The increasing disparity in the biotech product approval timelines between exporting countries that utilize new technologies and large grain importing countries is a significant and growing impediment to trade, specifically in the European Union and China. A new report from the Council for Agricultural Science & Technology (CAST) – "The Impact of Asynchronous Approvals for Biotech Crops on Agricultural Sustainability, Trade & Innovation" – examines timely issues of trade and biotechnology.
As task force chair Dr. Nicholas Kalaitzandonakes said, “How the world’s regulatory systems operate in the area of biotech crops is critically important to producers and consumers.”
Crops produced through modern biotechnology are strictly regulated, and regulatory approaches differ across countries. Governments regulate biotechnology and its products in an attempt to minimize any potential environmental and animal or human health risks that new biotech events might present.
Associated regulations involve administrative, compliance and other social costs that must also be taken into account. The time required to review and approve new biotech events varies significantly from one country to another. Regulatory review times for new biotech events have increased in key jurisdictions, and approvals have become more asynchronous in recent years.
However, the paper points out that on a few occasions, regulatory asynchrony has led to a situation in which new biotech crops have been approved and commercialized in some key markets while still unauthorized for use in others.
Most countries have “zero tolerance” for unapproved biotech events. Asynchrony in regulatory approvals between importing and exporting countries puts at risk large volumes of trade worth billions of dollars. Under zero tolerance, low-level presence (LLP) incidents can lead to trade disruption and, ultimately, trade distortions.
The most immediate effects of LLP incidents caused by asynchronous approvals fall directly on the trading parties. Shippers experience substantial economic losses, and in extreme cases, they may lose the value of the entire shipment. The report added that the impact of any LLP incident propagates quickly across international agrifood supply chains.
“The potential for sustained regulatory asynchrony and chronic trade disruptions in the future is magnified by the tendency of major importers to adopt approval systems that are not synchronized with those of key exporting countries,” the paper noted.
Asynchronous approvals have further impacts by delaying the commercialization and adoption of new biotech events. Delayed commercialization of new biotech events imposes additional social costs by denying producers and consumers benefits from innovation. Some potentially profitable innovations may be neglected if regulatory delays and higher costs decrease the net present value of a prospective biotech innovation.
The report offers several potential solutions and provides research about approaches that might ease the negative impacts of asynchronous approvals and LLP. “More research is needed to evaluate the global cost of asynchronous approvals and LLP, the impacts of asynchrony on innovation and crop improvements and the decision-making process of biotech developers in both the public and private sectors,” the authors said. “Timely research could inform policy-making and improve the design of policy instruments.”
Many factors influence the approval process, including differences in institutional arrangements, regulatory procedures, administrative capacity and attitudes toward biotech crops. Therefore, the time required to review new biotech events varies significantly from one country to another. The paper concludes, “As long as the current situation persists, agricultural biotechnology will be prevented from delivering the full range of promised benefits of improved standard of living and food security.”