By Maury Bredahl
Can we trade the current generation of products from biotech or the technology itself? Can we trade future generations of products of the technology? These authors pose these questions and attempt to answer them in their commentary about the future of biotechnology and its trade-ability. Given current consumer concerns about food safety and product attributes, some constraints have already been placed on commodity trade, especially by importing countries. This paper focuses on the future of nutraceuticals and functional foods. These products have consumer-desired traits as opposed to agronomic functionality. How will these biotechnologically engineered foods be classified? As food or as drugs? Currently, we see many private initiatives to heighten consumer awareness and demarcate food containing GMO’s from products that do not or vice versa. Some producers, processors, and marketing agents make it part of their corporate strategy to “protect” consumers from GMO products.
Attempts to resolve this issue on an international level have been spearheaded by the WTO. The Cartagena Protocol on Biosafety has been drafted as a proposed regulatory framework for the trade of biotechnologically engineered organisms and products. Identified as the three most prominent threats to free trade of GMO products are the safety of GMO containing food, potentially detrimental environmental effect, and the ethical concerns with the technology itself. Mainly, the Cartagena Protocol advocates the employment of the precautionary principle, that we should proceed cautiously until product safety and soundness may be proven scientifically. Currently, the largest problem in adapting a regulatory protocol is our lack of knowledge and understanding about the long and short term effects of these products.
However, proceeding without any type of regulation or regulatory guide could encourage market segmentation and inefficiencies may arise out of that. There is already attitude discrepancy between importing and exporting countries in approach to regulation: the importing countries tend to be much more skeptical and likely to enact regulation due to negative consumer response.
Biotech’s next quest is to produce crops with value to the consumer as opposed to ones with agronomic value. This will enable farmers to target the needs of the end user. The future implications for trade of these products will undoubtedly mean that product attributes must be carefully targeted to local markets and this will largely take place through direct investment as opposed to product flows. The EU and the US will establish the tenor of these potential regulations and problems may arise in EU’s greater concern with the safety of the underlying production process.
In conclusion, trade will happen and so will the trade of biotechnology and its products. “Institutional developments such as agreement on labeling standards will be so slow and any outcome so ambiguous that reducing risk and transaction costs will fall to the private sector.” This may be the most efficient and desirable outcome. The market will eventually be differentiated on the basis of consumer attributes that will vary across nations and geographic areas.
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