Will the European Commission challenge US labelling rules?

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.

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6 Responses to Will the European Commission challenge US labelling rules?

  1. Jeremiah says:

    I am slightly confused by this issue. Don't manufacturers have to produce different labels for different markets anyway? For example, American products destined for Canada must have both French and English on the label. The same is for Europe. Wouldn't a product sold in Germany be required to be labeled in German or sold in Greece or Italy be required to be labeled in Greek or Italian? If you have to make labels language specific, then those labels don't need to include useless supplementary units.

    What about health warnings or nutritional information that may vary from country to country? Doesn't this also destroy the argument that a company can produce a one size fits all label?

    Due to NAFTA, some American products that sell in Canada and Mexico do include Spanish and French on the labels, but they are very few. Most labels on products are English only.

    Thus there is no reason why the non-American world that can have labels in their own language can not have them in metric only.

    The statement: "There is no question that supplementary “units” should “achieve long term acceptance” in the EU." is strange. It sounds to me like there is some belief by the US that if you include USC on labels that EU citizens (or anyone else in the world) will see them and over time become use to them, then the long term effect is that they will prefer them over SI.

    It seems that if a US manufacturer produces products in rounded USC with supplementary SI in awkward numbers, the EU citizen may then perceive that USC is simpler then metric. Is this why there is such an insistence by the US to force USC on the metric world?

    Also, what determines if a unit is primary or supplementary? If an American product is labeled 1 lb 453.6 g, would this violate any EU laws? The US could insist that position does not determine which number is primary or secondary, but as long as the SI is there, the law is obeyed.

    Isn't the WTO basically a US run organization and wouldn't they more likely favour actions or policies that promote US interests? It is a great idea to push the issue through such an organization if it can be proved that the organization is not biased in favour of the country whose policies have created the issue. But why would it have to be Europe alone? Why doesn't the rest of the world get involved too? It is also in their interest.

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  2. Michael Glass says:

    In considering the response of the European Commission, the following points from DIRECTIVE 2009/3/EC http://ts.nist.gov/WeightsAndMeasures/Metric/upload/Official-Journal-European-Union-Amend-EU-Metric-Directive-7May2009.pdf

    "(5) It is appropriate that the Commission continue to strongly pursue, in the context of its third country trade relations, including the Transatlantic Economic Council, the acceptance in third country markets of products labelled only in the units of the International System of Units (SI)."

    This would appear to commit the EU to strongly pursue the acceptance of products labelled only in SI units in the United States. It follows that they would be committed to lobbying for voluntary metric only labelling.

    However, there would be other countries whose interests would be served by voluntary metric-only labelling in the US. It would certainly be in the interest of Canada, Australia, New Zealand, South Africa and any other country where English is widely used to push for voluntary metric-only labelling in this important market.

    Perhaps the Food Marketing Institute's real concern is foreign competition. If so, their opposition to voluntary metric only labelling would be an informal trade barrier that is illegal under international law.

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  3. philh says:

    To help clarify the confusion for Jeremiah, it should be pointed out that the contentious FPLA only regulates product labelling on goods imported into the US or those produced domestically for internal markets. It does not have any jurisdiction over goods exported from the US. Exported goods have to comply with whatever regulations exist in the destination country.

    It could be argued that the US, in not allowing metric-only is no different in principle from the EU not allowing USC only labelling. However, given that the SI is language independant and used world-wide (including within the US itself), USC only labelling would amount to a special concession foisted on foreign markets.

    It may well be the case that language variants nullify the cost advantage of universal SI labelling in some cases. But by putting up a selfish artificial barrier to the use of a globally recognised system of units, the opportunity to economize is removed even in those cases where language would not be an issue.

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  4. David Pearl says:

    It is so simple. Americans simply need to get on board with the other 95.5% of the people on Earth and adopt SI. I live in Salem Oregon USA. Write to your government representatives. Urge them to conform to the world measurement standard. Americans are paying a high price for their arrogance. It is so embarrassing to live in a nation that prides itself on being the best of the best, when in reality, the simplest thing becomes the most difficult thing. Go Metric already! We are WAY overdue.

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  5. RonnieC says:

    The British government has said that supplementary indications should continue to meet US labelling requirements. Hence the EU has allowed supplementary indications to be used indefinitely. The government's logic is flawed for several reasons.

    The UK labels of US products frequently contains the name and address of the importer, which would not appear on the US labels. There are spelling differences of certain words (e.g. US "color" versus UK "colour") so different labels would be needed to accommodate UK and US differences in English usage. Different labels are often needed for different markets because of local language requirements.

    The need for different labels for different markets should not be seen as a trade barrier. For example, bottles of Tabasco sauce, a US product, sold in the UK only show a metric quantity with no supplementary indication and also show the name and address of the importer.

    There are also reasons against the use of supplementary indications that relate to the differences between the imperial and 'English'/US Customary systems. British volume measurements cannot be used on product labels in the US because the US requires dual labelling in metric and US customary units, and all imperial volume measurements differ between UK and US even though the same unit names are used.

    These measurement issues would not arise if the US allowed metric-only labelling as the metric system is the same all over the world. NIST proposed a change in US law to allow metric-only labels but it has not been adopted. The fact that the EU has allowed supplementary indications to be used indefinitely has reduced incentives for the US to adopt metric-only labelling laws. Instead of appeasing the US over their refusal to officially adopt the metric system, the British government should have stood firm with the rest of the EU and insisted that the US accept metric-only product labels.

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  6. John Steele says:

    @RonnieC

    You can't argue both sides of the coin. You, yourself, say "The need for different labels for different markets should not be seen as a trade barrier." Yet, you expect "color" to be corrected to "colour" for the British market, but the US is unreasonable in demanding Customary measure in addition to metric.

    I'm not sure a common label is practical. The need to identify the importer/distributor is one difference (we have the same requirement on imports). Also US nutrition labelling is different as it is all based on defined serving sizes, not 100 mL or 100 g portions. A goal of common package sizes with labels unique to the market may be a more viable goal. Truly common labels will require more compromise by all parties.

    Passing the metric-only FPLA would be an enormous boost to metrication in the US, and I have no problem with other countries "encouraging" us to take the step. However, the argument that the present requirement is a trade barrier requires willingness to negotiate other trade barriers that are similar. I would propose we could accept "colour" on Worcestershire sauce bottles if you could accept "color" on Tabasco sauce. However, I don't know what to suggest on the nutrition label differences.

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