Hormone beef, chlorinated chicken and international trade

We study international trade in innovative goods subject to uncertain consumer health effects. Such goods are often at the center of international trade disputes. We show that an interesting form of protectionism may arise because of scientific uncertainty. A free-riding effect is identified, implying more conservative behavior by countries. We also study the role of producers (lobbies) in providing valuable information, finding that the innovative lobby has an advantage in providing information as compared with the lobby producing the ‘traditional’ good. Moreover, lobbies disclose more information when the health effects are long lasting.