Food Labels, Information, and Trade in GMOs

This article focuses on the economics of labeling of genetically modified (GM) products in an international trade context with coexistence of both GM and traditional products and asymmetric information. Even though the scientific consensus is that GM food products are safe for human consumption, there has been a lack of acceptance by a growing segment of consumers, which has resulted in reduced or curbed demand for GM food products. The size of the anti-GM consumer segment differs across countries and suggests that coexistence will continue in a subset of countries for the near future. Many countries have developed regulations, approval processes, and labelling policies that largely reflect the economics and politics specific to each country. Hence, different labeling policies have emerged across countries. These differences in policies will continue to create difficulties, and may lead to the dominance of private standards.