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The World Trade Organization Special Safeguard Mechanism: A Case Study of Wheat
Author(s) -
Grant Jason H.,
Meilke Karl D.
Publication year - 2006
Publication title -
applied economic perspectives and policy
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.4
H-Index - 49
eISSN - 2040-5804
pISSN - 2040-5790
DOI - 10.1111/j.1467-9353.2006.00271.x
Subject(s) - safeguard , world trade , mechanism (biology) , international trade , business , epistemology , philosophy
A special safeguard mechanism is an attractive policy tool for low‐income importing countries because it is automatic and does not require an injury test. Exporters might accept a safeguard for low‐income countries if it results in larger tariff cuts than in its absence. The effects of a special safeguard mechanism on market stability and welfare are evaluated using wheat as a case study. The results show that a safeguard mechanism is not very trade distorting. Almost 80% of the increase in world welfare is still realized when low‐income countries are granted a safeguard mechanism.