Country of Origin Labeling - Coursework Example

? Country of Origin Labeling Country of Origin Labeling Introduction Country of origin labeling (COOL) is a final rule on a wide variety of unprocessed foods, and it was signed in the United States on in 2002 under Title X of the Farm Security and Rural Investment Act of 2002. This requirement is also called the 2002 Farm Bill. This law makes retailers responsible for providing country of origin labeling for unprocessed food items such as beef, pork, and lamb (U.S. International Trade Commission, 2010, pp.5-8). At the same time, this law gives exemption to processed meats. On September 2008, The United States Congress expanded the provisions of the COOL law and added more food items like fresh fruits and vegetables under the jurisdiction of this law. This paper will discuss the Country of Origin Labeling law, its advantages, and disadvantages. Country of Origin Labeling (COOL) Although this rule was proposed several years before, it went into effect in the country on 30th September 2008. The Agricultural Marketing Act of 1946 was amended by ‘the 2002 and 2008 Farm Bills’ as part of providing source country information to customers (National Archives and Records Administration, 2009). The 2008 Farm Bill includes a set of provisions such as addition of new commodities and requirement for labeling products of multiple origins. This framework also requires a supplier to share country of origin and other production information with the retailer. Retail firms which are functioning under the Perishable Agricultural Marketing Act (PACA) are legally liable to comply with the provisions of the COOL. A person selling any type of perishable goods at retail comes under the jurisdiction of PACA. As per PACA requirements, retailers must be licensed when their invoiced purchase costs of perishable agricultural commodities exceed a limit of $230,000 during a calendar year (Rynn & Janowdky, LLP, 2010). According to this Act, perishable agricultural commodities include fresh fruits and vegetables. Since exporters are excluded in the definition, they do not need to adhere to COOL requirements. Similarly, other food service establishments such as restaurants, lunchrooms, bars, lounges, taverns are also exempt from this rule in addition to salad bars and delicatessens that supply fast food. In addition, processed foods- which refer to food items undergone several processing changes- like chocolate, bagged salad, mixed nuts, breading, and orange juice need to comply with COOL requirements (cited in GPO Access, 2012). However, it must be noted that this law covers some additional items such as canned roasted peanuts although they are considered as a processed food. The origin of country labeling statute clearly directs that if the covered commodity undergoes the processes like frying, boiling, roasting, broiling, steaming, curing, grilling, baking, smoked, or restructuring, the item does not need to be labeled (Third Party Written Submission of Australia, 2010). As Johnecheck (2010) points out, the COOL rule clearly states that the labeling has to be specific and accurate. According to this statute, the labeling option may include sticker, label, sign, placard, twist tie, pin tag, stamp, or band. It is allowable for the retailer to give the information on the package, holding unit, display material, or the bin placed at the end point of the sale. The country of origin information must be displayed in a conspicuous place so that customer can easily read and understand the information during the course of purchase process. The rule also specifically mentions that the country of origin information printed or handwritten should not overlay other labeling information mandated by the Federal regulation. Sometimes, retailers may use bulk containers to display a large number of products, including covered commodities from different countries. Under such circumstances, retailers are required to list all possible origins and other product information. Nowadays, the concept of e-commerce has attained great popularity and hence more and more people are switching their demand from conventional buying to online purchasing. Hence, the COOL statute demands the retailers to provide the origin of country and other information on the concerned website or at the delivery time in case of internet sales. According to this ruling, retailers should display the information regarding the country of origin at the end point of sale as long as they keep the product under their custody. If the product has been already labeled, the label itself will be sufficient enough to document the product’s country of origin and production process. Advantages of Country of Origin Labeling Although the significance of this statue is a debatable topic in international conferences, majority of legal authorities and consumer welfare forums strongly supports this requirement. In the words of Becker (2005), many of the policymakers believe that the COOL requirement would provide competitive advantages to US products over other foreign product because the US native people always like domestically produced fresh foods. Hence, policy makers argue that this labeling policy will assist customers to easily identify fresh foods of domestic origin and this situation in turn may aid the struggling US food industry. Proponents claim that the COOL rule would be an effective strategy to address the increasing health issues in the United States. According to Becker (2005), the policy supporters point out the increasing prevalence of bovine spongiform encephalopathy or mad cow disease in Canadian born cows since 2003. They strongly opine that the US people can refuse such health threatening food items if they are given the opportunity to identify the foods of foreign origin. Furthermore, the US food imports are significantly increasing nowadays and therefore customers must be given the right to know the origin of the food they are going to consume. Supporters of this law also argue that it is unfair to exempt meat from the country of origin labeling because majority of the other imported consumer products ranging from automobiles to a wide variety of other foods are required to comply with this statute. Proponents also point out that many of the foreign countries have already encouraged the practice of country of origin labeling. Many times it is observed that some foreign made or imported food items offer superior quality and more economic prices than domestically manufactured foods. In total, this law assists the consumer to choose most cost effective and health promising food items from the available food categories. Disadvantages of Country of Origin Labeling Like any other policy, this statute has also some demerits. The major argument against this labeling policy is that this requirement becomes a barrier to international trade since it notably increases importers’ operating costs. Moreover, this ruling may stimulate an indirect perception that imported food items would be harmful to health and have less quality than US products. According to opponents, no study has proven that consumers are really in need of such labeling. They also argue that the probability of food safety issues in imports is same as in the case of domestic food items. As Hallman, Cuite & Hooker (2009) point out, in order to support this claim they refer to the USDA’s more than 30 meat and poultry products recalls of 2006. The Federal regulations have already demanded the food importers to meet US safety standards and hence all imported food items are processed for quality checking. Opponents strongly say that the scientific checking systems must be the arbiter of quality and safety instead of the geographical boundaries. As per report, “industry implementation and recordkeeping costs, estimated by USDA to be as high as $3.9 billion in the first year and $4548 million per year after that, would far outweigh any economic benefits” (Tolenhoff , p.52). Finally, it is argued that the provisions of the COOL requirements do not cover red meat or any type of poultry. Comparison Although statues such as Agricultural Marketing Act of 1946 and Product Labeling Act of 1976 also require country of origin labeling, they are not comprehensive and broader like the COOL law enforced in 2008. It is clear that the COOL requirements specifically detail the food products covered by this law and every aspect of product labeling. Under the COOL statute, a supplier or retailer may be fined between $1,000 and $10,000 for each violation if the Secretary finds that he/she has not made a sincere attempt to comply with the provisions of the Act. This Act also clearly describes under what situations a retailer or supplier would be punished for the law violation. Case analysis The country of origin labeling law adversely affected nations like Canada and Mexico who are the major food and livestock exporters to the United States. Since the signing of this Bill in 2002, the Government of Canada has been raising its concerns about the impacts of this law and negotiating with the US administrative officials. The country has also approached WTO dispute settlement consultations. The Canadian government argues that this provision would add additional costs to different processing stages of Canadian foods. The diagrammatic representation of US imports data given below (USDA, Economic Research Service-Congressional Research Service, cited in Jurenas, 2010) show that the country’s cattle and hog imports from Canada have been considerably declined after the enforcement of COOL requirement. Hence, this law is greatly threatening the long term sustainability of Canadian food export sector. US Cattle imports from Canada and Mexico US hog imports from Canada Monthly hog imports from Canada by US (Source: Jurenas, 2010) Conclusion In total, the country of origin labeling has been mandated in the United States to provide customers with information regarding sources of food production. Many people believe that this law would assist the US to address the increasing health issues. Proponents also claim that this strategy would raise the sale of the US made food items as there is an increased demand for domestically made food products. At the same time, opponents argue that this policy would add to importers’ expenses and thereby cause the country to incur high establishment costs. The COOL statue is more effective than other food quality regulatory laws; and evidence from overseas countries show that it would contribute to the home country’s food industry. References Becker, G. S. (2008). Animal agriculture: 2007 farm bill issues. In K. B. Tolenhoff (Ed) . Animal Agriculture Research Progress. New York: Nova Science Publishers. Becker, G. S. (2005). BSE (“mad cow disease”): A brief overview. CRS Report for Congress, 1-6. Retrieved from http://www.policyarchive.org/handle/10207/bitstreams/4293.pdf Becker, G. S & Johnson, R. (2009). Animal agriculture: 2008 farm bill issues. Congressional Research Service, 1-32. Retrieved from http://www.nationalaglawcenter.org/assets/crs/RL33958.pdf GPO Access. (2012). Agriculture. Electronic Code of Federal Regulations. Retrieved from http://ecfr.gpoaccess.gov/cgi/t/text/text-idx?c=ecfr&sid=f0532d701d3f5f191e8c5c07f3f16a52&rgn=div5&view=text&node=7:3.1.1.1.11&idno=7 Hallman, W. K., Cuite, C. L & Hooker, N. H. (2009). Consumer responses to food recalls: 2008 national survey report. Rutgers: Food Policy Institute, 1-27, Retrieved from http://fpi.rutgers.edu/docs/news/RR-0109-018.pdf Johnecheck, W. A. (2010). Consumer Information, Marks of origin and WTO law: A case study of the United States – Certain country of origin labeling requirements dispute. Tufts University: Food Policy and Applied Nutrition Program, 1-96. Retrieved from http://nutrition.tufts.edu/documents/fpan/wp43_cool.pdf Jurenas, R. (2010). Country- of- origin labeling for foods. Congressional Research Service, 1-17. Retrieved from http://www.fas.org/sgp/crs/misc/RS22955.pdf National Archives and Records Administration. (2009). Department of agriculture: Agricultural marketing service. Federal Register, 74(10), 2658-2707. Rynn & Janowdky, LLP. (2010). Frequently asked questions: Agricultural law. Retrieved from http://www.rjlaw.com/faq.php Third Party Written Submission of Australia. (2010). United States – certain country of origin labeling, 1-29. Retrieved from http://www.dfat.gov.au/trade/negotiations/disputes/downloads/US-COOL-requirements-Australias-third-party-submission.pdf U.S. International Trade Commission. (2010). The Year in Trade 2009, Operation of the Trade Agreements Program. USA: USITC Publication. Read More