Could the proposed WTO Special Safeguard Mechanism protect farmers from low international prices?

This paper offers an empirical analysis of the proposal by some developing
countries for an agricultural Special Safeguard Mechanism (SSM) in the World Trade
Organization. It draws on political economy and market theory to demonstrate that the lossaverting
domestic producer benefits that proponents believe the SSM would offer
agricultural-importing developing countries may be illusory, insofar as agricultural-exporting
countries also seek to avert producer losses. By way of illustration, the paper then uses time
series data to analyse past government responses to fluctuations in the world’s rice markets.
The results suggest that the proposed SSM would deliver at most only a small fraction of the
loss-averting benefits that have been advertised by the proponents of the SSM. Since the
analysis applies to upward as well as downward spikes in international prices, it underscores
the importance of strengthening multilateral disciplines on both import and export trade
interventions to reduce beggar-thy-neighbor unilateral trade policy responses to food price
fluctuations.