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This paper reviews current trade–related regulations of genetically modified (GM) food and discusses their effects on developing countries. There is a large heterogeneity in current import approval and marketing policies of GM food worldwide. At the international level, the harmonization efforts are led by the Codex Alimentarius Commission, the Cartagena Protocol on Biosafety and the World Trade Organization. While internationally harmonized guidelines for safety approval have been finalized, we show that there is no clear consensus on labeling regulations for GM food, and there is an increasing risk of conflicts among international agreements. We analyze the GM food regulations of two large rich importers, Japan and the European Union (EU) and discuss their differences and their potential impact on international trade. We also show that the effects of international and domestic trade related regulations critically depend on the type of traded products and their intended use: food and unprocessed products are subject to more stringent regulations than animal feed and processed products. Finally, we identify the main spillover effects of national and international regulations on developing countries' policy making, and suggest four policy arrangements on GM food to enable developing countries to satisfy production, consumption, international trade, and risk management objectives simultaneously while complying with their international obligations. ; Non-PR ; IFPRI1; Theme 10; Subtheme 10.1; GRP1; GRP34; Subtheme 10.3; Pro-poor science and technology policies; Markets and Trade; PBS ; EPTD

AbstractA computable general equilibrium model is applied to evaluate the opportunity costs of not adopting Bt cotton, a genetically‐modified (GM) insect resistant cotton, in Benin, Burkina‐Faso, Mali, Senegal, Togo, Tanzania, and Uganda when it is adopted in other countries. Our model uniquely employs country‐specific partial adoption rates and factor‐biased productivity shocks in the cotton and oilseed sectors of all adopting regions. Assuming a 50% adoption rate, the opportunity cost of not adopting Bt cotton in the seven surveyed countries amounts to $41 million per year, which is a significant but lower cost than that suggested by the results of previous studies. Trade liberalization only marginally increases this estimate.

In 2006, India proposed a draft rule requiring the labeling of all genetically modified (GM) foods and products derived thereof. In this paper, we use primary and secondary market data to assess the economic implications of introducing such a mandatory labeling policy for GM food. We focus on four products that would likely be the first affected by such a regulation in India: cottonseed oil, soybean oil, brinjal (eggplant), and rice. We find that GM food labeling would generate a specific market outcome for each of these products. With GM labeling, virtually all cottonseed oil would be labeled as GM, with limited costs for all actors involved, but also limited benefit for consumers. Labeling soybean oil derived from GM crops could affect market shares for edible oils at the benefit of domestic oils, and non-GM soybean oil could appear on the market at a very limited scale. Labeling GM brinjal would be extremely challenging. Assuming it was implemented, some non-GM brinjal would be sold at a premium in high-income retail outlets, while virtually all others would be labeled GM. A similar outcome would occur for rice, with high-quality rice used for both domestic consumption and exports markets certified non-GM and most of the remaining rice labeled as GM. In each of the cases, labeling would generate significant adjustment costs for the industry and large enforcement costs, and consumer benefit would not always be visible and would highly depend on the degree of enforcement. In fact, voluntary labeling could achieve less-distorted results with lower costs and therefore appears to be a superior regulatory solution. Still, provided enforcement is ensured, a well-designed mandatory labeling regulation with limited product coverage, a non-zero labeling threshold, and an informative labeling content would lead to a much better outcome and lower costs in India than the current draft rule, especially if it is accompanied by a large awareness campaign regarding GM food and consumer safety in India. ; Non-PR ; IFPRI1; GRP1 ; EPTD

IFPRI3; ISI; CRP2 ; EPTD; DSGD; PIM ; PR ; CGIAR Research Program on Policies, Institutions, and Markets (PIM)

Abstract.  Faced with divergent opinions among consumers on the use of genetically modified (GM) foods, Canada has adopted a voluntary labelling approach for non‐GM foods, whereas the European Union has a mandatory labelling policy for GM foods. Interestingly, both labelling systems have resulted in very little, if any, additional consumer choice. Using an analytical model, we show that the coexistence of GM and non‐GM products at the retail level depends on the labelling policy, consumer perceptions, and the type of product. Although voluntary labelling tends to favour the use of GM products, it is more likely to provide consumer choice.