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Ian Sheldon and Timothy E. Josling

No 14594, Working Papers from International Agricultural Trade Research Consortium

Abstract: This paper examines the regulation of trade in genetically modified organisms (GMOs) by the World Trade Organization (WTO). Despite rapid adoption of GMOs by a few exporters, many importers have developed relatively restrictive procedures for pre-market approval of GMOs, and are introducing mandatory labeling. While exporters have yet to seek a ruling from the WTO on these regulations, a trade dispute over GMOs is likely to occur before too long. Exporting countries will likely argue that importing countries' regulations are too restrictive, given existing scientific knowledge of the safety of current GM crops, and that labeling of GM foods is unnecessary due to the fact that they are typically similar to their conventional counterparts. In response, importing countries will likely argue that existing scientific knowledge about GMOs is insufficient, and that a precautionary approach to approval is appropriate. In addition, importers will claim that labeling is necessary due to the fact that they are not equivalent to their conventional counterparts, and consumers have a right to choose whether or not consume such foods, be it for religious, ethical or other reasons. In the event a panel will have decide on whether GM and non-GM products are "like goods", whether adequate risk assessment was undertaken for any regulation introduced for health reasons, whether labels constitute the "least trade distorting" way of meeting legitimate objectives, and whether regulations imply discrimination among suppliers or in favor of domestic producers. Experience with the SPS and TBT Agreements has not been extensive enough to indicate how such a panel might rule. But one can also view the issue in broader trade policy terms, as a balance between market access obligations that need to be adjusted as domestic regulations on new technologies are developed. A possible solution is for importing countries with tough GM regulation and mandatory labeling to offer reciprocal increases in market access for non-GM foods in compensation for any losses of market access for GM foods. There is a question though of whether such "rebalancing" is actually practical, and it would certainly add to the costs of dispute settlement in the WTO, but it may be the only viable solution in the long run if the WTO is not to be dragged in to evaluating social and ethical bases for regulation of biotechnology.

Keywords: International Relations/Trade; Research and Development/Tech Change/Emerging Technologies (search for similar items in EconPapers)
Pages: 26
Date: 2002
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DOI: 10.22004/ag.econ.14594

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