Labeling Demands, Coexistence and the Challenges for Trade

Abstract As with other facets of regulatory policy for genetically modified organisms, labeling is a contentious issue in international trade policy. Labeling can be a trade barrier. The existing multilateral system for labeling is based in the Sanitary and Phytosanitary (SPS) and Technical Barriers to Trade (TBT) agreements of the World Trade Organization (WTO) – and is focused on limiting the rent-seeking trade inhibiting aspects of labeling. An alternative view of labeling is based on the social policy of consumers’ right to know and takes no account of the trade costs associated with labeling. The labeling rules of the SPS and TBT are explained. These are contrasted with the trade effects of a labeling system based on consumers’ right to know that might be incorporated into a preferential trade agreement. The relative economic effects are explained and contrasted with those of the social policy of coexistence. The difficulties arising from some trading partners using the labeling rules of a preferential trade agreement while others use those of the WTO are outlined. The likelihood of alternative rules for labeling being included in the Transatlantic Trade and Investment Partnership (T-TIP), the Trans-Pacific Partnership (TPP) and the Comprehensive Economic and Trade Agreement (CETA) are examined.