United States – measures concerning the
importation, marketing and sale of tuna and tuna products
recourse to article 21.5 of the dsu by Mexico
AB-2015-6
Report of
the Appellate Body
Addendum
This Addendum contains Annexes A
to D to the Report of
the Appellate Body circulated as document WT/DS381/AB/RW.
The Notices of Appeal and Other
Appeal and the executive summaries of written submissions contained in this
Addendum are attached as they were received from the participants and third
participants. The content has not been revised or edited by the Appellate Body,
except that paragraph and footnote numbers that did not start at one in the
original may have been re‑numbered to do so, and the text may have been
formatted in order to adhere to WTO style. The executive summaries do not serve
as substitutes for the submissions of the participants and third participants
in the Appellate Body's examination of the appeal.
_______________
LIST OF ANNEXES
ANNEX A
NOTICES
OF APPEAL and other appeal
Contents
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Page
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Annex A-1
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United States' Notice of Appeal
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A-2
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Annex A-2
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Mexico's Notice of Other Appeal
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A-5
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ANNEX B
Arguments
Of The PartiCIPANTS
Contents
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Page
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Annex B-1
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Executive summary of the United States'
appellant's submission
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B-2
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Annex B-2
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Executive summary of Mexico's other appellant's
submission
|
B-10
|
Annex B-3
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Executive summary of Mexico's appellee's
submission
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B-14
|
Annex B-4
|
Executive summary of the United States'
appellee's submission
|
B-20
|
ANNEX C
Arguments
of the Third PaRTICIPANTS
Contents
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Page
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Annex C-1
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Executive summary of Canada's third
participant's submission
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C-2
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Annex C-2
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Executive summary of the European Union's
third participant's submission
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C-3
|
Annex C-3
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Executive summary of Japan's third
participant's submission
|
C-6
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Annex C-4
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Executive summary of New Zealand's third
participant's submission
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C-7
|
ANNEX D
PROCEDURAL
RULING
Contents
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Page
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Annex D
|
Procedural Ruling of 21 July 2015 regarding modification
of the dates for the oral hearing
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D-2
|
|
|
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ANNEX A
NOTICEs
OF APPEAL and other appeal
Contents
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Page
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Annex A-1
|
United States' Notice of
Appeal
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A-2
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Annex A-2
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Mexico's Notice of Other
Appeal
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A-5
|
ANNEX A-1
united
states' NOTICE OF APPEAL*
1.
Pursuant to
Article 16 of the Understanding on Rules and
Procedures Governing the Settlement of Disputes ("DSU")
and to Rule 20 of the Working Procedures for
Appellate Review, the United States hereby notifies its decision to
appeal to the Appellate Body certain issues of law covered in the Report of the
Panel in United States – Measures Concerning the Importation,
Marketing and Sale of Tuna and Tuna Products: Recourse to Article 21.5 of
the DSU by Mexico (WT/DS381/RW) ("Panel Report") and
certain legal interpretations developed by the Panel.
2.
The United States
seeks review by the Appellate Body of the Panel's findings and conclusion that
the amended U.S. dolphin safe labeling measure is inconsistent with Article 2.1
of the Agreement on Technical Barriers to Trade
(the "TBT Agreement") because it accords less favorable treatment to
Mexico's tuna and tuna product exports.[1] This conclusion is in
error and is based on erroneous findings on issues of law and legal
interpretations, including:
(a) the Panel's finding that the
certification requirements of the amended measure modify the conditions of
competition in the U.S. market to the detriment of like Mexican tuna and tuna
products because they impose a lighter burden on tuna and tuna product caught
outside the Eastern Tropical Pacific (ETP) large purse seine fishery than on
tuna and tuna product caught within it.[2]
(b) the Panel's finding that the detrimental
impact caused by the certification requirements does not stem exclusively from
legitimate regulatory distinctions because the requirements for tuna caught
outside the ETP large purse seine fishery may result in inaccurate information
being passed to consumers.[3]
(c) the Panel's finding that the detrimental
impact caused by the certification requirements does not stem exclusively from
legitimate regulatory distinctions due to the design of the determination
provisions.[4]
(d) the Panel's finding that the tracking
and verification requirements of the amended measure modify the conditions of
competition in the U.S. market to the detriment of like Mexican tuna and tuna
products because they impose a lesser burden on tuna and tuna product caught
outside the ETP large purse seine fishery than on tuna and tuna product caught
within it.[5]
(e) the Panel's finding that the detrimental
impact caused by the tracking and verification requirements does not stem
exclusively from legitimate regulatory distinctions.[6]
3.
The United States
also seeks review by the Appellate Body of the Panel's findings and conclusions
that the amended U.S. dolphin safe labeling measure is inconsistent with
Articles I:1 and III:4 of the General Agreement on
Tariffs and Trade 1994 (the "GATT 1994")[7] and, if the Appellate
Body should not reverse the Panel's finding with respect to either
Article I:1 or Article III:4, then the United States seeks review of
the Panel's findings that the amended measure is not applied consistently with
the Article XX chapeau.[8] These conclusions are
in error and are based on erroneous findings on issues of law and legal
interpretations, including:
(a) the Panel's finding that the
certification requirements of the amended measure are inconsistent with
Article I:1 of the GATT 1994 because they require observer coverage
for purse seine vessels in the ETP but not for vessels in other fisheries.[9]
(b) the Panel's finding that the tracking
and verification requirements of the amended measure are inconsistent with
Article I:1 of the GATT 1994 because they impose a lesser burden on
vessels outside the ETP large purse seine fishery than on vessels within it.[10]
(c) the Panel's finding that the
certification requirements of the amended measure are inconsistent with Article
III:4 of the GATT 1994 because they impose a lighter burden on tuna caught
outside the ETP large purse seine fishery than inside it.[11]
(d) the Panel's finding that the tracking
and verification requirements of the amended measure are inconsistent with
Article III:4 of the GATT 1994 because they impose a lighter burden
on tuna caught outside the ETP large purse seine fishery than inside it.[12]
(e) the Panel's finding that the
certification requirements of the amended measure impose "arbitrary and
unjustifiable discrimination between countries where the same conditions
prevail," contrary to the chapeau of Article XX of the
GATT 1994, because the requirements for tuna and tuna product caught
outside the ETP large purse seine fishery make it easier for non-dolphin-safe
tuna to be incorrectly labeled as dolphin safe.[13]
(f) the Panel's finding that the
certification requirements of the amended measure impose "arbitrary and
unjustifiable discrimination between countries where the same conditions
prevail," contrary to the chapeau of Article XX of the
GATT 1994, due to the design of the determination provisions.[14]
(g) the Panel's finding that the tracking
and verification requirements impose "arbitrary and unjustifiable
discrimination between countries where the same conditions prevail"
contrary to the chapeau of Article XX of the GATT 1994 because they
impose a lesser burden on tuna caught other than in the ETP large purse seine
fishery.[15]
4.
The United States
also requests the Appellate Body to find that the Panel failed to make an
objective assessment of the matter before it, as called for by Article 11
of the DSU, with regard to the so-called "determination provisions."[16] The Panel drew its
conclusions with regard to these provisions based on factual findings that were
without a sufficient evidentiary basis, without assessing the totality of the
evidence, and without adequate explanation.[17]
5. In the event that Mexico appeals the finding by the Panel that the
amended measure, including the three challenged elements, is provisionally
justified under subparagraph (g) of Article XX of the GATT 1994 and
the Appellate Body reverses the finding with respect to any of the three
challenged elements, the United States seeks review of the Panel's exercise of
judicial economy with respect to the U.S. defense under Article XX(b) of
the GATT 1994.[18]
The United States submits that there are sufficient facts on the
record for the Appellate Body to complete the analysis of the amended measure,
including the three challenged elements, and find that the measure is
provisionally justified under Article XX(b).
ANNEX A-2
mexico's
NOTICE OF Other APPEAL*
1.
Pursuant to Articles 16.4 and 17 of the Understanding on Rules and Procedures Governing the Settlement of
Disputes (DSU) and Rule 23(1) of the Working
Procedures for Appellate Review, the United Mexican States (Mexico)
hereby notifies its decision to appeal to the Appellate Body certain issues of
law and certain legal interpretations developed by the Panel in Measures Concerning the Importation, Marketing and Sale of Tuna and
Tuna Products (Recourse to Article 21.5 of the DSU by Mexico)
(WT/DS386/RW) (Panel Report).
2. Pursuant to Rules 23(1) and 23(3) of the Working Procedures for Appellate Review,
Mexico is simultaneously filing this Notice of Other Appeal and its Other
Appellant Submission with the Appellate Body Secretariat.
3. The measure at issue in this
dispute concerns the amended tuna measure which comprises: (i) Section
1385 ("Dolphin Protection Consumer Information Act") (DPCIA), as
contained in Subchapter II ("Conservation and Protection of Marine Mammals")
of Chapter 31 ("Marine Mammal Protection"), in Title 16 of the U.S.
Code; (ii) U.S. Code of Federal Regulations, Title 50, Part 216, Subpart H
("Dolphin Safe Tuna Labeling"), as amended by the 2013 Final Rule;
and (iii) the court ruling in Earth Island Institute v.
Hogarth, 494 F.3d 757 (9th Cir. 2007).
4. Pursuant to Rule 23(2)(c)(ii) of
the Working Procedures for Appellate Review,
this Notice of Other Appeal includes an indicative list of the paragraphs of
the Panel Report containing the alleged errors, without prejudice to Mexico's
ability to refer to other paragraphs of the Panel Report in the context of
this appeal.
I. The Panel Erred in Finding and
Concluding that Specific Requirements under the Amended Tuna Measure were
Inconsistent with WTO Provisions Rather than the Measure as a Whole
5. Mexico seeks review by the
Appellate Body of, and requests the Appellate Body to modify, the findings and
conclusions of the Panel that only two of the three elements of the amended
tuna measure are inconsistent with Article 2.1 of the Agreement on Technical
Barriers to Trade (TBT Agreement) and Articles I:1 and III:4 of the
General Agreement on Tariffs and Trade 1994 (GATT 1994).
6. While Mexico agrees with some of
the reasoning and findings in the Panel's Report, the Panel should have
explicitly concluded that the amended tuna measure as a whole is inconsistent
with those provisions rather than limiting its ruling to specific elements.
7. The Panel should have concluded
that the amended tuna measure as a whole is inconsistent with Articles 2.1 of
the TBT Agreement, I:1 and III:4 of the GATT 1994 and, in the case of the GATT
1994, the inconsistencies were not justifiable under Article XX. The Panel's
failure to do so is a legal error.[19]
II.
The Panel Erred in its Findings Regarding the
Fishing Method Eligibility Criteria when Assessing the Consistency of the
Amended Tuna Measure with Article 2.1 of the TBT Agreement
8. Mexico seeks review by the
Appellate Body of, and requests the Appellate Body to reverse, the findings and
conclusion of the Panel, with respect to the fishing method eligibility
criteria when assessing the consistency of the amended tuna measure with
Article 2.1 of the TBT Agreement. The Panel's conclusion is an error and is
based on erroneous findings on issues of law and legal interpretation.[20]
9. Particularly, the Panel erred in
finding that the Appellate Body previously ruled on this issue. It further
erred in finding that the eligibility criteria were applied in an even-handed
manner. Instead, it should have found that the eligibility criteria lacked
even-handedness and, therefore, by virtue of the eligibility criteria, the
detrimental impact of the amended tuna measure does not stem exclusively from a
legitimate regulatory distinction.
10. Mexico also requests the Appellate
Body to find that the panel failed to make an objective assessment of the
matter before it in accordance with Article 11 of the DSU in relation to the
following factual findings: (i) changing its factual findings regarding
unobserved adverse effects for dolphin sets from the original proceedings
without any new evidence to support such a change; (ii) finding that other
fishing methods have no unobservable adverse effects and omitting consideration
of contrary evidence on the record; and (iii) finding that the Appellate Body
found that dolphin sets are particularly more harmful to dolphins than other
fishing methods when no such finding was made by the Appellate Body.[21]
11. As a result of these errors, Mexico
requests that the Appellate Body modify the reasoning of the Panel, reverse the
Panel's finding that the eligibility criteria are applied in an even-handed
manner and find, instead, that by virtue of the eligibility criteria, the
detrimental impact of the amended tuna measure does not stem exclusively from a
legitimate regulatory distinction and, for this additional reason, the amended
tuna measure is inconsistent with Article 2.1.
III. The Panel Erred in its Findings Regarding
Independent Observers under the Certification Requirements when Assessing the
Consistency of the Amended Tuna Measure with Article 2.1 of the TBT Agreement
12. Mexico seeks review by the
Appellate Body of, and requests the Appellate Body to reverse, the findings and
conclusions of the Panel, with respect to the findings regarding independent
observers under the certification requirements when assessing the consistency
of the amended tuna measure with Article 2.1 of the TBT Agreement. This
conclusion is an error and is based on erroneous findings on issues on law and
legal interpretation.[22]
13. Particularly, the Panel erred by
not finding that (i) in respect of dolphin-safe certifications, captains in
some cases may have an economic conflict of interest, making their
certifications less reliable, and (ii) the justification for differing
requirements provided by the United States that circumstances in the Eastern
Tropical Pacific (ETP) are unique is in fact contradicted by evidence that tuna
associate with dolphins in other ocean regions, in particular the Indian Ocean.
Mexico requests the Appellate Body to find that the Panel failed to make an
objective assessment of the facts, as required by Article 11 of the DSU, with
respect to these findings.
14. As a result of these errors, Mexico
requests that the Appellate Body modify the reasoning of the Panel and find,
for the additional reasons that dolphin sets are made outside of the ETP and
captains' self-certifications create gaps in the dolphin-safe designation, that
the certification requirements are not applied in an even-handed manner, and
accordingly, the detrimental impact of the amended tuna measure does not stem
exclusively from a legitimate regulatory distinction, and for this additional
reason the amended tuna measure is inconsistent with Article 2.1.
IV.
The Panel Erred in its Findings Regarding the
Eligibility Criteria when Assessing the Consistency of the Amended Tuna Measure
under the Chapeau of Article XX
15. Mexico seeks review by the
Appellate Body of, and requests the Appellate Body to reverse, the findings and
conclusions of the Panel, with respect to the findings regarding the
eligibility criteria when assessing the consistency of the amended tuna measure
under the chapeau of Article XX of the GATT 1994. This conclusion is an
error and is based on erroneous findings on issues on law and legal
interpretation.[23]
16. As a result of these errors, Mexico
requests that the Appellate Body modify the reasoning of the Panel and find
that for this additional reason that the eligibility requirements demonstrate
that the amended tuna measure is applied in manner that constitutes arbitrary
and unjustifiable discrimination between countries where the same conditions
prevail and, therefore, the requirements of the chapeau are not met.
_______________
ANNEX B
Arguments
Of The Participants
Contents
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Page
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Annex B-1
|
Executive summary of the
United States' appellant's submission
|
B-2
|
Annex B-2
|
Executive summary of
Mexico's other appellant's submission
|
B-10
|
Annex B-3
|
Executive summary of
Mexico's appellee's submission
|
B-14
|
Annex B-4
|
Executive summary of the
United States' appellee's submission
|
B-20
|
ANNEX B-1
EXECUTIVE
SUMMARY OF THE UNITED STATES' APPELLANT'S SUBMISSION
1.
In the underlying
dispute, the Appellate Body found that the U.S. dolphin safe labeling measure
was inconsistent with Article 2.1 of the TBT Agreement. The United States took
careful note of the concern identified by the Appellate Body and addressed it
through the 2013 Final Rule. Specifically, the Appellate Body found that the
original measure was inconsistent with Article 2.1 because tuna product
produced from the ETP large purse seine fishery was ineligible for the dolphin
safe label if a dolphin was killed or seriously injured in the set in which the
tuna was caught, but this condition did not apply to tuna product produced from
other fisheries.[24] Under the amended
measure, this condition applies to all tuna product, regardless of the fishery
in which the tuna was caught.[25] Thus the United States
considers that the amended measure is consistent with Article 2.1 of the TBT
Agreement and with the non-discrimination provisions of the GATT 1994.
2.
The Panel
disagreed, however, finding that certain aspects of the amended measure –
namely the certification and tracking and verification requirements – were
inconsistent with Article 2.1 of the TBT Agreement and Articles I:1: and
III:4 of the GATT 1994 and not justified under the chapeau of Article XX. As
described below, the United States considers that these findings of the Panel are
in error and respectfully requests that the Appellate Body reverse the Panel's
findings and find that the amended measure is fully consistent with the non‑discrimination
provisions of the TBT Agreement and the GATT 1994.
3.
Section II of
this submission sets out the context in which the U.S. measure must be
understood and assessed. It explains that the harvest of fish around is
governed by numerous national and supranational institutions. One – the AIDCP –
was established in response to a unique dolphin mortality crisis specifically
to document and mitigate dolphin bycatch due to tuna fishing. The unique
requirements and programs that the AIDCP parties imposed on their tuna
industries reflect this unique objective. The AIDCP requirements include
mandatory on-board observers and a tuna tracking and verification system. No
other fisheries management body has faced a situation similar to that in the
ETP large purse seine fishery, and no other body has adopted requirements
similar to the AIDCP.
4.
Sections III through
VI then set out the U.S. appeals of the Panel's findings.
1. Article
2.1 of the TBT Agreement
5.
In Section III of
this submission, the United States explains that the Panel erred in finding the
amended measure to be inconsistent with Article 2.1 of the TBT Agreement.
Subsections A, B, and C provide an introduction to the U.S. arguments,
summarize the legal standard of Article 2.1, and describe the applicable burden
of proof in WTO dispute settlement proceedings. Subsections D and E describe
the DSB recommendations and rulings in the original proceeding and the U.S.
measure taken to comply, the 2013 Final Rule, which directly addressed those
recommendations and rulings.
a. The
Panel Erred in Finding that the Certification Requirements Are Inconsistent with
Article 2.1
6.
In Section III.G,
the United States explains that the Panel erred in finding that the
certification requirements of the amended measure accord less favorable
treatment to Mexican tuna product than that accorded to like products from the
United States and other Members.
7.
In Section
III.G.3, the United States explains that the Panel erred in finding that the
certification requirements modify the condition of competition in the U.S.
market to the detriment of Mexican tuna product. The United States considers
that the Panel's findings are in error in three respects. If the Appellate Body
were to find in favor of the United States on any one of these three appeals,
the Appellate Body should consequently reverse the Panel's finding that the
certification requirements modify the conditions of competition in the U.S.
market to the detriment of Mexican tuna product. Such a reversal would mean
that the Panel's finding that the certification requirements are inconsistent
with of Article 2.1 would also need to be reversed.[26]
8.
First, as
explained in Section III.G.3.a, the Panel erred in its allocation of the burden
of proof. The Appellate Body has been clear that nothing in its Article 2.1
analysis alters the traditional allocation of the burden of proof[27] whereby a complainant
must establish a prima facie case for all the
elements of its claims.[28] Here, Mexico argued
that the certification requirements have a detrimental impact on Mexican tuna
products due to differences in the accuracy of the
certifications for tuna caught inside and outside the ETP large purse seine
fishery.[29] The Panel made no "definitive
finding" on this issue.[30] Instead, the Panel found a detrimental impact based on an entirely
different theory, namely a difference in observer-related costs, that Mexico
had never asserted or introduced evidence to support. Thus the Panel erred in
making an alleged prima facie case for Mexico, and
the Panel's finding of detrimental impact was in error.
9.
Second, as
explained in Section III.G.3.b, the Panel erred in finding that any difference
in observer-related costs modifies the conditions of competition in the U.S.
market to the detriment of Mexican tuna product. A panel may not assume that a
measure provides less favorable treatment merely because treatment provided to
the imported product is different from
that accorded to other like products.[31] And, indeed, past
panels have actually analyzed whether the conditions of competition in the
respondent's market have been altered to the detriment of the imported product.
The Panel's analysis represented a significant departure from the
Appellate Body's guidance and the approach of previous panels. The Panel
neither identified the cost that Mexican producers may incur nor analyzed
whether such costs modified the conditions of competition in the U.S. market.
Instead, the Panel's analysis derived from potential costs to other countries
of establishing an observer program – an inaccurate proxy. Thus, the Panel did
not conduct an analysis on which to base a finding that the certification
requirements modify the conditions of competition to the detriment of Mexican
tuna product. As such, the Panel's finding of detrimental impact was in error.
10.
Third, as
explained in Section III.G.3.d, the Panel erred in finding that a genuine relationship
exists between the amended measure and the detrimental impact. First, because
Mexican tuna product is produced using a fishing method that renders the
product ineligible for the label, the Panel was wrong to conclude that any
differences in observer-related costs incurred by Mexico is "attributable"
to the amended measure. In fact, the amended measure does not
require Mexican tuna products, which are non-dolphin safe, tuna products to be
accompanied by proof of an observer certificate at
all. Second, even aside from this, any
difference in observer-related costs is not "attributable" to the
amended measure because the requirement to have an observer onboard Mexican ETP
large purse seine vessels stems from Mexico's obligations under the AIDCP, not
U.S. law. In fact, the U.S. measure does not cause or affect in any way the
observer-related costs that different fleets and industries bear. As such, the
Panel erred in finding a genuine relationship between the U.S. measure and any
preexisting differences in observer-related costs.
11.
For these
reasons, the Panel's erred in finding that the certification requirements of
the amended measure have a detrimental impact on the competitive opportunities
of Mexican tuna product, and the United States respectfully requests that this
finding and the finding of inconsistency with Article 2.1, which rests on this
detrimental impact finding, be reversed.[32]
12.
In Section
III.G.4, the United States explains that the Panel erred in finding that any
detrimental impact caused by the certification requirements does not stem
exclusively from legitimate regulatory distinctions. The United States appeals
two aspects of the Panel's analysis. Because these two aspects appear to form
independent bases for the Panel's finding regarding the even-handedness of the
certification requirements, if the Appellate Body were to rule in favor of the
United States on both of these appeals, it should, as a consequence, reverse
the Panel's finding and, consequently, the Panel's ultimate finding of inconsistency
with Article 2.1.[33]
13.
First, in Section
III.G.4.a, the United States explains that the majority panelists erred in
finding that any detrimental impact caused by the certification requirements
does not stem exclusively from a legitimate regulatory distinction due to
differences in education and training between those that certify that the tuna
was harvested in a "dolphin safe" manner in the ETP large purse seine
fishery (captains and AIDCP-approved observers) and those that certify in other
fisheries (captains). Specifically, the majority applied an incorrect legal
standard, asking whether the detrimental treatment is explained by the
objectives pursed by the measure at issue," when the question under the
second step of Article 2.1 is whether the regulatory distinctions that account
for that detrimental impact "are designed and applied in an even-handed
manner."[34]
14.
Under the correct
legal analysis, there are two bases for why any detrimental impact caused by
the certification requirements does, in fact, stem exclusively from a
legitimate regulatory distinction. First, the majority's own findings prove
that the certification requirements are even‑handed in that they are "calibrated"
to the risks to dolphins arising from different fishing methods in different
areas of the ocean. Specifically, the requirements reflect that, as the Panel
found, the ETP large purse seine fishery has a different (greater) "risk
profile" for dolphin harm than other fisheries, and the certification
requirements are calibrated to that different risk profile. Second, the
certification requirements are even-handed in that they are explained by a
legitimate, non-discriminatory reason: they reflect the fact that the parties
to the AIDCP have consented to impose a unique observer program on their tuna
industries. The fact that the amended measure requires an observer certificate
where an observer is already onboard the vessel for that
very purpose and does not impose such a requirement where no such
certifier is onboard, has a legitimate, non-discriminatory basis, and the
majority erred in not finding so.
15.
Second, as
explained in Section III.G.4.b, the Panel erred in finding that the
determination provisions were a further basis to find that the detrimental
impact caused by the certification requirements does not stem exclusively from
a legitimate regulatory distinction. First, the Panel erred in its allocation
of the burden of proof. Mexico did not raise this issue at all – much less set
out a prima facie case of inconsistency – and
the Panel erred in relieving Mexico of its burden. Second, the Panel erred in
its reasoning and finding by applying the incorrect legal analysis and acting
inconsistently with DSU Article 11. Specifically, the Panel erred by not
analyzing whether the determination provisions support a finding that the
certification requirements "are designed and applied" in an
even-handed manner, and acted inconsistently with Article 11 by arriving at a
finding that is unsupported by the evidence in the record. The Panel also erred
by applying the incorrect legal analysis and failing to find that the
determination provisions can be reconciled with the objectives of the amended
measure.
16.
In light of the
above, the Panel erred in finding that any detrimental impact caused by the certification
requirements does not stem exclusively from legitimate regulatory distinctions,
and United States respectfully requests that the Appellate Body reverse this
finding and the finding of a breach of Article 2.1, which rests on this finding
of detrimental impact.[35]
b. The
Panel Erred in Finding that the Tracking and Verification Requirements Are
Inconsistent with Article 2.1
17.
In Section III.H,
the United States explains that the Panel erred in finding that the tracking
and verification requirements of the amended measure accord less favorable
treatment to Mexican tuna product than that accorded to like products from the
United States and other Members.
18.
In Section
III.H.3, the United States explains that the Panel erred in finding that the
tracking and verification requirements modify the conditions of competition in
the U.S. market to the detriment of Mexican tuna product. The United States
appeals the Panel's analysis in four respects. If the Appellate Body were to
rule in favor of the United States on any one of these four appeals, the
Appellate Body should, consequently, reverse the Panel's finding that the
tracking and verification requirements modify the conditions of competition in
the U.S. market to the detriment of Mexican tuna product. Such a reversal would
mean that the Panel's ultimate finding that the requirements are inconsistent
with Article 2.1 would also need to be reversed.[36]
19.
First, Section
III.H.3.a explains that, for the same reasons discussed in Section III.G.3.a,
the Panel erred in its allocation of the burden of proof. On this issue, Mexico
argued that the absence of sufficient record keeping requirements for tuna
product produced outside the ETP large purse seine fishery causes Mexican tuna
product to lose competitive opportunities to product that may be incorrectly
labelled dolphin safe.[37] The Panel made no "definitive
finding" with regard to this argument.[38] Rather, the Panel found
that a detrimental impact existed based on a different
theory, i.e. that the tracking and verification requirements
impose a different "burden" on different tuna product industries that
has modified the conditions of competition in the U.S. market to the detriment
of Mexican tuna product. Mexico never raised or presented evidence in support
of this argument and, therefore, never established a prima facie
case. The matter should have ended there as a panel may not take it upon itself
"to make the case for a complaining party."[39] In raising sua sponte an argument that Mexico never argued or proved,
the Panel acted inconsistently with the burden of proof in this proceeding.
Thus, the Panel's finding of detrimental impact was in error.
20.
Second, as
explained in Section III.H.3.b, the Panel erred in coming to a finding that is
legally unsupportable based on the evidence on the record. The Panel found that
the AIDCP and NOAA tracking and verification regimes were different in three
respects: "depth, accuracy, and degree of government oversight."[40] The Panel found that
these differences proved "modify the conditions of competition," as
the NOAA regime is "less burdensome." The Panel never identified what
this meant or provided any additional analysis of how this difference in "burden"
modifies the conditions of competition in the U.S. market, equating
any difference in "burden" with detrimental impact. The evidence
regarding the differences that the Panel identified does not prove that the
NOAA regime is less "burdensome" to adhere to than the AIDCP regime
in any way that modifies the conditions of competition to the detriment of
Mexican tuna product. Thus the Panel erred in coming to a legal conclusion on
burden and detrimental impact for which there is no basis in the record.
21.
Third, Section
III.H.3.c explains that, for similar reasons to those discussed in
Section III.G.3.b, the Panel erred by not applying the correct legal
analysis in making its detrimental impact finding. The Panel considered that
its finding of a difference in "burden" between the AIDCP and NOAA
regimes, ipso facto, established a prima facie case as to the first step of Article 2.1.
In fact, a panel must examine whether any difference it has identified modifies
the conditions of competition to the detriment of the group of imported
products. The Panel's failure do so was a significant departure from the clear
guidance of the Appellate Body and the actual approach of previous panels. The
Panel's finding of detrimental impact was in error.
22.
Fourth, Section
III.H.3.e explains that, for the reasons discussed in Section III.G.3.d, the
Panel erred in finding that a genuine relationship exists between the U.S.
measure and any detrimental impact. As with the certification requirements, the
Panel's finding is in error on two different bases. First, the Panel erred by
not taking into account the fact that Mexican tuna product is not
eligible for the dolphin safe label. As such, the amended measure
does not incorporate the AIDCP requirements or create any regulatory
distinction with respect to Mexican tuna product. Second, the Panel failed to
properly take into account that the regulatory distinction of the amended
measure reflects the fact that the parties to the AIDCP have consented to rules
regarding the operation of their large purse seine vessels in the ETP that are
not replicated in other fisheries. Indeed, if the United States eliminated all
references to the AIDCP in the amended measure, the difference in "burden"
identified by the Panel would still exist.
23. For these reasons, the Panel's erred in finding that the tracking
and verification requirements of the amended measure have a detrimental impact
on the competitive opportunities of Mexican tuna product, and the United States
respectfully requests that this finding and the related finding of
inconsistency with Article 2.1 be reversed.[41]
24.
In Section
III.H.4, the United States explains that the Panel erred in finding that any
detrimental impact caused by the tracking and verification requirements does
not stem exclusively from legitimate regulatory distinctions. The Panel erred
by applying the incorrect legal standard in its analysis. The second step of
the Article 2.1 analysis is not a single-factor test based on whether a "rational
connection" exists between the detrimental impact and the objectives of
the measure but an analysis of whether the regulatory distinctions that account
for the detrimental impact "are designed and applied in an even-handed
manner."[42]
25.
If the Appellate
Body were to find in favor of the United States on this appeal, it should,
consequently, reverse the Panel's finding that the detrimental impact does not
stem exclusively from a legitimate regulatory distinction. Such a reversal
would mean, that the Panel's ultimate finding that the tracking and
verification requirements are not consistent with Article 2.1 of the TBT
Agreement" would need to be reversed.[43]
26.
In Sections
III.H.4.a and III.H.4.b, the United States explains the two separate bases for
why any detrimental impact caused by the different tracking and verification
requirements stems exclusively from a legitimate regulatory distinction.
27.
First, as was the
case with the certification requirements, the tracking and verification
requirements are even-handed because they are "calibrated" to the
risks to dolphins from different fishing methods in different fisheries. The
Panel agreed with the United States that the
ETP large purse seine fishery has a different "risk profile" for
dolphin harm than other fisheries. In light of that fact, it is entirely
appropriate for the United States to set different requirements for tuna
produced in the ETP large purse seine fishery than for tuna produced in other
fisheries. Thus the fact that the AIDCP and NOAA regimes are
different – and may have different rates of
accuracy – cannot, standing alone, be a basis on which to find that the
difference in the regimes is not even‑handed where the risk profiles between
the ETP large purse seine fishery and all other fisheries are so different.
28.
Second, as
explained with respect to the certification requirements in Section III.H.3.e,
the tracking and verification requirements are even-handed because they reflect
the fact that the parties to the AIDCP have consented to impose a unique
tracking and verification regime on their own tuna industries. By "incorporating"
the AIDCP requirements, the amended measure appropriately recognizes the
utility of the AIDCP regime for the purposes of the amended measure. They Panel's
analysis, by contrast, suggests that having done so, the United States is now
required to impose the same regime on
all tuna product, even though no other RFMO has created a parallel regime. In
short, the AIDCP requirements form the "floor" of requirements below
which the United States may not go. But that is certainly not true – the
United States, and Mexico's international legal obligations, sets the level of
protection it considers "appropriate."
29.
In light of the
above, the Panel erred in finding that any detrimental impact caused by the
tracking and verification requirements does not stem exclusively from
legitimate regulatory distinctions, and United States respectfully requests
that the Appellate Body reverse this finding and the related finding of a
breach of Article 2.1.[44]
30.
And for all the
above reasons, the United States respectfully requests the Appellate Body to
reverse the Panel's finding that the amended measure is inconsistent with
Article 2.1 of the TBT Agreement.[45]
2. The GATT 1994
31.
In Sections IV
and V of this submission, the United States explains that, for all the reasons
discussed in terms of Article 2.1 of the TBT Agreement in III.G.3 and III.H.3,
the Panel erred in finding that the certification requirements and the tracking
and verification requirements modify the conditions of competition in the U.S.
market to the detriment of Mexican tuna and tuna products. Accordingly, the
United States respectfully requests the Appellate Body to reverse the Panel's
findings that the certification and tracking and verification requirements of
the amended measure are inconsistent with Articles I:1 and III:4 of the GATT
1994.[46]
32.
In Section VI,
the United States explains its conditional appeal of the Panel's finding that
the amended dolphin safe labeling measure is not justified under Article XX of
the GATT 1994.
33.
In Section VI.B,
the United States explains that the Panel erred in finding that amended measure
does not meet the requirements of the Article XX chapeau. The United States
considers that, with respect to both the certification requirements and the
tracking and verification requirements, the Panel erred in two independent
respects – in finding that these elements of the amended measure discriminate
under the chapeau and in finding that any such discrimination is "arbitrary
and unjustifiable." If the Appellate Body were to rule in favor of the
United States on one of these appeals, the Appellate Body should consequently
reverse the Panel's finding that the certification or tracking and verification
requirements, as relevant, are not consistent with the Article XX chapeau.[47]
34.
In Section
VI.B.1, the United States explains that the Panel erred in applying the
incorrect legal analysis in examining whether the certification requirements
and the tracking and verification requirements "discriminate" for
purposes of the chapeau. It is well established that "discrimination
within the meaning of the chapeau of Article XX 'results . . . when countries
in which the same conditions prevail are differently treated.'"[48] The Panel's analysis,
however, deviated significantly from this principle and from the Appellate Body's
application of it. Specifically, with regard to both the certification
requirements and the tracking and verification requirements, the Panel did not
conduct the appropriate analysis of whether the relevant "conditions"
are the same across countries and did not appear to consider that the
examination of whether discrimination under the chapeau existed
was a separate analysis from whether such discrimination is "arbitrary or
unjustifiable."
35.
Section VI.B.1.a
explains that the Panel applied the incorrect legal analysis in examining
whether the certification requirements discriminate for purposes of the
chapeau. The Appellate Body has considered that the most pertinent
guidepost for determining the relevant "conditions" is "the
particular policy objective under the applicable subparagraph," although
the GATT 1994 provision with which the measure was found inconsistent "may
also provide useful guidance."[49] The certification
requirements were justified under Article XX(g) as relating to the protection
of dolphins. In light of this objective, the relevant "condition" for
purposes of the chapeau analysis is the relative harm
(both observed and unobserved) suffered by dolphins from different fishing
methods in different fisheries. And the findings of the Appellate Body in the
original proceeding and the Panel in this dispute affirm that this "condition"
is not the same in the ETP large purse
seine fishery and all other fisheries. As such, no "discrimination" –
as the term is understood for purposes of the chapeau – exists with respect to
the certification requirements.
36.
Furthermore, the
Panel erred in seeming find that the certification requirements discriminated
under the chapeau due to any difference in the accuracy of the dolphin safe
certifications for tuna caught inside and outside the ETP large purse seine
fishery. The Panel made no "definitive finding" as to whether any
difference in accuracy discriminates against Mexican tuna product for purposes
of Articles I:1 and III:4, noting in its Article 2.1 analysis that to do so
would have required "a complex and detailed analysis of all of the various
factors that may lead to tuna being inaccurately labelled."[50] As such, even under the Panel's own view, there was insufficient
evidence on the record to prove that the certification requirements
discriminate on the grounds that tuna product produced outside the ETP large
purse seine fishery without an observer onboard has a "competitive
advantage" over Mexican tuna product. Indeed, as discussed above in
section III.G.3.c, the evidence on the record suggests just the opposite.
The quantitatively and qualitatively different nature of dolphin interactions
in the ETP large purse seine fishery is such that it is far more difficult to
make an accurate certification in the ETP large purse seine fishery than in
other fisheries. And there is no evidence on the record to suggest that any
advantages in education and training that an AIDCP-approved observer may have
over a captain fully compensate for this increased level of difficulty.
37.
Section VI.B.1.b
then explains that the Panel applied the incorrect legal analysis in examining
whether the tracking and verification requirements discriminate for purposes of
the chapeau. The Panel did not even mention the analysis of whether this aspect
of the measure discriminated between countries where "the same conditions
prevail" or make a finding in this regard. For the same reasons discussed
with regard to the certification requirements, the tracking and verification
requirements do not discriminate for purposes of the chapeau. Again, the
United States considers that the relevant "condition" is the relative harm to dolphins caused by different fishing
methods in different fisheries, and, as such, in light of the Panel's own
factual findings the tracking and verification requirements do not treat
countries differently where the prevailing conditions are the same.
38.
In light of the
above, the Panel erred in (implicitly) finding that the certification
requirements and tracking and verification requirements discriminate "where
the same conditions prevail" under the Article XX chapeau.[51] In the absence of any
discrimination under the chapeau, the Panel's findings that the amended measure
is not consistent with the Article XX chapeau should be reversed.[52]
39.
Second, in
Section VI.B.2, the United States explains that, even if the certification
requirements and the tracking and verification requirements discriminate for
purposes of the chapeau, the Panel erred in finding any such discrimination to
be "arbitrary and unjustifiable."
40.
In section
VI.B.2.a, the United States explains that the Panel erred in finding the
certification requirements impose "arbitrary or unjustifiable
discrimination" under the chapeau. The United States appeals two
aspects of the Panel's analysis. Because these two aspects appear to form
independent bases for the Panel's finding regarding arbitrary and unjustifiable
discrimination, if the Appellate Body were to rule in favor of the United
States on both of these appeals, it should reverse the Panel's finding and,
consequently, the Panel's ultimate finding that the certification requirements
do not meet the chapeau requirements.[53]
41.
First, the
majority erred in finding that the certification requirements impose arbitrary
or unjustifiable discrimination in light of the differences in education and
training between captains and AIDCP-approved observers. To begin with, the
Panel applied the wrong legal analysis as to whether the discrimination is "arbitrary
or unjustifiable." Additionally, the majority erred because, in fact, the
certification requirements do not impose arbitrary or unjustifiable
discrimination because they are "calibrated to the risks to dolphins from
different fishing methods in different fisheries." Finally, the
certification requirements reflect the fact that the parties to the AIDCP
consented to impose a unique observer program on their tuna industries.
42.
Second, the Panel
erred in finding that the determination provisions prove that the certification
requirements impose arbitrary or unjustifiable discrimination. The Panel again
applied the wrong legal analysis, considering it to be a single-factor test,
rather than a cumulative test in which one element is the relationship of the
discrimination to the measure's objective. Additionally, the Panel erred in
finding that the design of the provisions is not reconcilable with the
objective of dolphin protection. The Panel also erred because it improperly
raised this argument in rebuttal to the U.S. prima facie
case that the certification requirements were consistent with the chapeau.
Mexico had not argued that the determination provisions rendered the
certification requirements inconsistent with the chapeau. Thus the Panel's
considering the determination provisions at all was contrary to the burden of
proof in this proceeding. Also, for the reasons discussed in the context of
Article 2.1, the Panel erred in finding that the design of the determination
provisions are not rationally connected to the objective of dolphin protection.
43.
In section
VI.B.2.b, the United States explains that the Panel erred in finding the
tracking and verification requirements impose "arbitrary or unjustifiable
discrimination" under the chapeau. The United States considers that the
Panel's analysis and finding are in error for many of the same reasons the
United States has discussed with regard to the certification requirements: (1)
the Panel applied the incorrect legal analysis; (2) the Panel erred in its
application of the burden of proof; (2) the Panel erred in finding that the
tracking and verification requirements impose arbitrary or unjustifiable
discrimination because the different requirements are "calibrated" to
the risks to dolphins from different fishing methods in different fisheries,
and (4) the Panel erred in finding that the tracking and verification
requirements impose arbitrary or unjustifiable discrimination because the
different requirements reflect the consent of the AIDCP Parties to impose a
unique regime on their own tuna industries.
44.
In light of the
above, the Panel erred in finding that the certification requirements and
tracking and verification requirements impose "arbitrary or unjustifiable
discrimination" under the Article XX chapeau[54] and respectfully
requests that the Panel's findings that the amended measure is not consistent
with the Article XX chapeau should be reversed.[55]
ANNEX B-2
EXECUTIVE
SUMMARY OF mexico's OTHER APPELLANT'S SUBMISSION
1. The United States continues to highlight outdated information about
the ETP to divert attention from the significant progress in reducing dolphin
mortality in the ETP and the tremendous harm to dolphins taking place in other
ocean regions, where there are no comparable measures for the protection or
sustainability of dolphins. This is a genuine tragedy for the world's
environment and also undermines the consumer information objectives that the
United States purports to achieve.
2.
In these
compliance proceedings, Mexico's challenge focuses on the improper granting of
access to the dolphin-safe label to products containing tuna caught by the
fleets of other countries using fishing methods other than setting on dolphins
in an AIDCP-compliant manner and fishing in oceans other than the ETP. These
proceedings can be distinguished from the original proceedings on this basis.
The difference is highlighted by the fact that, under the amended tuna measure,
even if Mexican tuna products were granted the right to use the dolphin-safe
label, there would still be a violation of the non-discrimination provisions
raised in this dispute. This is because Mexican dolphin-safe tuna products
would be losing competitive opportunities to like products from the United
States and other countries under circumstances where the dolphin-safe status of
those like products cannot be assured.
3.
The measure at
issue in this dispute is the "amended tuna measure", which comprises:
(i) Section 1385 ("Dolphin Protection Consumer Information Act")
(DPCIA), as contained in Subchapter II ("Conservation and Protection of
Marine Mammals") of Chapter 31 ("Marine Mammal Protection"), in
Title 16 of the U.S. Code; (ii) U.S. Code of Federal Regulations, Title 50,
Part 216, Subpart H ("Dolphin Safe Tuna Labeling"), as amended by the
2013 Final Rule; and (iii) the court ruling in Earth Island Institute v.
Hogarth, 494 F.3d 757 (9th Cir. 2007).
4.
In its argument
that the detrimental impact of the amended tuna measure on Mexican
tuna and tuna products did not stem exclusively from a legitimate
regulatory distinction under Article 2.1 of the TBT Agreement, Mexico
identified three aspects of the amended tuna measure – i.e., three "labelling
conditions and requirements" evidencing regulatory differences for tuna
products containing tuna caught by setting on dolphins in the ETP, on the one
hand, and for tuna products containing tuna caught by other fishing methods
outside the ETP, on the other hand – that are designed and applied in a
manner that lacks even‑handedness:
· Mexico's AIDCP-compliant fishing method is disqualified as a method
for catching dolphin‑safe tuna when other fishing methods are qualified for
catching dolphin-safe tuna even though they have adverse effects on dolphins
that are equal to or greater than Mexico's method (referred to by the Panel as
the "eligibility criteria");
· the record-keeping and verification requirements (referred to by the
Panel as the "tracking and verification requirements") for tuna
caught inside the ETP are comprehensive, reliable and accurate, whereas there
are no comparable requirements for tuna caught outside the ETP, which makes the
information on the dolphin-safe status of that tuna unreliable and inaccurate;
and
· in the ETP, the initial designation of the dolphin-safe status of
tuna at the time of capture (referred to by the Panel as the "certification
requirements") is reliable and accurate because it is done by an
independent, specially-trained, AIDCP-approved observer on board the fishing
vessel, whereas outside the ETP, the initial designation is unreliable and
inaccurate because it is done by the captain of the vessel, who is not
qualified to make the designation, may not be directly involved in the setting
of nets and capturing of fish, and has financial and other incentives not to
declare non‑dolphin-safe sets.
5.
Mexico raised the
same three labelling conditions and requirements in its argument that the
requirements of the chapeau of Article XX of the GATT 1994 had not been met,
therefore, the general exceptions did not apply to the inconsistencies of
the amended tuna measure with Articles I:1 and III:4 of the GATT 1994.
6.
The Panel
concluded that the different certification requirements and the different
tracking and verification requirements in the amended tuna measure are
inconsistent with Article 2.1 of the TBT Agreement. It also concluded that
the different certification requirements and different tracking and
verification requirements are inconsistent with Articles I:1 and III:4 of
the GATT 1994, and do not meet the requirements of Article XX of the
GATT 1994. The Panel also found that the eligibility criteria of the amended
tuna measure are consistent with Article 2.1 of the TBT Agreement and that,
although they are inconsistent with Articles I:1 and III:4 of
the GATT 1994, they are justifiable under Article XX of the GATT
1994.
7.
Mexico requests
the Appellate Body to reverse certain findings and conclusions of the Panel,
with respect to the errors of law and legal interpretation discussed in this
submission.
I. The Panel Erred in Finding and Concluding that Specific Requirements
under the Amended Tuna Measure were Inconsistent with WTO Provisions Rather
than the Measure as a Whole
8.
Notwithstanding
that Mexico challenged the amended tuna measure as a whole, and that the
Appellate Body in the original proceedings found the original tuna measure as a
whole to be WTO‑inconsistent, the Panel did not specifically conclude that the
amended tuna measure as a whole is inconsistent with Article 2.1 of the TBT
Agreement and Articles I:1 and III:4 of the GATT 1994. Rather, it
concluded that two of the three elements that Mexico identified in its
arguments were WTO-inconsistent, while claiming that the other element had
purportedly already been found by the Appellate Body in the original
proceedings to be even-handed and not WTO‑inconsistent.[56] While Mexico agrees with
some of the reasoning and findings in the Panel's Report, the Panel should
have explicitly concluded that the amended tuna measure as a whole is
inconsistent with those provisions rather than ruling on some of its elements.
The Panel's error is reflected, in part, in its finding that the amended tuna
measure's modification of the competitive opportunities in the U.S. market to
the detriment of Mexican tuna and tuna products comprises two "distinct
type[s] of detrimental impact", such that "Mexico's arguments on the
different certification and tracking and verification requirements constitute a
clear and cognizable claim of detrimental impact separate
from the detrimental impact identified by Mexico as the result of
the eligibility criteria".[57] In its analysis the Panel
confuses the "detrimental impact" of the amended tuna measure that is
the focus of the first part of the test under Article 2.1 with the
identification of the "relevant" regulatory distinction in the second
part of the test, i.e., the regulatory distinction that accounts for the
detrimental impact.[58] The Panel should have
explicitly found that the amended tuna measure has a detrimental impact on the
competitive opportunities for Mexican tuna products in the US market, and that
the differences in the labelling conditions and requirements identified by
Mexico demonstrate that the measure's relevant regulatory distinction is
designed and applied in a manner that lacks even-handedness, such that the
detrimental impact does not stem exclusively from a legitimate regulatory
distinction. On this basis, the Panel should have concluded that the amended tuna
measure is inconsistent with Article 2.1 of the TBT Agreement.
9.
Similarly, the
Panel should have found that the amended tuna measure is inconsistent with
Articles I:1 and III:4 of the GATT 1994, and the inconsistencies were not
justifiable under Article XX. The Panel's failure to do so is a legal
error. As a result of this error, Mexico requests the Appellate Body to modify
the conclusions of the Panel in respect of Article 2.1 of the
TBT Agreement and Articles I:1, III:4 and XX of the GATT 1994 and conclude
that the amended tuna measure is inconsistent with these provisions.
II. The Panel Erred in its Findings Regarding the Eligibility Criteria
when Assessing the Consistency of the Amended Tuna Measure with
Article 2.1 of the TBT Agreement
10.
Mexico argued
that it was not even-handed for the amended tuna measure to completely
disqualify the dolphin set fishing method from access to the dolphin-safe
label, while allowing other fishing methods to be eligible, when it has been
established that other fishing methods kill and seriously injure dolphins. In
the context of Article 2.1 of the TBT Agreement, the fishing method eligibility
criteria are relevant to assessing whether the detrimental impact on Mexican
tuna caused by the amended tuna measure stems exclusively from a legitimate
regulatory distinction. The eligibility criteria are included in the relevant
regulatory distinction (i.e., the difference in labelling conditions and
requirements). The Panel had to determine, based on the particular
circumstances of this dispute, whether this regulatory distinction is designed
and applied in an even-handed manner.
11.
The Panel erred
in finding that the Appellate Body previously made factual and legal findings
on this issue.[59] Moreover, the Panel in
effect applied the arbitrary benchmark for adverse effects on dolphins
urged by the United States, rather than the "zero tolerance"
benchmark actually incorporated into the amended tuna measure and its
objectives. It further erred in finding that the eligibility criteria were
applied in an even-handed manner. Instead, it should have found that the
eligibility criteria lacked even-handedness and, therefore, by virtue of the
eligibility criteria, the detrimental impact of the amended tuna measure does
not stem exclusively from a legitimate regulatory distinction. These
deficiencies were legal errors.
12.
The Panel also
acted inconsistently with Article 11 of the DSU in relation to the following
factual findings: (i) changing its factual findings regarding unobserved
adverse effects for dolphin sets from the original proceedings without any new
evidence to support such a change; and (ii) finding that other
fishing methods have no unobservable adverse effects and omitting consideration
of contrary evidence on the record; (iii) finding that the Appellate Body found
that dolphin sets are particularly more harmful to dolphins than other fishing
methods when no such finding was made by the Appellate Body. These factual
findings, once corrected, support Mexico's position that the eligibility
criteria are applied in a manner that is not even-handed.
13.
As a result of
this error, Mexico requests that the Appellate Body modify the legal reasoning
of the Panel, reverse the Panel's finding that the eligibility criteria are
applied in an even-handed manner and find, instead, that by virtue of the lack
of even-handedness in the eligibility criteria, the detrimental impact of the
amended tuna measure does not stem exclusively from a legitimate regulatory
distinction and, for this additional reason, the amended tuna measure is
inconsistent with Article 2.1.
III. The Panel Erred in its Findings Regarding Independent Observers
under the Certification Requirements when Assessing the Consistency of the
Amended Tuna Measure with Article 2.1 of the TBT Agreement
14.
In assessing
Mexico's arguments that it was not even-handed for the amended tuna measure not
to require independent observers to support dolphin-safe certifications outside
the ETP, the Panel disagreed with Mexico's arguments that (i) in respect
of dolphin-safe certifications specifically, captains in some cases may have an
economic conflict of interest, making their certifications less reliable, and
(ii) the justification for differing requirements provided by the United States
that circumstances in the ETP are unique is in fact contradicted by evidence
that tuna associate with dolphins in other ocean regions, in particular the
Indian Ocean.
15.
In rejecting
Mexico's evidence regarding captains' economic self-interest, the Panel found
that certifications by vessel captains are generally reliable "in a
variety of fishing and environmental areas".[60] In doing so, the Panel
acted inconsistently with Article 11 of the DSU. While Mexico does not suggest
that fishing vessel captains are generally unreliable, the evidence on the record
establishes that the inherent unreliability of captains' self-certifications
specifically respecting the "dolphin-safe" status of the tuna caught
by their own vessels means that in some instances the dolphin-safe designation
will be inaccurate. This creates gaps in the accuracy of the dolphin-safe label
for tuna caught outside the ETP by fishing methods other than AIDCP-compliant
setting on dolphins.
16.
In finding that
dolphin sets are only made in the ETP, the Panel acted inconsistently with
Article 11 of the DSU. Mexico presented evidence that the situation in the ETP
is not unique or different in any way that could justify different treatment of
the ETP purse seine fishery from other fisheries, and in particular presented a
recent and comprehensive report on tuna-dolphin association in the Indian
Ocean. The Panel rejected Mexico's position, stating that "although
dolphins may occasionally and incidentally be set on outside the ETP, it is
only inside the ETP that setting on dolphins is practiced consistently or 'systematically.'"[61] The failure of the Panel
to even mention, let along address, the evidence Mexico submitted that dolphins
associate with tuna and are intentionally set upon in the Indian Ocean was
inconsistent with the Panel's obligations under DSU Article 11.
17.
As a result of
this error, Mexico requests that the Appellate Body modify the reasoning of the
Panel and find, for the additional reasons that dolphin sets are made outside
of the ETP and captains' self-certifications create gaps in the dolphin-safe
designation, that the certification requirements are not applied in an
even-handed manner and, therefore, the detrimental impact of the amended tuna
measure does not stem exclusively from a legitimate regulatory distinction, and
the amended tuna measure is inconsistent with Article 2.1.
IV. The Panel Erred in its Findings Regarding the Eligibility Criteria
when Assessing the Consistency of the Amended Tuna Measure under the Chapeau of
Article XX
18.
The Panel found
that the fishing method eligibility criteria in the amended tuna measure (i.e.,
the disqualification of the dolphin set and allowance of other methods) are
applied in a manner that meets the requirements of the chapeau of Article XX.
In making this finding, the Panel erred when it found that the conditions in
the countries between which there was arbitrary and unjustifiable
discrimination were not the same and it erred when it found that the
application of the measure did not result in arbitrary or unjustifiable
discrimination. In particular, the Panel erred when it found that the
eligibility criteria are directly related to the objective of the amended
measure and any discrimination that they (i.e. the eligibility criteria) cause
is directly connected to the main goal of the amended tuna measure (i.e. to
contribute to the protection of dolphins).
19.
As a result of
this error, Mexico requests that the Appellate Body modify the reasoning of the
Panel and find, for the additional reason that the eligibility requirements
demonstrate that the amended tuna measure is applied in manner that constitutes
arbitrary and unjustifiable discrimination between countries where the same
conditions prevail, that the amended tuna measure does not meet the
requirements of the chapeau.
ANNEX B-3
EXECUTIVE
SUMMARY OF mexico's APPELLEE'S SUBMISSION
1.
The foundation of
the United States' appeal is its insistence that the amended tuna measure is "calibrated"
to risks of harm to dolphins outside the Eastern Tropical Pacific (ETP) large
purse seine fishery. But it has been established – both in the original
proceedings and in the compliance proceedings – that dolphins are at
significant risk in tuna fisheries outside the ETP, from a variety of different
fishing methods. Moreover, the United States does not contest the Panel's factual
findings that vessel captains outside the ETP are not sufficiently trained to
make reliable dolphin‑safe certifications, and that the amended tuna measure
does not require tracking and verification systems outside the ETP that can
reliably ensure that a certification is legitimately matched to the tuna with
which it is associated. In essence, therefore, the United States' position is
that consumers do not need to know with any certainty whether non-ETP tuna
products bearing the dolphin-safe label actually contain tuna that was caught
without killing or seriously injuring a dolphin, or in a manner that does not
adversely affect dolphins. There is no legitimate legal or policy justification
for that position. The United States must apply the same standard to non-ETP
tuna products as it does to ETP tuna products, including those from Mexico.
2.
Mexico's
AIDCP-compliant tuna fishing method protects dolphins, tuna fisheries stocks
and the oceanic environment in a manner that is vastly superior to the
alternative tuna fishing methods that are being promoted by the amended tuna
measure. Nonetheless, Mexico acknowledges the rights of WTO Members to
establish their own levels of protection. In this light, the findings of the
Panel and the claims raised in Mexico's other appeal hold the United States to
the standard that it has set for itself. Due to its gaps, deficiencies, lack of
even-handedness and arbitrariness, the amended tuna measure is modifying the
conditions of competition in the U.S. market to the detriment of Mexican
tuna products in a WTO-inconsistent manner. The measure does not ensure that
accurate information is provided to U.S. consumers and, accordingly, it does
not meet the strict standard that the United States has set for itself or
accomplish the measure's stated objectives.
I.
Measure as a Whole
3.
The Panel should
have explicitly concluded that the amended tuna measure as a whole is
inconsistent with the WTO provisions in question rather than making separate
findings and conclusions in respect of specific requirements of the measure. The
eligibility criteria, the certification requirements and the tracking and
verification requirements relate to elements of the legal tests necessary to
establish the WTO-inconsistency of the amended tuna measure as a whole.
Specifically, they relate to the second part of the legal test in Article 2.1
of the TBT Agreement and to the legal test under the chapeau of Article XX
of the GATT 1994. Mexico did not challenge these requirements independently as
three separate measures and did not have to establish an independent prima
facie case for each. This error of the Panel is replicated in the arguments of
the United States.
II. ERRONEOUS ARGUMENTS THAT FORM THE FOUNDATION OF THE APPEAL
A. Modification
of Conditions of Competition & Detrimental Impact
4.
In the original
proceedings, the Appellate Body found in the context of Article 2.1 that the
tuna measure modified the conditions of competition in the U.S. market to the
detriment of Mexican tuna products. The Appellate Body stated that the
detrimental impact of the measure on Mexican tuna products is caused by the
fact that most Mexican tuna products contain tuna caught by setting on dolphins
in the ETP and are therefore not eligible for a dolphin-safe label, whereas
most tuna products from the United States and other countries that are sold in
the U.S. market contain tuna caught by other fishing methods outside the ETP
and are therefore eligible for a dolphin-safe label. The aspect of the measure
that causes the detrimental impact is the difference in labelling conditions
for tuna products containing tuna caught by setting on dolphins in the ETP, on
the one hand, and for tuna products containing tuna caught by other fishing
methods outside the ETP, on the other hand. This detrimental impact is caused
by the measure itself and therefore has a genuine relationship with the
measure.
5.
This is unchanged
in the amended tuna measure and, therefore, the measure continues to deny
competitive opportunities to Mexican tuna products. This conclusion under the
first part of the legal test under Article 2.1 is sufficient, in the
circumstances of this dispute, to establish that the amended tuna measure is
inconsistent with Articles I:1 and III:4 of the GATT 1994.
6.
The amended
measure's labelling conditions and requirements operate together to modify the
conditions of competition to the detriment of imported Mexican tuna products.
The detrimental impact involves not only the denial of the dolphin-safe label
to Mexican tuna products, but also — at the same time — the granting of the
label to tuna products from the United States and other countries that
potentially may contain tuna caught in a manner that adversely affects
dolphins, and therefore is not dolphin-safe. Like in EC – Seal Products, it is
the combined operation of the prohibitive and permissive aspects of the measure
that leads to the de facto discrimination in question. By focusing on the fact
that the label is denied to Mexican tuna products, the United States is
missing the important permissive aspects of the amended tuna measure which, in
addition to their contribution to the detrimental impact, result in inaccurate
labelling information being passed to U.S. consumers due to their deficiencies
and gaps.
B. "Calibration"
to Risks to Dolphins
7.
The United States
argues that the certification requirements and tracking and verification
requirements are "calibrated" to the risks to dolphins from different
fishing methods in different fisheries and, for that reason, are even-handed
under Article 2.1 and do not impose arbitrary or unjustifiable discrimination
on Mexican products under the chapeau of GATT Article XX. These arguments are
flawed.
8.
The jurisprudence
developed by the Appellate Body in interpreting Article 2.1 of the
TBT Agreement and Article XX of the GATT 1994 does not include a "calibration
test" that can override the even-handedness and arbitrary discrimination
tests. Moreover, it is insufficient simply to assert, as the United States
does, that a distinction reflects a Member's chosen level of protection in
order to establish even-handedness or a lack of arbitrariness.
9.
Tuna is either "dolphin-safe"
or it is not. Eligibility for the dolphin-safe label cannot be viewed as a
relative assessment. The United States' argument implies that the label means "probably
dolphin-safe" or "might be dolphin-safe", rather than "dolphin-safe".
A "zero tolerance" benchmark is incorporated in the design,
architecture, revealing structure, operation, and application of the measure. The
measure's objectives are in no way qualified to allow some level of "acceptable"
mortality or serious injury or any "margin of error"; rather, the
objectives are asserted in terms that are absolute in the goal of avoiding
misleading consumers about whether the tuna they purchase was caught in a
manner that adversely affects dolphins. Complete precision is required for both
the certification process and the tracking and verification of tuna. Under
these circumstances, a purported comparison of the magnitude or nature of
dolphin harms caused by different fishing methods is not relevant.
10.
Even if "calibration"
were somehow permitted, in light of the adverse effects on dolphins from almost
all fishing methods in all fisheries, the purported differences between the ETP
and other tuna fisheries cited by the United States could not justify a
difference in the regulatory requirements, such that untrained captains are
allowed to make certifications and tuna cannot be accurately tracked back to
the vessel well in which it was stored after capture.
C. Absence
of a Rational Connection to the Objective
11.
The Panel
correctly interpreted and applied the law. Although the rational connection is "one of
the most important factors" in assessing whether there is arbitrary or
unjustifiable discrimination under Article XX and therefore even-handedness
under Article 2.1, depending on the nature of the measure at issue and the
circumstances of the case at hand, there could be additional factors that may
also be relevant to the overall assessment. Contrary to the U.S. "single factor"
argument, the Panel provided the United States with the opportunity to explain
why other factors establish that the measure is even-handed and not arbitrary
and the United States was unable to do so.
D. Amended Tuna Measure Not the AIDCP
12.
The United States
incorrectly suggests that the tracking, verification and observer requirements
imposed with respect to Mexican tuna products are exclusively the result of the
AIDCP, and would exist without the amended tuna measure. To the contrary, the
amended tuna measure expressly incorporates the AIDCP and other requirements
for the purpose of conditioning access to the U.S. dolphin-safe label in the
U.S. market. Moreover, the measure establishes requirements that apply to tuna
caught in fisheries outside the scope of the AIDCP. The United States also
repeatedly and incorrectly refers to the differences in the certification
requirements and the tracking and verification requirements between the "AIDCP
and NOAA" regimes. The relevant comparison is between the different ways
in which the amended tuna measure conditions access to the dolphin-safe label
under the different labelling conditions and requirements for tuna products
containing tuna caught by setting on dolphins in the ETP, on the one hand, and
for tuna products containing tuna caught by other fishing methods outside the
ETP, on the other hand.
E. Unnecessary
to Prove Mislabelling
13.
For the purposes
of establishing a lack of even-handedness under the second part of the legal
test in Article 2.1 and arbitrary discrimination under the chapeau of Article
XX, the Appellate Body made clear in EC – Seal Products that
Mexico is only required to establish a prima facie
case that, under the circumstances related to the design and application of the
Amended Tuna Measure's labelling conditions and requirements, tuna products
containing non‑dolphin-safe tuna caught outside the ETP could potentially
enter the U.S. market inaccurately labelled as dolphin-safe. The burden then
shifts to the United States to sufficiently explain how such instances can be
prevented in the application of the Amended Tuna Measure's labelling conditions
and requirements. Mexico has met its burden. That burden shifted to the United
States, which was unable to rebut Mexico's prima facie case.
III. Article 2.1 – CERTIFICATION REQUIREMENTS
A. Detrimental
Impact
14.
As explained
above, there was no need for the Panel to make an independent finding with
respect to the certification requirements because the amended tuna measure as a
whole has a detrimental impact on Mexican imports. Thus, even if the United
States is correct in its arguments, they have no bearing on the first part of
the legal test under Article 2.1. In the context of analyzing the denial of
competitive opportunities, it is not necessary to demonstrate actual trade
effects. If the Appellate Body finds that the differences in costs and burdens
are relevant to the determination, it is sufficient that the Panel found that
it is clear that the difference between having observers on-board large purse
seine vessels in the ETP and not having observers on-board other vessels
imposes a lighter burden on tuna products made from tuna caught other than by
large purse seine vessels in the ETP, as observer coverage involves the
expenditure of significant resources. The detailed cost and burden analysis put
forward by the United States is not necessary in the circumstances of this
dispute. Finally, there is a genuine relationship between the measure, which
contains all of the prohibitive and permissive requirements, and the
detrimental impact.
B. Whether
Detrimental Impact Stems Exclusively from a Legitimate Regulatory Distinction
1. Lack of Even-Handedness
15.
The Panel was
correct to consider that the different certification requirements are designed
in a manner that "may result in inaccurate information being passed to
consumers, in contradiction with the objectives of the amended tuna measure"
(i.e., because "captains may not necessarily and always have the technical
skills required to certify that no dolphins were killed or seriously injured in
a set or other gear deployment"), and to find, on this basis, that the "the
different certification requirements are not even-handed," such that the
detrimental impact cannot be said to stem exclusively from a legitimate
regulatory distinction.[62] The Panel provided the
United States with an opportunity to justify the regulatory distinction, and
the United States was unable to do so. Thus, there are no additional relevant
factors that could outweigh the Panel's finding. As explained above, the U.S.
arguments regarding "calibration" and the "AIDCP rather than the
measure" have no merit.
2. The
Panel's Findings Regarding the Determination Provisions Further Support Mexico's
Case
16.
Mexico agrees
with the United States that Mexico did not argue that the determination
provisions themselves directly result in detrimental impact. There was no need
for Mexico to do so. In determining whether the regulatory distinctions of the
measure are even-handed, the Panel was required to assess the design,
architecture, revealing structure, operation, and application of the measure,
and the determination provisions are an integral part of the amended tuna
measure. There was considerable evidence in the record to support the Panel's
findings. Moreover, the Panel was fully justified to apply the same logical
deductions to tuna fishing outside the ETP that the United States applies to
tuna fishing inside the ETP. It was both reasonable and appropriate for the
Panel to conclude that dolphin association with fishing methods other than
purse seine nets could be harmful to dolphins, and that purse seine fishing
could cause dolphin mortalities even if an ocean region did not feature
tuna-dolphin association similar to the ETP. The design of the determination
provisions is completely at odds with the objective of the amended tuna
measure, and the Panel was correct in unanimously finding that the regulatory
distinction is arbitrary.
IV. ARTICLE 2.1 – Tracking and Verification Requirements
A. Detrimental
Impact
17.
The above points
regarding the detrimental impact associated with the certification requirements
apply equally to the detrimental impact associated with the tracking and
verification requirements.
B. The
Panel Correctly Found that the Detrimental Impact Does Not Stem Exclusively
from a Legitimate Regulatory Distinction
18.
Contrary to the
arguments of the United States, the Panel was correct that Mexico had
established prima facie that there is no rational
connection between the different burden created by the tracking and
verification requirements and the objectives of the amended tuna measure. The
Panel correctly ruled that Mexico could establish a prima facie
case that tuna products containing non-dolphin-safe tuna caught outside the ETP
could potentially enter the U.S. market inaccurately labelled as
dolphin-safe on the basis of evidence and arguments going to the design,
architecture, and revealing structure of the amended tuna measure. The Panel
made a number of factual findings in its assessment of the different tracking
and verification requirements which demonstrate "major gaps in coverage"
that could potentially contribute to inaccurate labelling of tuna caught
outside the ETP large purse seine fishery. These factual findings, together with
the Panel's overall findings are sufficient to support the Panel's legitimate
regulatory distinction analysis and its conclusion in the second step of the
Article 2.1 legal test. However, in the event that the Appellate Body finds
that the Panel erred in declining to make a definitive finding on the question
of whether the different labelling conditions and requirements may permit non‑dolphin‑safe
tuna harvested in fisheries outside the ETP to be inaccurately and
unjustifiably granted the competitive advantage of the dolphin-safe label in
the U.S. market, Mexico respectfully requests that the Appellate Body complete
the analysis using the applicable standard of proof, as correctly found by the
Panel, and the Panel's findings of fact.
19.
Contrary to the
arguments of the United States, the Panel committed no error in resolving the
legitimate regulatory distinction analysis on the basis of the rational
connection. There are no additional relevant factors in the present dispute
that could outweigh the Panel's finding that the relevant regulatory
distinction is designed and applied in a manner that permits inaccurate
labelling. This is because incorrect labelling results in inaccurate and
misleading information being provided to consumers who choose to purchase and
consume tuna products which they believe have been produced in a dolphin-safe
manner, which directly contradicts the objectives of the amended tuna measure.
20.
For the same
reasons discussed above for the certification requirements, the Panel committed
no error as alleged by the United States in finding that the different tracking
and verification requirements evidence that the detrimental impact caused by
the amended tuna measure cannot be explained or justified on the basis of "calibration"
to different risk profiles in different fisheries. In addition, tuna is either
dolphin-safe or non-dolphin-safe at the point of capture. After the tuna has
been harvested and stored aboard a fishing vessel, the risk profile of harm to
dolphins is no longer a relevant consideration with respect to that tuna. It is
only this post-harvest tuna — the storage, transportation and processing of
which poses no risk of harm to dolphins — to which the different tracking and
verification requirements apply. Therefore, there is no nexus or relationship
at all between the tracking and verification of the dolphin-safe status of
harvested tuna and the allegedly different risk profiles of harm to dolphins
from different fishing methods in different areas of the ocean.
21.
Finally, Mexico's
claims are concerned with the amended tuna measure's differential regulatory
treatment under the different labelling conditions and requirements that
condition access to the competitive advantage of the "dolphin-safe"
label in the U.S. market. The Panel expressly explained that it is the design
and structure of the amended tuna measure, and not the AIDCP, that sets up the
relevant regulatory distinction in two sets of rules that condition access to
the dolphin safe label under a single regulatory framework. The AIDCP is not
relevant to the determination of consistency with Article 2.1.
V.
ArticleS I:1
and III:4 of the GATT 1994
22.
The amended tuna
measure conditions the extension of an advantage – namely, the "dolphin-safe"
label – in a manner that modifies the conditions of competition between like
imported tuna products in the U.S. market to the detriment of Mexican tuna
products and therefore violates Article I:1. Moreover, the measure has a
detrimental impact on the conditions of competition in the U.S. market to the
detriment of Mexican tuna products vis-à-vis U.S.
tuna products and therefore violates Article III:4. There is no merit to the
United States' arguments that the Panel erred in finding that these provisions
were violated.
VI. Chapeau of Article XX of the GATT 1994
23.
The Panel
correctly set out the three elements of the legal test under the chapeau of
Article XX and correctly concluded that, in the circumstances of this
dispute, it was appropriate for it to rely on the reasoning and findings that
it developed in the context of Article 2.1 in the course of its analysis under
the chapeau of Article XX.
A. The
Amended Tuna Measure Discriminates between Countries in which the Same
Conditions Prevail
24.
Contrary to the
United States' arguments, it is clear from the Panel's reasoning under
Article XX, read in conjunction with its reasoning under Article 2.1, that
the Panel conducted an analysis of whether discrimination exists and it found
that it does exist. Similar to EU – Seal Products,
the causes of discrimination found to exist under Articles I:1 and III:4 are
the same as those to be examined under the chapeau. Moreover, the Panel
correctly found that this discrimination occurs between countries where the
same conditions prevail. The same conditions exist in Mexico, the United States
and other countries because dolphins may be killed or seriously injured by all
fishing methods in all oceans, and accordingly accurate certification and
tracking and verification is necessary regardless of the particular fishery in
which tuna is caught.
B. The
Amended Tuna Measure is Applied in a Manner that Constitutes a Means of
Arbitrary or Unjustifiable Discrimination
25.
Contrary to the
United States' arguments, it is sufficient that the Panel elaborated upon the
relationship between the chapeau of Article XX and Article 2.1 and explained
why it was appropriate, in the circumstances of this dispute, to rely on the
reasoning it had developed in the context of Article 2.1 in the course of its
analysis under the chapeau of Article XX.
26. The Panel did not err, as the United States alleges, by merely
applying a "single-factor" test to determine arbitrary or
unjustifiable discrimination under the chapeau. Mexico acknowledges that, in
principle, the chapeau analysis is not necessarily a single-factor test. In the
present dispute, however, there are no additional relevant factors that could
outweigh the Panel's finding that the different certification requirements and
different tracking and verification requirements are applied in a manner that
is arbitrarily or unjustifiably discriminatory because they permit inaccurate
information to be passed to consumers with respect to the dolphin-safe status
of the tuna in the products which consumers choose to purchase, contrary to the
policy objective of conserving dolphins through informed consumer choice. The
Panel also did not err in finding that the determination provisions are
arbitrary.
27.
For the same
reasons explained above, the Panel also did not err in rejecting the
United States' argument that the differences in the requirements are "calibrated"
to the risks to dolphins arising from different fishing methods in different
ocean areas and rejecting the argument that the differences reflect the fact
that the parties to the AIDCP agreed to unique requirements.
ANNEX B-4
EXECUTIVE
SUMMARY OF the united states' APPELLEE'S SUBMISSION
1.
As described
below, Mexico's legal and factual appeals of the Panel's findings are without
merit. Accordingly, the United States respectfully requests the Appellate Body
to reject Mexico's appeals in their entirety.
2.
Section II of
this submission addresses one particular incorrect characterization of fact
that Mexico set out in the opening sections of its Other Appeal Submission.
Specifically, it demonstrates that, at the time of signing the AIDCP, the
parties knew that the United States had made any
change to the standard dolphin safe label subject to the fulfillment of a
particular condition, namely that setting on dolphins in the ETP was not having
a significant adverse impact on depleted dolphin populations. As the original
panel found, this condition was not fulfilled. Thus, Mexico is wrong to assert
that the parties to the AIDCP agreed to impose the unique requirements on their
tuna industries in exchange for the United States allowing access to its
dolphin safe label for tuna product produced by setting on dolphins.
3.
Sections III, IV,
and V set out the U.S. response to Mexico's specific appeals.
1. The
Three Challenged Aspects of the Amended Measure
4.
In Section III of
this submission, the United States explains that Mexico's claim that the Panel
erred in making separate findings as to the specific aspects of the amended
measure challenged by Mexico and should have found the amended measure as a whole inconsistent with the covered agreements is in
error. Subsections A and B provide an overview of Mexico's appeal and of the
Panel's relevant analysis.
5.
In Section III.C,
the United States explains the several reasons why Mexico's appeal is in error.
First, Mexico cites no basis for its assertion that the Panel's findings
regarding the detrimental impact caused by the certification and tracking and
verification requirements constituted legal error, in
that Mexico puts forward no reason why it was not reasonable for the Panel to
consider Mexico's claims of discrimination by interpreting Mexico's arguments
as Mexico did. Second, the factual premise of Mexico's argument – that Mexico
did not argue that the certification and tracking and verification requirements
cause a "distinct" detrimental impact from the eligibility criteria –
is in error. Third, it is unclear why Mexico's appeal, if accepted, would have
any substantive effect on this proceeding.
2. Article
2.1 of the TBT Agreement
6.
In Section IV of
this submission, the United States explains that Mexico's other appeals of the
Panel's analysis and findings regarding Article 2.1 of the TBT Agreement should
be rejected. In Section IV.A, the United States explains that Mexico's appeals
regarding the eligibility criteria should fail. In Section IV.B, the United
States explains that Mexico's appeals regarding the certification requirements
should also fail.
a. The
Eligibility Criteria
7.
In Section IV.A,
the United States explains that the Panel did not err in finding that the
eligibility criteria are consistent with Article 2.1 of the TBT Agreement.
Mexico makes several legal and factual appeals regarding the Panel's finding.
Each of these appeals is without merit.
8.
As explained in
Section IV.A.1, Mexico's appeal of the Panel's finding that the Appellate Body
had "definitively settled" that the eligibility criteria are
even-handed should fail. Mexico is wrong to argue that the Appellate Body's
even-handedness analysis was limited to the disqualification of tuna caught by
setting on dolphins and did not cover the eligibility of tuna caught by other
fishing methods. To the contrary, the issue of whether the United States could
deny access to the label for tuna product produced from setting on dolphins
while allowing other tuna product to be potentially eligible for the label was squarely before the Appellate Body. And the Panel did
not err in finding that the Appellate Body "definitively settled" the
issue. Mexico is also wrong to minimize the importance of one of the statements
of the Appellate Body on which the Panel relied, as that statement was made in
response to a U.S. argument and offered guidance on how the United States
could come into compliance with the covered agreements.
9.
As explained in
Section IV.A.2, Mexico's appeal of the Panel's legal analysis of whether the
eligibility criteria are even-handed should fail.
10.
First, Mexico's
appeal is premised on an incorrect legal test. The Appellate Body has explained
that, to analyze whether "detrimental impact stems exclusively from
legitimate regulatory distinctions" a panel must examine whether the
distinctions that account for the detrimental impact "are designed and
applied in an even-handed manner such that they may be considered 'legitimate'
for the purposes of Article 2.1."[63] For this dispute, the
Appellate Body has been clear that this answer will depend on whether the
regulatory distinction "is even-handed in the manner in which it addresses
the risks to dolphins arising from different fishing methods in different areas
of the ocean."[64] Mexico is wrong to
argue that whether the eligibility criteria are calibrated to the different
risks in different fisheries is irrelevant.
11.
Second, Mexico's
proposed "benchmarks" for purposes of an even-handedness analysis are
in error. Under Mexico's "zero tolerance" benchmark, Article 2.1
would prohibit the United States from drawing any
distinctions between fishing methods and Mexico's approach would prohibit the
United States from labeling tuna product as dolphin safe even where no dolphin
was harmed in producing that tuna. Such a position is inconsistent
with the Appellate Body's even-handed analysis, and Mexico errs in arguing for
such an approach. Mexico's alternate formulation of the "zero tolerance
benchmark" (focused on whether a particular fishing method causes "systematic"
adverse effects) was never presented to the Panel. As such, the Panel made no
assessment of this issue, and the statements that Mexico references cannot be
understood in this new context. And Mexico's other proposed benchmark (a comparison
of fishery-specific Potential Biological Removal (PBR) levels) is both
impossible to implement and not consistent with the objectives of the amended
measure.
12.
Third, the
eligibility criteria are even-handed under the correct legal test. Setting on
dolphins is the only fishing method in the world that intentionally targets dolphins. As
such, it is inherently dangerous to dolphins,
putting hundreds of dolphins in danger of sustaining both direct and
unobservable harms in each and every set. The same cannot be said of other
fishing methods, where "the nature and degree of the interaction is
different in quantitative and qualitative terms."[65] Numerous factual
findings of the Panel, as well as uncontested facts on the record, support the
conclusion that the eligibility criteria are even-handed. The factual findings
of the Panel establish that the ETP large purse seine fishery has a different,
and greater, risk profile for dolphins – in terms of both direct and
unobservable harms – than other fisheries. In addition, numerous uncontested
facts on the record support this conclusion. Specifically, the United States
has submitted fishery-by-fishery data, generated by RFMOs, national
governments, and scientists, showing the clear difference between the ETP large
purse seine fishery and other fisheries. Mexico has not refuted or challenged
the accuracy of this data.
13.
As explained in
Section IV.A.3, Mexico's Article 11 claims also lack merit.
14.
First, the Panel
did not improperly change from the original proceeding its finding concerning
the unobserved harms of dolphin sets. As an initial matter, Mexico does not
explain how the Panel's alleged error in this regard is "so material"
that it undermines the objectivity of the Panel's assessment of Mexico's claim,
and, on this basis, Mexico's claim does not meet the standard for a proper
Article 11 appeal.[66] Additionally, the Panel's
characterization of the original panel as having made definitive findings
concerning the "various adverse impacts
[that] can arise from setting on dolphins, beyond observed mortalities" was accurate, as the Appellate Body's analysis in the original
proceeding confirmed. Further, Mexico's suggestion that it introduced new
evidence concerning exhibits on which the original panel relied is incorrect.
15.
Second, the Panel
did not err in finding that other fishing methods do not have unobservable
effects similar to those associated with setting on dolphin in the ETP.
Contrary to Mexico's assertion that the Panel ignored certain evidence, the
Panel conducted a detailed analysis of the evidence on the record, including
discussing the paragraphs of Mexico's submissions that Mexico asserts the Panel
ignored. Further, the Panel's finding was amply supported by evidence on the
record and reflected a weighing and balancing of that evidence of the sort
committed to a panel's discretion.[67] In making this appeal,
Mexico fails to confront the fact that the Panel was right that Mexico produced
no evidence that fishing methods other than setting on dolphins cause
unobservable harms that occur independently from direct, observable mortalities
and whose existence "cannot be certified because it leaves no observable
evidence."[68]
16.
Third, the Panel
did not err in its characterization of the Appellate Body's finding concerning
setting on dolphins. First, the original proceeding clearly resolved that
setting on dolphins, including under the AIDCP regime, causes "various
adverse impacts … beyond observed mortalities," as the Appellate Body
incorporated the original panel's finding in this regard.[69] Second, it is clear
from the Appellate Body report that the finding that setting on dolphins is "particularly
harmful to dolphins" was not limited to setting on dolphins other than
under the AIDCP regime. Rather, what makes setting on dolphins "particularly
harmful" includes the "various unobserved effects" that occur as
a result of the chase itself and thus are not addressed by the AIDCP
requirements, as well as the "substantial amount of dolphin mortalities
and injuries" that continue to occur under the AIDCP regime.
b. The
Certification Requirements
17.
In Section IV.B,
the United States explains that Mexico's appeals regarding the certification
requirements of the amended measure should be rejected.
18.
As explained in
Section IV.B.1, Mexico's appeal of the Panel's finding regarding the
reliability of captain's statements should fail. Mexico's explanation of this
appeal is improperly vague in that Mexico does not specify whether it is making
a legal or an Article 11 appeal, despite the Appellate Body's guidance
that parties must do so.[70] Regardless of how one
interprets Mexico's argument, however, the Panel's analysis and finding were
not in error.
19.
First, the Panel's
finding regarding the reliability of captains' certifications was not
inconsistent with Article 11. Mexico is wrong in arguing that the Panel failed
to understand or address its argument that the "specific circumstances"
associated with dolphin safe certifications render captains' certifications
inherently unreliable or any evidence related to that argument. To the
contrary, the Panel simply did not agree that Mexico had proven its case.
Mexico is also wrong to argue that the Panel erred by finding that Mexico had
not established that captains' statements were unreliable. In fact, the Panel's
finding was supported by a significant amount of evidence on the record, which
Mexico fails to confront in making this appeal. Further, Mexico does not even
allege that the Panel's treatment of the evidence undermined its objectivity,
as is required to meet the standard for a successful Article 11 claim.[71]
20.
Second, the Panel
did not err as a matter of law in its finding regarding the reliability of
captains' certifications. Mexico has not identified a legal finding that it
seeks reversal of, nor has it identified a legal error that the Panel has
allegedly committed. However, to the extent that Mexico is alleging that the
Panel committed a legal error, Mexico's appeal fails. In particular, any legal
finding that Mexico would appeal is amply supported by the evidence on the
record, and it cannot be said that the Panel's finding has no
basis in the record. Mexico's complaint is, rather, that the Panel failed to
accord to the evidence the weight that Mexico preferred and to make the factual
and legal findings that Mexico sought. However, this does not constitute
grounds for a legal appeal any more than it does for an Article 11 appeal.
21.
As explained in
Section VI.B.2, Mexico's appeal of the Panel's finding concerning the
geographic distribution of dolphin sets should be rejected. First, the Panel did analyze Mexico's evidence and arguments concerning the
existence of dolphin sets outside the ETP. However, the Panel had discretion to
choose "which evidence . . . to utilize in making findings" and the
fact that it did not rely on one of Mexico's exhibits in a particular place
does not establish a failure under Article 11.[72] Second, the Panel's
finding certainly had a "proper basis" in the evidence on the record,
as the record contained no evidence at all that
dolphins are chased to catch tuna anywhere
other than the ETP large purse seine fishery, let alone on a routine basis.
Third, the exhibit that Mexico asserts the Panel did not address in no way
undermines the Panel's finding.
3. Article
XX of the GATT 1994
22.
In Section V, the
United States explains that Mexico's appeals regarding Article XX of the
GATT 1994 should be rejected. Subsections A and B provide an overview of
the Panel's relevant analysis and Mexico's appeal. In Subsection V.C, the
United States explains that Mexico's appeal is in error.
23.
In Section V.C.1,
the United States addresses Mexico's argument regarding whether the application
of the measure results in discrimination. Mexico does not appear to allege that
the Panel erred in this section, and Mexico does not make explicit why this
section is relevant to its appeals under the chapeau. It does appear, however,
that Mexico is asserting that the "discrimination" found to exist for
purposes of positive GATT 1994 obligations must be the same for purposes of the
chapeau. But that is not necessarily the case, as the Appellate Body has noted.[73] Rather, whether
discrimination exists requires examination of "whether the 'conditions'
prevailing in the countries between which the measure allegedly discriminates
are 'the same.'"[74] Mexico also appears to
argue that the Panel should have found that the same set of "conditions"
are relevant for the analysis of all three aspects of the amended measure
challenged by Mexico.
24.
In Section V.C.2,
the United States explains that Mexico's argument that the Panel erred in
finding that the relevant "conditions" are the "same" is in
error. As discussed elsewhere, the objectives of
the measure – which the Panel found to have a close nexus with the policy
objective of subparagraph (g) – relate to all adverse effects on dolphin due to
commercial fishing practices inside and outside the ETP. As such, the relevant "conditions"
relate to all adverse effects suffered by dolphins, including mortality and
serious injuries and those unobservable harms that dolphins incur from being
chased. And the harm to dolphins in the ETP large
purse seine fishery and other fisheries is different,
in terms of dolphin mortalities and serious injuries and unobservable harms. As
the relevant "conditions" are not the "same," no
discrimination exists for purposes of the chapeau and the eligibility criteria
are thus justified under Article XX.
25.
In Section V.C.3,
the United States explains that Mexico's argument regarding whether the amended
measure imposes arbitrary or unjustifiable discrimination is in error. Mexico
is wrong to assert that it is arbitrary or unjustifiable to distinguish between
setting on dolphins and other methods. This distinction is, in fact,
reconcilable with, and rationally related to, the policy objective of
protecting dolphins. Setting on dolphins is the only
fishing method that intentionally targets dolphins. As such, every dolphin set
must involve a sustained interaction with a school of dolphins and must pose
significant risk of observed and unobserved harm to those animals. This inherent danger is simply not present in other fishing
methods. This difference is borne out by the factual findings of the Panel, as
well as RFMO and national government data and scientific studies. And Mexico is
wrong that Article XX(g) prohibits
Members from applying measures that are "calibrated" to different
risks. Indeed, surely the opposite is
true.[75]
26. For the foregoing reasons, the United States respectfully requests
the Appellate Body to reject in their entirety Mexico's appeals of the Panel's
report.
_______________
ANNEX C
Arguments
of the Third PaRTICIPANTS
Contents
|
Page
|
Annex C-1
|
Executive summary of
Canada's third participant's submission
|
C-2
|
Annex C-2
|
Executive summary of the
European Union's third participant's submission
|
C-3
|
Annex C-3
|
Executive summary of Japan's
third participant's submission
|
C-6
|
Annex C-4
|
Executive summary of New
Zealand's third participant's submission
|
C-7
|
ANNEX C-1
EXECUTIVE
SUMMARY OF canada's THIRD PARTICIPANT'S SUBMISSION
I.
Introduction
1.
Canada addresses:
the scope of review under Article 21.5 of the DSU; the allocation of the burden
of proof under Article 2.1 of the TBT Agreement; and the interpretation of the
chapeau under Article XX of GATT 1994.
II. Scope of Review under Article 21.5 of the DSU
2.
Canada considers
that a review under Article 21.5 allows a compliance panel to consider
unchanged aspects of the amended measure because the amended measure, viewed as
a whole, may alter the legal import of those unchanged aspects in the context
of the amended measure.
3.
Canada is of the
view that it is unclear whether the Appellate Body found that the eligibility
criteria are consistent with Article 2.1. It should clarify this point.
III. The Allocation of the Burden of Proof under Article 2.1
4.
The United States
asserts that the complainant must demonstrate that the measure at issue
satisfies both elements of the "less favourable treatment" test in
Article 2.1. Canada disagrees.
5.
The burden should
lie on the respondent to demonstrate that the LRD
element is satisfied once the complainant has demonstrated that the measure has
caused such an impact. This allocation reflects the balance found in GATT 1994.
Further, given the parallel nature of the LRD test under Article 2.1 and
the chapeau of Article XX, it is reasonable and logical to conclude that the
LRD test also functions as an exception and a defence.
IV. Article XX of the Chapeau
6.
Canada agrees
with the United States that the Compliance Panel erred in collapsing the
separate analyses of whether there is discrimination and whether it is
arbitrary or unjustifiable into one, and by considering the arbitrary and
unjustifiable discrimination element before determining whether there was
discrimination between countries where the same conditions prevail.
7.
The Compliance
Panel also failed to conduct the appropriate analysis of whether the relevant
conditions were the same across countries. With
respect to the eligibility requirements, instead of examining different fishing
methods, it should have analysed whether these conditions occurred in
countries.
8.
Canada disagrees
with the United States' characterization of the test for arbitrary or
unjustifiable discrimination. The scope of the test
to determine whether there is arbitrary and unjustifiable discrimination is
dictated by the particular facts of the dispute. The rational connection test
is particularly important and may be the only test needed, depending on
circumstances.
ANNEX C-2
EXECUTIVE
SUMMARY OF the european union's THIRD PARTICIPANT'S SUBMISSION
I.
Article 2.1
TBT
A. US claims
1. Certification
1.
Whether or not
there is a detrimental impact is assessed by considering what the measure
causes. The measure is the set of relevant regulatory distinctions.
The increased certification requirements do not change this aspect of the
assessment and thus do not bear on the question of detrimental impact.
2.
Members must
ensure that their SPS measures are adapted to the characteristics of the area
from which the product originates. The issue of calibration arises in this
case, in a particular way, in light of the argument Mexico is making. That
argument is conceptually similar to the rule in Article 5.5 SPS, which requires
comparable regulatory responses to comparable risks. We only get to these
arguments because recognising the concept of de facto
discrimination opens up the discussion to include all facts. Hence the US point
that what Mexico is arguing for would mean that the US would have to impose the
AIDCP standards on all its trading partners, who would no doubt argue that is
unnecessary.
3.
It is the private
choice of the Mexican tuna fleet to continue setting on dolphins. The concept
of de facto discrimination demands some
consideration of this issue. Further, recalling that the covered agreements may
encourage but do not mandate international harmonisation; and recalling that
there is no pure proportionality test (no trade-off between the appropriate
level of protection and trade-restrictiveness), because judges are neither
mandated nor qualified to make political decisions – we think that there is
such a thing as regulatory space. We have said in all the recent TBT cases that
regulatory autonomy is as much a pillar of the WTO as MFN or national
treatment. Regulatory space cannot be subjected to judicial scrutiny without
limitation. Beyond the threshold of regulatory space, regulating Members have
the right to choose: that is, there is some margin of appreciation. The chapeau
of Article XX does not preclude this: it precludes arbitrary discrimination.
4.
A cost-benefit analysis
does not necessarily identify the only measure that can reasonably be adopted.
It tests a measure for rationality by assessing whether its benefits outweigh
its costs. This means that there may be more than one measure that satisfies a
cost-benefit analysis. This is consistent with the concept of regulatory space,
within which Members have a margin of appreciation. We do not think that, in
order to be WTO consistent, a measure must be based on a cost-benefit analysis
that takes into account the costs of a measure for trading partners, but this
would be a strong indication that it falls within the concept of regulatory
space. We would expect a cost-benefit analysis to take into account the welfare
loss to consumers resulting from higher import prices. We recognise that some
caution should be exercised when looking at these issues through the prism of
costs and benefits, in the sense that it may be problematic when the benefits
accrue to the domestic industry, whilst the costs are borne by the imported product.
We do not, however, see this case in those terms.
5.
We note that
another way of looking at the kinds of issues that arise in this case is in
terms of regulatory competition. Different Members have different regulations.
Some are more burdensome than others. This can affect trade, and Members can
disagree about whether the regulatory burden imposed by another Member is
necessary. However, we again draw attention to the fact that Mexico's case is
not directed at the removal of additional costs resulting from the
US measure. Rather, Mexico's complaint is that the same costs should be
imposed on everyone else. In this kind of situation, we wonder if it is not
relevant, for the purposes of assessing such arguments, whether or not the
complaining Member itself imposes
such costs on everyone else.
2. Tracking
and verification
6.
The EU refers to
the comments that it has already made with respect to the certification
requirements. Our ability to comment more precisely is significantly hampered
by the fact that the version of the Panel Report that has been circulated to
the Members contains many instances in which allegedly confidential information
has been extensively deleted. Furthermore, we situate this issue in the broader
context of third party rights in the panel proceedings. We specifically request
the Appellate Body to address this point in its Report.
7.
Turning to the
substance of the matter, we note that the Panel considers that the explanations
provided by the US do not disclose any "rational connection" between
the objective of the measure and the tracking and verification requirements. At
the same time, the Panel states that it is not suggesting that there could not
be a reason for such differences. We consider that the existence of a
reasonable cost-benefit analysis could support the proposition that a measure
is even-handed, particularly if such analysis would account for costs to
foreign and domestic trade interests in an even-handed way, as well as the
costs to US consumers resulting from the higher price of dolphin-safe tuna.
B. Mexico's claims
1. Whole measure
8.
The measure and
the set of regulatory distinctions complained of (viewed in the context of the
measure as a whole) are conceptually the same thing. In this case Mexico
complained about three regulatory distinctions: eligibility; certification; and
tracking and verification. We agree with Mexico that a panel must determine
whether or not the measure (that is, the set of regulatory distinctions
complained of, not one of them considered in isolation) causes a detrimental
impact. We also agree with Mexico that, in this particular case, the three
factors on which the original finding of detrimental impact was based have not
changed. We also agree with Mexico that, if a panel finds detrimental impact,
it must go on to consider whether or not the measure is even‑handed. We agree
that, in this respect, a panel is entitled to consider the regulatory
distinctions one at a time and/or collectively.
9.
However, if a
panel finds that one of the regulatory distinctions (in this case, eligibility)
does not demonstrate a lack of even-handedness, then we think that that
regulatory distinction is no longer problematic from a WTO law point of view,
and should not be caught by the findings and conclusions of the panel.
Therefore, if the Panel was correct to find that the eligibility criteria do
not demonstrate a lack of even-handedness (a point that we address below), then
we think that it is correct that the eligibility criteria should not be part of
the final adverse ruling. Another way of saying the same thing is that the
measure found to be WTO inconsistent consists of the second (certification) and
third (tracking and verification) regulatory distinctions. We take note of
Mexico's attempt to sweep up the eligibility criteria into the concept of the
measure, even if the eligibility regulatory
distinction would ultimately be found to be even-handed. We do not agree with
that proposition.
2. Eligibility
10.
We do not
consider that Members are jurisdictionally "precluded" from making
particular claims and arguments in compliance proceedings, as a function of
what happened in the original proceedings. At the same time, we do consider
that compliance adjudicators are expected to take into account the findings
from the original proceedings. We do not agree with Mexico's assertion that "it
is not possible to compare the raw numbers of dolphins killed [or injured] in
different fisheries". We believe that a measure can and indeed must be
calibrated or adapted to the characteristics of the area from which the product
originates. Furthermore, we do not agree with Mexico's assertion that the
burden of generating conclusive evidence in this
respect falls on the regulating authority. We find contextual support for these
propositions in Article 5.7 of the SPS Agreement and in Article 2.3 of the
TBT Agreement.
3. Certification
11.
In our
experience, captain's certifications are one pillar of the overall system. Some
infringements are reported, but they would appear
to be the exception rather than the rule. In this respect, the Panel's
assessment appears reasonable to us. Like the Panel, we would be hesitant about
the "significant implications" of encroaching on Members' regulatory
space based on the assumption that captain's certifications are inherently
unreliable.
ANNEX C-3
EXECUTIVE
SUMMARY OF Japan's THIRD PARTICIPANT'S SUBMISSION
I. Legal Test Under the Second Step of TBT
Article 2.1
1. Rather than following the test
articulated by the Appellate Body, the Panel majority focused its inquiry on
whether the detrimental impact can be reconciled with, or is rationally related
to, the policy pursued by the measure.[76] Japan believes that whether the regulatory distinctions causing
detrimental impacts are calibrated to the risks they address is a critical
question to determine even-handedness under Article 2.1. Japan encourages the
Appellate Body to identify what risks each of the regulatory distinctions in
the amended measure addresses, and to examine whether each regulatory
distinction is "calibrated" to those risks.
II. The "Sufficient Flexibility"
Criteria Under the Second Step of TBT Article 2.1 and the GATT Article XX Chapeau
2. The measure at issue involves a
process or production method (PPM) like in US ‒ Shrimp.
Japan therefore considers that "arbitrary or unjustifiable discrimination"
under the Article XX chapeau and the second step of the TBT Article 2.1
analysis in this case could have followed the approach taken for "arbitrary
and unjustifiable discrimination" under the Article XX chapeau in US – Shrimp, where the Appellate Body agreed that "conditioning
market access on the adoption of a programme comparable in
effectiveness, allows for sufficient flexibility in the application
of the measure so as to avoid 'arbitrary or unjustifiable discrimination'."[77]
III. Interpretation of "Where The Same
Conditions Prevail" in the GATT Article XX Chapeau
3. Regarding the eligibility criteria,
the Panel and the United States appear to be of the same view that the "type
of harm" caused by the two different fishing methods is the relevant "condition."[78] Japan believes that the relevant "conditions" are what would
make the distinction or discrimination "comparable" for the purpose
of the inquiry under the chapeau. Therefore, the presence, and not the degree,
of risks addressed by the measures in question, should be the relevant "condition."
Furthermore, conflating the cause of the regulatory distinction with the
relevant "condition" will always result in a finding of dissimilar
conditions.
IV.
Legal Test Under GATT Article III:4
4. Japan continues to believe that the
assessment of de facto less favourable
treatment under GATT Article III:4 should proceed along the lines of the
two-step test developed by the Appellate Body in the context of Article
2.1 of the TBT Agreement. The application of different tests gives rise to
incongruous outcomes.
ANNEX C-4
EXECUTIVE
SUMMARY OF new zealand's THIRD PARTICIPANT'S SUBMISSION
New Zealand welcomes this opportunity to provide its views on matters
at issue in the appeal of the Compliance Panel's report. In this submission,
New Zealand draws attention to three matters concerning this appeal. First, in
determining compliance of an implementing measure under the Understanding on
Rules and Procedures Governing the Settlement of Disputes (DSU), a panel is
required to consider the measure "as a whole". Second, in relation to
the approach to "treatment no less favourable" in Article 2.1 of
the Agreement on Technical Barriers To Trade (TBT Agreement), New Zealand
considers that the so-called "calibration test" is simply part of the
assessment of whether the regulatory distinction is even-handed and not a 'separate
test'. Third, in New Zealand's view it would be unreasonable for the
United States to impose observer requirements on other countries involved in
tuna fisheries in other parts of the world where there is a different risk of
dolphin mortality as a result of different fishing methods than occurs in the
Eastern Tropical Pacific (ETP).
_______________
ANNEX D
PROCEDURAL
RULING
Contents
|
Page
|
Annex D
|
Procedural Ruling of 21 July
2015 regarding modification of the dates for the oral hearing
|
D-2
|
|
|
|
ANNEX D
PROCEDURAL
RULING of 21 july 2015
1.1. On 13 July 2015, the Division hearing this appeal informed the
participants and the third participants that the oral hearing would take
place on 7‑8 September 2015. The scheduling of the oral hearing in this
appeal was coordinated with the working schedules in the other proceedings
simultaneously before the Appellate Body, in particular, in China – Measures Imposing Anti‑Dumping Duties on High-Performance
Stainless Steel Seamless Tubes ("HP-SSST") from Japan (DS454) and from the European
Union (DS460).
1.2. On 15 July 2015, the Division received a letter from Mexico requesting
that the oral hearing not be scheduled on 7‑8 September 2015 because a key
member of Mexico's litigation team would not be available on those dates.
Mexico submitted that attending the hearing with a reduced legal team would
have an impact on its ability to present adequately its arguments before the
Appellate Body. Mexico requested the Division to
modify the date of the oral hearing to a date either before, or after, 7‑8
September 2015. Mexico further requested the Division to take into
consideration the fact that the same legal team will represent Mexico in the
oral hearing in United States – Certain Country of Origin Labelling (COOL) Requirements (Recourse by the United States to Article
22.6 of the DSU) (DS386), scheduled for 15-16 September 2015. Mexico thus suggested that the Division reschedule the oral hearing
in this appeal and hold it on, for instance, 3‑4 September or 21‑22 September
2015.
1.3. On 16 July 2015, the Division wrote to the United States and to the
third participants soliciting their views on Mexico's request. On 16 July,
comments were received from the European Union, and, on 17 July, comments
were received from Japan and the United States.
1.4. In
their comments, neither the United States nor any of the third participants
objected to Mexico's request, at least with respect to the proposed dates of 21‑22
September. Similar to Mexico, the United States wished
to avoid a hearing during the week starting 14 September 2015, as it also has
members of the same legal team engaged in both the current proceedings and
those in US – COOL (Article 22.6 – US). The United States indicated that, if it were not possible to move
the hearing dates to the week starting 21 September 2015, then it would prefer
to retain the currently scheduled dates of 7‑8 September. The United States did
not favour holding the oral hearing on 3‑4 September, due to its own
scheduling concerns.
1.5. The European Union indicated its flexibility with respect to
the alternative dates proposed by Mexico, while stating that it would prefer to
avoid a hearing on 14‑17 September 2015, as its lawyers in the current appeal
are due to participate in hearings in two other cases on those dates. The
European Union expressed the view that requests to change dates in a working
schedule should be approached on a case-by-case basis, and identified the
following elements as potentially relevant to the decision as to whether to
accept or reject such requests: (i) how far in advance the dates of the oral
hearing have been known; (ii) the nature of the scheduling conflict; (iii) the
capacity of Members, including developing country Members, to deal with several
disputes at the same time; and (iv) the Appellate Body's own resource
constraints and scheduling requirements. The European Union considered the Appellate
Body best placed to weigh and balance these competing considerations.
1.6. Japan did not comment on the specific dates proposed by Mexico.
Japan noted, however, that the hearing dates communicated by the Appellate
Body, as well as the alternative dates suggested by Mexico, all fall outside the time-period stipulated in Article 17.5
of the Understanding on Rules and Procedures Governing the Settlement of
Disputes (DSU) and Rule 27 of the Working Procedures for Appellate Review (Working Procedures). Japan expressed its
understanding that the Division would, in any event, provide sufficient
explanation for its determination of any hearing dates.
1.7. In considering Mexico's request, we recall that Rule 16(2) of the
Working Procedures provides:
In exceptional circumstances,
where strict adherence to a time-period set out in these Rules would result in
a manifest unfairness, a party to the dispute, a participant, a third party or
a third participant may request that a division modify a time-period set out in
these Rules for the filing of documents or the date set out in the working
schedule for the oral hearing. Where such a request is granted by a division,
any modification of time shall be notified to the parties to the dispute,
participants, third parties and third participants in a revised working
schedule.
1.8. Mexico submits that attending the hearing with a reduced legal team would
adversely impact its ability to present adequately its arguments before the
Appellate Body. We recognize that, as a general principle, a Member's right to
defend properly its case is instrumental to the exercise of its rights under the DSU.
1.9. We further observe that the WTO dispute settlement system is
currently experiencing a high level of activity, which can be onerous for WTO
Members engaged in multiple, parallel proceedings. In such circumstances, a
Member's ability to engage effectively in all such proceedings may be impaired,
especially if that Member is a developing country. Moreover, Members' capacity
to manage limited resources across multiple disputes may be rendered all the
more difficult given that the timeframes in appellate proceedings are set
independently from those in other phases of WTO dispute settlement proceedings
in other disputes.
1.10. In the circumstances of this appeal, we consider relevant the fact
that at least some members of the legal teams representing the participants in
this appeal are also representing the parties in US –
COOL (Article 22.6 – US), and that an oral hearing in those arbitral
proceedings is scheduled for 15-16 September 2015. We further note that
neither the United States nor any third participant in these
proceedings has expressed any opposition to Mexico's request to reschedule the
oral hearing for 21-22 September 2015, or suggested that holding the oral
hearing on those days would prejudice its due process
rights.
1.11. Taking account of the particular circumstances of this appeal, and
in the light of the above considerations, taken together, we consider that
Mexico has identified exceptional circumstances warranting modification of the dates for the oral hearing. We, therefore, decide to modify the
Working Schedule in this appeal and to hold the oral hearing on 21-22 September
2015.
1.12. A
revised Working Schedule is attached to this ruling.
__________
* This Notice, dated 5 June 2015, was circulated to Members as
document WT/DS381/24.
[1] See, e.g.,
Panel Report, paras. 7.233, 7.263, 8.2(b) (with respect to the certification
requirements); id. paras. 7.400, 8.2(c) (with
respect to the tracking and verification requirements).
[2] See, e.g.,
Panel Report, paras. 7.162, 7.170, 7.178-179, 7.454, 7.500, 8.2(b). The United
States considers that the Panel erred as a matter of law with respect to this
finding. However, to the extent that the Appellate Body considers the question
of the meaning of municipal law in this instance to be a question of fact, the
Panel acted inconsistently with Article 11 of the DSU in concluding that the
certification requirements apply to all tuna
and tuna product.
[3] See e.g.,
Panel Report, paras. 7.233-7.234, 7.246, 7.598-7.602, 8.2(b).
[4] See e.g.,
Panel Report, paras. 7.258-263, 7.283, 8.2(b).
[5] See, e.g.,
Panel Report, paras. 7.369-7.372, 7.382, 7.462-7.463, 7.502, 8.2(c). The United
States considers that the Panel erred as a matter of law with respect to this
finding. However, to the extent that the Appellate Body considers the question
of the meaning of municipal law in this instance to be a question of fact, the
Panel acted inconsistently with Article 11 of the DSU in concluding that the
tracking and verification requirements apply to all
tuna and tuna product.
[6] See, e.g.,
Panel Report, paras. 7.392, 7.395, 7.397-7.402, 8.2(c).
[7] See, e.g.,
Panel Report paras. 7.455-456, 7.500-7.501, 7.504, 8.3(b) (with respect to the
certification requirements); id. paras.
7.464-465, 7.502-7.504, 8.3(c) (with respect to the tracking and verification
requirements).
[8] See, e.g.,
Panel Report, paras. 7.603-7.605, 8.5(b) (with respect to the certification
requirements); id. paras. 7.611, 8.5(c)
(with respect to the tracking and verification requirements).
[9] See, e.g.,
Panel Report, paras. 7.455-7.456, 8.3(b).
[10] See, e.g.,
Panel Report, paras. 7.463-7.465, 8.3(c).
[11] See, e.g.,
Panel Report, paras. 7.500-7.501, 8.3(b).
[12] See, e.g.,
Panel Report, paras. 7.502-7.503, 8.3(c).
[13] See, e.g.,
Panel Report, paras. 7.598-7.603, 7.605, 8.5(b).
[14] See, e.g.,
Panel Report, paras. 7.604-7.605, 7.607, 8.5(b).
[15] See, e.g.,
Panel Report, paras. 7.610-7.611, 8.5(c).
[16] See
Panel Report, paras. 7.258-7.263, 7.604.
[17] See, e.g.,
Panel Report, paras. 7.258-7.263, 7.604.
[18] See
Panel Report, paras. 7.543-7.545.
* This document,
dated 10
June 2015, was circulated to Members as document WT/DS381/25.
[19] The Panel's errors in law are
contained, inter alia, in paragraphs 7.97-7.108,
7.179, 7.233, 7.246, 7.258-7.259, 7.283, 7.382, 7.400, 7.428, 7.430, 7.442,
7.451, 7.455-7.456, 7.464-7.465, 7.492, 7.501, 7.503, 7.504, 7.541, 7.605,
7.607, 7.611, 8.2(b), 8.2(c), 8.3(b), 8.3(c), 8.5(b), 8.5(c) of the Panel
Report.
[20] The Panel's errors in law are
contained, inter alia, in paragraphs 7.117-7.134
and 8.2(a) of the Panel Report.
[21] The Panel's errors in law are
contained, inter alia, in paragraphs 7.130, 7.135,
7.120, 7.130, 7.132, 7.134 and 7.135 of the Panel Report.
[22] The Panel's errors in law are contained,
inter alia, in paragraphs 7.208-7.211,
7.241-7.242 and 7.595‑7.597 of
the Panel Report.
[23] The Panel's errors in law are
contained, inter alia, in paragraphs 7.545, 7.577,
7.581-7.582, 7.584‑7.585 and 8.5(a), of the Panel Report.
[24] US – Tuna II
(Mexico) (AB), paras. 289-292, 298.
[25] See US –
Tuna II (Article 21.5 – Mexico) (Panel), para. 7.142.
[26] US – Tuna II
(Article 21.5 – Mexico) (Panel), para. 8.2(b).
[27] US – Tuna II
(Mexico) (AB), para. 216 (quoting US – Wool
Shirts and Blouses (AB), p. 14).
[28] US –
Gambling (AB), para. 140.
[29] US – Tuna II
(Article 21.5 – Mexico) (Panel), para. 7.152.
[30] US – Tuna II
(Article 21.5 – Mexico) (Panel), para. 7.169.
[31] See, e.g.,
Korea – Various Measures on Beef
(AB), paras. 141, 144.
[32] See US –
Tuna II (Article 21.5 – Mexico) (Panel), paras. 7.170, 7.179,
8.2(b).
[33] US – Tuna II
(Article 21.5 – Mexico) (Panel), para. 8.2(b).
[34] US – COOL
(Article 21.5 – Canada/Mexico) (AB), para. 5.92; see also US – Tuna II (Mexico) (AB), n. 461; US – COOL (AB), para. 271.
[35] See US –
Tuna II (Article 21.5 – Mexico) (Panel), paras. 7.233-234, 7.263,
8.2(b).
[36] US – Tuna II
(Article 21.5 – Mexico) (Panel), para. 8.2(c).
[37] US – Tuna II
(Article 21.5 – Mexico) (Panel), para. 7.288.
[38] US – Tuna II
(Article 21.5 – Mexico) (Panel), para. 7.382; see also id.
para. 7.372.
[39] Japan
– Agricultural Products II (AB), para. 129.
[40] US – Tuna II
(Article 21.5 – Mexico) (Panel), para. 7.354 (emphasis omitted).
[41] See US –
Tuna II (Article 21.5 – Mexico) (Panel), paras. 7.372, 7.382,
8.2(c).
[42] US – COOL
(Article 21.5 – Canada/Mexico) (AB), para. 5.92; US – COOL (AB), para. 271.
[43] US – Tuna II
(Article 21.5 – Mexico) (Panel), para. 8.2(c).
[44] See US –
Tuna II (Article 21.5 – Mexico) (Panel), paras. 7.392, 7.400,
8.2(c).
[45] US – Tuna II
(Article 21.5 – Mexico) (Panel), para. 8.2(b)-(c).
[46] See
US – Tuna II (Article 21.5 – Mexico) (Panel),
paras. 8.3(b), 8.3(c).
[47] US – Tuna II
(Article 21.5 – Mexico) (Panel), paras. 8.5(b)-(c).
[48] EC – Seal
Products (AB), para. 5.303 (quoting US – Shrimp
(AB), para. 165).
[49] EC – Seal Products
(AB), para. 5.300; see also id.
para. 5.317.
[50] See US –
Tuna II (Article 21.5 – Mexico) (Panel), para. 7.169.
[51] See US –
Tuna II (Article 21.5 – Mexico) (Panel), paras. 7.605, 7.610-611.
[52] US – Tuna II
(Article 21.5 – Mexico) (Panel), paras. 8.5(b)-(c).
[53] US – Tuna II
(Article 21.5 – Mexico) (Panel), para. 8.5(b).
[54] See US –
Tuna II (Article 21.5 – Mexico) (Panel), paras. 7.605, 7.610-611.
[55] US – Tuna II
(Article 21.5 – Mexico) (Panel), paras. 8.5(b)-(c).
[56] Panel Report, US – Tuna II
(Article 21.5 – Mexico), paras. 8.2, 8.3.
[57] Panel Report, US – Tuna II
(Article 21.5 – Mexico), para. 7.105.
[58] See, e.g., Appellate Body Report, US – Tuna II (Mexico), para. 286.
[59] Panel Report, US – Tuna II
(Article 21.5 – Mexico), paras. 7.118-7.126, 7.130.
[60] Panel Report, US – Tuna II
(Article 21.5 – Mexico), para. 7.208.
[61] Panel Report, US – Tuna II
(Article 21.5 – Mexico), para. 7.242.
[62] Panel Report, US – Tuna II
(Article 21.5 – Mexico), para. 7.233.
[63] US – COOL
(Article 21.5 – Canada/Mexico) (AB), para. 5.92; see also US – Tuna II (Mexico) (AB), n. 461; US – COOL (AB), para. 271.
[64] US – Tuna II
(Mexico) (AB), para. 232.
[65] US – Tuna II
(Article 21.5 – Mexico) (Panel), para. 7.240 (maj. op.).
[66] See China –
Rare Earths (AB), para. 5.179; EC – Fasteners (AB),
para. 499.
[67] See Korea – Dairy (AB), para. 137.
[68] US – Tuna II
(Article 21.5 – Mexico) (Panel), paras. 7.132, 7.134.
[69] See
US – Tuna II (Mexico) (AB), para. 251; see also id. para. 287.
[70] See China –
Rare Earths (AB), para. 5.173.
[71] See China –
Rare Earths (AB), para. 5.179; EC – Fasteners (AB),
para. 499.
[72] China – Rare
Earths (AB), para. 5.178.
[73] See, e.g.,
EC – Seal Products (AB), para. 5.298.
[74] EC – Seal
Products (AB), para. 5.317.
[75] See US –
Shrimp (AB), para. 165; US – Shrimp (Article 21.5
– Malaysia) (AB), paras. 140-143.
[76] Panel Report, paras. 7.91 and
7.390.
[77] Appellate Body Report, US – Shrimp (Article 21.5 – Malaysia), para. 144.
[78] Panel Report, para. 7.584.