International Agriculture and Trade Outlook No. (WRS-04-02) 17 pp

January 2004

Country-of-Origin Labeling: Theory and Observation

This report examines the economic rationale behind the various claims about the effects of mandatory country-of-origin labeling, thereby identifying the most likely outcomes. Profits motivate firms to innovate and introduce thousands of new food products each year to satisfy consumers' demand. Yet, food suppliers have generally not emphasized, advertised, or labeled food with U.S. country of origin. The infrequency of "Made in USA" labels on food suggests suppliers do not believe domestic origin is an attribute that can attract much consumer interest. We find little evidence that suppliers would have difficulty supplying such labels if there were sufficient consumer interest.

Keywords: country-of-origin labeling, consumer demand, meat, fruits and vegetables, fish and shellfish, and peanuts

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