The WTO Bans Labels on Meat
The World Trade Organization is a bureaucracy that vetoes national economic policies. In theory, it is powerful. In fact, it is toothless.
Any nation can pull out of the WTO. It can set its own policies. The WTO has no army. It cannot invade. It can tell other nations to impose trade restrictions on a non-cooperating nation. But there is a powerful response by any penalized nation. It can reduce all of its tariffs and import quotas to zero. It would then have every foreign exporter salivating to get into that now free market.
There is nothing like free trade to undermine the World Trade Organization. “You want free trade? We’ll give it to you.” Of course, the WTO does not want free trade. It wants managed trade — trade managed by the WTO.
The most effective strategy in a trade war is to surrender. “We give up! Bring us your goods. Sell us your services. Destroy our power to resist by making irresistible offers.” I recommended this strategy back in 1969. Sadly, it has not been tried.
The World Trade Organization has recently struck down a bad law made in America. Congress passed a bill which President Obama signed into law. This law forced meat sellers to identify which nation the meat they sell came from.
Why was this a bad law? Because it added a regulation that most consumers do not care about.
This is not to say that consumer advocacy, free tradey groups do not care. They care very much. They claim to represent “consumers,” but these consumers apparently are not numerous enough to threaten non-compliant businesses with a boycott. If they were, businesses would comply.
How much time have you spent worrying about where McDonalds buys its meat? I have spent no time at all. I also do not worry where Subway buys its meat. I always order a six-inch vegetarian sandwich. I won’t pay a dollar extra for a few pieces of meat. But there are lots of well-paid lobbyists who thought they know better than customers do. They lobbied Congress to pass this bill.
Then the WTO vetoed it. The lobbyists are furious.
The WTO should have no legal power to veto bonehead laws passed by Congress. It’s not worth surrendering national legal sovereignty to distant foreign bureaucrats. It is better to live with a bonehead Congress. Why? Because there is an outside possibility that, in a national government bankruptcy, we can replace a bonehead Congress with a slightly less bonehead Congress. There is no possibility that we can replace bureaucrats in the WTO.
Here is a video that features an interviewer who interviews a representative of some consumer advocacy group that you and I have never heard of. The agent speaks in the name of consumers. I wonder why I had never heard of his group if he really speaks for me.
Consumers can speak for themselves. They don’t need a lobbyist to pressure Congress to add another layer of bureaucracy to tell businessmen what to do.
If consumers want grass-fed local beef, they can pay extra to buy it. If they want labels of national origin, and no one offers this, they can buy from a local beef producer. Consumers need neither Congress nor the WTO to tell them what to eat. Sadly, we have both.
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Published on March 15, 2012. The original is here.
The original law was an anti-import law. It interfered with free trade. U.S. beef producers resented Canadian and Mexican exports to the U.S.
The WTO banned the labels. Then Congress modified the law. Canada and Mexico still complained. Then the Congress repealed the law. It was a bad law. But surrendering sovereignty to the WTO is a worse policy.
In 2020, the libertarian Cato Institute published an article on this. The article took the free market view.
There were plenty of ways to structure such a labelling requirement so that it didn’t discriminate against imports. In fact, the first panel looking at the issues here found that the labelling requirement that applies to ground beef (as opposed to muscle cuts of beef) does not violate the rules.Second, depending on where you shop, you are probably well aware that labelling on beef products is common. A store like Whole Foods indicates the origin of its products, and often does so in more useful ways than the statute here required. “Product of the United States” was one of the categories under the statute, but that is pretty broad and I’m not sure how valuable it is. Whole Foods sometimes tells you the specific farm the beef comes from, which seems much more useful if you really want to know something about how the product has been made.
Let consumers decide.