THE SPECIAL SAFEGUARD MECHANISM IN THE DOHA DEVELOPMENT AGENDA: A CASE STUDY OF SOYBEANS

The Special Safeguard Mechanism (SSM) proposed for developing countries has become athorny issue in the Doha Development Agenda’s (DDA) agricultural negotiations. Proponents ofthe mechanism argue that it is a necessary compromise to counter sharp price declines or rapidimport surges in staple commodity markets of developing nations. Opponents of the SSM,which include many developed exporters, contend that the policy flexibility contained incurrent SSM proposals would severely limit market access if the mechanism is triggered. Theimpact of the SSM depends on a number of parameters: the number of times the SSM istriggered, whether the price or volume SSM is triggered, the size of current tariffs, themagnitude with which tariffs are reduced in the DDA, and the number of times a developingcountry will actually make use of the SSM. This study introduces a static, synthetic, global,partial equilibrium model of the world soybean complex to assess the preliminary aspects ofthe DDA’s proposed tariff cuts. Future work on this project will extend the model to astochastic framework from which to simulate the effects of an SSM combined with the DDAtariff cutting formulas for developing nations.