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Abstract
International trade of agricultural products not only generates wealth but is also
responsible for the introduction of invasive pests beyond their natural range. Comprehensive
bioeconomic modelling frameworks are increasingly needed to assist in the resolution
of import access disputes. However, frameworks that combine welfare
analysis attributable to trade and invasive species spread management are lacking.
This study provides a demonstration of how a comprehensive economic framework,
which takes into account both the gains from trade and the costs of invasive species
outbreaks, can inform decision-makers when making quarantine decisions. We
develop a partial equilibrium trade model considering international trade and combine
it with a stratified dispersal model for the spread and management of potential outbreaks
of an invasive species. An empirical estimation is made of the economic welfare
consequences for Australia of allowing quarantine-restricted trade in New Zealand
apples to take place. The results suggest the returns to Australian society from importing
New Zealand apples are likely to be negative. The price differential between the
landed product with SPS measures in place and the autarkic price is insufficient to outweigh
the increase in expected damage resulting from increased fire blight risk. As a
consequence, this empirical analysis does not support the opening up of this trade.