Trade has become the main mode of transport for many invasive species, including diseases and agricultural pests. Most species are brought to their new homes unintentionally, which constitutes a market failure rooted in international trade. Unless it is practical to drive invasion risk to zero, the external costs may justify a tariff. In this paper, we analyze the political process likely to govern the formation of tariffs so justified using a straightforward incorporation of an invasive species externality into Grossman and Helpman's (GH) well-known political economy model. We show that our measure of disguised protectionism-the gap between the optimal tariff and that set in the equilibrium of the political economy game-is equal to the tariff that would be set if there were no invasive species and no international disciplines on trade policy. The informational needs required to distinguish disguised protectionism from legitimate public-goods protection are formidable.
- Disguised protectionism
- Invasive species