Disease Management,Economic Incentives and Trade

Abstract

Barriers to trade can be imposed if a threat of importing a disease exists. Sanitary and phytosanitary (SPS) measures have historically been applied on a national basis, even though regions in an exporting country may have very different disease profiles. The World Trade Organization's 1995 Agreement on SPS Measures included a provision for exports from disease-free subnational areas. Regionalization has been explored in depth by many countries from a scientific disease control perspective, but not from an economic perspective, and negotiations have been exclusively science-focused. As yet, little progress has been made towards correcting this provision. This article examines the question of creating a sustainable subnational disease-free area approved for export from an economic perspective. The analysis shows that there may be significant benefits from applying regionalization to international trade, but these benefits are not guaranteed. Recognition of economic incentives provides the key to creating sustainable disease-free subnational regions. In particular, removing the incentive to smuggle between regions is an essential requirement of an exporter's domestic policy. Economic incentives have largely been ignored both by the responsible domestic agencies and by international negotiators, but until the question of economic incentives is included in the international agenda, little progress can be expected.