Empirical evidence on the trade impact of asynchronous regulatory approval of new GMO events Rosane Nunes de Faria a,⇑ , Christine Wieck b,1 a Department of Economics, Federal University of Sao Carlos, Rodovia Joao Leme dos Santos, KM 110, SP-264, 18052-780 Sorocaba, SP, Brazil b University of Bonn, Nussallee 21, D-53115 Bonn, Germany article info Article history: Received 2 October 2014 Received in revised form 11 February 2015 Accepted 23 March 2015 Keywords: Genetically modified organism Asynchronous approval Regulatory heterogeneity indices Trade impact abstract This paper focuses on the ex-post empirical analysis of the trade impact of asynchronous regulatory approval of new genetically modified organism (GMO) events. We contribute to the literature in three ways: first, we define indices to assess the extent of asynchronicity and the relative strictness of the GMO approval authorizations of 40 countries considering GMO regulatory developments between 2000 and 2012 regarding cotton, maize and soybeans. Second, we introduce indices that are country-pair specific, product-specific, and year-specific in a gravity model to examine the trade impact of asyn- chronous regulatory approval across countries. By grouping the countries according to the state of their national regulatory GMO frameworks, we have an even more differentiated view on the trade impact of asynchronous approval that focuses not only on the existence of regulations but also on their restrictive- ness. The results from the gravity model show that asynchronous approval has negatively impacted trade flows of cotton, maize and soybeans. It is observed that both asynchronous approvals and the restrictive- ness of importing countries’ regulations to address the importation of GMO products matter, meaning those countries that have already adopted a comprehensive GMO regulatory framework and have policies to manage the importation of GMO crops tend to feel a higher negative impact on trade flows. Ó 2015 Elsevier Ltd. All rights reserved. Introduction Although widely traded, the commercialization of GMO crops is regulated by domestic regulations, such as regulatory approval for importing or cultivation, labeling policy and traceability, all of which vary considerably among countries (Gruère, 2006; Davison, 2010; Wohlers, 2010; Viju et al., 2011; Vigani and Olper, 2013). The regulatory review and approval process for a new GMO event is country-specific and is the essential criterion for its introduction into cultivation and/or marketing for feed and food use into the domestic market (Vigani and Olper, 2013: Kalaitzandonakes et al., 2014). Consequently, approval is a direct measure that affects market access (Gruère, 2006). Countries with well-defined 2 regulations have authorized the commercialization of new GMO events in their territories; however, the large regulatory heterogeneity, especially as related to different timings of GMO approvals of products for commercial use as feed, food or cultivation, has created a situation known as asynchronous approval (AA), which means that the approval of a new GMO event 3 does not occur simultaneously across countries (Stein and Rodríguez-Cerezo, 2010). Under this circumstance, a new biotech crop might be cultivated and marketed for food and feed in one or more countries but remain unauthorized in other countries (Kalaitzandonakes, 2011). Considering that the approval processes are not synchronized across countries and the perfect segregation of approved and unap- proved GMO crops cannot be consistently achieved, the probable http://dx.doi.org/10.1016/j.foodpol.2015.03.005 0306-9192/Ó 2015 Elsevier Ltd. All rights reserved. ⇑ Corresponding author. Tel.: +55 15 3229 6016. E-mail addresses: rnfaria@ufscar.br (R.N. de Faria), christine.wieck@ilr.uni-bonn. de (C. Wieck). 1 Tel.: +49 228 73 23 22. 2 The ‘‘countries with well-defined regulations’’ include those countries that have already adopted their regulatory framework with a set of safety approval and labeling policies with specific characteristics (Gruère, 2006). 3 A GMO event refers to ‘‘the unique DNA recombination event that took place in one plant cell, which was then used to generate entire transgenic plants. Every cell that successfully incorporates the gene of interest represents a unique ‘event’. The derived transgenic line is identified by an abbreviation (e.g., Bt11, MON 863)’’ (GMO- COMPASS Glossary, 2013). Food Policy 53 (2015) 22–32 Contents lists available at ScienceDirect Food Policy journal homepage: www.elsevier.com/locate/foodpol