How Trade Policies Affect Invasive Species Control.pdfVIP

How Trade Politics Affect Invasive Species Control Michael Margolis and Jason F. Shogren January 2004 • Discussion Paper 04-07 Resources for the Future 1616 P Street, NW Washington, D.C. 20036 Telephone: 202–328–5000 Fax: 202–939–3460 Internet: © 2004 Resources for the Future. All rights reserved. No portion of this paper may be reproduced without permission of the authors. Discussion papers are research materials circulated by their authors for purposes of information and discussion. They have not necessarily undergone formal peer review or editorial treatment. How Trade Politics Affect Invasive Species Control Michael Margolis and Jason F. Shogren Abstract Trade has become the main mode of transport for many invasive species including diseases and agricultural pests. Most species are brought to their new homes unintentionally, which constitute a market failure rooted in international trade. Unless it is practical to drive invasion risk to zero, the external costs may justify a tariff. In this paper we analyze the political process likely to govern the formation of tariffs so justified, using a straightforward incorporation of an invasive species externality into Grossman and Helpman’s well-known political economy model. We show our measure of disguised protectionism—the gap between the optimal tariff and that set in the equilibrium of the political economy game—is equal to the tariff that would be set if there were no invasive species and no international disciplines on trade policy. The informational needs required to distinguish disguised protectionism from legitimate public- goods protection are formidable. Key Words: invasive species, protectionism, tariff, political economy JEL Classification Numbers: Q17, Q56, Q57 Contents 1. Introduction 1 2. Background 3 3. A Model 8 4. Concluding remarks 11 References 13 How Trade Politics Affect Inva