Label Me

Technology will make labeling battles moot.

Labeling is back in the news because of one mad cow. Actually, the Canadian Holstein seems to have been pretty well labeled. Investigators were able to use her paper trail to trace her north of the border and then confirm it by testing her DNA. Instead of slaughtering 450 calves in order to kill the mad one's progeny, they could have DNA testing to fin the calf—probably still too expensive.

In any case, Washington state's single mad cow is now propelling the usual gaggle of "consumer advocates" to push Congress to adopt new labeling requirements on our food. Two years from now the U.S. will require that labels identifying country of origin be placed on imported meats. The idea is that consumers want to have this information. Actually, some domestic meat producers conceived of labeling as a kind of non-tariff barrier, thinking that consumers might prefer to buy American instead of Argentine or Australian beef. Besides, didn't we once have labels in textiles and clothing that read "Made in the USA?" You can see how that stopped Americans from buying the cheaper clothes made in Mexico, China and Brazil.

Labeling is a major international trade issue right now. For example, under the Trade-Related Aspects of International Property Rights Agreement (TRIPS Agreement), Europeans are trying to expand the use of labels as "geographical indications" (GIS). GIS are supposed to be "indications which identify a good as originating in the territory of a Member, or a region or locality in that territory, where a given quality, reputation or other characteristic of the good is essentially attributable to its geographic origin."

For example, if the Europeans get their way, California wine makers would not be allowed to call their wines burgundy or champagne or Wisconsin cheese makers couldn't label their cheeses feta or parmesan. Only wines from the Burgundy and Champagne regions of France could be so designated; California wines would have to be labeled red and sparkling wine. Similarly only cheese from Greece and Parma in Italy could carry the feta and parmesan labels. US trade negotiators are resisting this ploy and point out that such terms in this country have long been used as generic terms to identify a type of product rather than its place of origin. The Europeans are pushing GIS as a way to create nontariff trade barriers that they hope will garner their products premium prices.

Of course, the labeling and traceability of foods made from genetically enhanced crops is a huge issue in international trade right now. And let's not forget the proliferation of organic product labels, eco-labels, fair trade labels, and more. Already activists of various sorts are agitating to make these labels mandatory.

Thinking of a consumer's right to know, one might think, why not just go ahead and label things. But labels involve more than just of the cost of printing them. Chiefly, the cost is in segregating and tracking goods, especially commodity goods like grain or fiber, through production and distribution systems that can stretch from Timbuktu to Tacoma.

However, if the consumers who want them are voluntarily willing to pay the extra costs incurred in maintaining the bureaucratic, testing and paper trails necessary to insure that what the labels say is true, let them. On the other hand, mandatory labels will raise prices for us all and make us pay to support causes in which we have no interest.

By the end of this decade most of the sturm und drang over labels will simply dissolve. Why? RFID and DNA. Cheap near-microscopic radio frequency identification (RFID) tags will be attached to nearly all products by 2010 making them easy to identify and track. The RFIDs can encode all kinds of information like date of manufacture, origin, ingredients, nutritional information, distribution channels and so forth. And RFID labeling will not be mandated; companies and consumers will adopt it voluntarily because of the advantages it offers them. Retailers are already gearing up to use them despite the concerns of some privacy advocates.

As the Washington State mad cow incident shows, DNA is the ultimate label; living things can't do without it (though the proliferation of clones might someday confuse things a bit). While RFIDs will track manufactured products, cheaper DNA identification testing will make it possible to identify and track biological goods.

RFIDs won't end the fight over geographical indications since that is essentially a trademark and advertising battle. But they will resolve many other controversies. In the future everything will be labeled and the battles then will be over what should not be labeled.