Country of Origin Labeling is Critical to Buying American and Must be Improved

On January 15, 2013, Walmart and Sam's Club announced that they will buy an additional $50 billion in U.S. products over the next 10 years. " increasing what it already buys here - in categories like sporting goods, apparel basics, storage products, games, and paper products, and by helping to onshore U.S. production in high potential areas like textiles, furniture and higher-end appliances."


The news release stated, "A popular misconception about Walmart is where the majority of the products on its shelves are sourced. According to data from its suppliers, items that are made here, sourced here, or grown here account for about two-thirds of what the company spends to buy products at Walmart U.S."


Since 11 months has passed since Walmart's announcement, I wanted to see if the company was living up the claims of their press release. So I visited two Walmart stores in San Diego to see if I could find products with "Made in USA" labels. I spent a couple of hours going through various departments. In the clothing departments for men, women, boys, girls, and babies, I only found one "Made in USA" label on a team logo shirt made by Intex in the sports team department. The majority of clothing in all departments had "Made in China" labels, but there were also labels for clothing made in Bangladesh, Cambodia, El Salvador, Honduras, Jordan, Nicaragua, Pakistan, and Vietnam.


When I browsed the small appliance and furniture departments, I found only "Made in China" products. I was especially disturbed to see only "Made in China" labels for everything in the baby department: car seats, cribs, infant seats, playpens, strollers, swings, etc.


Since Walmart pledged to buy more "Made in USA" textiles, I made a point to check the labels of all the products in the Bedding department. I found sheets made in China, India, and Pakistan, but all of the comforters, blankets, bedding sets, pillows, towels, bath rugs, and throw pillows were made in China. It was interesting to find two brands of foam mattress pads (Intex and Mainstay) made in America that were cheaper than the brands made in China.


I browsed the sporting goods department carefully and was pleased to find Exxel sleeping bags made in America. I wrote about this company in the second edition of my book as an example of a company that "reshored" manufacturing; that is, returned manufacturing to America from offshore. "In 2007, 60 percent of Exxel's sleeping bags were made in Shanghai, while Haleyville [Alabama] produced the rest. By 2009, only a third came from China, and by 2010, Haleyville accounted for 90 percent. 'Labor is China's advantage and our weakest link,' Kazazian said. 'But they can't compete with me on my just-in-time production cycle.'"

I did find one model of Coleman coolers (a blow-molded plastic model) "Made in USA," but all other models were made in China. All of the weights, exercise balls, golf clubs, tents, air mattresses, and sports balls were made in China.


Regarding paper goods, you can find "Made in USA" cards in the gift card section, but they are outnumbered by a 3:1 ratio by "Made in China" cards.


I didn't have time to check labels in the grocery department, but am sure that I would have found the same labeling information I am accustomed to seeing as I noticed that they carry the same brands that I regularly buy at my local grocery store.


The problem with food labeling is that Country of Origin (COOL) Labeling rules defined by the U. S. Department of Agriculture (USDA) leave some loopholes that mean consumers are not getting all the information they need to make informed buying decisions.

For example, seafood has been covered since 2005, and raw seafood requires a label, but if it is cooked or smoked, no label is required. Since 2009, beef, poultry, lamb, goat, some nuts (peanuts, pecans and macadamias), fresh and some frozen fruits and vegetables, and ginseng have to be labeled with their country of origin. However, this requirement applies to retailers (grocery stores), but is not required at restaurants or specialty markets (like fish markets, butcher shops or roadside stands).


The USDA rules for COOL exempt "processed" versions of the foods, and unfortunately, USDA defines the word "processed" in the broadest way they could, so that the maximum amount of food is exempted from labeling. The rules now exempt things that are:

- cooked, roasted, smoked or cured

- combined with one other ingredient

This means that all of the frozen meals that you warm up in your microwave have no Country of Origin labels for the ingredients of the meal. The packages just provide "Distributed by" information. The rule that adding one ingredient exempts products from labeling means that lots of frozen vegetables (think peas and carrots) and salad mixes don't have to be labeled.


Most nuts sold in grocery stores are roasted, so they aren't labeled. Meat that is cooked, roasted, smoked or cured doesn't require COOL labeling, so a lot of product in the pork section of the meat case is exempt because it is smoked or cured.


An example of labels that are misleading is the "Product of Canada" labeling on Gorton's gilled Tilapia packages. Since tilapia is a warm water fish, my husband recently inquired as to where their tilapia is raised. The email reply from Gorton's Customer Service said: "All of our tilapia is produced (finished and packaged) in facilities located in either the U.S. or in Canada. All of our coatings, glazes, breading, and flavors are produced in the US and Canada. Our tilapia is aquacultured (farm-raised) fish raised in freshwater ponds and lakes, primarily in China and Indonesia. All of our tilapia is from  Best Aquaculture Practices (BAP) or  Aquaculture Stewardship Council (ASC) certified facilities. Gorton's goes beyond FDA standards to ensure that our tilapia is safe and of the highest quality. We work with only a few, carefully selected tilapia growers who share our dedication to producing only high quality, safe products. In addition, we inspect every lot of tilapia in our own raw material inspection and safety testing facility. Regardless of where our seafood is caught and processed, Gorton's uses strict, rigorous quality control processes to ensure that we provide you with the safest, most wholesome and delicious seafood products on the market." The good news about Gorton's fish products is that the labeling on their grilled salmon states "Made with 100% wild-caught salmon."


Another example of a misleading labeling is the new label on some of the Starkist tuna products as part of their recently launched its "Made in America" campaign to celebrate its 50th anniversary in American Samoa... The new American flagged themed labels are on 12-ounce cans of "chunk light" tuna processed in American Samoa - an American territory, so technically it's made in America.


However, according to a U.S. General Accounting Office report, "...more than three-quarters of cannery employees were foreign workers from neighboring Samoa, an independent country." The workers are far paid less than the U.S. minimum because Congress passed legislation that delayed for Samoa the minimum wage increases that went into effect for the rest of the country. "The minimum wage in American Samoa's canning industry is set at $4.76 per hour and will not increase until at least 2015."


In addition, it's nearly impossible to verify the issue of where the fish is caught and if the fish were caught by U.S. flagged vessels. An article in  Undercurrent News states, "While it may seem important to know whether the majority of the fish is caught - in US waters or outside of them - it is not, as far as the US government is concerned. ' As long as a US-flagged vessel catches the fish, the US government considers it to be US fish, ยด said Peter Flournoy, a lawyer for commercial marine harvesters. He added, 'This includes fish caught outside of US waters.'"


Besides ensuring food safety, one of the goals for knowing the Country of Origin for products is to promote the creation of jobs for Americans. The current loopholes for labeling of products such as Starkist's chunk light tuna are certainly not contributing to achieving this goal.


I'm sure few Americans know that Starkist is now a U. S. subsidiary of the Korea-based tuna giant  Dongwon Industries, which means that when American consumers buy Starkist tuna, they are buying a product of a Korean company selling fish caught in international waters, packaged in American Samoa by foreign workers making less than the minimum wage.


We need to make Country of Origin (COOL) Labeling mandatory for all processed food, including frozen meals, vegetables, as well as canned food such as tuna. We could start by requiring that all ingredients representing 25 percent or more of the product be identified by country of origin on the label, including where fish are being farm raised.


Michele Nash-Hoff is President of ElectroFab Sales and author of Can American Manufacturing be Saved?  Why we should and how we can.