JAGTIV · Previous Year Questions

UPSC

ECONOMY · 2010

Previous Year Question

In the context of the affairs of which of the following is the phrase ‘Special Safeguard Mechanisms’ mentioned in the news frequently?

A.

United Nations Environment Programme

B.

World Trade Organisation

C.

ASEAN-India Free Trade Agreement

D.

G-20 Summits

Correct Answer: B

Detailed Solution

The Special Safeguard Mechanism—SSM is a proposed arrangement connected with agricultural negotiations under the World Trade Organisation. It is intended to allow developing countries to impose an additional temporary import duty to protect their farmers against a sudden increase in agricultural imports or a sharp fall in import prices.

The proposed SSM may be activated under two circumstances:

  1. Volume trigger: When the volume of imports of an agricultural product rises beyond a prescribed threshold.

  2. Price trigger: When the price of the imported agricultural product falls significantly below a specified reference price.

A developing country may then temporarily impose an additional duty above the normally applied tariff. The purpose is not permanent protectionism but temporary protection of small and vulnerable farmers from an import shock.

Why was the SSM considered necessary?

In developing countries, agriculture is not merely a commercial activity. It is closely connected with:

  • Livelihoods;

  • Food security;

  • Rural employment;

  • Income security.

If heavily subsidised or exceptionally inexpensive agricultural imports increase suddenly, domestic agricultural prices may decline and farmers’ incomes may be adversely affected. The proposed SSM seeks to provide temporary relief in such exceptional circumstances.

Difference between SSG and SSM

The two should not be confused:

Basis

Special Safeguard—SSG

Special Safeguard Mechanism—SSM

Legal basis

Article 5 of the Agreement on Agriculture

Proposed under the Doha agriculture negotiations

Availability

Only for members and products where the right was reserved in their schedules

Proposed for developing countries

Status

Existing WTO Agreement provision

Not yet a fully agreed and operational mechanism

Trigger

Import surge or price decline

Proposed volume and price triggers

The SSM became a major point of disagreement during the 2008 WTO Doha Round negotiations. Members could not agree on the size of the import surge required to activate the mechanism or the extent to which the additional tariff could exceed the pre-Doha bound rate.

The term is, therefore, associated with the WTO rather than UNEP, the ASEAN-India FTA or G-20 summits.

Current position (2026)

A final multilateral agreement on the SSM has not yet been reached in WTO agricultural negotiations. Developing-country members consider it necessary for food and livelihood security, whereas other members are concerned that excessive use could obstruct agricultural trade.

The SSM, therefore, remains a subject of WTO agriculture negotiations and should not be understood as an existing unrestricted right available to all developing countries.

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