Special Safeguard Mechanism (SSM)

The World Trade Organisation (WTO) is an international body that is frequently referred to in the news. The Special Safeguard Mechanism (SSM) is a safeguard mechanism under the WTO which is especially of relevance to developing countries like India. In this article, you will learn all about the Special Safeguard Mechanism for the IAS exam.

What is the Special Safeguard Mechanism (SSM)?

The Special Safeguard Mechanism of the WTO is a special protection mechanism for developing countries that allows developing countries to raise tariffs on agricultural imports that are injurious to domestic farmers. The details for the same are still being negotiated.

• It is a permission to increase tariffs for developing countries when imports surge or price declines for agricultural products.
• SSM is different from the Special Agricultural Safeguard (SSG) that is provided for in the Agreement on Agriculture (AoA).
• The design and use of the SSM is an area of conflict under the WTO.
• At the Doha Ministerial Conference (2001) of the WTO, developing countries were given the option of adopting the SSM besides existing safeguards like the SSG.
• But, because of differences, there was a delay in the implementation of the entire Doha Development Agenda. The differences were chiefly on setting the conditions for placing restrictions on imports, and the amount of tariff imposition.
• While the Nairobi Package (2015) indicates that developing country members will have the right to have recourse to a special safeguard mechanism (SSM), there have been disagreements among members on various aspects of the SSM.
• India and the US particularly have conflicting versions of the SSM’s structure.

Differences between Members on SSM

India, along with the G33, have advocated for a simple and accessible SSM as a trade remedy tool to check price volatility risks and to balance agricultural trade distortions. 

• India wanted a higher level of tariff and a lower import surge for making the SSM. 
• But the US and a few agricultural exporting countries like Brazil argued for a lower level of tariff and higher import surge for invoking the SSM. 
• The developed countries want the SSM to be used when imports surge on a sustained basis by 40% over the previous year. But India and others argue that the SSM should be allowed to be invoked when imports rise by 10%. 
• The advocates for SSM say that it is a protection for the poor and vulnerable farmers in their domestic economies against price volatility. Others, however, argue that it is a time-bound tool to support increased market access and trade opening.
• The underlying cause of the disagreement among members was the inability to distinguish between import surges that do not threaten the livelihood conditions of developing country farmers and those that do. 
• In simple terms, members disagree on when to invoke the SSM and by how much the import tariffs may be increased in case it is invoked.

Note:- The G33 is a group of developing countries that coordinate at the WTO especially on matters related to agriculture. It was set up prior to the 2003 Cancun ministerial conference. India is a leading member of the group.

WTO Safeguards

Basically, there are three kinds of safeguards. Safeguards are contingency restrictions on imports taken temporarily to deal with special circumstances, such as a surge in imports. 

The following table makes clear the three types of safeguards and their details:

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