Abstract

The Uruguay Round of the General Agreement on Tariffs and Trade (GATT) negotiations is deadlocked on the issue of agricultural policy reform. Although broad consensus has been reached regarding replacing all nontariff trade barriers with "equivalent tariffs," agreement on the questions of domestic farm policy reforms and access to domestic markets by exporting countries has not yet been reached. Arthur Dunkel, Director General of the GATT, has put forward a compromise proposal that seeks to ensure minimum access to the domestic markets of all countries while providing importing countries with special safeguard mechanisms to protect their domestic markets against large price declines and import surges. Within this context, we analyze and compare safeguard mechanisms activated either by prices declining below some benchmark level or by imports surging above a prespecified level.