Parliament backs ‘Made In’ labels, riles retailing industry

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The European Parliament voted on Thursday (21 October) to approve new labelling laws that may soon have an impact on a wide range of imported products, from shoes and clothes to tools and tyres.

When the legislation is finalised, likely next year, manufacturers must specify the country where the majority of their product was originally made on the label. 

Currently, foreign manufacturers can claim a product was 'Made in the EU' when it only underwent minor assembly in the bloc. That could mislead consumers who are looking for local craftsmanship or want to support local businesses.

The new requirements could affect billions of euros' worth of goods that are imported into Europe yearly, especially from Asian countries. If consumers turn away from some foreign-made products, that could help boost European production and employment levels as local businesses step in to fill in the gap.

The new labels would be "an important way of responding to people's concerns on quality and safety," said French MEP Kader Arif, spokesman on international trade for the Socialists & Democrats group in the European Parliament.

The new rules still need backing from EU member states in the Council of Ministers, where distribution-heavy states such as Sweden and Britain are concerned about red tape and falling profits. Others, including Italy, Spain and Portugal, have long pushed for mandatory 'Made In' labels, which they hope will act as a brake on growing low-cost imports.

'Enormous' business impact

The decision could have an "enormous" impact on many companies, especially small firms and the retail industry. Complying with the rules may also be a financial burden for many small companies still reeling from the economic slowdown and tight credit markets, said Dennis de Jong, a Dutch Socialist member of Parliament.

The regulation also does not take into account products made under 'Fair Trade' practices designed to ensure such principles as the rights of children, respect for cultural identity and safe working conditions, he said.

"My argument was this was a short-term fix," he said. "In the longer term, people are not interested in the country, they are interested that the product was made properly, without child labour and with respect for the environment."

Likewise, the European Association of Fashion Retailers argued that identifying one country is misleading because the fabric for a shirt could come from Portugal, for example, but the sewing could be done in Egypt.

"We're not happy at all with the outcome of the plenary vote," said Alessandro Bedeschi, the association's secretary-general.

Catching up with EU trade partners

Wednesday's vote puts the European Union's policies more in line with other countries, including Canada, Japan and the United States, which has had a labeling policy in place since 1930.

But there is no international standard for labelling. So a product that might have to be labeled 'Made in Vietnam' under the EU law might be 'Made in China' under US law, according to the retail organisation, which wants labeling to remain voluntary.

The rules will mean that if only 25% of the products are made in the EU, manufacturers cannot claim they are EU-made, and Cristiana Muscardini, an Italian MEP and member of the European People's Party (EPP), said the rules would put EU consumers on "the same playing field as of the consumers of our major trade partners".

"’The regulation on the marking of origin intends to inform European consumers properly about the country of origin of some categories of goods, such as clothing, textiles, footwear, ceramics, goldsmith's art and ensure them the same level playing field of the consumers of our major trade partners where such legislation is in force," said Italian MEP and rapporteur Cristiana Muscardini (European People’s Party).

Renaud Batier, managing director of Cerame-Unie (The European Ceramic Industry Association), and Michele Anselme, secretary-general of EuroCoton, wrote of the vote: "The additional administrative costs for placing the mark of origin are negligible and are by far outweighed by the benefits for the EU consumer."

"Equally important, the scheme will address the growing demand from consumers for more transparency on the origin of the imported goods concerned. It is also expected to reduce the incidence of fraudulent or misleading indications of origin," they wrote.

The Socialists & Democrats group supported the vote and its spokesperson on international trade, French MEP Kader Arif, said: "Labelling of the country of origin is an important way of responding to people's concerns on quality and safety. This regulation will also help maintain small and medium manufacturers who struggle to preserve traditional and artisanal methods, by giving the chance to EU consumers to decide if they want to pay a little more for European production quality."

The European Association of Fashion Retailers was disappointed by the vote and said, "it would be much more appropriate for the EU and the member states to focus energies and resources to ensure a proper implementation and respect of the existing legislation and to enhance controls to effectively fight against fraud and illegality (e.g. counterfeiting, product safety, use of illicit sub-contractors exploiting clandestine workers for domestic productions in some member states)".

The European Commission tabled a proposal for a regulation on the indication of the country of origin of certain products imported from third countries in December 2005.

Its proposal stemmed from concerns over the mounting incidence of misleading and/or fraudulent origin marks being carried by imported products.

The regulation was backed by the European Parliament's trade committee on 29 September.

It still needs backing from EU member states in the Council of Ministers, where some countries are still opposed to labelling laws.

  • 2011: Draft regulation still needs to be approved by the Council, where some member states are still opposed to the idea of a European 'made in' law. 
  • Once finally adopted by both Parliament and Council, the new rules will be applicable in all member states starting one year after publication in the EU Official Journal.

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