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On the Need for More Economic Assessment of Quarantine/SPS Policies

  • Anderson, Kym
  • James, Sarah

Quarantine policy reviews are becoming more sophisticated following the Uruguay Round’s Agreement on Sanitary and Phytosanitary (SPS) Measures and, in Australia’s case, following also the 1996 Nairn Report. Yet they still focus primarily on the effects of restrictions just on import-competing producers. A fuller analysis that includes the consumers demonstrates that even if imported diseases were to wipe out a local industry, the gains to consumers may outweigh the losses to import-competing producers from removing a ban on imports. This paper provides the simplest partial-equilibrium framework for thinking more about the economics of quarantine policy measures. An empirical analysis of Australia’s ban on imports of bananas, used to illustrate the methodology, suggests a move to free trade may well cause a major contraction of banana growing in Australia but the economic welfare gains to consumers are almost certain to far outweigh the losses to producers. The paper concludes by arguing that there is a need for a comprehensive economic review of Australia’s myriad quarantine restrictions.

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Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 1934.

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Date of creation: Jul 1998
Date of revision:
Handle: RePEc:cpr:ceprdp:1934
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  1. K.W. Clements & L.A. Sjaastad, 1983. "How Protection Taxes Exporters," Economics Discussion / Working Papers 83-15, The University of Western Australia, Department of Economics.
  2. Anderson, Kym, 1998. "Are resource-abundant economies disadvantaged?," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 42(1), March.
  3. Tanner, Carolyn & Nairn, Malcolm, 1997. "Principles of Australian Quarantine," 1997 Conference (41st), January 22-24, 1997, Gold Coast, Australia 135413, Australian Agricultural and Resource Economics Society.
  4. MacLaren, Donald, 1997. "Uncertainty Aversion and Technical Barriers to Trade: An Australian Example," 1995: Understanding Technical Barriers to Agricultural Trade Conference, December 1995, Tucson, Arizona 51388, International Agricultural Trade Research Consortium.
  5. Stuckey, John A. & Anderson, Jock R., 1974. "Demand Analysis of the Sydney Banana Market," Review of Marketing and Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 42(01), March.
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