The Role of Trade Facilitation Indicators and Genetically Engineered Restrictive Index on U.S. State Exports and Efficiency

Abstract

Trade Facilitation Indicators have become important mechanisms of monitoring the ease of trade. Another issue of rising concern is the pervasive debate on genetically engineered organisms and the development of Genetically Engineered Restrictive Index to evaluate its implications on trade. With regards to these, the objective of the United States Trade Representative is to eliminate implicit trade barriers. Hence, this study examines the impact of TFIs on U.S. agricultural export and its efficiency. From the results, a 1% increase in destination’s Genetically Engineered Restrictive Index leads to a US$ 9,426.82 and US$ 74,268.04 decline in corn and soybean exports while wheat experiences a US$ 26,204.05 increase. The ‘I-State’ paradox was also revealed from the efficiency rankings. This research recommends that GE labelling policies should be synchronized to match the requirements of the destination countries. Furthermore, information on GE foods must be transparent and disseminated to change destinations’ negative perception.