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Abstract

Just as international food and agricultural trade has increased over time, food safety has become increasingly important. This paper discusses the economic framework of food safety and international food trade. Both the private and public sectors within individual countries have incentives to improve food safety, and as a result they have taken many actions to reduce food-safety risks, often in the form of private, national, and international standards that they impose of firms. The first half of this article discusses these issues. Differences in standards across borders can lead to trade conflicts whose resolutions depend on the distribution of costs and benefits from the manufacture, trade, and consumption of safe food. The second half of this article presents a framework of three main types of international outcomes arising from differing food-safety standards, with examples from both the public and private sectors.

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