IFPRI Discusses Trade Effects of Strict Info Requirements for GM Commodities

The International Food Policy Research Institute (IFPRI) released a discussion paper on the global economic implications of the proposed strict documentation requirements on traded shipments of potentially GM commodities under the Cartagena Protocol on Biosafety. The paper evaluates the trade diversion, price, and welfare effects of shipments to carry a list of specific GM events in maize and soybean sectors. Through the use of equilibrium model for maize and soybean-trading countries, it was shown that information requirements would significantly affect the global market for both crops. But they would have more impacts on trade, specifically by creating trade distortion that diverts exports from their original destination.

The measure would also bring negative welfare effects for all members of the Protocol and nonmembers that produce GM maize and/or soybeans. Non-GM producers in Protocol countries may benefit from the regulation, however, consumers and producers in the developing countries would have to pay a higher price for such a measure.

Read IFPRI Discussion Paper at http://www.ifpri.org/sites/default/files/publications/ifpridp01102.pdf.