Economic and Environmental Consequences of the ECJ Genome Editing Judgement in Agriculture

Genome edited crops are on the verge of being placed on the market and their agricultural and food products will thus be internationally traded soon. National regulation, however, diverges regarding the classification of genome edited crops. Major countries such as the US and Brazil do not specifically regulate genome edited crops, while in the European Union they fall under GMO legislation, according to the European Court of Justice (ECJ). As it is in some cases impossible to analytically distinguish products from genome edited plants compared to non-genome edited plants, EU importers may fear the risk of violating EU legislation. They may choose to not import anymore agricultural and food products based on crops, for which genome edited varieties are available. As a consequence, crop products, for which the EU is currently a net importer, would become more expensive in the EU and production would intensify. Furthermore, strong substitution among products covered and not covered by genome editing would occur in consumption, production and trade. We analyse the effects of such a cease of EU imports for cereals and soy on the EU agricultural sector with the comparative static agricultural sector equilibrium model CAPRI. Our results indicate that effects on agricultural and food prices as well as farm income are strong, and the intensification of EU agriculture may result in negative net environmental effects in the EU as well as increases in global greenhouse gas emissions. This suggests that the trade effects should be taken into account when developing domestic regulation for genome edited crops.