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

Author

Listed:
  • Anderson, Kym
  • James, Sarah

Abstract

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.

Suggested Citation

  • Anderson, Kym & James, Sarah, 1998. "On the Need for More Economic Assessment of Quarantine/SPS Policies," CEPR Discussion Papers 1934, C.E.P.R. Discussion Papers.
  • Handle: RePEc:cpr:ceprdp:1934
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    References listed on IDEAS

    as
    1. 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.
    2. 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.
    3. MacLaren, D., 1995. "Uncertainty AVersion and Technical Barriers to Trade: An Australian Example," Department of Economics - Working Papers Series 498, The University of Melbourne.
    4. 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.
    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.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    Externalities; Optimal Policy; quarantine; risk and uncertainty; SPS measures;

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • Q17 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agriculture in International Trade
    • Q28 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Government Policy

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