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European Review of Agricultural Economics Advance Access originally published online on August 24, 2007
European Review of Agricultural Economics 2007 34(3):365-392; doi:10.1093/erae/jbm021
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© Oxford University Press and Foundation for the European Review of Agricultural Economics 2007; all rights reserved. For permissions, please email journals.permissions@oxfordjournals.org

Strategic response to GMOs by GM-free countries

Luc Veyssiere

Department of Economics, Iowa State University, Ames, USA

Corresponding author: Luc Veyssiere, Department of Economics, 260 Heady Hall, Iowa State University, Ames, IA 50011-1070, USA. E-mail: luc{at}iastate.edu

Received July 2006; Revision received May 2007. This article examines the dilemma of a large exporting country of an agricultural product that has to determine whether or not to approve genetically modified (GM) products with or without a labelling regime. We derive two main results. First, the approval decision on GM products is specific to the labelling regime: approval of GM products is optimal under a labelling regime, whereas non-approval is optimal in the absence of a mandatory labelling requirement. Second, the inability to protect the innovator's rent through IPR enforcement can prevent the approval of GM products.

Keywords: genetically modified crop, approval, labelling, intellectual property rights (IPRs), trade

JEL classification: Q13, Q18, O34


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