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Anh Tu Thuy, John Beghin, 2007. "Intra-Industry Trade, Multilateral Trade Integration and Invasive Species Risk"
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| 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. |
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