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GTAP Resource #2323

"Welfare Implications of Animal Disease-Related Trade Restrictions: Case of BSE-Related Export Bans on Cattle and Beef "
by Weerahewa, Jeevika, Randall Wigle and Maury Bredahl

Trade restrictions are sometimes necessary to ensure food safety and animal and plant health protection. Between 2003 and 2006, Canada faced a series of trade restrictions related to BSE. Some refer to the events as a crisis for the Canadian cattle and beef sector, and some estimates placed the loss for Canada s high as $5 billion. This paper examines the impacts of BSE related trade bans on cattle and beef on economic welfare and trade flows. While our analysis is global, the discussion focuses somewhat on Canada. The analysis was performed using GTAP and the GTAP data aggregated to 15 sectors and 10 regions. Four policy experiments simulated actual trade bans placed on Canadian and the US products soon after the BSE crisis were simulated. The results suggest a Canadian welfare loss of between $70 and $700 million depending on the extent of the export ban. The US, Canada and Japan were the most adversely affected. Australia and New Zealand acquired welfare gains. Not surprisingly (given the huge volume of bilateral trade) Canada's welfare is very sensitive to access to the US market, especially for cattle trade. Price and trade impacts were visible on grain and other agricultural markets as well.

Resource Details (Export Citation) GTAP Keywords
Category: GTAP Application
Status: Not published
Date: 2007
Version: Draft
Created: Weerahewa, J. (4/12/2007)
Updated: Batta, G. (5/9/2007)
Visits: 2,163
No keywords have been specified.

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