The GMO Pipeline, Import Bans and Asynchronous Approvals – The Impact on Agricultural Trade

The divergence in approaches to regulation of genetically modified organisms (GMOs) among countries is a contentious policy issue that has externalities that inhibit trade in agricultural products. One result is that approvals of GMO events is internationally asynchronous. Countries whose approval processes are slower or more stringent often impose import bans or other non-tariff barriers on imports of GM products they have rejected or have yet to approve. These trade barriers have been the subject of considerable investigation. As more and more GMO events are approved in some countries, but not in others, the probability of unintended mingling of GM crops in shipments of non-GM crops increases. Shipments of non-GM crops with a low level presence of non approved GM crops are routinely rejected by importing countries. This growing disruption to trade has not received a great deal of attention. This paper uses information from the GMO research and commercialization pipeline to estimate the potential impact of increases in mingling on international trade flows using a CGE model – GTAP. The results suggest that the growing potential for mingling will have a considerable detrimental impact on trade flows and, hence, tolerance levels should be an important question for multilateral trade negotiations.