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

Author

Listed:
  • John Christopher Beghin

    (ISU - Iowa State University, ECO-PUB - Economie Publique - INRA - Institut National de la Recherche Agronomique - AgroParisTech)

  • Anne-Célia Disdier

    (PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, PSE - Paris-Jourdan Sciences Economiques - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - INRA - Institut National de la Recherche Agronomique - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique)

  • Stéphan Marette

    (ECO-PUB - Economie Publique - INRA - Institut National de la Recherche Agronomique - AgroParisTech)

Abstract

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 à 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.
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Suggested Citation

  • John Christopher Beghin & Anne-Célia Disdier & Stéphan Marette, 2013. "The Economics and Potential Protectionism of Food Safety Standards and Inspections: An Application to the U.S. Shrimp Market," PSE-Ecole d'économie de Paris (Postprint) halshs-00849883, HAL.
  • Handle: RePEc:hal:pseptp:halshs-00849883
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    References listed on IDEAS

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    1. Dermot J. Hayes & Jason F. Shogren & Seung Youll Shin & James B. Kliebenstein, 1995. "Valuing Food Safety in Experimental Auction Markets," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 77(1), pages 40-53.
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    4. Holland, Daniel & Wessells, Cathy R., 1998. "Predicting Consumer Preferences for Fresh Salmon: The Influence of Safety Inspection and Production Method Attributes," Agricultural and Resource Economics Review, Cambridge University Press, vol. 27(1), pages 1-14, April.
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    8. S. Andrew Starbird, 2007. "Testing errors, supplier segregation, and food safety," Agricultural Economics, International Association of Agricultural Economists, vol. 36(3), pages 325-334, May.
    9. Anne-Célia Disdier & Stéphan Marette, 2010. "The Combination of Gravity and Welfare Approaches for Evaluating Nontariff Measures," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 92(3), pages 713-726.
    10. Debaere, Peter, 2005. "Small Fish - Big Issues The Effect of Trade Policy on the Global Shrimp Market," CEPR Discussion Papers 5254, C.E.P.R. Discussion Papers.
    11. Kyle J. Mayer & Jack A. Nickerson & Hideo Owan, 2004. "Are Supply and Plant Inspections Complements or Substitutes? A Strategic and Operational Assessment of Inspection Practices in Biotechnology," Management Science, INFORMS, vol. 50(8), pages 1064-1081, August.
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    13. John M. Crespi & St)phan Marette, 2001. "How Should Food Safety Certification be Financed?," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 83(4), pages 852-861.
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    Cited by:

    1. Kathy Baylis & Lia Nogueira & Linlin Fan & Kathryn Pace, 2022. "Something fishy in seafood trade? The relation between tariff and non‐tariff barriers," American Journal of Agricultural Economics, John Wiley & Sons, vol. 104(5), pages 1656-1678, October.
    2. Chen, Rui & Hartarska, Valentina & Wilson, Norbert L.W., 2018. "The causal impact of HACCP on seafood imports in the U.S.: An application of difference-in-differences within the gravity model," Food Policy, Elsevier, vol. 79(C), pages 166-178.
    3. Wilson, Norbert L. W., 2017. "Labels, Food Safety, and International Trade," ADBI Working Papers 657, Asian Development Bank Institute.

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    More about this item

    Keywords

    Food Safety;

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations

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