Dynamic Sanitary and Phytosanitary Trade Policy

Lars Olson () and Santanu Roy ()

No 806, Departmental Working Papers from Southern Methodist University, Department of Economics

Abstract: This paper characterizes the optimal use of sanitary and phytosanitary standards to prevent the introduction of harmful pests and diseases through international trade. Because established pest and disease infestations grow and spread over time their introduction has intertemporal consequences. In a dynamic economic model, an efficient trade policy balances the costs of SPS measures against the discounted stream of the costs of control and social damages that are avoided by using SPS measures, where future growth and spread of any established infestation is accounted for. We examine when phytosanitary trade policy makes good economic sense, when it is efficient to provide full protection against pests and diseases, and when restrictive, but not fully protective trade policy is efficient.

Keywords: International trade; pests and diseases; invasive species; sanitary and phytosanitary trade policy. (search for similar items in EconPapers)
JEL-codes: Q5 F18 D9 Q2 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-agr
Date: 2008-08
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Related works:
Working Paper: Dynamic Sanitary and Phytosanitary Trade Policy (2008)
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Persistent link: http://EconPapers.repec.org/RePEc:smu:ecowpa:0806

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