Tariff Escalation and Invasive Species Risk
Anh Tu, John C. Beghin, Estelle Gozlan
October 2005 [05-WP 407]
Tu, A., J.C. Beghin, and E. Gozlan. 2005. "Tariff Escalation and Invasive Species Risk." Working paper 05-WP 407. Center for Agricultural and Rural Development, Iowa State University.
We investigate the interface between trade and invasive species (IS) risk, focusing on the existing tariff escalation in agro-forestry product markets and its implication for IS risk. Tariff escalation in processed agro-forestry products exacerbates the risk of IS by biasing trade flows toward increased trade of primary commodity flows and against processed-product trade. We show that reducing tariff escalation by lowering the tariff on processed goods increases allocative efficiency and reduces the IS externality, a win-win situation. We also identify policy menus for trade reforms involving tariffs on both raw input and processed goods, leading to win-win situations.
Keywords: agro-forestry products, exotic pest, international trade, invasive species, tariff escalation, trade flows.