WT/DS384/AB/R
WT/DS386/AB/R
Page iii

World Trade
Organization
WT/DS384/AB/R
WT/DS386/AB/R
29 June 2012
(12-3450)
Original: English

UNITEDSTATES – certain country of origin
labelling (cool) requirements

AB-2012-3

Reports of the Appellate Body

Note:

The Appellate Body is issuing these Reports in the form of a single document constituting twoseparate Appellate Body Reports: WT/DS384/AB/R; and WT/DS386/AB/R. The cover page, preliminary pages, sections I through VIII, and the annexes are common to both Reports. The page header throughout the document bears two document symbols,WT/DS384/AB/R and WT/DS386/AB/R, with the following exceptions: sectionIX on pages CDA219 to CDA221, which bears the document symbol for and contains the Appellate Body's findings and conclusions in the Appellate Body Report WT/DS384/AB/R; and sectionIX on pagesMEX219 to MEX221, which bears the document symbol for and contains the Appellate Body's findings and conclusions in the Appellate Body Report WT/DS386/AB/R.

WT/DS384/AB/R
WT/DS386/AB/R
Page xv

I. Introduction 1

II. Arguments of the Participants and the Third Participants 9

A. Claims of Error by the United States – Appellant 9

1. Article 2.1 of the TBT Agreement 9

(a) The Interpretation and Application of Article 2.1 of the TBTAgreement 10

(b) Article 11 of the DSU 14

(c) The Relevance of the Appellate Body Report in US – Clove Cigarettes in this Appeal 15

2. Article 2.2 of the TBT Agreement 16

(a) Trade-Restrictiveness 17

(b) The Objective Pursued and the Level at which the UnitedStates Considers It Appropriate to Fulfil Its Objective 17

(c) Whether the COOL Measure Is "More TradeRestrictive than Necessary to Fulfil a Legitimate Objective" 19

B. Arguments of Canada – Appellee 23

1. Article 2.1 of the TBT Agreement 23

(a) The Interpretation and Application of Article 2.1 of the TBTAgreement 23

(b) Article 11 of the DSU 27

(c) The Relevance of the Appellate Body Report in US – Clove Cigarettes in this Appeal 28

2. Article 2.2 of the TBT Agreement 30

(a) Trade-Restrictiveness 30

(b) The Objective Pursued and the Level at which the UnitedStates Considers It Appropriate to Fulfil Its Objective 31

(c) Whether the COOL Measure Is "More TradeRestrictive than Necessary to Fulfil a Legitimate Objective" 33

C. Arguments of Mexico – Appellee 38

1. Article 2.1 of the TBT Agreement 38

(a) The Interpretation and Application of Article 2.1 of the TBTAgreement 38

(b) Article 11 of the DSU 42

(c) The Relevance of the Appellate Body Report in US – Clove Cigarettes in this Appeal 43

2. Article 2.2 of the TBT Agreement 44

(a) Trade-Restrictiveness 45

(b) The Objective Pursued and the Level at which the UnitedStates Considers It Appropriate to Fulfil Its Objective 45

(c) Whether the COOL Measure Is "More TradeRestrictive than Necessary to Fulfil a Legitimate Objective" 46

D. Claims of Error by Canada – Other Appellant 50

1. "Legitimate Objective" under Article 2.2 of the TBT Agreement 50

(a) The Identification of the Objective 51

(b) The Legitimacy of the COOL Measure's Objective 54

2. Less Trade-Restrictive Alternative Measures 56

3. Article III:4 of the GATT 1994 59

4. Article XXIII:1(b) of the GATT 1994 60

E. Claims of Error by Mexico – Other Appellant 60

1. "Legitimate Objective" under Article 2.2 of the TBT Agreement 61

(a) The Identification of the Objective 62

(b) The Legitimacy of the COOL Measure's Objective 64

2. Less Trade-Restrictive Alternative Measures 64

3. Article III:4 of the GATT 1994 66

4. Article XXIII:1(b) of the GATT 1994 68

F. Arguments of the United States – Appellee 69

1. "Legitimate Objective" under Article 2.2 of the TBT Agreement 70

(a) The Identification of the Objective 70

(b) The Legitimacy of the COOL Measure's Objective 75

2. Less Trade-Restrictive Alternative Measures 76

3. Article III:4 of the GATT 1994 79

4. Article XXIII:1(b) of the GATT 1994 80

G. Arguments of the Third Participants 81

1. Australia 81

2. Brazil 83

3. Colombia 85

4. European Union 89

5. Guatemala 94

6. Japan 95

7. Korea 96

III. Issues Raised in This Appeal 97

IV. Background and Overview of the Measures at Issue 99

A. The COOL Measure 101

1. Introduction 101

2. Categories of Origin for Meat 104

3. Labelling 105

B. The Vilsack Letter 109

C. Background Information 110

V. Article 2.1 of the TBT Agreement 113

A. Introduction 113

B. Summary of the Panel's Findings 113

C. Overview of the Issues Raised on Appeal 117

D. Interpretation of Article 2.1 of the TBT Agreement 117

E. Application of Article 2.1 of the TBT Agreement: "Treatment No Less Favourable" 121

1. Detrimental Impact 121

(a) "Different Treatment" 121

(b) Did the Panel Err in Finding that the COOL Measure Has a Detrimental Impact on Imported Livestock? 124


2. Did the Panel Err under Article 11 of the DSU in Making Certain Factual Findings in the Course of Its Analysis under Article 2.1 of the TBTAgreeement? 130

(a) Segregation and Commingling 130

(b) The Existence of a Price Differential 137

3. Does the Detrimental Impact on Imported Livestock Violate Article2.1? 144

(a) Arguments on Appeal 144

(b) Relevant Panel Findings 146

(c) Does the Detrimental Impact Reflect Discrimination? 151

VI. Article 2.2 of the TBT Agreement 155

A. Introduction 155

B. The Panel's Analysis 158

C. Analysis 162

1. Article 2.2 of the TBT Agreement 162

2. Did the Panel Err in Finding that the COOL Measure Is Trade Restrictive? 167

3. Did the Panel Err in Its Identification of the Objective Pursued? 168

(a) Canada's and Mexico's Other Appeals of the Panel's Approach to Identifying the Objective Pursued 172

(b) Canada's and Mexico's Claims under Article 11 of the DSU with respect to the Panel's Identification of the Objective Pursued 173

(c) The United States' Appeal of the Panel's Finding concerning the COOL Measure's "Level of Fulfilment" of Its Objective 184

(d) Canada's Claim that the Panel Failed to Define the Objective of the COOL Measure at a "Sufficiently Detailed Level" 186

(e) Summary of Conclusions 186

4. Did the Panel Err in Finding that the Objective of the COOL Measure Is "Legitimate"? 187

5. Did the Panel Err in Its Analysis of Whether the COOL Measure Is More Trade Restrictive than Necessary to Fulfil a Legitimate Objective, Taking Account of the Risks Non-Fulfilment Would Create? 197

6. Completion of the Legal Analysis – Is the COOL Measure More Trade Restrictive than Necessary to Fulfil the Legitimate Objective, Bearing in Mind the Risks that NonFulfilment Would Create? 204

VII. Article III:4 of the GATT 1994 216

VIII. Article XXIII:1(b) of the GATT 1994 216

IX. Findings and Conclusions CDA-219

IX. Findings and Conclusions MEX-219

ANNEX I Notification of an Appeal by the United States

ANNEX II Notification of an Other Appeal by Canada

ANNEX III Notification of an Other Appeal by Mexico

ANNEX IV Procedural Ruling and additional procedures regarding public observation of the oral hearing


CASES CITED IN THESE REPORTS

Short Title / Full Case Title and Citation /
Australia – Apples / Appellate Body Report, Australia – Measures Affecting the Importation of Apples from New Zealand, WT/DS367/AB/R, adopted 17 December 2010
Australia – Salmon / Appellate Body Report, Australia – Measures Affecting Importation of Salmon, WT/DS18/AB/R, adopted 6 November 1998, DSR 1998:VIII, 3327
Brazil – Retreaded Tyres / Appellate Body Report, Brazil – Measures Affecting Imports of Retreaded Tyres, WT/DS332/AB/R, adopted 17 December 2007, DSR 2007:IV, 1527
Canada – Pharmaceutical Patents / Panel Report, Canada – Patent Protection of Pharmaceutical Products, WT/DS114/R, adopted 7 April 2000, DSR 2000:V, 2289
Chile – Alcoholic Beverages / Appellate Body Report, Chile – Taxes on Alcoholic Beverages, WT/DS87/AB/R, WT/DS110/AB/R, adopted 12 January 2000, DSR 2000:I, 281
Chile – Price Band System (Article 21.5 – Argentina) / Appellate Body Report, Chile – Price Band System and Safeguard Measures Relating to Certain Agricultural Products – Recourse to Article 21.5 of the DSU by Argentina, WT/DS207/AB/RW, adopted 22 May 2007, DSR 2007:II, 513
China – Auto Parts / Appellate Body Reports, China – Measures Affecting Imports of Automobile Parts, WT/DS339/AB/R / WT/DS340/AB/R / WT/DS342/AB/R, adopted
12 January 2009
China – Publications and Audiovisual Products / Appellate Body Report, China – Measures Affecting Trading Rights and Distribution Services for Certain Publications and Audiovisual Entertainment Products, WT/DS363/AB/R, adopted 19 January 2010
China – Raw Materials / Appellate Body Reports, China – Measures Related to the Exportation of Various Raw Materials, WT/DS394/AB/R / WT/DS395/AB/R / WT/DS398/AB/R, adopted 22 February 2012
Colombia – Ports of Entry / Panel Report, Colombia – Indicative Prices and Restrictions on Ports of Entry, WT/DS366/R and Corr.1, adopted 20 May 2009
Dominican Republic – Import and Sale of Cigarettes / Appellate Body Report, Dominican Republic – Measures Affecting the Importation and Internal Sale of Cigarettes, WT/DS302/AB/R, adopted
19 May 2005, DSR 2005:XV, 7367
Dominican Republic – Import and Sale of Cigarettes / Panel Report, Dominican Republic – Measures Affecting the Importation and Internal Sale of Cigarettes, WT/DS302/R, adopted 19 May 2005, as modified by Appellate Body Report WT/DS302/AB/R, DSR 2005:XV, 7425
EC – Asbestos / Appellate Body Report, European Communities – Measures Affecting Asbestos and AsbestosContaining Products, WT/DS135/AB/R, adopted
5 April 2001, DSR 2001:VII, 3243
EC – Bed Linen
(Article 21.5 – India) / Appellate Body Report, European Communities – AntiDumping Duties on Imports of CottonType Bed Linen from India – Recourse to Article 21.5 of the DSU by India, WT/DS141/AB/RW, adopted 24 April 2003, DSR 2003:III, 965
EC – Fasteners (China) / Appellate Body Report, European Communities – Definitive Anti-Dumping Measures on Certain Iron or Steel Fasteners from China, WT/DS397/AB/R, adopted 28 July 2011
EC – Hormones / Appellate Body Report, EC Measures Concerning Meat and Meat Products (Hormones), WT/DS26/AB/R, WT/DS48/AB/R, adopted 13 February 1998, DSR 1998:I, 135
EC – Poultry / Appellate Body Report, European Communities – Measures Affecting the Importation of Certain Poultry Products, WT/DS69/AB/R, adopted 23 July 1998, DSR 1998:V, 2031
EC – Sardines / Appellate Body Report, European Communities – Trade Description of Sardines, WT/DS231/AB/R, adopted 23 October 2002, DSR 2002:VIII, 3359
EC – Sardines / Panel Report, European Communities – Trade Description of Sardines, WT/DS231/R and Corr.1, adopted 23 October 2002, as modified by Appellate Body Report WT/DS231/AB/R, DSR 2002:VIII, 3451
EC – Selected Customs Matters / Appellate Body Report, European Communities – Selected Customs Matters, WT/DS315/AB/R, adopted 11 December 2006, DSR 2006:IX, 3791
EC – Tariff Preferences / Panel Report, European Communities – Conditions for the Granting of Tariff Preferences to Developing Countries, WT/DS246/R, adopted 20 April 2004, as modified by Appellate Body Report WT/DS/246/AB/R, DSR 2004:III, 1009
EC – Trademarks and Geographical Indications (Australia) / Panel Report, European Communities – Protection of Trademarks and Geographical Indications for Agricultural Products and Foodstuffs, Complaint by Australia, WT/DS290/R, adopted 20 April 2005, DSR 2005:X, 4603
EC – Tube or Pipe Fittings / Appellate Body Report, European Communities – AntiDumping Duties on Malleable Cast Iron Tube or Pipe Fittings from Brazil, WT/DS219/AB/R, adopted 18 August 2003, DSR 2003:VI, 2613
EC and certain member States – Large Civil Aircraft / Appellate Body Report, European Communities and Certain Member States – Measures Affecting Trade in Large Civil Aircraft, WT/DS316/AB/R, adopted 1 June 2011
Japan – Agricultural
Products II / Appellate Body Report, Japan – Measures Affecting Agricultural Products, WT/DS76/AB/R, adopted 19 March 1999, DSR 1999:I, 277
Japan – Alcoholic
Beverages II / Appellate Body Report, Japan – Taxes on Alcoholic Beverages, WT/DS8/AB/R, WT/DS10/AB/R, WT/DS11/AB/R, adopted 1 November 1996, DSR 1996:I, 97
Japan – Apples / Appellate Body Report, Japan – Measures Affecting the Importation of Apples, WT/DS245/AB/R, adopted 10 December 2003, DSR 2003:IX, 4391
Japan – Film / Panel Report, Japan – Measures Affecting Consumer Photographic Film and Paper, WT/DS44/R, adopted 22 April 1998, DSR 1998:IV, 1179
Korea – Alcoholic Beverages / Appellate Body Report, Korea – Taxes on Alcoholic Beverages, WT/DS75/AB/R, WT/DS84/AB/R, adopted 17 February 1999, DSR 1999:I, 3
Korea – Dairy / Appellate Body Report, Korea – Definitive Safeguard Measure on Imports of Certain Dairy Products, WT/DS98/AB/R, adopted 12 January 2000, DSR 2000:I, 3
Korea – Various Measures on Beef / Appellate Body Report, Korea – Measures Affecting Imports of Fresh, Chilled and Frozen Beef, WT/DS161/AB/R, WT/DS169/AB/R, adopted 10 January 2001, DSR 2001:I, 5
Mexico – Taxes on Soft Drinks / Panel Report, Mexico – Tax Measures on Soft Drinks and Other Beverages, WT/DS308/R, adopted 24 March 2006, as modified by Appellate Body Report WT/DS308/AB/R, DSR 2006:I, 43
Thailand – Cigarettes (Philippines) / Appellate Body Report, Thailand – Customs and Fiscal Measures on Cigarettes from the Philippines, WT/DS371/AB/R, adopted 15 July 2011
Thailand – Cigarettes (Philippines) / Panel Report, Thailand – Customs and Fiscal Measures on Cigarettes from the Philippines, WT/DS371/R, adopted 15 July 2011, as modified by Appellate Body Report WT/DS371/AB/R
US – Carbon Steel / Appellate Body Report, United States – Countervailing Duties on Certain CorrosionResistant Carbon Steel Flat Products from Germany, WT/DS213/AB/R and Corr.1, adopted 19 December 2002, DSR 2002:IX, 3779
US – Clove Cigarettes / Appellate Body Report, United States – Measures Affecting the Production and Sale of Clove Cigarettes, WT/DS406/AB/R, adopted 24 April 2012
US – Clove Cigarettes / Panel Report, United States – Measures Affecting the Production and Sale of Clove Cigarettes, WT/DS406/R, adopted 24 April 2012, as modified by Appellate Body Report WT/DS406/AB/R
US – Continued Zeroing / Appellate Body Report, United States – Continued Existence and Application of Zeroing Methodology, WT/DS350/AB/R, adopted 19 February 2009, DSR 2009:III, 1291
US – COOL / Panel Reports, UnitedStates – Certain Country of Origin Labelling (COOL) Requirements, WT/DS384/R / WT/DS386/R, circulated to WTO Members 18November 2011
US – FSC
(Article 21.5 – EC) / Appellate Body Report, United States – Tax Treatment for "Foreign Sales Corporations" – Recourse to Article 21.5 of the DSU by the European Communities, WT/DS108/AB/RW, adopted 29 January 2002, DSR 2002:I, 55
US – Gambling / Appellate Body Report, United States – Measures Affecting the CrossBorder Supply of Gambling and Betting Services, WT/DS285/AB/R, adopted 20 April 2005, DSR 2005:XII, 5663 (Corr.1, DSR 2006:XII, 5475)
US – Gambling / Panel Report, United States – Measures Affecting the CrossBorder Supply of Gambling and Betting Services, WT/DS285/R, adopted 20 April 2005, as modified by Appellate Body Report WT/DS285/AB/R, DSR 2005:XII, 5797
US – Large Civil Aircraft
(2nd complaint) / Appellate Body Report, United States – Measures Affecting Trade in Large Civil Aircraft (Second Complaint), WT/DS353/AB/R, adopted 23 March 2012
US – Oil Country Tubular Goods Sunset Reviews / Appellate Body Report, United States – Sunset Reviews of AntiDumping Measures on Oil Country Tubular Goods from Argentina, WT/DS268/AB/R, adopted 17 December 2004, DSR 2004:VII, 3257
US – Shrimp (Thailand) / Panel Report, United States – Measures Relating to Shrimp from Thailand, WT/DS343/R, adopted 1 August 2008, as modified by Appellate Body Report WT/DS343/AB/R / WT/DS345/AB/R, DSR 2008:VII, 2539
US – Steel Safeguards / Appellate Body Report, United States – Definitive Safeguard Measures on Imports of Certain Steel Products, WT/DS248/AB/R, WT/DS249/AB/R, WT/DS251/AB/R, WT/DS252/AB/R, WT/DS253/AB/R, WT/DS254/AB/R, WT/DS258/AB/R, WT/DS259/AB/R, adopted 10 December 2003, DSR 2003:VII, 3117
US – Tuna II (Mexico) / Appellate Body Report, UnitedStates – Measures Concerning the Importation, Marketing and Sale of Tuna and Tuna Products, WT/DS381/AB/R, adopted 13 June 2012
US – Tuna II (Mexico) / Panel Report, UnitedStates – Measures Concerning the Importation, Marketing and Sale of Tuna and Tuna Products, WT/DS381/R, adopted 13June 2012, as modified by Appellate Body Report WT/DS381/AB/R
US – Upland Cotton
(Article 21.5 – Brazil) / Appellate Body Report, United States – Subsidies on Upland Cotton – Recourse to Article 21.5 of the DSU by Brazil, WT/DS267/AB/RW, adopted 20 June 2008, DSR 2008:III, 809
US – Wheat Gluten / Appellate Body Report, United States – Definitive Safeguard Measures on Imports of Wheat Gluten from the European Communities, WT/DS166/AB/R, adopted 19 January 2001, DSR 2001:II, 717


PANEL EXHIBITS REFERRED TO IN THESE REPORTS