Special agricultural safeguards

• Author: Jean-Jacques Hallaert
• Position: IMF Policy Development and Review Department
• Pages: 317-329

Page 317

To protect local producers from a temporary drop in price, or surge in quantity, of certain agricultural imports, some countries can invoke additional import duties that were introduced in the World Trade Organization's Uruguay Round of trade talks. These safeguards form the basis of a special mechanism that negotiators under the Doha Round have agreed to create for developing countries.

But a new IMF Working Paper warns that because the safeguards are, in fact, protectionist devices, caution must be exercised in designing the new mechanism.

Page 328

Special agricultural safeguards: Lessons for the Doha Round

In the World Trade Organization's (WTO) current Doha Round of trade talks, negotiators are discussing the future of the special agricultural safeguards that were introduced in the Uruguay Round. These safeguards allow certain WTO members to levy an additional duty on selected agricultural imports so as to protect local producers from the effects of a temporary drop in the price of these imports or a surge in their quantity. At the same time, negotiators have agreed to create a special safeguard mechanism-along the lines of the special safeguards-for use solely by developing countries for agricultural imports. A new IMF Working Paper draws lessons from the experience with agricultural safeguards for the design of the proposed mechanism.

One of the aims of the Uruguay Round's Agreement on Agriculture was to improve market access for agricultural products by encouraging WTO members to convert their nontariff barriers (such as quotas and imports bans) into tariffs.

Some countries, however, feared that this reform would trigger domestic market disruptions.WTO members therefore agreed that those members "tariffing" their nontariff barriers could invoke the special safeguard.

At first glance, the impact of the special safeguards appears limited, given that only 39 WTO members are eligible to invoke them on only a small portion of their agricultural imports (see box), and only 14 of these eligible members (Barbados, Costa Rica, Czech Republic, the European Community (EC) 15, Hungary, Japan, Korea, Nicaragua, Philippines, Poland, the Slovak Republic, Switzerland, Taiwan Province of China, and the United States) have actually implemented them. In fact, however, the safeguards have become a protectionist device for several reasons:

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