On the Need for More Economic Assessment of Quarantine/Sps Policies

Working Paper No. 98-02

25 Pages Posted: 15 May 1998

See all articles by Kym Anderson

Kym Anderson

University of Adelaide - Centre for International Economic Studies (CIES); Centre for Economic Policy Research (CEPR); Australian National University

Sallie James

The University of Western Australia - School of Agricultural and Environment

Multiple version iconThere are 2 versions of this paper

Date Written: February 1998

Abstract

Quarantine policy reviews are becoming more sophisticated following the Uruguay Round's Agreement on Sanitary and Phytosanitary (SPS) Measures and, in Australia's case, following also the 1996 Nairn Report. Yet they still focus primarily on the effects of restrictions just on import-competing producers. A fuller analysis that includes the consumers demonstrates that even if imported diseases were to wipe out a local industry, the gains to consumers may outweigh the losses to import-competing producers from removing a ban on imports. This paper provides the simplest partial-equilibrium framework for thinking more about the economics of quarantine policy measures. An empirical analysis of Australia's ban on imports of bananas, used to illustrate the methodology, suggests a move to free trade may well cause a major contraction of banana growing in Australia but the economic welfare gains to consumers are almost certain to outweigh the losses to producers. The paper concludes by arguing that there is a need for a comprehensive economic review of Australia's myriad quarantine restrictions.

JEL Classification: Q17, Q28, F13, F14

Suggested Citation

Anderson, Kym and James, Sallie, On the Need for More Economic Assessment of Quarantine/Sps Policies (February 1998). Working Paper No. 98-02, Available at SSRN: https://ssrn.com/abstract=86630 or http://dx.doi.org/10.2139/ssrn.86630

Kym Anderson (Contact Author)

University of Adelaide - Centre for International Economic Studies (CIES) ( email )

School of Economics
Adelaide SA 5005
Australia
+61 8 8313 4712 (Phone)
+61 8 8223 1460 (Fax)

Centre for Economic Policy Research (CEPR)

London
United Kingdom

Australian National University ( email )

Arndt-Corden Dept of Economics
Coombs Building
Canberra, AK ACT 2600
Australia
+61 8 8313 4712 (Phone)

HOME PAGE: http://publicpolicy.anu.edu.au/crawford_people/content/staff/acde/kanderson.php

Sallie James

The University of Western Australia - School of Agricultural and Environment ( email )

Nedlands, Western Australia 6907
Australia
+61 8 9380 2514 (Phone)
+61 8 9380 1098 (Fax)

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