The Implications of GMOs for Australian Trade1

The introduction of genetically modified crops can affect international trade in a number of ways. Prior studies have focussed on the effects of higher productivity of GM crops and on differences in consumer attitudes across regions. This study builds on this earlier work by including the costs of actual or proposed regulation in different regions. It analyses two crops (grains and oilseeds), using working assumptions about productivity gains, consumer attitudes and costs of regulation. Under these assumptions, welfare increases in the major GM crop producing regions. Small GM-producing regions, such as Australia and New Zealand, experience welfare declines linked to terms of trade deterioration