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Risking Market Integration without Regulatory Integration: The Case of NAFTA and BSE
Author(s) -
Sparling David H.,
Caswell Julie A.
Publication year - 2006
Publication title -
applied economic perspectives and policy
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.4
H-Index - 49
eISSN - 2040-5804
pISSN - 2040-5790
DOI - 10.1111/j.1467-9353.2006.00282.x
Subject(s) - bovine spongiform encephalopathy , market integration , international trade , business , free trade agreement , vertical integration , international economics , economics , free trade , industrial organization , prion protein , medicine , disease , pathology , macroeconomics
Under the North American Free Trade Agreement (NAFTA), there has been a dramatic increase in the integration of markets for live cattle and beef products in Canada, Mexico, and the United States. These markets were severely disrupted in 2003 by the confirmation of single cases of bovine spongiform encephalopathy (BSE) in Canada and the United States. The bulk of this disruption could have been avoided if the countries had developed more closely coordinated risk management programs based on the guidance of international standards. The BSE events illustrate that failure to address regulatory integration leaves integrated markets vulnerable to recurring disruptions.