Trade implications of gene-edited wheat under different regulatory scenarios
Wheat is a key global commodity and an essential component in the global food basket. However, in an era of climate change, dry weather conditions, and plant diseases, meeting the increasing demand for food is still a challenge. New breeding techniques (NBTs) or gene editing are rapidly emerging as alternative and sustainable methods of improving methods wheat traits. Although these innovative breeding methods contribute to higher yields and develop crops with valuable traits, the regulatory status and the adoption of these new breeding technologies are still being debated. Focusing on the regulatory approach of gene-editing in Canada and its main trade partners, this study analyzes the impact of different regulatory approaches to NBT on the potential trade of gene-edited wheat. The research simulates five regulatory case scenarios that test the effect of exporting Canadian gene-edited wheat. The first scenario states that Canada does not commercialize editing, while its competitors Australia and the US do. The second scenario presents the opposite case, only Canada commercializes gene-editing while the US and Australia do not. In the third scenario, the three exporters commercialize gene-edited wheat. In scenarios 1 to 3, countries with stringent regulations such as Italy (EU) and Algeria ban the import of gene-edited wheat. The fourth scenario assumes that only Italy establishes a trade ban for Canadian gene-edited wheat, and only Canada commercializes gene-edited wheat. The fifth scenario assumes that the three major wheat exporters: Canada, the US, and Australia export gene-edited wheat, and previously stringent countries (Italy (EU) and Algeria) become open to importing gene-edited wheat. Using data from the World Trade Organization (WTO) in 2019, a Global Simulation Model (GSIM) was devised to calculate the change in net welfare for each scenario. Results show that Canada registered a negative change in the net welfare when adopting gene editing versus a positive change in welfare when not using gene editing. The results suggest that heterogeneity in policy frameworks regarding gene-editing products disrupts trade continuity and shuts down the export markets in some cases, mainly in countries/ jurisdictions such as the European Union and Algeria, where gene-editing products are regulated as GMOs and their imports are banned. Additionally, the genetic gain from using gene-editing technology does not offset the market loss by countries that export gene-edited wheat.
Wheat, Gene editing, PNT regulation, wheat trade
Master of Science (M.Sc.)
Agricultural and Resource Economics