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Draft NAFTA provision targets front-of-package warning labels

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A New York Times report suggesting the Trump administration is using NAFTA to curb front-of-package (FOP) labeling efforts has generated widespread attention and has galvanized public health advocates, some of whom have slammed the effort as a back-door tactic to prioritize trade over public health.

 

Questions about the news report trickled into a Wednesday (March 21) hearing of the U.S. House Ways and Means Committee, where U.S. Trade Representative Robert Lighthizer confirmed his office has concerns about package labeling as negotiations continue on the North American Free Trade Agreement (NAFTA).

“The idea of putting limits on the ability of countries to put warning labels or symbols on products is something we are concerned about," Lighthizer said at the hearing, though he stopped short of commenting on specifics outlined in the Times report. Lighthizer said the administration does not want countries to use label statements to “create a protectionist environment.”

Lighthizer’s comments came in response to questions from Rep. Lloyd Doggett (D-Texas), who asked Lighthizer about the Times report. 

After the meeting, Doggett tweeted about his motivations.

“Today, I questioned U.S. Trade Rep Robert Lighthizer in a Ways & Means hearing on the public health impacts of current NAFTA negotiations,” he said. “We must not let private interests, like Big Tobacco, Big Pharma & the Obesity Lobby subvert public health through such agreements.”

The March 20 Times report said a draft provision for NAFTA, backed by USTR and food industry, would impede any of the three countries involved in the agreement from mandating the use of front-of-package (FOP) warning labels on foods and drinks. The NAFTA provision seeks to target the potential use of “any warning symbol, shape or color" that "inappropriately denotes that a hazard exists from consumption of the food or nonalcoholic beverages."

The proposal reflects the interests of large food and beverage industry groups, and specifically of the Grocery Manufacturers Association (GMA), which sits on the advisory board for the trade talks and has been fighting against FOP warning labels being mandated for sugary drinks and packaged foods,. the Times reported.

GMA, which has developed its own voluntary FOP labeling initiative, known as Facts Up Front, opposes mandatory FOP warning labels, particularly when they are only focused on nutrients to avoid.   

Both Mexico and Canada are currently weighing proposals for such labels that could be affected by such a provision, even though Canada’s effort is much further ahead.

Additionally, a provision like that could also affect the United States. FDA in the past has expressed some interest in adopting some form of FOP labeling and in 2011 the Institute of Medicine recommended “that the Food and Drug Administration develop, test, and implement a single, standard FOP symbol system to appear on all food and beverage products, in place of other systems already in use.”

But FDA has not acted on that recommendation. At the time when FDA began planning the changes surrounding the updated Nutrition Facts labels, agency officials indicated that once the new Nutrition Facts label is in place they would go back and consider FOP options.  

FOP labels have been gaining popularity in recent years, as governments across the globe have tried to find solution to the growing problem of obesity. Though different systems of FOP warning labels have emerged in different parts of the world, in the Americas health advocates have hailed the efforts of the Chilean government, which in 2016 began enforcing the use of octagon-shaped symbols resembling stop signs to highlight packaged foods that are high in calories, saturated fat, refined sugars, or sodium bear stop-sign-shaped warning notices.

Taking a cue from Chile, Canadian government officials have started their own process to establish mandatory warning labels for foods that include a high concentration of three nutrients to avoid – salt, sugar and fat. While the effort in Canada is still in its initial stages, Canadian officials have been moving forward and in February unveiled one of four potential FOP label designs, one of which will be chosen to indicate whether certain food products may contain too much of any of the three unhealthy ingredients.

Canada has been working on parameters for the new mandate since October 2016 and in February called on the public to help narrow down the options. The mandate is expected to go into effect by 2022.

“The world is experiencing an epidemic of obesity, and public health agencies in these countries shouldn’t be handcuffed or undercut by trade officials." - Peter Lurie, Center for Science in the Public Interest president

However, that FOP labeling effort may be blocked if a provision like the one described by the Times ends up in NAFTA, note advocates, some of whom took to Twitter on Wednesday to voice their concerns.

Jan Hux, president of Diabetes Canada, said in a tweet that her group has been encouraged by Health Canada`s efforts to set in place FOP labeling for foods high in sugar, salt or saturated fat.

“It would be a shame to see that progress undermined in the NAFTA negotiations,” Hux said.

Canadian Sen. Nancy Green Raine from British Columbia also said news about the U.S. NAFTA labeling proposal was “very concerning.”

American advocates also voiced concerns about the proposed provision and the impact it could have on public health.

The Center for Science in the Public Interest (CSPI), an advocacy group that has led efforts to establish FOP nutrition labeling in the United States and in 2006 petitioned FDA to create such a labeling system, expressed deep concern about the impact of labeling provision in NAFTA on public health.

“Not surprisingly, several other countries, notably Chile, are far ahead of the United States,” said Peter Lurie, CSPI’s president in a statement on Tuesday. Lurie said it is “very distressing to learn that President Trump’s trade negotiators are using NAFTA as an excuse to pour cold water on front-of-package labeling.”

“This is just another case of the administration putting trade in the front seat and public health in the back,” Lurie said. “As the New York Times has convincingly demonstrated, the United States Trade Representative’s hostility to front-of-package labeling has already had a chilling effect throughout the Americas.”

According to Lurie, more countries, including the United States, Canada, and Mexico, should follow the example of Chile.

“The world is experiencing an epidemic of obesity, and public health agencies in these countries shouldn’t be handcuffed or undercut by trade officials,” Lurie said. “This is not an ‘America First’ policy; it is an ‘Industry First’ policy, conducted at the expense of the health of consumers in the U.S. and abroad.”

The Center for Economic and Policy Research (CEPR), which seeks to promote "democratic debate on the most important economic and social issues that affect people's lives," also criticized the use of NAFTA as vehicle to advance non-trade-related issues in a March 20 post. The center called the case "a beautiful example of an industry working to use a trade agreement to subvert the democratic process to advance its interests in a trade deal."

Dean Baker, a senior economist and co-founder of CEPR, said over the past decade it has been increasingly common for non-trade related issues to be folded into trade agreements. A similar issue came up in discussions of the Trans-Pacific Partnership (TPP) when the United States unsuccessfully tried to ban individual countries’ restrictions on tobacco advertising, Baker  told IEG Policy on Wednesday.

“There have been a lot of issues like that,” he said. “This has been a feature of trade agreements in recent years. It ends up being about regulatory systems.”

Under the current administration, it has been difficult to predict how the ongoing NAFTA talks would play out, whether the provision would make it into a final agreement and even whether a final agreement will be reached, Baker suggested. “With Trump, it’s almost impossible to know where he is going to go with it,” Baker said.

Bruce Silverglade, a principal attorney at OFW Law, on the other hand, noted that in the past Chile was able to defend its warning labels, when back in 2013, several World Trade Organization (WTO) members – including Canada, Mexico, the European Union and the United States - expressed concerns that the country’s FOP labeling scheme would create unnecessary barriers to international trade.

Chile at the time defended the new labeling scheme as a tool to reduce obesity.

“The fact that Chile was able to defend its labeling scheme at the WTO portends problems for attacking such requirements under NAFTA, as the two trade agreements contain similar exceptions for national regulations that protect health,” Silverglade noted in an email to IEG Policy.

Canada oversimplifies information

Cary Frye, senior vice president for regulatory affairs at the International Dairy Food Association (IDFA), which opposes Canada’s plans for FOP labels, said she could not comment on the NAFTA negotiations due to confidentiality issues. However, she did say the group stands firmly against any effort to enforce mandatory and oversimplified FOP labels. 

“IDFA has had a position consistently over many years, even when the U.S. was considering front-of-pack labeling. And IDFA’s position is that systems for nutrition labeling should be voluntary and they need to present nutrients to encourage,” she said.

IDFA opposes Canada’s FOP labeling plans, because the effort would be mandatory and because the new mandate is only focused on nutrients to avoid.

“Dairy foods have a nutrient-rich package,” Frye said. “And if they are stigmatized by a symbol that is focusing on what to avoid, it could really not present the whole information," she said. "The full Nutrition Facts panel does provide all of that information for consumers.”

Canada’s proposed FOP would oversimplify that information, and that is why IDFA opposes the effort, Frye said.

The group instead backs the Facts Up Front label, which was developed by GMA in collaboration with the Food Marketing Institute. The voluntary label includes four basic icons (for calories, saturated fat, sodium and sugars), which represent nutrients that should be limited.

Unlike Canada’s proposed FOP labels, Facts Up Front allows food producers to include up to two “nutrients to encourage,” such as potassium, fiber, protein, vitamin A, vitamin C, vitamin D, calcium and iron. The voluntary initiative has already been adopted by 120 companies in the U.S.

However, the interest in FOP warning labels is growing and now even Codex plans to start discussions to establish general guidelines for FOP nutrition labels.

The Codex Committee on Food Labeling noted in October such discussion would be necessary to ensure consistency and guidance on the increasing use of FOP warning labels.

“That usually takes a number of years,” Frye noted. “Codex is just beginning the work. And it’s important to realize that all the countries that make up Codex would need to agree on guidance for FOP labeling. There will be countries like Chile, the U.S., Canada, Europe, all having to decide. It’s going to be very interesting if that work proceeds, because all of those countries have different schemes.”

 

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