Nutrition labelling as a trade policy issue

Regulatory measures such as front-of-pack nutrition labelling (FOPNL) may fall within the ambit of trade law. Trade law encompasses a range of multilateral, plurilateral, regional and bilateral trade agreements governing the rules of trade between nations in relation to goods, services and intellectual property including food products. Measures that affect the trade of food products, including nutrition labelling requirements that differ between countries, may therefore invoke obligations under trade law.

Technical Barriers to Trade (TBT)

The World Trade Organization (WTO) is the only multilateral international organization dealing with the rules of trade between nations.¹ Comprising a number of agreements, one of the most relevant agreements relating to nutritional labelling measures is the Technical Barriers to Trade (TBT) agreement. The TBT agreement aims to ensure that technical regulations, standards, testing and certification procedures do not create unnecessary obstacles to trade. A mandatory FOPNL measure may fall within the definition of a ‘technical regulation’ for the purposes of the TBT agreement.²

The TBT Agreement requires that technical regulations: i. do not discriminate against imported products or between imported products of WTO members; ii. are not more trade-restrictive than is necessary to achieve a legitimate objective such as public health; and iii. are based on relevant international standards unless those standards are ineffective or inappropriate.³

The TBT Committee is a multilateral forum where specific measures may be discussed, and the implementation of the TBT agreement's provisions is reviewed by WTO member countries prior to the initiation of a formal dispute. WTO members have used the TBT Committee to raise Specific Trade Concerns (STC) about interpretive FOPNL measures in Chile, Peru, Ecuador, Mexico, Uruguay, Bolivia, Thailand and Indonesia.⁴⁵⁶

Concerns about nutrition labelling initiatives raised in the TBT Committee have included claims that the measures are more trade-restrictive than necessary to achieve a legitimate public health objective, and that evidence on the effectiveness of the public health measure is insufficient to justify the anticipated impact on trade. WTO members have raised STCs that less trade restrictive measures, such as voluntary approaches being undertaken in countries including Australia, would achieve the same policy objective.⁴

Codex standards

There have also been claims raised that the nutrition labelling measures are not based on relevant international standards, namely standards established by the Codex Alimentarius Commission (Codex) - the central food standardising body established by the United Nations’ Food and Agriculture Organization and the World Health Organization. Codex standards are voluntary standards that facilitate international trade by establishing definitions and requirements for foods, with the overarching objective of protecting consumer health and ensuring fair trading practices in the food trade.⁷ Since 2021, Codex provides general guidance for countries on establishing FOPNL systems, which provides latitude to countries on which type of FOPNL should be implemented⁸.

The food industry has attempted to use international trade law arguments to oppose or delay country efforts to advance FOPNL policies. For example, some WTO countries raised STCs before the TBT Committee after several countries in Latin America, such as Chile, Peru, Uruguay and Mexico, introduced mandatory FOPNL for packaged foods that exceed specified thresholds for nutrients of concern (e.g., of sodium, saturated fat, sugar or calories). Concerns included that those measures created unnecessary obstacles to trade and were more trade-restrictive than necessary to fulfil its legitimate objective of attaining public health.⁵⁹ In the case of Chile, concerns were raised that Chile’s labels deviated from international standards, namely Codex standards, as the measure risked stigmatising some foods. Chile responded to the claims by stating that the nutritional labelling measure was evidence-based and designed to achieve a legitimate public health objective of addressing the growing prevalence of non-communicable diseases and childhood obesity in the country. Guidelines for FOPNL were subsequently developed at the Codex Alimentarius Commission which recognised the use of FOPNL by countries and provided broad guidance on its implementation without endorsing a particular system of FOPNL.

As reported in the New York Times, in 2018, as part of the renegotiations of the North American Free Trade Agreement (NAFTA) - a regional trade agreement (now replaced by the United States-Mexico-Canada Agreement (USMCA)) - the US reportedly wanted to include a ban on FOPNL of unhealthy foods that would prohibit labels like Chile’s black warning labels being introduced in Mexico and Canada. According to the news article, a draft US provision sought to ‘prevent any warning symbol, shape or colour that “inappropriately denotes that a hazard exists from consumption of the food or non-alcoholic beverages”’.¹⁰

Lessons on nutrition labelling for policy makers

Researchers and legal experts have identified several lessons for public health policymakers related to nutrition labelling and related policies⁴¹¹. They suggest that policymakers:

• strengthen policy processes to proactively identify potential legal and trade issues
• define robust regulatory objectives, including linking to existing laws and standards, referring to supporting evidence, and including proximal objectives that are achievable in the short term
• minimise trade restrictiveness and
• engage with Codex processes to ensure Codex standards reflect current public health evidence and allow space to advance nutrition policy.

Content for this page was reviewed and updated by Tailane Scapin at Deakin University, and reviewed by Gary Sacks, Co-Director at the Global Centre for Preventive Health and Nutrition at Deakin University and Suzanne Zhou at the McCabe Centre for Law and Cancer. For more information about the approach to content on the site please see About | Obesity Evidence Hub.