The Trade and Welfare Impacts of Australian Quarantine Policies: The Case of Pigmeat

Authors

John C. Beghin, Iowa State UniversityFollow
Mark Melatos, University of Sydney

Document Type

Article

Date of this Version

8-2012

Citation

Beghin, John C., and Mark Melatos. 2011. The trade and welfare impacts of Australian quarantine policies: The case of pigmeat. Working Paper No. 11014. Iowa State University, Department of Economics, Ames, Iowa.

Comments

Published in The World Economy 35:8 (August 2012), pp. 1006-1021.

doi: 10.1111/j.1467-9701.2012.01459.x

Copyright © 2012 Blackwell Publishing Ltd. Used by permission.

Abstract

We analyze the trade and welfare impact of quarantine measures imposed by Australia on imports of pigmeat. In particular, we account for changes to Australia’s pigmeat quarantine policy over time, including those changes related to the recent resolution of a WTO dispute between Australia and the European Union. Using a random utility model and applying it to corner solutions in import decisions, tariff equivalents (by major trading partner) are estimated for the different pigmeat quarantine regimes implemented by Australia during the period 1988-2009. The welfare impact on consumers, producers, and foreign exporters is computed using a partial equilibrium model calibrated on the econometric estimates. The quarantine regimes have a strong effect on trade and welfare with a tariff equivalent above 113% of average real world prices over the period analyzed.