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Tariff escalation and invasive species damages

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  • Tu, Anh Thuy
  • Beghin, John
  • Gozlan, Estelle
Abstract
We investigate the interface between trade and damages from invasive species (IS), focusing on escalation in tariffs between raw-input and processed-good markets, and its implication for IS-based damages. The current tariff escalation in processed agro-forestry products motivates our analysis. Tariff escalation exacerbates the likelihood of IS introduction by biasing trade flows towards increased trade of primary commodity flows and against processed-product trade. We show that a reduction of tariff escalation, by lowering the tariff on processed goods increases allocative efficiency and reduces IS-based damages, a win-win situation. We also identify policy menus for trade reforms involving tariffs on both raw input and processed goods leading to win-win situations.

Suggested Citation

  • Tu, Anh Thuy & Beghin, John & Gozlan, Estelle, 2008. "Tariff escalation and invasive species damages," ISU General Staff Papers 200801010800001426, Iowa State University, Department of Economics.
    • Handle: RePEc:isu:genstf:200801010800001426
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    2. Lichtenberg, Erik & Olson, Lars J., 2020. "Tariffs and the risk of invasive pest introductions in commodity imports: Theory and empirical evidence," Journal of Environmental Economics and Management, Elsevier, vol. 101(C).
    3. Warziniack, Travis W. & Finnoff, David & Shogren, Jason F., 2013. "Public economics of hitchhiking species and tourism-based risk to ecosystem services," Resource and Energy Economics, Elsevier, vol. 35(3), pages 277-294.

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