need to be satisfied to justify invocation of a safeguard instrument, transparency and regular scrutiny of the use of such instruments is arguably as if not more important. Studies have shown that the existence of instruments of contingent protection can help government both implement and sustain general trade liberalization (Finger and Nogues, 2008). In practice, contingency protection mechanisms offer the opportunity to re-impose protection on a selective and temporary basis. Insofar as this is costly to some groups in society – and inherently it will be – they will have an incentive to both contest the action and push for its removal over time. This suggests pro-active monitoring, analysis and reporting can play an important role in ensuring that actions, if taken, are subject to debate, and that they are periodically reviewed. Indeed, it suggests consideration be given to go beyond the valuable monitoring and reporting on policies done by the WTO and to assess and publish analyses of the incidence and impact of contingent protection. A first step in this direction is provided by the Global Trade Alert, which identifies the countries affected by trade measures (Evenett, 2009b).

As widely reported in the press, the proposed SSM for agricultural products was a major sticking point in July 2008. Subsequent analyses of the SSM proposal conclude that the suggested combination of price and quantity triggers to invoke the mechanism is unlikely to achieve the objective of food security (Finger, 2009; Hufbauer and Adler, 2008).<sup>18</sup> The proposed SSM may well be used much less frequently than its rules permit because, as shown by Finger (2009), the proposed criteria would frequently permit protection when it is unlikely to be sought after by policymakers—such as when imports “surge” because of a harvest failure, or prices fall from very high to normal levels.

While the use of safeguards of different types will increase in times of weak economic activity, the welfare cost of imposing such actions has been far less than the tariff and other trade barriers that were removed over time. At the end of the day the specific issues that are often very contentious and the subject of extensive analysis may not be that significant from an economywide perspective. The zeroing question – the practice of not including transactions at prices that do not generate positive dumping margins – is an example. There is a consensus among economists that this approach is analytically flawed. It has been deemed to be inconsistent with

> 18 One motivation for the SSM is to be able to offset reductions in world prices or import “surges” such as those resulting from harvest shortfalls. While this may benefit local producers, it will be at the expense of countries that are net consumers of agricultural commodities. Recent analysis indicates that a volume trigger-based SSM, if used, would likely contract world trade (make markets thinner) and destabilize, rather than stabilize, domestic prices (Hertel, Martin and Leister 2009). It would do this by reducing imports when domestic output declines, and, indirectly, by increasing the volatility of international prices. The price-trigger based SSM appears likely to have much less impact on price volatility.

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