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Biotechnology regulations threaten new economy

By Rob Hosking

Friday 13th December 2002

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Government moves to tighten regulation of biotechnology could strangle the industry and impede economic growth, according to a new Ministry of Economic Development study.

The study, which takes an overarching look at whether New Zealand has developed any aspects of the "new economy" which was much talked about until a couple of years ago, warns that the government's fears of political backlash around genetic modification could cause long-term damage to New Zealand's economic prospects.

"The regulatory environment is particularly important for biotechnology," the study says.

"Public fears about genetic engineering are understandable and strong but overly stringent controls can throttle domestic research and drive scarce human capital overseas."

US researchers only have to pay a $US15 research fee for GE research applications, the study points out, while in New Zealand the Forest Research Institute had to pay a massive $344,000 of costs for two applications to field test GE pine trees.

The government, while "well aware of private industry concerns ... is also under strong pressure to strengthen an already tight regulatory environment."

Three factors will shape the future role of biotechnology on the New Zealand economy, the report says: technical prospects, institutions and markets.

On the technical side, developments are moving extremely quickly and "the extent to which New Zealand will keep up with the play remains to be seen."

The institutional impact is crucial ­ New Zealand has been something of a world leader in setting up institutions to deal with the issues thrown up by biotechnology, the report points out.

That is a mixed blessing, however.

The Royal Commission on Genetic Modification, the Hazardous Substances legislation and the Environmental Risk Management Authority "are all examples of institutions which have had a significant impact on the development of modern biotechnology in New Zealand, although some might suggest that their main effect has been to discourage its use in New Zealand."

The study is more equivocal on the issue of markets.

It cites US research that shows many instances where biotechnology had "diffused very rapidly and faced little consumer resistance" but notes that "more recently the picture has changed radically."

"Certainly, market perceptions are having a major impact on the willingness of many players to invest in biotech research and development."

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