Sticky Labels

Biotech labeling schemes are trade barriers in disguise.

Geneva, Switzerland—Labels can kill. Some 14 million people in Zimbabwe, Zambia, and Malawi are facing imminent starvation, but their governments are reluctant to give them food aid because the European Union wants to put special labels on products with ingredients from genetically enhanced crops. The E.U. has banned the importation of modern biotech foods until it can devise a labeling scheme for them. Not surprisingly, African leaders and E.U. consumers both interpret such labels as warnings that biotech foods are unsafe.

Labels can also impoverish. Shipments of handmade curios from northern Zululand in South Africa were sent back from Germany recently because the cardboard boxes containing them did not have the recycled paper content required by Germany's eco-labeling laws. No company in Africa manufactures boxes that meet German ecological standards, and handicraft makers cannot afford to import such boxes from Germany to remote areas of Zululand. Thus Germans are deprived of Zulu handicrafts, and poor Zulus are denied access to a lucrative market.

These examples of the harm that labeling can cause were cited at a recent conference on labeling and trade organized by the International Policy Network. As tariff barriers continue to fall around the world under the guidance of the World Trade Organization (WTO), protectionists are turning to mandatory labeling schemes as a way of erecting nontariff trade barriers. These schemes are proliferating rapidly and "are having serious effects on international trade," said Doaa Abdel Motaal, the WTO's Trade and Environment secretary, pointing to a recent WTO analysis.

The Netherlands, for example, has tried to require that all imported timber come from "sustainably managed forests." A Belgian "social label" plan would require that all imports be "produced in a socially sustainable manner," in compliance with International Labor Organization standards.

The most notorious labeling proposal is the E.U.'s plan to require identification of foods containing ingredients from genetically enhanced crops. This requirement is defended based on "the consumer's right to know," and it sets a new precedent in international trade treaties, which have never mandated labels merely to satisfy consumer curiosity. Government-required labels generally aim to alert consumers to health and safety concerns. Labels showing information on nutrition or allergens have always been based on objective, verifiable scientific evidence.

Companies also voluntarily label their products when they believe consumers want to know about some aspect of the manufacturing process, as with kosher or halal foods, "cruelty-free" products, and organic foods. Such voluntary process labeling alerts consumers who want this kind of information without imposing a burden on those of us who don't.

Now the E.U. is trying to establish a global mandatory process labeling scheme with regard to foods that are made using modern plant biotechnology. As with kosher, halal, cruelty-free, and organic products, the labeling of biotech foods has nothing to do with health or safety. One scientific panel after another—including experts appointed by the U.S. National Academy of Sciences, the British Royal Society, the Indian Academy of Sciences, and the Third World Academy of Sciences—has concluded that current biotech crops are safe. So have the American Medical Association, the Food and Agriculture Organization, and the World Health Organization. For the last eight years 280 million Americans have been happily eating unlabeled foods made from more than 50 varieties of genetically enhanced crops. Nobody has gotten so much as a sniffle from eating these products.

Although the E.U. claims its labels are not intended as warnings, they inevitably would feed ungrounded fears about the safety of biotech foods. "Even as we speak," an E.U. official said at a recent debate about biotech labeling, "the E.U. Agriculture Commission is assuring a delegation from Zambia that biotech foods are safe for them to eat." If so, I asked him, why isn't the E.U. Agriculture Commission also reassuring misinformed and frightened consumers in Europe that biotech foods are safe?

Voluntary labeling can give consumers all the information they want. Next week the U.S. Department of Agriculture will formally issue more than 500 pages of regulations defining what qualifies as "organic" food. Among other things, the definition requires that organic foods not be produced using genetically modified crops. Consumers who want to avoid biotech products need only look for the "organic" label.

There is no reason why conventional growers who believe they can sell more by avoiding genetically enhanced crops should not label their products accordingly, so long as they do not imply any health claims. In the United States, the Food and Drug Administration has begun to solicit public comments on ways to label foods that are not genetically enhanced without implying that they are superior to biotech foods. The European Union and other countries could easily adopt this approach as well.

Labeling is not free. It would force farmers, grain companies, and food manufacturers to segregate biotech crops from conventional crops. Such segregation would require a great deal of duplication in infrastructure, including separate grain silos, rail cars, ships, and production lines at factories and mills. It has been estimated that constructing the parallel infrastructure to comply with these regulations could cost as much as $4 billion in the U.S. In a study for the University of Guelph in Canada, KPMG Consulting estimated that a labeling mandate would add 35 percent to 41 percent to the prices of commodity grain, and raise the prices of processed foods by 9 percent to 10 percent.

Any testing regime for biotech crops would be enormously expensive. Most processed foods are made from many ingredients, any one of which could come from genetically enhanced crops, and each crop could be enhanced using scores of genes. That could mean that each food would have to be subjected to hundreds of tests before it could be labeled as not containing biotech ingredients.

A regulatory system based on scientific risk assessment is essential to international trade. Jettisoning scientific risk assessment will open the entire trading system to arbitrary interruptions. Capricious labeling requirements will proliferate. Such labels are unjustifiably stigmatizing and costly, and offer no consumer health or safety benefits.

At the International Policy Network conference, Victor Bradley, from the Canadian Department of Foreign Affairs and Trade, flatly declared: "I have not run across any process labeling requirements [such as eco-labels or biotech labels] that had anything to do with consumers. They all have to do with establishing trade barriers."