Anne-Célia Disdier

The Economics and Potential Protectionism of Food Safety Standards and Inspections: An Application to the U.S. Shrimp Market

We formally investigate the effects of an inspection system influencing safety of foreign and domestic food products in the domestic market. Consumers purchase domestic and imported food and value safety. Potential protectionism a la Fisher and Serra (2000) can arise: inspection frequency imposed on foreign producers set by a domestic social planner would be higher than the corresponding policy set by a global social planner treating all producers as domestic. The domestic social planner tends to impose most if not all of the inspection on foreign producers, which improves food safety for consumers and limits the production loss for domestic producers. Despite this protectionist component, inspections address a potential consumption externality such as health hazard in the domestic country when unsafe food can enter the country undetected. We then calibrate the analytical framework to the U.S. shrimp market incorporating key stylized facts of this market. Identifying protectionist inspection requires much information on inspection, safety, damages, and costs. We also investigate how to finance the inspection policy from a social planner perspective. Financing instruments differ between the domestic and international welfare-maximizing objectives.

A Cost-Benefit Approach for the Assessment of Nontariff Measures in International Trade

This chapter uses a welfare-based conceptual framework for the assessment of costs and benefits associated with nontariff measures in the presence of market imperfections such as asymmetric information and environmental or health externalities. The framework allows for evidence-based comparative assessments of alternative regulatory approaches addressing these imperfections. The conceptual work is illustrated with an empirical case study of labeling internationally traded fish products.