Country-Of-Origin Labeling: Opportunities for USDA and Industry to Implement Challenging Aspects of the New Law

As we recommended, USDA's Agricultural Marketing Service (AMS) recognized and addressed how the country-of-origin labeling (COOL) law and the Tariff Act differ in their definitions of a US product in its 2003 proposed rule for country-of-origin labeling (COOL), which covers beef, lamb, pork, fish, perishable commodities, and peanuts, and in the 2004 interim final rule for fish and shellfish (the only products implemented, to date). The proposed rule uses language from our report to help explain the Tariff Act requirements and definition of "country-of-origin;" it contrasts that with the COOL requirements for labeling US and imported food. The interim final rule identifies criteria for fish and shellfish products to bear a "United States country of origin" label. The interim final rule clarified the records on different types of fish and shellfish that would provide retailers with credible information on which to base U.S. origin declarations. The June 2007 compliance guide includes a list of the various labeling scenarios for fish and shellfish, which require method of production (e.g., wild vs. farm-raised) labeling as well as country-of-origin.

AMS has taken several measures to obtain input from industry to identify options or alternatives for, among other things, developing and maintaining record-keeping systems and options for labeling covered foods, as we recommended. The 2003 proposed rule for country-of-origin labeling (COOL)included a request for further comments from industry on all aspects of the rule's recordkeeping requirements and alternatives for labeling covered foods. AMS has issued Q&A's and met with industry stakeholders on the COOL requirements. In the interim final rule for fish and shellfish, which became effective in April 2005, AMS decided not to prescribe specific requirements on label placement or size in order "to provide industry with as much flexibility as possible." Finally, the COOL compliance guide, issued June 2007, includes many examples of records and activities that industry may use to document origin. COOL implementation for all covered foods, which has been delayed twice, is now scheduled for September 2008.

USDA has recognized, but never emphasized, the Tariff act requirement that the meat industry maintain country-of-origin identity on imported meat after it has been cut or ground in the United States. Although USDA occasionally acknowledged that the meat industry might have additional responsibilities under the Tariff act for labeling imported meat, USDA never adopted Customs' (now Customs and Border Protection) position, which was upheld and reinforced through a number of court rulings. Instead, USDA's position is that imported meat is "deemed" to be part of the US meat supply once it has been cut or ground in the United States. The purpose of our recommendation was to ensure that meat packers and processors understood their responsibilities under the Tariff requirements, with regard to maintaining the identity of imported meat. USDA is now planning to implement COOL for beef, lamb, and pork in September 2008. Under the COOL law, meat must be labeled with the country where the source animal was born, raised, and slaughtered, which will satisfy the Tariff act and make USDA's position moot. AMS's October 2003 proposed rule, which was reopened for comments in June 2007, describes several scenarios that could apply to labeling meat with the source animal information when COOL is implemented. When AMS implemented COOL for fish and shellfish in 2005, it included the law's unique and detailed origin identification requirements. We believe that USDA's COOL regulations, when implemented, will satisfy the intent of this recommendation.

AMS has taken steps that should result in more accurate estimates of the paperwork burden on the affected industries for developing record-keeping systems and maintaining records. USDA has requested and received comments on costs by and within industries and analyzed data compile by others on this cost burden for implementing and maintaining COOL. It also has the actual implementation experience of COOL for 2 years in the fish and shellfish industry and, in November 2006, requested actual industry economic impact data in preparation of issuing the final rule. Finally, in June 2007 AMS reopened comments on the proposed rule implementing COOL for the other covered foods and requested specific comments, data, and other relevant information on whether aspects of the interim fish and shellfish rule would apply to mandatory COOL for these foods. AMS's efforts should result in more accurate estimates, thereby satisfying the intent of our recommendation.