GLOBAL IMPLICATIONS FROM A NORTH-NORTH-SOUTH TRADE MODEL: A BIOTECH REVOLUTION

The emergence of agricultural biotechnology and policy responses to is altering global agricultural trade patterns. This paper models the effects of restrictive policies concerning the production and consumption of genetically modified agricultural products. The model relies on a Hecksher-Ohlin-Samuelson framework, adapted to include neo-Schumpeterian research and innovation. The model includes two 'North' countries, the United States (US) and the European Union (EU), and the 'South'. The EU is represented as prohibiting the production and consumption of biotech products, but not restricting biotech research relative to NA. Model results include implications for economic growth, welfare, and trade patterns for the EU, US and S, given the restrictive biotech policies of the EU.