Abstract
The production and trade of biotech maize across major North and South America exporters has increased dramatically in the last 15 years. However, as new biotech maize traits are being deregulated by national regulatory authorities at increasingly different speeds, the chances that some biotech maize traits may be approved for commercialization and production in some exporting country but not for use in an importing country, have been growing. So has the risk of costly trade disruptions. In this paper we use a spatial equilibrium model of the global maize trade to evaluate the potential economic impacts of such trade disruptions in the Americas. We find that potential trade disruptions for import dependent Latin American countries can have significant negative economic impacts. The results suggest that the development of adequate regulatory capacity and pooling regulatory resources at a regional level as well as adopting national policies for dealing with unapproved biotech crops (e.g. adoption of CODEX Annex) will likely be important in the future in Latin America.
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Notes
- 1.
For instance, imports of soybean meal and soybean oil to Ecuador were stopped for several weeks by the Ministry of Agriculture in May 2005 causing great difficulties in local poultry, animal feed and tuna canning industries. These led the government of Ecuador to reverse its prior decision and permit the restart of the imports [24].
- 2.
We review the trade of maize here in some detail but we note that the trade of other major agricultural commodities follows similar patterns.
- 3.
Costa Rica and Chile also have a small number of hectares that grow biotech maize seeds for export markets.
- 4.
Approvals for new biotech events are generally granted for food use, feed use, processing, importation and planting. Individual countries may use particular approvals and not others. For example, some countries grant food and feed approvals, while others require an importation approval when food and feed safety for imports is necessary. Countries grant planting approvals when permission to grow a new biotech event is sought. In Table 23.4food, feed, processing and importation approvals are summarily presented as “Use” approvals, implying that a new biotech event (imported or otherwise) can be placed in the market for consumption. Planting approvals (placed in parenthesis) are separately indicated.
- 5.
2005 was chosen as a baseline year because it was representative of a short global maize crop and hence of tight market conditions. 2007 was chosen as an alternative baseline year since global production was above average and hence it was representative of a well-supplied global maize market. The two alternative baselines are used to envelop “normal” market conditions.
- 6.
The importing countries in scenarios 1 and 2 were chosen in order to provide effective examples of differential size in imports and relative proximity to suppliers.
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Kalaitzandonakes, N., Kaufman, J., Miller, D. (2014). Economic Impact Analysis of Potential Trade Restrictions on Biotech Maize in Latin American Countries. In: Pinto, A., Zilberman, D. (eds) Modeling, Dynamics, Optimization and Bioeconomics I. Springer Proceedings in Mathematics & Statistics, vol 73. Springer, Cham. https://doi.org/10.1007/978-3-319-04849-9_23
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