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97-508: Country-of-Origin Labeling for Foods:
Current Law and Proposed Changes
Geoffrey S. Becker
Specialist in Agricultural Policy
Resources, Science, and Industry Division
Updated December 1, 2000
Federal law requires most imports, including many food items, to bear labels
informing the "ultimate purchaser" of their country of origin. Various bills
were introduced into the 106th Congress to impose expanded country-of-origin
labeling requirements on meats and on several other agricultural products. Such
proposals have attracted attention for a number of reasons. One is that they are
viewed (by some advocates) as a way to help U.S. producers dealing with low farm
prices. Also, some perceive that food products from certain countries might pose
greater risks than those from the United States. Proponents of the bills contend
that additional country labeling requirements would enable consumers to know the
source of retail food offerings and include that knowledge in selecting their
purchases. Opponents counter that country-of-origin labeling bears no relation
to food safety and would not raise U.S. commodity prices. They argue that it
would impose excessive and costly regulatory burdens on retailers and others in
the marketing system and on consumers, be difficult to enforce, and--by imposing
new non-tariff trade barriers--undermine ongoing U.S. efforts to reduce other
countries' trade barriers and expand international markets for U.S. products.
This report will be updated as events warrant.
Current Country-of-Origin Labeling
Tariff Act Provisions
Under section 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. The U.S. Customs
Service, which administers and enforces this requirement, generally defines the
"ultimate purchaser" as the last U.S. person who will receive the article in the
form in which it was imported. So, if articles arrive at the U.S. border in
retail-ready packages--including food products, e.g., a can of Danish ham, a
slab of Dutch cheese, or a box of English candy--each must carry such a mark.
However, if the article is destined for a U.S. processor or manufacturer where
it will undergo "substantial transformation" (as determined by Customs), then
that processor or manufacturer is considered the ultimate purchaser.
The law authorizes a series of exceptions to the labeling requirements, such
as articles that are incapable of being marked or where the cost would be
"economically prohibitive." One important set of exceptions is the "J List," so
named for section 1304(a)(3)(J) of the statute, which empowered the Secretary of
the Treasury (where Customs is located) 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."
Among the items the Secretary placed on the J List were the following
agricultural products: eggs; cigars and cigarettes; feathers; flowers; raw
hides; unfinished leather; livestock; fur skins; maple sugar; and "natural
products, such as vegetables, fruits, nuts, berries, and live or dead animals,
fish and birds; all the foregoing which are in their natural state or not
advanced in any manner further than is necessary for their safe transportation."
(See 19 C.F.R. 134.33.) The J List has not changed substantially since it was
developed in the 1930's, according to Customs officials.
Although J List items themselves, including the agricultural products such as
fruits and vegetables, are exempt from the labeling requirements, section 304 of
the 1930 Act requires that their "immediate containers" have country-of-origin
labels. For example, if Mexican tomatoes, or Chilean grapes, are sold loosely
from a bin at the supermarket, country-of-origin labeling is not required.
However, if those tomatoes or grapes are wrapped in cellophane or otherwise
packaged, the label is required.
Meat and Poultry Inspection Program Provisions
The U.S. Department of Agriculture's (USDA's) Food Safety and Inspection
Service (FSIS) is responsible for ensuring the safety, wholesomeness, and proper
labeling of all meat and poultry products for human consumption, including
imports, under the Federal Meat Inspection Act as amended (21 U.S.C. 601 et
seq.) and the Poultry Products Inspection Act as amended (21 U.S.C. 451
et seq.). Regulations issued under these laws require that the country
of origin appear in English on the immediate containers of all meat and poultry
products entering the United States (9 C.F.R. 327.14 and 9 C.F.R. 381.205,
respectively). Only plants in countries certified by USDA to have inspection
systems equivalent to those of the United States are eligible to export products
to the United States.
Such labeling must appear on all individual, retail-ready packages of
imported meat products (for example, canned hams or packages of salami).
Imported bulk products, such as carcasses, carcass parts, or large containers of
meat or poultry parts destined for U.S. plants for further processing also must
bear country-of-origin marks.
However, once these non-retail items enter the country, the meat and poultry
inspection laws consider them to be domestic products. When they are further
processed in a domestic, USDA-inspected meat or poultry establishment--which is
considered the ultimate purchaser for purposes of country-of-origin
labeling--USDA no longer requires such labeling on either the new product or its
container. USDA considers even minimal processing, such as cutting a larger
piece of meat into smaller pieces, enough of a transformation so that country
markings are no longer necessary. For example, after a U.S. establishment grinds
boneless foreign beef into hamburger and/or mixes it with domestic product,
processes it into sausage or lunchmeat, or uses it in a soup or stew, neither
that establishment nor the retailer is required to label the finished product to
indicate that it contains imported meat.
Although country-of-origin labeling is not required by USDA after an
import leaves the U.S. processing plant, the Department (which must
preapprove all meat labels) has the discretion to
permit labels to cite the country of origin, if the processor requests
it. This includes labels citing the United States as the country of origin.
Meat and poultry product imports must comply not only with the meat and
poultry inspection laws and rules, but also with the Tariff Act labeling
regulations. Because Customs generally requires that imports undergo more
extensive changes (i.e., "substantial transformation") than required by USDA to
avoid the need for labeling, there is a potential for conflict between the two
requirements, Administration officials acknowledge. Several Customs officials
said that if their "substantial transformation" test were applied more
rigorously to meat and poultry products, it is likely that a piece of foreign
meat that simply was cut or ground into hamburger still would have to bear a
country-of-origin label. Customs notes that it requires such labels on other
processed and/or repackaged food products that contain imported agricultural
commodities. However, the agency rarely has challenged USDA-inspected products,
according to Administration officials.
In the 106th Congress, a number of country labeling bills were
introduced, and both the House and Senate Agriculture Committees held hearings
on the issue. However, no legislation was enacted.
Provisions to impose additional country labeling requirements for meats and
produce were included in a wide-ranging Democrat farm relief amendment (S.Amdt.
1514) to the FY2000 USDA appropriations bill (H.R. 1906),
but the amendment was defeated by the Senate on August 4, 1999. However,
language was added to the conference report on H.R. 1906 (H.Rept.
106-354) directing the Secretary of Agriculture to "promulgate regulations
defining which cattle and fresh beef products are 'Products of the U.S.A.' This
will facilitate the development of voluntary, value-added promotion programs..."
On September 8, 2000, the National Cattlemen's Beef Association, the American
Farm Bureau Federation, the Food Marketing Institute, the National Meat
Association, and the American Meat Institute petitioned USDA for regulations
establishing a voluntary certification program for U.S.-produced beef. However,
as of early December 2000, USDA had not yet acted on either the legislative
directive or the industry petition.
Meat Labeling Bills
Bills introduced into the 106th Congress that would impose various
new country-of-origin labeling requirements on meat and meat products (but not
The Imported Meat Labeling Act of 1999 (H.R. 222),
introduced January 6, 1999, by Representative Chenoweth, which would require
meat food products--both imported and those prepared in the United States using
foreign meat--to be labeled to identify the country where the animal was raised
before slaughter. Products (including retail products) that lack such
information would be considered "misbranded" under the Meat Inspection Act.
The Country-of-Origin Meat Labeling Act of 1999 (H.R. 1144),
introduced March 17, 1999, by Representative Chenoweth, which is a more
prescriptive version of the measure she introduced in January. It would spell
out distinctions between "domestic" and "imported" livestock and meat, set forth
specific requirements for label appearance and placement, and require packers
and processors to ensure that the country-of-origin label--whether imported or
domestic--is maintained through the marketing chain to the "ultimate purchaser,"
among other things.
The Meat Labeling Act of 1999 (S. 242) by
Senator Johnson, and Section 7 of the Agricultural Safety Net and Market
Competitiveness Act of 1999 (S. 19) by Senator
Daschle, both introduced January 19, 1999, which would impose somewhat similar
requirements, and cover muscle cuts, ground, and/or processed products from
beef, lamb, pork. The labeling provision in the unsuccessful Senate Democrat
farm relief amendment (see above) was modeled on these bills, and included $8
million for implementation.
A bill (S.
251) introduced January 19, 1999, by Senator Burns, which would require
retail-level country-of-origin labeling on beef and lamb but not pork. The Burns
bill also authorizes USDA to permit firms to affix an all-U.S. label to ground
beef that is made entirely from domestic beef. The Burns bill parallels, but is
somewhat less detailed than, the amendment passed in 1998 by the Senate.
In addition, S.
19, S. 241
by Senator Johnson, and H.R. 1698 by
Representative Rick Hill, would not permit imported products to carry a USDA
quality grade seal. (As of early December 2000, the Administration had not yet
acted on industry proposals that it use its regulatory authority to restrict
USDA grades on imported beef, veal, and/or lamb.)
Other Product Labeling Bills
Representative Bono introduced, on March 17, 1999, the Produce Consumers'
Right-to-Know Act (H.R. 1145),
which would require retailers (except for food service establishments) to inform
consumers of the country of origin of all domestic and imported produce (i.e.,
fresh fruits and vegetables), including loose items. Retailers could do so "by
means of a label, stamp, mark, placard, or other clear and visible sign on the
imported perishable agricultural commodity or on the package, display, holding
unit, or bin containing the commodity at the final point of sale to consumers."
Retailers failing to comply would be subject to monetary penalties. Senator
Graham introduced a similar produce labeling measure (S. 860) on April
22, 1999. Other mandatory labeling bills included the Peanut Labeling Act of
3263), introduced November 9, 1999, by Representative Bishop, and the
Ginseng Truth in Labeling Act of 2000 (S. 3005),
introduced September 6, 2000, by Senator Feingold.
Arguments for Expanded Labeling Requirements
One impetus for these bills is the concern about recent low farm prices.
(1) Some believe that country-of-origin labeling requirements would
provide U.S.-raised products with a competitive advantage over foreign products
because, they argue, U.S. consumers, if offered a clearer choice, would choose
fresh foods of domestic origin (an assertion that others challenge). Proponents
of these bills have long argued that U.S. consumers have a right to know the
origin of their food, particularly during a period when food imports are
increasing, and will continue to increase in the wake of trade agreements like
the North American Free Trade Agreement (NAFTA) and the World Trading
Organization (WTO) accords. Such information is particularly important to
consumers whenever specific health and safety problems arise that may be linked
to imported foods, proponents add. They cite the 1997 hepatitis outbreak linked
to strawberries grown in Mexico, and concerns about the potential safety of some
European beef due to an outbreak (mainly in Great Britain) of bovine spongiform
encephalopathy (BSE, or "mad cow disease"). (2)
Backers contend that the costs for industry, including retailers, to comply
with country-of-origin labeling requirements are minimal. For example, the
Florida Department of Agriculture has estimated the annual cost of its mandatory
produce labeling law to be less than $250,000 for the entire industry, in the
country's fourth-largest state. Compliance can be achieved, according to
proponents, simply by placing signs near produce bins or with price information
in stores, or displaying the items in their shipping cartons.
They also allege that it is unfair to exempt fruits, vegetables, and meats
from some country labeling requirements when almost all other imported consumer
products, from automobiles to most other foods, must comply with them,
proponents add. Furthermore, they note that numerous foreign countries already
impose their own country-of-origin labeling, at retail and/or import sites, for
various perishable agricultural commodities, which USDA has documented in a 1998
survey of foreign requirements.
Arguments Against Expanded Labeling Requirements
Opponents of the proposals view them as new, thinly-disguised, protectionist
trade barriers deliberately intended to increase costs for importers and foster
the unfounded perception that foreign products are inherently less safe (or of
lower quality) than U.S. products. They argue that such labeling does not
increase public health protection by telling consumers which foods are safer
than others: all food imports already must meet equivalent U.S. food safety
standards, which are enforced vigorously by U.S. officials at the border and
overseas. In fact, they note, several serious outbreaks of food borne illness in
recent years have been linked to contaminants in perishable agricultural
commodities produced in the United States, including the bacteria
e. coli 0157:H7 and salmonella. Sound science must be the
arbiter of safety, not geography, they add.
The proposed bills undermine continuing U.S. efforts to break down other
countries' trade barriers and to expand international markets for U.S. products,
opponents contend. Some have expressed reservations about some proposals
because, by singling out imports, they might be in violation of WTO trade rules
mandating that imported and domestic products be treated equitably. Also, other
countries might retaliate by requiring that more U.S. products bear origin
labels and/or whether a product is produced by methods that, while proven to be
safe scientifically, might raise unreasonable fears among potential foreign
consumers, they contend.
Critics also argue that industry compliance and government implementation
costs would be high. They point out, for example, that the average produce
department carries more than 200 items annually, which change continuously due
to perishability and availability of supplies. Retailers and their suppliers
would have to constantly update their signs, imposing new labor, paperwork, and
materials costs--which inevitably would result in higher food prices for
consumers, according to the Food Marketing Institute, a supermarket trade
association. Government oversight would be costly--in the millions of
dollars--if compliance were monitored down to the retail level, where as many as
several hundred thousand local sites might come under regulation, opponents
GAO and USDA Reports
A congressionally mandated General Accounting Office (GAO) report on produce
found that the cost to government and the private sector of implementing and
enforcing new produce labeling requirements could be costly, although it would
depend upon a number of unknown factors such as how much current labeling
practices would have to be changed. GAO also concluded that new labeling
requirements: were favored in surveys by most consumers -- although freshness,
nutrition, handling and storage, and preparation tips were ranked higher; might
be viewed by other countries as a trade barrier; and be of limited value in
responding to produce-related illnesses due to the time lag between outbreaks
and their cause. (3)
A congressionally mandated USDA study for beef and lamb concluded that the
costs of segregating and protecting the identity of imports "is unknown, but
could be significant." Other potential costs include those for the labels
themselves, from $500,000 to as much as $8 million depending upon the extent of
the requirements; for government verification; and for market disruption (both
also dependent upon the type of program required). The USDA report found no
"direct or empirical evidence" that U.S. meats would gain a large or long-term
price advantage from new country labeling rules, despite new government and
industry costs to implement and enforce them. The USDA report also cautions
against potentially adverse trade impacts, depending on the program imposed.
1. (back)See CRS
Issue Brief IB10043, Farm
Economic Relief: Issues and Options for Congress.
prohibits the importation of cattle and beef from any country with BSE, and no
BSE cases have been found in the United States.
Produce: Potential Consequences of Country-of-Origin Labeling
Country of Origin Labeling of Imported Fresh Muscle Cuts of Beef
and Lamb, January 2000. http://www.fsis.usda.gov/oa/congress/cool.htm
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