Topics handled by WTO committees and agreements
Issues covered by the WTO’s committees and agreements

REPERTORY OF APPELLATE BODY REPORTS

TBT Agreement


ON THIS PAGE:

> Object and purpose
> Annex 1 — Terms and their definitions
> Annex 1.1 — “technical regulation” definition
> Annex 1.2 — Standards
> Article 2.1 — MFN and national treatment obligations
> Article 2.2 — Not more trade-restrictive than necessary to fulfil a legitimate objective. See also General Exceptions: Article XX of the GATT 1994, Article XX(a) and (b) — Necessity test (G.3.3A); General Exceptions: Article XX of the GATT 1994, Article XX(d) — Necessity test (G.3.6); General Exceptions: Article XIV of the GATS, Article XIV(a) — Necessity test — Reasonably available alternative (G.4.4)
> Article 2.4 — International standards as a basis for technical regulation. See also Burden of Proof, General (B.3.1); Temporal Application of Rights and Obligations, TBT Agreement (T.5.3)
> Article 2.4 — “except when such international standards or relevant parts would be an ineffective or inappropriate means”
> Article 2.4 — Preparation, adoption and continued application of existing regulations
> Article 2.12 — Reasonable interval between publication and entry into force of technical regulations. See also Relevance of Article 2.12 of the TBT Agreement when implementation takes place through a technical regulation (ARB.5.16.2)

T.4.0 Object and purpose     back to top

T.4.0.1 US — Clove Cigarettes, paras. 89, 91–92, 94–96
(WT/DS406/AB/R)
 

The preamble of the TBT Agreement … sheds light on the object and purpose of the Agreement. …
 

...
 

… The second recital indicates that the TBT Agreement expands on pre-existing GATT disciplines and emphasizes that the two Agreements should be interpreted in a coherent and consistent manner.
 

The fifth recital reflects the trade-liberalization objective of the TBT Agreement by expressing the “desire” that technical regulations, technical standards, and conformity assessment procedures do not create unnecessary obstacles to international trade. …
 

...
 

The objective of avoiding the creation of unnecessary obstacles to international trade through technical regulations, standards, and conformity assessment procedures is, however, qualified in the sixth recital by the explicit recognition of Members’ right to regulate in order to pursue certain legitimate objectives. …
 

We read the sixth recital [of the TBT Agreement] as counterbalancing the trade-liberalization objective expressed in the fifth recital. …
 

The balance set out in the preamble of the TBT Agreement between, on the one hand, the desire to avoid creating unnecessary obstacles to international trade and, on the other hand, the recognition of Members’ right to regulate, is not, in principle, different from the balance set out in the GATT 1994, where obligations such as national treatment in Article III are qualified by the general exceptions provision of Article XX.
 

T.4.0.2 US — Clove Cigarettes, para. 109
(WT/DS406/AB/R)
 

… the balance that the preamble of the TBT Agreement strikes between, on the one hand, the pursuit of trade liberalization and, on the other hand, Members’ right to regulate, is not, in principle, different from the balance that exists between the national treatment obligation of Article III and the general exceptions provided under Article XX of the GATT 1994. The second recital of the preamble links the two Agreements by expressing the “desire” “to further the objectives of the GATT 1994”, while the “recognition” of a Member’s right to regulate in the sixth recital is balanced by the “desire” expressed in the fifth recital to ensure that technical regulations, standards, and conformity assessment procedures do not create unnecessary obstacles to international trade. We note, however, that in the GATT 1994 this balance is expressed by the national treatment rule in Article III:4 as qualified by the exceptions in Article XX, while, in the TBT Agreement, this balance is to be found in Article 2.1 itself, read in the light of its context and of its object and purpose.
 

T.4.0A Annex 1 — Terms and their definitions     back to top

T.4.0A.1 US — Tuna II (Mexico), para. 354
(WT/DS381/AB/R)
 

The introductory clause of Annex 1 to the TBT Agreement also stipulates that: “[f]or the purpose of this Agreement, however, the following definitions shall apply”. The use of the word “however” indicates that the definitions contained in Annex 1 to the TBT Agreement prevail to the extent that they depart from the definitions set out in the ISO/IEC Guide 2: 1991. A panel must therefore carefully scrutinize to what extent the definitions in Annex 1 to the TBT Agreement depart from the definitions in the ISO/IEC Guide 2: 1991.
 

T.4.1 Annex 1.1 — “technical regulation” definition     back to top

T.4.1.1 EC — Asbestos, para. 67
(WT/DS135/AB/R)
 

The heart of the definition of a “technical regulation” is that a “document” must “lay down” — that is, set forth, stipulate or provide — “product characteristics”. The word “characteristic” has a number of synonyms that are helpful in understanding the ordinary meaning of that word, in this context. Thus, the “characteristics” of a product include, in our view, any objectively definable “features”, “qualities”, “attributes”, or other “distinguishing mark” of a product. Such “characteristics” might relate, inter alia, to a product’s composition, size, shape, colour, texture, hardness, tensile strength, flammability, conductivity, density, or viscosity. In the definition of a “technical regulation” in Annex 1.1, the TBT Agreement itself gives certain examples of “product characteristics” — “terminology, symbols, packaging, marking or labelling requirements”. These examples indicate that “product characteristics” include, not only features and qualities intrinsic to the product itself, but also related “characteristics”, such as the means of identification, the presentation and the appearance of a product. In addition, according to the definition in Annex 1.1 of the TBT Agreement, a “technical regulation” may set forth the “applicable administrative provisions” for products which have certain “characteristics”. Further, we note that the definition of a “technical regulation” provides that such a regulation “may also include or deal exclusively with terminology, symbols, packaging, marking or labelling requirements” (emphasis added). The use here of the word “exclusively” and the disjunctive word “or” indicates that a “technical regulation” may be confined to laying down only one or a few “product characteristics”.
 

T.4.1.2 EC — Asbestos, para. 68
(WT/DS135/AB/R)
 

The definition of a “technical regulation” in Annex 1.1 of the TBT Agreement also states that “compliance” with the “product characteristics” laid down in the “document” must be “mandatory”. A “technical regulation” must, in other words, regulate the “characteristics” of products in a binding or compulsory fashion. It follows that, with respect to products, a “technical regulation” has the effect of prescribing or imposing one or more “characteristics” — “features”, “qualities”, “attributes”, or other “distinguishing mark”.
 

T.4.1.3 EC — Asbestos, para. 69
(WT/DS135/AB/R)
 

“Product characteristics” may, in our view, be prescribed or imposed with respect to products in either a positive or a negative form. That is, the document may provide, positively, that products must possess certain “characteristics”, or the document may require, negatively, that products must not possess certain “characteristics”. In both cases, the legal result is the same: the document “lays down” certain binding “characteristics” for products, in one case affirmatively, and in the other by negative implication.
 

T.4.1.4 EC — Asbestos, para. 70
(WT/DS135/AB/R)
 

A “technical regulation” must, of course, be applicable to an identifiable product, or group of products. Otherwise, enforcement of the regulation will, in practical terms, be impossible. This consideration also underlies the formal obligation, in Article 2.9.2 of the TBT Agreement, for Members to notify other Members, through the WTO Secretariat, “of the products to be covered” by a proposed “technical regulation” (emphasis added). Clearly, compliance with this obligation requires identification of the product coverage of a technical regulation. However, in contrast to what the Panel suggested, this does not mean that a “technical regulation” must apply to “given” products which are actually named, identified or specified in the regulation (emphasis added). Although the TBT Agreement clearly applies to “products” generally, nothing in the text of that Agreement suggests that those products need be named or otherwise expressly identified in a “technical regulation”. Moreover, there may be perfectly sound administrative reasons for formulating a “technical regulation” in a way that does not expressly identify products by name, but simply makes them identifiable — for instance, through the “characteristic” that is the subject of regulation.
 

T.4.1.5 EC — Asbestos, para. 72
(WT/DS135/AB/R)
 

… It is important to note here that, although formulated negatively — products containing asbestos are prohibited — the measure, in this respect, effectively prescribes or imposes certain objective features, qualities or “characteristics” on all products. That is, in effect, the measure provides that all products must not contain asbestos fibres. Although this prohibition against products containing asbestos applies to a large number of products, and although it is, indeed, true that the products to which this prohibition applies cannot be determined from the terms of the measure itself, it seems to us that the products covered by the measure are identifiable: all products must be asbestos free; any products containing asbestos are prohibited. …
 

T.4.1.6 EC — Sardines, paras. 175–176
(WT/DS231/AB/R)
 

As we explained in EC — Asbestos [at paragraph 59], whether a measure is a “technical regulation” is a threshold issue because the outcome of this issue determines whether the TBT Agreement is applicable. If the measure before us is not a “technical regulation”, then it does not fall within the scope of the TBT Agreement. …
 

We interpreted this definition in EC — Asbestos [at paragraphs 66–70]. In doing so, we set out three criteria that a document must meet to fall within the definition of “technical regulation” in the TBT Agreement. First, the document must apply to an identifiable product or group of products. The identifiable product or group of products need not, however, be expressly identified in the document. Second, the document must lay down one or more characteristics of the product. These product characteristics may be intrinsic, or they may be related to the product. They may be prescribed or imposed in either a positive or a negative form. Third, compliance with the product characteristics must be mandatory. …
 

T.4.1.7 EC — Sardines, para. 180
(WT/DS231/AB/R)
 

… Thus, a product does not necessarily have to be mentioned explicitly in a document for that product to be an identifiable product. Identifiable does not mean expressly identified.
 

T.4.1.8 EC — Sardines, para. 183
(WT/DS231/AB/R)
 

… We observe that the EC Regulation does not expressly identify Sardinops sagax. However, this does not necessarily mean that Sardinops sagax is not an identifiable product. As we stated in EC — Asbestos [at paragraph 70], a product need not be expressly identified in the document for it to be identifiable.
 

T.4.1.9 EC — Sardines, paras. 190–191
(WT/DS231/AB/R)
 

We do not find it necessary, in this case, to decide whether the definition of “technical regulation” in the TBT Agreement makes a distinction between “naming” and labelling. … We are of the view that this requirement — to be prepared exclusively from fish of the species Sardina pilchardus — is a product characteristic “intrinsic to” preserved sardines that is laid down by the EC Regulation. …
 

In any event, as we said in EC — Asbestos [at paragraph 67], a “means of identification” is a product characteristic. A name clearly identifies a product; indeed, the European Communities concedes that a name is a “means of identification” …
 

T.4.1.10 US — Tuna II (Mexico), paras. 185–187
(WT/DS381/AB/R)
 

Annex 1.1 defines the term “technical regulation” by reference to a “document”, which is defined quite broadly as “something written, inscribed, etc., which furnishes evidence or information upon any subject”. The use of the term “document” could therefore cover a broad range of instruments or apply to a variety of measures. Annex 1.1 to the TBT Agreement, however, narrows the scope of measures that can be characterized as a “technical regulation” by referring to a document that “lays down product characteristics or their related processes and production methods, including the applicable administrative provisions”. The verb “lay down” is defined as “establish, formulate definitely (a principle, a rule); prescribe (a course of action, limits, etc.)”. Annex 1.1 further describes a technical regulation by reference to a “document” “with which compliance is mandatory”. The noun “compliance” is defined as “[t]he action of complying”. The verb “comply” refers to an “[a]ct in accordance with or with a request, command, etc.”. The word “mandatory” means “obligatory in consequence of a command, compulsory”, or “being obligatory”.
 

Regarding the subject matter of a technical regulation, we note that the language in Annex 1.1 clarifies that a technical regulation may establish or prescribe “product characteristics or their related processes and production methods”. Annex 1.1 to the TBT Agreement further states that a technical regulation may include or “deal exclusively with terminology, symbols, packaging, marking or labelling requirements as they apply to a product, process or production method”. Regarding the meaning of the notion of “labelling requirements”, we note that the word “requirement” means “a condition which must be complied with”. The term “labelling requirements” thus refers to provisions that set out criteria or conditions to be fulfilled in order to use a particular label.
 

The second sentence of Annex 1.2, which sets out the definition of “standard” for purposes of the TBT Agreement, contains language identical to that found in the second sentence of Annex 1.1. With respect to the second sentence of these provisions, the subject matter of a particular measure is therefore not dispositive of whether a measure constitutes a technical regulation or a standard. Instead, “terminology”, “symbols”, “packaging”, “marking”, and “labelling requirements” may be the subject-matter of either technical regulations or standards. The fact that “labelling requirements” may consist of criteria or conditions that must be complied with in order to use a particular label does not imply therefore that the measure is for that reason alone a “technical regulation” within the meaning of Annex 1.1.
 

T.4.1.11 US — Tuna II (Mexico), para. 188
(WT/DS381/AB/R)
 

… we consider that a panel’s determination of whether a particular measure constitutes a technical regulation must be made in the light of the characteristics of the measure at issue and the circumstances of the case. In some cases, this may be a relatively straightforward exercise. In others, the task of the Panel may be more complex. Certain features exhibited by a measure may be common to both technical regulations falling within the scope of Article 2 of the TBT Agreement and, for example, standards falling under Article 4 of that Agreement. Both types of measure could, for instance, contain conditions that must be met in order to use a label. In both cases, those conditions could be “compulsory” or “binding” and “enforceable”. Such characteristics, taken alone, cannot therefore be dispositive of the proper legal characterization of the measure under the TBT Agreement. Instead, it will be necessary to consider additional characteristics of the measure in order to determine the disciplines to which it is subject under that Agreement. This exercise may involve considering whether the measure consists of a law or a regulation enacted by a WTO Member, whether it prescribes or prohibits particular conduct, whether it sets out specific requirements that constitute the sole means of addressing a particular matter, and the nature of the matter addressed by the measure.
 

T.4.1.12 US — Tuna II (Mexico), paras. 196, 198
(WT/DS381/AB/R)
 

The United States contends that compliance with a labelling requirement is “mandatory” within the meaning of Annex 1.1 only “if there is also a requirement to use the label in order to place the product for sale on the market”. By contrast, in the United States’ view, compliance with a labelling requirement is not mandatory in situations where producers retain the option of not using the label but nevertheless are able to sell the product on the market. The text of Annex 1.1 to the TBT Agreement does not use the words “market” or “territory”. Nor does it indicate that a labelling requirement is “mandatory” only if there is a requirement to use a particular label in order to place a product for sale on the market. To us, the mere fact that there is no requirement to use a particular label in order to place a product for sale on the market does not preclude a finding that a measure constitutes a “technical regulation” within the meaning of Annex 1.1. Instead, in the context of the present case, we attach significance to the fact that, while it is possible to sell tuna products without a “dolphin-safe” label in the United States, any “producer, importer, exporter, distributor or seller” of tuna products must comply with the measure at issue in order to make any “dolphin-safe” claim.
 

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The measure at issue in EC — Sardines was a regulation setting out a number of prescriptions for the sale of “preserved sardines”, including the requirement that they contain only one named species of sardines, to the exclusion of others. Under the facts of that case, it was possible to sell these other species of sardines on the EC market, provided that such sardines were not sold under the appellation “preserved sardines”. The fact that the Appellate Body characterized the measure at issue in EC — Sardines as a “technical regulation” appears to support the notion that the mere fact that it is legally permissible to sell a product on the market without using a particular label is not determinative when examining whether a measure is a “technical regulation” within the meaning of Annex 1.1.
 

T.4.1.13 US — Tuna II (Mexico), para. 199
(WT/DS381/AB/R)
 

… a determination of whether a particular measure constitutes a technical regulation must be made in the light of the characteristics of the measure at issue and the circumstances of the case. In this case, we note that the US measure is composed of legislative and regulatory acts of the US federal authorities and includes administrative provisions. In addition, the measure at issue sets out a single and legally mandated definition of a “dolphin-safe” tuna product and disallows the use of other labels on tuna products that do not satisfy this definition. In doing so, the US measure prescribes in a broad and exhaustive manner the conditions that apply for making any assertion on a tuna product as to its “dolphin-safety”, regardless of the manner in which that statement is made. As a consequence, the US measure covers the entire field of what “dolphin-safe” means in relation to tuna products. For these reasons, we find that the Panel did not err in characterizing the measure at issue as a “technical regulation” within the meaning of Annex 1.1 to the TBT Agreement.
 

T.4.2 Annex 1.2 — Standards     back to top

T.4.2.1 EC — Sardines, paras. 222–223
(WT/DS231/AB/R)
 

… In our view, the text of the Explanatory note supports the conclusion that consensus is not required for standards adopted by the international standardizing community. The last sentence of the Explanatory note refers to “documents”. The term “document” is also used in the singular in the first sentence of the definition of a “standard”. We believe that “document(s)” must be interpreted as having the same meaning in both the definition and the Explanatory note. The European Communities agrees. Interpreted in this way, the term “documents” in the last sentence of the Explanatory note must refer to standards in general, and not only to those adopted by entities other than international bodies, as the European Communities claims.
 

Moreover, the text of the last sentence of the Explanatory note, referring to documents not based on consensus, gives no indication whatsoever that it is departing from the subject of the immediately preceding sentence, which deals with standards adopted by international bodies. …
 

T.4.2A Article 2.1 — MFN and national treatment obligations     back to top

T.4.2A.1 RELATIONSHIP WITH CORRESPONDING GATT 1994 PROVISIONS
 

T.4.2A.1.1 US — Clove Cigarettes, para. 96
(WT/DS406/AB/R)
 

The balance set out in the preamble of the TBT Agreement between, on the one hand, the desire to avoid creating unnecessary obstacles to international trade and, on the other hand, the recognition of Members’ right to regulate, is not, in principle, different from the balance set out in the GATT 1994, where obligations such as national treatment in Article III are qualified by the general exceptions provision of Article XX.
 

T.4.2A.1.2 US — Clove Cigarettes, paras. 99–101
(WT/DS406/AB/R)
 

We note that the language of the national treatment obligation of Article 2.1 of the TBT Agreement closely resembles the language of Article III:4 of the GATT 1994. …
 

The national treatment obligations of Article 2.1 and Article III:4 are built around the same core terms, namely, “like products” and “treatment no less favourable”. We further note that technical regulations are in principle subject not only to Article 2.1 of the TBT Agreement, but also to the national treatment obligation of Article III:4 of the GATT 1994, as “laws, regulations and requirements affecting the internal sale, offering for sale, purchase, transportation, distribution or use” of products. The very similar formulation of the provisions, and the overlap in their scope of application in respect of technical regulations, confirm that Article III:4 of the GATT 1994 is relevant context for the interpretation of the national treatment obligation of Article 2.1 of the TBT Agreement. We consider that, in interpreting Article 2.1 of the TBT Agreement, a panel should focus on the text of Article 2.1, read in the context of the TBT Agreement, including its preamble, and also consider other contextual elements, such as Article III:4 of the GATT 1994.
 

Finally, we observe that the TBT Agreement does not contain among its provisions a general exceptions clause. This may be contrasted with the GATT 1994, which contains a general exceptions clause in Article XX.
 

T.4.2A.1.3 US — Clove Cigarettes, para. 109
(WT/DS406/AB/R)
 

… the balance that the preamble of the TBT Agreement strikes between, on the one hand, the pursuit of trade liberalization and, on the other hand, Members’ right to regulate, is not, in principle, different from the balance that exists between the national treatment obligation of Article III and the general exceptions provided under Article XX of the GATT 1994. … We note, however, that in the GATT 1994 this balance is expressed by the national treatment rule in Article III:4 as qualified by the exceptions in Article XX, while, in the TBT Agreement, this balance is to be found in Article 2.1 itself, read in the light of its context and of its object and purpose.
 

T.4.2A.1.4 US — Tuna II (Mexico), para. 405
(WT/DS381/AB/R)
 

To us, it seems that the Panel’s decision to exercise judicial economy rested upon the assumption that the obligations under Article 2.1 of the TBT Agreement and Articles I:1 and III:4 of the GATT 1994 are substantially the same. This assumption is, in our view, incorrect. In fact, as we have found above, the scope and content of these provisions is not the same. Moreover, in our view, the Panel should have made additional findings under the GATT 1994 in the event that the Appellate Body were to disagree with its view that the measure at issue is a “technical regulation” within the meaning of the TBT Agreement. As a result, it would have been necessary for the Panel to address Mexico’s claims under the GATT 1994 given that the Panel found no violation under Article 2.1 of the TBT Agreement. By failing to do so, the Panel engaged, in our view, in an exercise of “false judicial economy” and acted inconsistently with its obligations under Article 11 of the DSU.
 

T.4.2A.1.5 US — COOL, para. 269
(WT/DS384/AB/R, WT/DS386/AB/R)
 

The Appellate Body recognized in US — Clove Cigarettes and US — Tuna II (Mexico) that relevant guidance for interpreting the term “treatment no less favourable” in Article 2.1 may be found in the jurisprudence relating to Article III:4 of the GATT 1994. …
 

T.4.2A.2 GENERAL
 

T.4.2A.2.1 US — Clove Cigarettes, para. 87
(WT/DS406/AB/R)
 

Article 2.1 of the TBT Agreement contains a national treatment and a most-favoured nation treatment obligation. In this dispute, we are called upon to clarify the meaning of the national treatment obligation. For a violation of the national treatment obligation in Article 2.1 to be established, three elements must be satisfied: (i) the measure at issue must be a technical regulation; (ii) the imported and domestic products at issue must be like products; and (iii) the treatment accorded to imported products must be less favourable than that accorded to like domestic products. …
 

T.4.2A.2.2 US — Clove Cigarettes, paras. 89, 91–95
(WT/DS406/AB/R)
 

The preamble of the TBT Agreement is part of the context of Article 2.1 and also sheds light on the object and purpose of the Agreement. We find guidance for the interpretation of Article 2.1, in particular, in the second, fifth, and sixth recitals of the preamble of the TBT Agreement.
 

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While [the second recital of the TBT Agreement] may be read as suggesting that the TBT Agreement is a “development” or a “step forward” from the disciplines of the GATT 1994, in our view, it also suggests that the two agreements overlap in scope and have similar objectives. If this were not true, the TBT Agreement could not serve to “further the objectives” of the GATT 1994. The second recital indicates that the TBT Agreement expands on pre-existing GATT disciplines and emphasizes that the two Agreements should be interpreted in a coherent and consistent manner.
 

The fifth recital reflects the trade-liberalization objective of the TBT Agreement by expressing the “desire” that technical regulations, technical standards, and conformity assessment procedures do not create unnecessary obstacles to international trade. …
 

We see the fifth recital [of the TBT Agreement] reflected in those TBT provisions that aim at reducing obstacles to international trade and that limit Members’ right to regulate, for instance, by prohibiting discrimination against imported products (Article 2.1) or requiring that technical regulations be no more trade restrictive than necessary to fulfil a legitimate objective (Article 2.2).
 

The objective of avoiding the creation of unnecessary obstacles to international trade through technical regulations, standards, and conformity assessment procedures is, however, qualified in the sixth recital by the explicit recognition of Members’ right to regulate in order to pursue certain legitimate objectives. …
 

We read the sixth recital [of the TBT Agreement] as counterbalancing the trade-liberalization objective expressed in the fifth recital. The sixth recital “recognizes” Members’ right to regulate versus the “desire” to avoid creating unnecessary obstacles to international trade, expressed in the fifth recital. While the fifth recital clearly suggests that Members’ right to regulate is not unbounded, the sixth recital affirms that such a right exists while ensuring that trade-distortive effects of regulation are minimized. The sixth recital suggests that Members’ right to regulate should not be constrained if the measures taken are necessary to fulfil certain legitimate policy objectives, and provided that they are not applied in a manner that would constitute a means of arbitrary or unjustifiable discrimination or a disguised restriction on international trade, and are otherwise in accordance with the provisions of the Agreement. We thus understand the sixth recital to suggest that Members have a right to use technical regulations in pursuit of their legitimate objectives, provided that they do so in an even-handed manner and in a manner that is otherwise in accordance with the provisions of the TBT Agreement.
 

T.4.2A.2.3 US — Clove Cigarettes, paras. 97–98
(WT/DS406/AB/R)
 

… Article 2.1 of the TBT Agreement applies only in respect of technical regulations … . Product characteristics laid down in a technical regulation may themselves be relevant to the determination of whether products are like within the meaning of Article 2.1. Thus, we consider that, in the case of technical regulations, the measure itself may provide elements that are relevant to the determination of whether products are like and whether less favourable treatment has been accorded to imported products.
 

The definition of technical regulations as documents laying down product characteristics gives an indication that, under the TBT Agreement, measures making distinctions based on product characteristics are in principle permitted. However, the fact that a technical regulation defines a product’s characteristics with a view to fulfilling a legitimate policy objective does not mean that it may do so by treating imported products less favourably than like domestic products.
 

T.4.2A.2.4 US — Clove Cigarettes, para. 194
(WT/DS406/AB/R)
 

In sum, the national treatment obligation of Article 2.1 calls for a comparison of treatment accorded to, on the one hand, the group of products imported from the complaining Member and, on the other hand, the treatment accorded to the group of like domestic products. In determining what the scope of like imported and domestic products is, a panel is not limited to those products specifically identified by the complaining Member. Rather, a panel must objectively assess, based on the nature and extent of their competitive relationship, what are the domestic products that are like the products imported from the complaining Member. Once the universe of imported and domestic like products has been identified, the treatment accorded to all like products imported from the complaining Member must be compared to that accorded to all like domestic products. The “treatment no less favourable” standard of Article 2.1 does not prohibit regulatory distinctions between products found to be like, provided that the group of like products imported from the complaining Member is treated no less favourably than the group of domestic like products.
 

T.4.2A.2.5 US — Tuna II (Mexico), para. 211
(WT/DS381/AB/R)
 

Article 2.1 of the TBT Agreement applies “in respect of technical regulations”. A technical regulation is defined in Annex 1.1 as a “[d]ocument which lays down product characteristics or their related processes and production methods … with which compliance is mandatory”. As such, technical regulations are measures that, by their very nature, establish distinctions between products according to their characteristics or their related processes and production methods. Article 2.1 should not be read therefore to mean that any distinctions, in particular ones that are based exclusively on particular product characteristics or on particular processes and production methods, would per se constitute “less favourable treatment” within the meaning of Article 2.1.
 

T.4.2A.2.6 US — Tuna II (Mexico), paras. 212–215
(WT/DS381/AB/R)
 

The context provided by Article 2.2 supports a reading that Article 2.1 does not operate to prohibit a priori any restriction of international trade. The question of what is “less favourable treatment” within the meaning of Article 2.1 is also informed by a consideration of the context provided by the preamble of the TBT Agreement.
 

The sixth recital of the preamble recognizes that a WTO Member may take measures necessary for, inter alia, the protection of animal or plant life or health, or for the prevention of deceptive practices, at the levels it considers appropriate, subject to the requirement that such measures “are not applied in a manner which would constitute a means of arbitrary or unjustifiable discrimination” or a “disguised restriction on international trade” and are “otherwise in accordance with the provisions of this Agreement”. Although the sixth recital does not explicitly set out a substantive obligation, we consider it nonetheless sheds light on the meaning and ambit of the “treatment no less favourable” requirement in Article 2.1, by making clear, in particular, that technical regulations may pursue legitimate objectives but must not be applied in a manner that would constitute a means of arbitrary or unjustifiable discrimination.
 

Regarding the context provided by other covered agreements, we further note that the expression “treatment no less favourable” can be found in Article III:4 of the GATT 1994. In the context of that provision, the Appellate Body has indicated that whether or not imported products are treated “less favourably” than like domestic products should be assessed “by examining whether a measure modifies the conditions of competition in the relevant market to the detriment of imported products. We consider these previous findings by the Appellate Body to be instructive in assessing the meaning of the expression “treatment no less favourable”, provided that the specific context in which the term appears in Article 2.1 of the TBT Agreement is taken into account.
 

As the Appellate Body has previously explained, when assessing claims brought under Article 2.1 of the TBT Agreement, a panel should therefore seek to ascertain whether the technical regulation at issue modifies the conditions of competition in the relevant market to the detriment of the group of imported products vis-à-vis the group of like domestic products or like products originating in any other country. The existence of such a detrimental effect is not sufficient to demonstrate less favourable treatment under Article 2.1. Instead, in US — Clove Cigarettes, the Appellate Body held that a “panel must further analyze whether the detrimental impact on imports stems exclusively from a legitimate regulatory distinction rather than reflecting discrimination against the group of imported products”.
 

T.4.2A.2.7 US — COOL, paras. 323, 325
(WT/DS384/AB/R, WT/DS386/AB/R)
 

… the Panel was not required under the proper interpretation of the national treatment obligation in Article 2.1 of the TBT Agreement to find actual negative effects on the prices of imported livestock …
 

...
 

… The Panel made explicit that its finding of less favourable treatment was not dependent on its examination of the actual trade effects of the COOL measure and the evidence relating to such effects. Nor was the Panel required under Article 2.1 to confirm its legal conclusions based on the actual trade effects of the measure in the US market. …
 

T.4.2A.3 BURDEN OF PROOF
 

T.4.2A.3.1 US — Tuna II (Mexico), para. 216
(WT/DS381/AB/R)
 

With respect to the burden of showing that a technical regulation is inconsistent with Article 2.1 of the TBT Agreement, we recall that it is well-established “that the burden of proof rests upon the party, whether complaining or defending, who asserts the affirmative of a particular claim or defence”. Where the complaining party has met the burden of making its prima facie case, it is then for the responding party to rebut that showing. The nature and scope of arguments and evidence required to establish a prima facie case will necessarily vary according to the facts of the case. In the context of Article 2.1 of the TBT Agreement, the complainant must prove its claim by showing that the treatment accorded to imported products is “less favourable” than that accorded to like domestic products or like products originating in any other country. If it has succeeded in doing so, for example, by adducing evidence and arguments sufficient to show that the measure is not even-handed, this would suggest that the measure is inconsistent with Article 2.1. If, however, the respondent shows that the detrimental impact on imported products stems exclusively from a legitimate regulatory distinction, it follows that the challenged measure is not inconsistent with Article 2.1.
 

T.4.2A.3.2 US — Tuna II (Mexico), para. 283
(WT/DS381/AB/R)
 

As an initial matter, we note that, in Japan — Apples, the Appellate Body pointed out that “[i]t is important to distinguish, on the one hand, the principle that the complainant must establish a prima facie case of inconsistency with a provision of a covered agreement from, on the other hand, the principle that the party that asserts a fact is responsible for providing proof thereof”. Although the burden of proof to show that the US “dolphin-safe” labelling provisions are inconsistent with Article 2.1 of the TBT Agreement is on Mexico as the complainant, it was for the United States to support its assertion that the US “dolphin-safe” labelling provisions are “calibrated” to the risks to dolphins arising from different fishing methods in different areas of the ocean.
 

T.4.2A.3.3 US — COOL, para. 272
(WT/DS384/AB/R, WT/DS386/AB/R)
 

With respect to the burden of proof under Article 2.1, the Appellate Body found in US — Tuna II (Mexico) that, as with all affirmative claims, it is for the complaining party to show that the treatment accorded to imported products is less favourable than that accorded to like domestic products. Where the complaining party has met the burden of making its prima facie case, it is then for the responding party to rebut that showing. If, for example, the complainant adduces evidence and arguments showing that the measure is designed and/or applied in a manner that constitutes a means of arbitrary or unjustifiable discrimination of the group of imported products and thus is not even-handed, this would suggest that the measure is inconsistent with Article 2.1. If, however, the respondent shows that the detrimental impact on imported products stems exclusively from a legitimate regulatory distinction, it follows that the challenged measure is not inconsistent with Article 2.1.
 

T.4.2A.4 “LIKE PRODUCTS”.
 

National Treatment, Article III:2 of the GATT 1994, first sentence — “like products” (N.1.3); National Treatment, Article III:4 of the GATT 1994 — Regulatory discrimination (N.1.9); Textiles and Clothing Agreement, Article 6.2 — “like products” (T.7.5)
 

T.4.2A.4.1 US — Clove Cigarettes, para. 108
(WT/DS406/AB/R)
 

We agree with the Panel that the interpretation of the term “like products” in Article 2.1 of the TBT Agreement should start with the text of that provision in the light of the context provided by Article 2.1 itself, by other provisions of the TBT Agreement, and by the TBT Agreement as a whole. We also agree that the relevant context includes the fact that Article 2.1 applies to technical regulations, which are documents laying down the characteristics of products. We further note that the preamble of the TBT Agreement recognizes Members’ right to regulate through technical regulations. As explained below, however, we are not persuaded that these contextual elements and the object and purpose of the TBT Agreement suggest that the interpretation of the concept of “like products” in Article 2.1 of the TBT Agreement cannot be approached from a competition-oriented perspective.
 

T.4.2A.4.2 US — Clove Cigarettes, paras. 110–112
(WT/DS406/AB/R)
 

… in EC — Asbestos, … the Appellate Body did not base its conclusion that “likeness” in Article III:4 is about the “nature and extent of a competitive relationship between and among products” exclusively on the “general principle” expressed in Article III:1. Rather, the Appellate Body further clarified that “the word ‘like’ in Article III:4 is to be interpreted to apply to products that are in … a competitive relationship”, because it is “products that are in a competitive relationship in the marketplace [that] could be affected through treatment of imports ‘less favourable’ than the treatment accorded to domestic products”.
 

We agree that the very concept of “treatment no less favourable”, which is expressed in the same words in Article III:4 of the GATT 1994 and in Article 2.1 of the TBT Agreement, informs the determination of likeness, suggesting that likeness is about the “nature and extent of a competitive relationship between and among products”. Indeed, the concept of “treatment no less favourable” links the products to the marketplace, because it is only in the marketplace that it can be determined how the measure treats like imported and domestic products. We note, however, that, in determining likeness based on the competitive relationship between and among the products, a panel should discount any distortive effects that the measure at issue may itself have on the competitive relationship, and reserve the consideration of such effects for the analysis of less favourable treatment. In such cases, a panel should determine the nature and the extent of the competitive relationship for the purpose of determining likeness in isolation from the measure at issue, to the extent that the latter informs the physical characteristics of the products and/or consumers’ preferences.
 

… we disagree with the Panel that the text and context of the TBT Agreement support an interpretation of the concept of “likeness” in Article 2.1 of the TBT Agreement that focuses on the legitimate objectives and purposes of the technical regulation, rather than on the competitive relationship between and among the products.
 

T.4.2A.4.3 US — Clove Cigarettes, paras. 113, 115
(WT/DS406/AB/R)
 

We further observe that measures often pursue a multiplicity of objectives, which are not always easily discernible from the text or even from the design, architecture, and structure of the measure. Determining likeness on the basis of the regulatory objectives of the measure, rather than on the products’ competitive relationship, would require the identification of all the relevant objectives of a measure, as well as an assessment of which objectives among others are relevant or should prevail in determining whether the products are like. It seems to us that it would not always be possible for a complainant or a panel to identify all the objectives of a measure and/or be in a position to determine which among multiple objectives are relevant to the determination of whether two products are like, or not.
 

...
 

Measures, such as technical regulations, may have more than one objective. However, a panel that is tasked with determining whether two products are like may not be able to reach a coherent result if, in determining likeness, it has to rely on various possible regulatory objectives of the measure. If a panel were to focus on one of the objectives of a measure to the exclusion of all others that are equally important, it may reach a somewhat arbitrary result in the determination of what are the like products at issue which, in turn, has implications for the determination of whether less favourable treatment has been accorded. Moreover, we note that a purpose-based approach to the determination of likeness does not, necessarily, leave more regulatory autonomy for Members, because it almost invariably puts panels into the position of having to determine which of the various objectives purportedly pursued by Members are more important, or which of these objectives should prevail in determining likeness or less favourable treatment in the event of conflicting objectives.
 

T.4.2A.4.4 US — Clove Cigarettes, para. 116
(WT/DS406/AB/R)
 

More importantly, however, we do not consider that the concept of “like products” in Article 2.1 of the TBT Agreement lends itself to distinctions between products that are based on the regulatory objectives of a measure. As we see it, the concept of “like products” serves to define the scope of products that should be compared to establish whether less favourable treatment is being accorded to imported products. If products that are in a sufficiently strong competitive relationship to be considered like are excluded from the group of like products on the basis of a measure’s regulatory purposes, such products would not be compared in order to ascertain whether less favourable treatment has been accorded to imported products. This would inevitably distort the less favourable treatment comparison, as it would refer to a “marketplace” that would include some like products, but not others. As we consider further below in respect of the United States’ appeal of the Panel’s less favourable treatment finding, distinctions among products that have been found to be like are better drawn when considering, subsequently, whether less favourable treatment has been accorded, rather than in determining likeness, because the latter approach would alter the scope and result of the less favourable treatment comparison.
 

T.4.2A.4.5 US — Clove Cigarettes, paras. 117, 119
(WT/DS406/AB/R)
 

Nevertheless, in concluding that the determination of likeness should not be based on the regulatory purposes of technical regulations, we are not suggesting that the regulatory concerns underlying technical regulations may not play a role in the determination of whether or not products are like. In this respect, we recall that, in EC — Asbestos, the Appellate Body found that regulatory concerns and considerations may play a role in applying certain of the “likeness” criteria (that is, physical characteristics and consumer preferences) and, thus, in the determination of likeness under Article III:4 of the GATT 1994.
 

...
 

Similarly, we consider that the regulatory concerns underlying a measure, such as the health risks associated with a given product, may be relevant to an analysis of the “likeness” criteria under Article III:4 of the GATT 1994, as well as under Article 2.1 of the TBT Agreement, to the extent they have an impact on the competitive relationship between and among the products concerned.
 

T.4.2A.4.6 US — Clove Cigarettes, para. 120
(WT/DS406/AB/R)
 

The interpretation of the concept of “likeness” in Article 2.1 has to be based on the text of that provision as read in the context of the TBT Agreement and of Article III:4 of the GATT 1994, which also contains a similarly worded national treatment obligation that applies to laws, regulations, and requirements including technical regulations. In the light of this context and of the object and purpose of the TBT Agreement, as expressed in its preamble, we consider that the determination of likeness under Article 2.1 of the TBT Agreement, as well as under Article III:4 of the GATT 1994, is a determination about the nature and extent of a competitive relationship between and among the products at issue. To the extent that they are relevant to the examination of certain “likeness” criteria and are reflected in the products’ competitive relationship, regulatory concerns underlying technical regulations may play a role in the determination of likeness.
 

T.4.2A.4.7 US — Clove Cigarettes, paras. 125–126
(WT/DS406/AB/R)
 

… end-uses describe the possible functions of a product, while consumer tastes and habits reflect the consumers’ appreciation of these functions. … That a product is not principally used to perform a certain function does not exclude that it may nevertheless be capable of performing that function.
 

… while each criterion addresses, in principle, a different aspect of the products involved, which should be examined separately, the different criteria are “interrelated” and “not mutually exclusive”, so that certain evidence may well fall under more than one criterion. …
 

T.4.2A.4.8 US — Clove Cigarettes, para. 127
(WT/DS406/AB/R)
 

We do not consider that it is correct to characterize “satisfying an addiction to nicotine” and “creating a pleasurable experience associated with the taste of the cigarette and the aroma of the smoke” as consumer tastes and habits and not end-uses. To the extent that they describe possible functions of the products, rather than the consumers’ appreciation of these functions, they represent, in fact, different end-uses of the products at issue, rather than consumer tastes and habits. Consumer tastes and habits should indicate to what extent consumers are willing to substitute clove cigarettes and menthol cigarettes to “satisfy an addiction to nicotine” and/or to “create a pleasurable experience associated with the taste of the cigarette and the aroma of the smoke”.
 

T.4.2A.4.9 US — Clove Cigarettes, paras. 129, 132
(WT/DS406/AB/R)
 

An analysis of end-use should be comprehensive and specific enough to provide meaningful guidance as to whether the products in question are like products. It is not disputed that both clove and menthol cigarettes are “to be smoked”. Nevertheless, “to be smoked” does not exhaustively describe the functions of cigarettes. As a consequence, to find, as the Panel did, that the end-use of both clove and menthol cigarettes is “to be smoked” does not, in our view, provide sufficient guidance as to whether such products are like products within the meaning of Article 2.1 of the TBT Agreement. Also cigars, loose tobacco, and herbs share the same end-use of being “smoked”, although this does not say much as to whether all these products are like.
 

...
 

… We consider, however, that, based on the Panel’s findings referred to above, it can be concluded that both clove and menthol cigarettes share the end-uses of “satisfying an addiction to nicotine” and “creating a pleasurable experience associated with the taste of the cigarette and the aroma of the smoke”. Accordingly, we consider that the more specific products’ end-uses put forward by the United States also support the Panel’s overall finding that clove and menthol cigarettes are like products.
 

T.4.2A.4.10 US — Clove Cigarettes, para. 136
(WT/DS406/AB/R)
 

We have disagreed with the Panel’s approach to interpreting the concept of “likeness” in Article 2.1 of the TBT Agreement in the light of the regulatory objectives of the measure, rather than based on the competitive relationship between and among the products. In particular, we have observed that the context of the TBT Agreement and its object and purpose do not suggest that the regulatory objectives of a technical regulation should play a role that is separate from the determination of a competitive relationship between and among products. … In contrast, we have considered that the determination of likeness under Article 2.1 of the TBT Agreement is a determination about the nature and the extent of a competitive relationship between and among products, and that the regulatory concerns that underlie a measure may be considered to the extent that they have an impact on the competitive relationship.
 

T.4.2A.4.11 US — Clove Cigarettes, paras. 137–138
(WT/DS406/AB/R)
 

… we … consider that the Panel was wrong in confining its analysis of consumer tastes and habits to those consumers (young and potential young smokers) that are the concern of the objective of the regulation (to reduce youth smoking). In an analysis of likeness based on products’ competitive relationship, it is the market that defines the scope of consumers whose preferences are relevant. The proportion of youth and adults smoking different types of cigarettes may vary, but clove, menthol, and regular cigarettes are smoked by both young and adult smokers. To evaluate the degree of substitutability among these products, the Panel should have assessed the tastes and habits of all relevant consumers of the products at issue, not only of the main consumers of clove and menthol cigarettes, particularly where it is clear that an important proportion of menthol cigarette smokers are adult consumers.
 

Moreover, … the Panel’s approach discounts the fact that the technical regulation at issue may also have other objectives that concern other actual and potential consumers of the products at issue. Therefore, we disagree with the Panel that the legitimate objective of Section 907(a)(1)(A), that is, reducing youth smoking, delimits the scope of the consumers whose tastes and habits should be examined to young smokers and potential young smokers.
 

T.4.2A.4.12 US — Clove Cigarettes, paras. 142–143
(WT/DS406/AB/R)
 

… in order to determine whether products are like under Article 2.1 of the TBT Agreement, it is not necessary to demonstrate that the products are substitutable for all consumers or that they actually compete in the entire market. Rather, if the products are highly substitutable for some consumers but not for others, this may also support a finding that the products are like. In Philippines — Distilled Spirits, the Appellate Body considered that the standard of “directly competitive or substitutable” … is satisfied even if competition does not take place in the whole market but is limited to a segment of the market[ … and …] does not require that competition be assessed in relation to the market segment that is most representative of the “market as a whole”, and that Article III of the GATT 1994 “does not protect just some instances or most instances, but rather, it protects all instances of direct competition”.
 

Although the Appellate Body’s finding in Philippines — Distilled Spirits concerned the second sentence of Article III:2 of the GATT 1994, we consider this interpretation of “directly competitive or substitutable products” to be relevant to the concept of “likeness” in Article III:4 of the GATT 1994 and 2.1 of the TBT Agreement, since likeness under these provisions is determined on the basis of the competitive relationship between and among the products. In our view, the notion that actual competition does not need to take place in the whole market, but may be limited to a segment of the market, is separate from the question of the degree of competition that is required to satisfy the standards of “directly competitive or substitutable products” and “like products”.
 

T.4.2A.4.13 US — Clove Cigarettes, para. 144
(WT/DS406/AB/R)
 

The Panel’s consideration of consumer tastes and habits was too limited. At the same time, the mere fact that clove cigarettes are smoked disproportionately by youth, while menthol cigarettes are smoked more evenly by young and adult smokers does not necessarily affect the degree of substitutability between clove and menthol cigarettes. The Panel found that … young and potential young smokers perceive clove and menthol cigarettes as sufficiently substitutable. This, in turn, is sufficient to support the Panel’s finding that those products are like within the meaning of Article 2.1 of the TBT Agreement, even if the degree of substitutability is not the same for all adult smokers.
 

T.4.2A.4.14 US — Clove Cigarettes, paras. 191–192
(WT/DS406/AB/R)
 

… In determining what the like products at issue are, a panel is not bound by its terms of reference to limit its analysis to those products identified by the complaining Member in its panel request. Rather, Article 2.1 requires the Panel to identify the domestic products that stand in a sufficiently close competitive relationship with the products imported from the complaining Member to be considered like products within the meaning of that provision.
 

… The products identified by the complaining Member are the starting point in a panel’s likeness analysis. However, Article 2.1 requires panels to assess objectively, on the basis of the nature and extent of the competitive relationship between the products in the market of the regulating Member, the universe of domestic products that are like the products imported from the complaining Member.
 

T.4.2A.5 “TREATMENT NO LESS FAVOURABLE”.
 

MFN Treatment (M.2);National Treatment, Article III:4 of the GATT 1994 — “less favourable treatment” (N.1.11)
 

T.4.2A.5.1 US — Clove Cigarettes, para. 169
(WT/DS406/AB/R)
 

The “treatment no less favourable” requirement of Article 2.1 of the TBT Agreement applies “in respect of technical regulations”. A technical regulation is defined in Annex 1.1 thereto as a “[d]ocument which lays down product characteristics or their related processes and production methods … with which compliance is mandatory”. As such, technical regulations are measures that, by their very nature, establish distinctions between products according to their characteristics or their related processes and production methods. This suggests, in our view, that Article 2.1 should not be read to mean that any distinction, in particular those that are based exclusively on particular product characteristics or their related processes and production methods, would per se accord less favourable treatment within the meaning of Article 2.1.
 

T.4.2A.5.2 US — Clove Cigarettes, para. 171
(WT/DS406/AB/R)
 

The context provided by Article 2.2 suggests that “obstacles to international trade” may be permitted insofar as they are not found to be “unnecessary”, that is, “more trade-restrictive than necessary to fulfil a legitimate objective”. To us, this supports a reading that Article 2.1 does not operate to prohibit a priori any obstacle to international trade. Indeed, if any obstacle to international trade would be sufficient to establish a violation of Article 2.1, Article 2.2 would be deprived of its effet utile.
 

T.4.2A.5.3 US — Clove Cigarettes, para. 173
(WT/DS406/AB/R)
 

… We consider that the sixth recital of the preamble of the TBT Agreement provides relevant context regarding the ambit of the “treatment no less favourable” requirement in Article 2.1, by making clear that technical regulations may pursue the objectives listed therein, provided that they are not applied in a manner that would constitute a means of arbitrary or unjustifiable discrimination between countries where the same conditions prevail, or a disguised restriction on international trade, and are otherwise in accordance with the provisions of the TBT Agreement.
 

T.4.2A.5.4 US — Clove Cigarettes, para. 174
(WT/DS406/AB/R)
 

Finally, … the object and purpose of the TBT Agreement is to strike a balance between, on the one hand, the objective of trade liberalization and, on the other hand, Members’ right to regulate. This object and purpose therefore suggests that Article 2.1 should not be interpreted as prohibiting any detrimental impact on competitive opportunities for imports in cases where such detrimental impact on imports stems exclusively from legitimate regulatory distinctions.
 

T.4.2A.5.5 US — Clove Cigarettes, para. 175
(WT/DS406/AB/R)
 

Accordingly, the context and object and purpose of the TBT Agreement weigh in favour of reading the “treatment no less favourable” requirement of Article 2.1 as prohibiting both de jure and de facto discrimination against imported products, while at the same time permitting detrimental impact on competitive opportunities for imports that stems exclusively from legitimate regulatory distinctions.
 

T.4.2A.5.6 US — Clove Cigarettes, paras. 176, 179–180
(WT/DS406/AB/R)
 

Like the participants, we also find it useful to consider the context provided by the other covered agreements. In particular, we note that the non-discrimination obligation of Article 2.1 of the TBT Agreement is expressed in the same terms as that of Article III:4 of the GATT 1994. In the context of Article III:4, the “treatment no less favourable” requirement has been widely interpreted by previous GATT and WTO panels and by the Appellate Body. …
 

...
 

… the “treatment no less favourable” standard of Article III:4 of the GATT 1994 prohibits WTO Members from modifying the conditions of competition in the marketplace to the detriment of the group of imported products vis-à-vis the group of domestic like products.
 

Although we are mindful that the meaning of the term “treatment no less favourable” in Article 2.1 of the TBT Agreement is to be interpreted in the light of the specific context provided by the TBT Agreement, we nonetheless consider … previous findings by the Appellate Body in the context of Article III:4 of the GATT 1994 to be instructive in assessing the meaning of “treatment no less favourable”, provided that the specific context in which the term appears in Article 2.1 of the TBT Agreement is taken into account. Similarly to Article III:4 of the GATT 1994, Article 2.1 of the TBT Agreement requires WTO Members to accord to the group of imported products treatment no less favourable than that accorded to the group of like domestic products. Article 2.1 prescribes such treatment specifically in respect of technical regulations. For this reason, a panel examining a claim of violation under Article 2.1 should seek to ascertain whether the technical regulation at issue modifies the conditions of competition in the market of the regulating Member to the detriment of the group of imported products vis-à-vis the group of like domestic products.
 

T.4.2A.5.7 US — Clove Cigarettes, paras. 181–182
(WT/DS406/AB/R)
 

However, … the context and object and purpose of the TBT Agreement weigh in favour of interpreting the “treatment no less favourable” requirement of Article 2.1 as not prohibiting detrimental impact on imports that stems exclusively from a legitimate regulatory distinction. Rather, … the “treatment no less favourable” requirement of Article 2.1 only prohibits de jure and de facto discrimination against the group of imported products.
 

Accordingly, where the technical regulation at issue does not de jure discriminate against imports, the existence of a detrimental impact on competitive opportunities for the group of imported vis-à-vis the group of domestic like products is not dispositive of less favourable treatment under Article 2.1. Instead, a panel must further analyze whether the detrimental impact on imports stems exclusively from a legitimate regulatory distinction rather than reflecting discrimination against the group of imported products. In making this determination, a panel must carefully scrutinize the particular circumstances of the case, that is, the design, architecture, revealing structure, operation, and application of the technical regulation at issue, and, in particular, whether that technical regulation is even-handed, in order to determine whether it discriminates against the group of imported products.
 

T.4.2A.5.8 US — Clove Cigarettes, para. 193
(WT/DS406/AB/R)
 

… the national treatment obligation of Article 2.1 does not require Members to accord no less favourable treatment to each and every imported product as compared to each and every domestic like product. Article 2.1 does not preclude any regulatory distinctions between products that are found to be like, as long as treatment accorded to the group of imported products is no less favourable than that accorded to the group of like domestic products. …
 

T.4.2A.5.9 US — Clove Cigarettes, para. 206
(WT/DS406/AB/R)
 

… Article 2.1 does not establish a rigid temporal limitation on the evidence that the Panel could review in assessing Indonesia’s claim under Article 2.1. Nothing in Article 2.1 enjoins panels from taking into account evidence pre-dating the establishment of a panel to the extent that such evidence informs the Panel’s assessment of the consistency of the measure at that point in time. This is particularly so in the case of a de facto discrimination claim, where a panel must base its determination on the totality of facts and circumstances before it, including the design, architecture, revealing structure, operation, and application of the technical regulation at issue. Therefore, evidence that Section 907(a)(1)(A) had “chilling” regulatory effects on domestic producers of flavoured cigarettes prior to the entry into force of the ban on those cigarettes could be relevant in the Panel’s assessment of Indonesia’s claim under Article 2.1.
 

T.4.2A.5.10 US — Clove Cigarettes, para. 215
(WT/DS406/AB/R)
 

… the existence of a detrimental impact on competitive opportunities in the relevant market for the group of imported products vis-à-vis the group of domestic like products is not sufficient to establish a violation of the national treatment obligation contained in Article 2.1 of the TBT Agreement. Where the technical regulation at issue does not de jure discriminate against imports, a panel must carefully scrutinize the particular circumstances of the case, that is, the design, architecture, revealing structure, operation, and application of the technical regulation at issue, and, in particular, whether that technical regulation is even-handed, in order to determine whether the detrimental impact on imports stems exclusively from a legitimate regulatory distinction rather than reflects discrimination against the group of imported products.
 

T.4.2A.5.11 US — Clove Cigarettes, Footnote 431 to para. 221
(WT/DS406/AB/R)
 

… to the extent that the Panel’s finding could be read as suggesting that reducing potential costs of regulation per se constitutes an illegitimate regulatory objective, we disagree. Nothing in Article 2.1 prevents a Member from seeking to minimize the potential costs arising from technical regulations, provided that the technical regulation at issue does not overtly or covertly discriminate against imports.
 

T.4.2A.5.12 US — Clove Cigarettes, paras. 225–226
(WT/DS406/AB/R)
 

… we are not persuaded that the detrimental impact of Section 907(a)(1)(A) on competitive opportunities for imported clove cigarettes does stem from a legitimate regulatory distinction. … menthol cigarettes have the same product characteristic [flavouring] that, from the perspective of the stated objective of Section 907(a)(1)(A) [to prevent youth smoking], justified the prohibition of clove cigarettes. … according to the United States, the exemption of menthol cigarettes from the ban on flavoured cigarettes is justified in order to avoid risks arising from withdrawal symptoms that would afflict menthol cigarette smokers in case those cigarettes were banned. We note, however, that the addictive ingredient in menthol cigarettes is nicotine … and that this ingredient is also present in a group of products that is likewise permitted under Section 907(a)(1)(A), namely, regular cigarettes. Therefore, it is not clear that the risks that the United States claims to minimize by allowing menthol cigarettes to remain in the market would materialize if menthol cigarettes were to be banned, insofar as regular cigarettes would remain in the market.
 

Therefore, even though Section 907(a)(1)(A) does not expressly distinguish between treatment accorded to the imported and domestic like products, it operates in a manner that reflects discrimination against the group of like products imported from Indonesia. Accordingly, … by exempting menthol cigarettes from the ban on flavoured cigarettes, Section 907(a)(1)(A) accords to clove cigarettes imported from Indonesia less favourable treatment than that accorded to domestic like products, within the meaning of Article 2.1 of the TBT Agreement.
 

T.4.2A.5.13 US — Tuna II (Mexico), para. 221
(WT/DS381/AB/R)
 

An enquiry into whether a measure comports with the “treatment no less favourable” requirement in Article 2.1 does not hinge on whether the imported products could somehow get access to an advantage, for example, by complying with all applicable conditions. Rather, … a determination of whether imported products are accorded “less favourable treatment” within the meaning of Article 2.1 of the TBT Agreement calls for an analysis of whether the contested measure modifies the conditions of competition to the detriment of imported products. Contrary to what the Panel appears to have assumed, the fact that a complainant could comply or could have complied with the conditions imposed by a contested measure does not mean that the challenged measure is therefore consistent with Article 2.1 of the TBT Agreement.
 

T.4.2A.5.14 US — Tuna II (Mexico), para. 225
(WT/DS381/AB/R)
 

… the Panel seems to have assumed, incorrectly in our view, that regulatory distinctions that are based on different “fishing methods” or “geographical location” rather than national origin per se cannot be relevant in assessing the consistency of a particular measure with Article 2.1 of the TBT Agreement. The Panel’s approach is difficult to reconcile with the fact that a measure may be de facto inconsistent with Article 2.1 even when it is origin-neutral on its face. As the Appellate Body explained in US — Clove Cigarettes, in making a determination of whether a measure is de facto inconsistent with Article 2.1, “a panel must carefully scrutinize the particular circumstances of the case, that is, the design, architecture, revealing structure, operation, and application of the technical regulation at issue, and, in particular, whether that technical regulation is even-handed”. … we consider that in an analysis of “less favourable treatment” under Article 2.1, any adverse impact on competitive opportunities for imported products vis-à-vis like domestic products that is caused by a particular measure may potentially be relevant.
 

T.4.2A.5.15 US — Tuna II (Mexico), paras. 236, 239
(WT/DS381/AB/R)
 

… In assessing whether there is a genuine relationship between the measure at issue and an adverse impact on competitive opportunities for imported products, the relevant question is whether governmental action “affects the conditions under which like goods, domestic and imported, compete in the market within a Member’s territory”. …
 

...
 

… Moreover, it is well established that WTO rules protect competitive opportunities, not trade flows. It follows that, even if Mexican tuna products might not achieve a wide penetration of the US market in the absence of the measure at issue due to consumer objections to the method of setting on dolphins, this does not change the fact that it is the measure at issue, rather than private actors, that denies most Mexican tuna products access to a “dolphin-safe” label in the US market. The fact that the detrimental impact on Mexican tuna products may involve some element of private choice does not, in our view, relieve the United States of responsibility under the TBT Agreement, where the measure it adopts modifies the conditions of competition to the detriment of Mexican tuna products.
 

T.4.2A.5.16 US — Tuna II (Mexico), para. 284
(WT/DS381/AB/R)
 

… 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 US 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 on Mexican tuna products is thus 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. The question before us is thus whether the United States has demonstrated that this difference in labelling conditions is a legitimate regulatory distinction, and hence whether the detrimental impact of the measure stems exclusively from such a distinction rather than reflecting discrimination.
 

T.4.2A.5.17 US — Tuna II (Mexico), paras. 297–298
(WT/DS381/AB/R)
 

… we conclude that the United States has not demonstrated that 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, is “calibrated” to the risks to dolphins arising from different fishing methods in different areas of the ocean. It follows from this that the United States has not demonstrated that the detrimental impact of the US measure on Mexican tuna products stems exclusively from a legitimate regulatory distinction. We note, in particular, that the US measure fully addresses the adverse effects on dolphins resulting from setting on dolphins in the ETP, whereas it does “not address mortality (observed or unobserved) arising from fishing methods other than setting on dolphins outside the ETP”. In these circumstances, we are not persuaded that the United States has demonstrated that the measure is even-handed in the relevant respects, even accepting that the fishing technique of setting on dolphins is particularly harmful to dolphins.
 

… in our view, the United States has not justified as non-discriminatory under Article 2.1 the different requirements that it applies to tuna caught by setting on dolphins inside the ETP and tuna caught by other fishing methods outside the ETP for access to the US ”dolphin-safe” label. The United States has thus not demonstrated that the detrimental impact of the US measure on Mexican tuna products stems exclusively from a legitimate regulatory distinction.
 

T.4.2A.5.18 US — COOL, para. 268
(WT/DS384/AB/R, WT/DS386/AB/R)
 

… an analysis of less favourable treatment involves an assessment of whether the technical regulation at issue modifies the conditions of competition in the relevant market to the detriment of the group of imported products vis-à-vis the group of like domestic products. At the same time, the specific context of Article 2.1 of the TBT Agreement — which includes Annex 1.1; Article 2.2; and the second, fifth, and sixth recitals of the preamble — supports a reading that Article 2.1 does not operate to prohibit a priori any restriction on international trade. As the Appellate Body has already observed, technical regulations are measures that, by their very nature, establish distinctions between products according to their characteristics, or related processes and production methods, as reflected in Annex 1.1 to the TBT Agreement. Therefore, Article 2.1 should not be read to mean that any distinctions, in particular ones that are based exclusively on such particular product characteristics or on particular processes and production methods, would per se constitute less favourable treatment within the meaning of Article 2.1.
 

T.4.2A.5.19 US — COOL, para. 269
(WT/DS384/AB/R, WT/DS386/AB/R)
 

… As under Article III:4, the national treatment obligation of Article 2.1 prohibits both de jure and de facto less favourable treatment. That is, “a measure may be de facto inconsistent with Article 2.1 even when it is origin-neutral on its face”. In such a case, the panel must take into consideration “the totality of facts and circumstances before it”, and assess any “implications” for competitive conditions “discernible from the design, structure, and expected operation of the measure”. Such an examination must take account of all the relevant features of the market, which may include the particular characteristics of the industry at issue, the relative market shares in a given industry, consumer preferences, and historical trade patterns. That is, a panel must examine the operation of the particular technical regulation at issue in the particular market in which it is applied.
 

T.4.2A.5.20 US — COOL, para. 270
(WT/DS384/AB/R, WT/DS386/AB/R)
 

In the context of both Article III:4 of the GATT 1994 and Article 2.1 of the TBT Agreement, for a measure to be found to modify the conditions of competition in the relevant market to the detriment of imported products, there must be a “genuine relationship” between the measure at issue and the adverse impact on competitive opportunities for imported products. In each case, the relevant question is whether it is the governmental measure at issue that “affects the conditions under which like goods, domestic and imported, compete in the market within a Member’s territory”. While a measure may not require certain treatment of imports, it may nevertheless create incentives for market participants to behave in certain ways, and thereby treat imported products less favourably. However, changes in the competitive conditions in a marketplace that are “not imposed directly or indirectly by law or governmental regulation, but [are] rather solely the result of private entrepreneurs acting on their own calculations of comparative costs and benefits”, cannot be the basis for a finding that a measure treats imported products less favourably than domestic like products. In every case, it is the effect of the measure on the competitive opportunities in the market that is relevant to an assessment of whether a challenged measure has a detrimental impact on imported products.
 

T.4.2A.5.21 US — COOL, para. 271
(WT/DS384/AB/R, WT/DS386/AB/R)
 

If a panel determines that a measure has such an impact on imported products, however, this will not be dispositive of a violation of Article 2.1. This is because not every instance of a detrimental impact amounts to the less favourable treatment of imports that is prohibited under that provision. Rather, some technical regulations that have a de facto detrimental impact on imports may not be inconsistent with Article 2.1 when such impact stems exclusively from a legitimate regulatory distinction. In contrast, where a regulatory distinction is not designed and applied in an even-handed manner — because, for example, it is designed or applied in a manner that constitutes a means of arbitrary or unjustifiable discrimination — that distinction cannot be considered “legitimate”, and thus the detrimental impact will reflect discrimination prohibited under Article 2.1. In assessing even-handedness, a panel must “carefully scrutinize the particular circumstances of the case, that is, the design, architecture, revealing structure, operation, and application of the technical regulation at issue”.
 

T.4.2A.5.22 US — COOL, para. 277
(WT/DS384/AB/R, WT/DS386/AB/R)
 

… a finding of formal different treatment is not required for a finding of de facto less favourable treatment to be made. In the context of Article III:4 of the GATT 1994, the Appellate Body has expressly found that “[a] formal difference in treatment between imported and like domestic products is … neither necessary, nor sufficient, to show a violation” of the national treatment obligation.
 

T.4.2A.5.23 US — COOL, para. 286
(WT/DS384/AB/R, WT/DS386/AB/R)
 

… Article 2.1 of the TBT Agreement prohibits both de jure and de facto discrimination between domestic and like imported products. Therefore, where a technical regulation does not discriminate de jure, a panel must determine whether the evidence and arguments adduced by the complainant in a specific case nevertheless demonstrate that the operation of that measure, in the relevant market, has a de facto detrimental impact on the group of like imported products. A panel’s analysis must take into consideration the totality of the facts and circumstances before it, including any implications for competitive conditions discernible from the design and structure of the measure itself, as well as all features of the particular market at issue that are relevant to the measure’s operation within that market. In this regard, “any adverse impact on competitive opportunities for imported products vis-à-vis like domestic products that is caused by a particular measure may potentially be relevant” to a panel’s assessment of less favourable treatment under Article 2.1.
 

T.4.2A.5.24 US — COOL, para. 288
(WT/DS384/AB/R, WT/DS386/AB/R)
 

In our view, the circumstances of these disputes are similar to those in Korea — Various Measures on Beef. In that case, … [t]he Appellate Body did not find a detrimental impact on imported beef due only to “[t]he legal necessity of making a choice” that the measure itself imposed. Rather, it held that the adoption of a measure requiring such a choice to be made had the “direct practical effect”, in that market, of denying competitive opportunities to imports. Such an effect was not “solely the result of private entrepreneurs acting on their own calculations of comparative costs and benefits”, but was the result of the governmental intervention that affected the conditions of competition for beef in Korea. Thus, contrary to the United States’ arguments in this respect, the findings in Korea — Various Measures on Beef do not stand for the proposition that private market participants must be legally required to make a choice in order for the incentives that determine how such choice will be exercised to be attributed to a governmental measure. The relevant question is whether it is the governmental measure at issue that affects the conditions under which like goods, domestic and imported, compete in the market. While a measure may not legally require certain treatment of imports, it may nevertheless create incentives for market participants to behave in certain ways, and thereby have the “practical effect” of treating imported products less favourably. Thus, the findings in Korea — Various Measures on Beef are consistent with, and support the proposition that, whenever the operation of a measure in the market creates incentives for private actors systematically to make choices in ways that benefit domestic products to the detriment of like imported products, then such a measure may be found to treat imported products less favourably.
 

T.4.2A.5.25 US — COOL, para. 290
(WT/DS384/AB/R, WT/DS386/AB/R)
 

We understand the Panel to have considered that, in this case, the small market share held by Canadian and Mexican livestock imports exacerbates the effects of the COOL measure. In making its finding under Article 2.1, the Panel acknowledged that the incentive created by the COOL measure is “partly due to the relatively small market share of imported livestock”. Such reasoning is not inconsistent with a finding that it was the COOL measure that caused the detrimental impact. Indeed, the opportunity for a technical regulation to discriminate may well derive from its operation within a given market that exhibits particular characteristics. In some instances, the market share held by imported products may be one such relevant characteristic.
 

T.4.2A.5.26 US — COOL, para. 291
(WT/DS384/AB/R, WT/DS386/AB/R)
 

We further emphasize that, while detrimental effects caused solely by the decisions of private actors cannot support a finding of inconsistency with Article 2.1, the fact that private actors are free to make various decisions in order to comply with a measure does not preclude a finding of inconsistency. Rather, where private actors are induced or encouraged to take certain decisions because of the incentives created by a measure, those decisions are not “independent” of that measure. … In this case, the Panel expressly found that “[i]t is the result of the COOL measure … that in the circumstances of the US market, market participants, when faced with the choice between a scenario involving exclusively domestic livestock and a scenario involving both domestic and imported livestock, opted predominantly for the former”. Had it not been for the COOL measure, the Panel reasoned, “market participants would not have opted this way”. We therefore find that the Panel properly examined whether the COOL measure modifies the conditions of competition in the US market to the detriment of imported livestock. …
 

T.4.2A.5.27 US — COOL, para. 293
(WT/DS384/AB/R, WT/DS386/AB/R)
 

… The Panel seems to have considered its finding that the COOL measure alters the conditions of competition to the detriment of imported livestock to be dispositive, and to lead, without more, to a finding of violation of the national treatment obligation in Article 2.1. In this sense, the Panel’s legal analysis under Article 2.1 is incomplete. The Panel should have continued its examination and determined whether the circumstances of this case indicate that the detrimental impact stems exclusively from a legitimate regulatory distinction, or whether the COOL measure lacks even-handedness. …
 

T.4.2A.5.28 US — COOL, paras. 347–348
(WT/DS384/AB/R, WT/DS386/AB/R)
 

… the informational requirements imposed on upstream producers under the COOL measure are disproportionate as compared to the level of information communicated to consumers through the mandatory retail labels. … Yet, nothing in the Panel’s findings or on the Panel record explains or supplies a rational basis for this disconnect. Therefore, we consider the manner in which the COOL measure seeks to provide information to consumers on origin, through the regulatory distinctions described above, to be arbitrary, and the disproportionate burden imposed on upstream producers and processors to be unjustifiable.
 

… this lack of correspondence between the record-keeping and verification requirements, on the one hand, and the limited consumer information conveyed through the retail labelling requirements and exemptions therefrom, on the other hand, is of central importance to our overall analysis under Article 2.1 of the TBT Agreement. This is because … the Panel found that the record-keeping and verification requirements imposed under the COOL measure lead to the detrimental impact on imported livestock in the US market. We have affirmed this finding above.
 

T.4.2A.5.29 US — COOL, para. 349
(WT/DS384/AB/R, WT/DS386/AB/R)
 

In sum, our examination of the COOL measure under Article 2.1 reveals that its recordkeeping and verification requirements impose a disproportionate burden on upstream producers and processors, because the level of information conveyed to consumers through the mandatory labelling requirements is far less detailed and accurate than the information required to be tracked and transmitted by these producers and processors. It is these same record-keeping and verification requirements that “necessitate” segregation, meaning that their associated compliance costs are higher for entities that process livestock of different origins. Given that the least costly way of complying with these requirements is to rely exclusively on domestic livestock, the COOL measure creates an incentive for US producers to use exclusively domestic livestock and thus has a detrimental impact on the competitive opportunities of imported livestock. Furthermore, the record-keeping and verification requirements imposed on upstream producers and processors cannot be explained by the need to convey to consumers information regarding the countries where livestock were born, raised, and slaughtered, because the detailed information required to be tracked and transmitted by those producers is not necessarily conveyed to consumers through the labels prescribed under the COOL measure. … Therefore, the detrimental impact caused by the same recordkeeping and verification requirements under the COOL measure can also not be explained by the need to provide origin information to consumers. Based on these findings, we consider that the regulatory distinctions imposed by the COOL measure amount to arbitrary and unjustifiable discrimination against imported livestock, such that they cannot be said to be applied in an even-handed manner. Accordingly, we find that the detrimental impact on imported livestock does not stem exclusively from a legitimate regulatory distinction but, instead, reflects discrimination in violation of Article 2.1 of the TBT Agreement.
 

T.4.2A.6 RELATIONSHIP WITH ARTICLE 2.2
 

T.4.2A.6.1 US — Tuna II (Mexico), para. 286
(WT/DS381/AB/R)
 

… The Panel’s findings with respect to the calibration of the measure at issue for the purposes of its analysis under Article 2.2 are thus not necessarily dispositive of the question whether the measure is calibrated for the purposes of Article 2.1. In particular, it would appear that in answering the question of whether the measure gives accurate information to consumers, all distinctions drawn by the measure are potentially relevant. By contrast, in an analysis under Article 2.1, we only need to examine the distinction that accounts for the detrimental impact on Mexican tuna products as compared to US tuna products and tuna products originating in other countries. Bearing the different scope of these enquiries in mind, we need to examine carefully to what extent the Panel’s findings under Article 2.2 bear on the question of whether 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, are calibrated to the likelihood that dolphins would be adversely affected in the course of tuna fishing operations in the respective conditions.
 

T.4.2A.6.2 US — COOL, para. 381 and Footnote 756
(WT/DS384/AB/R, WT/DS386/AB/R)
 

[The United States challenges the Panel’s reliance] upon a finding that it had made in the course of its analysis under Article 2.1 to conclude that the COOL measure is trade restrictive for purposes of Article 2.2 ….756 … As we have, however, upheld the Panel’s finding that the COOL measure is inconsistent with Article 2.1, we need not further consider this ground of the United States’ appeal.
 

T.4.2B Article 2.2 — Not more trade-restrictive than necessary to fulfil a legitimate objective. See also General Exceptions: Article XX of the GATT 1994, Article XX(a) and (b) — Necessity test (G.3.3A); General Exceptions: Article XX of the GATT 1994, Article XX(d) — Necessity test (G.3.6); General Exceptions: Article XIV of the GATS, Article XIV(a) — Necessity test — Reasonably available alternative (G.4.4)     back to top

T.4.2B.1 GENERAL/NECESSITY TEST
 

T.4.2B.1.1 US — Tuna II (Mexico), para. 318
(WT/DS381/AB/R)
 

We turn next to the terms “unnecessary obstacles to international trade” in the first sentence and “not … more trade-restrictive than necessary” in the second sentence of Article 2.2 of the TBT Agreement. Both the first and second sentence of Article 2.2 refer to the notion of “necessity”. These sentences are linked by the terms “[f]or this purpose”, which suggests that the second sentence qualifies the terms of the first sentence and elaborates on the scope and meaning of the obligation contained in that sentence. The Appellate Body has previously noted that the word “necessary” refers to a range of degrees of necessity, depending on the connection in which it is used. In the context of Article 2.2, the assessment of “necessity” involves a relational analysis of the trade-restrictiveness of the technical regulation, the degree of contribution that it makes to the achievement of a legitimate objective, and the risks non-fulfilment would create. We consider, therefore, that all these factors provide the basis for the determination of what is to be considered “necessary” in the sense of Article 2.2 in a particular case.
 

T.4.2B.1.2 US — Tuna II (Mexico), para. 320 and Footnote 645
(WT/DS381/AB/R)
 

The use of the comparative “more … than” in the second sentence of Article 2.2 suggests that the existence of an “unnecessary obstacle[] to international trade” in the first sentence may be established on the basis of a comparative analysis of the above-mentioned factors. In most cases, this would involve a comparison of the trade-restrictiveness and the degree of achievement of the objective by the measure at issue with that of possible alternative measures that may be reasonably available and less trade restrictive than the challenged measure, taking account of the risks non-fulfilment would create.645 The Appellate Body has clarified that a comparison with reasonably available alternative measures is a conceptual tool for the purpose of ascertaining whether a challenged measure is more trade restrictive than necessary.
 

T.4.2B.1.3 US — Tuna II (Mexico), para. 322
(WT/DS381/AB/R)
 

In sum, we consider that an assessment of whether a technical regulation is “more trade-restrictive than necessary” within the meaning of Article 2.2 of the TBT Agreement involves an evaluation of a number of factors. A panel should begin by considering factors that include: (i) the degree of contribution made by the measure to the legitimate objective at issue; (ii) the trade-restrictiveness of the measure; and (iii) the nature of the risks at issue and the gravity of consequences that would arise from non-fulfilment of the objective(s) pursued by the Member through the measure. In most cases, a comparison of the challenged measure and possible alternative measures should be undertaken. In particular, it may be relevant for the purpose of this comparison to consider whether the proposed alternative is less trade restrictive, whether it would make an equivalent contribution to the relevant legitimate objective, taking account of the risks non-fulfilment would create, and whether it is reasonably available.
 

T.4.2B.1.4 US — COOL, para. 369
(WT/DS384/AB/R, WT/DS386/AB/R)
 

The first two sentences of Article 2.2 establish certain obligations with which WTO Members must comply when preparing, adopting, and applying technical regulations. In accordance with the first sentence, they must ensure that such preparation, adoption, and application is not done “with a view to or with the effect of creating unnecessary obstacles to international trade”; and, in accordance with the second sentence, they must ensure that their technical regulations are “not … more trade-restrictive than necessary to fulfil a legitimate objective, taking account of the risks non-fulfilment would create”. The words “[f]or this purpose” linking the first and second sentences suggest that the second sentence informs the scope and meaning of the obligation contained in the first sentence.
 

T.4.2B.1.5 US — COOL, para. 374
(WT/DS384/AB/R, WT/DS386/AB/R)
 

The notion of “necessity” is reflected in both the first and second sentences of Article 2.2, through the reference in the first sentence to “unnecessary obstacles to international trade”, and in the second sentence to “not … more trade-restrictive than necessary”. … the assessment of “necessity”, in the context of Article 2.2, involves a “relational analysis” of the following factors: the trade-restrictiveness of the technical regulation; the degree of contribution that it makes to the achievement of a legitimate objective; and the risks non-fulfilment would create. In a particular case, a panel’s determination of what is considered “necessary” will be based on a consideration of all these factors.
 

T.4.2B.1.6 US — COOL, para. 376 and Footnotes 748–750
(WT/DS384/AB/R, WT/DS386/AB/R)
 

The Appellate Body considered that the use of the comparative “more … than” in the second sentence of Article 2.2 suggests that the existence of an “unnecessary obstacle[] to international trade” in the first sentence may be established on the basis of a comparative analysis of the above-mentioned factors. In most cases,748 this will involve a comparison of the trade-restrictiveness of, and the degree of achievement of the objective by, the measure at issue, with that of possible alternative measures749 that may be reasonably available and that are less trade restrictive than the challenged measure, taking account of the risks non-fulfilment would create.750
 

T.4.2B.1.7 US — COOL, para. 461
(WT/DS384/AB/R, WT/DS386/AB/R)
 

… [In US — Tuna II (Mexico), t]he Appellate Body did not find or imply that, in order for a measure to comply with Article 2.2, it must meet some minimum threshold of fulfilment. Rather, the contribution that the challenged measure makes to the achievement of its objective must be determined objectively, and then evaluated along with the other factors mentioned in Article 2.2, that is: (i) the trade-restrictiveness of the measure; and (ii) the nature of the risks at issue and the gravity of the consequences that would arise from non-fulfilment of the objective(s) pursued by the Member through the measure. In most cases, a comparison of the challenged measure and possible alternative measures will then also need to be undertaken. Through such an analysis, a panel will be able to judge the “necessity” of the trade-restrictiveness of the measure at issue, that is, to discern whether the technical regulation at issue restricts international trade beyond what is necessary to achieve the degree of contribution that it makes to the achievement of a legitimate objective.
 

T.4.2B.1.8 US — COOL, para. 471 and Footnote 950
(WT/DS384/AB/R, WT/DS386/AB/R)
 

… an assessment of whether a technical regulation is “more trade-restrictive than necessary” within the meaning of Article 2.2 involves an evaluation of a number of factors, including: (i) the degree of contribution made by the measure to the legitimate objective at issue; (ii) the trade-restrictiveness of the measure; and (iii) the nature of the risks at issue as well as the gravity of the consequences that would arise from non-fulfilment of the objective pursued by the Member through the measure.950 The Appellate Body further stated that, “[i]n most cases, a comparison of the challenged measure and possible alternative measures should be undertaken”. In making this comparison, it will be relevant to consider whether the proposed alternative is less trade restrictive; whether it would make an equivalent contribution to the relevant legitimate objective, taking account of the risks non-fulfilment would create; and whether it is reasonably available. …
 

T.4.2B.2 BURDEN OF PROOF
 

T.4.2B.2.1 US — Tuna II (Mexico), para. 323
(WT/DS381/AB/R)
 

With respect to the burden of proof in showing that a technical regulation is inconsistent with Article 2.2, the complainant must prove its claim that the challenged measure creates an unnecessary obstacle to international trade. In order to make a prima facie case, the complainant must present evidence and arguments sufficient to establish that the challenged measure is more trade restrictive than necessary to achieve the contribution it makes to the legitimate objectives, taking account of the risks non-fulfilment would create. In making its prima facie case, a complainant may also seek to identify a possible alternative measure that is less trade restrictive, makes an equivalent contribution to the relevant objective, and is reasonably available. It is then for the respondent to rebut the complainant’s prima facie case, by presenting evidence and arguments showing that the challenged measure is not more trade restrictive than necessary to achieve the contribution it makes toward the objective pursued and by demonstrating, for example, that the alternative measure identified by the complainant is not, in fact, “reasonably available”, is not less trade restrictive, or does not make an equivalent contribution to the achievement of the relevant legitimate objective.
 

T.4.2B.2.2 US — COOL, para. 379
(WT/DS384/AB/R, WT/DS386/AB/R)
 

… In order to demonstrate that a technical regulation is inconsistent with Article 2.2, the complainant must make a prima facie case by presenting evidence and arguments sufficient to establish that the challenged measure is more trade restrictive than necessary to achieve the contribution it makes to the legitimate objective, taking account of the risks non-fulfilment would create. A complainant may, and in most cases will, also seek to identify a possible alternative measure that is less trade restrictive, makes an equivalent contribution to the relevant objective, and is reasonably available. It is then for the respondent to rebut the complainant’s prima facie case by presenting evidence and arguments showing that the challenged measure is not more trade restrictive than necessary to achieve the contribution it makes toward the objective pursued, for example, by demonstrating that the alternative measure identified by the complainant is not, in fact, “reasonably available”, is not less trade restrictive, or does not make an equivalent contribution to the achievement of the relevant legitimate objective.
 

T.4.2B.2.3 US — COOL, para. 442
(WT/DS384/AB/R, WT/DS386/AB/R)
 

… we agree with the Panel that it is for the complainant raising an Article 2.2 claim to establish that the relevant objective falls outside the scope of the legitimate objectives covered by that provision. …
 

T.4.2B.2.4 US — COOL, para. 469
(WT/DS384/AB/R, WT/DS386/AB/R)
 

… The Appellate Body has found, and the participants do not contest, that the burden of proof with respect to such alternative measures is on the complainants. …
 

T.4.2B.3 TRADE-RESTRICTIVENESS
 

T.4.2B.3.1 US — Tuna II (Mexico), para. 319
(WT/DS381/AB/R)
 

What has to be assessed for “necessity” is the trade-restrictiveness of the measure at issue. We recall that the Appellate Body has understood the word “restriction” as something that restricts someone or something, a limitation on action, a limiting condition or regulation. Accordingly, it found, in the context of Article XI:2(a) of the GATT 1994, that the word “restriction” refers generally to something that has a limiting effect. As used in Article 2.2 in conjunction with the word “trade”, the term means something having a limiting effect on trade. We recall that Article 2.2 does not prohibit measures that have any trade-restrictive effect. It refers to “unnecessary obstacles” to trade and thus allows for some trade-restrictiveness; more specifically, Article 2.2 stipulates that technical regulations shall not be “more trade-restrictive than necessary to fulfil a legitimate objective”. Article 2.2 is thus concerned with restrictions on international trade that exceed what is necessary to achieve the degree of contribution that a technical regulation makes to the achievement of a legitimate objective.
 

T.4.2B.3.2 US — COOL, para. 375
(WT/DS384/AB/R, WT/DS386/AB/R)
 

By its terms, Article 2.2 requires an assessment of the necessity of the trade-restrictiveness of the measure at issue. … the Appellate Body in US — Tuna II (Mexico) defined “trade-restrictive” to mean “having a limiting effect on trade”. Moreover, it found that the reference in Article 2.2 to “unnecessary obstacles” implies that “some” trade-restrictiveness is allowed and, further, that what is actually prohibited are those restrictions on international trade that “exceed what is necessary to achieve the degree of contribution that a technical regulation makes to the achievement of a legitimate objective”.
 

T.4.2B.3.3 US — COOL, para. 381 and Footnote 756
(WT/DS384/AB/R, WT/DS386/AB/R)
 

The United States appeals the Panel’s finding that the COOL measure is “trade-restrictive”, within the meaning of Article 2.2. … its argument on appeal is simply that, because the Panel relied upon a finding that it had made in the course of its analysis under Article 2.1 to conclude that the COOL measure is trade restrictive for purposes of Article 2.2, the latter finding must be reversed once that Article 2.1 finding has been reversed.756 … As we have, however, upheld the Panel’s finding that the COOL measure is inconsistent with Article 2.1, we need not further consider this ground of the United States’ appeal.
 

T.4.2B.4 LEGITIMATE OBJECTIVE
 

T.4.2B.4.1 US — Tuna II (Mexico), paras. 313–314
(WT/DS381/AB/R)
 

Considering, first, the meaning of the term “legitimate objective” in the sense of Article 2.2 of the TBT Agreement, we note that the word “objective” describes a “thing aimed at or sought; a target, a goal, an aim”. The word “legitimate”, in turn, is defined as “lawful; justifiable; proper”. Taken together, this suggests that a “legitimate objective” is an aim or target that is lawful, justifiable, or proper. Furthermore, the use of the words “inter alia” in Article 2.2 suggests that the provision does not set out a closed list of legitimate objectives, but rather lists several examples of legitimate objectives. We consider that those objectives expressly listed provide a reference point for which other objectives may be considered to be legitimate in the sense of Article 2.2. In addition, we note that the sixth and seventh recitals of the preamble of the TBT Agreement specifically recognize several objectives, which to a large extent overlap with the objectives listed in Article 2.2. Furthermore, we consider that objectives recognized in the provisions of other covered agreements may provide guidance for, or may inform, the analysis of what might be considered to be a legitimate objective under Article 2.2 of the TBT Agreement.
 

Accordingly, in adjudicating a claim under Article 2.2 of the TBT Agreement, a panel must assess what a Member seeks to achieve by means of a technical regulation. In doing so, it may take into account the texts of statutes, legislative history, and other evidence regarding the structure and operation of the measure. A panel is not bound by a Member’s characterization of the objectives it pursues through the measure, but must independently and objectively assess them. Subsequently, the analysis must turn to the question of whether a particular objective is legitimate, pursuant to the parameters set out above.
 

T.4.2B.4.2 US — Tuna II (Mexico), para. 338
(WT/DS381/AB/R)
 

Article 2.2 of the TBT Agreement recognizes that a technical regulation shall not create “unnecessary obstacles” to international trade. The provision thus envisages that some trade-restrictiveness may arise from a technical regulation. However, the technical regulation would not be inconsistent with Article 2.2 unless it is found to constitute an “unnecessary obstacle[] to international trade”. Hence, the mere fact that a WTO Member adopts a measure that entails a burden on trade in order to pursue a particular objective cannot per se provide a sufficient basis to conclude that the objective that is being pursued is not a “legitimate objective” within the meaning of Article 2.2.
 

T.4.2B.4.3 US — Tuna II (Mexico), para. 339
(WT/DS381/AB/R)
 

… According to the sixth recital, what must not be applied in a manner that would constitute a means of arbitrary or unjustifiable discrimination between countries where the same conditions prevail or a disguised restriction on international trade is a measure, and not the objective pursued by the technical regulation.
 

T.4.2B.4.4 US — COOL, paras. 370–372
(WT/DS384/AB/R, WT/DS386/AB/R)
 

… First, a “legitimate objective” refers to an aim or target that is lawful, justifiable, or proper. Article 2.2 lists specific examples of such “legitimate objectives”, namely: national security requirements; the prevention of deceptive practices; and the protection of human health or safety, animal or plant life or health, or the environment. The use of the words “inter alia” in Article 2.2 introducing that list, however, signifies that the list of legitimate objectives is not a closed one. In addition, the objectives expressly listed provide a reference point for other objectives that may be considered to be legitimate in the sense of Article 2.2. The sixth and seventh recitals of the preamble of the TBT Agreement refer to several objectives, which to a large extent overlap with the objectives listed in Article 2.2. As the Appellate Body has also noted, objectives recognized in the provisions of other covered agreements may provide guidance for, or may inform, the analysis of what might be considered to be a legitimate objective under Article 2.2.
 

A panel adjudicating a claim under Article 2.2 may face conflicting arguments by the parties as to the nature of the “objective” pursued by a responding party through its technical regulation. In identifying the objective pursued by a Member, a panel should take into account that Member’s articulation of what objective(s) it pursues through its measure. However, a panel is not bound by a Member’s characterizations of such objective(s). Indeed, in order to make an objective and independent assessment of the objective that a Member seeks to achieve, the panel must take account of all the evidence put before it in this regard, including “the texts of statutes, legislative history, and other evidence regarding the structure and operation” of the technical regulation at issue.
 

With respect to the determination of the “legitimacy” of the objective, we note first that a panel’s finding that the objective is among those listed in Article 2.2 will end the inquiry into its legitimacy. If, however, the objective does not fall among those specifically listed, a panel must make a determination of legitimacy. It may be guided by considerations that we have set out above, including whether the identified objective is reflected in other provisions of the covered agreements.
 

T.4.2B.4.5 US — COOL, para. 387
(WT/DS384/AB/R, WT/DS386/AB/R)
 

… we observe that the Panel’s formulation of the objective pursued by the United States varied over the course of its analysis. … Through these differing formulations of the objective, the Panel introduced a level of uncertainty in its reasoning. It is of course self-evident that panels should seek to avoid using different language to denote the same concept. This is especially so in the context of an analysis under Article 2.2 of the TBT Agreement, given that the relevant objective is the benchmark against which a panel must assess the degree of contribution made by a challenged technical regulation, as well as by proposed alternative measures. For these reasons, the importance of a panel identifying with sufficient clarity and consistency the objective or objectives pursued by a Member through a technical regulation cannot be overemphasized.
 

T.4.2B.4.6 US — COOL, para. 395
(WT/DS384/AB/R, WT/DS386/AB/R)
 

… the proper approach to be followed by a panel in determining the objective a Member seeks to achieve by means of a technical regulation … calls for an independent and objective assessment, based on an examination of the text of the measure, its design, architecture, structure, legislative history, as well as its operation. While a panel may take as a starting point the responding Member’s characterization of the objective it pursues through the measure, a panel is not bound by such characterization. This is so especially where the objective of a measure is contested between the parties, and competing arguments have been raised on the basis of the text of the measure, its design, architecture, structure, legislative history, and evidence relating to its operation. …
 

T.4.2B.4.7 US — COOL, paras. 420, 422
(WT/DS384/AB/R, WT/DS386/AB/R)
 

… Canada’s arguments fail to recognize that the Panel appears not to have considered evidence of legislative intent to be particularly probative of a measure’s objective, in general. Before assessing the arguments of the parties … the Panel referred to earlier findings of the Appellate Body which, in its view, suggested that the subjective intent of legislators was not relevant to an inquiry into the objective of a measure, but which recognized that it was possible to have recourse to the purpose or objectives of the legislature “to the extent that they are given objective expression in the statute itself”. …
 

...
 

… the lack of importance that the Panel attached to the evidence of statements made by legislators reflects not only its appreciation of the facts, but also its recognition that, as a matter of law, care should be exercised in relying upon this type of evidence in order to determine the objective pursued by a measure. …
 

T.4.2B.4.8 US — COOL, paras. 437, 442
(WT/DS384/AB/R, WT/DS386/AB/R)
 

… the Panel began its analysis of this issue by noting that the burden of proving that the relevant objective is not legitimate within the meaning of Article 2.2 rested on the complainants. …
 

...
 

… we agree with the Panel that it is for the complainant raising an Article 2.2 claim to establish that the relevant objective falls outside the scope of the legitimate objectives covered by that provision. …
 

T.4.2B.4.9 US — COOL, paras. 442–444
(WT/DS384/AB/R, WT/DS386/AB/R)
 

… the relevant issue is whether the provision of consumer information on origin — an objective not explicitly listed in Article 2.2 — can be considered “legitimate”. …
 

… the thrust of Canada’s appeal is directed at the Panel’s alleged failure to articulate a proper test for determining whether an objective that is not explicitly listed in Article 2.2 is “legitimate” within the meaning of that provision. More specifically, Canada considers that the Panel erred in not adopting the test proposed by Canada in this regard, which relies upon the ejusdem generis principle to limit the class of “legitimate” objectives to those objectives that are of the same type or kind as the ones explicitly listed in that provision.
 

… in determining whether an unlisted objective qualifies as legitimate, a panel may usefully have regard to those objectives that are expressly listed in Article 2.2, because these may provide an illustration and reference point for other objectives that may be considered “legitimate”. Thus, an objective that is linked or related to a specific listed objective may be more likely to be found to be legitimate. … Indeed, it is difficult to discern such commonality amongst the disparate listed objectives that are, moreover, “expressed at a high level of generality”. In addition, it seems to us that any relevant “commonality” among explicitly listed objectives would have to relate to the nature and content of those objectives themselves, rather than, as Canada seems to suggest, to the fact that each objective in Article 2.2 is also listed in exceptions provisions in other covered agreements. For these reasons, we do not consider the Panel to have erred in failing to rely upon the ejusdem generis principle to identify the class of “legitimate objectives” under Article 2.2 of the TBT Agreement.
 

T.4.2B.4.10 US — COOL, para. 445
(WT/DS384/AB/R, WT/DS386/AB/R)
 

… objectives listed in the recitals of the preamble of the TBT Agreement and provisions of other covered agreements may guide or usefully inform a panel’s determination of which other objectives can be considered “legitimate” for purposes of Article 2.2. We observe, in this regard, that the provision of information to consumers on origin bears some relation to the objective of prevention of deceptive practices reflected in both Article 2.2 itself and Article XX(d) of the GATT 1994, insofar as consumers could be deceived as to the origin of products if labelling is inaccurate or misleading. In our view, support for the legitimate nature of the objective of providing information to consumers on origin is also found elsewhere in the covered agreements, in particular in Article IX of the GATT 1994. This provision, entitled “Marks of Origin”, expressly recognizes the right of WTO Members to require that imported products carry a mark of origin. Although the applicability of this provision to the circumstances of these disputes has not been explored by the participants, and it is in any event not at issue, Article IX does indicate that requiring origin labelling for imported goods is, at least in some circumstances and for some definitions of “origin”, considered under WTO law to be a permissible means of regulating trade in goods.
 

T.4.2B.4.11 US — COOL, paras. 449, 452
(WT/DS384/AB/R, WT/DS386/AB/R)
 

We are … troubled by certain aspects of the Panel’s analysis of the legitimacy of the United States’ objective. First, although the Panel recognized, at the outset of its analysis, that the burden of proving that an objective is not legitimate lay with the complainants, its reasoning at times suggests that it, instead, placed on the United States the burden of proving that its objective was legitimate. …
 

...
 

… we have some difficulties understanding how the Panel viewed the relationship between “the practice in a considerable proportion of WTO Members” and “social norms”, and the role that these considerations played in its analysis. …
 

T.4.2B.5 “TO FULFIL”
 

T.4.2B.5.1 US — Tuna II (Mexico), paras. 315–316
(WT/DS381/AB/R)
 

Next, we consider the meaning of the word “fulfil” in the context of the phrase “fulfil a legitimate objective” in Article 2.2 of the TBT Agreement. We note, first, that the word “fulfil” is defined as “provide fully with what is wished for”. Read in isolation, the word “fulfil” appears to describe complete achievement of something. But, in Article 2.2, it is used in the phrase “to fulfil a legitimate objective” and, as described above, the word “objective” means “a target, goal, or aim”. As we see it, it is inherent in the notion of an “objective” that such a “goal, or aim” may be something that is pursued and achieved to a greater or lesser degree. Accordingly, we consider that the question of whether a technical regulation “fulfils” an objective is concerned with the degree of contribution that the technical regulation makes toward the achievement of the legitimate objective.
 

We see support for this reading of the term “fulfil a legitimate objective” in the sixth recital of the preamble of the TBT Agreement, which provides relevant context for the interpretation of Article 2.2. It recognizes that a Member shall not be prevented from taking measures necessary to achieve its legitimate objectives “at the levels it considers appropriate”, subject to the requirement that such measures are not applied in a manner that would constitute a means of arbitrary or unjustifiable discrimination between countries where the same conditions prevail or a disguised restriction on international trade, and are otherwise in accordance with the TBT Agreement. As we see it, a WTO Member, by preparing, adopting, and applying a measure in order to pursue a legitimate objective, articulates either implicitly or explicitly the level at which it seeks to pursue that particular legitimate objective.
 

T.4.2B.5.2 US — Tuna II (Mexico), para. 317
(WT/DS381/AB/R)
 

A panel adjudicating a claim under Article 2.2 of the TBT Agreement must seek to ascertain to what degree, or if at all, the challenged technical regulation, as written and applied, actually contributes to the legitimate objective pursued by the Member. The degree of achievement of a particular objective may be discerned from the design, structure, and operation of the technical regulation, as well as from evidence relating to the application of the measure. As in other situations, such as, for instance, when determining the contribution of a measure to the achievement of a particular objective in the context of Article XX of the GATT 1994, a panel must assess the contribution to the legitimate objective actually achieved by the measure at issue.
 

T.4.2B.5.3 US — Tuna II (Mexico), para. 341
(WT/DS381/AB/R)
 

… the question of whether a technical regulation “fulfils” an objective is concerned with the degree of contribution that the technical regulation makes toward the achievement of the legitimate objective. An assessment of the necessity of a measure’s trade-restrictiveness under Article 2.2 therefore focuses on the extent to which a measure contributes to the objective pursued.
 

T.4.2B.5.4 US — COOL, paras. 373, 390, and Footnote 742
(WT/DS384/AB/R, WT/DS386/AB/R)
 

… The Appellate Body in US — Tuna II (Mexico) found that, while, read in isolation, the word “fulfil” could be understood to signify the complete achievement of something, as used in Article 2.2 this term is concerned with the degree of contribution that the technical regulation makes towards the achievement of the legitimate objective. The Appellate Body found relevant contextual support for this reading in the sixth recital of the preamble of the TBT Agreement, which provides that, subject to certain qualifications, a Member shall not be prevented from taking measures necessary to achieve its legitimate objectives “at the levels it considers appropriate”. The degree or level of contribution of a technical regulation to its objective is not an abstract concept, but rather something that is revealed through the measure itself. In preparing, adopting, and applying a measure in order to pursue a legitimate objective, a WTO Member articulates, either implicitly or explicitly, the level at which it pursues that objective. Thus, a panel adjudicating a claim under Article 2.2 must seek to ascertain — from the design, structure, and operation of the technical regulation, as well as from evidence relating to its application — to what degree, if at all,742 the challenged technical regulation, as written and applied, actually contributes to the achievement of the legitimate objective pursued by the Member.
 

...
 

… Neither Article 2.2 in particular, nor the TBT Agreement in general, requires that, in its examination of the objective pursued, a panel must discern or identify, in the abstract, the level at which a responding Member wishes or aims to achieve that objective. Rather, what a panel is required to do, under Article 2.2, is to assess the degree to which a Member’s technical regulation, as adopted, written, and applied, contributes to the legitimate objective pursued by that Member.
 

T.4.2B.5.5 US — COOL, para. 426
(WT/DS384/AB/R, WT/DS386/AB/R)
 

… We have already explained … why it was not necessary or appropriate for the Panel, in identifying the objective …, to further identify the level at which the United States desired to fulfil its objective of providing consumer information on origin … . As we noted, the fulfilment of an objective is a matter of degree, and what is relevant for the inquiry under Article 2.2 is the degree of contribution to the objective that a measure actually achieves.
 

T.4.2B.5.6 US — COOL, para. 461 and Footnote 928
(WT/DS384/AB/R, WT/DS386/AB/R)
 

… in US — Tuna II (Mexico) …, the Appellate Body clarified that an analysis under Article 2.2 involves an assessment of a number of factors, and that one such factor is whether a technical regulation “fulfils” an objective. The Appellate Body explained that this factor is concerned with the degree of contribution that the technical regulation makes towards the achievement of the legitimate objective, and that a panel must seek to ascertain to what degree, or if at all,928 the challenged technical regulation, as written and applied, actually contributes to the legitimate objective pursued by the Member. The degree of achievement of a particular objective may be discerned from the design, structure, and operation of the technical regulation, as well as from evidence relating to the application of the measure. …
 

T.4.2B.5.7 US — COOL, paras. 467–468
(WT/DS384/AB/R, WT/DS386/AB/R)
 

… the Panel’s concluding statements and ultimate finding suggest that the Panel considered that, in order for the COOL measure to fulfil its objective, either all of the labels had to provide 100% accurate and clear information, or that the COOL measure had to meet or surpass some minimum threshold. …
 

We have stated above that a panel’s assessment of whether a measure fulfils its objective is concerned primarily with the actual contribution made by the measure towards achieving its objective. Thus, a panel’s assessment should focus on ascertaining the degree of contribution achieved by the measure, rather than on answering the questions of whether the measure fulfils the objective completely or satisfies some minimum level of fulfilment of that objective. Because the Panel seems to have considered it necessary for the COOL measure to have fulfilled the objective completely, or satisfied some minimum level of fulfilment to be consistent with Article 2.2, it erred in its interpretation of Article 2.2. Moreover, because the Panel ignored its own findings, which demonstrate that the labels under the COOL measure did contribute towards the objective of providing consumer information on origin, it also erred in its analysis under Article 2.2. For these reasons, we find that the Panel erred … in finding that “the COOL measure does not fulfil the identified objective within the meaning of Article 2.2” … .
 

T.4.2B.6 “THE RISKS NON-FULFILMENT WOULD CREATE”
 

T.4.2B.6.1 US — Tuna II (Mexico), para. 321
(WT/DS381/AB/R)
 

Article 2.2 of the TBT Agreement further stipulates that the risks non-fulfilment of the objective would create shall be taken into account, and that, in assessing such risks, relevant elements of consideration are “inter alia: available scientific and technical information, related processing technology or intended end-uses of products”. As we see it, the obligation to consider “the risks non-fulfilment would create” suggests that the comparison of the challenged measure with a possible alternative measure should be made in the light of the nature of the risks at issue and the gravity of the consequences that would arise from non-fulfilment of the legitimate objective. This suggests a further element of weighing and balancing in the determination of whether the trade-restrictiveness of a technical regulation is “necessary” or, alternatively, whether a possible alternative measure, which is less trade restrictive, would make an equivalent contribution to the relevant legitimate objective, taking account of the risks non-fulfilment would create, and would be reasonably available.
 

T.4.2B.6.2 US — COOL, para. 377
(WT/DS384/AB/R, WT/DS386/AB/R)
 

With respect to the requirement under Article 2.2 to consider “the risks non-fulfilment would create”, the Appellate Body explained that this suggests that the comparison of the challenged measure with a possible alternative measure should be made “in the light of the nature of the risks at issue and the gravity of the consequences that would arise from non-fulfilment of the legitimate objective”, which suggests a “further element of weighing and balancing” in the analysis under Article 2.2.
 

T.4.2B.7 ALTERNATIVE MEASURES
 

T.4.2B.7.1 US — Tuna II (Mexico), paras. 325, 330–331
(WT/DS381/AB/R)
 

In reviewing the Panel’s application of Article 2.2 to the facts of this case, we recall its finding that the objectives at issue are, first, “ensuring that consumers are not misled or deceived about whether tuna products contain tuna that was caught in a manner that adversely affects dolphins”; and, second, “contributing to the protection of dolphins, by ensuring that the US market is not used to encourage fishing fleets to catch tuna in a manner that adversely affects dolphins”.
 

...
 

… the alternative measure proposed by Mexico would contribute to both the consumer information objective and the dolphin protection objective to a lesser degree than the measure at issue … . We disagree therefore with the Panel’s findings that the proposed alternative measure would achieve the United States’ objectives “to the same extent” as the existing US “dolphin-safe” labelling provisions, and that the extent to which consumers would be misled as to the implications of the manner in which tuna was caught “would not be greater” under the alternative measure proposed by Mexico.
 

For these reasons, we find that the Panel’s comparison and analysis is flawed and cannot stand. Therefore, the Panel erred in concluding… that it has been demonstrated that the measure at issue is more trade restrictive than necessary to fulfil the United States’ legitimate objectives, taking account of the risks non-fulfilment would create. …
 

T.4.2B.7.2 US — Tuna II (Mexico), paras. 340–342
(WT/DS381/AB/R)
 

… Mexico alleges that the Panel erred in proceeding to examine whether there was a less trade-restrictive alternative measure after it had found that the measure at issue could, at best, only partially fulfil the two United States’ objectives. For Mexico, it is not possible to find that there is a less trade-restrictive alternative measure that fulfils the objectives when the measure at issue itself does not fulfil the objectives. In addition, it would be impossible to take “account of the risks non-fulfilment would create” if, in fact, non-fulfilment already exists with the measure at issue. Mexico argues that, upon concluding that the US “dolphin-safe” labelling provisions did not fulfil the two United States’ objectives, the Panel’s analysis should have ended and it should have found that the US “dolphin-safe” labelling provisions were inconsistent with Article 2.2.
 

… We have stated above that the question of whether a technical regulation “fulfils” an objective is concerned with the degree of contribution that the technical regulation makes toward the achievement of the legitimate objective. An assessment of the necessity of a measure’s trade-restrictiveness under Article 2.2 therefore focuses on the extent to which a measure contributes to the objective pursued.
 

… therefore, we reject Mexico’s … request to find the measure at issue inconsistent with Article 2.2 of the TBT Agreement based on the Panel’s finding that the measure did not entirely fulfil its objectives.
 

T.4.2B.7.3 US — COOL, para. 469
(WT/DS384/AB/R, WT/DS386/AB/R)
 

… The Appellate Body has found, and the participants do not contest, that the burden of proof with respect to such alternative measures is on the complainants. Accordingly, we agree with the United States that, by finding the COOL measure to be inconsistent with Article 2.2 of the TBT Agreement without examining the proposed alternative measures, the Panel erred by relieving Mexico and Canada of this part of their burden of proof.
 

T.4.3 Article 2.4 — International standards as a basis for technical regulation. See also Burden of Proof, General (B.3.1); Temporal Application of Rights and Obligations, TBT Agreement (T.5.3)     back to top

T.4.3.1 EC — Sardines, para. 248
(WT/DS231/AB/R)
 

We see no need here to define in general the nature of the relationship that must exist for an international standard to serve “as a basis for” a technical regulation. Here we need only examine this measure to determine if it fulfils this obligation. In our view, it can certainly be said — at a minimum — that something cannot be considered a “basis” for something else if the two are contradictory. Therefore, under Article 2.4, if the technical regulation and the international standard contradict each other, it cannot properly be concluded that the international standard has been used “as a basis for” the technical regulation.
 

T.4.3.2 EC — Sardines, para. 250
(WT/DS231/AB/R)
 

In making this determination, we note at the outset that Article 2.4 of the TBT Agreement provides that “Members shall use [relevant international standards], or the relevant parts of them, as a basis for their technical regulations” (emphasis added). In our view, the phrase “relevant parts of them” defines the appropriate focus of an analysis to determine whether a relevant international standard has been used “as a basis for” a technical regulation. In other words, the examination must be limited to those parts of the relevant international standards that relate to the subject-matter of the challenged prescriptions or requirements. In addition, the examination must be broad enough to address all of those relevant parts; the regulating Member is not permitted to select only some of the “relevant parts” of an international standard. If a “part” is “relevant”, then it must be one of the elements which is “a basis for” the technical regulation.
 

T.4.3.3 US — Tuna II (Mexico), paras. 350–352
(WT/DS381/AB/R)
 

The composite term “international standard” is not defined in Annex 1 of the TBT Agreement. However, Annex 1.2 to the TBT Agreement defines a “standard” ….
 

Moreover, Annex 1.4 to the TBT Agreement defines an “international body or system” … .
 

The TBT Agreement thus establishes the characteristics of a standard and of an international body. The Explanatory Note to Annex 1.2 states that “[s]tandards prepared by the international standardization community are based on consensus”.
 

T.4.3.4 US — Tuna II (Mexico), para. 353
(WT/DS381/AB/R)
 

The introductory clause of Annex 1 to the TBT Agreement provides that terms used in the TBT Agreement that are also “presented” in the ISO/IEC Guide 2: 1991, General Terms and Their Definitions Concerning Standardization and Related Activities (the “ISO/IEC Guide 2: 1991”) “shall … have the same meaning as given in the definitions in the said Guide”. The term “international standard” is defined in the ISO/IEC Guide 2: 1991 as a “standard that is adopted by an international standardizing/standards organization and made available to the public”. This definition suggests that it is primarily the characteristics of the entity approving a standard that lends the standard its “international” character. By contrast, the subject matter of a standard would not appear to be material to the determination of whether the standard is “international”. The definition of “international standard” in the ISO/IEC Guide 2: 1991 and the Explanatory Note to the definition of “standard” in the TBT Agreement also suggest that there may be additional procedural conditions that have to be met for a standard to be considered “international” for the purposes of the TBT Agreement. Since the United States’ appeal is limited to the characteristics of the entity approving an “international” standard, we do not need to address in this appeal the question of whether, in order to constitute an “international standard”, a standard must also be “based on consensus”. Nor do we have to address whether it has to be “made available to the public”.
 

T.4.3.5 US — Tuna II (Mexico), paras. 355–356
(WT/DS381/AB/R)
 

With respect to the type of entity approving an “international” standard, the ISO/IEC Guide 2: 1991 refers to an “organization”, whereas Annex 1.2 to the TBT Agreement stipulates that a “standard” is to be approved by a “body”. According to the ISO/IEC Guide 2: 1991, a “body” is a “legal or administrative entity that has specific tasks and composition”, whereas an “organization” is a “body that is based on the membership of other bodies or individuals and has an established constitution and its own administration”. The answer to the question of whether an “international” standard has to be approved by a “body” or an “organization” thus determines whether the entity can be a “legal or administrative entity that has specific tasks and composition”, or whether the entity must also be “based on the membership of other bodies or individuals” and must have “an established constitution and its own administration”.
 

Annex 1.2 to the TBT Agreement refers to a “body”, not to an “organization”, and Annex 1.4 defines an “international body or system”, but not an “international organization”. This suggests that, for the purposes of the TBT Agreement, “international” standards are adopted by “bodies”, which may, but need not necessarily, be “organizations”. This is also supported by the context provided by other provisions of the TBT Agreement. For example, Articles 2.6, 10.1.4, 11.2, 12.5, and 12.6, as well as Annexes 3.G and 3.H to the TBT Agreement envisage that international standards are prepared by “international standardizing bodies”. Since the definitions in Annex 1 to the TBT Agreement prevail over the definitions in the ISO/IEC Guide 2: 1991, we find that, in order to constitute an “international standard”, a standard has to be adopted by an “international standardizing body” for the purposes of the TBT Agreement.
 

T.4.3.6 US — Tuna II (Mexico), para. 357
(WT/DS381/AB/R)
 

With respect to other necessary features of a body that can approve an “international” standard, the ISO/IEC Guide 2: 1991 stipulates that it must be a “standardizing/standards” organization. A “standardizing body” is defined as a “body that has recognized activities in standardization”, whereas a “standards body” is a “standardizing body recognized at national, regional or international level, that has as a principal function, by virtue of its statutes, the preparation, approval or adoption of standards that are made available to the public”. Annex 1.2 to the TBT Agreement provides that a “standard” must be approved by a “recognized body”. As we see it, the definition of “standardizing body” in the ISO/IEC Guide 2: 1991 does not conflict with the definition in the TBT Agreement. Instead, the definition in the ISO/IEC Guide 2: 1991 adds to and complements the definition in the TBT Agreement, specifying that a body must be “recognized” with respect to its “activities in standardization”.
 

T.4.3.7 US — Tuna II (Mexico), paras. 358–359
(WT/DS381/AB/R)
 

With regard to the requirement that only a document approved by an “international” standardizing body can be an “international” standard, the ISO/IEC Guide 2: 1991 stipulates that a standardizing organization is “international” if its “membership is open to the relevant national body from every country”, whereas Annex 1.5 to the TBT Agreement defines an “international body” as a body “whose membership is open to the relevant bodies of at least all Members”.
 

We consider, therefore, that a required element of the definition of an “international” standard for the purposes of the TBT Agreement is the approval of the standard by an “international standardizing body”, that is, a body that has recognized activities in standardization and whose membership is open to the relevant bodies of at least all Members. As we see it, the different components of this definition inform each other. The interpretation of the term “international standardizing body” is therefore a holistic exercise in which the components of the definition are to be considered together.
 

T.4.3.8 US — Tuna II (Mexico), paras. 360–363
(WT/DS381/AB/R)
 

As noted above, the ISO/IEC Guide 2: 1991 defines a “body” as a “legal or administrative entity that has specific tasks and composition”. With respect to the specific tasks, the definition specifies that an international standardizing body must have “activities in standardization”. “Activity” is defined in the dictionary as the “state of being active”. The term “activity” thus may refer to an instance of action, as well as a state. As a result, the use of the plural “activities” does not necessarily imply that a body is, or has been, involved in the development of more than one standard. As we see it, a body simply has to be “active” in standardization in order to have “activities in standardization”. The word “standardization” is defined in the ISO/IEC Guide 2: 1991 as the “[a]ctivity of establishing, with regard to actual or potential problems, provisions for common and repeated use, aimed at the achievement of the optimum degree of order in a given context”. With respect to the “provisions” that are established through standardization, we recall that the definition of a standard in the TBT Agreement refers to a “document … that provides … rules, guidelines or characteristics for products or related processes and production methods” and “may also include or deal exclusively with terminology, symbols, packaging, marking or labelling requirements as they apply to a product, process or production method”.
 

Moreover, the definition of “international standardizing body” provides that the body’s activities in standardization must be “recognized”. The term “recognize” is defined as “[a]cknowledge the existence, legality, or validity of, [especially] by formal approval or sanction; accord notice or attention to; treat as worthy of consideration”. These definitions fall along a spectrum that ranges from a factual end (acknowledgement of the existence of something) to a normative end (acknowledgement of the validity or legality of something). In interpreting “recognized activities in standardization”, we will therefore bear in mind both the factual and the normative dimension of the concept of “recognition”.
 

The definition of a “standards body” in the ISO/IEC Guide 2: 1991 sheds light on the question of what it means for a body to have “recognized activities in standardization”. We recall that a “standards body” is a “standardizing body recognized at national, regional or international level, that has as a principal function, by virtue of its statutes, the preparation, approval or adoption of standards that are made available to the public”. By implication, a “standardizing body”, that is, a body with “recognized activities in standardization”, does not need to have standardization as its principal function, or even as one of its principal functions. At the same time, we note that the factual dimension of the concept of “recognition” would appear to require, at a minimum, that WTO Members are aware, or have reason to expect, that the international body in question is engaged in standardization activities.
 

With respect to the question of who has to recognize a body’s activities in standardization, we note that Articles 2.6, 11.2, and 12.6 of the TBT Agreement contemplate that “Members” participate in international standardizing activities. Article 12.5, Annex 3.G, and Annex 1.4 to the TBT Agreement, in turn, foresee the involvement of the “relevant bodies” or “standardizing bodies” of Members in the development of international standards. We further note that, under the SPS Agreement, “relevant international organizations” are identified by the SPS Committee, which is composed of all WTO Members. This context suggests that, in examining whether an international body has “recognized activities in standardization”, evidence of recognition by WTO Members as well as evidence of recognition by national standardizing bodies would be relevant.
 

T.4.3.9 US — Tuna II (Mexico), para. 364
(WT/DS381/AB/R)
 

With respect to the composition of the body, the definition specifies that membership in an international standardizing body must be “open to the relevant bodies of at least all Members”. The term “open” is defined as “accessible or available without hindrance”, “not confined or limited to a few; generally accessible or available”. Thus, a body will be open if membership to the body is not restricted. It will not be open if membership is a priori limited to the relevant bodies of only some WTO Members.
 

T.4.3.10 US — Tuna II (Mexico), para. 365
(WT/DS381/AB/R)
 

We also note that the TBT Agreement distinguishes international bodies, “whose membership is open to the relevant bodies of at least all Members”, and regional bodies, “whose membership is open to the relevant bodies of only some of the Members”. The TBT Agreement thus explicitly stipulates that not all transnational standardizing bodies are “international” for the purposes of the TBT Agreement.
 

T.4.3.11 US — Tuna II (Mexico), paras. 366, 370
(WT/DS381/AB/R)
 

We further note … the TBT Committee Decision on Principles for the Development of International Standards, Guides and Recommendations with Relation to Articles 2, 5, and Annex 3 to the Agreement (the “TBT Committee Decision”). This Decision sets out principles and procedures that standardizing bodies should observe when developing international standards.
 

...
 

The TBT Committee Decision sets out several principles that WTO Members have decided “should be observed” when international standards, guides, and recommendations are elaborated “to ensure transparency, openness, impartiality and consensus, effectiveness and relevance, coherence, and to address the concerns of developing countries”. …
 

T.4.3.12 US — Tuna II (Mexico), paras. 371–372
(WT/DS381/AB/R)
 

Pursuant to Article 3.2 of the DSU, panels and the Appellate Body are to “clarify” the provisions of the covered agreements “in accordance with customary rules of interpretation of public international law”. This raises the question on what basis we can take into account the TBT Committee Decision in the interpretation and application of Article 2.4 of the TBT Agreement. In particular, the issue is whether the Decision can qualify as a “subsequent agreement between the parties regarding the interpretation of the treaty or the application of its provisions” within the meaning of Article 31(3)(a) of the Vienna Convention on the Law of Treaties (the “Vienna Convention”). In this respect, we note that the Decision was adopted by the TBT Committee in the context of the Second Triennial Review of the Operation and Implementation of the TBT Agreement, which took place in the year 2000. It was thus adopted subsequent to the conclusion of the TBT Agreement. We further note that the membership of the TBT Committee comprises all WTO Members and that the Decision was adopted by consensus.
 

With respect to the question of whether the terms and content of the Decision express an agreement between Members on the interpretation or application of a provision of WTO law, we note that the title of the Decision expressly refers to “Principles for the Development of International Standards, Guides and Recommendations with Relation to Articles 2, 5 and Annex 3 of the Agreement”. We further note that the TBT Committee undertook the activities leading up to the adoption of the Decision “[w]ith a view to developing a better understanding of international standards within the Agreement” and decided to develop the principles contained in the Decision, inter alia, “to ensure the effective application of the Agreement” and to “clarify and strengthen the concept of international standards under the Agreement”. We therefore consider that the TBT Committee Decision can be considered as a “subsequent agreement” within the meaning of Article 31(3)(a) of the Vienna Convention. The extent to which this Decision will inform the interpretation and application of a term or provision of the TBT Agreement in a specific case, however, will depend on the degree to which it “bears specifically” on the interpretation and application of the respective term or provision. In the present dispute, we consider that the TBT Committee Decision bears directly on the interpretation of the term “open” in Annex 1.4 to the TBT Agreement, as well as on the interpretation and application of the concept of “recognized activities in standardization”.
 

T.4.3.13 US — Tuna II (Mexico), paras. 373–375
(WT/DS381/AB/R)
 

The TBT Committee Decision clarifies the temporal scope of the requirement that a body be “open”. …
 

… in order for a standardizing body to be considered “international” for the purposes of the TBT Agreement, it is not sufficient for the body to be open, or have been open, at a particular point in time. Rather, the body must be open “at every stage of standards development”.
 

Moreover, the TBT Committee Decision clarifies that a standardizing body must be open “on a non-discriminatory basis”. Thus, provisions for accession that de jure or de facto disadvantage the relevant bodies of some Members as compared to other Members would tend to indicate that a body is not an “international” standardizing body for the purposes of the TBT Agreement.
 

T.4.3.14 US — Tuna II (Mexico), paras. 376–377
(WT/DS381/AB/R)
 

In addition, the TBT Committee Decision assists in the determination of whether an international body has “recognized activities in standardization”. As an initial matter, we note that the TBT Committee Decision establishes principles and procedures that WTO Members have decided “should be observed” in the development of international standards. Evidence that an international body has followed the principles and procedures of the TBT Committee Decision in developing a standard would therefore be relevant for a determination of whether the body’s activities in standardization are “recognized” by WTO Members. …
 

We further note that the objectives expressed in the TBT Committee Decision with respect to the development of international standards are similar to the objectives that the Code of Good Practice for the Preparation, Adoption and Application of Standards contained in Annex 3 to the TBT Agreement pursues with respect to standards adopted by local, national, and regional governmental and non-governmental standardizing bodies. … As we see it, this provision lends contextual support to our interpretation that evidence of a body’s compliance with procedural and substantive safeguards formulated by WTO Members would be relevant for the question of whether its standardizing activities are “recognized” for the purposes of the TBT Agreement.
 

T.4.3.15 US — Tuna II (Mexico), para. 378
(WT/DS381/AB/R)
 

In sum, the TBT Committee Decision clarifies the temporal scope of the requirement that an international standardizing body be open to the relevant bodies of at least all WTO Members, and specifies that the body should be open on a non-discriminatory basis. By setting out principles and procedures that WTO Members have decided “should be observed” by international standardizing bodies, the TBT Committee Decision also assists in the determination of whether an international body’s activities in standardization are “recognized” by WTO Members.
 

T.4.3.16 US — Tuna II (Mexico), para. 379
(WT/DS381/AB/R)
 

Finally, we consider how the object and purpose of the TBT Agreement informs the interpretation of the term “international standardizing body”. We note that the TBT Agreement explicitly encourages the development of international standards. Thus, the preamble of the TBT Agreement states, in relevant part: “Recognizing the important contribution that international standards … can make … by improving efficiency of production and facilitating the conduct of international trade; Desiring therefore to encourage the development of such international standards”. Moreover, contrary to the SPS Agreement, which defines “international standards, guidelines and recommendations” by reference to specific organizations, the TBT Agreement does not contain a list of international standardizing organizations. This suggests that the TBT Agreement also aims to encourage the development of international standards by bodies that were not already engaged in standardizing activities at the time of the adoption of the TBT Agreement. At the same time, other elements of the TBT Agreement, as well as the TBT Committee Decision, reflect the intent of WTO Members to ensure that the development of international standards take place transparently and with wide participation. The obligations and privileges associated with international standards pursuant to Articles 2.4 and 2.5 of the TBT Agreement further underscore the imperative that international standardizing bodies ensure representative participation and transparency in the development of international standards. In analyzing whether an entity is an “international standardizing body”, a panel needs to balance these considerations.
 

T.4.3.17 US — Tuna II (Mexico), paras. 382, 386
(WT/DS381/AB/R)
 

As noted above, we are of the view that the TBT Committee Decision clarifies the temporal scope of the requirement that a body be “open” to the relevant bodies of at least all WTO Members. Specifically, the body must be open “at every stage of standards development”.
 

...
 

The question whether a body is “open” if all WTO Members or their relevant bodies can accede pursuant to an invitation has to be decided on a case-by-case basis. It is conceivable that an invitation might indeed be a “formality”. In our view, this would be the case if the invitation occurred automatically once a Member or its relevant body has expressed interest in joining a standardizing body. A panel must therefore carefully scrutinize the provisions, procedures, and practices governing accession to a standardizing body before concluding that it is “open to the relevant bodies of at least all Members”.
 

T.4.3.18 US — Tuna II (Mexico), para. 392
(WT/DS381/AB/R)
 

We agree with the Panel that recognition of a body’s standardization activities may “be inferred from the recognition of the resulting standard, i.e. when its existence, legality and validity [have] been acknowledged”. While we regard the recognition of a body’s standards by WTO Members and national standardizing bodies as highly pertinent evidence that a body has recognized activities in standardization, we do not consider that only a body whose standards are widely used can have recognized activities in standardization for the purposes of the TBT Agreement.
 

T.4.3.19 US — Tuna II (Mexico), paras. 393–394
(WT/DS381/AB/R)
 

The United States … submits that … recognition of a single standard would not amount to recognition of a body’s “standardizing activities”. …
 

We disagree with this argument. … we find it difficult to see why an international organization that develops a single standard could not have “recognized activities in standardization” if other evidence suggests that the body’s standardization activities are recognized, for example, if a large number of WTO Members participate in the development of the standard, acknowledge the validity and legality of the standard, or the body follows the principles contained in the TBT Committee Decision.
 

T.4.4 Article 2.4 — “except when such international standards or relevant parts would be an ineffective or inappropriate means”     back to top

T.4.4.1 EC — Sardines, para. 285
(WT/DS231/AB/R)
 

… we noted earlier the Panel’s view that the term “ineffective or inappropriate means” refers to two questions — the question of the effectiveness of the measure and the question of the appropriateness of the measure — and that these two questions, although closely related, are different in nature. The Panel pointed out that the term “ineffective” “refers to something which is not ‘having the function of accomplishing’, ‘having a result’, or ‘brought to bear’, whereas [the term] ‘inappropriate’ refers to something which is not ‘specially suitable’, ‘proper’, or ‘fitting’”. The Panel also stated that:
 

Thus, in the context of Article 2.4, an ineffective means is a means which does not have the function of accomplishing the legitimate objective pursued, whereas an inappropriate means is a means which is not specially suitable for the fulfilment of the legitimate objective pursued. … The question of effectiveness bears upon the results of the means employed, whereas the question of appropriateness relates more to the nature of the means employed. (original emphasis)
 

We agree with the Panel’s interpretation.
 

T.4.4.2 EC — Sardines, para. 286
(WT/DS231/AB/R)
 

As to the second question, we are of the view that the Panel was also correct in concluding that “the ‘legitimate objectives’ referred to in Article 2.4 must be interpreted in the context of Article 2.2”, which refers also to “legitimate objectives”, and includes a description of what the nature of some such objectives can be. Two implications flow from the Panel’s interpretation. First, the term “legitimate objectives” in Article 2.4, as the Panel concluded, must cover the objectives explicitly mentioned in Article 2.2, namely: “national security requirements; the prevention of deceptive practices; protection of human health or safety, animal or plant life or health, or the environment”. Second, given the use of the term “inter alia” in Article 2.2, the objectives covered by the term “legitimate objectives” in Article 2.4 extend beyond the list of the objectives specifically mentioned in Article 2.2. Furthermore, we share the view of the Panel that the second part of Article 2.4 implies that there must be an examination and a determination on the legitimacy of the objectives of the measure.
 

T.4.5 Article 2.4 — Preparation, adoption and continued application of existing regulations     back to top

T.4.5.1 EC — Sardines, para. 205
(WT/DS231/AB/R)
 

… We fail to see how the terms “where technical regulations are required”, “exist”, “imminent”, “use”, and “as a basis for” give any indication that Article 2.4 applies only to the two stages of preparation and adoption of technical regulations. To the contrary, as the Panel noted, the use of the present tense suggests a continuing obligation for existing measures, and not one limited to regulations prepared and adopted after the TBT Agreement entered into force. …
 

T.4.5.2 EC — Sardines, para. 208
(WT/DS231/AB/R)
 

Furthermore, like Articles 5.1 and 5.5 of the SPS Agreement, Article 2.4 is a “central provision” of the TBT Agreement, and it cannot just be assumed that such a central provision does not apply to existing measures. Again, following our reasoning in EC — Hormones, we must conclude that, if the negotiators had wanted to exempt the very large group of existing technical regulations from the disciplines of a provision as important as Article 2.4 of the TBT Agreement, they would have said so explicitly. No such explicit exemption is found in the terms “where technical regulations are required”, “exist”, “imminent”, “use”, or “as a basis for”.
 

T.4.5.3 EC — Sardines, para. 215
(WT/DS231/AB/R)
 

… In our view, excluding existing technical regulations from the obligations set out in Article 2.4 would undermine the important role of international standards in furthering these objectives of the TBT Agreement. Indeed, it would go precisely in the opposite direction.
 

T.4.6 Article 2.12 — Reasonable interval between publication and entry into force of technical regulations. See also Relevance of Article 2.12 of the TBT Agreement when implementation takes place through a technical regulation (ARB.5.16.2)     back to top

T.4.6.1 US — Clove Cigarettes, para. 267
(WT/DS406/AB/R)
 

… the text of Article 31(3)(a) of the Vienna Convention does not establish a requirement as to the form which a “subsequent agreement between the parties” should take. We consider, therefore, that the term “agreement” in Article 31(3)(a) of the Vienna Convention refers, fundamentally, to substance rather than to form. Thus, in our view, paragraph 5.2 of the Doha Ministerial Decision can be characterized as a “subsequent agreement” within the meaning of Article 31(3)(a) of the Vienna Convention provided that it clearly expresses a common understanding, and an acceptance of that understanding among Members with regard to the meaning of the term “reasonable interval” in Article 2.12 of the TBT Agreement. In determining whether this is so, we find the terms and content of paragraph 5.2 to be dispositive. In this connection, we note that the understanding among Members with regard to the meaning of the term “reasonable interval” in Article 2.12 of the TBT Agreement is expressed by terms — “shall be understood to mean” — that cannot be considered as merely hortatory.
 

T.4.6.2 US — Clove Cigarettes, para. 274
(WT/DS406/AB/R)
 

The obligation imposed on Members by Article 2.12 to provide a “reasonable interval” between the publication and the entry into force of their technical regulations carefully balances the interests of, on the one hand, the exporting Member whose producers might be affected by a technical regulation and, on the other hand, the importing Member that wishes to pursue a legitimate objective through a technical regulation. With regard to the former, Article 2.12 of the TBT Agreement, as clarified by paragraph 5.2 of the Doha Ministerial Decision, establishes a rule that, “normally”, producers in exporting Members require a period of at least six months to adapt their products or production methods to the requirements of the importing Member’s technical regulation. Thus, Article 2.12 presumes that foreign producers in exporting Members, and particularly in developing country Members, require a minimum of at least six months to adapt to the requirements of an importing Member’s technical regulation.
 

T.4.6.3 US — Clove Cigarettes, para. 275
(WT/DS406/AB/R)
 

With regard to the interests of the importing Member, we recall that paragraph 5.2 of the Doha Ministerial Decision tempers the obligation to provide a “reasonable interval” of not less than six months between the publication and the entry into force of a technical regulation by stipulating that this obligation applies “except when this would be ineffective in fulfilling the legitimate objectives pursued” by the technical regulation. Thus, while Article 2.12 of the TBT Agreement imposes an obligation on importing Members to provide a “reasonable interval” of not less than six months between the publication and entry into force of a technical regulation, an importing Member may depart from this obligation if this interval “would be ineffective to fulfil the legitimate objectives pursued” by the technical regulation.
 

T.4.6.4 US — Clove Cigarettes, paras. 279–281
(WT/DS406/AB/R)
 

… the elements of a prima facie case of inconsistency with Article 2.12 of the TBT Agreement are to be drawn from a proper interpretation of Article 2.12, taking into account — pursuant to Article 31(3)(a) of the Vienna Convention — the interpretative clarification provided by the terms of paragraph 5.2 of the Doha Ministerial Decision.
 

… we consider that a prima facie case of inconsistency with Article 2.12 is established where it is shown that an importing Member has failed to allow an interval of not less than six months between the publication and the entry into force of the technical regulation at issue.
 

… If the complaining Member establishes this prima facie case of inconsistency, it is for the responding Member to rebut the prima facie case of inconsistency with Article 2.12. …
 

T.4.6.5 US — Clove Cigarettes, para. 282
(WT/DS406/AB/R)
 

The text of Article 2.12 of the TBT Agreement read in the light of paragraph 5.2 of the Doha Ministerial Decision provides an indication of the nature of evidence that is required to rebut a prima facie case of inconsistency with that provision. First, Article 2.12 of the TBT Agreement excludes from the obligation to provide a “reasonable interval” between the publication and the entry into force of technical regulations “those urgent circumstances” referred to in Article 2.10 of the TBT Agreement. Thus, where “urgent problems of safety, health, environmental protection or national security” arise for a Member that is implementing a technical regulation, a period of six months or more cannot be considered to be a “reasonable interval” within the meaning of Article 2.12. Second, Article 2.12 expressly states that the rationale for providing a “reasonable interval” between the publication and the entry into force of a technical regulation is “to allow time for producers in exporting Members, and particularly in developing country Members, to adapt their products or methods of production” to the requirements of the importing Member’s technical regulation. If these producers can adapt their products or production methods to the requirements of an importing Member’s technical regulation in less than six months, a period of six months or more cannot be considered to be a “reasonable interval” within the meaning of Article 2.12. Third, paragraph 5.2 allows an importing Member to depart from the obligation to provide a “reasonable interval” of, “normally”, not less than six months between the publication and entry into force of their technical regulation, if this interval would be “ineffective to fulfil the legitimate objectives pursued” by its technical regulation. Therefore, a period of “not less than six months” cannot be considered to be a “reasonable interval”, within the meaning of Article 2.12, if this period would be ineffective to fulfil the legitimate objectives pursued by the technical regulation at issue.
 

T.4.6.6 US — Clove Cigarettes, para. 283
(WT/DS406/AB/R)
 

… we consider that, in order to rebut a prima facie case of inconsistency with Article 2.12 of the TBT Agreement, a responding Member that has allowed an interval of less than six months between the publication and entry into force of its technical regulation must submit evidence and argument sufficient to establish either: (i) that the “urgent circumstances” referred to in Article 2.10 of the TBT Agreement surrounded the adoption of the technical regulation at issue; (ii) that producers of the complaining Member could have adapted to the requirements of the technical regulation at issue within the shorter interval that it allowed; or (iii) that a period of “not less than” six months would be ineffective to fulfil the legitimate objectives of its technical regulation.
 

T.4.6.7 US — Clove Cigarettes, paras. 287, 289
(WT/DS406/AB/R)
 

… By its own terms, Article 2.12 singles out producers in exporting Members, and particularly in developing country Members, as the beneficiaries of a “reasonable interval” between the publication and the entry into force of an importing Member’s technical regulation. Thus, the concept of a “reasonable interval” within the meaning of Article 2.12 is meant to provide a degree of certainty to producers in exporting Members, and particularly in developing country Members, with regard to the time within which an importing Member’s technical regulation can reasonably be expected to enter into force.
 

...
 

The rule in Article 2.12, as clarified by paragraph 5.2 of the Doha Ministerial Decision, is expressly designed to allow producers in the complaining Member, and in particular in a complaining developing country Member, sufficient time to adapt their products or production methods to the requirements of the responding Member’s technical regulation. Thus, it seems to us that, where a responding Member seeks to deviate from this rule, which, by its own terms, singles out producers in the complaining Member as the beneficiaries of a “reasonable interval” between the publication and the entry into force of a technical regulation, the responding Member must shoulder the burden of establishing a prima facie case that the conditions under which derogations from the rule are permitted are extant. … we consider that, under Article 2.12 of the TBT Agreement, as clarified by paragraph 5.2 of the Doha Ministerial Decision, the burden rests upon the responding Member to make a prima facie case that an interval of not less than six months “would be ineffective to fulfil the legitimate objectives pursued” by its technical regulation.
 

T.4.6.8 US — Clove Cigarettes, para. 290
(WT/DS406/AB/R)
 

In sum, under Article 2.12 of the TBT Agreement, as clarified by paragraph 5.2 of the Doha Ministerial Decision, a complaining Member is required to establish a prima facie case that the responding Member has failed to allow for a period of at least six months between the publication and the entry into force of the technical regulation at issue. If the complaining Member establishes such a prima facie case, the burden rests on the responding Member that has allowed for an interval of less than six months between the publication and the entry into force of its technical regulation to establish either: (i) that the “urgent circumstances” referred to in Article 2.10 of the TBT Agreement surrounded the adoption of the technical regulation at issue; (ii) that producers of the complaining Member could have adapted to the requirements of the technical regulation at issue within the shorter interval that it allowed; or (iii) that a period of “not less than” six months would be ineffective to fulfil the legitimate objectives of its technical regulation.
 

 

756. Although the Panel expressed the view that “a technical regulation’s non-conformity with Article 2.1 is not per se an issue for that technical regulation’s conformity with Article 2.2 in general or the ‘trade-restrictive’ element in particular” (Panel Reports, para. 7.573), it nevertheless relied upon findings that it had made in its Article 2.1 analysis to find that the COOL measure is trade restrictive within the meaning of Article 2.2. …     back to text

645. Similarly, the Appellate Body has held that in order to establish “necessity” in the context of Article XX of the GATT 1994 and Article XIV of the GATS, a comparison of a measure found to be inconsistent and reasonably available less trade-restrictive alternatives should be undertaken. …     back to text

748. The Appellate Body observed that there are “at least two instances” when such a comparison might not be required, namely, when the measure is not trade restrictive at all, or when a trade-restrictive measure makes no contribution to the achievement of the relevant legitimate objective. …     back to text

749. The Appellate Body explained that the comparison with reasonably available alternative measures is a “conceptual tool” to be used for the purpose of ascertaining whether a challenged measure is more trade restrictive than necessary. …     back to text

750. The Appellate Body drew an analogy with the analysis of “necessity” in the context of Article XX of the GATT 1994 and Article XIV of the GATS, in which a measure found to be inconsistent with a relevant obligation is to be compared with reasonably available less trade-restrictive alternative measures. …     back to text

950. … As noted above, the Appellate Body identified two instances where a comparison of the challenged measure with possible alternative measures may not be required, namely, when the measure is not trade restrictive at all, or when a trade-restrictive measure makes no contribution to the achievement of the relevant legitimate objective. …     back to text

756. Although the Panel expressed the view that “a technical regulation’s non-conformity with Article 2.1 is not per se an issue for that technical regulation’s conformity with Article 2.2 in general or the ‘trade-restrictive’ element in particular” (Panel Reports, para. 7.573), it nevertheless relied upon findings that it had made in its Article 2.1 analysis to find that the COOL measure is trade restrictive within the meaning of Article 2.2. The United States challenges, in particular, the Panel’s reliance upon its finding that “the COOL measure negatively affects imported livestock’s conditions of competition in the US market in relation to like domestic livestock by imposing higher segregation costs on imported livestock” (Ibid., para. 7.574) …     back to text

756. Although the Panel expressed the view that “a technical regulation’s non-conformity with Article 2.1 is not per se an issue for that technical regulation’s conformity with Article 2.2 in general or the ‘trade-restrictive’ element in particular” (Panel Reports, para. 7.573), it nevertheless relied upon findings that it had made in its Article 2.1 analysis to find that the COOL measure is trade restrictive within the meaning of Article 2.2. The United States challenges, in particular, the Panel’s reliance upon its finding that “the COOL measure negatively affects imported livestock’s conditions of competition in the US market in relation to like domestic livestock by imposing higher segregation costs on imported livestock” (Ibid., para. 7.574) …     back to text

742. This may involve an assessment of whether the measure at issue is capable of achieving the legitimate objective. …     back to text

928. This may involve an assessment of whether the measure at issue is capable of achieving the legitimate objective.     back to text


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