Agricultural biotechnologies, and especially transgenic crops, have the potential to offer higher incomes to biotech firms and farmers, and lower-priced and better quality food for consumers. However, the welfare effects of adoption of genetically modified (GM) food and feed crop varieties are being affected not only by some countries' strict regulations governing GM food production and consumption, but also by their choice of food trade policy instruments. Specifically, notwithstanding the ending of the European Union's GM moratorium in April 2004, the continuing use by the EU of strict labeling and liability laws and of variable trade taxes-cum-subsidies and tariff rate quotas is reducing the aggregate gains from new biotechnologies and the incentive for EU taxpayers and for life science companies to support GM food research. The use of variable levies and prohibitive out-of-quota MFN tariffs in particular is yet another reason to push for an ambitious outcome from the WTO's Doha round of agricultural trade negotiations.
Anderson, K. Interactions between Trade Policies and GM Food Regulations. (2006)