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Trade Bans, Imperfect Competition, and Welfare: BSE and the U.S. Beef Industry

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  • Dimitrios Panagiotou
  • Azzeddine M. Azzam

Abstract

Between May 2003 and July 2005, the U.S. beef industry faced a total ban on Canadian cattle imports following the discovery of BSE in Canada in May 2003 and restrictions on U.S. beef exports following the discovery of BSE in the United States in December 2003. When the United States reopened its border to Canadian cattle in July 2005, shipments were restricted to cattle less than 30 months of age. The total ban on Canadian cattle imports and restrictions on U.S. beef exports overlapped between January 2004 and July 2005. The restrictions on Canadian cattle imports and U.S. beef exports overlapped for some time after July 2005. This paper addresses theoretically and empirically how to disentangle the impact on the U.S. beef industry of the BSE‐related beef trade interruptions in the presence of overlaps and imperfect competition. Entre mai 2003 et juillet 2005, l'industrie bovine américaine s'est vue imposer une interdiction d'importer des bovins canadiens à la suite de la découverte d'un cas d'ESB au Canada en mai 2003 ainsi que des restrictions quant aux exportations de bœuf américain à la suite de la découverte d'un cas d'ESB aux États‐Unis en décembre 2003. En juillet 2005, les États‐Unis ont rouvert leur frontière aux bovins canadiens vivants de moins de 30 mois uniquement. L'interdiction absolue d'importer des bovins canadiens et les restrictions sur les exportations de bœuf américain se sont chevauchées entre janvier 2004 et juillet 2005. Les restrictions sur les importations de bovins canadiens et les exportations de bœuf américain se sont chevauchées pendant quelque temps après juillet 2005. Le présent article s'est penché sur les façons, théoriques et empiriques, de démĉler les répercussions que les interruptions du commerce du bœuf attribuables à l'ESB ont eues sur l'industrie bovine américaine en présence de chevauchements et de concurrence imparfaite.

Suggested Citation

  • Dimitrios Panagiotou & Azzeddine M. Azzam, 2010. "Trade Bans, Imperfect Competition, and Welfare: BSE and the U.S. Beef Industry," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 58(1), pages 109-129, March.
    • Handle: RePEc:bla:canjag:v:58:y:2010:i:1:p:109-129
    DOI: 10.1111/j.1744-7976.2009.01162.x
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    1. Dimitrios Panagiotou & Athanassios Stavrakoudis, 2020. "A Stochastic Frontier Analysis Approach for Estimating Market Power in the Major US Meat Export Markets," Journal of Industry, Competition and Trade, Springer, vol. 20(3), pages 569-586, September.
    2. Arnaud Rault & Stéphane Krebs, 2011. "Catastrophic risk and risk management, what do we know about livestock epidemics? State of the art and prospects," Working Papers SMART 11-05, INRAE UMR SMART.
    3. Zornitsa Kutlina-Dimitrova, 2017. "The economic impact of the Russian import ban: a CGE analysis," International Economics and Economic Policy, Springer, vol. 14(4), pages 537-552, October.
    4. Dimitrios Panagiotou & Athanassios Stavrakoudis, 2017. "A Stochastic Production Frontier Estimator of the Degree of Oligopsony Power in the U.S. Cattle Industry," Journal of Industry, Competition and Trade, Springer, vol. 17(1), pages 121-133, March.
    5. Chen‐Ti Chen & John M. Crespi & William Hahn & Lee L. Schulz & Fawzi Taha, 2020. "Long‐run impacts of trade shocks and export competitiveness: Evidence from the U.S. BSE event," Agricultural Economics, International Association of Agricultural Economists, vol. 51(6), pages 941-958, November.
    6. Rault, Arnaud & Krebs, Stephane, 2011. "Livestock epidemics and catastrophic risk management: State of the art and prospects on economic dynamics," 2011 International Congress, August 30-September 2, 2011, Zurich, Switzerland 114793, European Association of Agricultural Economists.

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