/ Presentation
PURL Identifier:
http://purl.umn.edu/20236
Total Pages:
25
Series Statement:
Selected Paper




 Record created 2017-04-01, last modified 2017-08-24

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