Defining Acceptable Levels of Risk in International Trade. K. W. Forsythe, Jr., and W. T. Disney, Centers for Epidemiology and Animal Health; and A. H. Seitzinger, APHIS, USDA
Under the basic rights provision of the Uruguay Round of the General Agreement on Tariffs and Trade (GATT), a country has the right to adopt and maintain any measures it believes necessary to protect the health of its humans, plants, and animals, as long as the measures are not inconsistent with the provisions of The Agreement. Risk assessments using scientific data and methodologies are to be the basis for countries’ import decisions when sanitary and phytosanitary issues arise.
The agreement to these provisions opens existing sanitary and phytosanitary measures to review and presents greater opportunities to influence the future development of such measures in international trade. Central to the review and future development is a means for defining countries’ acceptable levels of risk for importation of agricultural commodities. A variety of accepted methodologies lead to estimates of the risk that a pest will be imported into a country, but the interpretation of that risk estimate as high, medium, or low and the measures to be imposed as a result of such a determination remain the subject of debate. Should one specific level of risk be defined as acceptable across all commodities and pest situations for a country or to what extent should other factors such as the consequences of pest entry or the consequences of interrupted trade be considered in defining acceptable levels of risk?
The potential role for economics in defining decision criteria for acceptable levels of risk in international trade is significant but highly controversial. This paper explores the general information cited in the Uruguay Round S&P agreements and the recently published OIE (Office International des Epizooties). Guidelines for import risk assessments as inputs into the risk analysis process and highlight the strengths and weaknesses of traditional economic analyses in guiding decision-making about such issues.
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