The eventual problem was the point at which “special safeguard mechanisms” would cut in, allowing developing countries to respond to a sudden flood in agricultural imports by putting up emergency tariff barriers to protect their subsistence farmers. The complaining about SSMs ignores three points: first, losses from the implementation of such provisions would be a fraction of what the agricultural exporters in developed countries would earn from market access; second, most countries already have them, but use them very rarely; and third, there are built-in restrictions on their use, because it is usually politically necessary to keep food prices low.

We will also hear a lot about the specific cut-offs for SSMs: was 40 per cent too high? Was 10 per cent, as India and China demanded, too low? Dismissal of this as “trivial”, as some have done, is ridiculous: economic losses may have been small, but the relative number of lives at stake was not. Among the factors being glossed over in the frantic spin emerging from Geneva is that these are increases in quantities of agricultural imports, not in their prices: when the concern is insulating subsistence farmers from catastrophic risk, prices are relevant, so the bar for quantities should be lower to allow governments to respond to price changes that do not exactly track quantities. In any case, suggesting that intervention can wait till exports have already flooded in is economically illiterate: even discreet measures take time to work.

Developing nations are being blamed for not responding adequately to “brave” moves by the US. US trade representative Susan Schwab offered to cap the domestic farm subsidy bill at $15 billion, from a previous maximum several times that. This is not as generous as Schwab made it sound: the amount barely crossed $7 billion last year. More, Schwab represents a president deeply unpopular with Congress — which means that the latter, which approved an absurdly bloated farm bill last year, has taken away his negotiating power. She could hardly make offers Congress might not approve. (Amusingly, this apparently led Commerce Minister Kamal Nath to call her an “impostor” at one point. One would think that a member of a cabinet that has just faced a confidence vote over domestic opposition to international negotiations would have a little more empathy.)

... contd.