Philip L. Paarlberg

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

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.

Multifunctionality and Agricultural Trade Negotiations

Differing views of multifunctionality - attributing nonmarket benefits to agricultural production - continue to be an obstacle in World Trade Organization (WTO) negotiations. Some nations see multifunctionality as justifying subsidies to agricultural production; others see it as disguised protection. This paper shows that while multifunctionality never justifies trade interventions, it can justify production subsidies or taxes. Recognizing that the subsidies or taxes can be economically efficient policies, nations must precisely define and value the externalities in order to design policies and defend those interventions in the WTO. Trade rules are developed that accommodate domestic policy intervention while preventing disguised protection.

Targeted Agricultural Export Subsidies and Social Welfare

Most agricultural export subsidies are targeted to specific countries. This paper demonstrates that in a standard general equilibrium model of international trade, a small targeted subsidy increase the welfare of the subsidizing country by exploiting differences in price responsiveness of demand relationships of importers. A single-product spatial equilibrium model then is used to show that targeted export subsidies can be used to increase the subsidizing countrys welfare by exploiting transportation cost differences and the elasticity of excess supply of competitors or of markets supplied by competitors through subsidization of shared markets. In addition, an empirical model of the world wheat market is used to illustrate the theoretical conclusions.

Measuring Welfare Effects of an FMD Outbreak in the United States

Questions have been raised regarding the economic costs of food-and-mouth disease (FMD) outbreak in the United States. This analysis examines how welfare changes are measured and argues that they must be decomposed by groups. Producers with animals quarantined and slaughtered because of FMD measure their welfare change using lost sales. Producers not quarantined measure their welfare change using producer surplus. The change in national sales revenue is accurate when the supply elasticity is low. Welfare changes for consumers also must be decomposed because the change in aggregate consumer surplus hides important shifts in welfare among groups of consumers.

Economic Impacts of Regionalization of a Highly Pathogenic Avian Influenza Outbreak in the United States

This analysis examines the economic impact of an outbreak of highly pathogenic avian influenza (HPAI) and the consequences of regionalization. The results suggest that an outbreak would have serious economic effects. Depending on the regionalization scenario, returns to capital and management in the poultry meat and egg sectors would fall between

A Simulation Model of the U.S. Export Enhancement Program for Wheat

602 million and

U.S. Trade Policy on Lamb Meat: Who Gets Fleeced?

853 million dollars over 16 quarters. Consumers of poultry meat lose

Agricultural Export Subsidies and Intermediate Goods Trade

900 million in consumer surplus in the first four quarters, a decline of 10.7%. Egg consumer surplus falls 17.1%. Regionalization lowers the economic welfare losses for producers because it dampens the export loss.

Prrs And The North American Swine Trade: A Trade Barrier Analysis

Nash bargaining game models representing negotiations of Export Enhancement Program (EEP) sales are combined with a quarterly spatial price equilibrium model representing non-EEP world wheat trade to simulate the EEPs impact in late 1985 and early 1986. The benefits of the EEP in terms of increased U.S. export revenues adjusted for subsidy costs are estimated to be less than one percent of total U.S. revenues. For the first quarter of 1986, model simulations also show a lowering of the CCC loan rate to have a much greater potential for increasing U.S. wheat exports than the EEP as operated.

In-Kind Export Subsidies for Processed and Bulk Goods

The U.S. lamb meat industry received protection from import competition in 1999 with a tariff-rate quota. This paper analyzes proposed and adopted policies using a partial equilibrium model of lamb meat and lambs incorporating imperfect competition in the packing industry. Under a tariff policy packers can only exercise oligopsony power in the lamb market and both packers and lamb growers benefit from protection. If a quota or tariff-rate quota policy is used, packers can assert oligopoly power. Packers benefit from protection, but lamb growers may not. Under the tariff-rate quota adopted, lamb growers suffer a welfare loss. Copyright 2001, Oxford University Press.