Impact of special safeguards (SSG) on world trade of agricultural products and on the Brazilian economy

• Grant number: 15/04256-5
• Support Opportunities: Regular Research Grants
• Start date: October 01, 2015
• End date: March 31, 2018
• Field of knowledge: Applied Social Sciences - Economics - International Economy
• Principal Investigator: Cinthia Cabral da Costa
• Grantee: Cinthia Cabral da Costa
• Host Institution: Embrapa Instrumentação Agropecuária. Empresa Brasileira de Pesquisa Agropecuária (EMBRAPA). Ministério da Agricultura, Pecuária e Abastecimento (Brasil). São Carlos , SP, Brazil
• Associated researchers: Heloisa Lee Burnquist ; Joaquim José Martins Guilhoto

Abstract

The last round of trade negotiations completed (Uruguay Round) introduced a mechanism of special safeguards, called SSG, to agricultural products. That mechanism allows that importer countries add an additional tariff if some parameters, called triggers, is infringed. Two triggers can be independently observed in this system: an import volume above to the trigger (volume SSG) or an import price below to the trigger (price SSG). However, since 1995 when this mechanism started until today, several problems have been attributed to it. They are: (i) continuity of this mechanism, which should be temporary; (ii) lack of transparency of its operation and; (iii) the triggers levels do not take into account changes in the market. These problems, coupled with that some of the main agricultural products exported by Brazil in the main markets make use of this tool can cause significant losses of the export revenues and, consequently, growth in the country. The aim of this study proposed is: (a) organization of information and analysis of products and countries that applied SSG since 1995; (b) estimate the additional tariff applied to products and countries previously identified in all years that the SSG was applied; (c) measure the impact of the decline in the world trade for agricultural products caused by this instrument in all the years that it was used; (d) measure the impact on the Brazilian economy due to SSG in the all years it was applied; (e) measure future annual impacts considering new trends in prices for agricultural products, which are reducing and, thus, making the mechanism of SSG even more protective and (f) based on the problems identified, propose solutions and estimate them. Thus, it is expected to generate enough information that support the government in trade negotiations with other countries. (AU)