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Trade Standards and the Political Economy of Genetically Modified Food

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  • Anderson, Kym
  • Damania, Richard
  • Jackson, Lee Ann

Abstract

A common-agency lobbying model is developed to help understand why North America and the European Union have adopted such different policies towards genetically modified food. Our results show that when firms (in this case farmers) lobby policy-makers to influence standards and consumers and environmentalists care about the choice of standard, it is possible that increased competition from abroad can lead to strategic incentives to raise standards, not just lower them as shown in earlier models. This theoretical proposition is supported by numerical results from a global general equilibrium model of GM adoption in America without and with an EU moratorium.

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Bibliographic Info

Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 4526.

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Date of creation: Aug 2004
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Handle: RePEc:cpr:ceprdp:4526

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Keywords: GMOs; Political Economy; Regulation of Standards; Trade Policy;

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References

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  1. Riordan, Michael H, 1986. "Monopolistic Competition with Experience Goods," The Quarterly Journal of Economics, MIT Press, vol. 101(2), pages 265-79, May.
  2. Dixit, Avinash K & Stiglitz, Joseph E, 1977. "Monopolistic Competition and Optimum Product Diversity," American Economic Review, American Economic Association, vol. 67(3), pages 297-308, June.
  3. Grossman, G.M. & Helpman, E., 1992. "Protection for Sale," Papers 21-92, Tel Aviv.
  4. Bernheim, B Douglas & Whinston, Michael D, 1986. "Menu Auctions, Resource Allocation, and Economic Influence," The Quarterly Journal of Economics, MIT Press, vol. 101(1), pages 1-31, February.
  5. Gene M. Grossman & Elhanan Helpman, 1993. "Trade Wars and Trade Talks," NBER Working Papers 4280, National Bureau of Economic Research, Inc.
  6. Anderson, Kym & Jackson, Lee Ann, 2004. "Standards, Trade And Protection: The Case Of Gmos," 2004 Annual meeting, August 1-4, Denver, CO 20282, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
  7. Marra, Michele C. & Pardey, Philip G. & Alston, Julian M., 2002. "The payoffs to agricultural biotechnology: an assessment of the evidence," EPTD discussion papers 87, International Food Policy Research Institute (IFPRI).
  8. Harvey E. Lapan & Giancarlo Moschini, 2004. "Innovation and Trade with Endogenous Market Failure: The Case of Genetically Modified Products," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 86(3), pages 634-648.
  9. Boom, Anette, 1995. "Asymmetric International Minimum Quality Standards and Vertical Differentiation," Journal of Industrial Economics, Wiley Blackwell, vol. 43(1), pages 101-19, March.
  10. Fernandez-Cornejo, Jorge & McBride, William D., 2002. "Adoption Of Bioengineered Crops," Agricultural Economics Reports 33957, United States Department of Agriculture, Economic Research Service.
  11. Meijl, Hans van & Tongeren, Frank van, 2004. "International diffusion of gains from biotechnology and the European Union's Common Agricultural Policy," Agricultural Economics, Blackwell, vol. 31(2-3), pages 307-316, December.
  12. Feder, Gershon & Just, Richard E & Zilberman, David, 1985. "Adoption of Agricultural Innovations in Developing Countries: A Survey," Economic Development and Cultural Change, University of Chicago Press, vol. 33(2), pages 255-98, January.
  13. Fischer, Ronald & Serra, Pablo, 2000. "Standards and protection," Journal of International Economics, Elsevier, vol. 52(2), pages 377-400, December.
  14. Murray Fulton & Konstantinos Giannakas, 2004. "Inserting GM Products into the Food Chain: The Market and Welfare Effects of Different Labeling and Regulatory Regimes," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 86(1), pages 42-60.
  15. Flam, Harry & Helpman, Elhanan, 1987. "Vertical Product Differentiation and North-South Trade," American Economic Review, American Economic Association, vol. 77(5), pages 810-22, December.
  16. Fernandez-Cornejo, Jorge & McBride, William D., 2000. "Genetically Engineered Crops For Pest Management In U.S. Agriculture," Agricultural Economics Reports 33931, United States Department of Agriculture, Economic Research Service.
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Citations

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Cited by:
  1. Johan F.M. Swinnen & Scott Rozelle & Tao Xiang & Thijs Vandemoortele, 2008. "A Theory of Standards-Driven Rural Development," LICOS Discussion Papers 19908, LICOS - Centre for Institutions and Economic Performance, KU Leuven.
  2. Ana Santos & Jose Caetano, 2008. "EU regulation concerning genetically modified products: an issue of food security or a measure of disguised protectionism?," CEFAGE-UE Working Papers 2008_10, University of Evora, CEFAGE-UE (Portugal).
  3. Tao Xiang & Jikun Huang & d’Artis Kancs & Scott Rozelle & Jo Swinnen, 2010. "Food Standards and Welfare: A General Equilibrium Model with Market Imperfections," LICOS Discussion Papers 26310, LICOS - Centre for Institutions and Economic Performance, KU Leuven.
  4. Swinnen, Johan F.M. & Vandemoortele, Thijs, 2008. "The Political Economy of Nutrition and Health Standards in Food Markets," 2008 International Congress, August 26-29, 2008, Ghent, Belgium 44364, European Association of Agricultural Economists.
  5. Mauro Vigani & Alesandro Olper, 2012. "GMO Standards, Endogenous Policy and the Market for Information," LICOS Discussion Papers 30612, LICOS - Centre for Institutions and Economic Performance, KU Leuven.

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