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Rules, Norms and Standards in the international market: the Cartagena Protocol on Biosafety and its potential effects for Brazil

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Author(s):
Débora da Costa Simões
Total Authors: 1
Document type: Master's Dissertation
Press: Piracicaba.
Institution: Universidade de São Paulo (USP). Escola Superior de Agricultura Luiz de Queiroz (ESALA/BC)
Defense date:
Examining board members:
Heloisa Lee Burnquist; Márcia Azanha Ferraz Dias de Moraes; José Maria Ferreira Jardim da Silveira
Advisor: Heloisa Lee Burnquist
Abstract

The development of international rules, norms and standards related to the trade of GM products is complex and involves a diversity of interests. This complexity can be verified by the tough negotiations aiming at establishing procedures to put the Cartagena Protocol on Biosafety - CPB in place. The CPB establishes norms and minimum standards to control the transboundary movements of Living Modified Organisms - LMOs in order to protect the biodiversity. It has a direct effect in the international agricultural commodities market and can even alter the countries\' competitiveness. This work estimates that 81.2% of the main GM crops (soybean, corn, canola and cotton) global exports are affected by the CPB. In this context, Brazil is in a peculiar position, as it was the only country among the biggest world agricultural commodities producers that has ratified the agreement. The main objective of this dissertation was to verify the implications (related to additional costs) and potential impacts of the CPB to Brazil and its possible outcomes for the international market. The analysis was restricted to the Protocol\'s Article 18 - which states the rules related to transport, handling, packing and use of LMOs - and to the soybean international market. First, a theoretical framework was defined in order to analyze the effects of regulatory barriers to the international trade and to the domestic markets of exporters and importers countries. Then, the necessary additional costs to identify the cargoes containing LMOs were calculated considering the main proposals submitted by CPB members during the negotiations: \'contains\' with a list of events, \'contains\' with quantification of events and the adoption of an identity preservation system. In order to compare the CPB effects on different countries, this procedure was not only applied to Brazil, but also to Argentina and the US, two important soybeans exporters that have not signed the agreement. The outcomes revealed that the compliance costs of the CPB requirements are greater in Brazil than its competitors and that this difference increases as the exigencies become stricter. Last, the potential impacts of these additional costs in the international market were estimated using the Equilibrium Displacement Model - EDM. Two scenarios were constructed: under Scenario 1 it was considered that only Brazil complied with CPB standards; under Scenario 2, Argentina and the US also adopted equivalent measures with those established by the Protocol. The results showed that Brazil would be harmed in both situations. Considering the whole soybean complex, the country could loose US$ 133 million under Scenario 1 and US$ 329 million under Scenario 2. Though Brazilian soybean exports decreased in both circumstances, it could be verified that there was a stimulus to meal and oil production in the country under the conditions settled in Scenario 1. In Scenario 2, however, the rise of exports concentrated only in the oil market. Regarding Argentina and the US, the Scenario 2 presented better results that Scenario 1. Therefore, it is almost certain that these countries will comply with CPB requirements. It implies that Brazil will incur in greater losses. (AU)