Import Restrictions in the Presence of a Health Risk: An Illustration Using FMD

Philip L. Paarlberg and John G. Lee

American Journal of Agricultural Economics, 1998, vol. 80, issue 1, 175-183

Abstract: We present a simple model linking infection risk from imports to a tariff. The risk causes the exporter of the infected product to face a higher tariff than would otherwise be the case. A numerical example is developed for U.S. beef imports from nations with Foot-and-Mouth Disease (FMD). The additional tariffs are sensitive to the specification of risk and the expected magnitude of loss due to an FMD outbreak. For a low risk of importing FMD, the tariffs levied against the exporter of FMD-infected beef are not prohibitive but become so as the risk or expected output loss rises. Copyright 1998, Oxford University Press.

Date: 1998
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