Options for managing the infectious animal and plant disease risks of international trade

Infectious animal and plant diseases introduced through international trade in goods and services are a classic example of market externality. The potential harm they do is visited on people other than those engaged in their export or import, and is not taken into account in reaching export or import decisions. The use of economic instruments to internalize market externalities has been shown to yield substantial benefits in many areas of economic activity. By confronting decision-makers with the expected damage they cause, instruments of this kind have forced decision-makers to take the wider costs of their actions into account. This paper reviews the arguments for extending the range of instruments currently used to manage trade-related pest and pathogen risks, and assesses the options for deploying new instruments in the existing regulatory environment.