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.

Procedures to contain an outbreak of FMD to specific regions and allow maintenance of FMD-free exports and efforts to educate consumers about health risks are critical to mitigating adverse economic impacts of an FMD outbreak.

A model of the world wheat market is presented which treats public policies as endogenous. The oligopolistic nature of international wheat trade is captured by assuming policy makers form conjectures on the slope of the excess demand function they face and use that information to determine domestic and trade policies. The policies reflect differing influences of political interest groups. A U.S. crop shortfall scenario illustrates the different results with endogenous policies compared to the traditional model.

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 $602 million and $853 million dollars over 16 quarters. Consumers of poultry meat lose $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.

This paper examines several aspects of tariff rate quotas (TRQ) as adopted during tariffication of agricultural policies under the Uruguay Round of GATT. Quota rents and non-tariff barrier effects may remain under TRQs, contrary to the objectives of the tariffication process. Further, pricestability impacts of a TRQ are more complex than those for either tariffs or quotas, and under certain circumstances TRQs may be more stabilizing than either case, since TRQs truncate domestic production distributions much like price bands policies. This complexity results from the possibility of regime switching, and may reflect behavior under either a tariff, a quota, or a combination of cases. A TRQ policy may affect the timing of import decisions based on incentives created under quota allocation procedures envisioned for this institution. It may also allow increased imports as demand growth occurs because the quota is not necessarily a binding constraint. This means the above quota tariff is the critical policy instrument. An empirical study of Philippines pork imports illustrates these issues.