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A Brief Look at Why There is Such Widespread Support for the Country of Labeling Law

Background

Since 1930 most goods imported into the United States—including foods—have had to bear a label informing the "ultimate purchaser" of their country of origin.

The law exempted some articles "economically prohibitive" to label: livestock, vegetables, fruits, nuts, live or dead animals, and fish. However, the "immediate containers" in which fruits and vegetables are packed must be labeled. Thus cartons containing limes from Chile or mangoes from Mexico have to be labeled while individual limes or mangoes from those cartons are exempted.

The 2002 Farm Bill made Country of Origin Labeling (COOL) mandatory for beef, lamb, pork, fish, fresh and frozen fruits and vegetables, and peanuts. Congress directed the U.S. Department of Agriculture to issue rules to enable the mandatory program to go into effect by September 2004. The USDA issued draft Rules in October 2003.

In January 2004 Congress voted to delay the implementation of COOL until September 2006 with the exception of a seafood-labeling program. A coalition of food processors, wholesalers and retailers is seeking to repeal mandatory Country-of-Origin Labeling (COOL) requirements for foods.


WHY THE SUPPORT?

Proponents of mandatory country of origin labeling (COOL) maintain that American consumers want this information, that the additional costs estimated by USDA are highly inflated and that most of our trading partners and several U.S. states already have country or origin labeling programs that have caused little if any problems.

Supporters maintain, "Every survey relevant to the labeling of food has revealed overwhelming consumer support for such labeling and significant concern for information as to where their food is produced."

A GAO investigation in 1999 citied a number of studies that supported this conclusion. One found that 74-83 percent of consumers favor mandatory COOL for fresh produce. Another study found that about half said they would be willing to pay "a little more to get U.S. produce"

Supporters believe the USDA analysis of the cost of COOL was wildly inflated. They note that the General Accounting Office itself found that USDA's assumption "are questionable and not well supported".A study by several economists noted that to estimate the cost of the paperwork involved the USDA had used a $25 an hour cost for farmers and ranchers while the median wage of farm labor is $7.76 an hour. For food handlers, processors, packers, importers, wholesalers and distributors the USDA estimated a cost of $50 per hour, but the median salary in those sectors is $13.60. For retailers the USDA also used the $50 per hour figure while the median wage in the grocery sector is $9 per hour.

Supporters contend that country of origin labeling is acceptable under current international trade rules. The National Farmers Union (NFU) points out, "The U.S. country-of-origin labeling requirements apply to the enumerated commodities regardless of whether they are of domestic or foreign origin, satisfying the "national treatment" requirements of international trade agreements. In addition, there are no provisions in the law that would modify our current import tariff and quota commitments. In fact, foreign products are already labeled as to country of origin at the point they pass through U.S. customs. However, country of origin information is lost once these products enter the U.S. and undergo additional processing and blending in this country as a result of U.S. labeling decisions made years ago. The new law will correct this problem in a way that is totally within our rights under existing trade agreements.

The NFU notes, "36 other nations already require some form of country-of-origin labeling on imported food products, and U.S. exporters of those products regularly comply with those labeling regulations." The GAO surveyed 57 U.S. trading partner countries and found that 48 require country of origin labeling for one or more of the commodities covered by the new law.

The European Union imposes country of origin labeling regulations for fruits and vegetables, fish and shellfish and beef. Japan requires country of origin labeling for all foods covered by the US law. 

Eight states have COOL laws. Florida's program mainly covers fresh produce. It has been operating for more than 10 years as an extension of its food safety inspection regulations. Two to three times a year inspectors visit Florida grocery stores to check cleanliness, food storage temperatures, meat handling procedures and country of origin labeling. The COOL requirement takes about 15 minutes. The inspectors check the shipping boxes and packagers in the store against the display signs or labels. Florida does not require a verifiable audit trail and only requires imported products to be labeled.

Supporters argue that a number of federal programs already require suppliers to maintain records on the country of origin of their products. For example, for the National School Lunch and Breakfast Programs the USDA requires that fresh fruits and vegetables purchased be domestically grown, processed and packed and that meats be from domestic livestock. Under its Subsistence Prime Vendor Program the Department of Defense requires that food purchased for US troops must be grown or raised domestically.

Supporters note that for animals a far more invasive identification program is already occurring. Under the requirements of the Bioterrorism Act of 2002, the USDA has issued a Notice of Proposed Rulemaking to require the establishment and maintenance of records by nearly all businesses in the food industry.This would allow the FDA to quickly identify the immediate previous source in case of an outbreak of disease.

A key question in the rules regarding COOL is the level of record keeping required. What is meant by a "verifiable recordkeeping audit trail"? Will third party verification, such as is required for organic certification, be needed or could such verification be demanded by buyers further up the supply chain (e.g. slaughter houses, grocery stores.)?

Supporters argue that under the North American Free Trade Agreement's Country of Origin Marking rules "Each Party shall, in adopting, maintaining and applying any measure relating to country of origin marking, minimize the difficulties, cost and inconveniences that the measure may cause to the commerce and industries of the other parties."One way of accomplishing this is to presume that commodities are of US origin as the default position.

Under this regulatory reporting scheme all products are presumed to be of U.S. origin unless they carry a mark from another country. VanSickle, et. al. maintain, "The least cost alternative regulatory scheme that complies with existing law is to presume that all covered commodities are of U.S. origins while tracking existing marks of origin on imported products."

Proponents of the presumptive standard note that many small processors, packers and other handlers would be de facto exempt from any paperwork because they do not engage in the trade of imported product. They note that the General Agreement on Tariffs and Trade (GATT) provides that "(w)henever it is administratively practicable to do so, contracting parties should permit required marks of origin to be affixed at the time of importation".

Several federal laws already require most imports, including food items, to bear labels or other information designating the country of origin. All swine imported from Canada, for example, must have a health certificate.

R-CALF, an association of cattle producers, notes that the Farm Bill says the USDA may use existing models to design the program and the presumptive standard is already used in some these, such as the National School Lunch Act.