When countries trade internationally, the same issues arise, with a few additional concerns.Regulations might differ across countries, as countries have different types of regulations, different levels of tolerance for food safety risks, different
costs of producing safer food, and different levels of accidental
contamination. If a regulation imposed by the government of one country is More
stringent, its firms will have higher costs and may be unable to sell their
goods as cheaply as foreign firms not subject to the regulations. Consumers
will pay more for safer food, but the firm’s ability to communicate its food
safety level—and the consumers’ inability to take social costs into account—can
leave the domestic firms at a disadvantage. These regulatory differences can
create conflicts across countries.
costs of producing safer food, and different levels of accidental
contamination. If a regulation imposed by the government of one country is More
stringent, its firms will have higher costs and may be unable to sell their
goods as cheaply as foreign firms not subject to the regulations. Consumers
will pay more for safer food, but the firm’s ability to communicate its food
safety level—and the consumers’ inability to take social costs into account—can
leave the domestic firms at a disadvantage. These regulatory differences can
create conflicts across countries.
