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“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
Other opinions below.
“The overarching problem is that price signals in the baby-formula market don’t work well to begin with. A 2010 study from the USDA’s Economic Research Service estimated that 57 to 68 percent of all baby formula sold in the U.S. was purchased through the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC)…
“[This kind of shortage] would be very strange in a free market, but it makes perfect sense when you consider that predetermined contracts with state governments are responsible for such a large segment of total purchases. The USDA is fully aware of these problems, noting in a 2015 article that ‘WIC essentially replaces price-sensitive consumers of infant formula with price-insensitive consumers.’…
“When a negative supply shock, such as the Abbott recall, happens, the normal market mechanisms that would thrust other manufacturers into overdrive fail to function as they should. Increased government involvement in the baby-formula market, while coming from the best of intentions, sets it up for shortages like the one families are currently experiencing.”
Dominic Pino, National Review
“We have here an important test case if President Biden is serious about wanting to fight scarcity and reduce consumer prices. Expecting the career Washington politician to suddenly consider economy-wide regulatory relief and broad tariff reductions to counter inflation may not be realistic. But why can’t the president just take a baby step toward open markets and plentiful supplies by removing trade barriers? His youngest constituents need help.”
James Freeman, Wall Street Journal
“[Breastfeeding] is a personal decision and not an option for many parents due to allergies, medical conditions, and other factors beyond their control. Moreover, many mothers are unable to breastfeed because America is the only developed country that has no guaranteed paid family leave. In 2018, the average guaranteed paid maternity leave benefit among the 38 OECD countries [was 51 weeks]…
“Working mothers are guaranteed breaks to pump milk. But this requires expensive equipment and there is no requirement that workers are paid while they are pumping. And even unpaid time for pumping might require confronting management. For many women in low-wage industries like retail and fast food, pumping milk is not affordable or practical.”
Judd Legum, Tesnim Zekeria, and Rebecca Crosby, Popular Information
“Sen. Mitt Romney (R-Utah) sent an urgent letter posing numerous questions to the FDA and to Agriculture Secretary Tom Vilsack, and asking them to look into the concentration of the U.S. formula market, which is dominated by a handful of major companies. Families who need formula immediately might not be comforted by the prospect of new manufacturers entering the industry years from now, or by the idea of creating more robust supply chains for ingredients and packaging. But that’s exactly the sort of redundancy the U.S. formula market needs…
“Of late, conservatives have expressed more concern about the concentration of power in Big Tech than in other parts of the economy. But formula seems a worthy target for this sort of scrutiny.”
Alyssa Rosenberg, Washington Post
