Nutrition labelling as a trade policy issue

Regulatory measures such as front-of-pack nutrition labelling 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

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 nutrition labelling 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 do not discriminate against imported products or between imported products of WTO members, and must be no more trade-restrictive than is necessary to achieve a legitimate objective such as public health.³ The TBT Agreement also states that WTO Members should use relevant international standards as the basis for technical regulations. Several provisions of the TBT Agreement and its preamble recognise regulatory space for WTO members to adopt measures necessary to achieve legitimate objectives such as public health.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 interpretative nutrition labelling measures in Chile, Peru, Ecuador, Thailand and Indonesia.⁴

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 – 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.⁵

As an example of these claims, some WTO countries raised Specific Trade Concerns before the TBT Committee after Chile introduced mandatory black octagonal nutritional warning labels for packaged food that exceed specified thresholds of sodium, saturated fat, sugar or calories. Concerns included that the measure created unnecessary obstacles to trade and was more trade-restrictive than necessary to fulfil its legitimate objective of attaining public health.⁶ Concerns were raised that Chile’s labels deviated from international standards, namely Codex standards, as the measure risked stigmatising some foods.⁷ WTO members also relied on Codex guidelines that labels should convey an understanding of quantity of nutrients contained in a package and not lead consumers to think there is quantitative knowledge of what people should eat to be healthy.⁸ 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. The measure has not been the subject of a formal dispute before the WTO.

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 – the US reportedly wanted to include a ban on “front-of-pack” labelling 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”’.⁹ Canada reportedly rejected the US proposal amid reports Canada is considering the introduction of front-of-pack labelling.¹⁰

Lessons on nutrition labelling for policy makers

Australian researchers have identified four lessons for public health policy-makers related to interpretive nutrition labelling. They suggest that policy-makers:

• frame labelling initiatives strategically to emphasise the need for the measure
• proactively identify potential trade issues
• minimise trade restrictiveness; and
• engage with Codex Alimentarius Commission processes to develop international guidance on interpretative nutrition labelling.¹⁰

A detailed briefing note outlining the Codex discussions and public health priorities can be found here.