Order Code 97-508 ENR
Updated October 11, 2002
CRS Report for Congress
Received through the CRS Web
Country-of-Origin Labeling for Foods
Geoffrey S. Becker
Specialist in Agricultural Policy
Resources, Science, and Industry Division
Summary
Federal law requires most imports, including many food items, to bear labels
informing the “ultimate purchaser” of their country of origin. Meats, produce, and
several other raw agricultural products generally were exempt. A new omnibus farm
law (P.L. 107-171) signed by President Bush on May 13, 2002, contains a requirement
that many retail establishments provide, starting on September 30, 2004, country-of-
origin information on fresh fruits and vegetables, red meats, seafood, and peanuts. The
program is voluntary until then. USDA on October 8, 2002, issued guidelines for the
voluntary labeling program.
Background
Tariff Act Provisions. Under § 304 of the Tariff Act of 1930 as amended (19
U.S.C. 1304), every imported item must be conspicuously and indelibly marked in English
to indicate to the “ultimate purchaser” its country of origin. The U.S. Customs Service,
which administers and enforces this requirement, generally defines the “ultimate
purchaser” as the last U.S. person who will receive the article in the form in which it was
imported. So, if articles arrive at the U.S. border in retail-ready packages—including food
products, e.g., a can of Danish ham, a slab of Dutch cheese, or a box of English
candy—each must carry such a mark. However, if the article is destined for a U.S.
processor or manufacturer where it will undergo “substantial transformation” (as
determined by Customs), then that processor or manufacturer is considered the ultimate
purchaser.
The law authorizes a series of exceptions to the labeling requirements, such as
articles that are incapable of being marked or where the cost would be “economically
prohibitive.” One important set of exceptions has been the “J List,” so named for
§1304(a)(3)(J) of the statute, which empowered the Secretary of the Treasury (where
Customs is located) to exempt classes of items that were “imported in substantial
quantities during the five-year period immediately preceding January 1, 1937, and were
not required during such period to be marked to indicate their origin.”
Congressional Research Service ˜ The Library of Congress

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Among the items the Secretary placed on the J List were the following agricultural
products: eggs; cigars and cigarettes; feathers; flowers; raw hides; unfinished leather;
livestock; fur skins; maple sugar; and “natural products, such as vegetables, fruits, nuts,
berries, and live or dead animals, fish and birds; all the foregoing which are in their natural
state or not advanced in any manner further than is necessary for their safe transportation.”
(See 19 C.F.R. 134.33.) The J List has not changed substantially since it was developed
in the 1930's, according to Customs officials.
Although J List items themselves, including the agricultural products such as fruits
and vegetables, have been exempt from the labeling requirements, §304 of the 1930 Act
has required that their “immediate containers” have country-of-origin labels. For example,
when Mexican tomatoes, or Chilean grapes, are sold loosely from a bin at the supermarket,
country-of-origin labeling has not been required. However, if those tomatoes or grapes
are wrapped in cellophane or otherwise packaged, the label is required.
Meat and Poultry Inspection Provisions. The Food Safety and
Inspection Service (FSIS) of the U.S. Department of Agriculture (USDA) is responsible
for ensuring the safety, wholesomeness, and proper labeling of all meat and poultry
products for human consumption, including imports, under the Federal Meat Inspection
Act as amended (21 U.S.C. 601 et seq.) and the Poultry Products Inspection Act as
amended (21 U.S.C. 451 et seq.). Regulations issued under these laws have required that
the country of origin appear in English on the immediate containers of all meat and poultry
products entering the United States (9 C.F.R. 327.14 and 9 C.F.R. 381.205, respectively).
Only plants in countries certified by USDA to have inspection systems equivalent to those
of the United States are eligible to export products to the United States.
All individual, retail-ready packages of imported meat products (for example, canned
hams or packages of salami) have had to carry such labeling. Imported bulk products,
such as carcasses, carcass parts, or large containers of meat or poultry parts destined for
U.S. plants for further processing also have had to bear country-of-origin marks.
However, once these non-retail items entered the country, USDA has considered
them (under the federal meat inspection law, see 21 U.S.C. 620(a)) be domestic products.
When they are further processed in a domestic, USDA-inspected, meat or poultry
establishment—which has been considered the ultimate purchaser for purposes of country-
of-origin labeling—USDA no longer has required such labeling on either the new product
or its container. USDA has considered even minimal processing, such as cutting a larger
piece of meat into smaller pieces, enough of a transformation so that country markings are
no longer necessary. For example, once a U.S. establishment grinds boneless foreign beef
into hamburger and/or mixes it with domestic product, processes it into sausage or
lunchmeat, or uses it in a soup or stew, neither that establishment nor the retailer has been
required to label the finished product to indicate that it contains imported meat.
Although country-of-origin labeling has not been required by USDA after an import
leaves the U.S. processing plant, the Department (which must preapprove all meat labels)
has had the discretion to permit labels to cite the country of origin, if the processor
requested it. This has included labels citing the United States as the country of origin.
Meat and poultry product imports must comply not only with the meat and poultry
inspection laws and rules, but also with the Tariff Act labeling regulations. Because

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Customs generally requires that imports undergo more extensive changes (i.e., “substantial
transformation”) than required by USDA to avoid the need for labeling, there has been a
potential for conflict between the two requirements, Administration officials acknowledge.
Congressional Action
106th Congress. In the 106th Congress, a number of bills aimed at expanding
country labeling requirements for meats and other agricultural products were introduced,
and both the House and Senate Agriculture Committees held hearings on the issue.
However, no mandatory legislation was enacted. Instead, language was included in the
conference report to the FY2000 USDA appropriation (H.R. 1906; P.L. 106-78) directing
the Secretary of Agriculture to issue regulations to determine “which cattle and fresh beef
products are ‘Products of the U.S.A.’ This will facilitate the development of voluntary,
value-added promotion programs...”
In September 2000, several trade associations joined in petitioning USDA for
regulations establishing a new voluntary certification program for U.S.-produced beef.
The rulemaking process, started by FSIS in 2001, could be superseded by requirements of
the new 2002 farm law (see below).
107th Congress. A series of separate bills were introduced into the 107th Congress
to impose more prescriptive country-of-origin requirements on a variety of food products.
These included: H.R. 1121, for muscle cuts and ground products of beef, lamb, and pork
(but not poultry); H.R. 1605, for perishable agricultural commodities (i.e., fresh and fresh
frozen fruits and vegetables); H.R. 2439, for farm-raised fish; S. 144, for peanuts and
peanut products; H.R. 3329 and S. 1664, both for raw agricultural ginseng; and S. 280 and
Title III of S. 20, both for beef, lamb, pork, and perishable agricultural commodities.
Before passing its omnibus farm bill (H.R. 2646) in October 2001, the House voted
for a floor amendment requiring retail-level country-of-origin labeling for fresh produce,
based on H.R. 1605. The omnibus farm bill (S. 1731) reported by the Senate Agriculture
Committee in November 2001 contained more extensive labeling language, covering not
only fresh produce but also red meats, peanuts, and farm-raised fish. Prior to final Senate
passage in February 2002, the labeling provision was altered to include wild fish and
shellfish.1
Final Law. After conferees resolved differences in the House and Senate-passed
measures, President Bush signed the new omnibus farm law on May 13, 2002 (P.L. 107-
171, the Farm Security and Rural Investment Act of 2002). Title X, §10816, significantly
expands current requirements for notifying consumers of the country of origin of specified
agricultural products, by amending the Agricultural Marketing Act of 1946. Specifically,
the new program:
1 The Senate version included a provision prohibiting the use of USDA quality grade labels on
imported carcasses, meats, or meat food products. Currently, both domestic and imported meats
and meat products are eligible to receive USDA quality grades as a fee-based service. The
prohibition was deleted in the House-Senate conference on H.R. 2646.

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! Covers ground and muscle cuts of beef, lamb and pork, farm-raised and
wild fish and shellfish, peanuts, and “perishable agricultural
commodities,” i.e., fresh and fresh frozen fruits and vegetables;
! Exempts these products if they are ingredients of processed foods;
! Requires retailers (i.e., supermarkets and other food stores) to inform
consumers of these products’ country of origin “by means of a label,
stamp, mark, placard, or other clear and visible sign on the covered
commodity or on the package, display, holding unit, or bin containing the
commodity at the final point of sale to consumers;”
! Exempts “food service establishments,” such as restaurants, cafeterias,
bars, and similar facilities that prepare and sell foods to the public;
! Requires USDA to issue, by September 30, 2002, voluntary guidelines for
labeling the above commodities, with mandatory labeling to begin on
September 30, 2004;
! Defines requirements for products that denote the United States as the
country of origin. For example, U.S.-labeled beef, lamb, and pork have
to be from animals “exclusively born, raised, and slaughtered in the
United States;”
! Requires that country of origin notices distinguish between wild and
farm-raised fish;
! Provides guidance regarding record keeping, certification procedures and
enforcement by USDA.
Implementation
USDA is now implementing the new law. The Department’s Agricultural Marketing
Service (AMS) has the lead role in this task. On October 8, 2002, it issued guidelines for
the voluntary phase of the program. These guidelines, which also were published as a
notice in the October 11 Federal Register, provide more detail on such questions as what
specific products are covered, how exempted “processed products” are being defined, how
products of “mixed origin” should be labeled, store recordkeeping expectations, and so
forth.
The experience of those retailers who choose to undertake the voluntary program will
help AMS as it begins development of the mandatory program, the agency stated. The
process for developing mandatory rules will begin in April 2003, it added.
Selected Issues
Farm Prices. One impetus for new country-of-origin labeling has been a concern
about low farm prices. Some believe that country-of-origin labeling requirements will
provide U.S.-raised products with a competitive advantage over foreign products because,
they argue, U.S. consumers, if offered a clearer choice, would choose fresh foods of
domestic origin. A congressionally mandated USDA study for beef and lamb found no
“direct or empirical evidence” that U.S. meats would gain a large or long-term price
advantage from new country labeling rules.2 A separate report by USDA’s Economic
2 Mandatory Country of Origin Labeling of Imported Fresh Muscle Cuts of Beef and Lamb,
(continued...)

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Research Service (ERS) concluded that if a U.S. label were economically advantageous,
it already would be used more widely on a voluntary basis. The report offered a number
of possible reasons why this has not occurred: consumers might not care where their food
originates; they actually might prefer imported versions of the product; and/or they might
not be willing to pay for any increased costs of such labeling.3 (Also see “Consumer
Choice and Food Safety,” below.)
Trade. Supporters of the new law allege that it is unfair to exempt fruits, vegetables,
and meats from some country labeling requirements when almost all other imported
consumer products, from automobiles to most other foods, must comply with them.
Furthermore, they note that many foreign countries already impose their own country-of-
origin labeling, at retail and/or import sites, for various perishable agricultural
commodities, which USDA documented in a 1998 survey of foreign requirements.4
Critics counter that country-of-origin labeling is deliberately intended to increase
costs for importers and to foster the unfounded perception that foreign products are
inherently less safe (or of lower quality) than U.S. products. The new law will undermine
continuing U.S. efforts to break down other countries’ trade barriers and to expand
international markets for U.S. products, critics contend. They add that several countries
view the new requirement as discriminatory to imports and an unjustified obstacle to trade,
and that they are likely to challenge the provision as a violation of existing U.S. trade
obligations under the World Trade Organization (WTO) and the North American Free
Trade Agreement (NAFTA).
Consumer Choice and Food Safety. Proponents of the new program have long
argued that U.S. consumers have a right to know the origin of their food, particularly
during a period when food imports are increasing, and will continue to increase under both
existing and future trade agreements. Such information is particularly important to
consumers whenever specific health and safety problems arise that may be linked to
imported foods, proponents add. They cite as examples the 1997 hepatitis outbreak linked
to strawberries grown in Mexico, and concerns about the potential safety of some foreign
beef due to outbreaks of bovine spongiform encephalopathy (BSE, or “mad cow
disease”).5
Critics of the new law argue that such labeling does not increase public health
protection by telling consumers which foods are safer than others: all food imports already
2 (...continued)
January 2000. Further, the National Cattlemen’s Beef Association (NCBA), in its April-May
2002 National Cattlemen magazine, argued that approximately 70% of imported beef may never
be labeled under the new law. Such imports are used mainly in food service and processed foods,
which are exempted by the law, NCBA observed.
3 Kuchler, Fred, “Country-of-Origin,” from the ERS report Economics of Food Labeling (AER-
793), January 2001.
4 USDA, Foreign Agricultural Service, 1998 Foreign Country of Origin Labeling Survey,
February 4, 1998.
5 USDA prohibits the importation of cattle and beef from any country with BSE, and no BSE
cases have been found in the United States.

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must meet equivalent U.S. food safety standards, which are enforced vigorously by U.S.
officials at the border and overseas. In fact, they note, several serious outbreaks of food
borne illness in recent years have been linked to contaminants in perishable agricultural
commodities produced in the United States, including the bacteria e. coli 0157:H7 and
salmonella. Scientific principles, not geography, must be the arbiter of safety, they add.
A congressionally mandated General Accounting Office (GAO) report on produce
concluded that new labeling requirements were favored in surveys by most consumers –
although freshness, nutrition, handling and storage, and preparation tips were ranked
higher. However, labeling would be of limited value in responding to produce-related
illnesses due to the time lag between outbreaks and their cause.6
Compliance Costs. Backers contend that the costs for industry, including
retailers, to comply with country-of-origin labeling requirements are minimal. For
example, the Florida Department of Agriculture has estimated the annual cost of its
mandatory produce labeling law to be less than $250,000 for the entire industry, in the
country’s fourth-largest state. Compliance can be achieved, according to proponents,
simply by placing signs near produce bins or with price information in stores, or displaying
the items in their shipping cartons.
Critics point out that the average produce department alone carries more than 200
items annually, which change continuously due to perishability and availability of
supplies. Retailers and their suppliers will have to constantly update their signs, imposing
new labor, paperwork, and materials costs—which ultimately will result in higher food
prices for consumers, according to the Food Marketing Institute, a supermarket trade
association. Government oversight costs (although unknown at this time) also will be
high, opponents believe.
The GAO produce labeling study found that the cost to government and the private
sector of implementing and enforcing new labeling requirements could be high, although
it would depend upon a number of unknown factors such as how much current labeling
practices would have to be changed. The USDA study of beef and lamb labeling
concluded that the costs of segregating and protecting the identity of imports “is unknown,
but could be significant.” Other potential costs include those for the labels themselves,
from $500,000 to as much as $8 million depending upon the extent of the requirements;
for government verification; and for market disruption (both also dependent upon the type
of program implemented).
6 Fresh Produce: Potential Consequences of Country-of-Origin Labeling (GAO/RCED-99-112).
Also see the GAO report: Beef and Lamb: Implications of Labeling by Country (GAO/RCED-00-
44).