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"Metric-Only" Requirements Could Impact Transatlantic Business



U.S. and EU industry groups organize opposition



By Peter Mayberry and Jessica Franken



Published November 8, 2006
Related Searches: INDA Legal / Regulatory Automotive EDANA
Ah, the metric system. Over the years it has been the source of comedy and great consternation for the U.S. (and presumably Liberia and Burma, the only other two countries that have refused to convert measurement systems). But for U.S. business interests tracking a pending European initiative to require exclusive use of the metric system on products sold throughout the region, it is no laughing matter.
 
On October 12, a wide range of industry interests and other stakeholders attended a meeting hosted by the U.S. Department of Commerce to discuss a rapidly approaching January 1, 2010 deadline for a European Union (EU) directive that stands to substantially impact companies that sell products in both the U.S. and Europe.

In less than four years, the EU's so-called "Metric Directive" (80/181/EEC) will require all consumer products marketed in Europe to be labeled in metric units only. This, unfortunately, is in direct conflict with U.S. law requiring most consumer products to carry both metric and U.S. customary units (i.e. pounds/feet) on their labels.

Surveys project the financial impact of this directive on U.S. and European businesses will be about $250 billion every year. So, it is not surprising that business groups on both sides of the Atlantic have identified the "Metric Directive" as a top concern and have mobilized for legislative action.

Background


The root of the problem, of course, lies in the U.S. and EU's conflicting labeling standards for consumer products. Under the U.S. Fair Packaging and Labeling Act (FPLA), as amended in 1992, household consumer commodities and food, cosmetics, medical devices and other products that fall under the jurisdiction of either the Federal Trade Commission (FTC) or the Food and Drug Administration (FDA) must be labeled in both metric and U.S. customary units.

There are some exceptions to the FPLA requirements. Products distributed for industrial or institutional uses do not have to carry dual labeling. Insecticides and fungicides are also exempt from the FPLA. Other items such as automotive accessories, clothing, jewelry and household furnishing not regulated by FTC or FDA are subjected to state labeling requirements. As it currently stands, 46 states have adopted laws permitting the use of "metric-only" labeling for the products falling outside of FPLA jurisdiction.

Across the Atlantic, the European Council (EC) passed the "Metric Directive," in 1980 believing that the adoption of one system of measurement, the international system of units (SI), would eliminate internal obstacles to trade. Since some EU members—like the U.K. and Ireland—were then using a mix of metric and non-metric units on their labels, the directive included a nine-year "transition" phase during which products were permitted to carry dual-unit labels.

That deadline was extended several times in response to concerns that the conflicting U.S. and EU requirements would force companies doing transatlantic business to maintain two sets of labels for their products, as well as separate warehousing and inventory systems, costing industry, billions of dollars with no value add.  A well-accepted 1999 survey by the Transatlantic Labeling Alliance, in fact predicted the "Metric Directive" would, "adversely affect U.S.-EU trade of more than $118 billion in consumer goods and $143 billion in capital goods annually" and would impose hundred of millions of dollars in annual compliance costs. Some of these costs, the Alliance noted, would inevitably be passed down to the consumer.

In 2000, European officials agreed to extend the use of dual-unit labeling one last time, until 2010, but insisted there would be no further delays in implementation. Each of the EU Member States have adopted legislation to allow the Metric Directive to take effect when this last deadline expires.

"Metric-Only" to "Metric-Plus"


EC officials have made it clear that they will only respond to calls for changes to the directive or its implementation date from EU Member states and European industry. With this in mind, U.S. and European business interests have joined forces to influence legislation on both sides of the Atlantic. The National Association of Manufacturers (NAM) and European-American Business Council (EABC) issued a joint position paper last January calling upon the EC to make the "metric-only" directive "metric-plus" instead by permanently amending it to give producers the flexibility to use either metric-only or dual units on product labels. NAM and the EABC also asked U.S. state and federal lawmakers to approve "metric-only" options at every level of commerce and to consider amending the FPLA to include this flexibility.

Aside from macro-organizations like NAM, U.S. officials are also urging sector-specific U.S. industry associations to join forces with their European counterparts to increase the likelihood that EC officials heed their message. For our part, INDA plans to answer this call to action by coordinating a joint advocacy effort with its counterparts at EDANA and will keep our members informed of developments as they unfold. For more information about the EU's Metric-Directive, please visit www.nist.gov/metric.