May 13, 2022

Infant Formula

“U.S. President Joe Biden met on Thursday with executives from infant formula manufacturers and retailers including Target, Walmart and Nestle's Gerber, pressing them to do everything possible to get families access amid a nationwide shortage.” Reuters

Many on all sides criticize trade restrictions on infant formula:

“It is not illegal to import formulas into the United States, but any formula imported must be from a manufacturer that is FDA-registered, which entails meeting their strict rules for products and labels. Despite what media or some American doctors say, European formulas are not unsafe, and are preferred by many American moms

“Some perceive European brands to be higher quality than American formulas, although medical experts disagree on whether this is true. The European equivalent of the FDA does not allow any amount of trace pesticides to be present in their milk, so the foundation of the formula is coming from cows producing a higher quality of milk… The other main difference is the level of iron required by the FDA, which again, doctors and experts disagree on. A simplified explanation of the argument comes down to Americans perceiving Europeans as putting too little iron in their formula, while the Europeans think Americans put too much.”
Madeline Osburn, The Federalist

“One study found that many European formulas meet the FDA nutritional guidelines—and, in some ways, might even be better than American formula, because the European Union bans certain sugars, such as corn syrup, and requires formulas to have a higher share of lactose. Some parents who don’t care about the FDA’s imprimatur try to circumvent regulations by ordering formula from Europe through third-party vendors. But U.S. customs agents have been known to seize shipments at the border…

“U.S. policy also restricts the importation of formula that does meet FDA requirements. At high volumes, the tax on formula imports can exceed 17 percent. And under President Donald Trump, the U.S. entered into a new North American trade agreement that actively discourages formula imports from our largest trading partner, Canada… The Biden administration is focused on expanding domestic manufacturing of formula to meet families’ needs. But the bigger problem is our trade policy.”
Derek Thompson, The Atlantic

“Absurdly, provisions were added to the United States‐​Mexico‐​Canada Agreement (USMCA) to restrict imports of formula from Canada, supposedly because China was investing in a baby food plant in Ontario, and this new production might eventually enter the U.S. market…

“Making matters even worse, infant formula is subject to onerous U.S. regulatory (‘non‐​tariff’) barriers. For example, the FDA requires specific ingredients, labeling requirements, and mandates retailers wait at least 90 days before marketing a new infant formula. Therefore, if U.S. retailers wanted to source more formula from established trading partners like Mexico or Canada, the needs of parents cannot be quickly met because of these wait times… Congress may not be able to do much for the current crisis, but it should act now and consider how to liberalize trade in baby formula.”
Gabriella Beaumont‐​Smith, Cato Institute

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