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Importer's risk, smuggling and the role of incentives in the management of animal diseases

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  • Pavleska, Marija
  • Kerr, William A.

Abstract

Provisions for regionalization in the case of infectious diseases were included in the World Trade Organization in 1995, but after >20 years it has seen little uptake, primarily because importing countries have not accepted exporting countries' assurances regarding disease-free zones. Given the potential trade benefits, the failure to achieve acceptance for disease-free zones suggests revisiting regionalization. The current approach relies on physical barriers to the movement of infected animals or products taking no account of incentives. Restrictions on movement between infected and disease free areas lead to price declines in the infected area. Price disparity between the regions leads to an incentive for commercial and casual smuggling and, hence, the unwillingness to accept the disease free sub-national zone of the exporting country. This paper demonstrates that strict control and monitoring measures are unlikely to eliminate smuggling. A price support policy proposal is developed, which would remove the incentive to smuggle.

Suggested Citation

  • Pavleska, Marija & Kerr, William A., 2020. "Importer's risk, smuggling and the role of incentives in the management of animal diseases," Ecological Economics, Elsevier, vol. 175(C).
    • Handle: RePEc:eee:ecolec:v:175:y:2020:i:c:s0921800919317410
    DOI: 10.1016/j.ecolecon.2020.106672
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