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

Anh Thuy Tu and John Beghin ()
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Anh Thuy Tu: Department of Economics, Foreign Trade University, Hanoi, Vietnam

No 18, Working Papers from Development and Policies Research Center (DEPOCEN), Vietnam

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.

Keywords: Invasive species; Exotic pest; Trade protection; Trade cost; Trade integration; Two-way trade; Intra-industry trade; Liberalization (search for similar items in EconPapers)
Pages: 35 pages
Date: 2007
New Economics Papers: this item is included in nep-agr and nep-int
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Related works:
Working Paper: Intra-Industry Trade, Multilateral Trade Integration, and Invasive Species Risk (2006)
Working Paper: Intra-Industry Trade, Multilateral Trade Integration, and Invasive Species Risk (2006)
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Persistent link: https://EconPapers.repec.org/RePEc:dpc:wpaper:1807

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