China, Gmos and World Trade in Agricultural and Textile Products

Abstract

China has always strived for self-sufficiency in farm products, particularly staple foods. Its rapid industrialization following its opening up to global markets during the past two decades has been making that more difficult, and its accession to the WTO may add to that difficulty. New agricultural biotechnologies could ease that situation. The adoption and spread of some of those biotechnologies in agriculture have, however, raised concerns, particularly over the environmental and food safety effects of genetically modified organisms (GMOs). This Paper focuses on possible implications of the GMO controversy for China, since it is prospectively not only a major producer and consumer of GM farm products but also a potential exporter of some of them. It explores the potential economic effects of China not adopting versus adopting GMOs when some of its trading partners adopt that technology. The effects are shown to depend to a considerable extent on the trade policy stance taken in high-income countries opposed to GMOs and/or to liberalization of China's trade in textiles and apparel.

Keywords: GMOs, trade policy, import ban, China, WTO

JEL Classification: C68, D58, F13, O30, Q17, Q18