United States - Certain Country of Origin Labelling (COOL) Requirements - Recourse to article 21.5 of the DSU by Canada and Mexico - AB-2014-10 - Reports of the Appellate Body

United States – CERTAIN COUNTRY OF
ORIGIN LABELLING (COOL) REQUIREMENTS

Recourse to Article 21.5 of the DSU by Canada and Mexico

AB-2014-10

Reports of the Appellate Body

Table of Contents

 

1            Introduction.. 11

2            Arguments OF THE PARTICIPANTS AND THIRD PARTICIPANTS. 16

2.1        Claims of error by the United States – Appellant. 16

2.1.1      Article 2.1 of the TBT Agreement 16

2.1.1.1   The increased recordkeeping burden entailed by the amended COOL measure. 17

2.1.1.2   The accuracy of labels prescribed by the amended COOL measure. 18

2.1.1.3   The exemptions under the amended COOL measure. 20

2.1.2      Article 2.2 of the TBT Agreement 23

2.1.3      Articles III:4 and IX of the GATT 1994. 24

2.1.4      Article XX of the GATT 1994. 25

2.1.5      Article XXIII:1(b) of the GATT 1994. 26

2.2        Arguments of Canada – Appellee. 26

2.2.1      Article 2.1 of the TBT Agreement 26

2.2.1.1   The increased recordkeeping burden entailed by the amended COOL measure. 26

2.2.1.2   The accuracy of labels prescribed by the amended COOL measure. 28

2.2.1.3   The exemptions under the amended COOL measure. 30

2.2.2      Article 2.2 of the TBT Agreement 32

2.2.3      Articles III:4 and IX of the GATT 1994. 33

2.2.4      Article XX of the GATT 1994. 33

2.2.5      Article XXIII:1(b) of the GATT 1994. 34

2.3        Arguments of Mexico – Appellee. 34

2.3.1      Article 2.1 of the TBT Agreement 34

2.3.1.1   The increased recordkeeping burden entailed by the amended COOL measure. 34

2.3.1.2   The accuracy of labels prescribed by the amended COOL measure. 36

2.3.1.3   The exemptions under the amended COOL measure. 37

2.3.2      Article 2.2 of the TBT Agreement 39

2.3.3      Articles III:4 and IX of the GATT 1994. 40

2.3.4      Article XX of the GATT 1994. 40

2.3.5      Article XXIII:1(b) of the GATT 1994. 41

2.4        Claims of error by Canada – Other appellant. 41

2.4.1      Article 2.1 of the TBT Agreement 41

2.4.1.1   The Panel's analysis of Label D. 41

2.4.1.2   The Panel's analysis of Label E. 42

2.4.1.3   The prohibition of a trace-back system.. 43

2.4.2      Article 2.2 of the TBT Agreement 44

2.4.2.1   Introduction. 44

2.4.2.2   The legal test under Article 2.2 of the TBT Agreement 45

2.4.2.3   The degree of contribution made by the amended COOL measure to its objective. 46

2.4.2.4   The first and second proposed alternative measures. 47

2.4.2.5   The third and fourth proposed alternative measures. 48

2.4.3      Article XXIII:1(b) of the GATT 1994. 49

2.5        Claims of error by Mexico – Other appellant. 49

2.5.1      Article 2.1 of the TBT Agreement 49

2.5.1.1   The Panel's analysis of Label E. 49

2.5.2      Article 2.2 of the TBT Agreement 50

2.5.2.1   Introduction. 50

2.5.2.2   The legal test under Article 2.2 of the TBT Agreement 51

2.5.2.3   The degree of contribution made by the amended COOL measure to its objective. 53

2.5.2.4   The first and second proposed alternative measures. 53

2.5.2.5   The third and fourth proposed alternative measures. 54

2.5.3      Article XXIII:1(b) of the GATT 1994. 55

2.6        Arguments of the United States – Appellee. 55

2.6.1      Article 2.1 of the TBT Agreement 55

2.6.1.1   The Panel's analysis of Label D. 56

2.6.1.2   The Panel's analysis of Label E. 57

2.6.1.3   The prohibition of a trace-back system.. 57

2.6.2      Article 2.2 of the TBT Agreement 58

2.6.2.1   Introduction. 58

2.6.2.2   The legal test under Article 2.2 of the TBT Agreement 58

2.6.2.3   The degree of contribution made by the amended COOL measure to its objective. 60

2.6.2.4   The first and second proposed alternative measures. 61

2.6.2.5   The third and fourth proposed alternative measures. 62

2.6.3      Article XXIII:1(b) of the GATT 1994. 62

2.7        Arguments of the third participants. 63

2.7.1      Australia. 63

2.7.2      Brazil 64

2.7.3      China. 64

2.7.4      Colombia. 65

2.7.5      European Union. 66

2.7.6      Japan. 69

2.7.7      Korea. 71

2.7.8      New Zealand. 72

3            Issues Raised in This Appeal. 72

4            BACKGROUND AND OVERVIEW OF THE MEASURE AT ISSUE. 74

4.1        Introduction. 74

4.2        Overview of the amended COOL measure. 75

4.3        Coverage of the amended COOL measure. 76

4.4        Categories of meat. 77

4.5        Labelling requirements. 78

4.6        Flexibilities. 81

5            Analysis of the Appellate Body. 82

5.1        Article 2.1 of the TBT Agreement. 82

5.1.1      Introduction. 82

5.1.2      Claims of the United States under Article 2.1 of the TBT Agreement 83

5.1.2.1   Claims relating to the Panel's analysis of the recordkeeping burden entailed by the amended COOL measure. 83

5.1.2.2   Claims relating to the Panel's analysis of the accuracy of the labels prescribed by the amended COOL measure. 93

5.1.2.3   Claims relating to the exemptions prescribed by the amended COOL measure. 98

5.1.3      Claims of Canada and Mexico under Article 2.1 of the TBT Agreement 109

5.1.3.1   Whether the Panel erred in its assessment of Label D under Article 2.1 of the TBT Agreement 110

5.1.3.2   Whether the Panel erred in its assessment of Label E under Article 2.1 of the TBT Agreement 115

5.1.3.3   Whether the Panel erred in its assessment of the amended COOL measure's prohibition of a trace-back system under Article 2.1 of the TBT Agreement 120

5.2        Article 2.2 of the TBT Agreement. 122

5.2.1      Interpretation of Article 2.2 of the TBT Agreement 123

5.2.2      Claims of error with respect to the legal test for "more trade-restrictive than necessary" under Article 2.2 of the TBT Agreement 130

5.2.3      Claims of error with respect to the Panel's finding on the amended COOL measure's degree of contribution to its objective. 134

5.2.4      Claims of error with respect to the Panel's interpretation and application of the phrase "taking account of the risks non-fulfilment would create" in Article 2.2 of the TBT Agreement 137

5.2.4.1   The United States' claim that the Panel erred in its interpretation of the phrase "taking account of the risks non-fulfilment would create". 137

5.2.4.2   Canada's and Mexico's claims that the Panel erred in the factors it took into account in assessing "the risks non-fulfilment would create". 143

5.2.4.3   Claims of error with respect to the Panel's finding that Canada and Mexico failed to make a prima facie case that the first and second proposed alternative measures would make an equivalent degree of contribution to the amended COOL measure's objective. 149

5.2.4.4   Claims of error with respect to the Panel's assessment of certain evidence and arguments in respect of consumer demand for origin information. 153

5.2.4.5   Completion of the legal analysis with respect to the first and second proposed alternative measures  153

5.2.5      Claims of error with respect to the third and fourth proposed alternative measures. 155

5.3        Article III:4 and Article IX of the GATT 1994. 160

5.3.1      The Panel's findings. 160

5.3.2      Article IX of the GATT 1994 as relevant context for the interpretation of Article III:4 of the GATT 1994  161


5.4        Article III:4 and Article XX of the GATT 1994. 164

5.4.1      Interim review section of the Panel Reports. 165

5.4.2      The availability of an Article XX exception with respect to the amended COOL measure. 166

5.5        Article XXIII:1(b) of the GATT 1994. 168

6            Findings and Conclusions in the Appellate Body report WT/DS384/AB/RW    cda-169

6            Findings and Conclusions in the Appellate Body report WT/DS386/AB/RW    MEX-173

Annex 1  United States' Notice of Appeal 177

Annex 2  Canada's Notice of Other Appeal 179

Annex 3  Mexico's Notice of Other Appeal 181

Annex 4  Procedural Ruling of 2 December 2014. 184

Annex 5  Procedural Ruling of 17 December 2014. 188

Annex 6  Procedural Ruling of 7 January 2015. 190