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ICSTD Possible Solutions to the SSM Impasse

ICSTD Possible Solutions to the SSM Impasse. Gary Hufbauer , Reginald Jones Senior Fellow Peterson Institute for International Economics December 1, 2008. Major Points of Contention. Coverage – All agriculture or only a subset?

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ICSTD Possible Solutions to the SSM Impasse

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  1. ICSTD Possible Solutions to the SSM Impasse Gary Hufbauer, Reginald Jones Senior Fellow Peterson Institute for International Economics December 1, 2008

  2. Major Points of Contention • Coverage – All agriculture or only a subset? • Triggers – (a) Type of triggers? (b) Level of triggers? (c) Single or multiple triggers? • Ceilings – With respect to exceeding pre-Doha bound rates, how much, how long, and how many goods? • Injury test – National discretion? Some degree of harm? • Duration – (a) How long should the remedy last? (b) How many successive implementations? (c) Life of the SSM framework?

  3. Possible Pathways around the Obstacles • Tiered country groups • Differentiated phase-out schedules • Multiple elements in the differentiated schedules • These are just suggestions to help break out of the impasse!

  4. Tiered Country Groups • Group 1 – Developing countries (a residual) • Group 2 – Recently acceded members • Group 3 – Small and vulnerable countries • Group 4 – Least developed members • To illustrate the difference between Group 1 and Group 2, see the schedules of Chinese and Indian agricultural tariffs, tables 2 and 3 of the paper

  5. Illustrative Phase-out Schedules • Break point years suggested for the phase-out schedules: 2010, 2015, 2020, 2025, 2030 • Each element in the SSM framework becomes progressively more stringent in each successive break point year • Groups 1 and 2 completely phase out by 2025 • Groups 2 and 3 completely phase out by 2030 • These suggestions are only illustrative; see table 1 in the text

  6. Suggested Multiple Elements in the SSM Framework • The suggested framework has many elements so that members can reconcile their differences! • Minimum volume surge trigger • Minimum price drop trigger • Maximum volume surge tariff remedy, above post-Doha rate • Price drop remedy, percent of gap • Maximum tariff remedy above pre-Doha rate • Percent of tariff lines above pre-Doha rate w/o injury test • Percent of tariff lines above pre-Doha rate w/ injury test • Duration of SSM implementation periods (days) • Number of successive implementations

  7. Suggested Oversight Committee • Core idea is to prevent abuse, not to prevent use of the SSM framework • Members would notify all cases of SSM use, with evidence of volume and/or price triggers • In relevant cases, members would show injury according to impact standards developed by the Committee, using Article 15.1 of the ASCM as a possible guideline

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