WORLD TRADE
ORGANIZATIONG/TBT/W/213
27 June 2003
(03-3446)
Committee on Technical Barriers to Trade
CONTRIBUTION TO THE THIRD TRIENNIAL REVIEW OF THE
AGREEMENT ON TECHNICAL BARRIERS TO TRADE
LABELLING
Communication from Chile
1. In recent years labelling has become an important issue in the WTO.  Some countries have
even linked the concessions that they might make in some negotiating groups with the introduction of
new rules on labelling.  At the same time, this subject has repeatedly appeared in the discussions of
the TBT Committee, not just as a theoretical subject fo r debate, but also as an apparent source of trade
disputes.
2. The discussion on labelling mainly revolves around issues that are not as complex as they
seem, and it is from this perspective that this document is intended to contribute to the Third Triennial
Review of the TBT Agreement.
I. LABELLING AS A TECHNICAL STANDARD
3. We consider labelling to be, above all, a technical standard and, in some cases, a technical
regulation which is no different from any other technical standard.  Consequently, the same principlesand disciplines in the TBT Agreement that apply to any other technical standard should also apply to
labelling.
4. The TBT Agreement provides a clear framework for the preparation, adoption and application
of technical standards and regulations.  If problems  apparently relating to labelling have arisen in
recent years, that is because the Agreement has not been properly implemented in such cases, and not
because the Agreement is unable to deal satisfactorily with such problems owing to particular features
that might distinguish labelling from other technical standards.
5. While we fully recognize that there may be a relative lack of international standards on
labelling, that is not in itself sufficient grounds for giving labelling any special treatment.
II. THE ECONOMIC LOGIC OF LABELLING
6. If we consider the economic logic behind the development of technical standards, whether
national or international in scope, we shall find that technical norms are not created in a vacuum.Assuming that they are not created for protectionist reasons, technical standards are always
formulated because there is someone, whether it be the public authorities, the private sector or
consumers, who have a specific need for them.G/TBT/W/213
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7. The need for technical standards depends on who is demanding them.  For example, the
public authorities may require technical standards so as to achieve a legitimate objective of public
policy such as the protection of health, safety or the environment, or to avoid practices that might lead
to deception or fraud.  For its part, the private sector may demand them so as, for example, to increase
its efficiency by reducing the costs involved in producing goods under different standards for differentcountries, or to create or develop markets by, for example, producing a range of products that are
compatible with one another.
8. The demand for technical standards also depends on various factors such as consumer
preferences, income level or a country's level of development, but especially on the possible harm that
may arise from the absence of a technical standard.  In other words, Chile does not have the same
demand for technical standards as a developed country, but at the same time the demand forinformation (e.g. labelling) is certainly less than the demand for safety (e.g. electrical standards).
9. It is worth pointing out that, in general terms, the consequences of being misled or deceived
by a label cannot be compared with the consequences of, for example, receiving an electric shock. If a
consumer buys a bottle of wine believing, on the basis of the label, that the wine has certain
distinctive characteristics and, after tasting it, realizes that he had been misled, his loss will be limitedsolely to the price paid for the bottle. What is more, the consumer will probably punish the producer
by not buying that wine again. However, the consequences of an electric shock are considerably more
serious.
10. In view of the above, the relative lack of international standards on labelling should come as
no surprise. In general terms, there has obviously not been any clear international demand forlabelling so far that would justify the development of such standards. While there are evidently some
countries which attach great importance to this issue, the lack of international standards on labelling
reflects the fact that there is as yet no concensus on the need to develop such standards and even less
on how they should be developed.
III. TRADE DISPUTES APPARENTLY RELATED TO LABELLING
11. At the most recent meetings of the TBT Committee some countries expressed their concern at
various measures relating to labelling. The document prepared by the Secretariat (G/TBT/W/184)
provides a good summary of the discussions. At first glance that document gives the impression that
labelling is in fact the cause of a growing number of trade disputes, but a more careful reading reveals
that this may not necessarily be the case.
12. Are the problems mentioned in that document really related to labelling? If country A
prohibits country B from using a certain expression on the label of its product X, is this a problem oflabelling or a problem relating to the TRIPS Agr eement (to mention only one possible prohibition on
importing)?
13. If country A requires certain characteristics of a product to be mentioned on a label so that
that product may enter its market, is this a problem of labelling or of import licensing and/or a
problem involving a technical regulation or a conformity assessment procedure?
14. When country B requires the rest of the world to indicate on their products that they have
been produced in accordance with a specific method or process, is this a problem of labelling or a
problem of technical regulations or conformity assessment ?
15. In our opinion, although there are obviously intrinsic costs involved in labelling, to put labels
on a product should not per se  be a problem for producers.  There is clearly a problem of labellingG/TBT/W/213
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when the label itself is required to be of a certain size or with a specific kind of lettering, or when the
information must be engraved or incised in the product instead of being simply stuck on it.
16. However, when the problem is what can or cannot be written on the label, or when the label is
supposed to contain information on compliance of the product with a particular productive process a
specific technical standard or technical regulation, this is obviously not a problem of labelling, andany trade disputes that may arise should concentrate on the source of the problem, that is to say, the
technical regulation.
IV. CONCLUSION
17. Chile is not against systems of labelling or against the provision of accurate information to
consumers. We believe that informed consumers take better decisions and that they are an important
part of any competitive market. However, ther e needs to be a balance between a compulsory
requirement to provide information and the creation of unnecessary obstacles to trade.
18. As a general rule, in view of the low risks normally associated with the need to label a
product, labelling should as far as possible be voluntary. In cases where information is necessary for
the correct use of a product and to avoid problems or risks arising from an incorrect use of the
product, such information is normally provided by th e producers since to do so is in their own interest
and therefore there is no need for the authorities to establish regulations, except when the associatedrisk is very high.
19. If consumers demand some kind of labelling which for some reason cannot be provided
voluntarily, and in view of the relative lack of relevant international standards, the basic principles
and disciplines of the TBT Agreement should be followed. In particular, it is important to avoid the
creation of unnecessary obstacles to trade. Consequently, when adopting a technical regulation it is offundamental importance to follow the procedures laid down with regard to transparency, and to
examine other options that are less restrictive to trade.
20. Finally, in the event of a trade dispute relating to labelling, an analysis should be conducted to
determine whether the dispute in question really reflects a problem of labelling or rather a bad
regulatory practice.
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