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The Economics and Potential Protectionism of Food Safety Standards and Inspections: An Application to the U.S. Shrimp Market

Listed author(s):
  • John Christopher Beghin

    (ISU - Iowa State University, ECO-PUB - Economie Publique - INRA - Institut National de la Recherche Agronomique - AgroParisTech)

  • Anne-Célia Disdier

    (PSE - Paris School of Economics, PSE - Paris-Jourdan Sciences Economiques - ENS Paris - École normale supérieure - Paris - INRA - Institut National de la Recherche Agronomique - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique)

  • Stéphan Marette

    (ECO-PUB - Economie Publique - INRA - Institut National de la Recherche Agronomique - AgroParisTech)

We formally investigate the effects of an inspection system influencing safety of foreign and domestic food products in the domestic market. Consumers purchase domestic and imported food and value safety. Potential protectionism à la Fisher and Serra (2000) can arise: inspection frequency imposed on foreign producers set by a domestic social planner would be higher than the corresponding policy set by a global social planner treating all producers as domestic. The domestic social planner tends to impose most if not all of the inspection on foreign producers, which improves food safety for consumers and limits the production loss for domestic producers. Despite this protectionist component, inspections address a potential consumption externality such as health hazard in the domestic country when unsafe food can enter the country undetected. We then calibrate the analytical framework to the U.S. shrimp market incorporating key stylized facts of this market. Identifying protectionist inspection requires much information on inspection, safety, damages, and costs. We also investigate how to finance the inspection policy from a social planner perspective. Financing instruments differ between the domestic and international welfare-maximizing objectives.

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Paper provided by HAL in its series Post-Print with number halshs-00849883.

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Date of creation: 2013
Publication status: Published in John Beghin. Nontariff Measures with Market Imperfections: Trade and Welfare Implications, Emerald, pp.43-71, 2013
Handle: RePEc:hal:journl:halshs-00849883
Note: View the original document on HAL open archive server: https://halshs.archives-ouvertes.fr/halshs-00849883
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References listed on IDEAS
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  1. Dermot J. Hayes & Jason F. Shogren & Seung Youll Shin & James B. Kliebenstein, 1995. "Valuing Food Safety in Experimental Auction Markets," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 77(1), pages 40-53.
  2. S. Andrew Starbird, 2005. "Moral Hazard, Inspection Policy, and Food Safety," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 87(1), pages 15-27.
  3. Stéphan Marette & John Beghin, 2017. "Are Standards Always Protectionist?," World Scientific Book Chapters,in: Nontariff Measures and International Trade, chapter 11, pages 179-192 World Scientific Publishing Co. Pte. Ltd..
  4. Tsunehiro Otsuki & John S. Wilson, 2001. "What price precaution? European harmonisation of aflatoxin regulations and African groundnut exports," European Review of Agricultural Economics, Foundation for the European Review of Agricultural Economics, vol. 28(3), pages 263-284, October.
  5. Fischer, Ronald & Serra, Pablo, 2000. "Standards and protection," Journal of International Economics, Elsevier, vol. 52(2), pages 377-400, December.
  6. Stéphan Marette, 2007. "Minimum safety standard, consumers’ information and competition," Journal of Regulatory Economics, Springer, vol. 32(3), pages 259-285, December.
  7. John M. Crespi & St)phan Marette, 2001. "How Should Food Safety Certification be Financed?," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 83(4), pages 852-861.
  8. Buzby, Jean C. & Unnevehr, Laurian J. & Roberts, Donna, 2008. "Food Safety and Imports: An Analysis of FDA Food-Related Import Refusal Reports," Economic Information Bulletin 58626, United States Department of Agriculture, Economic Research Service.
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