Oils ain’t oils: product labelling, palm oil and the WTO

Under existing food labelling rules in Australia, palm oil can be classified generically as a ‘vegetable oil’ on labels. Due to concerns over the environmental impact of palm oil production on deforested land, and health concerns relating to the saturated fat content of palm oil, Senators Nick Xenophon and Bob Brown proposed the Food Standards Amendment (Truth in Labelling — Palm Oil) Bill 2010 (Cth) (the ‘Bill’). The Bill seeks to change current food labelling rules to require that all food products containing palm oil specifically list palm oil as an ingredient. This commentary considers whether the Bill, if enacted, would be consistent with Australia’s obligations under the Agreement on Technical Barriers to Trade (‘TBT Agreement’)1 and the General Agreement on Tariffs and Trade 1994 (‘GATT’)2 of the WTO. We begin by analysing whether the Bill is covered by the TBT Agreement and is consistent with arts 2.1 and 2.2 of that Agreement. We then turn to consider the requirements of the GATT, particularly art III:4, and whether the Bill could be saved from any inconsistency with this provision by the general exceptions in art XX by reason of its environmental and health justifications. We conclude that, if the Bill was enacted, and was then challenged in the WTO dispute settlement system, a WTO panel would probably find the Bill inconsistent with Australia’s WTO obligations