WORLD TRADE
ORGANIZATIONG/TBT/W/174
12 March 2002
(02-1247)
Committee on Technical Barriers to Trade Original:  English
LABELLING AND REQUIREMENTS OF THE AGREEMENT ON TECHNICAL
BARRIERS TO TRADE:  FRAMEWORK FOR INFORMAL,
STRUCTURED DISCUSSIONS
Communication from Canada
I. PURPOSE
1. The objective of this submission is to outline a number of considerations for a more structured
approach to discussions on labelling in the TBT Committee.
II. CONTEXT
2. In recent years, the number of labelling proposals notified and adopted by WTO Members has
grown significantly.   It is difficult to estimate precisely the impact that such measures have on trade,
as well as whether the measures are being designed and implemented to ensure that they do not
become unnecessary obstacles to trade.  Nevertheless, there is strong evidence that certain labelling
measures have not been without consequences to the international flow of goods.
3. Both developed and developing country Members have raised labelling ‘cases’ at every
TBT Committee meeting in 2001 under the standing agenda item on “Implementation and
Administration of the Agreement”1.  Discussions on labelling also took place in the first and the
second Triennial Reviews of the TBT Agreement.  While some labelling concerns are broad and were
addressed under “international standards”2, other labelling issues continue to be raised by specific
Members3.  At the October 2001 meeting of the TBT Committee, it was agreed that Members would
“continue informal discussions on labelling in a more structured way”  (G/TBT/M/25).
3. The 1994 Decision on Trade and Environment established the Committee on Trade and
Environment (CTE) and identified “requirements for environmental purposes relating to products,
including standards and technical regulations, packaging, labelling and recycling” as a relevant issue
for the Committee to address.  In the 2001 WTO Ministerial Declaration, paragraph 32 calls on the
CTE to examine “labelling for environmental purposes”, an item already on the CTE agenda.
Ministers also requested that recommendations on this item be made to them at theFifth WTO Ministerial Conference to be held in 2003.  However, labelling issues in the context of the
WTO rules are largely horizontal.  In other words, the concerns that might arise in relation to how
trade disciplines function in the context of label ling for environmental purposes can be expected to
arise also in regard to general product safety or performance, including food safety.  Disciplines on
                                                     
1  See TBT Committee meeting minutes (G/TBT/M/2 5, G/TBT/M/24 and G/TBT/M/23) for statements
or questions raised expressing concern or grievances re lated to notifications of proposed labelling regulations.
2  See the Report of the 2nd Triennial Review of the Operation and Implementation of the Agreement
on Technical Barriers to Trade contained in G/TBT/9, and specifically, Annex 4 on “Decision of the Committee
on Principles for the Development of International Standards, Guides and Recommendations with relation to
Articles 2.5 and Annex 3 of the Agreement.
3  See Submissions by the European Commission (G/TBT/W/150), Switzerland (G/TBT/W/162) and
the USA (G/TBT/W/165).G/TBT/W/174
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labelling are provided for in both the TBT Agr eement and in the Agreement on the Application of
Sanitary and Phytosantitary (SPS) Measures4.  Thus, the CTE report on labelling may have
implications for both the TBT and SPS Committees.  In this context, the TBT Committee should
decide what action, if any, it might wish to take in advance of the next Ministerial Conference either
in its own right or to complement the work of the CTE.
4. The Ministerial Declaration from Doha also confirms that “non-trade concerns” will be taken
into account in the negotiations relating to the Agreement on Agriculture (paragraph 13 of the Doha
Declaration).  While some Members have suggested that some aspects of labelling are relevant to
trade in agricultural products, labelling measures directly related to food safety are covered in the
SPS Agreement.  Should WTO Members wish to elabor ate on labelling measures related to providing
consumers with information (as some have suggested  for this context) then such discussions, if
necessary, should take place in the TBT Committee.
III. IMPLEMENTATION OF TBT AGREEMENT IN THE CONTEXT OF LABELLING
5. Canada believes that the TBT Agreement applies to all labelling measures that fall within the
definitions of either a technical regulation or a standard, except to the extent that such measures are
governed by the labelling disciplines found in the SPS Agreement.  Further, in our assessment, the
TBT provisions are balanced and adequate.  We have not seen any compelling arguments fordeveloping guidelines.  We have not seen any compelling rationale to re-negotiate existing rules or to
begin negotiations of new rules.
6. We support discussions on labelling as it relates to implementation of the TBT Agreement,
and the Committee could benefit from a structured approach to these discussions.  For example, the
Committee could identify common themes of concern found in various labelling proposals (and/orexisting labelling measures that have arisen in past notifications) and then group the broad issues for
further examination.  We believe that a better understanding of the practical steps that need to be
followed in developing labelling measures in accordance with the requirements of the
TBT Agreement will lead to more effective implementation and fewer ‘grievances’ for Committee
Members to discuss around this issue.  It may be useful, in this regard, for the Committee to furtherexchange practical experiences in informal discussions, using the TBT disciplines as a “framework”
for such discussions.
IV. FRAMEWORK FOR DISCUSSIONS
A. C
HOICE OF POLICY INSTRUMENTS FOR LABELLING
7. There are generally a number of equally effective policy options available to meet objectives
for labelling5.  Transparent and well-designed voluntary labelling programs can be effective
alternatives to mandatory labelling requirements in some cases.  These options and the issues relatedto them could be further examined in the broader context of good regulatory practice.
                                                     
4 Annex 1 of the TBT Agreement, under  “Terms and their definitions for the purpose of this
agreement”, states that technical regulation “may also  include or deal exclusively with terminology, symbols,
packaging, marking or labelling requirements, as they apply to a product, process or production method”.
Annex A of the SPS Agreement, under “Definitions” states  that SPS measure includes all relevant laws, decrees,
regulations, requirements and procedures, including “packaging and labelling requirements directly related tofood safety”.
5 For example, to provide certain information to some consumers, government intervention,
requirements and/or enforcement are not the only approaches available.  Mandatory measures may not be the
most effective or the first best option either, given concerns expressed by some that such measures could
unjustifiably promote discrimination amongst essentially “like products” (See TBT Article 2.1).  Other policyoptions to consider could include consumer education tools such as toll-free telephone hot-lines, web-sites andleaflets, etc.G/TBT/W/174
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B. MANDATORY VERSUS VOLUNTARY MEASURES
8. In pursuing discussions in the TBT Committee, Members would need to distinguish at the
outset between mandatory measures (i.e. measures issued under government authority with which
compliance is compulsory) and voluntary measures (i.e. where adherence to the measure is optional).
In considering whether a labelling measure should be mandatory or voluntary, two sequential sets ofquestions should be explored:
(a) Necessity: What is the problem or risk to be addressed?  Is the labelling proposal necessary to
fulfill a legitimate objective?  Does the proposal have to be in the form of a technical
regulation?  Are there other equally effective options?  This includes discussion on whether
the technical regulation option can meet a “least trade restrictive” or “no more trade
restrictive than necessary” test while achieving the objective;  and whether the proposal
would discriminate amongst “like products”.
(b) Design:  If labelling measures in the form of technical regulations are deemed necessary and
considered the best option for achieving a given legitimate objective, then there needs to be
further consideration on methodology and transparency when establishing criteria for the
labelling measure (e.g.,  Is the criteria being proposed more onerous than necessary to meetthe objective?   Is the process to establish the criteria inclusive and transparent? etc).
C. TBT 
REQUIREMENTS FOR TECHNICAL REGULATIONS
9. Once a decision has been made that the labelling measure should be in the form of a
“technical regulation” as defined in the TBT Agreement, then Article 2 of the TBT Agreement setsout a number of requirements that all technical regulations must meet.  For example, labelling
measures in the form of technical regulations
6.
(i) must not discriminate against imported like products;
(ii) must not be more trade restrictive than necessary to fulfil a legitimate objective;
(iii) must be monitored and reviewed to addr ess changes in circumstances and objectives;
(iv) when available and where appropriate, must adopt international standards as its basis; and
(v) must specify technical regulations based on product requirements in terms of performance
rather than design or descriptive characteristics, where appropriate.
D. TRANSPARENCY AND CONFORMITY ASSESSMENT
10. Another key requirement in the TBT Agreement is transparency and information provisio7 --
an item worth in-depth discussion in itself, particularly when designing labelling measures.Transparency provides greater disciplines on regulation makers, as well as a mechanism for quality
control.  Other Articles of the TBT Agreement address conformity assessment
8 and we believe this is
also a topic worth in-depth discussion in itself  when it comes to implementation of labelling
measures.  Since the effectiveness of government regulations depends on the level of compliance, the
manner in which conformity is achieved is an essential element of the process.
E. LABELLING “STANDARDS ”
11. Informal discussions in the TBT Committee could also address voluntary labelling measures
and Article 4: Preparation, Adoption and Application of Standards, as well as the associated Annex 3:
“Code of Good Practice for the Preparation, Adoption,  and Application of Standards”.  For labelling
                                                     
6  See Articles 2.1, 2.2, 2.3, 2.4, and 2.8 of the TBT Agreement.  This is only a selection of examples.
7  See Article 2.9 and Article 10 of the TBT Agreement
8  See Articles 5 - 9 of the TBT AgreementG/TBT/W/174
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discussions based on voluntary measures, standards-setting bodies (e.g., ISO) should be involved as
appropriate.
F. HARMONIZATION AND EQUIVALENCY
12. The concepts of equivalency9 and harmonization10 are both recognized in the
TBT Agreement.  One notion behind both concepts is to encourage the recognition and/or use ofexisting and proven approaches, instruments, and/or schemes as much as possible, to avoid
“reinventing the wheel”.  The provisions in the TBT Agreement encourage Members to participate in
international standardizing bodies (e.g., CODEX) to better share experiences, to cooperate on regional
or multilateral approaches where possible.  Cooperation in this area helps to lower transaction costs
and to facilitate trade.  Both equivalency and harmonization could be discussed further in the context
of mandatory and voluntary labelling measures.
G. N
ON-PRODUCT RELATED PROCESS AND PRODUCTION METHOD (NPR PPM) LABELLING
13. Ministers mandated the CTE to discuss “labelling for environmental purposes” and as we
have already noted in the context above, the TBT Committee should have a strong interest in those
discussions and recommendations.  The topic of labelling for environmental purposes presents more
complex scenarios that can involve, for example, labelling for the sole purpose of describing
life-cycle analysis11.  An example would be a label put on a product solely to describe a process or
production method (PPM) but where the PPM leaves no discernable traits on the product itself, or is
otherwise not reflected in the performance or the characteristics of the final product.  This form of
labelling is often referred to as non-product related process and production method (npr PPM)
labelling12.  Canada believes that there is much to discuss on this topic, particularly with respect to the
trade effects of npr PPM labelling.  If the TB T Committee is prepared to engage in informal
discussions on this topic, then we would note that the dialogue on npr PPMs as they relate to
eco-labels could proceed from the basis of the 1996 CTE Report to Ministers which addressed
labelling for environmental purposes among other issu es.  We would also note that npr PPM labelling
is not limited in implications only to the environm ental context, but also has impacts in agriculture
and food trade (e.g., animal welfare), and social/ethical/value issues (e.g., labour practices amongothers).
H. D
EVELOPING COUNTRY CONSIDERATIONS
14. The TBT Agreement also contains provisions that address developing country concerns and
needs13.  Since many developing countries have expr essed reservations about having a dialogue on
labelling in the TBT Committee, developing countries’ needs and interests have to be considered as
an essential feature in any framework for discussions.  Poorly designed labelling measures (whether
voluntary or mandatory) could have market-access effects on all, but particularly on developingcountries.  This issue could be another item for discussion for TBT Members so as to ensure that
developing countries can substantially contribute to, and benefit from, the dialogue on labelling.  For
example, the discussion could focus on how Members can enhance market access by reducing
unnecessary obstacles to trade, and on mechanisms to target available technical assistance and
capacity-building programmes to where the needs are greatest.  There is already a concern that
                                                     
9  See Article 2.7 of the TBT Agreement
10  See Article 2.6 of the TBT Agreement and Paragraph G of Annex 3 to the Agreement
11  A “life-cycle analysis ” (LCA) is used to analyse the full environmental impact of a single product,
including, for example, water and energy use and release of various pollutants.  A LCA would combine andconsider all the environmental impacts of a product’s produ ction, use, and disposal (i.e. from cradle to grave).
See “Environment and Trade, A Handbook”, which is jointly published by the International Institute for
Sustainable Development (IISD) and the United Nations Environment Program (UNEP).
12  See Annex 1 for a fuller description of process and production methods (PPMs)
13  See Articles 11 - 12 of the TBT AgreementG/TBT/W/174
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developing country exports are at risk given their limited capacity to compete with the more
technologically advanced production methods sometimes used in developed country markets.
I. RULES OF ORIGIN / GEOGRAPHICAL INDICATORS
15. Labelling requirements to indicate country of origin or geographical indicators can also affect
trade and/or implicate intellectual property rights provisions in trade agreements.  Should theTBT Committee wish to explore these types of labelling issues as well, then we would propose that
this work be undertaken in cooperation with the relevant WTO fora (i.e. Committee on Rules of
Origin and the Council for Trade-Related Intellectual Property Rights).
V. NEXT STEPS / PROPOSALS
16. We propose that the TBT Committee consider tasking the Secretariat with preparing a
taxonomy of all labelling issues that relate to trade (and not just labelling concerns related to PPMs).
The Secretariat could prepare this taxonomy, drawing from labelling notifications at the WTO, as wellas reviewing recent Members’ submissions on labelling and discussions at the TBT Committee,
including issues raised under the agenda item on “Implementation of the Agreement”.  Previous
Secretariat work, e.g., work for the CTE on eco-labelling, could also be drawn upon.
16. In addition, we propose that the TBT Committee consider whether Members would be
interested in an informal workshop, outside the formal deliberations of the Committee’s work.  The
informal workshop could be designed mainly as a “learning event” that would involve Members from
the CTE and perhaps the SPS Committee(s) as well, depending on the program.  One objective could
be to draw out current practices on labelling through specific examples and case studies to be
identified by Members.   All Members could be invited to relate their experiences with bothmandatory and voluntary labelling programs to further exchange ideas.  In this context, Canada would
be prepared to describe its domestic approach in a number of areas -- both in the mandatory and
voluntary context.G/TBT/W/174
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ANNEX 1
WHAT IS THE DIFFERENCE BETWEEN PRODUCT-RELATED PROCESS
AND PRODUCTION METHODS (PPMS) AND
NON-PRODUCT RELATED
(NPR) PPMS?
Labelling that describes “ how” a product is produced is known as labelling based on a
“process or production method” (PPM).
PPM labelling can be classified under two types: (i) product-related PPMs;  and
(ii) non-product related (npr) PPMs.
(i) Product-related PPMs:   refer to process and production methods which affect the nature,
properties or qualities of the product itself and its ability to have direct impact on, for example, the
environment in the country of use and/or disposal, or human health.  It typically describes a process or
production method which changes the characteristic of the final product and that PPM is discernible in
the change.  In any case, the PPM has an expression in the product.  Product-related PPMs are
normally dealt with through product specifications.  This type of PPM is most frequently found in the
case of industrial process requirements to ensure a product’s quality or fitness for use (e.g. rules formetalizing practices to prevent corrosion or ensure strength).  Another example is the pasteurization
of milk.
(ii) Non-product-related (npr) PPMs:  describe a process or production method which does not
affect or change the nature, properties or qualities of (nor discernible traits in or on) a product.  An
example could be the harvesting of fish.  A fishing vessel that uses a net with mesh size larger than
another fishing vessel could catch the same fish in the sea.  The final product (e.g. the fish) is not
affected by the production method (e.g. mesh size of fishing net).  However, the mesh/net size or
catch method more generally can affect other sea-life and shared living resources (e.g. an impact on
the ability of non-target species to escape capture).  Other examples of non-product related process
and production methods not related to the environment include labour standards or the welfare of
animals in farming practices for agricultural products.
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