Special Safeguard Mechanism

Special Safeguard Mechanism (SSM)

It has been defined by World Trade Organisation (WTO) as "A tool that will allow developing countries to raise tariffs temporarily to deal with import surges or price falls".

Need for it:

“Developed countries are giving 70-80% subsidies to their farmers, which only they can afford to give. We don’t have the wherewithal to pay these kinds of subsidies. It distorts prices and make our farmers vulnerable when the products hit our markets. It is against those kinds of aberrations that we need protection. That’s what SSM will do."

                                                                                             -  Rita Teaotia (trade secretary)

A world bank paper http://www-wds.worldbank.org/external/default/WDSContentServer/IW3P/IB/2010/06/06/000158349_20100606235900/Rendered/PDF/WPS5334.pdf says that 

"Agricultural producers in developing countries are vulnerable to shocks both domestically—particularly from weather-related shocks to output—and from shocks to international markets. However, it must be remembered that consumers in developing countries are also particularly vulnerable to shocks to food prices, given that the poorest people spend as much as three quarters of their incomes on food. Policy measures that raise the price of food by imposing an import duty may help farmers whose incomes have fallen due to a harvest shortfall, but will do so at the expense of net buyers of food— including many farmers—as they will be hurt by the increase in the price of food. If farmers are isolated from world markets by poor infrastructure and communications, an even worse possibility emerges in which protection raises the cost of food to poor consumers linked to world markets, while providing little or no benefit to producers in more isolated locations. This highlights the need for careful analysis of the impact of special safeguards taking into account the potential differentiation between imported and domestic goods."

Doha Development Agenda and the origin of the SSM

At the Doha Ministerial Conference, the developing countries were given a concession to adopt a Special Safeguard Mechanism (SSM) besides the existing safeguards (like the Special Agricultural Safeguard or the SSG). 

This SSM constituted an important part of the promises offered to the developing world at Doha (known as Doha Development Agenda) and the Doha MC became known as a development round.

Special Agricultural Safeguard (SSG)

The Special Agricultural Safeguard (SSG) is provision in the Uruguay Round Agreement on Agriculture. The SSG allows Member countries to impose additional tariffs on agricultural products if their import volume exceeds defined trigger levels, or if prices fall below specified trigger levels. Its purpose is to prevent disruption of domestic markets due to import surges or abnormally low import prices.

Difference between SSM and other safeguards under Agreement on Agriculture

The SSG was available to all countries- both developing and developed whereas the SSM is allowable only to the developing countries.

It is to be mentioned that the SSG was available as it was inducted under the GATT agreement; whereas the SSM was the invention of the Doha MC.