A recent posting by NIST (the National Institute of Standards and Technology) has prompted this question: Are American labelling requirements now illegal under WTO rules?
NIST, which is part of the US Department of Commerce, recently issued the following statement on its website:
“The EU Metric Directive [sic] (80/181/EEC), scheduled to go into effect January 1, 2010, has been modified to allow the continuation of both supplemental (U.S. customary, inch-pound) and metric units for consumer goods sold in the EU. The rule was published on May 7, 2009 in the Official Journal of the European Union.
The Directive instructs the European Commission to produce a report to the Parliament and Council regarding the smooth functioning of the internal market and international acceptance of SI units by December 31, 2019, including proposals where appropriate.
Demonstrated progress will be important for U.S. stakeholders to achieve long-term acceptance of supplemental units [sic] in the EU. Modifying the U.S. Fair Package and Labeling Act (FPLA), which currently requires dual labeling, to permit optional metric labeling is an example where greater international marketplace acceptance of SI units can be achieved.”
[This report is slightly inaccurate in that the Directive has been in force since 1980, and in any case its proper informal title is the “Units of Measurement Directive”]
The statement is so badly written that it is difficult to work out what it means. In particular, the final paragraph , in so far as the words mean anything, appears to be gobbledegook. There is no question that supplementary “units” should “achieve long term acceptance” in the EU. The recent amendment to the Directive was simply a concession to exporters to remove a potential (alleged) business cost and/or barrier to trade – that is, the requirement for separate labelling for the EU and US markets. The only units legal for trade in the EU will continue to be metric (with the minor exception of the pint (imperial – not US) in limited circumstances in the UK and Ireland), but supplementary “indications” (not units) will be permitted on labels. The inability of NIST to get its head round this simple concept is depressing.
Perhaps I read too much into it, but why did the statement include reference to the review in 2019? Surely, NIST is not planning to lobby the EU to allow American units as primary units with no metric equivalent stated? In fact the obvious interpretation is that Directive’s intention is that the Commission should report on whether it will still be necessary to permit supplementary indications.
The statement’s final sentence is also nonsense. Amending the Fair Packaging and Labeling Act (FPLA) will not achieve “greater international marketplace acceptance of SI units”. They already are accepted internationally – except in the USA!
If NIST feel that their statement has been misinterpreted, then perhaps they can explain what they really did mean.
However, NIST is right to focus on the issue of whether the FPLA should be amended to permit metric-only labelling on goods that are regulated at the federal level. Current federal law requires both metric and US customary units on regulated goods, and so far all attempts to introduce into Congress an amendment to permit metric-only labels have been blocked as a result of lobbying by powerful US business interests such as the Food Marketing Institute (FMI). (Illogically, they seem to believe that allowing voluntary metric-only labelling would compel them to change the sizes of their packages). Further details can be read on the USMA website at http://lamar.colostate.edu/~hillger/fpla-update.html
(It should also be explained that some goods that are not regulated at the federal level may be regulated at the level of the State, and most States do in fact permit metric-only labels on these goods).
The question now arises whether the FPLA is a non-tariff barrier to trade. Such barriers, unless they can be justified on legitimate grounds (e.g. health and safety), are illegal under the rules of the World Trade Organisation (WTO), and this was one of the reasons why the European Commission agreed to support the continuation of supplementary indications on packages within the EU. Otherwise the USA might have filed a complaint against the EU. However, arguably, the boot now appears to be on the other foot.
European (and other non-US) manufacturers would naturally expect to label their goods in metric units only. However, if they want to export those goods to the USA, they will need to incur an increased business cost by adding an additional label or alternatively creating completely different packaging for the US market. Of course, they could simply standardise on a uniform dual-unit label and use this in all markets worldwide – but why should they? Since the EU’s concession to the USA was not reciprocated, its effect is that EU manufacturers who currently export or might in the future export to the USA have effectively lost the option to label their goods in metric units only. The USA has effectively imposed dual-unit labelling world-wide – a form of American imperialism.
Can anything be done to retrieve the situation? Whether a complaint to the WTO would be upheld probably depends on what view its Appellate Body would take of the argument that EU (and other) manufacturers should be free to label in metric-only and should not be compelled to dual-label simply because a single state (however powerful) refuses to use the same measurement system as the rest of the world. Arguably, if the USA wishes to engage in international trade, it should be expected to accept the international system of measurement and not impose unnecessary burdens on foreign manufacturers.
In my view the European Commission should be seriously considering such a complaint – or at least it should let it be known (diplomatically of course) that unless there is progress on amending the FPLA, a complaint might be filed. Without such an implied sanction, it is difficult to see how the US Congress might be persuaded to drop its opposition.