Washington Insider -Wednesday

Reducing the Mystery of Food Labels

Here's a quick monitor of Washington farm and trade policy issues from DTN's well-placed observer.

Indonesia Appeals WTO Ruling on Agricultural Product Trade Restrictions

An appeal was launched by Indonesia challenging a World Trade Organization (WTO) dispute panel decision, which found the nation's trade restrictions on various agricultural products violate international trade obligations.

The U.S. and New Zealand jointly filed the dispute, and the WTO panel sided with them in all 18 claims brought against Indonesia. The decision to appeal will delay a final ruling by at least three months. If the WTO upholds the initial ruling, it could help increase U.S. exports of agricultural products to Indonesia by more than $200 million per year.

Indonesia's import licensing rules impose timing mandates, minimum price restrictions and quantitative restrictions, and set high delivery fulfillment requirements to ensure import licenses are not suspended or revoked, the U.S. and New Zealand alleged. U.S. agricultural exports affected by Indonesia's restrictions include apples, grapes, oranges, potatoes, onions, flowers, juices, cattle, beef and poultry.

A three-member WTO appellate body panel will now investigate the case and work to issue a final report before the end of May. The WTO dispute settlement understanding requires appellate panels to issue their rulings in 90 days, but a series of delays and a shortage of panelists in the WTO's appellate body system could delay a decision beyond May 2017.


Sen. Manchin Links USTR Nominee Support to Coal Miner Benefits

Support by Sen. Joe Manchin, D-W.Va., for President Donald Trump's nominee for U.S. trade representative, Robert Lighthizer, is tied passage of the Miners Pensions Act -- which would shore up a pension fund for retired coal miners -- Manchin told Bloomberg BNA.

"I think on miners' pensions we've been promised and promised and extended and extended," Manchin said. "This is the time to finish it, and I'm going to use the opportunity I have."

Other Democratic lawmakers cited reasons they remain undecided on Lighthizer's nomination. Senate Finance Committee Ranking Member Ron Wyden, D-Ore., told Bloomberg BNA "there are some issues here that have to be tackled given the matter of him having represented Brazil previously." He declined to comment on the use of the Miners Pension Act as a bargaining chip.

Lighthizer's 1985 representation of Brazil on behalf of the law firm Skadden, Arps, Slate Meagher & Flom, required him to register as a foreign agent. The Lobbying Registration Act of 1995 stipulates that registered foreign agents cannot serve as USTR, although there is the precedent of a waiver being passed by Congress in 1997 for former USTR Charlene Barshefsky, who had represented Mexico.

Prospects for the miners bill are uncertain. Senate Finance Committee Chairman Orrin Hatch, R-Utah, told Bloomberg BNA he did not think that the pension bill would move, citing its "tremendous cost." He questioned the wisdom of Democrats withholding votes for a waiver of Lobbying Registration Act requirements for Lighthizer, saying Democrats do not like other possible nominees.

"I think he's going to be fine," Hatch said of the Lighthizer nomination. "We've just got to get the Democrats to agree to a waiver and right now they're holding him hostage," to approval of the Miners Pension Act.

Washington Insider: Reducing the Mystery of Food Labels

Last year, the food industry went through a bitter fight about labels for GMO foods, and USDA still is on the pan to come up with an acceptable approach, so that fight likely will reignite later on. However, now the Washington Post is taking on the question of what "sell by" labels mean, and asserts that "the majority of Americans have no clear idea about why the labels exist, or what they mean." It says that after 40 years of letting us guess, the grocery industry has now moved to "clear up the confusion," but that may not be as easy as the Post says.

The Food Marketing Institute and the Grocery Manufacturers Association, the two largest trade groups for the grocery industry, announced last week that they've adopted standardized, voluntary regulations to "clear up what product date labels mean." Where manufacturers now use any of 10 separate label phrases, ranging from "expires on" to "better if used by," they'll now be encouraged to use only two: "Use By" and "Best if Used By."

So, to the industry, the meaning is clear: "the former is a safety designation, meant to indicate when perishable foods are no longer good." And, "Best if Used By" is a quality descriptor, a subjective guess of when the product should be consumed for "peak flavor," whatever that may mean.

That's what most "use-by" dates indicate now, the Post says —although many consumers believe they signal whether a product is "okay" to eat. In fact, it's "totally fine" to eat a product even well after its so-called expiration date, the Post opines, without defining what it means by "totally fine."

These dates typically indicate either a message to the grocery store, or a subjective suggestion about quality, often little more than a guess, with the methods used left to manufacturers. Still, when consumers see a date labeled "use by" (or, not labeled at all) they often assume that it's a food-safety claim, regulated by some objective standard, the Post asserts.

Both USDA and a coalition of environmental groups have been urging the industry to clear this up. In addition to costing consumers in the form of prematurely tossed groceries, the waste represents a significant use of landfill space and source of greenhouse gas emissions.

"I think it's huge. It's just an enormous step," said Emily Broad-Leib, the director of Harvard's Food Law and Policy Clinic. "It's still a first step — but it's very significant," since many people interpret date labels as a warning. As a result, "one industry survey found, 91 percent of consumers have mistakenly thrown away past-date food," when the label only signals the manufacturer's guess at its peak quality.

Shoppers shouldn't expect to see the new labels on their next shopping trip, however. While FMI and GMA are urging manufacturers and retailers to make it now, they have until July 2018. Even then, the standards are voluntary, so there's no guarantee that they'll be adopted by every single company although Walmart and others have already signaled their enthusiasm. And both FMI and GMA are expecting to see widespread adoption, especially since the standards were written by representatives from large food companies.

In addition, the Post says the voluntary standards are also seen as "a way to influence, or preempt, pending federal regulation since there has been growing interest in a federal standard for label dates, to both align the patchwork of state rules and guarantee corporate compliance." In mid-December, the USDA also published nonbinding guidance that encouraged manufacturers to switch to the "Best if Used By" phrasing.

This all delights Broad-Leib, who made similar policy recommendations in a 2013 report with the Natural Resources Defense Council. According to NRDC, Americans throw $218 billion worth of food away each year. The anti-food-waste coalition ReFED estimates that 398,000 tons, or $1.8 billion, could be saved through standardized date labels.

Of course, that is just a drop in the bucket: To make a real dent in America's food waste problem, Broad-Leib said, more will have to be done. The Food Law and Policy Clinic is arguing for several federal interventions, including policy changes that make it easier for companies and farms to donate food and incentives to encourage them to do so.

Broad-Leib would also like to see more USDA money and local composting and anaerobic facilities, as well as education campaigns for consumers. After all, Broad-Leib points out, if Americans don't understand food waste the new labels won't help.

So, it will be important to see how the new labels affect consumer behavior. Certainly, the current labels seem to have little credibility, so the contemplated change should help. However, it seems unreasonable that it will go far to cut food waste—especially since that does not seem to be a widespread goal of food consumers, in spite of the hopes of some advocate groups, Washington Insider believes.

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