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Tariff Escalation and Invasive Species Risk

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  • Tu, Anh Thuy
  • Beghin, John C.
  • Gozlan, Estelle

Abstract

We investigate the interface between trade and invasive species (IS) risk, focusing on the existing tariff escalation in agro-forestry product markets and its implication for IS risk. Tariff escalation in processed agro-forestry products exacerbates the risk of IS by biasing trade flows toward increased trade of primary commodity flows and against processed-product trade. We show that reducing tariff escalation by lowering the tariff on processed goods increases allocative efficiency and reduces the IS externality, a win-win situation. We also identify policy menus for trade reforms involving tariffs on both raw input and processed goods, leading to win-win situations.

Suggested Citation

Handle: RePEc:ags:hebarc:18377
DOI: 10.22004/ag.econ.18377
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