Some Issues in the Economic Analysis of Technical Barriers to International Trade in Agri-Food Products
This paper examines the technical barriers to international trade. It focuses on the Sanitary and Phytosanitary (SPS) barriers. In Section 2, the standard, small country, partial equilibrium model is modified to reflect the investment aspect of trade policy reform. Investment theory, itself, however, assumes away an important feature of the quarantine situation, namely, the vagueness about the probable effects of relaxing or removing a quarantine barrier. Such removal may give rise to events which have very small probabilities of occurence but which have substantial and possibly irreversibly damaging effects. This aspect of the decision problem is explored in Section 3, while Section 4 contains some concluding comments.
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