Intra-Industry Trade, Multilateral Trade Integration, and Invasive Species Risk, December 2006

(2006) Intra-Industry Trade, Multilateral Trade Integration, and Invasive Species Risk, December 2006. Iowa State University

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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.

Item Type: Departmental Report
Keywords: exotic pest, intra-industry trade, invasive species, liberalization, trade cost, trade
Subjects: Business and industry > Economic forecasts
Business and industry > Trade and commerce
Business and industry > Economic development
ID Code: 4559
Deposited By: Margaret Barr
Deposited On: 23 Jan 2007
Last Modified: 23 Jan 2007
URI: http://publications.iowa.gov/id/eprint/4559

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