Genetically modified (GM) foods are widely produced in the United States and in two other Western Hemisphere countries (Argentina and Canada) but almost nowhere else. In most other wealthy industrial countries, including Europe and Japan, it is legal for farmers to plant these crops, but they voluntarily refrain from doing so because consumers are averse to eating GM. In most developing countries it is not yet legal for farmers to grow GM foods, on biological safety grounds. Yet biosafety is not the real issue. Poor countries are now trying to stay "GM–free" so as to retain the option of exporting food to Europe and Japan.
New regulations in the EU on the labeling and traceability of imported GM foods and feeds will only increase the potential cost to exporters of planting GM seeds. The United States has considered challenging EU regulations as illegal under the WTO, and a serious trade conflict now looms. The EU, not the United States, is better positioned to prevail in this conflict. In international food markets, safety and labeling standards tend to be set by big importers rather than big exporters.
WCFIA Working Paper 02–04, July 2002.