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

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  • Anh Thuy Tu

    (Department of Economics, Foreign Trade University, Hanoi, Vietnam)

  • John Beghin

    (Department of Economics at Iowa State University)

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.

Suggested Citation

  • Anh Thuy Tu & John Beghin, 2007. "Intra-Industry Trade, Multilateral Trade Integration and Invasive Species Risk," Working Papers 18, Development and Policies Research Center (DEPOCEN), Vietnam.
    • Handle: RePEc:dpc:wpaper:1807
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    1. M. Ataman Aksoy & John C. Beghin, 2005. "Global Agricultural Trade and Developing Countries," World Bank Publications - Books, The World Bank Group, number 7464.
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