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Nutrition labelling is a trade policy issue: lessons from an analysis of specific trade concerns at the World Trade Organization

In international trade agreements, restrictions on goods or demands for labelling which differ from country to country can be ‘barriers to trade’, effectively restricting the free movement of goods. Trade organisations which manage such agreements, such as the World Trade Organisation (WTO), have mechanisms in place to ensure that environmental or public health measures are not in fact ‘disguised restrictions on international trade’ which aim to protect national industries. Formal processes exist in the WTO to query public health and environment regulations for their ‘trade restrictiveness’, their necessity and the possibility of using alternatives.

A good example is provided by interpretive front-of-pack labels on packaged food; labels which provide simplified interpretations of information on key nutrients in relation to health or on the environmental impact of production. Such measures include ‘traffic light’ labels, healthy choice logos and Daily Intake Guides. Countries might aim to improve eating practices, and thus public health, by providing consumers with additional information, yet other trading nations may perceive this as a protective barrier to trading their products and express a formal concern to the WTO.

This paper analyses the five cases in which ‘Specific Trade Concerns’ have been expressed to the WTO about national interpretative nutrition labelling regulation up until 2015: these were addressed to a number of low and middle-income countries which had recently implemented new labelling measures: Chile, Thailand, Peru, Indonesia, and Ecuador. The authors’ aim is to identify opportunities for stronger policy making for interpretive nutrition labelling.

The five case studies showed that the concerns were not about the ultimate policy aim of the different labels - to prevent obesity and non-communicable diseases - but about a range of different technical matters. The complaints were:

  • A lack of clear justification of the measures
  • They were perceived as more trade restrictive than necessary
  • Scientific evidence for effectiveness of the measure in achieving the objective was lacking
  • Potential existed for less trade restrictive alternative measures to achieve the same policy objectives
  • No consistency with international standards
  • The regulating country gave insufficient time for comment by other WTO members

Consequently, the authors argue, when food nutrition labelling measures are created in such manner as to preemptively consider potential trade concerns, this can help ensure that trade policy is coherent with nutrition action and formal disputes are avoided. The paper provides advice to regulators to avoid trade disputes in this area, suggesting three potential areas of action to consider in advance.

The paper concludes that while trade agreements can be used to stifle innovation in nutrition labelling, there is, however, significant policy space at the international level for enhancements in interpretive nutrition labelling.

 

Abstract

Interpretive nutrition labels provide simplified nutrient-specific text and/or symbols on the front of pre-packaged foods, to encourage and enable consumers to make healthier choices. This type of labelling has been proposed as part of a comprehensive policy response to the global epidemic of non-communicable diseases. However, regulation of nutrition labelling falls under the remit of not just the health sector but also trade. Specific Trade Concerns have been raised at the World Trade Organization’s Technical Barriers to Trade Committee regarding interpretive nutrition labelling initiatives in Thailand, Chile, Indonesia, Peru and Ecuador. This paper presents an analysis of the discussions of these concerns. Although nutrition labelling was identified as a legitimate policy objective, queries were raised regarding the justification of the specific labelling measures proposed, and the scientific evidence for effectiveness of such measures. Concerns were also raised regarding the consistency of the measures with international standards. Drawing on policy learning theory, we identified four lessons for public health policy makers, including: strategic framing of nutrition labelling policy objectives; pro-active policy engagement between trade and health to identify potential trade issues; identifying ways to minimize potential ‘practical’ trade concerns; and engagement with the Codex Alimentarius Commission to develop international guidance on interpretative labelling. This analysis indicates that while there is potential for trade sector concerns to stifle innovation in nutrition labelling policy, care in how interpretive nutrition labelling measures are crafted in light of trade commitments can minimize such a risk and help ensure that trade policy is coherent with nutrition action.

 

Reference

Thow, A.M., Jones, A., Hawkes, C., Ali, I. and Labonté, R., 2017. Nutrition labelling is a trade policy issue: lessons from an analysis of specific trade concerns at the World Trade Organization. Health Promotion International, p.daw109.

You can find the full paper here (paywall).

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