Question

Q. Which of the following statements is correct about the Special Safeguard Mechanism (SSM)? (M)

• A. It is a mechanism that allows countries to take loans from the IMF (international monetary fund) in case of a Balance of payment crisis.
• B. It is a protectionist tool under WTO (World trade organization) that allows developing countries to increase tariffs temporarily to suppress import surges or price falls of agricultural products.
• C. It is a mechanism under WTO (World trade organization) according to which developed countries can restrict imports from other countries on the basis of quality.
• D. It is a mechanism under which the World Bank provides loans to developing countries

Answer 1

The correct option is B It is a protectionist tool under WTO (World trade organization) that allows developing countries to increase tariffs temporarily to suppress import surges or price falls of agricultural products.

Explanation:

The Special Safeguard Mechanism of the WTO is a special protection mechanism for developing countries that allow 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.