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Intra-Industry Trade, Multilateral Trade Integration and Invasive Species Risk

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Author Info
Anh Thuy Tu (Department of Economics, Foreign Trade University, Hanoi, Vietnam)
John Beghin (Department of Economics at Iowa State University)

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Abstract

We analyze the linkage between protectionism and invasive species (IS) hazard in the context of two-way trade and multilateral trade integration, two major features of real-world agricultural trade. Multilateral integration includes the joint reduction of tariffs and trade costs among trading partners. Multilateral trade integration is more likely to increase damages from IS than predicted by unilateral trade opening under the classic Heckscher-Ohlin-Samuelson (HOS) framework because domestic production (the base susceptible to damages) is likely to increase with expanding export markets. A country integrating its trade with a partner characterized by relatively higher tariff and trade costs is also more likely to experience increased IS damages via expanded domestic production for the same reason. We illustrate our analytical results with a stylized model of the world wheat market.

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Publisher Info
Paper provided by Development and Policies Research Center (DEPOCEN), Vietnam in its series Working Papers with number 18.

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Length: 35 pages
Date of creation: 2007
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Handle: RePEc:dpc:wpaper:1807

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Related research
Keywords: Invasive species Exotic pest Trade protection Trade cost Trade integration Two-way trade Intra-industry trade Liberalization

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This paper has been announced in the following NEP Reports: References listed on IDEAS
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  1. James A. Brander & Paul Krugman, 1983. "A 'Reciprocal Dumping' Model of International Trade," NBER Working Papers 1194, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  2. James E. Anderson & Eric van Wincoop, 2004. "Trade Costs," NBER Working Papers 10480, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  3. Beghin, John C. & Roland-Holst, David & van du Mensbrugghe, Dominique, 2002. "Trade and the Environment in General Equilibrium: Evidence from Developing Economies," Staff General Research Papers 4090, Iowa State University, Department of Economics. [Downloadable!]
  4. J. D. Mumford, 2002. "Economic issues related to quarantine in international trade," European Review of Agricultural Economics, Oxford University Press for the Foundation for the European Review of Agricultural Economics, vol. 29(3), pages 329-348, July.
  5. Cook, D. C. & Fraser, R. W., 2002. "Exploring the regional implications of interstate quarantine policies in Western Australia," Food Policy, Elsevier, vol. 27(2), pages 143-157, April. [Downloadable!] (restricted)
  6. Aksoy, M. Ataman & Beghin, John C., 2005. "Global Agricultural Trade and Developing Countries," Staff General Research Papers 12228, Iowa State University, Department of Economics. [Downloadable!]
  7. Monika Binder, 2002. "The role of risk and cost-benefit analysis in determining quarantine measures," International Trade 0203002, EconWPA. [Downloadable!]
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