## _wp05131 — 4. Effect on Import Price of Price-based SSGs

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---

### Overview and key findings
- Four main findings:
  - First, the SSGs are no longer a prerogative of rich countries: transition economies and developing countries are increasingly using them.
  - Second, the SSGs are used to protect almost continuously a small number of commodities. This is in clear violation of the spirit of the AoA.
  - Third, the SSGs provide an additional protection to commodities that are already heavily protected by restrictive tariff quotas and specific or mixed duties.
  - Fourth, the SSGs are applied in such a way that they reduce the transparency of tariff schedules and introduce a new element of unpredictability in market access.

### Implementation and utilization statistics
- Eligibility and notifications:
  - Only 39 WTO members can invoke SSGs.
  - As of end-May 2005, 1,477 SSGs were notified to the WTO.
  - Only 13 WTO members have actually implemented SSGs (Appendix II).
  - Key players (Republic of Korea, the European Communities, the United States) accounted for more than 70 percent of all the SSGs notified during 1995-2000, but later notifications were incomplete, reducing ability to calculate shares for 2001-04.
- Transparency and reporting failures:
  - Most WTO members have not complied with timely notification requirements; notifications are often provided after implementation and with substantial lag.
  - Some members ignore the obligation that a reservation to use special safeguards must appear beside the products concerned in the member’s schedule.
- Comparison with regular safeguards:
  - About 150 regular safeguards were invoked during the 50 years of the GATT, while almost 10 times more SSGs have been implemented in just 9 years.

### Magnitude of additional duties and interaction with existing tariffs
- Reported additional duty examples:
  - In the small set of notifications reporting additional duties (Costa Rica, Nicaragua, Slovak Republic—0.6 percent of all notifications), the additional duty was substantial: 24 percent on average, added to an already high MFN tariff of 43 percent.
- Costa Rica illustrative sequence (notifications and reported outcomes):
  - In 1995 Costa Rica increased its tariff from about 14 percent on average to the bound level of 35 percent.
  - Authorities estimated the additional duty would push the total tariff to 40-41 percent.
  - According to Oryza (2002), the total tariff reached 54 percent.
  - A regular safeguard later increased the total tariff to 71 percent.
  - In March 2002 the country placed a temporary import duty of 80 percent on paddy rice imported from the United States through the application of Article XIX.
  - In October 2002 the price-based SSG was put back in place and the sanitary and quality inspection fee was almost doubled to $19 / MT.
- Over-quota tariffs and TRQs:
  - In 2002 the over-quota average tariff for agricultural goods was 4.3 times higher than average bound tariff in the United States and 2.6 times higher in the EC.
  - In 2004 the difference decreased to 3.0 times higher for the United States and 2.5 times higher for the EC.
  - In 2004 average over-quota tariff on agricultural commodities reached 35 percent in the United States compared to an average in-quota tariff of 10 percent.
  - In 2004 in the EC they reached respectively 79 percent (over-quota) and 17 percent (in-quota).
- Overlap with specific and mixed duties:
  - Virtually all tariff lines for which the EC has reserved the right to invoke SSGs are protected by mixed or specific duties; only four exceptions (three of them with seasonal tariffs).
  - The WTO estimates that the ad valorem equivalent of the EC specific duty on beet sugar reaches 114.4 percent.
  - The EC’s total support to sugar accounted to 51 percent of total gross farm receipts on average over 1999-2001.

### Patterns of use: permanence, concentration, and protection stacking
- Frequency and concentration:
  - SSGs have been increasingly used by transition economies and developing countries since 1999 and 2002 respectively.
  - SSGs are frequently invoked and tend to protect a small set of sensitive commodities (sugar, fruits and vegetables, meat are prominent for the EC).
  - The notified SSGs covered only about 5 percent of the EC’s imports of agricultural goods during 1996-2001, but they affected almost all its imports of sugar.
- Continuous use:
  - Many members have used SSGs continuously over several years; Hungary imposed a continuous safeguard on sugar from end-May 1999 to end-April 2004.
  - Table 2 shows high percentages of continuity in successive years for several members (examples include EC, Japan, Republic of Korea, United States, Poland, Hungary).
- Protection stacking and closed-market invocation:
  - SSGs often add protection on top of existing specific/mixed duties and TRQs, magnifying effective protection.
  - Some SSGs were invoked on products with no imports (e.g., Japan and Taiwan Province of China notified SSGs on products with no recorded imports), implying use as a protectionist barrier despite absence of import surges.
  - The design of SSG triggers (ratio of imports over consumption) failed to prevent such abuses and was often uncomputable due to data limitations.

### Lessons for the Doha Round and design considerations for an SSM
- Risks if an SSM mirrors SSGs:
  - An SSM modeled on existing SSGs—no justification required, no compensation, simple triggers—would be open to the same abuses and could undermine liberalization.
  - Somwaru and Skully (2003) show an SSM would also have adverse welfare implications.
- Four main design objectives to reduce protectionist misuse:
  - The additional tariff should take the form of an ad valorem tariff applied on a non-discriminatory basis; the use of quantitative restrictions should be ruled out.
  - Market access should not be compromised; the SSM should not be invoked when markets are closed. The SSG criterion (ratio of imports over consumption) is inadequate and often uncomputable.
  - The SSM should be limited to large, sudden, and temporary shocks; continuous or repetitive use should be precluded by explicitly limiting the number of successive years or marketing periods a safeguard can be invoked and/or by requiring a (simpler) proof of injury.
  - Notification and transparency requirements should be strongly enforced; negotiators should consider requiring countries invoking the SSM to notify the expected additional duty.
- Eligibility and coverage trade-offs:
  - Although the SSM is to be for developing countries only, country eligibility is unclear (all developing countries or a subset).
  - The larger the country eligibility, the smaller the product coverage needs to be to preserve liberalization gains.
  - Many developing countries demand self-determination of product coverage; some WTO members argue only products undergoing significant tariff reductions should be eligible.
  - Anderson and Martin (2005) illustrate sensitivity: three-quarter of welfare gains from cuts in agricultural subsidies and tariffs could disappear if developed countries exclude only 2 percent of products (and developing countries exclude 4 percent); poverty impacts of a Doha agreement would be virtually eliminated (Hertel and Winters, 2005).
- Design options from proposals:
  - Japan’s proposal for seasonal and perishable products suggests a variable levy to prevent drop of prices below a threshold.
  - The SSGs allow smoothing price volatility but do not fully offset price drops—no guaranteed floor price or insulation against long-term decline.

### Conclusions and policy recommendations
- Conclusions:
  - Special agricultural safeguards were introduced to facilitate tariffication and market opening but have been used as near-permanent protectionist devices.
  - SSGs have reduced the transparency and predictability of tariff schedules and can allow bound tariffs to be effectively exceeded.
  - Since the Doha Round has agreed to create a Special Safeguard Mechanism for developing countries, careful design is essential to avoid repetition of SSG abuses.
- Policy recommendations (explicit):
  - A prolonged use of the SSM should be precluded—explicitly limit the possibility to invoke safeguards year after year and/or require proof of injury.
  - The use of the SSM should be prohibited when markets are closed.
  - The additional duty should be an ad valorem duty applied on a non-discriminatory basis; the use of quantitative restrictions should be ruled out.
  - Notification and transparency requirements should be strongly enforced; require notification of expected additional duty.
  - Limit product coverage if country eligibility is broad; restrain product coverage to preserve liberalization gains.

### Appendix I — Formula for the Calculation of the Additional Duty (summary)
- 1. The price-based SSGs (shipment-by-shipment formula):
  - If D ≤ 10 % then t = 0
  - 10% < D ≤ 40% then t = 0.27 (P_T / P_M) – 0.3
  - 40% < D ≤ 60% then t = 0.39 (P_T / P_M) – 0.5
  - 60% < D ≤ 75% then t = 0.47 (P_T / P_M) – 0.7
  - D > 75% then t = 0.52 (P_T / P_M) – 0.9
  - Definitions:
    - P_M = the current c.i.f. import price of the shipment expressed in domestic price.
    - P_T = the trigger price (the average c.i.f. price for 1986-88)
    - D = (P_T - P_M) / P_T ; the percentage fall in the import price below the trigger price.
    - t = the additional ad valorem duty.
- 2. The volume-based SSGs:
  - The volume-based SSGs may be taken in any year when:
    - M > Mt = M_AV X + Y
  - Definitions:
    - M = the absolute volume of imports
    - Mt = the trigger level of imports
    - M_AV = the average quantity of imports during the three preceding years for which data are available
    - Y = the absolute volume change in domestic consumption of the product in the most recent year for which data are available compared to the preceding year.
    - X = the base trigger level which equals:
      - 105% if M/C > 30%
      - 110% if 10% < M/C ≤ 30%
      - 125% if M/C ≤ 10%
    - where: M/C is the share of imports in domestic consumption during the three preceding years.
  - In such a case an additional duty can be imposed. It shall not exceed 1/3 of the level of the ordinary duty in effect and be maintained only until the end of the year in question.
  - Source: FAO (2003).

### Appendices — Notifications, commodity coverage, and TRQ overlap (selected figures)
- Appendix II (selected notifications and totals as presented in source):
  - Canada1000000000H1:0
  - EC3112616035363640
  - Japan1243655981282013
  - Republic of Korea83597820
  - New Zealand<0.5000000000
  - United States9   2049748035374453
  - Total39153153133213118114279117158
  - Notes: - : not yet WTO member. Shaded area: no notification received by the WTO. H1: notifications covering the first semester of the year.
- Appendix III — Share of Agricultural Lines Reserved for SSGs: Breakdown by Commodities (2002 tariff schedules)
  - A. EC (2002 tariff schedule) — HS-8 level:
    - ALL: 29%
    - Meat: 60%
    - Dairy products: 83%
    - Eggs: 62%
    - Cereals: 64%
    - Fruits & vegetables: 9%
    - Fats and oils: 7%
    - Sugar: 64%
    - Coffee, tea, cocoa, spices: 3%
    - Beverages: 4%
    - Tobacco: 0%
    - Fibers: 0%
    - Other products: 0%
  - B. Japan (2002 tariff schedule) — HS-9 level:
    - ALL: 22%
    - Meat: 79%
    - Dairy products: 0%
    - Eggs: 35%
    - Cereals: 4%
    - Fruits & vegetables: 3%
    - Oil seeds, fats and oils & products: 0%
    - Sugar & confectionery: 14%
    - Coffee, tea, mate, cocoa, spices & food...: 0%
    - Beverages & spirits: 0%
    - Tobacco: 28%
    - Agricultural fibers: 1%
    - Other agricultural products: 17%
  - Footnote: Adjustments were necessary to reflect changes in the nomenclature since 1995. Therefore, the percentage may differ from Appendix I.
- Appendix IV — Tariff Quotas and the SSGs (country coverage) — selected entries with X indicating presence:
  - Australia: Tariff Quotas X ; Reserved right to invoke SSGs X
  - Barbados: Tariff Quotas X ; Reserved right to invoke SSGs X
  - Canada: Tariff Quotas X ; Reserved right to invoke SSGs X
  - Costa Rica: Tariff Quotas X ; Reserved right to invoke SSGs X
  - Czech Republic: Tariff Quotas X ; Reserved right to invoke SSGs X
  - EC: Tariff Quotas X ; Reserved right to invoke SSGs X
  - Japan: Tariff Quotas X ; Reserved right to invoke SSGs X
  - New Zealand: Tariff Quotas X ; Reserved right to invoke SSGs X
  - Philippines: Tariff Quotas X ; Reserved right to invoke SSGs X
  - Poland: Tariff Quotas X ; Reserved right to invoke SSGs X
  - South Africa: Tariff Quotas X ; Reserved right to invoke SSGs X
  - Switzerland-Liechtenstein: Tariff Quotas X ; Reserved right to invoke SSGs X
  - Taiwan Province of China: Tariff Quotas X ; Reserved right to invoke SSGs X
  - Thailand: Tariff Quotas X ; Reserved right to invoke SSGs X
  - United States: Tariff Quotas X ; Reserved right to invoke SSGs X
  - Venezuela: Tariff Quotas X ; Reserved right to invoke SSGs X

*Source: _wp05131 - 4. Effect on Import Price of Price-based SSGs (PDF chapter), author’s calculations and reported WTO notifications, as of end-May 2005.*

### References..............................................................................................................

### _wp05131 - References..............................................................................................................

### Tables
- 1. Regional Pattern of the SSGs.................................................................................................5
- 2. Continuous Use of SSGs........................................................................................................8
- 3. EC—Overlap of Potential SSGs with Other Types of Protections......................................10

### Figures
- 1. Additional Duties Reported in Notifications to the WTO .....................................................6
- 2. EC—Share of Imports Affected by Special Safeguards (value)............................................9
- 3. One Option of the Japanese Proposal ..................................................................................13

*Source: _wp05131 - References.*

### 4. Effect on Import Price of Price-based SSGs........................................................................13

### 4. Effect on Import Price of Price-based SSGs

### Overview and key findings
- Four main findings:
  - First, the SSGs are no longer a prerogative of rich countries: transition economies and developing countries are increasingly using them.
  - Second, the SSGs are used to protect almost continuously a small number of commodities. This is in clear violation of the spirit of the AoA.
  - Third, the SSGs provide an additional protection to commodities that are already heavily protected by restrictive tariff quotas and specific or mixed duties.
  - Fourth, the SSGs are applied in such a way that they reduce the transparency of tariff schedules and introduce a new element of unpredictability in market access.

### Implementation and utilization statistics
- Eligibility and notifications:
  - Only 39 WTO members can invoke SSGs.
  - As of end-May 2005, 1,477 SSGs were notified to the WTO.
  - Only 13 WTO members have actually implemented SSGs (Appendix II).
  - Key players (Republic of Korea, the European Communities, the United States) accounted for more than 70 percent of all the SSGs notified during 1995-2000, but later notifications were incomplete, reducing ability to calculate shares for 2001-04.
- Transparency and reporting failures:
  - Most WTO members have not complied with timely notification requirements; notifications are often provided after implementation and with substantial lag.
  - Some members ignore the obligation that a reservation to use special safeguards must appear beside the products concerned in the member’s schedule.
- Comparison with regular safeguards:
  - About 150 regular safeguards were invoked during the 50 years of the GATT, while almost 10 times more SSGs have been implemented in just 9 years.

### Magnitude of additional duties and interaction with existing tariffs
- Reported additional duty examples:
  - In the small set of notifications reporting additional duties (Costa Rica, Nicaragua, Slovak Republic—0.6 percent of all notifications), the additional duty was substantial: 24 percent on average, added to an already high MFN tariff of 43 percent.
- Costa Rica illustrative sequence (notifications and reported outcomes):
  - In 1995 Costa Rica increased its tariff from about 14 percent on average to the bound level of 35 percent.
  - Authorities estimated the additional duty would push the total tariff to 40-41 percent.
  - According to Oryza (2002), the total tariff reached 54 percent.
  - A regular safeguard later increased the total tariff to 71 percent.
  - In March 2002 the country placed a temporary import duty of 80 percent on paddy rice imported from the United States through the application of Article XIX.
  - In October 2002 the price-based SSG was put back in place and the sanitary and quality inspection fee was almost doubled to $19 / MT.
- Over-quota tariffs and TRQs:
  - In 2002 the over-quota average tariff for agricultural goods was 4.3 times higher than average bound tariff in the United States and 2.6 times higher in the EC.
  - In 2004 the difference decreased to 3.0 times higher for the United States and 2.5 times higher for the EC.
  - In 2004 average over-quota tariff on agricultural commodities reached 35 percent in the United States compared to an average in-quota tariff of 10 percent.
  - In 2004 in the EC they reached respectively 79 percent (over-quota) and 17 percent (in-quota).
- Overlap with specific and mixed duties:
  - Virtually all tariff lines for which the EC has reserved the right to invoke SSGs are protected by mixed or specific duties; only four exceptions (three of them with seasonal tariffs).
  - The WTO estimates that the ad valorem equivalent of the EC specific duty on beet sugar reaches 114.4 percent.
  - The EC’s total support to sugar accounted to 51 percent of total gross farm receipts on average over 1999-2001.

### Patterns of use: permanence, concentration, and protection stacking
- Frequency and concentration:
  - SSGs have been increasingly used by transition economies and developing countries since 1999 and 2002 respectively.
  - SSGs are frequently invoked and tend to protect a small set of sensitive commodities (sugar, fruits and vegetables, meat are prominent for the EC).
  - The notified SSGs covered only about 5 percent of the EC’s imports of agricultural goods during 1996-2001, but they affected almost all its imports of sugar.
- Continuous use:
  - Many members have used SSGs continuously over several years; Hungary imposed a continuous safeguard on sugar from end-May 1999 to end-April 2004.
  - Table 2 shows high percentages of continuity in successive years for several members (examples include EC, Japan, Republic of Korea, United States, Poland, Hungary).
- Protection stacking and closed-market invocation:
  - SSGs often add protection on top of existing specific/mixed duties and TRQs, magnifying effective protection.
  - Some SSGs were invoked on products with no imports (e.g., Japan and Taiwan Province of China notified SSGs on products with no recorded imports), implying use as a protectionist barrier despite absence of import surges.
  - The design of SSG triggers (ratio of imports over consumption) failed to prevent such abuses and was often uncomputable due to data limitations.

### Lessons for the Doha Round and design considerations for an SSM
- Risks if an SSM mirrors SSGs:
  - An SSM modeled on existing SSGs—no justification required, no compensation, simple triggers—would be open to the same abuses and could undermine liberalization.
  - Somwaru and Skully (2003) show an SSM would also have adverse welfare implications.
- Four main design objectives to reduce protectionist misuse:
  - The additional tariff should take the form of an ad valorem tariff applied on a non-discriminatory basis; the use of quantitative restrictions should be ruled out.
  - Market access should not be compromised; the SSM should not be invoked when markets are closed. The SSG criterion (ratio of imports over consumption) is inadequate and often uncomputable.
  - The SSM should be limited to large, sudden, and temporary shocks; continuous or repetitive use should be precluded by explicitly limiting the number of successive years or marketing periods a safeguard can be invoked and/or by requiring a (simpler) proof of injury.
  - Notification and transparency requirements should be strongly enforced; negotiators should consider requiring countries invoking the SSM to notify the expected additional duty.
- Eligibility and coverage trade-offs:
  - Although the SSM is to be for developing countries only, country eligibility is unclear (all developing countries or a subset).
  - The larger the country eligibility, the smaller the product coverage needs to be to preserve liberalization gains.
  - Many developing countries demand self-determination of product coverage; some WTO members argue only products undergoing significant tariff reductions should be eligible.
  - Anderson and Martin (2005) illustrate sensitivity: three-quarter of welfare gains from cuts in agricultural subsidies and tariffs could disappear if developed countries exclude only 2 percent of products (and developing countries exclude 4 percent); poverty impacts of a Doha agreement would be virtually eliminated (Hertel and Winters, 2005).
- Design options from proposals:
  - Japan’s proposal for seasonal and perishable products suggests a variable levy to prevent drop of prices below a threshold.
  - The SSGs allow smoothing price volatility but do not fully offset price drops—no guaranteed floor price or insulation against long-term decline.

### Conclusions and policy recommendations
- Conclusions:
  - Special agricultural safeguards were introduced to facilitate tariffication and market opening but have been used as near-permanent protectionist devices.
  - SSGs have reduced the transparency and predictability of tariff schedules and can allow bound tariffs to be effectively exceeded.
  - Since the Doha Round has agreed to create a Special Safeguard Mechanism for developing countries, careful design is essential to avoid repetition of SSG abuses.
- Policy recommendations (explicit):
  - A prolonged use of the SSM should be precluded—explicitly limit the possibility to invoke safeguards year after year and/or require proof of injury.
  - The use of the SSM should be prohibited when markets are closed.
  - The additional duty should be an ad valorem duty applied on a non-discriminatory basis; the use of quantitative restrictions should be ruled out.
  - Notification and transparency requirements should be strongly enforced; require notification of expected additional duty.
  - Limit product coverage if country eligibility is broad; restrain product coverage to preserve liberalization gains.

*Source: _wp05131 - 4. Effect on Import Price of Price-based SSGs (PDF chapter), author’s calculations and reported WTO notifications, as of end-May 2005.*

### References

### _wp05131 - References

### References cited
- Anderson, Kym, and Will Martin, 2005, Agricultural Trade Reform and the Doha Development Agenda (Washington: World Bank). Available via the internet: http://web.worldbank.org/WBSITE/EXTERNAL/TOPICS/TRADE/0,,contentMDK:20508607~menuPK:167367~pagePK:64020865~piPK:51164185~theSitePK:239071,00.html
- ERS/USDA, WTO Agricultural Trade Policy Commitments Database. Available via the internet: http://www.ers.usda.gov/db/Wto/WtoTariff_database/
- FAO, 2003, WTO Agreement on Agriculture: The Implementation Experience—Developing Country Case Studies (Rome: FAO). Available via the internet: http://www.fao.org/DOCREP/005/Y4632E/y4632e00.htm
- Hertel, Thomas W., and L. Alan Winters, 2005, Poverty Impacts of a WTO Agreement: Synthesis and Overview (Washington: World Bank). Available via the internet: http://www.gtap.agecon.purdue.edu/resources/download/2103.pdf
- MAFF (Ministry of Agriculture, Forestry, and Fisheries of Japan), 2001, Elaboration of Japan’s Negotiating Proposal: A New Safeguard Mechanism. Available via the internet: www.maff.go.jp/wto/wto_syousai_newsg_eng.pdf
- OECD, Agricultural Policies in OECD Countries – Monitoring and evaluation, Paris: OECD, various issues.
- Official Journal of the European Communities, 2001, L 279, Vol. 44 (October). Available via the internet: http://europa.eu.int/eur-lex/en/archive/2001/l_27920011023en.html
- Oryza, 2002, Oryza Market Report—Costa Rica, November 15. Available via the internet: http://oryza.com/latinamerica/costarica/index.shtml
- Ruffer, Tim, and Paolo Vergano, 2002, An Agricultural Safeguard Mechanism for Developing Countries, Report commissioned by DFID. Available via the internet: http://www.opml.co.uk/docs/ACF3043.pdf
- Somwaru, Agapi, and David Skully, 2003, Will Special Agricultural Safeguards Advance or Retard LDC Growth and Welfare? A Dynamic General Equilibrium Analysis, presented at the Sixth Annual Conference on Global Economic Analysis, The Hague, Netherlands. Available via the internet: http://www.gtap.agecon.purdue.edu/resources/res_display.asp?RecordID=1300
- WTO, 2000, Special Agricultural Safeguard, Background Paper by the Secretariat, G/AG/NG/S/9. Available via the internet: http://www.wto.org
- WTO, 2002a, Special Agricultural Safeguard, Background Paper by the Secretariat, G/AG/NG/S/9/Rev.1. Available via the internet: http://www.wto.org
- WTO, 2002b, WTO Negotiations on Agriculture—A Special Agricultural Safeguard Mechanism for Developing Countries and Small Developing Economies, negotiating proposal on behalf of Members of the Caribbean Community (CARICOM), proposal tabled at the Special Session of the Committee on Agriculture Informal Meeting (February). Available via the internet: http://www.moa.gov.jm/policies/wto3special_session_of_the_committee.htm
- WTO, 2002c, Negotiations on Agriculture—Overview, Committee on Agriculture, Special Session, TN/AG/6. Available via the internet: http://www.wto.org
- WTO, 2003a, Negotiations on agriculture—First Draft of modalities for the further commitments, Committee on Agriculture, Special Session, TN/AG/W/1. Available via the internet: http://www.wto.org
- WTO, 2003b, Negotiations on agriculture—First Draft of modalities for the further commitments—Revision, Committee on Agriculture, Special Session, TN/AG/W/1/Rev.1. Available via the internet: http://www.wto.org
- WTO, 2004a, Free Trade Agreement Between The United States And Chile, Committee on Regional Trade Agreements, WT/REG160/1. Available via the internet: http://www.ustr.gov/new/fta/Chile/final/index.htm
- WTO, 2004b, Doha Work Programme—Decision Adopted by the General Council on 1 August 2004, WT/L/579. Available via the internet: http://www.wto.org
- WTO, 2004c, Trade Policy Review—European Communities (Geneva: WTO).
- WTO, WTO analytical index: Agreement on Agriculture. Available via the internet: http://www.wto.org/english/res_e/booksp_e/analytic_index_e/agriculture_01_e.htm#article5B

### Appendix I — Formula for the Calculation of the Additional Duty
- 1. The price-based SSGs
  - The price-based special safeguards may be taken on a shipment-by-shipment basis using the following formula:
    - If D ≤ 10 % then t = 0
    - 10% < D ≤ 40% then t = 0.27 (P_T / P_M) – 0.3
    - 40% < D ≤ 60% then t = 0.39 (P_T / P_M) – 0.5
    - 60% < D ≤ 75% then t = 0.47 (P_T / P_M) – 0.7
    - D > 75% then t = 0.52 (P_T / P_M) – 0.9
  - Where:
    - P_M = the current c.i.f. import price of the shipment expressed in domestic price.
    - P_T = the trigger price (the average c.i.f. price for 1986-88)
    - D = (P_T - P_M) / P_T ; the percentage fall in the import price below the trigger price.
    - t = the additional ad valorem duty.
  - Figures 4 provides an illustration of this formula (figure referenced in source).

- 2. The volume-based SSGs
  - The volume-based SSGs may be taken in any year when:
    - M > Mt = M_AV X + Y
  - Where:
    - M = the absolute volume of imports
    - Mt = the trigger level of imports
    - M_AV = the average quantity of imports during the three preceding years for which data are available
    - Y = the absolute volume change in domestic consumption of the product in the most recent year for which data are available compared to the preceding year.
    - X = the base trigger level which equals:
      - 105% if M/C > 30%
      - 110% if 10% < M/C ≤ 30%
      - 125% if M/C ≤ 10%
    - where: M/C is the share of imports in domestic consumption during the three preceding years.
  - In such a case an additional duty can be imposed. It shall not exceed 1/3 of the level of the ordinary duty in effect and be maintained only until the end of the year in question.
  - Source: FAO (2003).

### Appendix II — Notifications to the WTO (selected entries and totals)
- Table shows % of tariff line covered by SSG for years 1995–2004 for multiple countries (entries presented as in source).
- Selected country entries (as presented):
  - Canada1000000000H1:0
  - EC3112616035363640
  - Japan1243655981282013
  - Republic of Korea83597820
  - New Zealand<0.5000000000
  - United States9   2049748035374453
- Total (as presented): Total39153153133213118114279117158
- Source: WTO (2000, 2002a) and author’s calculation based on notifications to the WTO as of end-May, 2005.
- Notes:
  - - : not yet WTO member.
  - Shaded area: no notification received by the WTO.
  - H1: notifications covering the first semester of the year.

### Appendix III — Share of Agricultural Lines Reserved for SSGs: Breakdown by Commodities
- A. EC (2002 tariff schedule) — Based on the 2002 tariff schedule at the HS-8 digit level:
  - ALL: 29%
  - Meat: 60%
  - Dairy products: 83%
  - Eggs: 62%
  - Cereals: 64%
  - Fruits & vegetables: 9%
  - Fats and oils: 7%
  - Sugar: 64%
  - Coffee, tea, cocoa, spices: 3%
  - Beverages: 4%
  - Tobacco: 0%
  - Fibers: 0%
  - Other products: 0%
- B. Japan (2002 tariff schedule) — Based on the 2002 tariff schedule at HS-9 digit level:
  - ALL: 22%
  - Meat: 79%
  - Dairy products: 0%
  - Eggs: 35%
  - Cereals: 4%
  - Fruits & vegetables: 3%
  - Oil seeds, fats and oils & products: 0%
  - Sugar & confectionery: 14%
  - Coffee, tea, mate, cocoa, spices & food...: 0%
  - Beverages & spirits: 0%
  - Tobacco: 28%
  - Agricultural fibers: 1%
  - Other agricultural products: 17%
- Footnote: Adjustments were necessary to reflect changes in the nomenclature since 1995. Therefore, the percentage may differ from Appendix I.

### Appendix IV — Tariff Quotas and the SSGs (country coverage)
- Countries with Tariff Quotas (43 WTO members) and Countries that have reserved the right to invoke the SSGs (39 WTO members) — entries as marked in source (X indicates presence). Selected rows as presented:
  - Australia: Tariff Quotas X ; Reserved right to invoke SSGs X
  - Barbados: Tariff Quotas X ; Reserved right to invoke SSGs X
  - Canada: Tariff Quotas X ; Reserved right to invoke SSGs X
  - Costa Rica: Tariff Quotas X ; Reserved right to invoke SSGs X
  - Czech Republic: Tariff Quotas X ; Reserved right to invoke SSGs X
  - EC: Tariff Quotas X ; Reserved right to invoke SSGs X
  - Japan: Tariff Quotas X ; Reserved right to invoke SSGs X
  - New Zealand: Tariff Quotas X ; Reserved right to invoke SSGs X
  - Philippines: Tariff Quotas X ; Reserved right to invoke SSGs X
  - Poland: Tariff Quotas X ; Reserved right to invoke SSGs X
  - South Africa: Tariff Quotas X ; Reserved right to invoke SSGs X
  - Switzerland-Liechtenstein: Tariff Quotas X ; Reserved right to invoke SSGs X
  - Taiwan Province of China: Tariff Quotas X ; Reserved right to invoke SSGs X
  - Thailand: Tariff Quotas X ; Reserved right to invoke SSGs X
  - United States: Tariff Quotas X ; Reserved right to invoke SSGs X
  - Venezuela: Tariff Quotas X ; Reserved right to invoke SSGs X
- Source: WTO.

*Content derived from _wp05131 - References and accompanying appendices as provided in the source PDF.*

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_Source: https://www.imf.org/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/wp/2005/_wp05131.pdf_