Country of Origin Labeling

For country of origin labeling in general, see Country of origin.

Country Of Origin Labeling (COOL) (or mCOOL [m for mandatory]) was a requirement signed into American law under Title X of the Farm Security and Rural Investment Act of 2002 (known as the 2002 Farm Bill, codified at 7 U.S.C. § 1638a). This law had required retailers to provide country-of-origin labeling for fresh beef, pork, and lamb. The program exempted processed meats. The United States Congress passed an expansion of the COOL requirements on 29 September 2008, to include more food items such as fresh fruits, nuts and vegetables.[1][2] Regulations were implemented on 1 August 2008 (73 FR 45106), 31 August 2008 (73 FR 50701), and 24 May 2013 (78 FR 31367). On 18 December 2015 Congress repealed the "COOL" law and it was signed by President Barack Obama. The repeal was a part of the omnibus budget bill.[3]

Background

"Under §304 of the Tariff Act of 1930 as amended (19 U.S.C. § 1304), every imported item must be conspicuously and indelibly marked in English to indicate to the “ultimate purchaser” its country of origin." According to the U.S. Customs, generally defined the “ultimate purchaser” is the last U.S. person who will receive the goods in the form in which it was imported.

However, if the goods are destined for a U.S. based processor where they will undergo “substantial transformation”, then that processor or manufacturer is considered the ultimate purchaser. The law authorizes exceptions to labeling requirements, such as for articles incapable of being marked or where the cost would be “economically prohibitive.”

Exceptions to this are codified into law and known as the “J List”, so named for §1304(a)(3)(J) of the statute, which empowered the Secretary of the Treasury to exempt classes of items that were “imported in substantial quantities during the five-year period immediately preceding January 1, 1937, and were not required during such period to be marked to indicate their origin.”

This does not apply to food 'processed' in U.S. with ingredients from other countries. Processed food includes milk, juice, dry foods and dietary supplements/vitamins. FDA website states: 1. An imported product, such as shrimp, is peeled, deveined and incorporated into a shrimp dish, such as "Shrimp Quiche." The product is no longer identifiable as shrimp but as "Quiche." The quiche is a product of the USA. Therefore, labeling it as "product of the USA" would not be a violation of the FFD&C Act. (Whether or not it violates *CBP’s* requirements would need to be asked.) 2. An imported product, such as shrimp, is peeled and deveined. It is labeled as "Imported by" or "Distributed by" a firm in the USA. Such labeling would not violate the FFD&C Act, but it would not meet the *CBP’s* requirement for country of origin labeling. The product would also have to be clearly identified as to country of origin.

Analysis

The contrasting intents of these bills reflected the continuing divergence of opinion among lawmakers over whether a federally mandated labeling program is needed. Some contend that mandatory COOL will provide U.S. products with a competitive advantage over foreign products because U.S. consumers, if offered a clear choice, prefer fresh foods of domestic origin, thereby strengthening demand and prices for them. Moreover, proponents argue that U.S. consumers have a right to know the origin of their food, particularly at a time when U.S. food imports are increasing, and whenever particular health and safety problems arise. They cite as one prominent example concerns about the safety of some foreign beef arising from the discoveries of bovine spongiform encephalopathy (BSE, or mad cow disease) in a number of Canadian-born cows (and two U.S. cows) since 2003. Supporters of the COOL law argue that it is unfair to exempt meats and produce from the longstanding country labeling already required of almost all other imported consumer products, from automobiles to most other foods. They also note that many foreign countries already impose their own country-of-origin labeling.

Opponents of mandatory COOL counter that studies do not provide evidence that consumers want such labeling. They believe COOL is a thinly disguised trade barrier intended to increase importers’ costs and to foster the unfounded perception that imports may be inherently less safe (or of lower quality) than U.S. products. Food safety problems can as likely originate in domestic supplies as in imports, as evidenced by the more than 30 recalls of U.S. meat and poultry products announced by USDA in 2006 alone, these opponents point out. Opponents argue that all food imports already must meet equivalent U.S. safety standards, which are enforced by U.S. officials at the border and overseas; scientific principles, not geography, must be the arbiter of safety. Industry implementation and record-keeping costs, estimated by USDA to be as high as $3.9 billion in the first year and $458 million per year after that, would far outweigh any economic benefits, critics add. (COOL proponents assert that these cost estimates were grossly exaggerated while some in industry claim they were too low).

Challenges at the World Trade Organization

In 2009, the Canadian government launched a challenge to mCOOL at the World Trade Organization (WTO).[4] The Canadian federal government argued before the WTO that American "country of origin" labelling rules (COOL) actually worked to the detriment of the meat industry on both sides of the border by increasing costs, lowering processing efficiency and otherwise distorting trade across the Canada-U.S. border. Mexico made similar claims.

In 2011, Canada said the WTO ruled in Canada's favor.[5] The US said the panel affirmed the right of the United States to require country of origin labeling for meat products.[6] Canada and Mexico are asking the WTO for another review and permission to impose more than $2 billion a year in retaliatory tariffs, and the governments involved will be notified confidentially of the WTO decision on June 20, which will be made public a month later.[7]

In May 2015, the WTO upheld its previous ruling that the U.S. COOL requirements discriminated against Canadian and Mexican livestock.[8] The two countries asked the WTO to authorize US$3 billion in retaliatory tariffs against U.S. imports.[8] In December 2015, the WTO determined the impact of the COOL requirements on the Canadian and Mexican economies at $1.1 billion and authorized Canada and Mexico to impose $781 million and $228 million, respectively, in retaliatory tariffs against U.S. imports.[8][9]

COO marketing

Companies are seeking to communicate the COO and to increase their customer's COO awareness with a number of different strategies:[10]

Legally regulated COO strategies:

Unregulated COO strategies:

See also

References

  1. ↑ "Associated Press". CNN News. Retrieved 2008-09-30.
  2. ↑
  3. ↑ "Found in Section 759 of US Bill 2029".
  4. ↑ "WTO to Hear Canada's Challenge to U.S. Mandatory Country-of-Origin Labelling". Foreign Affairs and International Trade Canada. November 19, 2009. Retrieved 2013-05-26.
  5. ↑ "Canada Wins World Trade Organization Case on U.S. Country-of-Origin Labelling". Foreign Affairs and International Trade Canada. November 18, 2011. Retrieved 2013-05-26.
  6. ↑ "Statement by the Office of the U.S. Trade Representative in Response to WTO Panel Decision on Country of Origin Labeling". Office of the United States Trade Representative. November 2011. Retrieved 16 May 2014.
  7. ↑ "Meat Industry Loses Attempt to Block Country-of-Origin Labeling". Food Safety News. 28 March 2014. Retrieved 16 May 2014.
  8. 1 2 3 Gee, Kelsey; Vieira, Paul (7 December 2015). "WTO Says Canada, Mexico Can Slap $1 Billion in Tariffs on U.S. Over Meat Labels". The Wall Street Journal. Retrieved 18 May 2016. (subscription required (help)). Canada can slap about $781 million in tariffs on U.S. products and Mexico can apply about $228 million, the WTO ruled on Monday. The organization in May upheld its earlier decision that the U.S. regulations, based on a 2009 law, discriminate against Canadian and Mexican livestock....The Canadian and Mexican governments had asked the WTO to authorize around $3 billion in retaliatory tariffs, but the WTO calculated the impact to the Canadian and Mexican economies using a slightly different methodology.
  9. ↑ Wingrove, John (7 December 2015). "Canada to Retaliate Against U.S. Beef Industry in Labeling Spat". Bloomberg Business. Retrieved 18 May 2016.
  10. ↑ Aichner, T. 2014. Country-of-origin marketing: A list of typical strategies with examples. Journal of Brand Management, 21(1): 81-93.

Further reading

External links

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