GE-Free New Zealand, says the milk contamination scandal in China shows how easily New Zealand's "clean green" reputation can be damaged.
Lobby group spokesperson Jon Carapiet says overseas companies involved in risky ventures with New Zealand companies should be more liable for any problems that occur.
He says bonds should be put in place to cover cleanup expenses if something goes wrong.
Mr Carapiet says New Zealand has already had to absorb the cost of cleaning up after a Scottish company, PPL Therapeutics, struck financial difficulties partway through a GE trial involving 3000 sheep near Tokoroa.
He says he is worried that plans by AgResearch to partner with overseas companies to develop pharmaceuticals also expose the institute and New Zealand's brand to dangerous risks.