Impacts of BSE on World Trade in Cattle and Beef: Implications for the Canadian Economy

Wigle, Randall; Weerahewa, Jeevika; Bredahl, Maury; Samarajeewa, Sudarma

Impacts of BSE on World Trade in Cattle and Beef: Implications for the Canadian Economy

2007

Wigle, Randall | Weerahewa, Jeevika | Bredahl, Maury | Samarajeewa, Sudarma

This paper evaluates the impact of BSE-related trade restrictions on Canada using a general equilibrium model. It links selected results of the Global Trade Analysis Project (GTAP) approach, a global computable general equilibrium model, with Basic Model of Regional Trade (BMRT), a Canadian regional model. We find first, that while producers were hurt a lot, there are other general equilibrium considerations (gains to processors and/or consumers) and sectoral adjustments that at the regional level tend to partially offset the losses suffered by producers. We also assess the extent to which opening of the U.S. border is important relative to access to the rest of the world. Our results indicate that the losses to the Canadian economy are around $1 billion and they were reduced significantly when Canada resumed beef trade with the United States, as a result of various government allegations.

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