WORLD TRADE  
ORGANIZATION   
WT/DS384/R 
WT/DS386/R 
18 November 2011 
 (11-5865) 
 Original:   English 
  
 
     
 
 
 
 
UNITED STATES – CERTAIN COUNTRY OF ORIGIN  
LABELLING (COOL) REQUIREMENTS 
 
 
 
 
 
Reports of the Panel 
 
 
 
  
 
  
 
Note: 
 
In the disputes WT/DS384 and WT/DS386, as explaine d in paragraph 2.11 of the Panel's Findings, 
the Panel decided to issue its Reports in the form  of a single document cons tituting two Panel Reports, 
each of the Reports relating to each one of the tw o complainants in this dispute.  The document 
comprises a common cover page, a common Descri ptive Part and a common set of Findings in 
relation to the complainants' claims that the Panel decided to address.  This document also contains 
Conclusions and Recommendations that, unlike the D escriptive Part and the Findings, are specific to 
each complainant.  In the Conclusions and Recommendations, separate document numbers/symbols have been used for each complainant (WT/DS 384 for Canada and WT/D S386 for Mexico). 
  WT/DS384/R 
 WT/DS386/R 
 Page i 
 
 
  TABLE OF CONTENTS 
 
Page 
I.  INTRODUCTION .................................................................................................................. .. 1 
A.  COMPLAINTS OF CANADA AND MEXICO  ..................................................................................... 1  
B.  ESTABLISHMENT AND COMPOSITION OF THE PANEL  .................................................................. 1  
C.  PANEL PROCEEDINGS  .................................................................................................................. 2  
II.  FACTUAL ASPECTS .............................................................................................................. 2 
A.  MEASURES AT ISSUE  ................................................................................................................... 2  
B.  PROCEDURAL HISTORY  ............................................................................................................... 3  
1.  Additional procedures for the protection of business confidential information 
("BCI procedures") ............................................................................................................ ...... 3 
2.  Procedures for open hearings ..................................................................................................  4 
3.  Enhanced third party rights ................................................................................................... . 4 
4.  Amicus curiae  briefs .................................................................................................................. 4  
5.  Request for separ ate reports .................................................................................................. .. 5 
III. PARTIES' REQUESTS FOR FIND INGS AND RECOMMENDATIONS......................... 5  
A.  CANADA  .............................................................................................................................. ........ 5 
B.  MEXICO  .............................................................................................................................. ......... 5 
C.  UNITED  STATES  .......................................................................................................................... 5  
IV.  ARGUMENTS OF THE PARTIES ........................................................................................ 6  
V.  ARGUMENTS OF THE THIRD PARTIES .......................................................................... 6  
VI.  INTERIM REVIEW ................................................................................................................ . 6 
A.  MEASURES THAT FALL WITHIN THE PANEL 'S TERMS OF REFERENCE  .......................................... 6  
1.  "USDA's clarification documents" (paragraphs 7.22, 7.23, and relevant parts of 
the Article X:3(a) section) ................................................................................................... ..... 6 
2.  Paragraph 7.24 ................................................................................................................ .......... 8 
3.  "USDA's implementing guidance" (paragraphs 7.26, 7.27-7.38) ......................................... 8  
4.  Other comments ................................................................................................................ ........ 9 
(a)  Paragraph 7.19 ................................................................................................................ ............ 9 
(b)  Paragraph 7.28 ................................................................................................................ ............ 9 
B.  FACTUAL  BACKGROUND ..................................................................................................... 9  
1.  Paragraph 7.85 ................................................................................................................ .......... 9 
2.  Paragraph 7.93 ................................................................................................................ .......... 9 
3.  Paragraph 7.94 ................................................................................................................ ........ 10 
4.  Paragraph 101 ................................................................................................................. ........ 10 
5.  Paragraph 7.126 and footnote 179 ......................................................................................... 10  WT/DS384/R 
WT/DS386/R Page ii 
 
 
  6.  Paragraphs 7.127-7.131 ........................................................................................................ .. 10 
C.  C
LAIMS UNDER THE TBT  AGREEMENT  ..................................................................................... 11  
1.  Technical regulation .......................................................................................................... ..... 11 
(a)  Paragraph 7.178 ............................................................................................................... ......... 11 
(b)  Paragraph 7.195 ............................................................................................................... ......... 11 
2.  Article 2.1 ................................................................................................................... .............. 11  
(a)  Introduction and legal test under Article 2.1 of the TBT Agre ement – Paragraph 7.223 ......... 11  
(b)  Whether the COOL measure is a techni cal regulation – Pa ragraph 7.242 ................................ 11  
(c)  Whether imported products are accorded less favourable treatment than like domestic 
products ...................................................................................................................... ............... 12  
(i)  Paragraph 7.264 ............................................................................................................... ........ 12 
(ii)  Paragraph 7.267 ............................................................................................................... ........ 12 
(iii) Paragraph 7.276 ............................................................................................................... ........ 12 
(iv)  Paragraph 7.290 ............................................................................................................... ........ 12 
(v)  Paragraph 7.299 ............................................................................................................... ........ 13 
(vi)  Paragraph 7.314 ............................................................................................................... ........ 13 
(vii) Paragraph 7.329 ............................................................................................................... ........ 13 
(viii) Paragraph 7.340 ............................................................................................................... ........ 13 
(ix) Paragraph 7.348 ............................................................................................................... ........ 14 
(x)  Paragraph 7.361 ............................................................................................................... ........ 14 
(xi)  Paragraph 7.367 ............................................................................................................... ........ 14 
(xii) Paragraph 7.368 ............................................................................................................... ........ 15 
(xiii) Paragraph 7.368, footnote 515 .................................................................................................  15 
(xiv) Paragraph 7.371 ............................................................................................................... ........ 15 
(xv) Paragraph 7.373 ............................................................................................................... ........ 15 
(xvi) Paragraph 7.375 ............................................................................................................... ........ 16 
(xvii) Paragraph 7.375, footnote 527 .................................................................................................  16 
(xviii) Paragraphs 7.385 and 7.415 ....................................................................................................  16 
(xix) Paragraph 7.392 ............................................................................................................... ........ 16 
(xx) Paragraph 7.384, footnotes 556 and 557 ................................................................................. 17  
(d)  Actual trad e effects .......................................................................................................... ......... 17 
(i)  Paragraph 7.443 ............................................................................................................... ........ 17 
(ii)  Paragraph 7.462, footnote 632 .................................................................................................  18 
(iii) Paragraphs 7.464 and 7.468 ....................................................................................................  18 
(iv)  Paragraph 7.478 ............................................................................................................... ........ 18  WT/DS384/R 
 WT/DS386/R 
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  (v)  Paragraph 7.480, footnote 669 .................................................................................................  18 
(vi)  Paragraphs 7.485-7.486 ........................................................................................................ ... 18 
(vii) Paragraph 7.513 ............................................................................................................... ........ 19 
(viii) Paragraph 7.514 ............................................................................................................... ........ 19 
(ix)  Paragraph 7.517 ............................................................................................................... ........ 19 
(x)  Paragraph 7.522 ............................................................................................................... ........ 19 
(xi)  Paragraph 7.523 ............................................................................................................... ........ 19 
(xii) Paragraph 7.530 ............................................................................................................... ........ 20 
(xiii) Paragraph 7.532 ............................................................................................................... ........ 20 
(xiv) Paragraph 7.539 ............................................................................................................... ........ 20 
(xv) Paragraph 7.548 ............................................................................................................... ........ 20 
3.  Article 2.2 ................................................................................................................... .............. 21  
(a)  Objective pursued by the United States through the COOL measure: 
paragraphs 7.593, 7.624,  7.625, and 7.676 ............................................................................... 21  
(b)  Legal interpretative approach under Article  2.2 – paragraphs 7.673 and 7.674 ....................... 22  
D.  TYPOGRAPHICAL ERRORS AND CLERICAL OBSERVATIONS  ....................................................... 22  
VII. FINDINGS ...................................................................................................................... ......... 22 
A.  OVERVIEW OF THE MATTERS BEFORE THE PANEL  .................................................................... 22  
B.  PRELIMINARY MATTERS  ............................................................................................................ 23  
1.  Measures at issue ............................................................................................................. ....... 23 
(a)  Introduction .................................................................................................................. ............. 23  
(b)  Measures that fall within the scope of  the Panel's terms of reference ...................................... 24  
(c)  Measures that were no longer in force at the time of the establishment of the Panel – 
Interim Final Rule (AMS) and In terim Final Rule (FSIS) ........................................................ 27  
(i)  Main arguments of the parties ................................................................................................. . 27 
(ii)  Analysis by the Panel ......................................................................................................... ....... 28 
Interim Final Rule (AMS) ...................................................................................................... ................. 28  
The Interim Final Rule (FSIS) ................................................................................................. ................ 29  
Conclu sion .................................................................................................................... ........................... 30  
(d)  Treatment of the measures at issue – as a single measure or as several distinct 
measures ...................................................................................................................... .............. 30  
(i)  Main arguments of the parties ................................................................................................. . 30 
(ii)  Analysis by the Panel ......................................................................................................... ....... 32 
2.  Products at issue ............................................................................................................. ......... 37 
3.  Order of analysis ............................................................................................................. ........ 37 
C.  FACTUAL BACKGROUND  ........................................................................................................... 39  WT/DS384/R 
WT/DS386/R Page iv 
 
 
  1.  The COOL measure .............................................................................................................. .. 39 
(a)  Recent legislative history of the COOL measure ...................................................................... 39  
(i)  The COOL statute .............................................................................................................. ....... 39 
(ii)  Regulations implementing the COOL statute............................................................................ 40  
(b)  Country of origin labelling requi rements for meat products ..................................................... 41  
(i)  Main requirements ............................................................................................................. ....... 41 
The COOL statute .............................................................................................................. ..................... 41  
The 2009 Final Rule (A MS) ..................................................................................................... ............... 43  
(ii)  Entities subject to the country of origin labelling requirements ............................................... 45  
(iii) Exemptions from the scope of the COOL requirements ............................................................ 46  
Products ex empted ............................................................................................................. ..................... 46  
Entities exem pted ............................................................................................................. ....................... 46  
(iv)  Other obligations ............................................................................................................. ......... 47 
The methods of notification ................................................................................................... ................. 47  
The audit verifi cation system ................................................................................................. ................. 49  
The certificati on of origin ................................................................................................... ..................... 49  
The enforcement of the COOL requirements ...................................................................................... .... 50 
2.  The Vilsack letter ............................................................................................................ ........ 50 
3.  The North American livestock and meat industries and trade ........................................... 51  
(a)  Stages of livestock and meat production ................................................................................... 51  
(i)  Cattle and beef ............................................................................................................... ........... 51  
(ii)  Hogs and pork ................................................................................................................. .......... 52 
(b)  Integrated nature of the North American livestock trade .......................................................... 53  
D.  CLAIMS UNDER THE TBT A GREEMENT  .................................................................................... 53  
1.  Technical regulation .......................................................................................................... ..... 54 
(a)  Whether compliance with the COOL measure and the Vilsack letter is mandatory ................. 55  
(i)  Whether compliance with the C OOL measure is mandatory .................................................... 55  
Main arguments of the parties ................................................................................................. ................ 55  
Analysis by the Panel ......................................................................................................... ..................... 56  
(ii)  Whether compliance with the V ilsack letter is mandatory ........................................................ 57  
Main arguments of the parties ................................................................................................. ................ 57  
Analysis by the Panel ......................................................................................................... ..................... 59  
(b)  Whether the COOL measure applies to an id entifiable product or group of products .............. 63  
(i)  Main arguments of the parties ................................................................................................. . 63 
(ii)  Analysis by the Panel ......................................................................................................... ....... 63 
(c)  Whether the COOL measure lays down one or more characteristics of the products .............. 64   WT/DS384/R 
 WT/DS386/R 
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  (i)  Main arguments of the parties ................................................................................................. . 64 
(ii)  Analysis by the Panel ......................................................................................................... ....... 65 
2.  Article 2.1 ................................................................................................................... .............. 66  
(a)  Introduction .................................................................................................................. ............. 66  
(i)  Legal test under Article 2. 1 of the TBT Agreement ................................................................... 66  
(ii)  Relevant context for Article 2.1 of the TBT Agreement ............................................................ 66  
Main arguments of the parties ................................................................................................. ................ 66  
Analysis by the Panel ......................................................................................................... ..................... 67  
(b)  The COOL measure's consiste ncy with Article 2.1 .................................................................. 69  
(i)  Whether the COOL measure is a technical regulation ............................................................. 69  
Main arguments of the parties ................................................................................................. ................ 69  
Analysis by the Panel ......................................................................................................... ..................... 70  
(ii)  Whether imported and domestic  products are "like" ................................................................ 71  
Main arguments of the parties ................................................................................................. ................ 71  
Analysis by the Panel ......................................................................................................... ..................... 72  
(iii) Whether the imported products are accord ed less favourable treatment than that 
accorded to like domestic products ........................................................................................... 73 
Main arguments of the parties ................................................................................................. ................ 73  
Legal te st .................................................................................................................... ...................... 73  
Whether the COOL measure involves segregation and differential costs for imported 
livesto ck ..................................................................................................................... ...................... 75  
Whether there is any incentive to  process domestic  livestock ......................................................... 78  
Analysis by the Panel ......................................................................................................... ..................... 78  
Introduc tion .................................................................................................................. ................... 78  
Statutory definition of the relevant m eat labels under the COOL measure ..................................... 79  
Muscle cut labels  ............................................................................................................. ................ 80  
Ground meat  label ............................................................................................................. ............. 108  
(c)  Actual trad e effects .......................................................................................................... ....... 111 
(i)  Trade volumes in the North American livestock market ......................................................... 114  
Cattle  ........................................................................................................................ ............................. 114  
Imports of Canadian cattle into the Unite d States .......................................................................... 11 4 
Imports of Mexican cattle in to the United States ........................................................................... 11 8 
Canadian hogs ................................................................................................................. ...................... 120  
Overall imports from  2000 to  2009 ............................................................................................. .. 120 
Imports du ring 20 10 ........................................................................................................... ........... 120  
Further data .................................................................................................................. .................. 120  
(ii)  Share of imported livestock in the United States .................................................................... 121  WT/DS384/R 
WT/DS386/R Page vi 
 
 
  Cattle  ........................................................................................................................ ............................. 122  
Share of Canadian cattle imports  in the United States ................................................................... 122  
Share of Mexican cattle imports  in the United States .................................................................... 124  
Canadian hogs ................................................................................................................. ...................... 125  
(iii) Costs of the COOL measure ................................................................................................... 1 26 
Informa Report ................................................................................................................ ...................... 127  
Summary of the st udy .......................................................................................................... .......... 127  
Criticisms by the United St ates ............................................................................................... ....... 128 
Analysis by the Panel ......................................................................................................... ............ 128  
Sumner Simulation Study ....................................................................................................... ............... 129  
Summary of the St udy .......................................................................................................... ......... 129 
Criticisms by the United St ates ............................................................................................... ....... 130 
Analysis by the Panel ......................................................................................................... ............ 130  
Conclusion on the Informa Report an d the Sumner Simula tion Study .................................................. 130  
(iv)  Whether the COOL measure had a nega tive and significant impact on imported 
Canadian livestock volumes and prices .................................................................................. 131  
Introduc tion .................................................................................................................. ......................... 131  
General observations on the econometric studies submitted by Canada and the United States ............ 131  
Summary of the Sumner Econometric Study subm itted by Canada ...................................................... 132  
Main findings of the Sumn er Econometri c Study .......................................................................... 132  
Criticisms by the United St ates ............................................................................................... ....... 133 
Canada's re sponse ............................................................................................................. ............. 133  
Further updates of the Sumn er Econometric Study ....................................................................... 134  
Summary of the USDA Econometric Study  submitted by the Un ited States  ........................................ 135  
Main findings of the USDA  Econometric Study ........................................................................... 135  
Canada's criticis ms............................................................................................................ ............. 136  
The United States' response ................................................................................................... ........ 136 
Updated USDA Eco nometric Study .............................................................................................. 1 37 
Analysis by the Panel ......................................................................................................... ............ 137  
(d)  Conclusion on the complainants' claims unde r Article 2.1 of the TBT Agreement ............... 138  
3.  Article 2.2 ................................................................................................................... ............ 138  
(a)  Legal framework for the analysis of the complainants' claim under Article 2.2 .................... 138  
(b)  Whether the COOL measure is trade-restric tive within the meaning of Article 2.2 ............... 141  
(i)  Main arguments of the parties ................................................................................................ 141 
(ii)  Analysis by the Panel ......................................................................................................... ..... 142 
(c)  Whether the objective pursued by the Unite d States through the COOL measure is 
legitimate .................................................................................................................... ............ 143   WT/DS384/R 
 WT/DS386/R 
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  (i)  Identification of the objective pursu ed by the United States through the 
COOL measure .................................................................................................................. ..... 144 
Main arguments of the parties ................................................................................................. .............. 144  
Analysis by the Panel ......................................................................................................... ................... 146  
Nature of a legitimate "objec tive" under Artic le 2.2 ...................................................................... 147  
Identification of the obj ective pursued by the United States  through the COOL measure ............ 152  
(ii)  Legitimacy of the identified objective within the meaning of Article 2.2 ................................ 153  
Main arguments of the parties ................................................................................................. .............. 153  
Analysis by the Panel ......................................................................................................... ................... 155  
(d)  Whether the COOL measure is more trade -restrictive than necessary to fulfil the 
legitimate objective .......................................................................................................... ....... 161 
(i)  Main arguments of the parties ................................................................................................ 162 
(ii)  Analysis by the Panel ......................................................................................................... ..... 164 
Whether consumer information on origin is  the objective of the COOL measure ................................ 167  
Whether the COOL measure fulfils the objective of  providing consumer information on origin ......... 171  
Overall asse ssment ............................................................................................................ .................... 176  
(e)  Conclusion on the complainants' claims unde r Article 2.2 of the TBT Agreement ............... 177  
4.  Mexico's claim under Article 2.4 ......................................................................................... 177  
(a)  Introduction .................................................................................................................. ........... 177  
(b)  Whether CODEX-STAN 1-1985 is not an ineffective or inappropriate means for the 
fulfilment of the legitimate objective pursued ........................................................................ 177  
(i)  Main arguments of the parties ................................................................................................ 177 
(ii)  Analysis by the Panel ......................................................................................................... ..... 178 
(c)  Conclusion on Mexico's claim under Article 2.4 .................................................................... 180  
5.  Mexico's claims under Articles 12.1 and 12.3 ..................................................................... 180  
(a)  Main arguments of the parties .................................................................................................  180 
(b)  Analysis by the Panel ......................................................................................................... ..... 182 
(i)  Whether Article 12.3 of the TBT Agreement in volves one or two legal obligations ............... 183  
(ii)  Burden of proof under Article 12.3 of the TBT Agreement ..................................................... 184  
(iii) Meaning of the term "take account of" ................................................................................... 186  
(iv)  Assessment of Mexico's cl aim under Article 12.3 ................................................................... 189  
(v)  Assessment of Mexico's cl aim under Article 12.1 ................................................................... 191  
(c)  Conclusion on Mexico's claim under Articles 12.1 and 12.3 .................................................. 192  
E.  CLAIMS UNDER THE GATT 1994 ............................................................................................ 192  
1.  The complainants' claims under the GATT 1994 .............................................................. 192  
2.  Article X:3(a) ................................................................................................................ ......... 193  
(a)  Laws, regulations, decisions and rulings of  the kind described in Article X:1 ....................... 193  WT/DS384/R 
WT/DS386/R Page viii 
 
 
  (b)  "Administer" its laws  and regulations ..................................................................................... 194  
(i)  Main arguments of the parties ................................................................................................ 194 
(ii)  Analysis by the Panel ......................................................................................................... ..... 195 
Canada's argumen t ............................................................................................................. .................... 195  
Mexico's ar gument ............................................................................................................. ................... 197  
(c)  "Not reasonable" administration of laws and regulations ....................................................... 200  
(i)  Main arguments of the parties ................................................................................................ 200 
(ii)  Analysis by the Panel ......................................................................................................... ..... 202 
Canada's argument – the Vilsack  letter ........................................................................................ ......... 202 
Mexico's argument – shifts in inte rpretation and guida nce by USDA .................................................. 204  
(d)  "Non-uniform" administration of  laws and regulations .......................................................... 205  
(i)  Main arguments of the parties ................................................................................................ 205 
(ii)  Analysis by the Panel ......................................................................................................... ..... 206 
(e)  "Partial" administration of laws and regulations ..................................................................... 208  
(i)  Main arguments of the parties ................................................................................................ 208 
(ii)  Analysis by the Panel ......................................................................................................... ..... 208 
(f)  Conclusion on the complainants' claims under Article X:3(a) ............................................... 208  
3.  Non-violation claim under Article XXIII:1(b) ................................................................... 208  
(a)  Main arguments of the parties .................................................................................................  208 
(b)  Analysis by the Panel ......................................................................................................... ..... 211 
VIII. FINDINGS AND RECOMMENDATIONS ........................................................................ 213  
A. C OMPLAINT BY CANADA (DS384):   FINDINGS AND RECOMMENDATION  ............................. 214A 
A. C OMPLAINT BY MEXICO (DS386):   FINDINGS AND RECOMMENDATION  .............................. 214B  WT/DS384/R 
 WT/DS386/R 
 Page ix 
 
 
  ANNEX A 
 
EXECUTIVE SUMMARIES OF THE FIRST WRITTEN SUBMISSIONS 
OF THE PARTIES 
 
Contents Page 
Annex A-1 Executive summary of the fi rst written submission of Canada A-2 
Annex A-2 Executive summary of the fi rst written submission of Mexico A-9 
Annex A-3 Executive summary of the first wr itten submission of the United States A-22 
 
 
ANNEX B 
 
EXECUTIVE SUMMARIES OF THE SECOND WRITTEN SUBMISSIONS  
OF THE PARTIES 
 
Contents Page 
Annex B-1 Executive summary of the second written submission of Canada B-2 
Annex B-2 Executive summary of the second written submission of Mexico B-10 
Annex B-3 Executive summary of the second written submission of the United States B-24 
 
 
ANNEX C 
 
THIRD PARTY SUBMISSIONS 
 
Contents Page 
Annex C-1 Executive summary of the third party written submission of Australia C-2 
Annex C-2 Third party oral statement of Australia at the first substantive meeting C-7 
Annex C-3 Third party oral statement of Australia at the second substantive meeting C-11 
Annex C-4 Third party written submission of Brazil C-15 
Annex C-5 Third party oral statement of Brazil at the first substantive meeting C-19 
Annex C-6 Third party oral statement of Brazil at the second substantive meeting C-21 
Annex C-7 Third party oral statement of China at the second substantive meeting C-23 
Annex C-8 Executive summary of the third party written submission of Colombia C-24 
Annex C-9 Third party oral statement of Colombia at the first substantive meeting C-29 
Annex C-10 Third party oral statement of Colombia at the second substantive meeting C-32 
Annex C-11 Executive summary of the third party written submission of the European Union C-33 WT/DS384/R 
WT/DS386/R Page x 
 
 
  Contents Page 
Annex C-12 Executive summary of the third part y oral statement of the European Union at 
the first substantive meeting C-38 
Annex C-13 Executive summary of the third part y oral statement of the European Union at 
the second substantive meeting C-43 
Annex C-14 Third party oral statement of Guat emala at the first substantive meeting C-48 
Annex C-15 Executive summary of the third party written submission of Japan C-50 
Annex C-16 Executive summary of the third pa rty oral statement of Japan at the first 
substantive meeting C-54 
Annex C-17 Third party oral statement of Japan at the second substantive meeting C-57 
Annex C-18 Executive summary of the thir d party written submission of Korea C-61 
Annex C-19 Third party oral statement of Korea at the first substantive meeting C-63 
Annex C-20 Executive summary of the third party written submission of New Zealand C-65 
Annex C-21 Third party oral statement of New Zealand at the first substantive meeting C-69 
Annex C-22 Third party oral statement of New Zealand at the second substantive meeting C-72 
Annex C-23 Third party oral statement of Peru at the first substantive meeting C-74 
 
 
ANNEX D 
 
ORAL STATEMENTS OF THE PARTIES  
AT THE FIRST AND SECO ND SUBSTANTIVE MEETINGS 
 
Contents Page 
Annex D-1 Executive summary of the opening oral statement of Canada at the first 
substantive meeting D-2 
Annex D-2 Executive summary of the opening oral statement of Mexico at the first 
substantive meeting D-6 
Annex D-3 Executive summary of the opening or al statement of the United States at the 
first substantive meeting D-11 
Annex D-4 Closing oral statement of Canada at the first substantive meeting D-17 
Annex D-5 Closing oral statement of Mexico at the first substantive meeting D-19 
Annex D-6 Executive summary of the opening or al statement of the United States at the 
second substantive meeting D-22  WT/DS384/R 
 WT/DS386/R 
 Page xi 
 
 
  Contents Page 
Annex D-7 Executive summary of the opening oral statement of Canada at the second 
substantive meeting D-27 
Annex D-8 Executive summary of the opening oral statement of Mexico at the second 
substantive meeting D-32 
Annex D-9 Closing oral statement of Canada at the second substantive meeting D-39 
Annex D-10 Closing oral statement of Mexico at the second substantive meeting D-41 
 
 
ANNEX E 
 
WORKING PROCEDURES FOR THE PANEL 
 
Contents Page 
Annex E-1 Working procedures for the Panel as revised on 21 September 2010 
 E-2 
Annex E-2 Additional procedures for the protection of business confidential information 
("BCI procedures") E-6 
 
 
ANNEX F 
 
PROCEDURES FOR OPEN HEARINGS 
 
Contents Page 
Annex F-1 Procedures for open hearings, first and second substantive meetings of the Panel F-2 
 WT/DS384/R 
WT/DS386/R Page xii 
 
 
  TABLE OF WTO AND GATT CASES CITED IN THIS REPORT 
 
Short Title Full case title and citation 
Argentina – Hides and Leather Panel Report, Argentina – Measures Affecting the Export of Bovine Hides and 
Import of Finished Leather , WT/DS155/R and Corr.1, adopted 16 February 
2001, DSR 2001:V, 1779 
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 Affec ting Imports of Retreaded 
Tyres , WT/DS332/AB/R, adopted 17 December 2007, DSR 2007:IV, 1527  
Brazil – Retreaded Tyres Panel Report, Brazil – Measures Affecting Imports of Retreaded Tyres , 
WT/DS332/R, adopted 17 December 2007, as modified by Appellate Body 
Report WT/DS332/AB/R, DSR 2007:V, 1649 
Canada – Autos Appellate Body Report, Canada – Certain Measures Affecting the Automotive 
Industry , WT/DS139/AB/R, WT/DS142/AB/R, adopted 19 June 2000, 
DSR 2000:VI, 2985 
Canada – Autos Panel Report, Canada – Certain Measures Affecting the Automotive Industry , 
WT/DS139/R, WT/DS142/R, adopted 19 June 2000, as modified by Appellate 
Body Report WT/DS139/AB/R, WT/DS142/AB/R, DSR 2000:VII, 3043 
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 
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 
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 Asbestos-Containing Products , WT/DS135/AB/R, adopted 
5 April 2001, DSR 2001:VII, 3243 
EC – Approval and Marketing of 
Biotech Products Panel Report, European Communities – Measures  Affecting the Approval and 
Marketing of Biotech Products , WT/DS291/R, WT/DS292/R, WT/DS293/R, 
Corr.1, and Add.1 to Add.9, adopted 21 November 2006, DSR 2006:III-VIII, 
847 
EC – Bananas III  Appellate Body Report, European Communities – Regime for the Importation, 
Sale and Distribution of Bananas , WT/DS27/AB/R, adopted 
25 September 1997, DSR 1997:II, 591  WT/DS384/R 
 WT/DS386/R 
 Page xiii 
 
 
  EC – Bananas III   
(Article 21.5 – US) Appellate Body Report  , European Communities – Regime for the Importation, 
Sale and Distribution of Bananas –  Recourse to Article 21.5 of the DSU by the 
United States , WT/DS27/AB/RW/USA and Co rr.1, adopted 22 December 
2008 
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 – 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 – Trademarks and 
Geographical Indications Panel Report,  European Communities – Protection of Trademarks and 
Geographical Indications for Agricultural Products and Foodstuffs , 
WT/DS290/R (Australia) , adopted 20 April 2005, DSR 2005:VIII, 3499 to 
DSR 2005:  X, 4603  
India – Autos Panel Report, India – Measures Affecting the Automotive Sector , 
WT/DS146/R, WT/DS175/R and Corr.1, adopted 5 April 2002, DSR 2002:V, 
1827 
India – Quantitative Restrictions Panel Report, India – Quantitative Restrictions on Imports of Agricultural, 
Textile and Industrial Products , WT/DS90/R, adopted 22 September 1999, as 
upheld by Appellate Body Report WT/DS90/AB/R, DSR 1999:V, 1799 
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 – Film Panel Report, Japan – Measures Affecting Consumer Photographic Film and 
Paper , WT/DS44/R, adopted 22 April 1998, DSR 1998:IV, 1179 
Japan – Semi-Conductors  GATT Panel Report, Japan – Trade in Semi-Conductors , L/6309, adopted 
4 May 1988, BISD 35S/116  
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 
Korea – Various Measures on Beef Panel Report, Korea – Measures Affecting Imports of Fresh, Chilled and 
Frozen Beef , WT/DS161/R, WT/DS169/R, adopted 10 January 2001, as 
modified by Appellate Body Report WT/DS161/AB/R, WT/DS169/AB/R, 
DSR 2001:I, 59 
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 
Turkey – Rice Panel Report, Turkey – Measures Affecting the Importation of Rice , 
WT/DS334/R, adopted 22 October 2007, DSR 2007:VI, 2151 
US – Corrosion-Resistant Steel 
Sunset Review Appellate Body Report, United States – Sunset Review of Anti-Dumping 
Duties on Corrosion-Resistant Carbon Steel Flat Products from Japan , 
WT/DS244/AB/R, adopted 9 January 2004, DSR 2004:I, 3 
US – FSC Appellate Body Report, United States – Tax Treatment for "Foreign Sales 
Corporations" , WT/DS108/AB/R, adopted 20 March 2000, 
DSR 2000:III, 1619 WT/DS384/R 
WT/DS386/R Page xiv 
 
 
  US – FSC (Article 21.5 – EC) Appellate Body Report, United States – Tax Treatment for "Foreign Sales 
Corporations" – Recourse to Articl e 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 Cross-Border 
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 – Stainless Steel (Korea) Panel Report, United States – Anti-Dumping Measures on Stainless Steel Plate 
in Coils and Stainless Steel Sheet and Strip from Korea , WT/DS179/R, adopted 
1 February 2001, DSR 2001:IV, 1295 
US – Superfund GATT Panel Report, United States – Taxes on Petroleum and Certain 
Imported Substances , L/6175, adopted 17 June 1987, BISD 34S/136 
  WT/DS384/R 
 WT/DS386/R 
 Page xv 
 
 
  TABLE OF ABBREVIATIONS 
Abbreviation Description 
2002 Farm Bill The Farm Security and Rural Investment Act of 2002 
2008 Farm Bill Food, Conservation, and Energy Act of 2008 
2009 Final Rule (AMS) Final Rule on Mandatory Country of Origin  Labelling of Beef, Pork, Lamb, 
Chicken, Goat Meat, Perishable Agri cultural Commodities, Peanuts, Pecans, 
Ginseng, and Macadamia Nuts, published on 15 January 2009 as 7 CFR Part 65 
BCI procedures Additional procedures for the pr otection of business confidential information 
AMS Agriculture Marketing Service (of the United States Department of Agriculture) 
APA Administrative Procedure Act 
CBP US Customs and Border Protection 
C.F.R Code of Federal Regulations 
COOL Country of Origin Labelling 
CUSTA Canada – United Stat es Free Trade Agreement 
DSB Dispute Settlement Body 
DSU Dispute Settlement Understanding 
FSIS Food Safety and Inspection Service (o f the United States Department of 
Agriculture) 
GATT 1994 General Agreement on Tariffs and Trade 1994 
HFCS High-fructose corn syrup 
Interim Final Rule (AMS) Interim Final Rule on Mandatory Countr y of Origin Labelling of Beef, Pork, 
Lamb, Chicken, Goat Meat, Perishable Agricultural Commodities, Peanuts, Pecans, Ginseng, and Macadamia Nuts, published on 1 August 2008 as 7 CFR 
Part 65  
Interim Final Rule (FSIS) Interim Final Rule on Mandatory Country of Origin Labelling of Muscle Cuts of 
Beef (including Veal), Lamb, Chicken, Goat, and Pork, Ground Beef, Ground Lamb, Ground Chicken, Ground Goat, and Ground Pork, published on 
28 August 2008 as 9 CFR Parts 317 and 381 
JBS JBS USA, Inc. 
NAFTA North American Free Trade Agreement  
PACA Perishable Agricultural Commodities Act of 1930 
R-CALF Ranchers-Cattlemen Action Legal Fund 
SPS Agreement Agreement on th e Application of Sanitary and Phytosanitary Measures 
TBT Agreement  Agreement on T echnical Barriers to Trade  
U.S.C. United States Code WT/DS384/R 
WT/DS386/R Page xvi 
 
 
  Abbreviation Description 
USDA United States Department of Agriculture 
Vilsack letter Letter to "Industry Representative" from the United States Secretary of 
Agriculture, Thomas J. Vilsack, of 20 February 2009 
WTO World Trade Organization 
 
 
 
  WT/DS384/R 
 WT/DS386/R 
 Page 1 
 
 
  I. INTRODUCTION 
A. COMPLAINTS OF CANADA AND MEXICO  
1.1 On 1 and 17 December 2008, respectively, Canada and Mexico independently requested 
consultations with the United States, pursuant to Articles 1 and 4 of the Understanding on Rules and 
Procedures Governing the Settlement of Disputes (D SU), Article XXII of the General Agreement on 
Tariffs and Trade (GATT 1994), Article 14 of th e Agreement on Technical Barriers to Trade 
(TBT Agreement), Article 11 of the Agreement of Sanitary and Phytosanitary Measures (SPS Agreement) and Article 7 of the Agreement on Ru les of Origin, with respect to the measures and 
claims set out below.
1  On 7 May 2009, Canada and Mexi co each requested supplemental 
consultations with the United States.2 
1.2 Canada and Mexico requested, pursuant to Article  4.11 of the DSU, to join in each other's 
consultations.3  Nicaragua and Peru requested to join in  the consultations requested by Canada, and 
Peru also requested to join in th e consultations reque sted by Mexico.4  The United States informed the 
Dispute Settlement Body (DSB) that it accepted the requests of Canada and Mexico.5 
1.3 Consultations were held between each complaining party and the United States. 
The United States and Canada held their consu ltations on 16 December 2008 and 5 June 2009.  
The United States and Mexico held their consu ltations on 27 February 2009 and on 5 June 2009.  
None of these consultations led to a mutually satisfactory resolution.6 
B. ESTABLISHMENT AND COMPOSITION OF THE PANEL  
1.4 On 7 and 9 October 2009, respectively, Canada  and Mexico each requested the establishment 
of a panel, pursuant to Article 6 of th e DSU, with standard terms of reference.7 
1.5 At its meeting on 19 November 2009, the DSB established a single panel, pursuant to the 
requests of Canada in document WT/DS384/8 and Mexico in document WT/DS386/7 and Corr.1, in 
accordance with Article 9.1 of the DSU.8 
1.6 At that meeting, the parties to the dispute agre ed that the Panel should have standard terms of 
reference.  The Panel's terms of reference are the following: 
"To examine, in the light of the relevant provisions of the covered agreements cited 
by the parties to the dispute, the matter referred to the DSB by Canada in document 
WT/DS384/8 and Mexico in document WT/D S386/7 and Corr.1, and to make such 
findings as will assist the DSB in making the recommendations or in giving the rulings provided for in those agreements."
9 
1.7 On 30 April 2010, Canada and Mexico request ed the Director-General to determine the 
composition of the panel, pursuant to Article 8.7 of the DSU. 
                                                      
1 WT/DS384/1 and WT/DS386/1. 
2 WT/DS384/1/Add. 1 and WT/DS386/1/Add. 1. 
3 WT/DS384/3, WT/DS384/5, WT/DS386/2 and WT/DS386/4. 
4 WT/DS384/2, WT/DS384/6 and WT/DS386/5. 
5 WT/DS384/4, WT/DS384/7, WT/DS386/3 and WT/DS386/6. 
6 WT/DS384/8, WT/DS386/7 and WT/DS386/7/Corr.1. 
7 WT/DS384/8, WT/DS386/7 and WT/DS386/7/Corr.1. 
8 WT/DSB/M/276, para. 60. 
9 WT/DS/384/9 and WT/DS/386/8. WT/DS384/R 
WT/DS386/R Page 2 
 
 
  1.8 On 10 May 2010, the Director-General composed the Panel as follows: 
Chairman: Mr Christian Häberli 
  Members: Mr Manzoor Ahmad 
   Mr João Magalhães 
 1.9 Argentina, Australia, Brazil, Canada (for WT/D S386), China, Colombia, the European Union, 
Guatemala, India, Japan, Korea, Mexico (for WT /DS384), New Zealand, Peru, and Chinese Taipei 
reserved their rights to participate in the Panel proceedings as third parties. 
C. P
ANEL PROCEEDINGS  
1.10 The Panel held the first substantive meeti ng with the parties on 14-15 September 2010.  
The second substantive meeting with the parties wa s held on 1-2 December 2010.  Enhanced third 
party rights granted by the Panel, after consultatio ns with the parties, allowed the third parties to 
participate in both the first and second substantive meetings of the Panel.  The sessions with third 
parties took place on 15 September 2010 and 2 December 2010.  In light of the preference expressed 
by the parties during the organizati onal meeting with the Panel, and in accordance with the procedures 
adopted on 18 June 2010, the meetings with the pa rties were open to public viewing by means of 
simultaneous closed-circuit television broadcas ting of the proceedings to a separate room. 
1.11 On 14 January 2011, the Panel issued the descr iptive part of its Panel Reports.  The Panel 
issued its Interim Reports to the parties on 20 Ma y 2011.  The Panel issued its Final Reports to the 
parties on 29 July 2011. 
II. FACTUAL ASPECTS 
A. MEASURES AT ISSUE10 
2.1 The claims brought by Canada and Mexico c oncern the United States' country of origin 
labelling (COOL) requirements for meat products. 
2.2 Canada submits that the COOL measure  consists of the following provisions:11 
(a) the Agricultural Marketing Act of 1946, as am ended by the Farm Security and Rural 
Investment Act of 2002 ("2002 Farm Bill") and the Food, Conservation, and Energy Act of 2008 ("2008 Farm Bill"); 
(b) the Interim Final Rule on Mandatory Count ry of Origin Labelling of Beef, Pork, 
Lamb, Chicken, Goat Meat, Perishable Ag ricultural Commodities, Peanuts, Pecans, 
Ginseng, and Macadamia Nuts, publishe d on 1 August 2008 as 7 CFR Part 65 
("Interim Final Rule (AMS)") and on Manda tory Country of Origin  Labelling of 
Muscle Cuts of Beef (including Veal), Lamb , Chicken, Goat, and Pork, Ground Beef, 
Ground Lamb, Ground Chicken, Ground Goat, and Ground Pork, published on 28 August 2008 as 9 CFR Parts 317 and 381 ("Interim Final Rule (FSIS)"); 
                                                      
10 The Panel's adoption of the terminology – "measures at issue" – in its sub-headings of these Reports 
is for convenience only and does not prejudge any disputed factual or legal issues relating to that terminology. 
11 WT/DS384/8.  WT/DS384/R 
 WT/DS386/R 
 Page 3 
 
 
  (c) the Final Rule on Mandatory Country of Origin  Labelling of Beef, Pork, Lamb, 
Chicken, Goat Meat, Perishable Agri cultural Commodities, Peanuts, Pecans, 
Ginseng, and Macadamia Nuts, published on 15 January 2009 as 7 CFR Part 65 (the 
"2009 Final Rule (AMS)"); 
(d) the letter to "Industry Representative " from the United States Secretary of 
Agriculture, Thomas J. Vilsack, of 20 Febr uary 2009 (the "Vilsack letter");  and 
(e) any modifications, administrative guidance, directives or policy announcements 
issued in relation to items (a) through (d) above. 
2.3 Mexico submits that the measures relating to the COOL provisions adopted by the 
United States include the following:12 
(a) the Agricultural Marketing Act of 1946 (7 U.S.C. 1621 et seq.), as amended by the 
Farm Security and Rural Investment Act of 2002 (Section 10816 of Public Law 107-171) and the Food, Conservation, and Energy Act of 2008 (Section 11002 
of Public Law 110-246); 
(b) Interim Final Rule – Mandatory Country of  Origin Labelling of Beef, Pork, Lamb, 
Chicken, Goat Meat, Perishable Agri cultural Commodities, Peanuts, Pecans, 
Ginseng, and Macadamia Nuts (publis hed in 73 Federal Register 45106, 
1 August 2008); 
(c) Final Rule – Mandatory Country of Origin  Labelling of Beef, Pork, Lamb, Chicken, 
Goat Meat, Wild and Farm-Raised Fish and Shellfish, Perishable Agricultural 
Commodities, Peanuts, Pecans, Ginseng, and Macadamia Nuts (7 CFR Parts 60 
and 65); 
(d) Interim Final Rule – Mandatory Country of Origin Labelling of Muscle Cuts of Beef 
(including Veal), Lamb, Chicken, Goat and Pork, Ground Beef Ground Lamb, Ground Chicken, Ground Goat, and Ground Pork (9 CFR Parts 317 and 381, 
published in 73 Federal Register 50710, 28 August 2008); 
(e) the letter from Thomas Vilsack, Secretary of Agriculture (United States Department 
of Agriculture, USDA), to Industry Repr esentatives (20 February 2009), cited in 
USDA News Release No. 0045.09, "Vilsack  Announces Implementation of Country 
of Origin Labelling Law" (20 February 2009);  and 
(f) any modification or amendment to measu res (i) through (v) above, including any 
further implementing guidance, directives or policy announcements or any other 
document issued in relation to those measures. 
B. P
ROCEDURAL HISTORY  
1. Additional procedures for the protectio n of business confidential information 
("BCI procedures") 
2.4 At the organizational meeting held on 21 Ma y 2010, Canada and Mexico mentioned the 
anticipated need for special wo rking procedures to cover business confidential information.  On 
                                                      
12 WT/DS386/7 and WT/DS386/7/Corr.1. WT/DS384/R 
WT/DS386/R Page 4 
 
 
  16 and 17 June 2010, Canada, having consulted with Mexico and the United States, submitted the 
parties' proposed text for BCI pro cedures.  After considering the pr oposed text, the Panel adopted BCI 
procedures on 18 June 2010, thereby creating right s and obligations for all parties in these 
proceedings, including third parties.  These procedur es were adopted according to, and are an integral 
part of, the Panel's working procedures of 18 June 2010 as attached in Annex E. 
2. Procedures for open hearings 
2.5 At the DSB meeting of 19 November 2009, the United States stated that it was the parties' 
agreed intention to have open hearings in these proceedings.
13  Mexico, at the same meeting, did not 
object to open hearings specifically for these procee dings, without prejudice to its systemic views on 
open hearings.  At the organizational meeting held  on 21 May 2010, Canada indicated that it would 
submit the parties' proposed procedures for open heari ngs to the Panel for its consideration.  Having 
received comments from the United States, Canada s ubmitted their proposed text on 17 June 2010.  
Based on the proposed text, the Panel adopted proce dures for open hearings on 18 June 2010.  Mexico 
had an opportunity to comment on the procedures and accepted the procedures without any changes.  
A copy of the procedures for open hear ings is attached in Annex F. 
3. Enhanced third party rights 
2.6 On 12 May 2010, Australia sent a letter to the Panel requesting enhanced third party rights in 
these panel proceedings.  At the organizational m eeting of 21 May 2010, all parties commented on 
this request. 
2.7 Having carefully considered Australia's request and the parties' comments thereon, the Panel 
decided to grant the following enhanced rights to  all third parties in these panel proceedings: 
(a) participation in the first and second substantive meetings of the Panel; 
(b) access to the parties' first and second written submissions;  and 
(c) the right in both the first and second substa ntive meetings to ask questions to the 
parties and other third parties without any obligation to respond on the part of the 
parties and other third parties. 
2.8 The Panel's working procedures and the pro cedures for open hearings reflect these 
enhanced third party rights.  In addition to the above-listed enhanced third party rights adopted on 
18 June 2010, the Panel, after havi ng consulted the parties, allowed the third parties to receive copies 
of the parties' written responses to the Panel's qu estions following the first substantive meeting.  
The Panel considered that this would facilitate the third parties' participation in the second substantive 
meeting with the parties.  The third parties were not, however, invited to submit a written submission 
prior to the second substantive meeting. 
4. Amicus curiae  briefs 
2.9 On 22 November 2010, the Panel received an unsolicited amicus curiae brief.  
On 26 November 2010, the Panel forwarded the amicus curiae  brief to the parties, with a copy to the 
third parties.  The Panel noted the information co ntained in the letter and that it was cited in the 
United States' second written submission. 
                                                      
13 WT/DSB/M/276, para. 65.  WT/DS384/R 
 WT/DS386/R 
 Page 5 
 
 
  2.10 The Panel gave the parties an opportunity to  provide comments on the brief at the second 
substantive meeting, both with respect to whethe r or not the Panel should accept and consider the 
brief, as well as the content of the brief in terms of its relevance for the Panel in carrying out its duties 
in these proceedings.  The parties and several th ird parties took the occasion to comment on the 
amicus curiae  brief at the second substantive meeting.  The Panel considered the information 
contained in the brief as necessary and to the extent  that it was reflected in the written submissions 
and evidence submitted by the parties. 
5. Request for separate reports 
2.11 At the second substantive meeting on 1-2 December 2010, the United States requested, 
pursuant to paragraph 18 of the Panel's working pro cedures, that the Panel issue its findings in the 
form of a single document containing two separat e reports with common sections on the Panel's 
findings and separate conclusions and recommendations  for each complaining party.  Canada agreed 
and Mexico did not object to the United States' request.  The Panel has prepared its Reports 
accordingly. 
III. PARTIES' REQUESTS FOR FINDINGS AND RECOMMENDATIONS 
A. CANADA  
3.1 Canada requests that the Panel find that: 
(a) the COOL measure of the United States is in consistent with its obligations under the 
TBT Agreement, in particular Articles 2.1 and 2.2;  and 
(b) the COOL measure of the United States is in consistent with its obligations under the 
GATT 1994, in particular Articles III:4, X:3(a) and XXIII:1(b). 
3.2 Canada therefore requests that the Panel recommend that the United States bring the 
COOL measure into conformity with its obligations under the TBT Agreement and the 
GATT 1994, subject to the provision of Article 26.1 of the DSU in respect of GATT Article XXIII:1(b). 
B. M
EXICO  
3.3 Mexico requests that the Panel find that: 
(a) the COOL measures are inconsistent with Articles III:4 and X:3 of the GATT 1994 
and Articles 2.1, 2.2, 2.4 and 12 of the TBT Agreement;  and 
(b) the COOL measures nullify or impair be nefits accruing to Mexico under the 
GATT 1994 within the meaning of Article XXIII:1(b) of the GATT 1994. 
3.4 Mexico requests that the Panel make such  recommendations that are necessary for the 
United States to bring itself into  conformity with these provisions. 
C. UNITED  STATES  
3.5 The United States requests that the Panel reject the claims made by Canada and Mexico in 
their entirety. WT/DS384/R 
WT/DS386/R Page 6 
 
 
  IV. ARGUMENTS OF THE PARTIES 
4.1 The arguments of Canada, Mexico and the Un ited States, as set out in the executive 
summaries of their submissions provided to the Pane l in accordance with paragraph 15 of the working 
procedures, are attached to these reports as annexes (see List of Annexes, pages vii-ix).  They are also 
referred to later in these Reports in the context of  the Panel's analysis of claims and defences. 
V. ARGUMENTS OF TH E THIRD PARTIES 
5.1 Argentina, Australia, Brazil, Canada (for WT/D S386), China, Colombia, the European Union, 
Guatemala, India, Japan, Korea, Mexico (for WT /DS384), New Zealand, Peru, and Chinese Taipei 
reserved their rights to participate in the Panel proceedings as third parties. 
5.2 The arguments of those third parties that provided to the Panel submissions
14, executive 
summaries and oral statements are attached to these Reports as annexes (see List of Annexes, 
pages vi-viii).  Argentina, India, Peru and Chin ese Taipei did not present written submissions to the 
Panel.  Argentina, India, and Chinese Taipei did not present oral statements at either substantive 
meeting of the Panel.  Korea and China presented or al statements at the first and second substantive 
meetings respectively, but in closed session. 
VI. INTERIM REVIEW 
6.1 On 20 May 2011, the Panel submitted its Inte rim Panel Reports to the parties.  On 
17 June 2011, Canada, Mexi co and the United States each submitted written requests for the review of 
precise aspects of the Interim Reports.  On 30 June  2011, Canada, and on 1 July 2011, Mexico and the 
United States submitted comments on a number of request s for review presented by the other parties.  
None of the parties requested an interim review meeting. 
6.2 In accordance with Article 15.3 of the DSU, this section of the Panel's reports sets out the 
Panel's response to the arguments made at the inte rim review stage, providing explanations where 
necessary.  The Panel has modified aspects of its repor ts in the light of the parties' comments where it 
considered these appropriate, as explained below.  The Panel has also made certain technical and 
editorial corrections and revisions to the Inte rim Panel Reports for the purposes of clarity and 
accuracy.  References to sections, paragraph numbers  and footnotes in this section relate to the 
Interim Panel Reports, except as otherwise noted. 
A. MEASURES THAT FALL WITHIN THE PANEL 'S TERMS OF REFERENCE  
1. "USDA's clarification documents" (paragra phs 7.22, 7.23, and relevant parts of the 
Article X:3(a) section)  
6.3 The United States  points out that, in its second writte n submission, it objected to the 
inclusion of USDA's clarification documents (Exhib its CDA-29, 30, 31), referenced by Canada in its 
oral statement in the first panel meeting,  within the Panel's terms of reference.15  Accordingly, the 
United States submits that paragraph 7.22 is inaccura te in stating that the United States did not object 
to the inclusion of these clarification docume nts in the Panel's terms of reference.   
                                                      
14 Third party written submissions were recei ved from Australia, Brazil, Colombia, the 
European Union, Japan, Korea, and New Zealand. 
15 United States' comments on the Interim Panel Re ports, para. 5, referring to its second written 
submission, para. 28.  WT/DS384/R 
 WT/DS386/R 
 Page 7 
 
 
  6.4 Furthermore, the United States argues that these clarification documents were neither 
identified in nor in effect at the time of the comp lainants' panel requests because they were superseded 
when the 2009 Final Rule (AMS) was published and became effective.  For example, the 
United States argues, Mexico did not mention these documents until its second written submission.16  
The United States also asserts that non-public pressu re (Exhibits MEX-33, 55, 56, 57), as referenced 
by Mexico, is neither a measure nor within the Panel's terms of reference.   
6.5 Based on the above, the United States requests the Panel to modify paragraphs 7.22 and 7.23 
and to change the reference in footnote 40 so as to refer to paragraph 28 of the United States' second 
written submission instead of paragraph 9 of the Un ited States' first written submission.  Further, 
consistent with this suggested modification, the United States requests that references to non-public 
pressure, implying that this constitutes a measure, be removed from the discussions of Article X:3(a) 
of the GATT 1994 in the Interim Reports, including pa ragraphs 7.813, 7.823, 7.836, 7.837, 7.839, and 
7.841.   
6.6 Canada  considers that these documents are covered by the terms "any modifications, 
administrative guidance, directives or policy announ cements issued in relation to items (i) through 
(iv) above" in its panel request.   
6.7 Mexico  argues that the United States' comments above are inaccurate.  Mexico considers that 
the terms "any further implementing guidance, di rectives or policy announcements" in its panel 
request sufficiently cover the asso ciated guidelines as well as the non-public pressure, as identified by 
Mexico in its written submissions.  This, accord ing to Mexico, encompasses the clarification 
documents referenced by the United States.  Rega rding the non-public pressure, Mexico argues that 
this was part of the US government guidance associat ed with the COOL measure and thus an integral 
part of the COOL measure.  Mexico submits that it  was evidence of the administration of the measure 
within the meaning of Article X:3(a) of the GATT 1994. 
6.8 The Panel considers that the United States' comments on the clarification documents 
referenced by Canada are moot as Canada did not pursue the position that "any modifications, 
administrative guidance, directives or policy announ cements issued in relation to items (i) through 
(iv) above" form part of the COOL measure.  Although Canada made a statement on the so-called 
"clarification documents" in its oral statement at th e first substantive meeting, Canada, in response to 
a question from the Panel after that meeting, clarified its position by focusing only on the COOL statute, the 2008 Interim Final Rule (AMS ), the 2009 Final Rule (AMS), and the Vilsack 
Letter, as instruments forming part of one single measure.
17 
6.9 Regarding the United States' comments in respec t of these documents referred to by Mexico 
in the context of its claim under Article X:3(a) of the GATT 1994, they are evidence  submitted to 
establish the USDA's acts of administering th e COOL measure, but not the measure itself.18  As such, 
documents provided as evidence to establish a claim need  not be identified in the panel request.  It is 
the measure at issue that needs to be identified in the panel request for it to fall properly within the 
Panel's terms of reference.  Further, the so- called "non-public pressure" is simply Mexico's 
categorization of certain types of evidence submitte d to prove the USDA's act of administering the 
measure at issue rather than the measure itself.  To accept the United States' argument will result in 
conflating the underlying measure with the acts of ad ministration of such underling measure.  In light 
                                                      
16 See Mexico's second written submission, para. 187, referring to Exhibit CDA-29. 
17 See Canada's response to Panel question No. 1. 
18 See paras. 7.836-7.847 for the Panel's discussion on whether Mexico has established based on 
evidence that USDA provided administ rative guidance with respect to the COOL measure within the meaning 
of Article X:3(a). WT/DS384/R 
WT/DS386/R Page 8 
 
 
  of this, and as the United States' comments are premised on a mistaken understanding that these 
documents form a measure at issue that Mexico pursues separately from other identified measures at 
issue, we reject the United States' request and dele te paragraphs 7.21-7.24 to avoid confusion as to the 
scope of the measures at issue that were properly identified and actually pur sed by the complainants 
in the proceedings.  We also added a footnote to th e last sentence of paragraph 7.836 to clarify the 
nature of the non-public pressure referenced by Mexico in the context of its claim under 
Article X:3(a) of the GATT 1994.   
2. Paragraph 7.24  
6.10 Mexico suggests a modification to paragraph 7.24 of  the Interim Panel Reports in order to 
avoid any further confusion regarding whether "a ny implementing guidance, directives or policy 
announcements" are within the Pane l's terms of reference.  The United States does not agree with 
Mexico's suggested modification to paragraph 7.24 .  The United States does not believe that "any 
further implementing guidance, directives, or po licy announcements" are within the scope of the 
Panel's terms of reference for the reasons set forth above in paragraphs 6.3-6.5. 
6.11 The Panel need not make the change suggested by Mexico as the Panel has already modified 
relevant parts of the Interim Panel Reports, including paragraph 7.24, in the context of the 
United States' comments on the USDA's clarification documents. 
3. "USDA's implementing guidance" (paragraphs 7.26, 7.27-7.38)  
6.12 The United States  submits that, in addition to the 2008 Interim Final Rule (AMS) and the 
2008 Interim Final Rule (FSIS), the USDA's guidan ce (also referred to as USDA's clarification 
documents) had expired at the time of the Panel's es tablishment.  The United States suggests that the 
Panel modify paragraph 7.26 so as to include th e implementing guidance as part of the expired 
measures; address this fact in paragraphs 7.27- 7.38; and conclude that conducting a separate 
examination of these instruments would not contribute to resolving the current dispute between the parties.  Mexico  argues that the Panel should reject the Un ited States' suggestion.  Mexico takes the 
position that although some of the documents referred to by Mexico were issued before the Panel's 
establishment, this does not necessarily m ean that they had already expired. 
6.13 The Panel  rejects the United States' request because, as explained above in paragraph 6.9, the 
so-called implementing guidance in this case is referred to as evidence  of an act of administering the 
measure at issue (i.e. COOL measure) under Article X:3(a) of the GATT 1994.
19  According to the 
Appellate Body, evidence of acts of administ ration submitted in the context of a claim under 
Article X:3(a) is not subjec t to temporal limitations.20  In the context of its claim under Article X:3(a) 
of the GATT 1994 during the panel proceedings, Mexico referred to the USDA's guidance as 
evidence of the United States' act of ad ministration, which is reflected in, inter alia , the associated 
guidelines issued by USDA (Exhibits CDA-29; ME X-83) and the non-public pressure by the US 
government on individual companies (Exhibits MEX-33, 56-57).  In other words, these documents 
that Mexico categorize as "associated guidelines"  and "non-public pressure" are evidence of the 
United States' act of administering the COOL measure (measure at issue) within the meaning of Article X:3(a), but are not the measures at issue themselves. 
                                                      
19 See footnote 18. 
20 Appellate Body Report in EC – Selected Customs Matters , para. 188.  The Appellate Body 
underlined that the Panel in that dispute was entitled to rely on evidence of acts of administration, which may 
pre-date or post-date the establishment of the panel, to determine whether the measures at issue have been 
administered at the time of the Panel's establishm ent in a manner inconsistent with Article X:(a).  WT/DS384/R 
 WT/DS386/R 
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  4. Other comments 
(a) Paragraph 7.19  
6.14 The United States submits that the 2009 Final Rule (FSIS) did not affirm the 2008 Interim 
Rule (FSIS).  It therefore requests the Panel to m odify the second sentence of paragraph 7.19 to more 
accurately describe the 2009 Final Rule (FSIS).   
6.15 Mexico objects to the United States' suggestion.  Mexico refers to the Federal Register 
publication of 20 March 2009 (i.e. the 2009 Final Rule  (FSIS)), which explicitly describes its action 
as the "Affirmation of the interim final rule".   
6.16 Taking into account the parties' comments, the Panel  amended the text of  the second sentence 
of paragraph 7.19 by directly citing the la nguage of the Federal Re gister publication of 
20 March 2009. 
(b) Paragraph 7.28 
6.17 The United States suggests a modification to the fourth sentence of paragraph 7.28 for 
greater accuracy.  The United States highlights that the addition of commingling flexibility is only one 
change made to the 2008 Interim Final Rule (AMS).  Canada and Mexico object to the United States' 
suggestion as the United States' position is alrea dy stated in the first sentence of the same 
paragraph and the suggested modification would c onfuse rather than incr ease the accuracy of the 
paragraph.   
6.18 The Panel  slightly modified the text of the fourth sentence of paragraph 7.28 in light of the 
parties' comments. 
B. FACTUAL  BACKGROUND 
1. Paragraph 7.85  
6.19 The United States  requests a modification to the second sentence of paragraph 7.85 so as to 
add a phrase that the 2002 Farm Bill delegated to US DA the decision on how to define origin for meat 
products derived from mixed origin animals.  Mexico  objects to this suggestion because, in its view, 
this additional information is irrelevant to the content of the concerned paragraph.   
6.20 The Panel  agrees with Mexico's view and declines the United States' request. 
2. Paragraph 7.93  
6.21 Canada requests the Panel to modify the description of category D meat contained in 
paragraph 7.93 by deleting the words "born, raised, or" or to add a footnote to clarify the type of animal used to produce meat marked as Label D under the COOL measure.  The United States 
objects to Canada's request as it believes the current  language of paragraph 7.93, item (D) accurately 
reflects the COOL statute.  Further, Canada's s uggested footnote refers to the requirements of the 
2009 Final Rule (AMS), which the United States does not understand to be within the intended scope 
of this paragraph. 
6.22 The Panel declines Canada's request because paragra ph 7.93 describes relevant part of the 
COOL statute as the Unit ed States submits.  We added quotation marks in the relevant parts of WT/DS384/R 
WT/DS386/R Page 10 
 
 
  paragraph 7.93 to indicate that the descriptions for the items listed are quoted directly from the text of 
the COOL statute. 
3. Paragraph 7.94  
6.23 The United States  requests a modification to paragraph 7. 94 to more accurately reflect the 
provisions of the COOL statute and USDA's task in the rulemaking process concerning the use of four 
categories of muscle cut labels.   
6.24 Canada  and Mexico  objects to the United States' request.   
6.25 The Panel  declines the United States' request.  As Canada points out, we consider that the 
description of the 2009 Final Rule (AMS) in paragraph 7.94, in combin ation with paragraphs 7.95 to 
7.106, sufficiently explains the circumstances in which the labels can be interchangeably used. 
4. Paragraph 101  
6.26 The United States  suggests that paragraph 7.101 be modified for greater accuracy regarding 
the description of the commingling permitted under th e 2009 Final Rule (AMS) of meat derived from 
different categories.  Mexico  disagrees with this suggestion because, inter alia , the concerned 
paragraph addresses a different issue and the suggested modification is confusing.   
6.27 The Panel  rejects the United States' suggest ion because, as Mexico points out, 
paragraph 7.101 addresses a different issue, and th e United States' suggested change is already 
reflected in the chart provided in paragraph 7.104. 
5. Paragraph 7.126 and footnote 179  
6.28 Mexico requests the Panel to modify paragraph 7. 126 and add a new sentence at the end of 
footnote 179 to fully reflect Mexico's arguments on the penalties with which the COOL measure can 
be enforced.  The United States  does not object to Mexico's request, but suggests that the 
United States' position on this issue also be added. 
6.29 Taking into account the comments of Mexico and the United States, the Panel made slight 
adjustments to paragraph 7.126 and footnote 179. 
6. Paragraphs 7.127-7.131 
6.30 Mexico  requests the addition of a new paragraph describing a relevant paragraph of the 
Vilsack letter.   
6.31 Given that the requested additional paragraph is  described in paragra ph 7.182 of the Interim 
Panel Reports, the Panel declines Mexico's request.  WT/DS384/R 
 WT/DS386/R 
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  C. CLAIMS UNDER THE TBT  AGREEMENT  
1. Technical regulation 
(a) Paragraph 7.178 
6.32 Mexico  requests that the first sentence of paragraph 7.178 be modified so as to avoid stating 
that, on its face, the Vilsack letter is clearly not mandatory.  The United States  disagrees, arguing that 
the Vilsack letter explicitly describes its recommendations as voluntary.   
6.33 The Panel  rejects Mexico's request – both in light  of the US arguments and given that the 
sentence in question starts with the phrase "[o]n its face". 
(b) Paragraph 7.195 
6.34 The United States  suggests modifying paragraph 7.19 5 because the Canadian exhibits 
referenced in that paragraph merely refer to the Vilsack letter without explic itly mentioning any of the 
three specific suggestions contained in this letter.    Canada  objects to these cha nges suggested by the 
United States, noting that the exhibits in questio n show that certain industry participants have 
responded to the Vilsack letter in a way that resulte d in the rejection of Canadian-born livestock.  
Canada adds that paragraph 7.195 uses the word "might".   
6.35 In light of the arguments of the United States and Canada, the Panel  has slightly modified 
paragraph 7.195, although to a lesser exte nt than requested by the United States. 
2. Article 2.1 
(a) Introduction and legal test under Article 2.1 of the TBT Agreement – Paragraph 7.223 
6.36 The United States  suggests inserting the phrase "as a minimum" into the chapeau , to make 
sure that the three criteria of the Article 2.1 legal test are only "minimum" criteria.  Canada  and 
Mexico  disagree with this suggested modification.  Canada emphasizes that the chapeau of 
paragraph 7.223 uses the word "includes", which do es not exclude additional criteria.  Mexico adds 
that the proposed change would describe an agreement that does not  exist, for neither complainant 
agrees with the United States that the thr ee criteria are only minimum criteria.   
6.37 The Panel rejects the suggestion of the United States because the chapeau of paragraph 7.223 
uses the word "includes", and it also reproduces the key term "essential" from the quote that follows 
in the same paragraph.  Rather, the Panel has de cided to extend footnote 294 to paragraph 7.223 to 
explain that, according to the United States, "[i]n a ddition to these three 'minimum' elements, the text 
of TBT Article 2.1 requires the complaining party to establish that such [less favourable] treatment is 
in respect of the technical regulation [at issue]." 
(b) Whether the COOL measure is a tec hnical regulation – Paragraph 7.242 
6.38 The United States  suggests modifying paragraph 7.2 42 to better reflect the relevant 
arguments in paragraphs 196- 199 of the United States' first written submission.  Canada  and Mexico  
oppose this suggested modification, arguing that pa ragraph 7.242 properly summarises the arguments 
in paragraphs 196-199 of the United States' firs t written submission.  Mexico adds that the 
United States has never withdrawn this argument.   At the same time, Mexico concedes that the 
United States made an additional ar gument in its opening oral statement at the Panel's first substantive WT/DS384/R 
WT/DS386/R Page 12 
 
 
  meeting.  Accordingly, Mexico does not exclude a dding, with minor modifications, part of the text 
that the United States would insert into paragraph 7.242.   
6.39 The Panel has decided to follow largely the suggesti on of Mexico, by inserting – with minor 
modifications – part of the text suggested by the United States at the end of paragraph 7.242. 
(c) Whether imported products are accorded l ess favourable treatment than like domestic 
products 
(i) Paragraph 7.264 
6.40 Canada  points out that it has never argued that the COOL measure does not involve de jure 
discrimination.  The referenced portion of its fi rst written submission noted that the COOL measure 
"does not explicitly require" less favourable treatment of imports.  The United States  argues that the 
phrase "does not explicitly require" covers de jure  discrimination, and it adds that country of origin 
labelling may be origin-neutral.   
6.41 Although the Panel does not consider it necessary to de termine in the abstract whether 
country-of-origin labelling may be origin-neutral, it h as decided to modify paragraph 7.264, to reflect 
Canada's arguments more faithfully. 
(ii) Paragraph 7.267 
6.42 The United States  requests deleting part of the last sen tence of paragraph 7.267 and replacing 
it with language that would reflect more faithfully an  argument made by the United States at various 
points in the dispute, in particular in pa ragraph 143 of its first written submission.  Mexico  disagrees.  
It argues that the last sentence of paragraph 7.26 7 is almost identical to the relevant portion of 
paragraph 143 of the United States' first written subm ission.  Mexico requests that if any changes are 
made to paragraph 7.267, the same language as paragraph 143 of  the United States' first written 
submission should be used.   
6.43 The Panel has modified paragraph 7.267 accordingly by  keeping the original last sentence, 
and by adding a new sentence following the arguments referenced by the United States. 
(iii) Paragraph 7.276 
6.44 Mexico  requests the Panel to modify paragraph 7.276 by adding a sentence summarizing 
Mexico's response to the US argument that it is pos sible to comply with the COOL measure without 
any segregation.   
6.45 In light of the United States' si lence on this Mexican request, the Panel has decided to 
introduce the language suggested by Mexico, although only at the end of paragraph 7.276 and with 
corrected paragraph numbers in the footnote inserted at the end of the new sentence. 
(iv) Paragraph 7.290 
6.46 The United States  requests modifying paragraph 7.290 to indicate that Label A is the only 
label with no foreign element and further that Labe l D is the only label with no domestic element.  
Canada  and Mexico  object to these suggested modifications.  Canada argues that the United States 
itself recognizes that Label D does not need to list when processing steps occur in more than one 
country.  Thus, Label D could refe r to muscle cuts from livestock that are born and raised in the 
United States and thus have some domestic element, but slaughtered abroad.  As also reflected in  WT/DS384/R 
 WT/DS386/R 
 Page 13 
 
 
  paragraph 7.663 of the Interim Reports, Mexico argu es that the suggested modifications are inaccurate 
because Label D could involve some domestic elements.   
6.47 The Panel rejects the modification suggested by the United States as it would address an issue 
that is not indispensable for analysing the co mplainants' claims under Article 2.1 of the 
TBT Agreement. 
(v) Paragraph 7.299 
6.48 The United States  suggests modifying paragraph 7.299, to reflect the full extent of the 
commingling provisions and the differences betw een the 2008 Interim Rule (AMS) and 2009 Final 
Rule (AMS) described in paragraphs 7.294-7.298 of the Interim Reports.  Canada  and Mexico  
disagree with this suggested modi fication.  The complainants argue  that it is the 2009 Final Rule 
(AMS) together with the COOL statute that imposes  the requirements summarised in paragraph 7.299.  
Mexico adds that modifying the second sentence of paragraph 7.299, as suggested by the United States, would incorrectly indicate that the 2009 Final Rule (AMS) is the basis of the 
ineligibility of imported livestock for Label A, wher eas the correct basis is the 2008 Farm Bill.   
6.49 Although the Panel  agrees with the complainants, it has decided to make one minor 
modification to paragraph 7.299 in light of one of the suggestions by the United States. 
(vi) Paragraph 7.314 
6.50 The United States  requests modifying paragraph 7.314, to better reflect the US arguments on 
the Informa Report.  Canada  objects to these suggested modifications, arguing that paragraph 7.314 
is sufficiently clear.   
6.51 The Panel  has slightly modified paragraph 7.314 in light of these comments.  
(vii) Paragraph 7.329 
6.52 The United States  suggests modifying paragraph 7.329, arguing that "US sources" in the first 
sentence is used inappropriately to refer to the C ongressional Research Service, which is not part of 
the US executive branch, and to the Food Marketi ng Institute, which is a private organization.  
Canada  and Mexico  object to this suggested modification.  The complainants point out that CRS is 
part of the US government for the purposes of WTO law.  Mexico adds that a private organization 
representing three quarters of all retail food sales  in the United States is also undoubtedly a 
"US source".  Further, Mexico disagrees with the US suggestion to delete the phrase that indicates 
that the COOL measure implies segregation.   
6.53 The Panel  has modified paragraph 7.329 along the lines of the language suggested by the 
United States.  The Panel does not consider that th is modification would alte r the intended meaning of 
the relevant sentence, or of the paragraph as a whole. 
(viii) Paragraph 7.340 
6.54 The United States  suggests modifying the first two sente nces of paragraph 7.340.  According 
to the United States, some plants may not accept both domestic and imported livestock.  Further, 
muscle cuts processed in the United States are not el igible for Label D because they necessarily derive 
from animals slaughtered in the United States.  Canada  and Mexico  disagree with the first 
modification suggested by the United States.  Mexi co argues that sourcing only domestic or imported 
livestock is a form of segregation.  Canada adds that  the first sentence of paragraph 7.340 starts with WT/DS384/R 
WT/DS386/R Page 14 
 
 
  the word "[t]his", which is a reference to the preceding paragraph.  As regards the suggested 
modification to the second sentence, Mexico is silent and Canada does not disagree. 
6.55 The Panel  agrees with Canada that the first modification suggested by the United States is 
redundant.  Paragraph 7.340 starts with the word  "[t]his", which refers to the phrase "processing 
domestic and imported livestock and meat solely according to  the price and quality of the products" in 
paragraph 7.335 (emphasis added).  This is al so confirmed by the five scenarios outlined in 
paragraph 7.337.  As regards the second modificati on suggested by the United States, in the absence 
of objections by the complainants, the Panel has d ecided to delete the phrase ", but possibly four" at 
the end of the second sentence in paragraph 7.340. 
(ix) Paragraph 7.348  
6.56 The United States  requests the Panel to delete paragr aph 7.348, arguing that commingling 
may take place already before the processing stag e, e.g. at feedlots, as also illustrated by 
Exhibit US-101.  Canada  and Mexico  disagree.  The complainants argue that the commingling 
flexibility in the 2009 Final Rule (AMS) is limi ted to processing on a single production day.  
As regards Exhibit US-101, Canada argues that the a ffidavits signify that the feedlot somehow tracked 
the origin of each of its animals and ensured th at on each processing day the processor received at 
least one Mexican-born or -raised, one Canadian-born or -raised, and one US-born or -raised animal.  
Canada refers to its explanation earlier in the di spute as to how this tracking would need to be 
accomplished.  Mexico argues that the various affi davits contained in Exhibit US-101 do not provide 
the option to certify that livestock were of Mexican or Canadian origin. 
6.57 The Panel agrees with the complainants that the 20 09 Final Rule (AMS) does not provide an 
explicit legal basis for commingling before the pr ocessing stage.  At the same time, although the 
Panel is not certain what conclusions it may draw  from Exhibit US-101, the Panel considers it more 
appropriate to delete pa ragraph 7.348.  Even without paragraph 7.348, paragraph 7.349 sufficiently 
justifies the statement made in paragraph 7.347. 
(x) Paragraph 7.361 
6.58 Mexico  points out that the double square brackets marking the figure in paragraph 7.361 as 
BCI are redundant as the same figure is containe d in paragraph 51 of the executive summary of 
Mexico's first written submission, which is att ached to the Interim Reports as Annex A-2.  
The United States  and Canada  do not comment on this request by Mexico. 
6.59 The Panel has removed the double square brackets from paragraph 7.361. 
(xi) Paragraph 7.367 
6.60 The United States  suggests adding a sentence at the end of paragraph 7.367 to qualify this 
paragraph.  The United States points out that a similar qualifier ends paragraph 7.370.  
Canada  and 
Mexico  object to this suggested addition.  Canada  notes that the statements referenced in 
paragraph 7.367 were made after the 2008 Interim Fi nal Rule (AMS) entered into force.  Mexico 
argues that this qualifier might reflect the United Stat es' views but the Panel should not agree with it.   
6.61 The Panel  does not believe it is necessary to modify paragraph 7.367.  Instead, the Panel has 
deleted the final sentence qualifying paragraph 7.370.  WT/DS384/R 
 WT/DS386/R 
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  (xii) Paragraph 7.368 
6.62 The United States  suggests deleting paragraph 7.368 alt ogether, pointing out that it has never 
argued that the evidence referenced in that paragr aph was anecdotal.  The United States used the term 
"anecdotal" to describe other eviden ce submitted by the complainants.  Canada  and Mexico  disagree 
with this suggested deletion.  Mexico suggests de leting only the first sentence of paragraph 7.368 
instead.  Canada also believes that there is no need  to delete the whole paragraph.  Canada quotes the 
relevant section of the United States' second oral st atement, noting that this statement used the word 
"anecdotal" with an unqualified reference to "evi dence and economic studies that Canada and Mexico 
submit[ted]." 
6.63 The Panel notes that, as footnote 513 to the word "anecdotal" in paragraph 7.368 indicates, 
the United States used this word four times in its  opening oral statement at the second meeting.  
Further, as Canada points out, the United States us ed it rather vaguely.  At the same time, the 
complainants' exhibits referenced in paragr aph 7.368 are not specifically mentioned in the 
United States' second oral statement.  Accordingl y, the Panel has deleted the first sentence of 
paragraph 7.368 and kept th e rest of the paragraph. 
(xiii) Paragraph 7.368, footnote 515 
6.64 Mexico  asks the Panel to modify footnote 515 to paragraph 7.368 by adding a reference to 
Exhibit MEX-111, because this latter also includes the market share information marked as BCI in 
paragraph 7.368.  Canada  and the United States  do not comment on this Mexican request. 
6.65 The Panel notes that Exhibit MEX-111 includes the market share information marked as BCI 
in paragraph 7.368.  Accordingly, the Panel has modified footnote 515 as requested by Mexico.  
In addition, the Panel has removed the brack ets around the market share information in 
paragraph 7.368 as, in light of Exhibit MEX-111, it no longer qualifies as BCI. 
(xiv) Paragraph 7.371 
6.66 The United States  suggests modifying paragraph 7.371, to reach the conclusion that a photo 
of a "Product of the US, Canada and Mexico" label (Exhibit US-95) actually proves that commingling 
has been taking place.  Canada  and Mexico  disagree with the suggested  changes, arguing that the 
resulting paragraph would make the Panel reverse it s original conclusion about these photos.  Mexico 
also argues that commingling applies to muscle cuts, not to livestock.  Mexico adds that 
paragraph 7.371 addresses commingling of Label A and B meat, and the US comments bear no 
relation to this issue. 
6.67 The Panel  rejects the suggested changes.  Th e suggested changes would add detailed 
arguments to paragraph 7.371 as to why photographs  of Label B prove commingling.  The Panel does 
not consider it appropriate to m odify paragraph 7.371 to reach the opposite conclusion on the basis of 
arguments made by the United States only at the interim review stage. 
(xv) Paragraph 7.373 
6.68 The United States  references Exhibit US-101, and suggests modifying paragraph 7.373 to 
reflect that commingling is possible at the feedlot level.  Canada  and Mexico  object to this suggested 
modification.  Canada argues that the first affidavit in Exhibit US-101 only attests to the origin of livestock when marketed to a slaughter house, ra ther than, as the United States suggests, that 
commingling is occurring in either a feedlot or a slaughter house.  Mexico reiterates that the 
COOL measure does not explicitly provid e for commingling prior to processing. WT/DS384/R 
WT/DS386/R Page 16 
 
 
  6.69 The Panel  notes that paragraph 7.373 references paragraph 57 of the United States' second 
written submission.  As Canada points out, it is not clear that Exhibit US-101 proves what the United States claims in paragraph 57 of its second written submission, in particular that commingling 
is in fact taking place at the feedlot stage.  Accordi ngly, the Panel has decided to maintain the original 
text of paragraph 7.373. 
(xvi) Paragraph 7.375 
6.70 The United States  suggests deleting the last sentence of paragraph 7.375, arguing that 
commingling involving up to 14% of category A beef and up to 20% of category A pork does not correspond to a relatively minor share of commingled meat.  Mexico  points out that the last sentence 
of paragraph 7.375 uses the words of the Unite d States' response to Panel question No. 91. 
6.71 In light of Mexico's comment, the Panel has decided to keep the last sentence of 
paragraph 7.375, although with certain modificati ons to better reflect the United States' relevant 
response. 
(xvii)  Paragraph 7.375, footnote 527 
6.72 The United States  suggests deleting the reference to Exhibit US-146 from footnote 527 for 
lack of relevance.  According to the United States, this exhibit does not refer to the actual labels used 
in the market but to the US supply of meat. 
6.73 The Panel  notes that the sentence of paragraph 7.375 in question refers to arguments by the 
complainants.  Accordingly, the Panel has decide d to delete the reference to Exhibit US-146 from 
footnote 527 to paragraph 7.375. 
(xviii)  Paragraphs 7.385 and 7.415 
6.74 The United States  suggests deleting paragraphs 7.385 a nd 7.415, which address the exclusion 
of imported products from US premium beef programm es.  According to the United States, at least 
two of the exhibits referenced in paragraph 7.385 pr e-date the 2009 Final Rule (AMS).  Further, the 
United States argues that none of the other Ca nadian and Mexican exhibits referenced in 
paragraph 7.385, support the claim that Canadi an and Mexican beef are being excluded from 
US premium programmes.  Canada  and Mexico  object to these suggested deletions.  Canada argues 
that it is irrelevant that some exhibits pre- date the 2009 Final Rule (AMS) because the former 
flexibility permitted under the 2008 Interim Final Ru le (AMS) was taken away by US governmental 
action at the end of September 2008.  Canada also refers to Exhibit CDA-36, in which Tyson states 
that "[its] approach will be to use the 'U.S.' or Category A label on all of our premium beef programs 
beginning early 2009".  According to Canada, the r est of the evidence referenced in paragraph 7.385 
provides the basis for a reasonable inference th at the producers in question were excluded from 
premium US programmes. Mexico, in turn, references Exhibit MEX-33, which is a brochure by Tyson dated April 2009, and which reproduces the October 2008 Tyson letter contained in 
Exhibit CDA-36. 
6.75 In light of the complainants' comments, the Panel has
 decided to keep paragraphs 7.385 and 
7.415 unchanged. 
(xix) Paragraph 7.392 
6.76 The United States  suggests adding a sentence to the end of paragraph 7.392 to reflect that 
Canadian and Mexican livestock were discounted vis-à-vis US livestock even before the  WT/DS384/R 
 WT/DS386/R 
 Page 17 
 
 
  COOL measure.  Canada  and Mexico  disagree with the suggested new sentence.  Canada argues that 
neither of the paragraphs that would be referenced  in the new footnote supports the statement in the 
new sentence that there were consistent discounts fo r Canadian livestock "as a result of comparatively 
higher transport costs and currency fluctuations".  Th e "basis" or "spread" referenced in Canada's first 
written submission applies to both Canadian and US ca ttle.  The relevant chart in Exhibit US-30, cited 
to support the United States' position that "prices are generally lower" for Canadian cattle, is a bare 
chart with no indication of who prepared it or what  data were used.  Canada adds that both first 
written submissions refer, in releva nt part, to Canadian cattle and not  to hogs or to Mexican cattle.  
Mexico argues that this is the first time that th e United States has argued that Mexican cattle received 
lower prices than US cattle.  The relevant portions of the US and Canadian written submissions do not 
address Mexican cattle.  Mexico refers to its submi ssions arguing that the price of Mexican cattle was 
freely determined before the COOL measure.  Me xico also notes that the United States has not 
contested this argument.  Further, Mexico argues that  currency fluctuation is irrelevant as the price of 
Mexican livestock for export is negotiated in US dolla rs.  In fact, as Exhibit MEX-48 demonstrates, at 
times before the COOL measure Mexican cattle receive d higher prices than US cattle.  There is also 
no reason to consider that transportation costs are any different for Mexican cattle than for US-born 
cattle located near the US-Mexican border. 
6.77 In light of the complainants' comments, the Panel  has decided to keep paragraph 7.392 
unchanged. 
(xx) Paragraph 7.384, footnotes 556 and 557 
6.78 Mexico  argues that two Mexican Exhibits should be  added to footnote 556 as evidence for the 
statement in paragraph 7.384 that "[s]everal supp liers reported that the price difference between 
imported and domestic livestock has become larger to the detriment of the latter".  Further, Mexico 
requests that footnote 557 reference two additiona l Mexican Exhibits to support the phrase in the 
same sentence of paragraph 7.384 that "discount s for imported livestock appeared or existing ones 
increased as a result of the COOL measure". 
6.79 The Panel  notes that the sentence in question starts w ith "[s]everal suppliers reported that…";  
however, none of the four exhibits mentioned by Me xico originate from "suppliers".  Accordingly, the 
Panel has decided to reject Mexico's request for referencing these exhibits in footnotes 556 and 557. 
(d) Actual trade effects 
(i) Paragraph 7.443 
6.80 The United States  requests modifying paragraph 7.443 because numerous aspects of the 
Panel's Article 2.1 analysis preceding paragraph 7. 443 involve looking at the trade effects of the 
COOL measure.  Canada and Mexico  object to this suggested modification.  Canada argues that the 
evidence referenced by the United States is not ev idence of trade effects but of the discriminatory 
impact of the COOL measure.  Evidence that US industry changed their practices precisely because of 
the COOL measure demonstrates ch anges in the conditions of competition to the detriment of 
Canadian livestock – and not a neutral change in trade volumes that may be unconnected with the measure at issue.  Mexico argues that it is importa nt for the report to distinguish the analysis of 
competitive conditions from a detailed  analysis of actual trade effects. 
6.81 In light of the complainants' comments and the u se of the term "in detail" in paragraph 7.443, 
the Panel  has decided to keep paragraph 7.443 unchanged. WT/DS384/R 
WT/DS386/R Page 18 
 
 
  (ii) Paragraph 7.462, footnote 632 
6.82 The United States  proposes to indicate in footnote 632 that the figures of the table in 
Exhibit US-28 do not include breeding animals.  Canada  does not object to this additional phrase.   
6.83 Accordingly, the Panel  has changed footnote 632 to paragraph 7.462 as suggested by the 
United States. 
(iii) Paragraphs 7.464 and 7.468 
6.84 The United States  requests including in the analysis 2010 data which covers the first nine 
months and which would suggest that Canadian  feeder and slaughter cattle exports to the 
United States increased by 6.8% with respect to the same time period in 2009.
21  According to the 
United States this is line with data provided by Ca nada and indicating that average Canadian exports 
per month were higher in 2010 compared with 2 009.  Accordingly, the United States suggests 
modifying paragraphs 7.464 and 7.468.  Canada  opposes the proposed modifications for two reasons.  
First, conclusions based only on partial or extra polated data are speculative.  Second, drawing a 
conclusion based only on data submitted by th e United States, as does the additional sentence 
proposed at the beginning of paragra ph 7.464, would be inappropriate. 
6.85 The Panel  rejects the suggested modifications to paragraphs 7.464 and 7.468.   Reaching a 
conclusion based on partial data would involve introducing additi onal assumptions, and would render 
the data comparison less objective. 
(iv) Paragraph 7.478 
6.86 With regard to the graph in paragraph 7.478, Canada  points out that the legend does not 
clearly show a dotted line for imports of slaughter hogs, and that the reference to "Series 1" and 
"Series 2" is unclear. 
6.87 The Panel  has corrected the graph accordingly. 
(v) Paragraph 7.480, footnote 669 
6.88 The United States  argues that since the parties did not dispute the fact that BSE restrictions 
in 2005 limited Canadian exports, the word "pr obably" should be deleted from footnote 669.  Canada  
does not object to the suggested deletion. 
6.89 The Panel  has replaced "probably" with "mostly" in  footnote 669 to paragraph 7.480, to 
reflect that other factors could have also affected imports of Canadian cattle. 
(vi) Paragraphs 7.485-7.486 
6.90 The United States  suggests moving to paragraph 7.523 the discussion in 
paragraphs 7.485-7.486 on Canada's  choice of denominator in the econometric model produced by 
Professor Sumner.  Canada  does not object to this suggestion. 
6.91 The Panel notes that footnotes 704-705 to paragraph 7.523 already reference 
paragraphs 7.485-7.486.  Accord ingly, the Panel does not consider it necessary to move 
paragraphs 7.485-7.486 to paragraph 7.523. 
                                                      
21 Exhibit US-143.    WT/DS384/R 
 WT/DS386/R 
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  (vii) Paragraph 7.513 
6.92 The United States  suggests changing paragraph 7.513, arguing that the effects of the 
COOL measure did not start in 2008.  The 2009 Fina l Rule entered into force in March 2009, and 
there is no mention of the COOL measure in Exhib it US-156, which is referenced in the footnote to 
paragraph 7.513. Canada  disagrees with the suggested changes because the reference date is the end 
of September 2008, when the COOL legislation an d the 2008 Interim Final Rule (AMS) came into 
effect. 
6.93 The Panel  rejects the suggested modification.  The United States considered, in its own 
econometric study, September 2008 as the starting date  for the COOL measure.  In addition, the 
United States never raised this issue when  criticizing the Sumner Econometric Study. 
(viii) Paragraph 7.514 
6.94 The United States  suggests using the word "attempt" inst ead of "are able" in paragraph 7.514 
to define the objective of econometric studies.  Ac cording to the United States, econometric studies, 
such as the Sumner Econometric Study, frequently fa il to isolate and quantify the factors at play.  
Canada  opposes this change arguing that well-d esigned econometric studies, like the Sumner 
Econometric Study, are able to isolate and quantify the various factors. 
6.95 The Panel notes that  statistics tests may be used to assess whether an econometric model is 
flawed.  Accordingly, the Panel rejects the change to paragraph 7.514 suggested by the United States. 
(ix) Paragraph 7.517 
6.96 The United States  suggests modifying paragraph 7.517 to make clear that, unlike the 
Sumner Econometric Study, the USDA Econometric Study did not analyse the hog market.  
Canada  recognizes that the USDA Econometric Study did not cover the hog market.  
However, Canada disagrees with the change suggest ed by the United States, which could imply that 
two econometric studies had been undertaken:  one fo r cattle and another one for hogs.  In Canada's 
view, any modification to paragra ph 7.517 should reflect that Ca nada submitted only one econometric 
study, i.e. the Sumner Econometric Study. 
6.97 The Panel has modified paragraph 7.517 in line with both parties' requests. 
(x) Paragraph 7.522 
6.98 The United States  suggests modifying paragraph 7.522 to reflect that there was a 
COOL impact on the price effect only for fed cattle but not for all livestock.  Canada  opposes the 
additional wording on the ground that the current para graph correctly reflects that none of the parties 
submitted evidence suggesting that there was no COOL impact on the price basis for feeder cattle or 
hogs. 
6.99 The Panel has modified paragraph 7.522 to clarify its language, but only to the extent that the 
changes do not involve factual errors  or unsubstantiated conclusions. 
(xi) Paragraph 7.523 
6.100  The United States  suggests modifying paragraph 7.523 to reflect US concerns with Canada's 
econometric models.  In particular, the United Stat es questions whether it is appropriate to base a 
legal analysis under Article 2.1 of the TBT Agre ement on the use of an econometric study that WT/DS384/R 
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  purports to show trade effects.  The United States also wonders whether a reduced form model, such 
as Exhibit CDA-152, properly captures price and export effects in a highly complex market like the North American livestock market.  Canada  disagrees with the suggested  changes.  Canada argues 
inter alia that the objective of the Sumner Econometric Stud y is to assess the differential effect of the 
COOL measure and not its "trade effect". 
6.101  The Panel has slightly modified paragraph 7.523 in light of the parties' comments. 
(xii) Paragraph 7.530 
6.102  The United States suggests deleting the last sentence of paragraph 7.530.  The United States 
argues that it never proposed that Canada should use overall trade in agricultural commodities as a 
(continuous) measure of economic recession.  Canada  disagrees with this suggested deletion, 
pointing out that the United States did mention the u se of overall trade in agricultural commodities in 
its comments on Canada's response to the Panel's qu estions following the second substantive meeting.  
Canada suggests including a footnote at the end of  the paragraph with the proper reference. 
6.103  The Panel has inserted such a footnote into paragraph 7.530, and kept the last sentence of this 
paragraph as is. 
(xiii) Paragraph 7.532 
6.104  The United States suggests  modifying paragraph 7.532, to elaborate on its criticisms of the 
Sumner Econometric Study in line with  its comment on paragraph 7.523.  Canada  disagrees with the 
suggested changes for the same reasons as the ones it raised in the context of paragraph 7.523. 
6.105  The Panel  has added a reference to paragraph 7.523 in footnote 717. 
(xiv) Paragraph 7.539 
6.106  The United States suggests changing a word in para graph 7.539 because a reduced form 
model is obtained from a system of equations by "rewriting", not "solvi ng" the system using algebra.  
Canada  disagrees with the United States, and believes that the term "rewritten" would be less 
accurate than "solved". 
6.107  The Panel considers that, in the circumstances of the di spute, it is more appropriate to leave 
paragraph 7.539 unchanged. 
(xv) Paragraph 7.548 
6.108  The United States  suggests modifying the Panel's analysis of the econometric studies as 
regards the findings of the USDA Econometric Study.  In particular, the United States suggests dropping the last sentence of pa ragraph 7.548, which explains th at potential multicollinearity calls 
into question the validity of certain findings of the USDA Econometric Study.   Canada  disagrees 
with the proposed changes, arguing that th ese would make the paragraph less accurate. 
6.109  The Panel has slightly modified, but has not deleted, the last sentence of paragraph 7.548.  WT/DS384/R 
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  3. Article 2.2  
(a) Objective pursued by the United States through the COOL measure: paragraphs 7.593, 7.624, 
7.625, and 7.676  
6.110  The United States  submits that the objective pursued through the COOL measure, as 
identified by the Panel in its Interim Report, h as two aspects – providing as much information about 
origin as possible and reducing compliance costs.  A ccording to the United States, it did clarify these 
two aspects of the objective in the panel proceedings.22  The United States therefore requests that both 
of these aspects of the objective be  reflected in the Panel Report in order to accurately portray the 
United States' position throughout the dispute.  Speci fically, the United States suggests that the Panel 
add the fact that the United States took into account  the reduction of compliance costs for the market 
participants as part of the objectiv e in the above-mentioned paragraphs. 
6.111  Canada  disagrees with the changes proposed by th e United States.  Canada asserts that the 
United States repeatedly argued throughout the pa nel proceedings that its objective for purposes of 
Article 2.2 of the TBT Agreem ent was consumer information.23  The United States, argues Canada, 
never referenced an objective related to costs on dom estic industry participants.  As a result, Canada 
was never in a position to address whether such an objective was legitimate under Article 2.2.  Canada 
also points out that although the United States stated  that the costs of compliance were taken into 
account "in deciding how to fulfil that objective", it failed to state that those costs of compliance 
formed part of the objective itself.   
6.112  Mexico  also objects to the United States' proposal.  Mexico argues that the consideration of 
reducing compliance costs on market participants  is only a way in which the United States 
purportedly intended to achieve the objective, but was not part of the objective itself.  In Mexico's 
view, the United States is confusing the objective of the measure (i.e. providing as much clear and accurate origin information as possible to consumers)  with the implementation of that measure (i.e. 
reduced compliance costs). 
6.113  The Panel  rejects the United States' request fo r the following reasons.  Based on the 
United States' arguments in the panel proceedings, the Panel decided that the objective as identified 
by the United States was "to provide consumer information on origin".
24  The Panel was not presented 
with the argument from the United States that the reduction of compliance costs for market 
participants also formed part of the objective pursued by the United States through the COOL measure.  As Mexico points out, the United States submitted that reducing compliance costs 
was one of the factors that it considered in implementing  the COOL measure to achieve the objective 
of providing consumer information on origin.
25  Reducing compliance costs therefore cannot form 
part of the objective itself. 
                                                      
22 The United States refers to the following parts of its submissions:  United States' responses to Panel 
question Nos. 24 (para. 43) 14 2(a) (para. 98); first written submission, paras, 2, 7. 
23 Canada refers to the following parts of the United States' submissions:  United States' first written 
submission, heading 1, page 57, and para. 211; oral statement at the first substantive meeting, para. 37; second 
written submission, heading C, page 47, and para. 118; oral statement at the second substantive meeting, 
heading B, page 12, and para. 40.  (Canada's comments on the United States' comments on Interim Panel 
Report, para. 40) 
24 See paragraphs 7.615-7.621. 
25 For example, the United States' argument relating to the reduction of compliance costs is included in 
paragraph 7.669 as part of the summary of the United States' argument as well as being addressed in the context 
of the Panel's analysis in paragraph 7.716. WT/DS384/R 
WT/DS386/R Page 22 
 
 
  (b) Legal interpretative approach under Artic le 2.2 – paragraphs 7.673 and 7.674 
6.114  The United States  submits that a discussion of the Unite d States' position with regard to the 
relationship between Article 2.2 of the TBT Agreement and Article XX of the GATT 1994 should 
reflect its argument and evidence submitted in support of its position.  The United States reiterates its 
arguments put forward in the panel proceedings th at the Panel should apply the legal interpretative 
approach under Article 5.6 of the SPS Agreement, but not that of Article XX of the GATT 1994, to 
Article 2.2 of the TBT Agreement.  The United States suggests that the Panel modify paragraphs 7.673 and 7. 674, and ad d a new footnote to paragraph 7.673. 
6.115  Canada  and Mexico  do not consider it necessary to include the additional detail as suggested 
by the United States in paragraph 7.673, including  the addition of a new footnote.  Canada and 
Mexico submit that the paragraph accurately  summarizes the United States' position. 
6.116  The Panel  considers that the current texts in pa ragraphs 7.673 and 7. 674 and footnote 880 
accurately summarize the United States' position.  To further clarify the United States' position 
however, we made slight adjustments to the text s of the concerned paragr aphs and moved footnote 
880 to the end of the first sentence at paragraph 7.6 73.  We also added a footnote to paragraph 7.675. 
D. T
YPOGRAPHICAL ERRORS AND CLERICAL OBSERVATIONS  
6.117  The Panel has worked from the original version of the Interim Panel Reports.  Further, as 
noted above, the Panel has incorporated all other comments by the parties on typographical errors in 
the Interim Panel Reports and has modified th e Reports to the extent it deemed necessary. 
VII. FINDINGS 
A. OVERVIEW OF THE MATTERS BEFORE THE PANEL  
7.1 In this dispute, Canada and Mexico advan ce claims against the United States' measures 
governing the country of origin labelling ("COOL") requirements with respect to meat products.  The 
complainants claim that the measures are inc onsistent with Articles 2.1 and 2.2 of the 
TBT Agreement, and Articles III:4 and X:3(a) of  the GATT 1994.  The complainants have also 
advanced a non-violation claim under Ar ticle XXIII:1(b) of the GATT 1994. 
7.2 The complainants argue that the measures accord imported liv estock treatment less favourable 
than that accorded to like domestic  livestock inconsistently with Artic le 2.1 of the TBT Agreement, as 
well as Article III:4 of the GATT 1994.  The complainan ts assert that this is because complying with 
the COOL requirements results in higher segregati on costs for imported livestock, which in turn 
affects the competitive conditions of imported livestock in the market. 
7.3 Furthermore, the complainants claim that th e COOL requirements are inconsistent with 
Article 2.2 of the TBT Agreement.  According to the complainants, the true objective of the 
COOL requirements is to protect domestic industry, not to provide consumer information on origin as 
stated by the United States, and that, in the circum stances of this dispute, the provision of consumer 
information is not legitimate.  The complainants stat e that there are less trade restrictive alternatives 
and, in any event, the COOL requirements do not fulfil the objective of providing consumer 
information on origin because labels under the CO OL requirements convey confusing and inaccurate 
information on the origin of meat products. 
7.4 Finally, the complainants allege that the Un ited States administered the COOL requirements 
in a manner inconsistent with Article X:3(a) of th e GATT 1994.  Canada claims that the United States  WT/DS384/R 
 WT/DS386/R 
 Page 23 
 
 
  administered the COOL requirements in an unreasonable manner by issuing the Vilsack letter.  
Mexico submits that an unreasonable, non-un iform, and partial administration of the 
COOL requirements is shown by in the shifts in the guidance provided by USDA on the COOL requirements, as reflected in the associat ed guidelines issued by USDA, non-public pressure 
by the US government on individual companies, and the Vilsack letter. 
7.5 Separately, Mexico presents claims under Articl es 2.4 and 12 of the TBT Agreement.  Mexico 
submits that the COOL measure is inconsistent w ith Article 2.4 because the United States failed to 
base its regulation on the General Standard for the Labelling of Prepackaged Foods ("CODEX-STAN 
1-1985"), which Mexico claims is an international st andard that is an effective and appropriate means 
for the fulfilment of the legitimate objective pursued  by the United States.  Mexico also argues that 
the COOL measure is inconsistent with Articles 12.1 and 12.3 of the TBT Agreement.  It claims that 
the United States did not take into account Mexico's special needs as a developing country when preparing and applying the COOL measure, w ith a view to ensuring that no unnecessary obstacles 
were created to Mexico's cattle  exports to the United States. 
B. P
RELIMINARY MATTERS  
1. Measures at issue 
(a) Introduction 
7.6 The parties agreed to the standard of review by the Panel pursuant to Article 7.1 of the DSU.26  
Accordingly, our terms of reference are defined by the complainants' re spective requests for the 
establishment of a panel under Article 6.2 of the DSU.  Canada27 and Mexico28 identified in their 
respective panel requests a number of measures alle gedly pertaining to the mandatory country of 
origin labelling requirements imposed by the United States.29 
7.7 Whilst not challenging the adequacy of the comp lainants' panel requests under Article 6.2, the 
United States questions the necessity for the Panel to examine expired measures.  The parties also 
dispute how the Panel should treat the measures at  issue in examining the complainants' claims, 
namely whether to treat them collectively as a single measure or separately as individual measures. 
7.8 In light of the issues raised by the parties as well as the obligation imposed on us to make an 
objective assessment of the parties' claims based on the properly identified measures, we will examine in this section the following three matters: 
 Which measures fall properly within the scope of our terms of reference; 
 Whether we should examine the measures that we re no longer in effect at the time of 
the Panel's establishment;  and 
                                                      
26 See para. 1.6. 
27 Canada defined the measures identified in its panel request as the provisions comprising the 
"COOL measure". 
28 Mexico refers to the measures identified in its pa nel request as the COOL measures (in plural).  In 
subsequent written submissions, however, Mexico has taken the same position as Canada and argues that these 
instruments consistent one single "COOL measure". 
29 See paras. 2.1-2.3.  WT/DS384/R 
WT/DS386/R Page 24 
 
 
   How we should treat the measures at issu e in examining the complainants' claims, 
namely, whether to treat them collectively as a single measure or separately as individual measures. 
(b) Measures that fall within the scope of the Panel's terms of reference 
7.9 We have already described the measures at issu e as identified by the complainants in their 
panel requests.
30  In the course of the Panel proceedings, the complainants further elaborated on the 
measures that they challenge in this dispute.31  The following are the "provisions"32 that both Canada 
and Mexico claim constitute the "COOL measure": 
 the Agricultural Marketing Act of 1946, as amended by the 2002 Farm Bill and 2008 
Farm Bill; 
 the Interim Final Rule33 (AMS34); 
 the 2009 Final Rule (AMS);  and 
 the Vilsack letter. 
7.10 In addition to the above listed "provisions",  Mexico refers to three other measures: 
 the Interim Final Rule (FSIS)35; 
 the 2009 Final Rule (FSIS)36;  and 
 any further implementing guidance, directives or policy announcements.37 
7.11 As the measures identified above consist of, inter alia , statutory and regulatory instruments 
pertaining to the mandatory country of origin labe lling requirements, we will first briefly review the 
legislative and rulemaking process in the United States. 
7.12 Under the United States' legal system, once a bill passes through Congress and becomes law, 
it is codified into the United States Code ("U.S.C.").  An enacted statute then forms the legal authority 
                                                      
30 See paras. 2.1-2.3. 
31 Canada's and Mexico's responses to Panel question Nos. 1 and 2. 
32 As described in Section II above, Canada used the term "provisions" to refer to various measures 
that, in its view, collectively constitute one single COOL measure. 
33 See para. 7.84 for an explanation of the interim final rule in the context of the US legal system. 
34 The Agricultural Marketing Service ("AMS") was vested with authority over the COOL rulemaking 
process, complementing the work that the USDA's Food Safety and Inspection Service ("FSIS") had been 
performing in the past.  The United States explains that the "FSIS ultimately discontinued its independent 
rulemaking after Congress passed the 2002 Farm Bill  and the AMS took over primary responsibility for 
determining when meat covered commodities could be designated as "U.S. origin", or some derivative thereof".  
However, the FSIS still has the "authority  within the US government for en suring that meat food products are 
safe, wholesome and accurately labelled". (Unite d States' first written submission, para. 31). 
35 In its response to Panel question No. 2, Canada states that it did not include the Interim Final Rule 
and the Final Rule that were adopted by the FSIS as part of the COOL measure. 
36 Canada clarified that it did not include the FSIS Fi nal Rule as part of the "COOL measure" (Canada's 
responses to Panel question Nos. 1 and 2). 
37 Mexico's first written submission, paras. 9, 29, 33 and 34;  response to Panel question No. 1;  and 
second written submission, paras. 20 and 42.  WT/DS384/R 
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 Page 25 
 
 
  and framework for a given subject matter.  Subs equently, in order for the executive branch to 
implement the concerned statute, relevant govern ment departments or ag encies undertake, where 
necessary, the rulemaking process to  introduce regulations.  These regulations are codified into the 
Code of Federal Regulations ("C.F.R."). 
7.13 The statutory provisions enacted through the 2002 Farm Bill and 2008 Farm  Bill in relation to 
the COOL requirements were inserted into  the Agricultural Marketing Act of 1946.38  In other words, 
the Farm Bills introduced the COOL requirements in Congress, subsequently becoming part of the US statutes, codified in 7 U.S.C. 1621 et seq .  For ease of reference, in our reports we will refer to the 
Agricultural Marketing Act of 1946, as amended by the 2002 Farm Bill and 2008 Farm Bill, as the 
"COOL statute". 
7.14 Further, the regulatory provisions implementi ng the COOL statute were introduced by the 
2009 Final Rule (AMS).  Most of the provisions in  the 2009 Final Rule (AMS) were carried forward 
from those in the Interim Final Rule (AMS).
39  These regulatory provisions are codified in 7 C.F.R. 
Parts 60 and 65.  Our reference in  these reports to the implementi ng regulations in relation to the 
COOL requirements means the 2009 Final Rule (AMS). 
7.15 To determine the scope of our terms of reference, we address, in turn, the measures identified 
by both Canada and Mexico and the three a dditional measures referred to only by Mexico.40 
7.16 Both Canada and Mexico presented the COOL statute, the 2009 Final Rule (AMS), the 
Interim Final Rule (AMS) and the Vilsack letter as th e measures at issue.  The complainants properly 
identified these measures in their panel requests within the meaning of Article 6.2 of the DSU.  In this 
connection, we note that the parties have not cont ested that all these measures, including the Vilsack 
letter, qualify as measures subject to WTO dispute settlement.  The Appellate Body stated that, "in 
principle, any act or omission attributable to a WTO Member can be a measure of that Member for purposes of dispute settlement proceedings.  The acts or omissions that are so attributable are, in the 
usual case, the acts or omissions of the organs of the state, including tho se of the executive branch".
41 
7.17 Accordingly, we conclude that the COOL stat ute, the 2009 Final Rule, the Interim Final Rule 
(AMS) and the Vilsack letter are properly w ithin the Panel's terms of reference. 
                                                      
38 Mexico's first written submission, para. 10;  United States' first written submission, para. 33.  Mexico 
further states that the Agricultural Marketing Act of 1946 contains provisions regulating the system for 
distributing and marketing agricultural products in the United States. 
39 The 2009 Final Rule modified certain provisio ns of the Interim Final Rule (AMS).  See 
paras. 7.90-7.100 for more detailed discussion in this regard. 
40 See paras. 7.9-7.10. 
41 Appellate Body Report, US – Corrosion-Resistant Steel Sunset Review , para. 81.  The panel in US – 
Export Restraints also stated, 
"[t]he Appellate Body [in Guatemala – Cement I ] recalled the GATT Panel in Japan – 
Semiconductors  that measures could consist of both binding and non-binding acts, including 
non-binding administrative guidance by a government.  We agree, and in particular find no 
reason or basis to rule in the abstract that a given type of instrument or action cannot be 
subject of claims in WTO dispute settlement.  This of course does not mean, however, that all measures are capable by themselves of giving rise to violations of WTO obligations." 
(Panel Report, US – Export Restraints , paras. 8.80-8.81 (original footnote omitted), also referring to the 
Appellate Body Report, Guatemala – Cement I , footnote 47) 
We observe that this is also consistent with the prin ciple in the relevant provisions of the International 
Law Commission Articles on Responsibility of States for Internationally Wrongful Acts, as pointed out by the 
European Union, a third party participant in this dispute (European Union's third-party oral statement at the 
second substantive meeting of the Panel, paras. 3-4; parties' responses to Panel question No. 97).  See also 
response of Canada and Mexico to Panel question No. 98. WT/DS384/R 
WT/DS386/R Page 26 
 
 
  7.18 Turning now to the additional measures challe nged only by Mexico (i.e. the Interim Final 
Rule (FSIS), the 2009 Final Rule (FSIS), and any fu rther implementing guidance, directives or policy 
announcements), we first find the Interim Final Rule (FSIS)42 to be properly within the scope of our 
terms of reference as it is specifically identified in Mexico's panel request. 
7.19 Mexico has also invoked the 2009 Final Rule (FSIS).  Mexico, however, did not identify the 
2009 Final Rule (FSIS) in its panel request43, although Mexico mentions  it in its first written 
submission as well as in its res ponse to a question from the Panel.44  Through the 2009 Final Rule 
(FSIS), the FSIS "[affirmed], without change, its interim final rule requiring a country of origin 
statement on the label of any meat or poultry product that is a covered commodity, as defined by the 
[AMS], and that is to be sold by a retailer …"45  Mexico submitted its request for the establishment of 
a panel on 9 October 2009.  As of the date of Mexico's panel requ est, therefore, the 2009 Final Rule 
(FSIS) had already been enacted (i.e. 15 January 2009 ).  The 2009 Final Rule (FSIS) is therefore not a 
measure that was enacted subsequent to the date of  Mexico's request for the establishment of a panel, 
which may have made it fall within the scope of the Panel's terms of refe rence should it be found, 
inter alia, sufficiently connected to the measures at issue identified in the panel request.  We conclude 
that the 2009 Final Rule (FSIS) falls outside the scope of the Panel's terms of reference.46 
7.20 In addition, Mexico identified "any furthe r implementing guidance, directives or policy 
announcements" in its panel request.47 
7.21 The table below summarizes the measures at issu e that fall within the scope of the Panel's 
terms of reference for the disputes brought  by Canada and Mexico, respectively: 
CANADA MEXICO 
THE COOL STATUTE  
THE 2009  FINAL RULE (AMS) 
THE VILSACK LETTER  
THE INTERIM FINAL RULE (AMS) 
 T HE INTERIM FINAL RULE (FSIS) 
 A NY FURTHER IMPLEMENTING GUIDANCE , 
DIRECTIVES OR POLICY ANNOUNCEMENTS  
 
7.22 Among these measures, the Interim Final Rule (A MS) and the Interim Final Rule (FSIS) had 
already expired at the time of the Panel's establishmen t.  As explained in more detail below, the fact 
that a measure ceased to exist or expired at the time of the establishment of a panel does not a priori  
make that measure fall outside the scope of the pane l's terms of reference, insofar as the measure is 
specifically identified within the meaning of Artic le 6.2 of the DSU.  Nonetheless, the question 
                                                      
42 Although Canada also identified the Interim Final Rule (FSIS) in its panel request, it subsequently 
submits that it "did not include the Interim Final Rule and the Final Rule that were adopted by the FSIS as part 
of the COOL measure" in its response to Panel question No . 2.  We understand this statement to mean that it has 
decided not to pursue the Interim Final Rule (FSIS) as part of the measures at issue in this proceeding regardless 
of the fact that it was identified in its panel request. 
43 WT/DS386/7 and WT/DS386/7/Corr.1. 
44 Mexico's first written submission, para. 9, referri ng to Exhibit MEX-6; response to Panel question 
No. 1. 
45 Exhibit MEX-6. 
46 We note that the United States has not objected to  Mexico's addressing the 2009 Final Rule (FSIS) in 
its submissions. This does not, however, cure the defect in Mexico's panel request that the concerned instrument 
was not identified as required by Article 6.2 of the DSU. 
47 Mexico's first written submission, paras. 9, 29, 33 and 34; response to Panel question No. 1; and 
second written submission, paras. 20 and 42.  WT/DS384/R 
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 Page 27 
 
 
  remains whether it is even necessary for us to exam ine the expired measures in pursuing the objective 
of bringing prompt resolution to the current disput e.  We consider this question in the following 
section. 
(c) Measures that were no longer in force at the tim e of the establishment of the Panel – Interim 
Final Rule (AMS) and Interim Final Rule (FSIS)48 
(i) Main arguments of the parties 
7.23 The United States  argues that both the Interim Final Ru le (AMS) and the Interim Final Rule 
(FSIS) have no effect in US law because they we re superseded by the 2009 Final Rule (AMS) on 
16 March 2009 and the 2009 Final Rule (FSIS) on 20 March 2009, respectively, and did not exist at 
the time of the establishment of the Panel.49 
7.24 The United States asserts that an examination of the Interim Final Rule (AMS), which did not 
exist at the time of the establishment of the Panel,  would not help achieve a satisfactory settlement of 
the matter at issue.50  The Interim Final Rule (AMS) does not provide evidence of the administration 
of the 2009 Final Rule (AMS) because of the subs tantive difference between these two instruments.  
Further, the United States subm its that the differenc es between the 2009 Final Rule (AMS) and the 
Interim Final Rule (AMS) are significant.  Among these differences, the United States highlights the flexibility provided under the 2009 Final Rule (AMS)
51 with regard to the use of B and C labels that 
did not exist under the Interim Final Rule (AMS):  (i ) a C label can be used on meat derived from a B 
animal in any circumstances;  and (ii) B and C labels  can be used when meat pertaining to category A, 
B, or C is commingled within a single production day in any combination.52  The United States, 
however, agrees that the 2009 Final Rule (AMS) do es not allow the use of B labels on category A 
meat when it is not commingled.53 
7.25 Regarding the Interim Final Rule (FSIS), the Un ited States argues that Mexico has failed to 
make a prima facie  case.54  The United States also reiterates that the Interim Final Rule (FSIS) is no 
longer in force. 
7.26 Canada agrees that the Interim Final Rule (AMS) expired on 15 March 2009.55  Canada 
underlines, however, that the contents of the Inte rim Final Rule (AMS) were carried forward, with 
minor modifications, into the 2009 Final Rule (AMS ), which became effective on 16 March 2009.  In 
Canada's view, both the Interim Final Rule (AMS ) and the 2009 Final Rule (AMS) implement the 
                                                      
48 The Interim Final Rule (FSIS) is relevant only for the dispute brought by Mexico. 
49 United States' first written submission, paras. 46 and 69-71. 
50 United States' second written submission, paras. 23-25. 
51 See Section VII.C.1(b)(i). 
52 Exhibit CDA-5, p. 2706.  The United States also refers to other differences between the 2009 Final 
Rule (AMS) and the Interim Final Rule (AMS) in para. 25 of its second written submission (footnotes 34-38) 
(Exhibit CDA-5, p. 2659-2660). 
53 The United States explains in footnote 33 in its second written submission that this change was made 
at the request of consumer groups, among other interested parties, who believed that meat derived from animals 
born, raised, and slaughtered in the United States should largely be labelled as US-origin. 
54 Canada clarified that it did not include either the 2009 Final Rule (FSIS) or the Interim Final Rule 
(FSIS) as part of the measures at issue. 
As for Mexico's claim in respect of the 2009 Final Rule (FSIS), we concluded above that it is not 
within the scope of our review in this dispute as that  specific instrument was not identified in Mexico's panel 
request. 
55 Canada's response to Panel question No. 2. WT/DS384/R 
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  COOL statute.
56  According to Canada, as the overall effect  of the Interim Final Rule (AMS) was the 
same as that of the 2009 Final Rule (AMS), the Pane l must take into account the effects of the Interim 
Final Rule (AMS) although it has expired.57 
7.27 Mexico also agrees that both the Interim Final Rule (AMS) and the Interim Final Rule (FSIS) 
have been superseded by the 2009 Final Rule (AMS ) and the 2009 Final Rule (FSIS) respectively and 
therefore have no legal effect under US law.58  However, for the purposes of its challenge, Mexico 
submits that the Interim Final Rules are evidence of the implementation, operation and administration of the COOL measure in a manner that unjustifiabl y discriminates against and restricts imports of 
Mexican cattle into the United States.  Specifically, Mexico refers to the decrease of Mexican feeder 
cattle imports into the United States
59 and the increase in the average price differential between 
Mexican and like US cattle after the issu ance of the Interim Final Rule (AMS).60  Mexico also points 
to announcements that were made at the end of 2008 concerning the reduction in plants accepting 
Mexican cattle.61 
(ii) Analysis by the Panel 
Interim Final Rule (AMS) 
7.28 We recall that the Interim Final Rule (AMS) wa s specifically identified in the complainants' 
panel requests and thus falls within the scope of the Panel's terms of reference.62  All parties also 
agree that the Interim Final Rule (AMS) had expire d at the time of the establishment of the Panel and 
currently has no legal effect under US law.63  The complainants are not requesting us to make a 
finding or recommendation with regard to the Interi m Final Rule (AMS).  The contention between the 
complainants and the United States concerning this instrument is, therefore, whether the Panel should 
even examine  it for the purpose of this dispute. 
                                                      
56 Canada agrees that compared to the Interim Fina l Rule (AMS), the 2009 Final Rule (AMS) provides 
more flexibility with respect to the use of Label B on meat from animals imported directly for slaughter and 
commingled with US origin animals or mixed origin animals during a single production day (Canada's first 
written submission, para. 26; response to Panel question No. 2).  At the same time, however, the 2009 Final 
Rule (AMS) removed the flexibility of labelling products from US origin animals as Label B, unless there is 
commingling with non-US origin animals during a single production day. 
57 Canada's response to Panel question No. 2. 
58 Mexico's response to Panel question No. 2.  Mexico  states that it "recognizes  that these instruments 
are not currently nullifying or impairing benefits accrui ng to Mexico under the WTO Agreements since they 
have been superseded by the 2009 Final Rules". 
59 Mexico's first written submission, para. 163;  response to Panel question No. 2, citing to the 
24 February 2009 report by the Congressional Research Service (Exhibit MEX-53). 
60 Mexico's first written submission, para. 164;  response to Panel question No. 2, citing to USDA price 
data contained in Exhibit MEX-47 and summarized in Exhibit MEX-48. 
61 Mexico's first written submission, para. 157; response to Panel question No. 2, citing to Tyson letter 
of 24 December 2008 (E xhibit MEX-42) and Affi davit (Exhibit MEX-37). 
62 We recall the Appellate Body's clarification in US – Upland Cotton  that the text of Article 6.2 does 
not preclude a Member from making representations with  respect to measures whose legislative basis has 
expired.  The Appellate Body further stated that the fact that a measure has expired is not dispositive of the 
preliminary question of whether a panel can address claims  in respect of that meas ure although it may affect 
whether, and if so, what recommendation a panel should make in respect of such a measure. (Appellate Body 
Report, US – Upland Cotton , para. 270)  See also the Panel Report, Thailand – Cigarettes (Philippines) , 
paras. 7.42-7.43. 
63 Canada's response to Panel question No. 2;  Mexico's response to Panel question No. 2;  
United States' first written submission, paras. 13,46, 59.  WT/DS384/R 
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  7.29 Specifically, the complainants take the position that the Panel should consider the Interim 
Final Rule (AMS) regardless of its legal status under US law.  In support of its position, Canada 
points to the similarities between the Interim Fina l Rule (AMS) and the 2009 Final Rule (AMS) in 
substance as well as in their overall effect:  both sets of regulations implement the COOL legislation.  
Mexico alleges that the effect it had on importe d livestock during the implementation period (i.e. 
September 2008–March 2009) forms evidence of its claim in respect of the COOL requirements.64 
7.30 The fact that a measure has already expired or ceased to exist at the time of a panel's 
establishment does not make it fall a priori  outside the scope of a panel's terms of reference.65  Insofar 
as a measure is clearly identified in the complainan t's panel request in accordance with Article 6.2 of 
the DSU, such a measure falls within the scope of the panel's terms of reference.  It is another matter, 
however, whether the panel should examine a measure that, although procedurally properly before it, 
had already expired at the time of the panel's estab lishment.  A panel is called upon to consider the 
nature of the dispute before it to determine whet her an examination of such a measure, despite its 
expired status, would still be necessary to assist the r esolution of the dispute.  We also find relevant 
the Appellate Body's clarification in EC – Selected Customs Matters that "evidence in support of a 
claim challenging measures that are within a panel's terms of reference may pre-date or post-date the 
establishment of the panel"66 and that "a panel is not precluded from assessing a piece of evidence for 
the mere reason that it pre-dates or post-dates its establishment".67 
7.31 In these circumstances and given the legal a nd substantive connection between the Interim 
Final Rule (AMS) and the 2009 Final Rule (AMS)68, as explained in paragra ph 7.61, we will take into 
consideration the Interim Final Rule (AMS) in exam ining the measures at issue that are currently in 
force. 
7.32 We note the United States' argument that the Interim Final Rule (AMS) does not provide 
evidence of the administration of the 2009 Final Ru le (AMS) because of wh at the United States 
alleges to be significant substantive differences be tween these two instruments.  In our view, the 
substantive differences between these two instrument s do not necessarily affect the conclusion that the 
Interim Final Rule (AMS) can be examined in the context of the complainants' arguments in respect 
of the instruments that are curren tly in force.  Particularly, the evolution of the COOL implementing 
regulations, shown through the rulemaking process,  can assist us in understanding the overall 
operation of the COOL requirements.  We will ther efore take the Interim Final Rule (AMS) into 
consideration in our examination of the instruments that are currently in force, bearing in mind its 
substantive similarities to, as well as diffe rences from, the 2009 Final Rule (AMS). 
The Interim Final Rule (FSIS) 
7.33 Our considerations above with respect to the Interim Final Rule (AMS) apply equally to the 
Interim Final Rule (FSIS).  Therefore, we will cons ider the Interim Final Rule (FSIS), to the extent 
appropriate, in our examination of the COOL statute, the 2009 Final Rule (AMS), and the 
Vilsack letter. 
                                                      
64 Mexico's response to Panel question No. 2. 
65 See the Appellate Body Reports, US – Upland Cotton , paras. 271-272 and EC – Selected Customs 
Matters , paras. 134-135. 
66 Appellate Body Report, EC – Selected Customs Matters , para. 188. 
67 Appellate Body Report, EC – Selected Customs Matters , para. 188. 
68 The summary part of the 2009 Final Rule (AMS) explains the nature of the Interim Final Rule 
(AMS) as follows: "[i]n order to meet the September 30, 2008, implementation date [the date designated under 
the COOL statute] and to provide the newly affected industries the opportunity to provide comments prior to 
issuing a final rule, on August 1, 2008, the Department published an interim final rule with a request for 
comments for all of the covered commodities…" (74 FR 2658, Exhibits CDA-5 and MEX-7) WT/DS384/R 
WT/DS386/R Page 30 
 
 
  Conclusion 
7.34 In light of the above considerations, among the five categories of measures that are within the 
scope of the Panel's terms of re ference, namely the COOL statut e, the 2009 Final Rule (AMS), the 
Vilsack letter, the Interim Final Rule (AMS), and the Interim Final Rule (FSIS), we will examine and 
make findings and recommendations with respect to the first three, namely the COOL statute, the 
2009 Final Rule (AMS) and the Vils ack letter.  We will not make findings or recommendations on the 
Interim Final Rule (AMS) and the Interim Final Rule  (FSIS).  However, we will consider them, where 
relevant, in the context of our examination of the pa rties' claims with regard to the measures that are 
currently in force.  In the factua l circumstances of this dispute, we do not consider that conducting a 
separate examination of these interim measures, or  making a finding or recommendation with respect 
to such measures, would contribute to resolving the current dispute between the parties. 
(d) Treatment of the measures at issue – as a si ngle measure or as several distinct measures 
(i) Main arguments of the parties 
7.35 Canada and Mexico argue that the Panel must cons ider the instruments at issue that fall within 
the Panel's terms of reference as a single measure consisting of various components, rather than as a 
series of independent measures.69 
7.36 Canada  submits that, while the COOL statute, th e 2009 Final Rule (AMS), and the Vilsack 
letter are separate instruments in US law that  does not prevent the Panel from considering the 
different components, which operate in concer t to achieve a common policy objective of the 
United States, as one measure.  It would be a mistake to consider each component instrument as a 
separate measure. 
7.37 Mexico also submits that the COOL statute, the 2009 Final Rule (AMS), the Vilsack letter, 
and the administrative guidance, directives and polic y announcements are elements or components of 
a single measure (i.e. the COOL measure).70  Mexico argues that the COOL measure comprises 
various closely connected instruments and that each  instrument is dependent upon others, starting 
with the 2002 Farm Bill.  It is the collection of  instruments as a whole that creates the measure being 
challenged by Mexico.  Mexico asserts that the Vils ack letter, administrative guidance, directives and 
policy announcements build on the 2009 Final Rules wh ich in turn build on the relevant provisions of 
the 2008 and 2002 Farm Bills.71 
                                                      
69 Canada's first written submission, footnote 1 to pa ra. 1; response to Panel question Nos. 1 and 89.  
Mexico's response to Panel question Nos. 1 and 89.  Canada refers to the Appellate Body Report, EC – 
Asbestos , para. 64; and the Panel Reports, Japan – Apples , para. 8.10-8.20 and EC – IT Products , para. 7.157. 
As discussed in Section VII.B.1, both Canada and Mexico include the Interim Final Rule (AMS) as 
part of the elements comprising the COOL measure in this regard (complainants' responses to Panel question 
No. 1).  Mexico additionally refers to the Interim Final Rule (FSIS).  We concluded that we would consider, 
without making findings or recommendations, these Interim Final Rules, which had already expired at the time 
of the Panel's establishment, to the extent relevant and us eful for our examination of and findings with respect to 
the instruments that are currently in fo rce.  Therefore, the question addressed in this section concerns only those 
instruments that are within the Panel's te rms of reference and currently in force. 
70 Mexico also includes both the Interim Final Rule (FSIS) and the 2009 Final Rule (FSIS) as part of 
elements comprising the COOL measure.  For the reasons  that are explained in Section VII.B.1 and footnote 69 
above, the question addressed in this section concerns only  those instruments that are within the Panel's terms of 
reference and currently in force. 
71 Mexico's second written submission, para. 20; response to Panel question No. 1.  WT/DS384/R 
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  7.38 Mexico argues that Japan – Film and Turkey – Rice are not applicable to the facts of this 
dispute.72  According to Mexico, this is because, unlike th e various instruments at issue in this dispute, 
each of the measures at issue in Japan – Film and Turkey – Rice  had an autonomous existence and 
independent effect. 
7.39 The United States does not agree with Canada and Me xico that the various measures 
described above together form one single COOL m easure.  The United States submits that the Panel 
should reject the complainants' attempt to charact erize all of the instruments at issue as a single 
COOL measure given, among other factors, the substantive differences  between the various 
instruments challenged in this dispute.73  Moreover, the United States argues that combining separate 
instruments in a single measure has important impli cations for Canada's and Mexico's legal claims.  
For example, neither party's arguments address how the COOL statute, apart from the 2009 Final Rule, is inconsistent with the United States' obliga tions.  Therefore, the United States contends that 
"each document cited by Canada a nd Mexico should be assessed on its own merits in relation to each 
of Canada and Mexico's claims, c onsistent with the approach used by panels in previous disputes".
74 
7.40 In particular, concerning the Vilsack letter, th e United States underlines that it is substantively 
different from the COOL statute and 2009 Final Rule (AMS).  Further, unlike the COOL statute and 
2009 Final Rule (AMS), the Vilsack letter, contai ning voluntary suggestions , is not mandatory and 
has no legal status under US law.75  Any review of Canada's and Mexico's claims with respect to the 
Vilsack letter would therefore need to take into account these differences in its status under US law.  
The United States submits that this, together with th e letter's lack of substantive content, argue in 
favour of a separate examination altogether. 
7.41 The United States also points out that neither Ca nada nor Mexico attempt to explain how "the 
US instruments have operated and continue to  operate in conjunction with each other".76  T h e  
United States argues that the complainants ignore the Interim Final Rule (AMS), the Interim Final 
Rule (FSIS), and the 2009 Final Rule (FSIS) a ltogether, failing to substantively address these 
instruments in any of their submissions.  The compla inants also fail to explain how the COOL statute 
breaches United States' WTO obligations alone or in  conjunction with the 2009 Final Rule (AMS).  
This is particularly in light of the fact that the implementing regulations could have been designed in a 
manner that, as Canada appears to concede, woul d be WTO-consistent.  Thus, according to the 
United States, Canada's and Mexico's arguments es sentially boil down to arguments against the 2009 
Final Rule (AMS) and the Vilsack letter. 
7.42 The United States further submits that the compla inants have failed to demonstrate that the 
Vilsack letter operates in conjunction with the 2009 Final Rule (AMS).  In light of this and given that 
the Vilsack letter has no operative effect at all, the 2009 Final Ru le (AMS) and the Vilsack letter 
should be examined separately.77  The United States further argues for a separate examination because 
the Vilsack letter does not fall within the scope of the WTO provisions under which Canada and 
Mexico challenge the so-called "COOL measure".  The Vilsack letter is not a technical regulation 
within the meaning of the TBT Agreement and it is not a "law, regulation, or requirement" within the 
meaning of the GATT 1994.  Therefore, according to the United States, it does not make sense to 
                                                      
72 Mexico's response to Panel question No. 1. 
73 United States' second written submission, paras. 11-28; response to Panel question No. 89; and 
comments on each other's response to Panel question No. 89. 
74 United States' first written submission, paras. 129-130, referring to the Panel Reports on Japan – 
Film , paras. 10.88-10.89 and Turkey – Rice , paras. 7.279-7.281. 
75 United States' second written submission, para. 12. 
76 United States' comments on each other's responses to Panel question No. 89. 
77 United States' comments on each other's responses to Panel question No. 89. WT/DS384/R 
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  examine this instrument under provisions that do not apply to it along with an instrument that falls 
within the scope of these provisions. 
7.43 The United States argues that the facts in this di spute must be distingui shed from the facts in 
EC – Asbestos and Japan – Apples .  Unlike in EC – Asbestos , the so-called measures at issue in this 
dispute are not contained in a single instrument.  Further, contrary to Japan – Apples , the facts and 
applicable obligations in this disput e are not identical for each instrument. 
(ii) Analysis by the Panel 
7.44 We concluded above that the measures at issue in  this dispute comprise the COOL statute, the 
2009 Final Rule (AMS), and the Vilsack letter.  Th e parties disagree whether the Panel should treat 
and examine these measures collectively as one single measure or individually as separate measures. 
7.45 Specifically, while not disputing that these meas ures are formally separate instruments, the 
complainants assert that they should  be examined as a single measure because they operate together as 
components constituting one single COOL measure.  The complainants do not argue, however, that these measures, if considered individually, are not capable of violating relevant provisions of the 
WTO Agreements.  In our understanding, their argument  is that it would be more appropriate for the 
Panel to approach the examination of the instruments at issue in their entirety as one measure.  This is 
because the instruments operate in conjunction with each other to ach ieve certain policy objectives, 
and because they depend on each other as elements or components of a single measure. 
7.46 The United States, however, emphasizes that the instruments must be considered as distinct 
measures because of their substantive and legal differences. 
7.47 In considering whether to examine the instrume nts at issue as one single measure or several 
distinct measures, we recall the panel's statement in Japan – Apples regarding the relevance of the 
question of how to treat measures:  the objective of findings by panels and the Appellate Body is to 
"assist the DSB in making sufficiently precise recommendations and rulings so as to allow for prompt compliance, in order to ensure effective resolution of the dispute".
78 
7.48 Our decision here will also affect how they are examined – as one single measure or 
individual separate measures – in respect of the pa rties' substantive claims under the TBT Agreement 
and the GATT 1994.79  Therefore, a proper characterization of the measures at issue will enable us to 
make findings that can assist the DSB in making "sufficiently precise recommendations and rulings" 
to ensure effective resolution of the dispute. 
7.49 Bearing the above in mind, we start our analys is by observing that questions relating to the 
characterization of measures have arisen in previous disputes.  In particular, the complainants refer to 
disputes such as Japan – Apples , EC – Asbestos , and US – Export Restraints , where several legal 
requirements or legal provisions were treated as a single measure.  The United States, on the other 
hand, refers to the disputes on Japan – Film and Turkey – Rice  where several legal requirements were 
examined as separate individual measures. 
7.50 Although the nature of the questions raised in  these disputes was similar, namely whether to 
treat several requirements or provisions as a single or multiple measures, the facts specific to each dispute, examined in light of certain factors, led the panels and the Appellate Body to adopt different 
                                                      
78 Panel Report, Japan – Apples , para. 8.10, referring to the Appellate Body's statement in Australia – 
Salmon (para. 223). 
79 Canada also points this out in its response to Panel question No. 89.  WT/DS384/R 
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  approaches to the examination of the measures.80  Among the main factors considered by panels and 
the Appellate Body in relation to this question in clude the following:  (i) the manner in which the 
complainant presented its claim(s) in respect of the concerned instruments81;  (ii) the respondent's 
position;  and (iii) the legal status  of the requirements or instrument(s), including the operation of, and 
the relationship between, the requirements or instru ments, namely whether a certain requirement or 
instrument has autonomous status.82  We will consider the measures at  issue in the present disputes in 
light of these factors. 
7.51 In the current dispute, Canada and Mexico, as the complainants, argue that the instruments 
must be examined as one single measure, whereas the United States, as the respondent, argues that 
they must be examined separately.  In contrast, the panel in Japan – Apples  followed the approach 
suggested by Japan, the respondent, that the numerous  phytosanitary requirements presented in that 
dispute should be examined as a single phytosanitary measure.83  The panel noted, among other 
                                                      
80 For example, in EC – Asbestos , the issue before the Appellate Body was whether it was appropriate 
for the panel to consider the measure at issue in two parts (elements) in assessing the applicability of the 
TBT Agreement (i.e. technical regulations) to the meas ure.  The Appellate Body found that "the proper 
character of the measure at issue [c ould not] be determined unless the m easure [was] examined as a whole". 
(Appellate Body Report, EC – Asbestos , paras. 59-65).  The facts of that dispute are slightly different from the 
current dispute in that the instruments at issue in this dispute are separate instruments, and not elements of the 
same instrument.  See also Appellate Body Report, Australia – Salmon , paras. 103-104. 
In Turkey – Rice , the United States claimed that the concer ned measures were in violation of the 
covered agreements, both considered separately and in conjunction.  As the panel found that the measures were 
each individually inconsistent with Turkey's obligations under covered ag reements, it did not see the need to 
reach a separate conclusion on those measures considered  jointly, for the resolution of that dispute. (Panel 
Report, Turkey – Rice , paras. 7.280-7.281). 
81 In US – Export Restraints , the panel describes Canada's, the complainant in that dispute, arguments 
as follows:  "each of the elements th at [Canada] cites (the statute, the SAA; the Preamble, and US practice) 
individually constitutes a measure that is susceptible to dispute settlement, and that, 'taken together' as well, 
these elements constitute a measure.  Fu rther, ... these measures individually and collectively require a particular 
treatment of export restraints". The United States, as the respondent, disagreed with Canada and argued that "it 
is dangerous for the Panel to seek to analyse an ill-defined 'measure' as a 'package'".  In light of Canada's 
position, the Panel decided to first analyse each concerned measure separately and subsequently in light of other 
measures to the extent necessary.  (Panel Report, US – Export Restraints , paras. 8.82-8.131) 
In Japan – Film , the United States argued that Japan's application of the eight distribution "measures" 
encouraged and facilitated the creation of a market struct ure for photographic film and paper in Japan in which 
imports are excluded from traditional di stribution channel.  Japan was of th e view that each measure must be 
examined on its own merit.  The panel proceeded to examine each of the ei ght distribution measures 
individually.  Regarding the United States' claim that certa in measures in combination nullify or impair benefits 
accruing to the United States, the panel noted that for US theo ry to have factual relevance in that case, it must be 
based on a detailed justification and convincing evid ence of record.  But the panel considered that the 
United States failed to make such a showing. (Panel Report, Japan – Film , paras. 10.90-10.94, 10.350-10.367). 
82 Appellate Body Report, EC – Asbestos , para. 64; Panel Report, US – Export Restraints , para. 8.85.  
The panel in US – Export Restraints explains that "it would have to do something concrete, independently of 
any other instruments, for it to be able to give rise independently to a violation of WTO obligations".  It then 
examined the status of each measure und er US law to determine whether such measure is operational on its own. 
83 In contrast, in Japan – Apples (21.5), the United States "has reques ted that we treat each requirement 
imposed by Japan as a separate measure," and that Japan "also requests us to make specific findings on each of 
the requirements that it maintains".  The panel, however, decided "to treat all the requirements imposed by 
Japan as elements of one measure" because "many elem ents of the compliance meas ure are interrelated and 
justified on the basis of the same scientific evidence". Thus, the panel said, "[t]reating them as separate 
measures could give the impression that they can apply independently of each other, which may not always be 
the case". The panel nonetheless noted, "we may make sp ecific findings on the diff erent elements of this 
measure if we believe this will assist in the pr ompt resolution of the dispute". (Panel Report, Japan – Apples 
(Article 21.5 – US) , paras. 8.28-8.30). WT/DS384/R 
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  factors, that the United States, the complainant in that dispute, did not consider it inappropriate for the 
panel to treat the requirements the United Stat es identified as one single measure, whereas Japan 
objected to the panel's reviewing each of these requirements separately.
84  The panel therefore 
considered that there was no legal, logical or factual obstacle to treating the requirements as one 
single phytosanitary measure.  The parties' starkly contrasting views on this matter in the present 
dispute, on the other hand, require us to make a criti cal review of the nature of the measures at issue. 
7.52 We will now examine whether and, if so, to what extent the measures operate, legally or 
substantively, in conjunc tion with each other or depend on each ot her.  In doing so, we will not be 
addressing in detail the substantive country of origin  requirements contained in these measures.  Such 
an analysis is provided in Section VII.C.1. 
7.53 First, the legal status of the COOL statute and the 2009 Final Rule (AMS) under US law is 
distinguishable from that of the Vilsack Letter:  the former are the instruments of statutory and 
regulatory authorities respectively, whereas the la tter does not have such legal status.  The 
complainants do not contest this aspect of the Vilsack letter.  The parties, however, disagree on 
whether the measures, in particular, the Vilsack lette r, should be examined as part of a single measure 
together with the COOL statute and the 2009 Final Rule (AMS). 
7.54 As explained in detail in para graphs 7.83-7.86, the COOL statute forms the framework and 
foundation for the 2009 Final Rule  (AMS).  Following the completion of the legislative process for 
the COOL statute, the 2009 Final Rule  (AMS) was subsequently adopted to implement  the country of 
origin labelling requirements embodied in the COOL st atute according to the authority granted to the 
Secretary of Agriculture.85  Legally, therefore, the 2009 Final Rule (AMS) does not have autonomous 
status; it lays out the specificities pertaining to th e country of origin labelling requirements that are 
necessary to implement the contents of the COOL st atute.  The COOL statute and the Final Rule are 
thus closely connected to each other in terms of le gal status.  This has not been contested by the 
United States.86 
7.55 On the other hand, the Vilsack letter87 does not have a formal legal link to either the 
COOL statute or the 2009 Final Rule (AMS).  In stating this, we are awar e of the disagreement 
between the parties regarding the existence of a factual link between the Vilsack letter, on the one 
hand, and the COOL statute and the 2009 Final Rule  (AMS) on the other, particularly based on the 
impact of the letter on the industry.88  The specific nature of the letter is examined in 
                                                      
84 Panel Report, Japan – Apples , para. 8.15.  The panel also consider ed that the concerned requirements 
cumulatively constituted the measures actually applied  by Japan to imported apple fruit. (para. 8.16) (emphasis 
in original). 
85 See paras. 7.83-7.86. 
86 United States' first written submission, para. 46. 
87 Letter from USDA Secretary Thomas Vilsack to Industry (20 February 2009) (Exhibits CDA-6 and 
MEX-8).  On the same day, USDA also issued a press release indicating that the COOL regulations would be 
implemented as expected on 16 March 2009 (Exhibit MEX-23). 
The parties do not dispute that the Vilsack letter falls within the scope of the Pa nel's terms of reference. 
The Vilsack letter was specifically identified in the co mplainants' panel requests and thus is subject to the 
Panel's review. 
88 In particular, the United States explained that  "[u]nlike the Statute and the 2009 Final Rule, 
Secretary's Vilsack letter contains no requirements and has no legal status" (United States' first written 
submission, para. 84) and that even if the Vilsack letter were to qualify as a measure, it does not constitute a 
technical regulation (United States' first written submissi on, para. 129).  The complainants emphasize the letter's 
practical impact on industry:  Canada argues that "the Vilsack letter contributed to the market uncertainty that 
resulted in reduced demand for Canadian livestock from U.S. slaughterhouses and feeding operations" (Canada's 
first written submission, para. 138), whereas Mexico asserts that the Vilsack letter has had the effect of  WT/DS384/R 
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  Section VII.D.1(a) in the context of the parties' s ubstantive claims.  What is  relevant for the question 
we are addressing here is that the Vilsack letter does not have the same statutory or regulatory status 
as the COOL statute or the 2009 Final Rule (AMS).   
7.56 We now turn to the existence of a substantiv e connection among the instruments at issue. At 
the core of the complainants' cases are the United States' mandatory country of origin labelling 
requirements  for meat products as contained in the framework of the COOL statute and the 2009 
Final Rule (AMS).89  As described in Section VII.C.1, the provisions in the COOL statute and the 
2009 Final Rule (AMS) are closely linked in the ope ration of the specific COOL requirements. For 
example, the basic framework relating to the COOL re quirements laid out in the statute, including the 
scope of the specific categories of labels applied to  meat products, remains the same in the 2009 Final 
Rule (AMS).  The 2009 Final Rule (AMS) then further expands the rules on how these different 
categories can be flexibly used by entities subj ect to the COOL requirements through the so-called 
commingling provisions.90 
7.57 The panel's statement in US – Section 301  Trade Act is helpful in this relation: 
"[i]n evaluating the conformity of S ections 301-310 with the relevant WTO 
provisions we must, thus, be cognizant of th is multi-layered character of the national 
law under consideration which includes statutory language as well as other 
institutional and administrative elements [i ncluding regulations and administrative 
procedures].  The elements of this type of national law are, as is the case here, often inseparable and should not be read indepe ndently from each other when evaluating 
the overall conformity of the law with WTO obligations."
91 
7.58 The panel further elaborated: 
"Accordingly, in examining the relevant pr ovisions of Sections 301-310 we first look 
at the statutory language itself, severed from all other elements of the law.  We then 
look at the other elements of Sections 301-310 which, in our view, constitute an 
integral part of the Measure in question and make our final evaluation based on all 
elements taken together."92 
7.59 We consider the Panel's approach in US – Section 301  Trade Act to be equally applicable to 
the situation here.  In our view, the COOL st atute and the 2009 Final Interim Rule (AMS) are 
"inseparable and should not be read independent ly from each other" when evaluating the overall 
conformity of country of origin requirements, as a pplicable to meat products, with the United States' 
WTO obligations. 
                                                                                                                                                                     
encouraging US packing plants, backgrounders and feed lots to impose stricter conditions for purchasing 
Mexican cattle (Mexico's first written submission, paras. 221-225). 
89 See paras. 7.77-7.122. 
90 See paras. 7.87-7.100. 
91 Panel Report, US – Section 301 Trade Act , paras. 7.26 and 7.27.  That Panel further stated, "For 
example, even though the statutory language granting specific powers to a government agency may be prima 
facie consistent with WTO rules, the agency responsible, within the discretion given to it, may adopt internal 
criteria or administrative procedures inconsistent with WTO obligations which would, as a result, render the 
overall law in violation.  The opposite may be equally true:  though the statutory language as such may be prima 
facie inconsistent, such inconsistency may be lawfully removed upon examination of other administrative or 
institutional elements of the same law". (para. 7.27) 
92 Panel Report, US – Section 301 Trade Act , para. 7.28. WT/DS384/R 
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  7.60 We note that the United States emphasizes th e differences in substance between the 
COOL statute and the 2009 Final Rule (AMS).  In the United States' view, such differences 
necessitate an examination of the instruments as sepa rate measures.  The differences as pointed out by 
the United States, however, are those arising from their differing legal structure:  one (the 
COOL statute) is the statutory legal authority and the other (the 2009 Fina l Rule (AMS)) is the 
regulation adopted to implement the statute.  We  do not find any significant difference between these 
two instruments in substance that could render them  separate and distinct measures.  They both 
pertain to the country of origin labelling require ments.  The 2009 Final Rule (AMS) elaborates on the 
specific manner in which subject entities must co mply with the labelling rules embodied in the 
COOL statute. 
7.61 Given the above considerations, in particular the close legal and substantive link between the 
COOL statute and the 2009 Final Rule (AMS), we consider it appropriate to examine the relevant 
elements of both the COOL statute and the 2009 Final Rule (AMS) pertaining to the COOL requirements for meat products "as an integral  part" of one single COOL measure.  In reaching 
this conclusion, we find sufficient "legal, logical and factual" bases to treat the COOL statute and 
2009 Final Rule (AMS) as the COOL measure.
93 In this connection, we observe the Appellate Body's 
statement in US – Gambling  that "the 'total prohibition' described by Antigua does not, in itself, 
constitute a 'measure'. ... the 'total prohibition' is th e collective effect of the operation of several state 
and federal laws of the United States.  And it is th e 'total prohibition' itself – as the effect of the 
underlying laws – that constitutes the alleged im pairment of Antigua's benefits under the GATS".94  
Similarly, we consider that the so-called "COOL measure", although used as the term for referring to 
the COOL statute and 2009 Final Rule (AMS) in th ese reports, does not constitute a measure in itself, 
but reflects the collective effect of the operation of the COOL statute and the 2009 Final Rule (AMS) 
in respect of the country of origin labelling requirements contained in those instruments. 
7.62 On the other hand, the Vilsack letter's substan tive connection to the COOL statute and 2009 
Final Rule (AMS) is not clear.  The Vilsack letter st arts with the statement that it pertains to the 
implementation of the Final Rule (AMS).95  It also contains matters relating to the mandatory country 
of origin labelling requirements, including concerns of the Secretary of Agriculture himself regarding 
the contents of the Final Rule at issue.  The f act that the letter was issu ed by the Secretary of 
Agriculture – the top authority heading the USDA – gives the letter a certain level of significance.  
There are therefore aspects of the letter, including its reference to  implementation and the authority 
who issued the letter, that connect it to the COOL statute and 2009 Final Rule (AMS).  However, we 
are not presented with any solid evidence showi ng that the Vilsack letter is connected to the 
COOL statute or the 2009 Final Rule (AMS) such that they, in combination, form the substantive 
legal basis for the country of origin labelling requirements as set out in the COOL measure.   
7.63 In light of its distinct legal and substantive na ture, we consider that the Vilsack letter should 
be considered as a separate measure distinguishab le from the COOL statute and the 2009 Final Rule 
(AMS).  Despite this conclusion, we will be referring  to the Vilsack letter to the extent relevant and 
necessary for the examination of the COOL st atute and the 2009 Final Rule (AMS), and vice versa .  
Further, we do not exclude at this stage of the anal ysis the possibility that when examined on its own, 
the Vilsack letter could fall within the sc ope of the TBT Agreement or the GATT 1994. 
                                                      
93 Panel Report, Japan – Apples , para. 8.15. 
94 Appellate Body Report, US – Gambling , para. 124. 
95 See para. 7.123 and Section VII.D.1.  WT/DS384/R 
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  2. Products at issue 
7.64 The complainants submit that the products at i ssue in this case are imported Canadian cattle 
and hogs and imported Mexican cattle, which are used in the United States to produce beef and pork, 
commodities covered by the COOL measure. 
7.65 Specifically, Canada submits that its complaint concerns the application of the 
COOL measure to "beef and pork produced in th e United States from cattle and hogs imported from 
Canada".96  In response to a question from the Panel, Canada elaborates that this dispute concerns 
Canadian cattle and hogs, whether for immediate sla ughter or for feeding in the United States, and not 
imports of Canadian beef or pork into the United States.  Canada further defines the imported 
products at issue as cattle and hogs falling into one of the following categories:  (i) born in Canada 
and raised in the United States;  (ii) born and raised  in Canada;  or (iii) born in the United States and 
raised in Canada.  Domestic cattle and hogs, argues Canada, are those born, raised and slaughtered in 
the United States.97 
7.66 Mexico also specifies that its clai ms relate to exports of Mexican  live feeder cattle (i.e. cattle 
born in Mexico, and then raised and slaughtered in the United States, including cattle partially fed in 
Mexico and subsequently raised and slaughtered in the United States).98 
7.67 The fact that the COOL measure formally a pplies to commodities such as beef and pork, 
and not livestock (products at issue in this dispute) per se , is addressed in the context of our 
examination of the complainants' claim under Article 2.1 of the TBT Agreement.99 
3. Order of analysis 
7.68 As indicated above100, Canada's and Mexico's claims re late to specific provisions of the 
TBT Agreement and the GATT 1994.  In particular , both complainants make national treatment 
claims under Article 2.1 of the TBT Agreement and Article III:4 of the GATT 1994.  They have also 
brought claims under Article 2.2 of the TBT Agreemen t, as well as Articles X:3(a) and XXIII:1(b) of 
the GATT 1994.  In addition, Mexico advances clai ms under Articles 2.4, 12.1 and 12.3(a) of the 
TBT Agreement. 
7.69 In their first written submissions, the complain ants addressed their claims in a slightly 
different sequence.  Canada devel oped arguments for its claims in th e sequential order of the relevant 
provisions of the TBT Agreement, followed by th e GATT 1994.  On the other hand, Mexico started 
with its claim under Article III:4 of the GATT 1994,  followed by its claims under the relevant 
provisions of the TBT Agreement in sequential order,  and by the remaining relevant provisions of the 
GATT 1994 also in sequential order.  Mexico, however,  stated in its first oral statement that it 
recognizes that it is accepted practice to first a ddress claims under the TBT Agreement and then under 
the GATT 1994.101 
7.70 In their second written submissions, both complain ants dealt with their national treatment 
claims under Article 2.1 of the TBT Agreement a nd Article III:4 of the GATT 1994 jointly, followed 
                                                      
96 Canada's first written submission, para. 1 (emphasis added). 
97 Canada's response to Panel question No. 47. 
98 Mexico's first written submission, paras. 193, 199, 261 and 273. 
99 See para. 7.246. 
100 See Sections III and VII.A. 
101 Mexico's opening oral statement at the first substantive meeting of the Panel, para. 26. Mexico then 
addressed its national treatment claims under Article 2.1 of the TBT Agreement and Article III:4 of the 
GATT 1994 together in its first oral statement. WT/DS384/R 
WT/DS386/R Page 38 
 
 
  by their claims under the relevant provisions of the TBT Agreement and then the GATT 1994 in 
sequential order. 
7.71 For the reasons explained below, we will first address their claims under the provisions of the 
TBT Agreement, followed by the claims under the GATT 1994. 
7.72 In the appeals procedure in US – Zeroing (EC) (Article 21.5 – EC)  the 
European Communities referenced the finding by the panel in EC – Sardines
102 as well as the 
Appellate Body report on US – Shrimp103, arguing that the panel made an error by failing to analyse 
the European Communities' claims in the order set  out in the European Communities' submissions.  
The Appellate Body, however, rejected the idea of panels having an obligation to follow the sequence 
in which complainants  address their claims: 
"In our view, these decisions do not support the proposition that panels are 'bound' by 
the order of claims made by the complaini ng party.  To the contrary, they confirm 
that, although panels may decide to follo w the particular order of legal claims 
suggested by the complaining party, they may also follow a different order of analysis 
so as to apply the correct interpretation of th e WTO law at issue.  Indeed, we consider 
that, in fulfilling its duties under Article 11 of the DSU, a panel may depart from the 
sequential order suggested by the complaini ng party, in particular, when this is 
required by the correct interpretation or application of the legal provisions at 
issue."104 
7.73 Furthermore, the Appellate Body established th at a claim under the more specific and detailed 
agreement should be addressed first over a cl aim under a similar provision in the GATT 1994.105  
Based on the guidance from the Appellate Body, the panel in EC – Sardines  considered that "if the 
[measure at issue] is a technical regulation, then the analysis under the TBT Agreement would 
precede any examination under the GATT 1994".106 
7.74 We will start our analysis of the claims under the TBT Agreement with the question of 
whether the COOL measure and the Vilsack letter qualify as technical regulations.107 
                                                      
102 Panel Report, EC – Sardines , para. 7.18. 
103 Appellate Body Report, US – Shrimp , para. 120. 
104 Appellate Body Report, US – Zeroing (EC) (Article 21.5 – EC) , para. 277. 
105 The Appellate Body in EC – Bananas III stated: 
"Although Article X:3(a) of the GATT 1994 and Article 1.3 of the Licensing Agreement both 
apply, the Panel, in our view, should have a pplied the Licensing Agreement first, since this 
agreement deals specifically, and in detail, with the administration of import licensing 
procedures.  If the Panel had done so, then there would have been no need for it to address the 
alleged inconsistency with Article X:3(a) of the GATT 1994". (Appellate Body Report, EC – 
Bananas III , para. 204) 
See also Panel Report, EC – Sardines , paras. 7.15-7.16 and Panel Report, EC – Asbestos , 
paras. 8.16-8.17. 
106 Panel Report, EC – Sardines , para. 7.16.  See also Panel Report, EC – Asbestos , paras. 8.16-8.17. 
107 This is also in line with EC – Sardines  where the panel held that "only if it is established that the 
[measure at issue] constitutes a techni cal regulation within the meaning of Annex 1.1 of the TBT Agreement, 
will we then proceed to consider the consistency of the [measure at issue] with the substantive obligations set 
out in Articles 2.4, 2.2 and 2.1 of the TBT Agreement". (Panel Report, EC – Sardines , para. 7.20) In the words 
of the panel in EC – Sardines , "[a]s the drafters of the TBT Agreement intended to further the objective of the 
GATT 1994 with a specialized legal regime that applies only to a limited class of measures, it is necessary to 
commence our analysis by examining whether the EC Regulation constitutes a technical regulation within the 
meaning of the TBT Agreement".  WT/DS384/R 
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  C. FACTUAL BACKGROUND  
7.75 Before commencing our review of the parties' claims, it is useful to recall the legislative 
history of the COOL measure (i.e. the COOL stat ute and the 2009 Final Rule (AMS));  the main 
obligations and features pertaining to the COOL re quirements under the COOL measure;  the Vilsack 
letter;  and, the main features of the North Am erican livestock and meat industries and trade. 
1. The COOL measure 
(a) Recent legislative history of the COOL measure 
7.76 The following table summari zes the sequence of events relating to the COOL measure: 
DATE LAWS AND REGULATIONS OTHERS 
13 May 2002 2002 Farm Bill enacted  
22 May 2008 2008 Farm Bill enacted  
1 August 2008 Interim Final Rule (AMS) issued  
28 August 2008 Interim Final Rule (FSIS) issued  
11 September 2008  USDA Guidelines (FAQ)108 
30 September 2008 Interim Final Rule (AMS) and Interim 
Final Rule (FSIS) entered into force  
October 2008  Industry letters to customers109 
15 January 2009 2009 Final Rule (AMS) issued  
20 January 2009  Change of the administration in 
the United States 
20 February 2009  Vilsack letter to industry 
16 March 2009 2009 Final Rule (AMS) entered into force  
20 March 2009 2009 Final Rule (FSIS) issued and entered 
into force  
 
(i) The COOL statute 
7.77 As explained above, the statutory provisions  of the COOL measure are contained in 
section 1638 of the Agricultural Marketing Act of 1946.  These provisions were introduced in the 
US Congress through the 2002 Farm Bill, which was subsequently amended by the 2008 Farm Bill.  
The legislative history of the COOL statute is briefly described below. 
7.78 Congress introduced two main mandatory country  of origin labelling requirements through 
the 2002 Farm Bill.110  First, the obligation for retailers to provide country of origin information on 
the covered commodities, namely beef, pork, lamb, perishable agricultural commodities, peanuts, and 
wild and farm-raised fish and shellfish.111  Second, the criteria that n eed to be met for the covered 
                                                      
108 Exhibit CDA-29. 
109 Exhibit CDA-24 (BCI); CDA-36 to 39, CDA-107 (BCI); Exhibit MEX-33, MEX-57. 
110 Farm Security and Rural Investment Act of 2002 ("the 2002 Farm Bill") (Public Law 107-171) 
(Exhibits CDA-1 and MEX-2).  The 2002 Farm Bill was enacted by the United States Congress on 13 May 2002 
and amended the Agricultural Marketing Act of 1946. 
111 7 U.S.C. 1638 (2)(A) and 1638a (a)(1) (Exhibits CDA-1 and MEX-2). WT/DS384/R 
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  commodities to be labelled as US origin.  In the ca se of beef and pork, the 2002 Farm Bill establishes 
the general rule that US origin can only be granted to meat derived from an animal that is exclusively 
born, raised and slaughtered in the United States.
112  The 2002 Farm Bill, however, does not stipulate 
how to label products derived from animals origin ating in countries other than the United States.113 
7.79 The 2002 Farm Bill specifies that the country of origin labelling requirements would be 
applied at the retail leve l as of 30 September 2004.114  Additionally, the Bill mandates the Secretary of 
Agriculture to promulgate, through the AMS115, the regulations necessary to implement the 
requirements contained in the Bill.  The deadlin e for issuing the implementing regulations was, 
however, delayed on two occasions.116  First, on 23 January 2004, Section 749 of the Consolidated 
Appropriations Act of 2004117 amended Section 285 of the Agricu ltural Marketing Act, extending the 
date of the implementation to 30 September 2006.118  The second extension was inscribed in 
Section 792 of the Agriculture, Rural Developmen t, Food and Drug Administration, and Related 
Agencies Appropriations Act of 2006119, which set the new deadline for issuing the regulations on 
30 September 2008. 
7.80 The United States explains that "Congress dete rmined that the best  way to balance the 
concerns of interested parties while achieving the po licy objective of providing consumer information 
was to revisit the COOL statute in the 2008 Farm Bill".120  Accordingly, the 2008 Farm Bill was 
introduced by the United States on 22 May 2008, modifying certain aspects of the 2002 Farm Bill. 
7.81 The 2008 Farm Bill sets out new rules for determ ining the origin of meat where animals from 
several countries are involved in the meat production process.  Such rules were not contained in the 
2002 Farm Bill.  Specifically, the 2008 Farm Bill creat ed four different labelling categories for muscle 
cut meat and also one for ground meat.  In additi on, the 2008 Farm Bill introduced the possibility of 
commingling meat of different origins, broadene d the exemptions for processed foods, and lessened 
the record keeping requirements and enforcement fi nes.  Finally, the 2008 Farm Bill added chicken to 
the list of covered commodities.121 
7.82 Provisions pertaining to the COOL requireme nts introduced by the 2008 Farm Bill were 
subsequently codified into Subtitle D of the Ag ricultural Marketing Act of 1946 (7 U.S.C. 1621 
et seq. ).122 
(ii) Regulations implementing the COOL statute 
7.83 As described above, the 2002 Farm Bill mandat es the Secretary of Agriculture, through the 
AMS, to promulgate the regulations necessary to implement the COOL requirements contained in the 
Bill.123 
                                                      
112 7 U.S.C. 1638a (a)(2) (Exhibits CDA-1 and MEX-2). 
113 Canada's first written submission, para. 14. 
114 7 U.S.C. 1638d. 
115 See footnote 34 above. 
116 Mexico's first written submission, paras. 29-32;  United States' first written submission, para. 67. 
117 Public Law 108-119, 118 Stat. 3 (23 January 2004). 
118 This extension, however, did not apply to "farm-raised fish" and "wild fish".  Consequently, the 
implementing regulations for these two categories of products were enacted on 5 October 2004.  (Mandatory 
Country of Origin Labeling of Fish  and Shellfish; Interim Rule, 7 C.F.R. Part 60 (Exhibit MEX-17). 
119 Public Law 109-97, 119 Stat. 2120 (10 November 2005). 
120 United States' first written submission, para. 68. 
121 United States' first written submission, paras. 73-83. 
122 Food, Conservation and Energy Act of 2008 ("the 2008 Farm Bill") (Public Law 110-234) 
(Exhibits CDA-2 and MEX-3).  WT/DS384/R 
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  7.84 The rulemaking process in the United States gene rally involves the issu ance of an interim 
final rule which is open for comments during a period usually lasting 60 days.124  Accordingly, on 
1 August 2008 the AMS published the Interim Final Rule, which entered into force on 
30 September 2008.125  The Interim Final Rule (AMS) sets out the rules governing the use of the four 
labelling categories of muscle cut meat.126 
7.85 Subsequently, the 2009 Final Rule (AMS) was enacted on 15 January 2009 and entered into 
force on 16 March 2009.127  The 2009 Final Rule (AMS) thus superseded the Interim Final Rule 
(AMS).  Substantively, the 2009 Final Rule (AMS ) contains provisions permitting the commingling 
of meat of different origin during a single production day and, thus, using certain labels 
interchangeably.  On the other hand, it removes th e possibility contained in the Interim Final Rule 
(AMS) of labelling meat derived exclusively from US-origin animals as meat of multiple origins without any commingling involved.
128 
7.86 To be in conformity with the Interim Final Rule (AMS), FSIS published on 28 August 2008 
an interim final rule on mandatory country of or igin labelling for the commodities covered by the 
2008 Farm Bill.  Subsequently, to be in accordance  with the changes introduced by the 2009 Final 
Rule (AMS), FSIS enacted the 2009 Final Rule ( FSIS) which entered into force on 20 March 2009.129 
(b) Country of origin labelling re quirements for meat products 
(i) Main requirements 
The COOL statute 
7.87 Section 1638a (a)(1) of the COOL statute estab lishes the main obligation concerning country 
of origin information: 
"Except as provided in subsection (b) of this section, a retailer of a covered 
commodity shall inform consumers, at the final point of sale of the covered commodity to consumers, of the country of origin of the covered commodity".
130 
7.88 Thus, the main obligation to provide the country  of origin of meat falls on the retailer.  
However, "any person engaged in the business of supplying a covered commodity to a retailer shall 
provide information to the retailer indicating th e country of origin of the covered commodity".131 
                                                                                                                                                                     
123 7 U.S.C. 1638, 1638a (a)(1) and 1638d (b).  Un ited States' first written submission, paras. 30-31. 
124 U.S.C. Title 5, Part I, Chap ter 5, Subchapter II, §553 (c). 
125 Exhibits CDA-3 and MEX-4. 
126 United States' first written submission, paras. 69-7 0. These four labelling categories for muscle cut 
meat products will be explained in detail in section (c)( i) which deals with the specific obligations set forth by 
the COOL Statute and the 2009 Final Rule (AMS). 
127 The 2009 Final Rule (AMS) was codified in the Code of Federal Regulations (C.F.R) in Title 7 
(Agriculture), Chapter 1 (Agricultura l Marketing Service, Department of Agriculture), Part 65 (Country of 
Origin Labelling of Beef, Lamb, Chicken, Goat Meat, Wild and Farm-raised Fish and Shellfish, Perishable 
Agricultural Commodities, Macadamia Nu ts and Peanuts) (i.e. 7 C.F.R. Pa rts 60 and 65) (Exhibits CDA-5 and 
MEX-7). 
128 Canada's first written submission, para. 26. 
129 Mexico's first written submission, para. 43 (E xhibit MEX-6).  According to para. 30 of the 
United States' first written submission, the "FSIS has prim ary authority within the U.S. government for ensuring 
that meat and meat food products are sa fe, wholesome, and accurately labelled". 
130 7 U.S.C. 1638a (a)(1), (Exhibit MEX-9). 
131 7 U.S.C. 1638a (e). WT/DS384/R 
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  7.89 The COOL statute establishes four categories
132 to classify the products at issue (muscle cut 
meat) and one additional category for ground meat:133 
(A) United States country of origin ("U.S. origin" – Category A134) – meat 
derived from animals: 
(1) "exclusively born, raised, and slaughtered in the 
United States"; 
(2) "born and raised in Alaska or Hawaii and transported for a 
period not more than 60 days through Canada to the United States and slaughtered in the United States";  or 
(3) "present in the United States on or before 15 June 2008". 
(B) Multiple countries of origin (Category B
135) – meat derived from animals: 
(1) "not exclusively born, raised, and slaughtered in the 
United States"; or 
(2) "born, raised, or slaughtered in the United States"; and 
(3) "not imported into the United States for immediate 
slaughter". 
The retailer may designate the country of origin as all of the countries 
in which the animal may have been born, raised, and slaughtered. 
(C) Imported for immediate slaughter (Category C136) – meat derived from 
animals 
– "imported into the United St ates for immediate slaughter". 
(D) Foreign country origin (Category D137) – meat derived from animals 
– "not born, raised, or slaughtered in the United States". 
(E) Ground meat products (Category E138) – the notice of country of origin 
includes 
(1) "a list of all countries of origin …"; or 
(2) "a list of all 'reasonably possible' countries of origin …". 
                                                      
132 The parties refer to the categories as A, B, C, D and E, which corresponds to the literals used in the 
COOL Statute. 
133 The descriptions in this paragraph of the categories of meat for labelling purposes are based on the 
text of the COOL statute. 
134 7 U.S.C. 1638a (2)(A). 
135 7 U.S.C. 1638a (2)(B). 
136 7 U.S.C. 1638a (2)(C). 
137 7 U.S.C 1638a (2)(D). 
138 7 U.S.C. 1638a(2)(E).  WT/DS384/R 
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  The 2009 Final Rule (AMS) 
7.90 The 2009 Final Rule (AMS) first lays do wn rules governing how the labels under 
categories A, B and C can be interchangeably used wh en meat of different origins is commingled in 
the production process. 
7.91 Section 65.125 of the 2009 Final Rule (AMS ) defines the term "commingled covered 
commodities" as: 
"[C]overed commodities (of the same type) presented for retail sale in a consumer 
package that have been prepared from  raw material sources having different 
origins."139 
7.92 The 2009 Final Rule (AMS) also defines the terms "raised"  and "imported for immediate 
slaughter".140  Categories B and C are distinguished based  on whether animals were raised in the 
United States (category B), instead of being importe d right before slaughter (category C).  The term 
"raised" is considered to be the "period of time from birth until slaughter or in the case of animals 
imported for immediate slaughter as defined in secti on 65.180, the period of time from birth until date 
of entry into the United States".141  Further, section 65.180 refers to "imported for immediate 
slaughter" as "that term is defined in 9 C.F.R. §93 .400, i.e. consignment directly from the port of 
entry to a recognized slaughtering establishment a nd slaughtered within 2 weeks from the date of 
entry".142 
7.93 The 2009 Final Rule (AMS) sets forth two differe nt provisions regulating the commingling of 
meat in a single production day, depending on the or igin of animals from which the meat is derived.143 
7.94 Section 65.300(e)(2) of the 2009 Final Rule (A MS) provides the following with regard to 
categories A and B: 
"For muscle cut covered commodities deri ved from animals born, raised, and 
slaughtered in the U.S. that are commingled during a production day with muscle cut covered commodities described in § 65.300(e)(1), the origin may be designated as 
Product of the United States, Country X, and (as applicable) Country Y."
144 
7.95 With regard to categories B and C, Section 65.3 00(e)(4) of the 2009 Final Rule (AMS) states: 
"For muscle cut covered commodities derived from animals that are born in 
Country X or Y, raised and slaughtered in the United States, that are commingled 
                                                      
139 2009 Final Rule (AMS), 7 C.F.R. §65.125 (Exhibits CDA-5 and MEX-7). 
140 The 2009 Final Rule (AMS) removes the possibility of using Label B for exclusively US-origin 
animals, as was initially foreseen in the Interim Final Rule (AMS).  The Interim Final Rule (AMS) provided that 
category B would be applicable when an animal was born, raised, and/or slaughtered in the United States.  
Accordingly, the inclusion of the term and/or  made it possible to conclude that an animal that was born, raised 
and slaughtered in the United States (and thus, would in principle be subject to category A) could also fall under 
category B. 
141 7 C.F.R. §65.235. 
142 7 C.F.R. §65.180. 
143 In response to Panel question No. 29 from the First Substantive Meeting, the United States explains 
that US meat processors tend to op erate one or two production shifts each day followed by a clean up shift and 
thus, "a single production day" is generally understood in  the industry as the period  of production between the 
two clean up shifts. 
144 7 C.F.R. §65.300 (e)(2). WT/DS384/R 
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  during a production day with muscle cut c overed commodities that are derived from 
animals that are imported into the United St ates for immediate slaughter as defined in 
§ 65.180, the origin may be designated as Product of the United States, Country X, and (as applicable) Country Y. ..."
145 
7.96 When meat falling under categories A, B or C is commingled on a single production day, the 
resulting meat might carry a different label from the one it should in principle be subject to under the 
categories set out in the COOL measure.146  As shown in the above provisions, the first possibility is 
the commingling of meat under categories A and B, which allows the resulting meat to use Label B 
even if a particular piece of meat may have been  derived from a category A animal.  Under the second 
provision, when meat under categories B and C are commingled during a single production day, the 
meat derived therefrom may use Label B.147 
7.97 The 2009 Final Rule (AMS) further provides that the labelled countries may be listed in any 
order  when the meat is derived from animals classified as category B, or when meat falling under 
categories A and B, as well as B and C, is commingled during a single production day.148 
7.98 In essence, the 2009 Final Rule (AMS) allows the use of Label B or C when meat falling 
under category A, B, and/or C is commingled in a single production day.149 
7.99 The United States150 has provided the following table illustrating the requirements for each 
label with the respective country of orig in notification in the right-hand column: 
Category B Meat from animals born in Country X and raised and 
slaughtered in the United States.  (These animals were not exclusively born, raised and slaughtered in the 
United States or imported for immediate slaughter.)  Product of the US, Country X, 
Country Y (if applicable) 
Category C Meat from animals imported in to the United States for 
immediate slaughter Product of Country X, US 
Category D Foreign meat imported into the United States Product of Country X 
 
7.100  Based on the parties' submissi ons, we understand that the different labelling possibilities as 
prescribed under the 2009 Final Rule (AMS) are as follows:  
 
 
 
   
                                                      
145 7 C.F.R. §65.300 (e)(4). 
146 To illustrate, when meat classified under category A is commingled during a single production day 
with meat falling under category B, the resulting meat can use Label B. 
147 7 C.F.R. §65.300 (e)(4). 
148 The text of this provision contained in the 2009 Final Rule (AMS).  7 C.F.R. §65.300 (e)(4) states 
the following: "In each case of paragraphs (e)(1), (e)(2), and (e)(4) of this section, the countries may be listed in 
any order". 
149 United States' first written submission, para. 77. 
150 United States' first written submission, para. 54.  Canada and Mexico provided similar tables which 
do not differ substantially from the one presented by the United States. Product of 
the US Label A When 100% of the meat is derived from category A animals  WT/DS384/R 
 WT/DS386/R 
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(ii) Entities subject to the country of origin labelling requirements 
7.101  Under both the COOL statute
151 and the 2009 Final Rule (AMS)152, the entities subject to the 
COOL requirements are "retailers".  Section 1(b) of the Perishable Agricultural Commodities Act of 
1930 (the "PACA") defines "retailer" as "a person th at is a dealer engaged in the business of selling 
any perishable agricultural commodity at retail".153  The term "dealer" is limited since "no person 
buying any such commodity solely for sale at reta il shall be considered as a 'dealer' until the invoice 
costs of his purchases of perishable agricultural co mmodities in any calendar year are in excess of 
US $230,000".154  In sum, for the purposes of the COOL measure, a retailer means an entity selling 
perishable agricultural commodities (i.e. fruits and vegetables, including cherries in brine155) at a level 
above USD 230,000 per year.156 
                                                      
151 7 U.S.C. 1638 (6). 
152 7 C.F.R. §65.240. 
153 United States' first written submission, para. 34, referring to 7 U.S.C. 499a(b). 
154 United States' first written submission, para. 34, referring to 7 U.S.C. 499a(b)(6). 
155 7 C.F.R. §65.205. 
156 Mexico's first written submission, paras. 7-10; United States first written submission, para. 49.  
According to Mexico, the PACA (7 U.S.C. 499a(b)(11)) de fines a retailer as "a person that is a dealer engaged Label C 
Label D 1) When 100% of the meat is derived from category C animals 
2) When A and B meat is commingled on a single production day, meat may be labelled as C 
3) When A and C meat is commingled on a single production 
day 4) When 100% of the meat is de rived from category B animals, 
meat may be labelled as C 5) When B and C meat is commingled on a single production day 
6) When A, B and C meat is commingled on a single production 
day 
When it is 100% imported foreign meat Product of 
country X, product of the US 
Product of 
country X Product of 
the US, 
product of 
country X  Label B 1) When 100% of the meat is derived from category B animals  
2) When A and B meat is commingled on a single production day 3) When A and C meat is commingled on a single production 
day 
4) When B and C meat is commingled on a single production day 5) When A, B and C meat is commingled on a single production 
day WT/DS384/R 
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  7.102  Nevertheless, as menti oned above, any person that supplied a covered commodity to a retailer 
must provide information on the country of origin to the retailer.
157 
(iii) Exemptions from the scope of the COOL requirements 
7.103  The COOL measure has certain exemptions in te rms of the products and the entities covered. 
Products exempted 
7.104  The COOL statute158 excludes from its scope any of the covered commodities that are an 
"ingredient in a processed food item".159 
7.105  The 2009 Final Rule (AMS) adds that processing resulting in a change of the character of a 
covered commodity includes cooking, curing, smoking and restructuring.160 
Entities exempted 
7.106  The COOL statute also establishes that the obligation of providing country of origin 
information shall not apply to food service establishments: 
"if the covered commodity is – (1) prepared or served in a food service establishment;  and 
(2) (A) offered for sale or sold at  the food service establishment in normal 
retail quantities;  or 
 (B) served to consumers at the food service establishment."
161 
7.107  The COOL statute defines the term "food servi ce establishment" as "a restaurant, cafeteria, 
lunch room, food stand, saloon, tavern , bar, lounge, or other similar facility operated as an enterprise 
engaged in the business of selling food to the public".162 
7.108  The 2009 Final Rule (AMS) further develops th at definition by adding that "[s]imilar food 
service facilities include salad bars, delicatessens,  and other food enterprises located within retail 
                                                                                                                                                                     
in the business of selling any perishable agricultural commodity at retail".  Mexico adds that 7 U.S.C. 
499a(b)(6) provides in defining the term "dealer" that "(B) no person buying any such commodity solely for sale 
at retail shall be considered as a 'dealer' until the invo ice costs of his purchases of perishable agricultural 
commodities in any calendar year are in excess of [US] $230,000". 
157 7 U.S.C. §1638a (e). 
158 7 U.S.C. §1638a (e). 
159 According to §65.220 of the 2009 Final Rule (AMS) a processed food item means:  "a retail item 
derived from a covered commodity that has undergone sp ecific processing resulting in a change in the character 
of the covered commodity, or that has been combined with at least one other covered commodity or other 
substantive food component (e.g. choc olate, breading, tomato sauce), excep t that the addition of a component 
(such as water, salt, or sugar) that enhances or represents a further step in the preparation of the product for 
consumption, would not in itself result in a processed food item". 
160 7 C.F.R. §65.220. 
161 7 U.S.C. §1638a (b). 
162 7 U.S.C. §1638 (4).  WT/DS384/R 
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  establishments that provide ready-to-eat foods that are consumed either on or outside of the retailer's 
premises".163 
(iv) Other obligations 
7.109  The COOL measure additionally sets forth obligations with respect to (a) the methods of 
notification of the country of origin information to the consumer;  (b) the audit verification system to 
ensure compliance with the COOL requirements;  (c) the certification of origin;  and (d) the 
enforcement of the statute and regulation. 
The methods of notification 
7.110  The COOL requirements prescribe in detail the methods of notifying the country of origin 
information to the consumer. The COOL statute provi des that the country of origin information may 
be conveyed to consumers "by means of a label, st amp, mark, placard, or other clear and visible sign 
on the covered commodity or on the package, display, holding unit, or bin containing the commodity at the final point of sale to consumers".
164  The 2009 Final Rule (AMS) additionally sets forth that the 
notification can be in "the form of a placard, sign, label, sticker, band, twis t tie, pin tag, or other 
format that allows consumers to  identify the country of origin".165 
7.111  The 2009 Final Rule (AMS) prescribes that the declaration made in any of the mentioned 
forms can be "typed, printed or handwritten"166 and "must be legible and placed in a conspicuous 
location, so as to render it likely to be read a nd understood by a customer under normal conditions of 
purchase".167 
7.112  Furthermore, the 2009 Final Rule (AMS) establish es that the declaration of the country of 
origin may be in the form of a statement such as  "product of USA", "produce of the USA", "grown in 
Mexico", or may only contain the name of  the country (e.g. "USA" or "Mexico").168  The 2009 Final 
Rule (AMS) also states that, as a general rule, count ry abbreviations are not acceptable. However, the 
abbreviations accepted under the US Customs and Border Protection (CBP) rules are deemed to comply with the COOL requirements (e.g. "U.K."  for "The United Kingdom of Great Britain and 
Northern Ireland" or "U.S." and "USA " for the "United States of America").
169 
                                                      
163 7 C.F.R. §65.140. 
164 7 U.S.C. 1638a (c) (1). 
165 7 C.F.R. § 65.400 (a). 
166 7 C.F.R. § 65.400 (c). 
167 7 C.F.R. § 65.400 (b). 
168 7 C.F.R. § 65.400 (a). 
169 7 C.F.R. § 65.400 (e). WT/DS384/R 
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  7.113  In response to a question from the Panel, th e parties submitted photographs of muscle cut 
labels taken in 2010.
170  For instance, Mexico and the United States submitted the following 
photographs of Label A171: 
                 
  
 
7.114  As regards mixed-origin labels , Canada submitted, for instance, a photograph containing the 
following label172: 
 
 
7.115  Likewise, the United States submitted the fo llowing photographs as an example of Label B173 
and an example of Label C as affixed on a retail shelf174: 
        
  
                                                      
170 See Canada's, Mexico's and the United States' responses to Panel question No. 23.  See also 
Exhibits CDA–161, MEX–71 and US–67, US-94, US-95, US-96, US-97 and US-98. 
171 Exhibit MEX–71 and US-67. 
172 Exhibit CDA-161. 
173 Exhibit US-67. 
174 Exhibit US-67.  WT/DS384/R 
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The audit verification system 
7.116  With respect to the audit verification system , the COOL statute grants authority to the 
Secretary of Agriculture to "conduct an audit of any person that prepares, stores, handles, or 
distributes a covered commodity for retail sale to verify compliance"175 with the COOL requirements. 
7.117  This audit verification system imposes certa in recordkeeping requirements for producers 
along the meat production chain.  The COOL statute est ablishes that a person subject to an audit must 
provide to the Secretary country of origin records,  including animal health papers, import or customs 
documents, or producer affidavits.  The Secretary is  prohibited from requiring any record other than 
those maintained in the course of the norm al conduct of business of the audited person.176  
7.118  The 2009 Final Rule (AMS) specifies that any person engaged in the business of supplying a 
covered commodity to a retailer, whether directly or  indirectly, must maintain records to establish and 
identify the immediate previous source (if applic able) and immediate subsequent recipient of a 
covered commodity for a period of one year from the date of transaction.177  In the case of beef and 
pork, the 2009 Final Rule (AMS) provides that the slaughterhouse is the supplier responsible for 
initiating a claim of country of origin.  Therefore,  such supplier must posse ss the records that are 
necessary to substantiate the country of origin cl aim for a period of one year from the date of the 
transaction.178 
7.119  With respect to imported commodities that fall under category D (e.g. meat imported from 
Canada or Mexico)179, the 2009 Final Rule (AMS) requires that  records provide clear product tracking 
from the port of entry into the United States to th e immediate subsequent recipient, and accurately 
reflect the country of origin as identified in rele vant CBP entry documents.  Such records must be 
maintained for a period of one year from the date of transaction.180 
7.120  The 2009 Final Rule (AMS) further elaborates on  the implementation details that such a 
verification system requires.  Section 65.500(a)(1) pr ovides that all records must be legible, and can 
be maintained in either electronic or hard-copy formats.  Due to the variation in inventory and 
accounting documentary systems, various forms of  documentation and records are acceptable.  
Moreover, Section 65.500(a)(2) establishes that or igin-related records maintained in the normal 
course of business must be available to USDA re presentatives within five business days of the 
request. 
The certification of origin 
7.121  The COOL statute provides that the Secretar y of Agriculture shall not use a mandatory 
identification system to verify the country of or igin of a covered commodity.  For the purpose of 
certifying the country of origin of a covered commodity, the Secretary can use, as a model, 
                                                      
175 Mexico's first written submission, para. 25, refe rring to 7 U.S.C. 1638a (d)(1) (Exhibit MEX-9). 
176 United States' first written submission, para. 81;  Mexico's first written submission, para. 25, 
referring to 7 U.S.C. 1638a (d)(2).  
177 7 C.F.R. § 65.500(b)(3). 
178 7 C.F.R. § 65.500(b)(1). 
179 § 65.300(f) of the 2009 Final Rule (AMS) provides that category D meat shall be labelled in the 
following manner: "(f) Labeling Imported Covered Commodities. Imported covered commodities for which 
origin has already been established as defined by this law (e.g., born, raised, and slaughtered or produced) and 
for which no production steps have occurred in the United States, shall retain their or igin, as declared to U.S. 
Customs and Border Protection at th e time the product entered the United States, through retail sale". 
180 7 C.F.R. § 65.500(b)(4). WT/DS384/R 
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  certification programmes in existence on the date of enactment of the Agricultural Marketing Act of 
1946 (e.g. the carcass grading and certification system effectuated under the Act, the voluntary country of origin beef labelling system containe d in the Act, voluntary programmes established to 
certify certain premium beef cuts, the origin veri fication system established for the child and adult 
care food programme under Section 17 of the Richar d B. Russell National School Lunch Act, or the 
origin verification system established for the market access program under Section 203 of the 
Agricultural Trade Act of 1978 (7 U.S.C. 5623)).
181 
The enforcement of the COOL requirements 
7.122  In situations where a violation of the compliance with the COOL requirements is found, the 
COOL statute establishes a two-step approach for enforcing the COOL requirements.  First, the 
Secretary of Agriculture notifies the retailer or s upplier to a retailer found in violation and provides 
the retailer or supplier a thirty–day period for co mplying with the COOL statute and regulations.182  
Second, after that thirty–day period, if the retaile r or supplier has not made a good faith effort to 
comply with the COOL requirements and continues to  wilfully violate them, the Secretary may fine 
the retailer or supplier up to USD 1,000 per violation.183  The United States explains that as part of the 
evolution of the COOL legislative process the fi nes decreased from USD 10,000 per violation in the 
2002 Farm Bill to USD 1,000 per vi olation in the 2008 Farm Bill.184  The United States explains that 
as of October 2010 no fines185 for failure to comply with the 2009 Final Rule (AMS) had been 
imposed.186 
2. The Vilsack letter 
7.123  In Section VII.B.1(d)(ii) above, we briefly described the Vilsack letter, a letter sent to 
industry representatives by the US Secretary of Agricu lture, Thomas J. Vilsack.  The Vilsack letter, in 
relevant part, states: 
"This letter pertains to the implementation  of the ... (COOL) Final Rule.  ...  I am 
suggesting ... that the industry voluntarily  adopt the following practices to ensure that 
consumers are adequately informed about the source of food products:  …  processors 
should voluntarily  include information about what  production steps occurred in each 
country when multiple countries appear on each  label. … Even if products [that are 
otherwise exempt] are subject to curing, smoking, broiling, grilling, or steaming, voluntary labeling would be appropriate. … Re ducing the time allowance [during 
which a processor is allowed to reference all of the reasonable possible countries of 
                                                      
181 7 U.S.C. 1638a(f). 
182 7 U.S.C. 1638b(a). 
183 7 U.S.C. 1638b(b). 
184 United States' first written submission, para. 82. 
185 According to the United States (response to Panel question No. 27) the USDA has identified a few 
violations at the retail level during its usual review period, but all of the retailers cited for non-compliance 
demonstrated to the USDA that they had addressed their violation within 30 days.  Therefore, no fines were 
imposed. As a result, the USDA has not yet made a determination as to how to apply the fines related to the 
COOL requirements.  In the event th at USDA determines to impose a fine, submits the United States, the size of 
the fine would depend on the particular facts and circumstances of a violation, and in general, USDA does not 
intend to automatically apply the fine to each individual package that is not labelled or mis-labelled. 
Mexico argued that because of th e possibility that USDA could impos e fines on a per-item basis, there 
is a perceived risk of very large fines that makes it rational for U.S. industry to attempt to avoid any possibilities 
of violations by limiting the use of Mexican and Canadian cattle (footnote 71 in Mexico's second written 
submission). 
186 United States' response to Panel question No. 27.  WT/DS384/R 
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  origin on its ground meat] to ten days woul d enhance the credibility of the label."  
(emphasis added) 
7.124  The Vilsack letter thus suggests the industry voluntarily follow three practices. 
7.125  First, the letter recommends that "processors should voluntarily include information about 
what production step occurred in each country wh en multiple countries appear on the label".187  For 
instance this would imply informing on the label:  "Born in country X, Raised and Slaughtered in 
Country Y".  This goes beyond the above mentione d obligations contained in the 2009 Final Rule 
(AMS), where the production step is not explic itly mentioned in the label and the commingling 
flexibilities provide a leeway for interchanging the order in which the countries are listed. 
7.126  Second, Secretary Vilsack takes the view that the definition of "processed foods", a category 
that is exempted from the COOL requirements, may be too broadly drafted.  Therefore, he 
recommends that the industry voluntarily provide coun try of origin information when the products are 
subject to curing, smoking, broiling, grilling or steaming. 
7.127  Finally, the 2009 Final Rule (AMS) provides that  ground meat should bear the name of all the 
countries of origin of meat that may have reasona bly been in a processor's inventory over a period of 
60 days.  In this regard, the Vilsack letter recomme nds that this period be reduced from 60 to 10 days.  
The alleged objective of such a recommendation is to enhance the credibility of the label.188 
7.128  The specific aspects of the Vilsack letter, as descr ibed above, will be examined in more detail 
in Section VII.D.1(a) where we address whether the measures at issue in these disputes fall within the 
scope of the TBT Agreement. 
3. The North American livestock and meat industries and trade 
(a) Stages of livestock and meat production 
(i) Cattle and beef 
7.129  In general, the production process from cattle to beef  consists of four stages:  (i) the cow/calf 
stage;  (ii) the backgrounding stage;  (iii) the feed ing stage;  and (iv) the slaughtering, cutting and 
packing stage.  The production of cattle covers th e first three stages, and takes approximately 33 
months from conception to slaughter weight.189 
7.130  The production of cattle begins in the cow/calf stage .  This stage involves the breeding of 
cows and the subsequent removal of the calves from the cow.  A calf is a young bovine animal under 
one year of age.190  At the end of the cow-calf stage, the calf weighs between 160 and 300 kilograms, 
and is sold for backgrounding or directly to feeding operations.191 
7.131  Backgrounding  involves feeding calves on a forage-based diet (e.g. grass, hay, clover, alfalfa) 
to increase their weight to 300-350 kilograms.192  The length of time during which an animal is fed a 
forage-based diet is based on several  factors, such as the cost of f eed, the availability of pasture and 
                                                      
187 Vilsack letter, page 1 (Exhibits CDA-6 and MEX-8). 
188 Vilsack letter, pages 1-2 (Exhibits CDA-6 and MEX-8). 
189 Canada's first written submission, para. 42 and Annex I (Exhibit CDA-51); Mexico's first written 
submission, paras. 116-148. 
190 Canada's first written submission, Annex III. 
191 Canada's first written submission, paras. 43-46; Mexico's first written submission, paras. 116-121. 
192 Canada's first written submission, para. 47; Mexico's first written submission, paras. 137-139. WT/DS384/R 
WT/DS386/R Page 52 
 
 
  the expected future price of fed cattle.
193  At the end of the backgrounding stage, calves are sold to 
feeding operations. 
7.132  The feeding stage  takes place in feeding operations or feedlots.  Feeding operators purchase 
cattle at a weight of approximately 350 kilogram s from backgrounders a nd cow/calf operations and 
feed them intensively on a grain-based diet until they reach slaughter weight (550-600 kilograms) and 
are then sold to slaughterhouses.194 
7.133  The slaughtering, cutting and packing  stage completes the meat production process.  Once the 
animal is slaughtered, the carcass is obtained by sep arating the body from the head, the organs and the 
hide.  The carcass is broken down into muscle cuts of meat, which are packed and then sold to 
wholesalers, retailers and others.195 
(ii) Hogs and pork196 
7.134  Unlike cattle, the production process of hogs is c ontinuous.  Hogs cannot be put out to pasture 
to slow down their growth rate.  Once hogs reach sl aughter weight, they cannot remain in the growing 
and feeding facilities for more than a few add itional days due to animal welfare concerns.197 
7.135  The production process from hogs to pork involves four stages:  (i) the farrowing stage;  (ii) 
the nursery stage;  (iii) the feeding stage;  and (iv) the slaughtering, cutting and packing stage.  
The production of hogs covers the first three st ages, and takes approximately ten months from 
conception until slaughter weight.198 
7.136  During the farrowing stage a sow gives birth to a litter of nine to eleven piglets, each 
weighing 1-2 kilograms.199  The piglets are separated from the so w between 21 to 28 days after birth, 
when they weigh 6-8 kilograms.200 
7.137  After the farrowing stage, piglets are moved to nurseries  for nearly seven weeks until they 
reach the weight of a "feeder pig" (25-28 kilograms).201 
7.138  During the feeding stage, feeder pigs are transferred to feeder barns , where they are fed a 
high-energy concentrated grain diet (e.g. corn, soyb eans barley or wheat) until they become slaughter 
hogs with a slaughter weight of approximately 115 kilograms.202 
7.139  The slaughtering, cutting and packing  stage completes the pork production process.  Once the 
hogs are slaughtered , they are turned into carcasses separa ted from the head and the organs.  
                                                      
193 Canada's first written submission, para. 48. 
194 Canada's first written submission, paras. 43-50 (Exhibit CDA-51); Mexico's first written 
submission, paras. 140-143. 
195 Canada's first written submission, para. 100;  Mexico's first written submission, paras. 144-147. 
196 Hogs and pork are relevant only to the dispute by Canada. 
197 Canada's first written submission, paras. 64-66.  The United  States has not commented on this 
description presented by Canada. 
198 Canada's first written submission, paras. 59-68 and Annex II. 
199 Canada's first written submission, Annex III. 
200 Canada's first written submission, para. 60. 
201 Canada's first written submission, para. 61. 
202 Canada's first written submission, paras. 59-63 and Annex II; Exhibit CDA-61.  WT/DS384/R 
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  The carcasses are further processed into pork chops, which are packed and then sold to wholesalers, 
retailers and others.203 
(b) Integrated nature of the North American livestock trade 
7.140  The market for livestock and meat of Cana da, Mexico and the United States is highly 
integrated.  Different stages of the North Americ an livestock and meat production are often performed 
in more than one country.  Trade in livestock ta kes place between, on the one hand, the United States 
and Canada and, on the other hand, the United Stat es and Mexico.  Both Ca nada and Mexico export 
cattle to the United States to be processed into meat.  Canada additiona lly exports hogs to the 
United States.204  The United States also exports a very limited amount of livestock to Mexico and 
Canada205, but this is not at issue in the current dispute.206 
7.141  Livestock are classified as fed or feeder  depending on whether they are ready for slaughter, 
or are still at the backgrounding or feeding operations stage.  Most of the Canadian cattle exported to 
the United States are fed cattle :  these usually go through the first three stages in Canada and are only 
exported to the United States for immediate sla ughter.  A smaller but considerable portion of 
Canadian cattle are feeder cattle :  these are exported to the United States directly after the 
backgrounding stage.207  Conversely, Mexico generally exports feeder cattle  immediately after the 
cow/calf stage to US backgrounding and feeding operations208, because of a lack of sufficient 
grasslands in Mexico and the general lack of we ll-developed feed grains and cattle-feedlot sectors.209  
As regards Canadian hog exports to the Unite d States, these involve a larger proportion of feeder than 
fed hogs .210 
7.142  The vast majority of Canadian and Mexican  livestock exports ar e destined for the 
United States.211  However, as specified further below livestock imports from Canada and Mexico 
only account for a small percentage of total livestock slaughter in the United States.212 
D. CLAIMS UNDER THE TBT A GREEMENT  
7.143  Both Canada and Mexico have brought cl aims under Articles 2.1 and 2.2 of the 
TBT Agreement.  In addition, Mexico has advanced claims under Articles 2.4, 12.1 and 12.3(a) of this 
Agreement.  As indicated above, we deal  with these claims in sequential order. 
7.144  We begin our analysis of the above-listed claims with an assessment of whether the 
COOL measure and the Vilsack letter qualify as tec hnical regulations within the meaning of the 
TBT Agreement.  As the Appellate Body explained,  "if the measure ... is not a 'technical regulation', 
                                                      
203 Canada's first written submission, paras. 100-103. 
204 Canada's first written submission, para. 37;  Mexico 's first written submission, paras. 109 and 114;  
United States' first written submission, paras. 88, 115 and 107. 
205 Canada maintains a voluntary country of origin labelling scheme for the "Product of Canada" and 
"Made in Canada" claims (Exhibit CDA-163). 
206 Exhibits US-150 and 151. 
207 United States' first written submission, para. 89;  Exhibit US-28, Table 3; Exhibit CDA-196. 
208 Mexico's first written submission, paras. 137-138;  United States' first written submission, para. 107. 
209 Mexico's first written submission, paras. 120-121; Exhibit MEX-35. 
210 Exhibit CDA-196. 
211 Canada's first written submission, para. 35;  Mexico's first written submission, paras. 109 
and 120-121. 
212 Canada's first written submission, paras. 34 and 36; United States' first written submission, para. 89 
(Exhibit US-86). WT/DS384/R 
WT/DS386/R Page 54 
 
 
  then it does not fall within the scope of the TBT Agreement ".
213  Thus, the question of technical 
regulations is a threshold issue for all of th e complainants' claims under the TBT Agreement. 
7.145  Specifically, Articles 2.1, 2.2 and 2.4 of the TBT Agreement apply only to 
"technical regulations".  In turn, Article 12.3 applies to "technical regulations, standards and 
conformity assessment procedures".  Since Mexico h as not contended that the COOL measure or the 
Vilsack letter would qualify as standards or conf ormity assessment procedures, the COOL measure 
and the Vilsack letter need to qualify as technical regulations for Mexico's Article 12.3 claim to 
potentially succeed in this dispute.  Article 12.1 of the TBT Agreement does not specifically mention 
technical regulations;  however, Mexico explains th at it does not claim an independent breach of that 
provision by the United States, but rather a c onsequential violation through the breach of 
Article 12.3.214  Hence, a successful Mexican claim under Ar ticle 12.1 of the TBT Agreement in this 
dispute also presupposes that the COOL requirements qualify as technical regulations. 
1. Technical regulation 
7.146  The term "technical regulation" is defined by  Annex 1.1 to the TBT Agreement as follows: 
"Document which lays down product characteristics or their related processes and 
production methods, including the applicable  administrative provisions, with which 
compliance is mandatory.  It may also include  or deal exclusively with terminology, 
symbols, packaging, marking or labelling requirements as they apply to a product, process or production method."  (explanatory note omitted) 
7.147  Based on this definition, the Appellate Body developed the following three-pronged test to 
establish whether a document qualifies as a technical regulation: 
"[There are]  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 char acteristics of the product.  These product 
characteristics may be intrinsic, or they ma y 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]hese three criteria are derived 
from the wording of the definition in Annex 1.1."
215 (emphasis original) 
7.148  We apply this test in turn to the two categor ies of instruments potentially at issue in the 
context of the TBT Agreement:  (i) the instrument s we found constitute the COOL measure (i.e. the 
COOL statute and the 2009 Final Rule (AMS));  and ( ii) the Vilsack letter.  We concluded above that 
                                                      
213 Appellate Body Report, EC – Sardines , para. 175.  See also Appellate Body Report, EC – Asbestos , 
para. 59 and Panel Report, EC – Sardines , para. 7.20. 
214 See Mexico's first written submission, para. 372. 
215 Appellate Body Report, EC – Sardines, para. 176.  See also Appellate Body Report, EC – Asbestos , 
paras. 66-70.  The parties refer to the definition of  technical regulation contained in Annex 1.1 to the 
TBT Agreement.  See Canada's first written submission, para. 69, Mexico's first written submission, para. 235 
and United States' first written submission, para. 133).  Further, Canada and Mexico argue that the 
COOL requirements, including the Vilsack letter, are "documents" within the definition developed by the 
Appellate Body.  See Canada's first written submissi on, para. 74 and Mexico's first written submission, 
para. 236.  WT/DS384/R 
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  because of its distinctive nature, the Vilsack letter should be examined separately from the 
COOL measure.216 
(a) Whether compliance with the COOL measure  and the Vilsack letter is mandatory 
7.149  We start our analysis with the last criterion of the above three-pronged test, namely whether 
compliance with the COOL measure and the Vilsack le tter is mandatory.  It is this criterion that is 
most vigorously disputed between the parties.  Starting with this criterion does not jeopardize the objective assessment of the matter before us as the three criteria under the technical regulation test are cumulative and, therefore, need not be applied in any particular order. 
7.150  As the panel in EC – Trademarks and Geographical Indications (Australia)  noted, 
"[t]he ordinary meaning of the word 'mandatory' can  be defined in the case of an action as 'obligatory 
in consequence of a command, compulsory.  (Foll. by upon )'.
217"218  The Appellate Body in EC –
 Asbestos also clarified the concept "mandatory" w ithin the meaning of Annex 1.1 of the 
TBT Agreement: 
"A 'technical regulation' must ... regulate th e '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', 'a ttributes', or other 'distinguishing mark'."219 
(emphasis original) 
7.151  In light of the Appellate Body's interpretation of the term "mandatory", we examine whether 
the COOL measure and the Vilsack letter regulate th e country of origin labelling requirement in a 
binding or compulsory manner or have the effect  of prescribing or imposing country of origin 
labelling requirements. 
(i) Whether compliance with the COOL measure is mandatory 
Main arguments of the parties 
7.152  The complainants argue that the COOL measure220 is mandatory because, in the words of the 
Appellate Body in EC – Asbestos221, it regulates the labelling of the covered commodities "in a 
binding or compulsory fashion".222 
7.153  According to Canada , the COOL measure establishes labelling requirements for all covered 
commodities, and failure to comply with these requi rements may lead to the imposition of a fine.  
Further, according to Canada, the United States has acknowledged that the COOL measure is a 
technical regulation through its notifications to the TBT Committee.223 
                                                      
216 See para. 7.55 above. 
217 (footnote original)  The New Shorter Oxford English Dictionary (1993). 
218 Panel Report, EC – Trademarks and Geographical Indications (Australia) , para. 7.453. 
219 Appellate Body Report, EC – Asbestos , para. 68. 
220 For the purpose of the sections on the main argum ents of the parties in these reports, we use the 
term "the COOL measure" and "the COOL measures" as presented by the parties in their written submissions.  
The use of these terms in the parties' arguments section of the reports, therefore, does not reflect the Panel's 
conclusion above in Section VII.B.1 on the ch aracterization of the in struments at issue. 
221 See Canada's first written submission, para. 73 and Mexico's first written submission, para. 246. 
222 Appellate Body Report, EC – Asbestos , para. 68. 
223 See Canada's first written submission, paras. 73-74. WT/DS384/R 
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  7.154  Likewise, Mexico  argues that it is clear from the statutory COOL provisions that the 
United States imposes a mandatory scheme, by requi ring retailers to inform  consumers about the 
country of origin of the covered commodities.
224  The Agricultural Marketing Act of 1946 prescribes 
this by using the word "shall".  Mexico adds th at the USDA itself refers to COOL as "MCOOL" or 
"Mandatory" COOL.  Further, Mexico argues, ther e is an enforcement procedure applicable to 
retailers and any person engaged in  supplying the covered commodity to a retailer.  This procedure 
may lead to the imposition of a fine for those who wilfully violate the COOL provisions or who do not make a good faith effort to comply with them. 
7.155  With respect to this element of the legal test, the United States  limits its arguments to the 
Vilsack letter;  it does not contest the mandatory nature of the COOL measure.
225 
Analysis by the Panel 
7.156  As noted, the United States does not contest th at compliance with the COOL measure is 
mandatory. 
7.157  Indeed, the COOL measure is composed of classi c legal instruments that are legally binding 
in US law.  Moreover, the COOL statute sets out the core country of origin labelling requirement by 
using the word "shall": 
"Except as provided in subsection (b), a retailer of a covered commodity shall  inform 
consumers, at the final point of sale of th e covered commodity to consumers, of the 
country of origin of the covered commodity".226 (emphasis added) 
7.158  The COOL statute also uses the word "shall" in  laying down the requirement for "any person 
engaged in the business of supplying a covered commodi ty to a retailer" to provide country of origin 
information to retailers.227 
7.159  Further, the COOL measure is suppor ted by an "enforcement" mechanism.228  In the case of a 
"violation" of the above obligations by a retailer  or by any other person engaged in the business of 
supplying a covered commodity to a retailer, th e enforcement mechanism of the COOL measure 
foresees the possibility of the S ecretary of Agriculture imposing a "fine ... for each violation".229 
7.160  The panel in EC – Trademarks and Geographical Indications (Australia)  considered that the 
use of the word "shall" is indicative of mandatory compliance230, and in EC – Asbestos 
the Appellate Body also found that enfor ceability through sanctions indicates mandatory 
compliance.231  Both of these features are present in the COOL measure. 
7.161  Further, the COOL statute refe rs to the core country of or igin labelling requirement as 
"the mandatory country of origin requirement".232 (emphasis added)  Similarly, the 2009 Final Rule 
                                                      
224 See Mexico's first written submission, paras. 247-250. 
225 See United States' first written submission, paras. 132-136. 
226 7 U.S.C. § 1638a(a)(1). 
227 7 U.S.C. § 1638a(e). 
228 7 U.S.C. § 1638b.  See also 74 FR 2664 (Exhibits CDA-5 and MEX-7). 
229 7 U.S.C. § 1638b. 
230 Panel Report, EC – Trademarks and Geographical Indications (Australia) , para. 7.453.  See also 
Appellate Body Report, EC – Sardines , para. 194, footnote 111. 
231 Appellate Body Report, EC – Asbestos , para. 72. 
232 7 U.S.C. § 1638a(a)(2)(B)(ii).  WT/DS384/R 
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  (AMS) contains the word "mandatory" in its very title, and consistently refers to the essence of the 
COOL measure as "mandatory COOL". 
7.162  Accordingly, we find that compliance with th e COOL measure is mandatory, and thus the 
COOL measure fulfils the third criterion of the le gal test under Annex 1.1 to the TBT Agreement. 
(ii) Whether compliance with the Vilsack letter is mandatory 
Main arguments of the parties 
7.163  As regards the Vilsack letter, Canada  argues that its evidence in the form of witness 
statements, letters and econometric analyses show s a shift by US industry from Canadian-born 
livestock towards livestock born, raised and slaughter ed in the United States.  This demonstrates 
compliance with the instructions of Secretary Vil sack.  The reference in the Vilsack letter to the 
"intent of Congress"233, coupled with the threat to reopen the 2009 Final Rule (AMS), demonstrate 
that the letter is mandatory.234 
7.164  Canada further submits that an instrument whic h is non-binding in the domestic legal system 
of a WTO Member may nevertheless  be "mandatory" under the TBT Agre ement.  This is the case of 
the Vilsack letter, argues Canada, because it interp rets the statutory COOL provisions, which are 
binding in US law, and as such derives its mandato ry nature from the "core" instruments that make up 
the COOL measure.235 
7.165  Canada argues that if the Panel were to decide that the Vilsack letter should be considered in 
isolation from other component parts of the COOL measure, it should in so doing take into account 
that the authorship of the Secretary of Agriculture lends great weight to ensure that the US industry 
will listen and be inclined to comply.  Canada fo cuses on a particular element of the letter:  the 
direction of the industry towards point-of-production labelling, i.e. the specification of where the animal was born, raised and slaughtered.  As a resu lt, Canada argues, the industry has shifted towards 
the production of Label A meat, wh ich is an effective form of compliance with the Vilsack letter.
236  
However, Canada clarifies that it does not have an y data that would quantify the amount of the shift 
away from labels B and C towards an increased use of Label A.237 
7.166  Mexico argues that the Vilsack letter has a mandatory nature in spite of the use of the word 
"voluntary".238  However, whether the letter is mandatory or not, should not be decided according to 
the characterization given by the issuing authority to  its own measure.  According to Mexico, the last 
paragraph of the Vilsack letter makes possible r estrictive modifications to the COOL measure 
contingent on whether the industry complies with the suggested practices.  Mexico adds that the 
mandatory nature of the Vilsack letter and its rela ted press release is evident from the "clear threat" 
implied therein.  Mexico refers to a letter issued just prior to the issuance of the Vilsack letter by 
Tyson Foods and JBS, two US meat producers, to illu strate that "threats" like the one included in the 
Vilsack letter are taken seriously by US industry.239 
                                                      
233 See Canada's response to Panel question No. 7 an d Canada's second written submission, para. 107. 
234 See Canada's second written submission, paras. 106-107 and Canada's response to Panel question 
Nos. 7 and 8. 
235 See Canada's response to Panel question No. 95. 
236 See Canada's response to Panel question No. 95. 
237 See Canada's response to Panel question No. 99. 
238 See Mexico's first written submission, paras. 252-258. 
239 See para. 258. WT/DS384/R 
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  7.167  Mexico contends that the Vilsack letter is not an  isolated act of the US government but part of 
the COOL measure and mandatory as such.
240  In fact, the inconsistencies of the COOL measure are 
created by the wording of the statute and regulati ons as interpreted and applied by the administering 
authorities.241  The Vilsack letter references the intent of  Congress and it is signed by the head of the 
USDA.  Thus, it reflects the viewpoint of the US executive branch on the correct implementation of 
the COOL measure.242  At the very least, the Vilsack letter confirms the strict interpretation of the 
COOL measure that has been applied by the USDA.243  Mexico adds, however, that it does not have 
any first-hand evidence demonstrating that the Vilsac k letter resulted in a change in the proportion of 
meat eligible for Label A that actually carries La bels B or C due to the commingling flexibility.244 
7.168  The United States  submits that the Vilsack letter does not meet the definition of 
"technical regulation" in the TBT Agreement beca use, by its terms, compliance with it is not 
mandatory.245  The letter does not contain binding obliga tions;  it uses the word "voluntary" several 
times in describing the suggestions of Secretary V ilsack.  Further, the Vilsack letter contains no 
requirements and has no legal status in the United States.246  Thus, the letter does not meet the 
definition accorded to the term "m andatory" by the Appellate Body:247  It does not regulate the 
characteristics of products in a binding or compulsory fashion.248 
7.169  Further, the United States points out, the Vil sack letter lacks any enforcement mechanism to 
ensure that companies follow its suggestions.  As the Vilsack letter was not adopted through the 
procedures established by the Administrative Proc edure Act (APA), USDA could not enforce the 
letter as a matter of US law even if it wanted to do so .  The last paragraph of the letter merely reflects 
the fact that USDA, like any other regulator,  has the ability to revisit its rule-making.249 
7.170  The United States rejects the argument presented by the complainants that the Vilsack letter 
derives its mandatory nature from being part of  a broader COOL measure.  According to the 
United States, as the Vilsack letter's recommendati ons are inconsistent with the 2009 Final Rule 
(AMS), a binding instrument, this precludes the possibility that the Vilsack letter derives the 
mandatory nature from it.250 
7.171  The United States argues that the complainants have not offered any evidence demonstrating 
that the industry is following the letter's suggesti ons, even though 18 months have passed since the 
letter was issued.  Rather, the United States alleg es, there is hard evidence that US slaughterhouses 
continue to process Label B meat and US retailers con tinue to display Label B meat in grocery stores.  
According to the United States, Mexico submits tw o exhibits, MEX-33 and MEX-67, in an attempt to 
show that the US industry modified its practices in response to the Vilsack letter.  However, the letter 
in exhibit MEX-33 precedes the Vilsack letter by nearly six months and concerns issues unrelated to the letter.  The article in exhibit MEX-67, argu es the United States, demons trates that the industry 
                                                      
240 See Mexico's response to Panel question No. 7. 
241 See Mexico's second written submission, para. 38. 
242 See Mexico's response to Panel question No. 8 and 96. 
243 See Mexico's second written submission, paras. 35, 37. 
244 See Mexico's response to Panel question No. 99. 
245 See United States' first written submission, para. 134. 
246 See United States' first written submission, para. 84. 
247 See Appellate Body Report, EC – Asbestos , para. 68. 
248 See United States' first written submission, para. 134-136 and United States' opening oral statement 
at the second substantive meeting of the Panel, paras. 16-17. 
249 See United States' first written submission, para. 135 and United States' comments on Canada's and 
Mexico's responses to Panel question No. 96. 
250 See United States' comments on Canada's and Mexico's responses to Panel question No. 96.  WT/DS384/R 
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  sees the Vilsack letter as voluntary.  Moreover, none of the exhibits cited by Canada in this regard251 
actually prove the existence of a relationship between  the Vilsack letter and any rejection of Canadian 
livestock by the US industry.  Since the release of the letter, USDA has take n no action to revisit the 
COOL measures.252 
7.172  Further, in response to a question from the Pa nel, the United States explains that USDA has 
been monitoring compliance with the 2009 Final Rule, while it has not done the same with regard to 
the Vilsack letter.253 
Analysis by the Panel 
7.173  As regards the Vilsack letter, the question of  compliance is more complex than for the 
COOL measure. 
7.174  On its face, the Vilsack letter is clearly not mandatory.  Unlike the instruments composing the 
COOL measure, the Vilsack letter is not a piece of  legislation or regulation legally binding in US 
law.254  In outlining action by industry, the Vilsack le tter uses permissive, hortatory terms such as 
"might", "should" and "would";  it mentions the word "voluntary" at least four times;  and it notes that 
it contains "suggestions for voluntary action".  It  is also not followed up by a classic legal 
enforcement mechanism. 
7.175  But the nature of compliance with the Vilsack le tter is not a merely formalistic question.  
We agree with the complainants that this matter  should not be decided purely on the basis of the 
language in the Vilsack letter, in particular the u se of the word "voluntary".  Adopting a formalistic 
interpretation of the phrase "with which complianc e is mandatory" would allow Members to escape 
the coverage of large portions of the TBT Agre ement merely by qualifying their own measures as 
non-mandatory, or compliance with such measures as voluntary.  This would strip Annex 1.1 and 
ultimately large portions of the TBT Agreement of their effet utile. 
7.176  It would also be contrary to the clarification made by the Appellate Body with respect to the 
mandatory compliance criterion of a technical regulation:  a regulation that has the effect of 
prescribing or imposing one or more "characteris tics" could also qualify as a technical regulation 
under Annex 1.1.255  The question therefore remains whether compliance with the Vilsack letter may 
be considered de facto mandatory;  namely, whether, in the words of the Appellate Body, "with 
respect to products" the Vilsack letter "has the effect of prescribing or imposing one or more 
'characteristics' – 'features', 'qualities', 'a ttributes', or other 'distinguishing mark'".256 
7.177  The complainants invoke various aspects of the Vilsack letter to demonstrate that this is the 
case.  They argue that the Vilsack letter creates a link to the COOL statute by referencing the need 
"to achieve the intent of Congress".  They also cont end that the Vilsack letter creates a link to the 
2009 Final Rule (AMS) by stating that it "pertains to the implementation of [the 2009 Final Rule]", 
and by using the phrase "after the effective date of th e final rule" to link the letter's suggestions to the 
entry into force of the 2009 Final Rule (AMS). 
                                                      
251 The United States refers to Exhibits CDA-67, 83, 86, and 92 in this context. 
252 See United States' first written submission, para. 13 7, United States' opening oral statement at the 
first substantive meeting of the Panel,  para. 19, United States' opening oral statement at the se cond substantive 
meeting of the Panel, para. 17, United States' response to Panel question No. 99 and United States' comments on 
Canada's and Mexico's responses to Panel question No. 99. 
253 See United States' response to Panel question No. 6. 
254 See para. 7.55 above. 
255 See Appellate Body Report, EC – Asbestos , para. 68.  See para. 7.150 above. 
256 Appellate Body Report, EC – Asbestos , para. 68 (emphasis added). WT/DS384/R 
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  7.178  Further, the complainants point out that the Vilsack letter was issued by the Secretary of 
Agriculture, who retains the power to modify the 2 009 Final Rule (AMS) within the framework of the 
statutory elements of the COOL measure.  According to the complainants, this is particularly relevant 
since the Vilsack letter is supported by the "threat" of the Secretary of Agri culture actually changing 
the 2009 Final Rule (AMS) along the lines of the s uggestions contained in his letter.  Indeed, 
Secretary Vilsack states in concluding his letter that: 
"[t]he Department of Agriculture will be closely reviewing industry compliance with 
the regulation and its performance in re lation to these suggestions for voluntary 
action.  Depending on this performance,  I will carefully consider whether 
modifications to the rule will be necessary to achieve the intent of Congress." 
7.179  For the reasons explained below, however, we do not find that these aspects of the Vilsack 
letter demonstrate that compliance with the letter is de facto  mandatory within the meaning of 
Annex 1.1 to the TBT Agreement by having the eff ect of prescribing or imposing country of origin 
labelling requirements. 
7.180  We agree that the Vilsack letter creates certain linkages to the COOL measure.
257  But this, in 
itself, is not sufficient to qualify compliance with  the Vilsack letter as mandatory.  As explained 
above258, the Vilsack letter remains distinct from the COOL measure.  The essence of the Vilsack 
letter is that, while Secretary Vilsack does not bloc k the entry into force of  the 2009 Final Rule 
(AMS) on the originally foreseen date of 16 Marc h 2009, he suggests additional and more stringent 
industry action in three specific areas, based on "concerns" about the requirements set out in the 
COOL measure.  The USDA news release accompanying the Vilsack letter states: 
"Agriculture Secretary Tom Vilsack today announced that the final rule for the 
Country of Origin Labeling (COOL) program will go into effect as scheduled on March 16th.  He also released a letter[ i.e.  the Vilsack letter] inviting stakeholders to 
follow additional  voluntary labelling requirements."
259  (emphasis added) 
7.181  The complainants do not contest that the ac tions suggested by Secretary Vilsack are 
substantively different from, additional to, or more stringent than, the requirements in the 
COOL measure.260 
7.182  Further, the complainants underline that the Vilsack letter was issued by a high-ranking 
United States government official.  Yet, this in itself does not turn the Vilsack letter into an instrument 
requiring mandatory compliance.  Not all communica tions by government officials involve mandatory 
compliance.  In their relations with the genera l public and specific stakeholder groups, high-ranking 
government officials regularly issue non-ma ndatory oral and written communications. 
7.183  It is undisputed that Secretary Vilsack has the power to promulgate regulations necessary to 
implement the country of origin labe lling provisions of the COOL statute261, which entails the power 
to modify the 2009 Final Rule (AMS) within the frame work of the COOL statute.  This, indeed, gives 
a certain weight to what the complainants descr ibed as the "threat" contained in the concluding 
section of the Vilsack letter. 
                                                      
257 See para. 7.177 above. 
258 See para. 7.55 above. 
259 Exhibits CDA-42 and MEX-23. 
260 See Canada's first written submission, para. 28 and Mexico's first written submission, para. 225. 
261 See 7 U.S.C. § 1638c(b).  WT/DS384/R 
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  7.184  However, there is no compelling evidence be fore us showing that this "threat" has 
materialized. 
7.185  We have evidence before us showing that USDA conducted surveys on the implementation of 
the COOL requirements in March 2009 (i.e. around  the entry into force of the 2009 Final Rule 
(AMS)), and in July 2009.262  The March 2009 survey is, however, largely irrelevant to the question 
here, as it does not even refer to the Vilsack letter. 
7.186  The July 2009 survey263 shows that USDA did look into industry's "performance" of one of 
the suggestions contained in the Vilsack letter.  However, this survey involved "152 randomly 
selected retail stores in seven [US] states"264 and focussed on industry compliance with the 2009 Final 
Rule (AMS).  In fact, it covere d only one of the three specific s uggestions of the Vilsack letter, 
namely "to assess whether labels included additi onal information about pr oduction steps for meat 
covered commodities as requested by the Secretary in a letter to the industry on February 20, 2009".265  
In this regard, the July  2009 survey found: 
"[O]nly four stores (all in California) mark ed veal items with production steps out of 
53 stores that carried veal ('Born in Cana da, Processed in the U.S.').  Production steps 
were not found on any other covered commodity. 
Retailers were – for the mo st part – labeling covered commodities for country of 
origin."266 
7.187  Canada adds that "[t]he survey did not fi nd any other meat commodities with voluntary 
labeling of production steps (born, raised, and slaughtered, or processed)".267 
7.188  In essence, therefore, the two surveys before  us fail to demonstrate industry's actual 
compliance with Secretary Vilsack's suggestion co ncerning "[l]abelling of product[s] from multiple 
countries of origin" by "includ[ing] informa tion about what production step occurred in each 
country".  Photos of the labels actually used by retailers under the COOL measure, submitted by the 
parties upon our request268, also do not indicate any compliance with Secretary Vilsack's suggestion to 
"include information about what production step occurred in each country when multiple countries 
appear on the label".  While multiple countries do appear on the labels on some of these photos, we 
cannot find any indication of where specific production steps took place. 
7.189  We have no evidence before us showing comp liance with Secretary Vilsack's other two 
suggestions either, namely in regard to "the  definition of processed foods" and concerning less 
flexibility for "inventory allowance". 
7.190  Furthermore, the rest of the exhibits submitted by the complainants in this respect do not 
make a convincing case.  Some of the eviden ce submitted by the complainants pre-dates  the Vilsack 
                                                      
262 See Exhibits CDA-227 and US-145 .  See also United States' respon se to Panel question Nos. 6 and 
90 and Canada's comments on the United States' response to Panel question No. 90. 
263 See Exhibit CDA-227.  See also Exhibit US-145. 
264 Exhibit CDA-227. 
265 Exhibit CDA-227. 
266 Exhibit CDA-227. 
267 Exhibit CDA-227. 
268 See Exhibits CDA-161, MEX-71 and US-67. WT/DS384/R 
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  letter, and thus cannot serve to demonstrat e the nature of compliance with the letter.
269  One piece of 
evidence submitted by Mexico explicitly confirms the voluntary  nature of any compliance by 
individual industry participants with  Secretary Vilsack's suggestions.270  Certain other exhibits 
submitted by Canada and Mexico do not reference the Vilsack letter at all or the specific suggestions 
contained therein.271  A further piece of evidence submitted by Canada, dated a few days after the 
Vilsack letter, merely records the issuance of the letter, without addressing the nature of any 
compliance with the letter's suggestions.272 
7.191  Testimonies by individuals active in the North American meat industry that do reference the 
Vilsack letter indicate that specific industry particip ants might have responded to Secretary Vilsack's 
suggestions.273  However, these testimonies are not suffi cient to establish that such behaviour 
amounted to more than voluntary compliance with th e Vilsack letter.  Hence, we cannot read these 
testimonies as proving the kind of across-the-board industry compliance that, taken together with 
other evidence, could demonstrate that compliance with the Vilsack letter is de facto mandatory. 
7.192  Overall, these testimonies and the above-refere nced evidence are insufficient to demonstrate 
mandatory compliance with the Vilsack letter.  They are also insufficient to prove that the 
Vilsack letter would "regulate the 'c haracteristics' of products in a binding or compulsory fashion"274, 
let alone have "the effect of prescribing  or imposing  one or more 'characteristics' – 'features', 
'qualities', 'attributes', or other 'distinguishing mark'"275 for the products at issue. 
7.193  Canada invokes four notifications by the Un ited States to the TBT Committee, arguing that 
the United States has thereby acknowledged that COOL requirements qualify as a technical 
regulation.276  However, only one of these notifications act ually follows the date of issuance of the 
Vilsack letter, and that notification does not relate or even refer specifically to the Vilsack letter. 
7.194  In light of these considerations, we conclude that  the complainants have not demonstrated that 
compliance with the Vilsack letter is mandatory  within the meaning of Annex 1.1 to the 
TBT Agreement. 
7.195  Given that the three criteria under the three-pronged test for "technical regulation" are 
cumulative, we need not assess the other two criteria of  the test with regard to the Vilsack letter.  
In fact, the panel in EC – Trademarks and Geographical Indications (Australia)  held that if one of the 
                                                      
269 See Exhibits CDA-32 to 34, MEX-55 and MEX-57.  In fact, much of this evidence relates to the 
process leading to the obligations contained in the 2009 Final Rule, as opposed to the suggestions contained in 
the Vilsack letter. 
270 "To the extent that companies are able and elect to go beyond these federal labeling requirements, 
as requested today by Agriculture Secretar y Vilsack, is an indi vidual company decision , which will have to be 
made in collaboration with a company's retail grocery cu stomers, which ultimately are the entities that provide 
country of origin information to their consumers". Exhibit MEX-67, emphasis added. 
271 See Exhibits CDA-92 and Exhibit MEX-33 (A copy of the Country of Original Labeling manual 
issued by Tyson Foods in April 2009 refers to a more frequent use of Label A for meat produced from livestock 
born, raised and slaughtered in the United States;  however, it does not refer specifically to any of the three 
suggestions contained in the Vilsack letter); and Exhibit CDA-41 (The CANFAX Update issued in April 2009 
summarizes "US procurement policies for Canadian cattle" without even referencing either the Vilsack letter or 
the specific suggestions contained therein). 
272 See Exhibit CDA-193. 
273 See Exhibits CDA-67, 83 and 86. 
274 Appellate Body Report, EC – Asbestos , para. 68 (emphasis added). 
275 Appellate Body Report, EC – Asbestos , para. 68 (emphasis original). 
276 See Canada's first written submission, para. 74, footnote 98.  WT/DS384/R 
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  three elements of the definition of "technical regulatio ns" is found to be unfulfilled, there is no need to 
analyse the other two elements.277 
7.196  We therefore find that the complainants have not  demonstrated that th e Vilsack letter qualifies 
as a technical regulation within the meaning of Anne x 1.1.  Accordingly, we refrain from reviewing 
the Vilsack letter under the provisions of the TBT Agreement invoked by the complainants in this 
dispute.278 
7.197  We continue our analysis of the remaining tw o criteria of the technical regulation test only 
with regard to the COOL measure. 
(b) Whether the COOL measure applies to an identifiable product or group of products 
(i) Main arguments of the parties 
7.198  According to Canada  and Mexico , the COOL measure applies to an identifiable group of 
products:  the "covered commodities".279  Mexico adds that by referencing the 2009 Final Rule 
(AMS), which is part of the COOL measure, the Vilsack letter also applies to the same 
"covered commodities".280  Thus, like other elements of the COOL measure, the Vilsack letter also 
applies to an identifiable group of products.281 
7.199  The United States  does not specifically address this element of the definition of 
"technical regulation" with regard to the COOL me asure;  instead, it focuses on the Vilsack letter and 
on the element addressed above, arguing that complia nce with the Vilsack letter is not mandatory. 
(ii) Analysis by the Panel 
7.200  Whether the document at issue applies to an identifiable product or group of products is 
another essential criterion for determining if  a document is a technical regulation. 
7.201  In EC – Asbestos , the Appellate Body explained that "[ a] 'technical regulation' must ... be 
applicable to an identifiable product, or group of products" because,  "[o]therwise, enforcement of the 
regulation will, in practical terms, be impossible".282  The Appellate Body added, however, that the 
identifiable  product or group of products need not be expressly specified in the document:  
the identifiable product coverage of a measure can al so be determined according to the substance of 
the measure at issue.  The Appellate Body stated: 
"[T]here may be perfectly sound admi nistrative reasons for formulating a 
'technical regulation' in a way that does not expressly identify products by name, 
but simply makes them identifiable – for inst ance, through the 'characteristic' that is 
the subject of regulation."283 
7.202  At first glance, the COOL measure appears to  fulfil this requirement as it specifically 
identifies the products to which it applies.  The COOL statute explicitly defines "covered commodity" 
                                                      
277 See Panel Report, EC – Trademarks and Geographical Indications (Australia), para. 7.508. 
278 The Vilsack letter will be analysed subsequently in the context of the cl aims under the GATT 1994. 
279 See Canada's first written submission, para. 71 and Mexico's first written submission, para. 239. 
280 See Mexico's first written submission, para. 240. 
281 See Mexico's first written submission, para. 241. 
282 Appellate Body Report, EC – Asbestos , para. 70 (emphasis original). 
283 Appellate Body Report, EC – Asbestos , para. 70 (emphasis original, footnote omitted). WT/DS384/R 
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  for country of origin labelling purposes as including "(i) muscle cuts of beef ... and pork" and 
"(ii) ground beef ... and ground pork".
284 
7.203  The question arises, however, whether the COOL  measure still satisfies this criterion when 
the actual products at issue in this dispute are liv estock, namely cattle and hogs from which meat is 
produced. 
7.204  In EC – Sardines the Appellate Body noted that the measure  at issue in that dispute referred to 
"preserved sardines", but not explicitly to Sardinops sagax , which was the product at issue in that 
dispute.285  Yet, the Appellate Body reiterated that "a product need not be expressly identified in the 
document for it to be identifiable "286 and that "the requirement that a 'technical regulation' be 
applicable to identifiable  products relates to aspects of  compliance and enforcement".287  
The Appellate Body concluded that Sardinops sagax was an identifiable product for the purposes of 
the measure since the measure at i ssue had been enforced against, a nd was thus also applicable to, 
Sardinops sagax .288 
7.205  Similarly, the facts of the present dispute s how that although the COOL measure identifies 
inter alia  beef and pork as part of the covered commodities289, the country of origin labelling 
requirement under the COOL measure is also applied to and thus enforceable against "[a]ny person 
engaged in the business of supplying a covered commodity to a retailer".290  This obligation imposed 
on the upstream suppliers of meat pr oducts is indispensable for retaile rs' effective compliance with the 
main country of origin labelling ob ligation under the COOL measure. 
7.206  Furthermore, the Agricultural Marketing Ac t of 1946 explicitly references livestock in 
defining "beef" as "meat produced from cattle"291, and "pork" as "meat produced from hogs".292 
7.207  In light of the above, we find that the COOL measure applies to an identifiable product or 
group of products within the meaning of Annex 1.1 to the TBT Agreement, namely (i) beef and pork, 
either as muscle cuts or in ground form;  and (ii)  livestock (i.e. cattle and hogs), which are the input 
products necessary to develop the beef and pork pr oducts explicitly covered by the COOL measure. 
7.208  As explained above, we do not address whether the Vilsack letter applies to an identifiable 
product or group of products, since we have held that  this letter is not mandatory within the meaning 
of Annex 1.1 to the TBT Agreement. 
(c) Whether the COOL measure lays down one or  more characteristics of the products 
(i) Main arguments of the parties 
7.209  Canada  and Mexico  argue that the COOL measure lays down product characteristics by 
requiring that labels be placed on covered commod ities when they are sold at the retail level.293  
                                                      
284 7 U.S.C. § 1638(2). 
285 See Appellate Body Report, EC – Sardines , para. 182. 
286 Appellate Body Report, EC – Sardines , para. 183 (emphasis original). 
287 Appellate Body Report, EC – Sardines , para. 185 (emphasis original). 
288 Appellate Body Report, EC – Sardines , para. 186. 
289 See 7 U.S.C. § 1638a(a)(1). 
290 7 U.S.C. § 1638a(e). 
291 7 U.S.C. § 1638(1). 
292 7 U.S.C. § 1638(7). 
293 See Canada's first written submission, para. 72 and Mexico's first written submission, 
paras. 244-245.  WT/DS384/R 
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  The complainants recall that in EC – Asbestos294 the Appellate Body found that 
"product characteristics" can include characteristics  that are used as a means of identification, 
presentation or the appearance of a product.295 
7.210  The United States  does not specifically address this element of the definition of 
"technical regulation" with regard to the COOL me asure;  instead, it focuses on the Vilsack letter and 
on the element addressed above, arguing that complia nce with the Vilsack letter is not mandatory. 
(ii) Analysis by the Panel 
7.211  The final criterion for the technical regulation test is that a document must lay down one or 
more characteristics of the product. 
7.212  There is no dispute among the parties that the COOL measure lays down a country of origin 
labelling requirement.  We agree that country of or igin labelling is the essence of the COOL measure.  
We also find that the obligations set out by the COOL measure, including the information requirement 
for "[a]ny person engaged in the business of supplying a covered commodity to a retailer"296, 
are closely related to this essential function. 
7.213  In EC – Asbestos  the Appellate Body found, on the basi s of the language of Annex 1.1 to the 
TBT Agreement, that labelling is a product characteristic.297 The panel in EC – Trademarks and 
Geographical Indications (Australia)  added that an explicit requirement to indicate country of origin 
on the label of the product is indeed a labelling requirement for the purpo ses of the definition of 
"technical regulation".298  The panel held that this country of  origin labelling requirement addresses a 
product characteristic and hence fulfils the second cr iterion of the "technical regulation" test under 
Annex 1.1 to the TBT Agreement.299 
7.214  We therefore find that, by imposing a country of origin labelling  requirement, the 
COOL measure fulfils the criterion of laying down one or more product characteristics. 
7.215  As explained above, we do not discuss whet her the Vilsack lette r addresses a product 
characteristic since we have held that this letter is  not mandatory within the meaning of Annex 1.1 to 
the TBT Agreement. 
7.216  As we have found that the COOL measure fulfils  all three criteria of  the thee-pronged test 
under Annex 1.1 to the TBT Agreement, we conc lude that the COOL measure is a technical 
regulation. 
7.217  Accordingly, we turn to the co mplainants' claims under the provisions of the TBT Agreement, 
and assess these claims with regard to the COOL measure.  We do not address these claims for the 
Vilsack letter, which we have c oncluded is not mandator y within the meaning of Annex 1.1 to the 
TBT Agreement, and is therefore not a technical regulation. 
                                                      
294 See Appellate Body Report, EC – Asbestos , para. 67. 
295 See Canada's first written submission, para. 72 and Mexico's first written submission, 
paras. 242-243. 
296 7 U.S.C. § 1638a(e). 
297 See Appellate Body Report, EC – Asbestos , para. 67.  See also Appellate Body Report, EC – 
Sardines , paras. 187-193. 
298 See Panel Report, EC – Trademarks and Geographical Indications (Australia) , paras. 7.447-7.448. 
299 See Panel Report, EC – Trademarks and Geographical Indications (Australia) , paras. 7.449-7.452. WT/DS384/R 
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  2. Article 2.1 
(a) Introduction 
(i) Legal test under Article 2.1 of the TBT Agreement 
7.218  Article 2.1 of the TBT Agreement provides: 
"With respect to their central government bodies: 
2.1 Members shall ensure that in resp ect of technical regulations, products 
imported from the territory of any Member shall be accorded treatment no less favourable than that accorded to like products  of national origin and to like products 
originating in any other country." 
7.219  The parties agree
300 that the legal test under Article 2. 1 includes the following three essential 
elements set out by the panel in EC – Trademarks and Geographical Indications (Australia) : 
"[T]he essential elements of an inconsiste ncy with Article 2.1 of the TBT Agreement 
are, as a minimum, [i] that the measure at issu e is a 'technical regulation';  [ii] that the 
imported and domestic products at  issue are 'like products' within the meaning of that 
provision;  and [iii] that the imported products are accorded 'less favourable' 
treatment than that accorded  to like domestic products."301 
7.220  We also consider that these three elements constitute the essence of the legal test under 
Article 2.1 of the TBT Agreement. 
7.221  We address the parties' arguments on these elemen ts in the order outlined by the panel in EC 
– Trademarks and Geographical Indications (Australia) .  In the context of this analysis, we also 
address the issue raised by the United States concer ning the function of the term "in respect of 
technical regulations" in Article 2.1 of the TBT Agreement. 
7.222  Before turning to our analysis of the three essen tial elements of the legal test, we first assess 
whether Article III:4 of the GATT 1994 may serve as c ontext for Article 2.1 of the TBT Agreement. 
(ii) Relevant context for Article 2.1 of the TBT Agreement 
Main arguments of the parties 
7.223  Canada and Mexico note that neither the Appellate Body  nor panels have interpreted the 
terms "like product" and "treatment no less favourable" in Article 2.1 of the TBT Agreement.  The complainants argue that these terms, and Article  2.1 of the TBT Agreement in general, should be 
interpreted in light of Article III:4 of the GATT 1994.
302 
                                                      
300 Canada's first written submission, para. 77, Me xico's first written submission, para. 264 and 
United States' first written submission, para. 138.  We note  that, according to the United States, "[i]n addition to 
these three 'minimum' elements, the text of TBT Article 2. 1 requires the complaining party to establish that such 
[less favourable] treatment is in respect of the techni cal regulation [at issue]". (United States' first written 
submission, para. 139, footnote 166) 
301 Panel Report, EC – Trademarks and Geographical Indications (Australia) , para. 7.444. 
302 Canada's first written submission, para. 78;  and Mexico's first written submission, para. 266.  WT/DS384/R 
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  7.224  In particular, Canada invokes the finding of the Appellate Body in EC – Asbestos that 
"a determination of 'likeness' under Article III:4 is , fundamentally, a determination about the nature 
and extent of a competitive relati onship between and among products".303  Further, Mexico points out 
that the panel in EC – Trademarks and Geographical Indications (Australia)  recognized that 
Article 2.1 of the TBT Agreement addresses the fundamental principle of national treatment:304 
"Article 2.1 of the TBT Agreement refers  to 'treatment no less favourable'.  
An essential element of a claim under Article 2.1 is that, in respect of technical regulations, the treatment accorded to imported products is 'less favourable' than that accorded to like products of national origin."
305 
7.225  Mexico adds306 that, in US – Section 211 Appropriations Act , the Appellate Body approved 
the panel's reliance on jurisprudence under Article III:4 of the GATT 1994 to interpret similar terms 
under Article 3.1 of the TRIPS Agreement, sin ce the latter provision also deals with national 
treatment.307 
7.226  Given that Article 2.1 of the TBT Agreem ent addresses both national and most-favoured-
nation treatment, the complainants argue that the Panel could choose to take into account 
jurisprudence developed under similar terms in Article I:1 of the GATT 1994.308  At the same time, 
both complainants contend that the outcome of such analysis will not be any different from an analysis which takes into account only jurispruden ce developed under Article III:4 of the GATT 1994. 
7.227  The United States  submits that there are textual differences between Article III:4 of the 
GATT 1994 and Article 2.1 of the TBT Agreement;  for instance, the latter only prohibits less 
favourable treatment that is "in respect of" the technical regulation in question.
309  Further, the 
United States argues that the Panel is faced with a national treatment, not an MFN, claim so it should 
take into account only Article III:4 of the GATT 1994.310 
Analysis by the Panel 
7.228  As mentioned above, "likeness" and "treatment  no less favourable" are two of the three 
elements of the legal test under Article 2.1 of th e TBT Agreement.  The specific meaning of these 
elements of Article 2.1 of the TBT Agreement h as not been reviewed in previous disputes.  
                                                      
303 Canada's first written submission, para. 79, referencing Appellate Body Report, EC – Asbestos , 
para. 99. 
304 Mexico's first written submission, para. 263, in particular footnote 199. 
305 Panel Report, EC – Trademarks and Geographical Indications (Australia) , para. 7.464. 
306 Mexico's first written submission, paras. 263,  266, in particular footnotes 199 and 204. 
307 The Appellate Body held that "the national treatment obligation is a fundamental principle 
underlying the TRIPS Agreement, just as it has been in what is now the GATT 1994.  
The Panel was correct in concluding that, as the language of Article 3.1 of the 
TRIPS Agreement,  in particular, is similar to that of Article III:4 of the GATT 1994, the 
jurisprudence on Article III:4 of the GATT 1994 may be useful in interpreting the national 
treatment obligation in the  TRIPS Ag reement".  Appellate Body Report, US – Section 211 
Appropriations Act , para. 242. 
308 Canada's response to Panel question No. 42;  and Mexico's response to Panel question No. 42. 
309 United States' response to Panel question No. 42. 
310 United States' response to Panel question No. 42. WT/DS384/R 
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  The similar provision under the Tokyo Round Agreem ent on Technical Barriers to Trade has never 
been the subject of a ruling by any GATT panel either.
311 
7.229  The complainants suggest interpreting these te rms in Article 2.1 of the TBT Agreement 
similarly to the meaning given to these terms under Article III:4 of the GATT 1994.  This latter 
provision encompasses the following national treatment obligation: 
"The products of the territory of any contr acting party imported into the territory of 
any other contracting party shall be accord ed treatment no less favourable than that 
accorded to like products of national origin  in respect of all laws, regulations and 
requirements affecting their internal sale, offering for sale, purchase, transportation, 
distribution or use.  ..." 
7.230  Article 2.1 of the TBT Agreement and Artic le III:4 of the GATT 1994 both set out, in 
relevant part, a "national treatment obligation"312 and have textual similarities.313  They contain the 
same key phrase:  "treatment no less favourable than that accorded to like products of national origin".  
Two parts of this phrase, "like products" and "t reatment no less favourable", serve also as key 
elements of the legal test under both provisions.  The above-quoted formulation of these two elements 
under the legal test for Article 2.1 of the TBT Agreement314 is quite similar to relevant elements of the 
legal test under Article III:4 of the GATT 1994.315 
7.231  As Mexico points out, in US – Section 211 Appropriations Act  the Appellate Body found that, 
given the fundamental role of the national treat ment principle for the TRIPS Agreement and the 
similarity in the language of the relevant provision s, "Article  III:4 of the GATT 1994 may be useful 
in interpreting the national treatment obligation in the TRIPS Agreement".316 
7.232  Further, the panel in Japan – Film  noted that the term "no less favourable treatment" is "to be 
found throughout the General Agreement and later Agreements negotiated in the GATT framework as 
an expression of the underlying principle of equality of treatment  of imported products as compared to 
                                                      
311 Appellate Body Report, EC – Asbestos , para. 81.  Article 2.1 of the Tokyo Round Agreement on 
Technical Barriers to Trade provides: 
 
"With respect to their central government bodies: 
 
2.1 Parties shall ensure that technical regula tions and standards are not prepared, adopted 
or applied with a view to creating obstacl es to international trade. Furthermore, products 
imported from the territory of any Party shall be accorded treatment no less favourable than 
that accorded to like products of national origin and to like products originating in any other 
country in relation to such technical regulations or standards.  They shall likewise ensure that 
neither technical regulations nor standards themselves nor their application have the effect of creating unnecessary obstacles to inte rnational trade."  (emphasis added). 
 
312 Panel Report, EC – Trademarks and Geographical Indications (Australia) , para. 7.469. 
313 Panel Report, EC – Trademarks and Geographical Indications (Australia) , para. 7.464. 
314 Panel Report, EC – Trademarks and Geographical Indications (Australia) , para. 7.444.  
See para. 7.219 above. 
315 The Appellate Body stated:  "For a violation of Article III:4 to be established, three 
elements must be satisfied:  [i] that the imported and domestic products at issue are 'like products';  [ii] that the measure at issue is a 'law, regulation, or requirement affecting their 
internal sale, offering for sale, purchase, transportation, distributio n, or use';  and [iii] that the 
imported products are accorded 'l ess favourable' treatment than that accorded to like domestic 
products."  (Appellate Body Report, Korea – Various Measures on Beef , para. 133). 
316 Appellate Body Report, US – Section 211 Appropriations Act , para. 242 (original emphasis).  WT/DS384/R 
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  the treatment given either to other foreign produc ts, under the most favoured nation standard, or to 
domestic products, under the national tr eatment standard of Article III.317"318 
7.233  According to its preamble, the TBT Agreement serves "to further the objectives of 
GATT 1994".319  Also, "no conflicting, i.e. mutu ally exclusive, obligations arise"320 from Article 2.1 
of the TBT Agreement and Article III:4 of the GA TT 1994 in the sense of the General Interpretive 
Note to Annex 1A to the WTO Agreement. 
7.234  In light of the above similarities and linkag es between the two provisions, and taking into 
account the above-quoted Appellate Bo dy and panel reports, we concl ude that Article III:4 of the 
GATT 1994 provides relevant context for interpreting Ar ticle 2.1 of the TBT Agreement, in particular 
for interpreting the term "no less favourable treatment  than that accorded to like products of national 
origin". 
(b) The COOL measure's consistency with Article 2.1 
7.235  As explained above, we address the complainan ts' claims under Article 2.1 by assessing the 
following three elements:  (i) whether the measure at issue is a "technical regulation";  (ii) whether the 
imported and domestic products at issue are "like pr oducts";  and (iii) whet her the imported products 
are accorded "less favourable" treatment than  that accorded to like domestic products. 
(i) Whether the COOL measure is a technical regulation 
7.236  We have already addressed above whether the measures at issue constitute technical 
regulations within the meaning of the definition contained in Annex 1.1 to the TBT Agreement.  
We concluded that only the COOL measure constitutes a technical regulation;  the Vilsack letter does 
not.321  Accordingly, our analysis of the complainants' Article 2.1 claims is limited to the 
COOL measure. 
7.237  In this connection, the United States argues that the term "in respect of technical regulations" 
in Article 2.1 of the TBT Agreement has a specifi c function.  We now turn to this argument. 
Main arguments of the parties 
7.238  The United States  considers the three elements of the legal test argued by the complainants 
as "minimum" elements for showing a violation of Ar ticle 2.1 of the TBT Agreement.  According to 
the United States, the text of Article 2.1 of th e TBT Agreement requires the complainant to also 
establish that less favourable treatment is "in respect of" the technical regulation.322  The United States 
contends that "the complaining party must show th at the imported and domestic products in respect of 
which the measure applies are 'like' products".323  According to the United States, the complainants 
have not demonstrated this, since they compare th e treatment accord ed to cattle and hogs (livestock), 
whilst the COOL measures apply to beef and pork (meat).324  The United States contends that the term 
"in respect of  technical regulations" in Article 2.1 of th e TBT Agreement should be interpreted on the 
                                                      
317 (footnote original)  US – Section 337 , BISD 36S/345, 386-387, paras. 5.11. 
318 Panel Report, Japan – Film , para. 10.379. 
319 See also Panel Report, EC – Trademarks and Geographical Indications (Australia) , para. 7.464. 
320 Panel Report, EC – Bananas III , para. 7.162. 
321 See paras. 7.196-7.216 above. 
322 United States' first written submission, footnote 166. 
323 United States' first written submission, para. 196. 
324 United States' first written submission, paras. 196-199. WT/DS384/R 
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  basis of the dictionary meaning of the term "respect".
325  According to the United States, the 
COOL measures contain labelling requirements that "r elate to" the labelling of meat, but are not "in 
respect of" livestock.326  The United States also argues that the language "in respect of" in Article 2.1 
of the TBT Agreement means that any less favourable tr eatment not directly attributable to a measure, 
such as that resulting from a privat e market actor's independent decision on how to comply, does not 
give rise to a breach of this provision.327 
7.239  The complainants reject the argument put forward by the United States.  Canada  argues that 
Article 2.1 of the TBT Agreement does not establish that technical regulations shall accord national 
treatment to the products in respect of which the te chnical regulations have been imposed.  Rather, the 
term "in respect of" contained in Article 2.1 refers to technical regulations, not to the products that are 
the subject of a discrimination claim.  Further, Canada argues that if the US interpretation were 
accepted, a Member would be free under the TBT Agreement to discriminate, by means of a technical regulation, against imported products that are conten ts, inputs or ingredients of a final product as long 
as the technical regulation did not discriminate against the final product.
328 
7.240  Likewise, Mexico  argues that the term "in respect of" simply clarifies that the non-
discrimination obligation in Article 2.1 applies only to technical regulations.  Further, the 
COOL measure explicitly applies to both livestock and the resulting meat since it links the labelling 
of meat to the country where the livestock was born, raised and slaughtered.329 
Analysis by the Panel 
7.241  We start our analysis with the term "in respect of".  The panel in US – Section 211 
Appropriations Act held that "the ordinary meaning of the te rm 'in respect of' is in 'relation [to], 
connection [with], reference [to]'330".331 
7.242  The clause "in respect of technical regulations" is inserted into the rest of the sentence of 
Article 2.1 of the TBT Agreement.  Hence, the clause  "in respect of technical regulations" is a general 
qualifier for the rest of Article 2.1.  In this regard , the clause "in respect of technical regulations" is 
similar to the qualifier contained in the chapeau of Article 2 ("[w]ith respect to their central 
government bodies"), which applies to Article 2 of the TBT Agreement as a whole. 
7.243  That the phrase "in respect of technical regula tions" is a general qualifier for the rest of 
Article 2.1 is confirmed by the French and Spanish ve rsions of Article 2.1, which include "pour ce qui 
concerne les règlements techniques" and "con resp ecto a los reglamentos técnicos" between commas, 
thus visually and functionally separating that clause from the rest of Article 2.1. 
7.244  The operative obligation laid down by the r est of Article 2.1 of the TBT Agreement 
establishes a clear link between "products" and "tre atment no less favourable" by requiring that the 
latter be accorded to the former.  This operativ e obligation does not, however, limit the scope of 
products covered by Article 2.1, which implies no specific limitation on the products falling within 
the scope of the provision. 
                                                      
325 United States' first written submission, para. 197. 
326 United States' first written submission, para. 198. 
327 United States' opening oral statement at the fi rst substantive meeting of the Panel, para. 34. 
328 Canada's second written submission, paras. 13-14. 
329 Mexico's second written submission, paras. 117 and 120. 
330 (footnote original)  The New Shorter Oxford English Dictionary , (Clarendon Press, 1993), p. 2565. 
331 Panel Report, US – Section 211 Appropriations Act , para. 8.30.  WT/DS384/R 
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  7.245  Accordingly, we conclude that the term "in resp ect of technical regulations" in Article 2.1 of 
the TBT Agreement does not have the specific functi on suggested by the United  States.  This term 
merely clarifies that the obligation in Article 2.1 of the TBT Agreement applies to a specific type of 
measure:  technical regulations.  In particular, it does not serve to limit the relevance, for Article 2.1 
of the TBT Agreement, of the "relatively broad product scope"332 attached to the term "like products" 
under Article III:4 of the GATT 1994. 
7.246  In any event, as we shall discuss below, the COOL measure applies not only to beef and pork 
but also to cattle and hogs.  Formally speaking,  the category of "covered commodities" under the 
COOL measure includes only beef and pork, not livestock333, and the labelling requirements under the 
COOL measure apply to beef and pork only "at the final point of sale of the covered commodity to 
consumers".334  As we explained above335, however, without upstream livestock producers and 
processors providing the necessary information on or igin as defined by the COOL measure, these 
retail labelling requirements are impossible to fulfil.  The COOL measure recognizes this by creating obligations not only for retailers of beef and por k but also for the broad category of "any person 
engaged in the business of supplying [these] to a retailer".
336  The latter category of upstream market 
participants "shall provide information to the retaile r indicating the country of origin of the covered 
commodity".337 The COOL measure supports this obliga tion with an enforcement mechanism, 
including fines – again, applicable to both retailers and their suppliers.338 
(ii) Whether imported and domestic products are "like" 
7.247  The second essential element of the legal test un der Article 2.1 of the TBT Agreement is 
whether the products at issue are "like". 
Main arguments of the parties 
7.248  As already indicated, Canada  and Mexico  argue that the Panel should interpret the term "like 
products" in Article 2.1 of the TBT Agreement in li ght of the similar term in Article III:4 of the 
GATT 1994.339  In particular, according to the complain ants, the Panel should apply the "like product" 
test under Article 2.1 of the TBT Agreement by asse ssing the four criteria of likeness confirmed by 
the Appellate Body in the context of Article III:4 of the GATT 1994340, namely: 
(a) the products' properties, nature and quality; 
(b) the products' end-uses in a given market; 
(c) consumer tastes and habits in respect of the products;  and 
                                                      
332 Appellate Body Report, EC – Asbestos , para. 100. 
333 7 U.S.C. § 1638. 
334 7 U.S.C. § 1638a. 
335 See para. 7.205 above. 
336 7 U.S.C. § 1638a. 
337 7 U.S.C. § 1638a. 
338 7 U.S.C. § 1638b. 
339 Canada's response to Panel question No. 42, Mexico's response to Panel question No. 42, 
United States' response to Panel question No. 42, Canada's opening oral statement at the first substantive 
meeting of the Panel, para. 11 and Mexico's opening oral statement at the first substantive meeting of the Panel, 
para. 29. 
340 Canada's first written submission, para. 79 an d Mexico's first written submission, paras. 200 
and 266. WT/DS384/R 
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  (d) the tariff classification of the products.
341 
7.249  To demonstrate that Canadian cattle and hogs are like products to US cattle and hogs, Canada 
argues that:  (i) cattle and hogs imported from Canada  are physically indistinguishable from US-origin 
cattle and hogs, they belong to the same breeds and are raised in the same way;  (ii) both Canadian 
and US cattle and hogs share the same end use of  producing beef and pork;  (iii) the consumers of 
cattle and hogs in the United States, i.e. feedi ng operations and slaughterhous es, view Canadian and 
US cattle and hogs as interchangeable and base their purchasing decisions on price, quality and 
availability;  and (iv) under the harmonized system  of tariff classification, both Canadian and US 
cattle are classified under subheading 0102.90.  Cana dian hogs are also classified under the same 
subheading as US hogs (0103.91 for live swine we ighing less than 50kg and 0103.92 for live swine 
weighing more than 50kg).342 
7.250  In addressing the four criteria of the likeness test, Mexico argues that:  (i) the physical 
properties of Mexican feeder cattle are equivalent if  not identical to US feeder cattle;  (ii) feeder 
cattle, whether from Mexico or the United States, ar e used principally to produce beef;  (iii) the 
consumers of feeder cattle (US backgrounders, feed lots and ultimately, slaughterhouses) perceived 
and treated Mexican and US cattle identically;  an d (iv) both Mexican and US cattle are classified 
under subheading 0102.90 of the Harmonized System.343 
7.251  The United States  invokes the same four elements of "likeness" as the complainants, but only 
in its arguments under Article III:4 of the GATT 1994344, and without addressing the complainants' 
suggestion that these four elements should guide th e Panel in assessing "likeness" under Article 2.1 of 
the TBT Agreement.  The United States does not pr ovide a detailed rebuttal of the complainants' 
arguments under the four criteria.  The United States  argues generally that the complainants have not 
demonstrated the "likeness" of US livestock and Cana dian and Mexican livestock, let alone of US and 
Canadian/Mexican meat.345 
Analysis by the Panel 
7.252  Canada argues that for the purposes of Article 2.1 of the TBT Agreement, Canadian and US 
cattle are like products, and Canadi an and US hogs are also like products,.  Likewise, Mexico argues 
that Mexican cattle, in particular Mexican feeder cat tle, and US cattle, in particular US feeder cattle, 
are also like products.  In this regard, Canada recalle d the findings of various panels to the effect that 
where the only alleged distinction under a measure at issue is based on the origin of imported and 
domestic products, such products  should be considered "like products" for the purposes of 
Article III:4 of the GATT 1994.346 
7.253  In response to a question from the Panel on whet her it agrees with the complainants on the 
issue of "likeness" in general, the United States i ndicated that Canada and Mexico both addressed this 
issue in their first written submissions, and the United States has not contested the arguments put 
forward by the complainants.347  Accordingly, we proceed on the understanding that the United States 
                                                      
341 See Appellate Body Report, Japan – Alcoholic Beverages II , pp. 20-21 and Appellate Body Report, 
EC – Asbestos , para. 101. 
342 Canada's first written submission, paras. 81-84. 
343 Mexico's first written submission, paras. 199-205 and 266-267. 
344 United States' first written submission, para. 281. 
345 United States' first written submission, para. 282. 
346 Canada's first written submission, para. 85. 
347 United States' response to Panel question No. 117 (footnote omitted).  WT/DS384/R 
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  does not object to the contention that the only basis of  distinction between the products at issue is that 
of origin.348 
7.254  We recall that, in previous disput es, products that are distinguish ed solely on the basis of their 
origin were found to be like products  within the meaning of Article III:4.349  The guidance of these 
panels is also relevant for the complainants' clai ms under Article 2.1 of the TBT Agreement in this 
dispute. 
7.255  Country of origin labelling, i.e. addressing and indicating "origin", is the essence and 
rationale of the COOL measure.  In the context of ground meat, the COOL measure refers to the 
origin of the meat that has been ground.  As re gards muscle cuts, the COOL measure distinguishes the 
products at issue according to the country in which the birth, raising and slaughtering of the animal 
from which meat is derived took place.  Also, under the COOL measure, the origin of meat does not change according to the length of time an animal was raised in a specific country. 
7.256  Accordingly, and in the absence of counterar guments from the United States, we need not 
engage in any further analysis to conclude that th e products at issue in this dispute are "like products" 
in the sense of Article 2.1 of the TBT Agreement.  In particular, we find that Canadian and US cattle 
are like products;  moreover, Canadian and US hogs are also like products.  Further, Mexican cattle, 
in particular Mexican feeder cattle, and US cattle, in  particular US feeder cattle, are also like products. 
(iii) Whether the imported products are accorded less favourable treatment than that accorded to 
like domestic products 
7.257  The third essential element of the legal test under Article 2.1 of the TBT Agreement is 
"treatment no less favourable", or less favourable treatment. 
Main arguments of the parties 
7.258  Canada  argues that the COOL measure treats Cana dian cattle and hogs less favourably than 
US cattle and hogs.350  Mexico  argues the same with regard to Mexican and US cattle.351  
The United States  submits that Canada and Mexico have failed to show that the COOL measures 
provide less favourable treatment to the imported products at issue.352 
Legal test 
7.259  The parties suggest that the Panel interpret th e term "less favourable treatment" contained in 
Article 2.1 of the TBT Agreement in light of Article III:4 of the GATT 1994.353  The complainants 
argue354 that "treatment no less favourable" should be assessed in light of whether the measure in 
question "modifies the conditions of competition in the relevant market to the detriment of imported 
                                                      
348 Canada's first written submission, para. 85. 
349 Panel Report, Turkey – Rice , para. 7. 214.  See also ibid., para. 7.216, Panel Report, Canada – 
Autos , para. 10.74, Panel Report, US – FSC (Article 21.5 – EC) , para. 8.133, Panel Report, India – Autos , 
para. 7.174 and Panel Report, Canada – Wheat Exports and Grain Imports,  para. 6.164 and footnote 246. 
350 Canada's first written submission, para. 86. 
351 Mexico's first written submission, para. 219. 
352 United States' first written submission, para. 140. 
353 Canada's first written submission, para. 86, Mexico's first written submission, para. 268, Canada's 
Response to Panel question No. 42, Mexico's Response to Panel question No. 42, and United States' Response to 
Panel question No. 42. 
354 Canada's first written submission, para. 83 an d Mexico's first written submission, para. 217. WT/DS384/R 
WT/DS386/R Page 74 
 
 
  products"
355, by addressing whether the measure "gives dom estic products a competitive advantage in 
the market over imported like products".356  Canada adds that, in the words of a GATT panel report, 
the objective of "treatment no less favourable"  is to provide "equ ality of opportunities"357 for imported 
products.358  Also, Canada recalls that in Korea – Various Measures on Beef , the Appellate Body 
upheld the violation of Article III:4 of the GATT 1994 on the basis of a "drastic reduction of 
commercial opportunity"359 for imported products.360 
7.260  Mexico argues that the COOL measure does not de jure distinguish between  imported and US 
livestock.361  In turn, Canada contends that the COOL measure does not explicitly require that 
imported covered commodities be treated less favour ably than domestic co mmodities, but has that 
effect.362  Thus, the complainants seek to demonstr ate that Canadian and Mexican livestock is 
accorded de facto  less favourable treatment than US livestock.363  Canada and Mexico argue that 
similarly to Article III:4 of the GATT 1994, Article  2.1 of the TBT Agreement should be interpreted 
as applying to both de jure and de facto discrimination.364 
7.261  Canada  argues that the COOL measure creates ince ntives for US industry  to use exclusively 
US-origin animals.365  Using the words of the Appellate Body in Korea – Various Measures on Beef , 
Canada contends that the COOL measure imposes the "necessity of making a choice"366, and argues 
that "the 'intervention of some element of priv ate choice' does not absolve the United States of the 
obligation to ensure that impor ted cattle and hogs are not subjec t to less favourable competitive 
conditions than their like domestic counterparts".367 
7.262  Mexico  argues that the COOL measure de facto discriminates against Mexican cattle.  
Mexico points out that a formal difference in tr eatment between imported and like domestic products 
is not necessary to show a violation;  rather, the question is whether the measure modifies the 
conditions of competition.368  Mexico submits that the following facts show the de facto  
discriminatory effect of the COOL measure:  (i) feeder cattle are a commodity product in a market 
that is sensitive to increased costs;   (ii) Mexican-born cattle are a small portion of the total US cattle 
slaughter;  (iii) prior to the COOL measure the stocks of Mexican and US cattle were normally 
commingled at all stages of production;  (iv) not all market participants handle both Mexican and US cattle;  and (v) the costs of compliance are highe r for participants who handle Mexican feeder 
cattle.
369 
7.263  The United States  references the Appellate Body's report in Dominican Republic – Import 
and Sale of Cigarettes  on the meaning of less favourable treatment in regard to competitive 
conditions, but contends that its application lead s to the opposite conclusion from that advanced by 
                                                      
355 Appellate Body Report, Korea – Various Measures on Beef , para. 137. 
356 Appellate Body Report, Dominican Republic – Import and Sale of Cigarettes , para. 93. 
357 GATT Panel Report, US – Section 337 Tariff Act , para. 5.11. 
358 Canada's first written submission, para. 88. 
359 Appellate Body Report, Korea – Various Measures on Beef , para. 145. 
360 Canada's first written submission, para. 90. 
361 Mexico's first written submission, para. 218. 
362 Canada's first written submission, para. 89. 
363 Canada's first written submission, paras. 91 -154 and Mexico's first written submission, 
paras. 220-232 and 269. 
364 Canada's response to Panel question No. 42 an d Mexico's first written submission, para. 218. 
365 Canada's first written submission, para. 91. 
366 Appellate Body Report, Korea – Various Measures on Beef , para. 146. 
367 Canada's first written submission, para. 91. 
368 Mexico's first written submission, para. 218. 
369 Mexico's first written submission, para. 220.  WT/DS384/R 
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  the complainants.370  According to the United States, the COOL measures do not accord less 
favourable treatment to imports.371  The United States refers to EC – Trademarks and Geographical 
Indications (Australia)372, where the panel held that "the star ting point for this analysis [of 'less 
favourable treatment'] must be whether the meas ure at issue accords any difference in treatment".373  
The United States argues that the COOL measures treat beef, pork and livestock identically, 
regardless of origin, since they do not explicitly require that imported co mmodities be treated less 
favourably than domestic ones.  Further, the Un ited States contends that the COOL measures are 
facially neutral since they require meat to be labe lled with origin information regardless of where the 
livestock from which the meat was derived had been born, raised, or slaughtered.374 
7.264  Further, the United States contends that it is not sufficient for the complainants to simply 
demonstrate that a measure has had some detrimental effect on imported products.375  A s  t h e  
Appellate Body explained, there is no less favourable treatment "if the detrimental effect is explained 
by factors or circumstances unrelated to the foreign origin of the product".376  According to the 
United States, the complainants  seem to acknowledge that any decision by livestock and meat 
processors to change their production practices resu lts in large part from th e complainants' relatively 
small market share.377  In this regard, the United States notes that in Dominican Republic – Import 
and Sale of Cigarettes , the Appellate Body found that a sma ller market share of imported products 
does not turn an origin-neutral measure into on e affording less favourable treatment in the legal 
sense.378  The United States additionally refers to Korea – Various Measures on Beef379, where the 
Appellate Body held that action by private actors not compelled by the measure at issue does not 
result in a violation of Article III:4 of the GATT 1994.380 
Whether the COOL measure involves segregation and differential costs for imported 
livestock 
7.265  Canada  argues that the COOL measure has modifi ed the conditions of competition to the 
detriment of Canadian cattle and hogs, because it imposes higher costs on the use and sale of imported 
livestock.381  These higher costs are due mainly to the segregation of domestic and imported animals 
and meat based on origin throughout the production chai n.  The majority of animals in the US market 
are of domestic origin.  Hence, US feeding opera tions and slaughterhouses relying only on US-origin 
livestock face much lower additional costs than feeding operations and slaughterhouses that produce 
both US and mixed-origin meat.382  As they operate in a competitive market, market participants using 
both domestic and imported livestock cannot pass on the additional costs resulting from the 
COOL measure.  Canada argues that  the substantial additional costs fo r the use of Canadian livestock 
resulting from the COOL measure have reduced dema nd for such livestock by US feeding operations 
                                                      
370 United States' first written submission, para. 147, footnote 169. 
371 United States' first written submission, para. 142. 
372 Panel Report, EC – Trademarks and Geographical Indications (Australia) , para. 7.464. 
373 United States' first written submission, para. 142. 
374 United States' first written submission, paras. 142-145. 
375 United States' first written submission, para. 147. 
376 Appellate Body Report, Dominican Republic – Import and Sale of Cigarettes , para. 96. 
377 United States' first written submission, para. 174. 
378 United States' first written submission, para. 173.  See also Appellate Body Report, Dominican 
Republic – Import and Sale of Cigarettes , para. 9 
379 Appellate Body Report, Korea – Various Measures on Beef , para. 149. 
380 United States' second written submission, paras. 64-65. 
381 Canada's first written submission, para. 91. 
382 Canada's first written submission, paras. 92-94. WT/DS384/R 
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  and slaughterhouses.  The price basis between Ca nadian and US-fed cattle has widened, and US 
imports of Canadian livestock have dramatically decreased.
383 
7.266  Canada submits that the COOL measure impos es costly segregation requirements on the use 
of imported cattle and hogs by reta ilers and slaughterhouses.  Retailers must track the country of 
origin of each piece of meat throughout retail operations.  Slaughterhouses handling livestock of 
multiple origins must be able to identify the anim als as they are processed into meat, which entails 
segregation.384  This has resulted in a deterioration of  the competitive opportunities for Canadian 
livestock.  In particular, the COOL measure has:   (i) reduced demand for Canadian cattle and hogs 
resulting from segregation costs385;  (ii) reduced the number of US feeding operations and 
slaughterhouses accepting Canadian livestock386;  and (iii) resulted in restrictions on the days and 
times that slaughterhouses accept Canadian animals.387  Canada adds that there is limited consumer 
demand for the kind of information provided under the COOL measure.388 
7.267  Mexico  submits that even the 2009 Final Rule (AMS) recognizes that costs are likely to 
increase for processors handling products sourced  from multiple countries, as they will probably 
choose to operate separate shifts for processing th ese products or to split processing within shifts.389  
Further, US packing plants have reduced the price paid for cattle born in Mexico and raised in the 
United States by applying an additional discount to the purchase price, which has been ultimately 
transferred to Mexican cow-calf operators.390 
7.268  Mexico adds that USDA recognized that th e COOL measure would necessarily lead to 
segregation during beef production391, and acknowledged the likelihood of additional costs generated 
by segregation.392  Mexico argues that the COOL measur e has caused US packing plants to cease 
commingling cattle born in Mexico and raised in th e United States with cattle born and raised in the 
United States and instead to segregate by:  (i) re ducing the number of backgrounders, feedlots and 
plants that raise and slaughter cattle born in Mexico and raised in the United States;  (ii) reducing the 
number of days per week when such cattle are sl aughtered and processed;  (iii) reducing the overall 
number of such cattle that are slaughtered and pr ocessed;  and (iv) requiring advance notice prior to 
accepting such cattle.393  Mexico adds that USDA itself recognizes that consumers are not willing to 
bear the costs of providing the kind of information required under the COOL measure.394 
7.269  The United States  argues that any technical regulati on, including the COOL measures, 
involve compliance costs, and compliance cost s will necessarily vary for different market 
participants.395  Likewise, the costs for market participants  will rarely be constant over time;  rather, 
these costs will be higher immediately following a regulatory change, and w ould decline with time.396  
The complainants' evidence on cost s relates to a brief period following the implementation of the 
COOL measures.  Further, even if certain costs of compliance with the COOL measures might not be 
                                                      
383 Canada's first written submission, paras. 140-154. 
384 Canada's first written submission, paras. 95-106. 
385 Canada's first written submission, paras. 107-112. 
386 Canada's first written submission, paras. 113-117. 
387 Canada's first written submission, paras. 118-124. 
388 Canada's first written submission, paras. 193-195. 
389 Mexico's first written submission, para. 228. 
390 Mexico's first written submission, paras. 222-230. 
391 Mexico's first written submission, para. 228. 
392 Mexico's first written submission, para. 230. 
393 Mexico's first written submission, para. 221. 
394 Mexico's first written submission, para. 89. 
395 United States' first written submission, para. 193. 
396 United States' first written submission, para. 194.  WT/DS384/R 
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  shared equally among market players, this alone cannot support the conclusion that the measures 
effectively modify the conditions of competition.  To the extent the C OOL measures impose costs 
these are merely costs inherent to regulating.397 
7.270  The United States adds that the complainants' arguments rest on a number of erroneous 
factual assertions regarding the operation of the COOL measures and their impact on the livestock 
market.398  The COOL measures do not require US processors to segregate.399  R a t h e r ,  t h e  
COOL measures entail considerable flexibility, so  feeding operations and slaughterhouses can meet 
the requirements in any way they choose.400  The United States asserts that a specific slaughterhouse 
has at least five options that do not require seg regation:  (i) processing livestock of exclusively 
domestic origin;  (ii) processing livestock of exclus ively foreign origin;  ( iii) processing livestock of 
exclusively mixed origin and affixing the same label on all the resulting meat;  (iv) using the 
commingling provisions to process domestic and mixe d-origin livestock on the same production day;  
and (v) processing domestic and mixed-origin livestock on separate days.401  In fact, argues the 
United States, the evidence referen ced by the complainants shows that numerous producers continue 
processing domestic and foreign-origin livestock w ithout segregating them or without limiting the 
days for foreign livestock supplies.402  These processing plants have more than enough capacity to 
process all of the complainants' livestock exports. 
7.271  According to the United States, to the exte nt that market players are segregating or 
demanding less foreign livestock, this results from thei r independent decisions, and is not attributable 
to the United States.403  In fact, some processors had segregated their processing lines before the 
COOL measures existed – in order to qualify for pr emium marketing programs, to meet third-country 
import requirements and to comply with BSE-related r estrictions.  According to the United States, this 
pre-existing segregation shows that individual mark et players have reasons for segregating products 
that have nothing to do with the COOL measures a nd that, to the extent processors are segregating to 
comply with the COOL measures, the costs imposed by this practice are not as high as the 
complainants assert.404 
7.272  Canada  and Mexico  reject this argument of the United States.  The complainants argue that 
the limited segregation prior to the COOL measure was not origin -based, but it was rather for 
participating in voluntary premium programs concer ning meat quality and for exporting beef through 
export verification programs.405  Canada clarifies that there is no grade-labelling for pork.  In any 
event, Canada submits that the expenses of those programs are offset by the premiums paid by the 
domestic or foreign consumer.406  Moreover, any small-scale segre gation to supply meat to niche 
markets is not comparable to the systematic  segregation required by the COOL measure.407  Further, 
                                                      
397 United States' first written submission, para. 191. 
398 United States' first written submission, para. 150. 
399 United States' first written submission, paras. 150, 152-159; and United States' second written 
submission, paras. 42-44. 
400 United States' first written submission, paras. 153-156 and 158. 
401 United States' first written submission, para. 158: and United States' second written submission, 
para. 43. 
402 United States' first written submission, paras.  164-167; and United States' second written 
submission, para. 57. 
403 United States' first written submission, paras. 150 and 168-189. 
404 United States' first written submission, paras. 16 8-170, United States' response to Panel question 
No. 43 and United States' second written submission, para. 59. 
405 Canada's second written submission, paras. 25-3 2, Canada's response to Panel question No. 120, 
Mexico's response to Panel question No. 43, Mexico's response to Panel question No. 120. 
406 Canada's second written submission, paras. 25-32. 
407 Canada's opening oral statement at the second substantive meeting of the Panel, para. 27. WT/DS384/R 
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  Mexico argues that although segregation is not exp licitly required by the COOL measure, in practice 
it is necessary for the industry to comply with the measure and that an  analysis of the options put forth 
by the United States demonstrates that segregation in some form is required by the COOL measure.
408 
Whether there is any incentive to process domestic livestock 
7.273  The complainants argue that the COOL me asure creates incentives al ong the meat production 
chain for participants to handle exclusively US livestock.409  Canada  argues that the possibility to 
commingle does not eliminate segregation costs that create an economic disincentive to use Canadian-
born livestock throughout the supply chain.410  Mexico  argues that the COOL measure is structured so 
that the most commercially rational means of comp liance is to stop handling Mexican cattle or to 
segregate Mexican cattle in a way th at restricts trade in those cattle.411 
7.274  The United States  contests the complainants' arguments about the COOL measures creating 
incentives for US industry to segregate and favour domestic livestock.412  According to the 
United States, the Appellate Body report in Korea – Various Measures on Beef does not support these 
arguments.  The dual retail system addressed in that dispute imposed "the legal necessity of making a 
choice"413 between domestic and foreign pr oducts.  By contrast, the complainants appear to argue that 
the COOL measures create a commercial  necessity for some producers to segregate products.  
However, claims the United States, the fact that some processors choose not to segregate shows that 
segregation is not even a commercial necessity, let alone a legal one.414 
Analysis by the Panel 
Introduction 
Relevance of Article III:4 of the GATT 1994 
7.275  We have noted the similarities between the te xt and structure of the national treatment 
obligations under Article 2.1 of the TBT Agreem ent and Article III:4 of the GATT 1994, and that, 
according to its preamble, the TBT Agreement serves "to further the objectives of GATT 1994".415  
Hence, we have concluded that Article III:4 of the GATT 1994 provides relevant context for 
interpreting Article 2.1 of the TBT Agreement – in particular, for interpreting the term "treatment no 
less favourable than that accorded to like products of national origin".416 
7.276  We recall that Article III:4 of the GATT 1994 u ltimately serves to further the "equality of 
competitive conditions for imported products in relation to domestic pr oducts" or "the equal 
competitive relationship between impor ted and domestic products", rather  than "expectations ... of any 
particular trade volume".417  Further, in Korea – Various Measures on Beef , the Appellate Body held, 
in the context of Article III:4 of the GATT 1994, that "[a]ccording 'treatment no less favourable' 
                                                      
408 Mexico's opening oral statement at the second substantive meeting of the Panel, paras. 20-23. 
409 Canada's first written submission, para. 91 an d Mexico's first written submission, para. 215. 
410 Canada's opening oral statement at the second substantive meeting of the Panel, para. 23. 
411 Mexico's second written submission, para. 135. 
412 United States' first written submission, para. 169. 
413 Appellate Body Report, Korea – Various Measures on Beef , para. 146. 
414 United States' first written submission, para. 171. 
415 See para. 7.233 above. 
416 See para. 7.234 above. 
417 Appellate Body Report, Japan – Alcoholic Beverages II , p. 16.  See also Appellate Body Report, EC 
– Asbestos , para. 93.  WT/DS384/R 
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  means ... according conditions of competition  no less favourable to the imported product than to the 
like domestic product".418 
7.277  We bear this and the interpretation of Artic le III:4 of the GATT 1994 in mind in analysing 
whether the COOL measure involves less favour able treatment for imported livestock under 
Article 2.1 of the TBT Agreement. 
Order of analysis 
7.278  Our analysis of the complainants' claims of less favourable treatment starts with a review of 
the statutory definition of the relevant meat labels under the COOL measure, followed by an 
assessment of the country of origin labelling regi mes applicable to muscle cuts and ground meat, 
respectively. 
7.279  In the context of muscle cuts, we address th e following issues to determine whether the 
COOL measure accords less favourable treatment to imported than to like domestic livestock: 
(a) whether the different categories of labels  under the COOL measure accord different 
treatment to imported livestock; 
(b) whether the COOL measure involves segrega tion and, consequently, differential costs 
for imported livestock;  and 
(c) whether, through the compliance costs i nvolved, the COOL measure creates any 
incentive to process domestic livestock, thus reducing the competitive opportunities of imported livestock. 
7.280  We also address specific arguments by the Unite d States regarding any incentive in favour of 
domestic livestock or any reduction in the compe titive opportunities of imported livestock as a result 
of the COOL measure.  We then briefly ad dress whether the ground-meat label under the 
COOL measure accords less favourable treatment to imported livestock.  Finally, we turn to the 
economic and econometric evidence submitted by the parti es, to complete our analysis with regard to 
the complainants' claims under Article 2.1 of the TBT Agreement. 
7.281  In analysing the complainants' claims under Artic le 2.1, we do not consider it necessary to 
address the country of origin labelling measures of  other WTO Members referenced by the parties.
419  
Our findings under Article 2.1 of the TBT Agreement address only the COOL measure of the United States as challenged by the comp lainants in the current proceedings. 
Statutory definition of the relevant meat labels under the COOL measure 
7.282  The COOL measure sets out labelling requirements at the retail stage, i.e. "at the final point of 
sale to consumers".
420  The labels at issue in this dispute must be affixed on muscle cuts of meat and 
on ground meat, namely beef and por k;  however, there is no requirement to place labels on livestock 
from which meat is produced. 
                                                      
418 Appellate Body Report, Korea – Various Measures on Beef , para. 135 (original emphasis).  See also 
ibid., paras. 136-137. 
419 See Canada's second written submission, paras.  17-23 and Mexico's response to Panel question 
No. 94. 
420 United States' first written submission, para. 33;  7 U.S.C.  § 1638a(a)(1). WT/DS384/R 
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  7.283  Nevertheless, the COOL measure and the C OOL labels are difficult to dissociate from 
upstream stages of meat production.  The labels are intended to convey information on the "origin" of 
meat.  Under the COOL statute, the ground-meat labe l shall list "all of the countries of origin of ... 
ground beef [or] ... pork" or "all of the reasonably po ssible countries of origin of ... ground beef [or] ... 
pork".
421  According to the 2009 Final Rule (AMS), these terms refer to the origin of meat that has 
been ground:  "if a country of origin is utilized as a raw material source in the production of ground 
meat, it must be listed on the label".422 
7.284  For the four muscle cut labels, country of orig in is determined by the country in which 
specific livestock production and processing steps, name ly birth, raising and slaughtering, took place.  
All three of these steps precede the meat retail stage;   indeed, they cover the period back to the birth 
of the animal from which meat is produced.  The st atutory definitions of the four muscle cut labels 
determine "origin" by explicit reference to the "ani mal" which the meat subject to COOL labelling is 
"derived from": 
MUSCLE 
CUT LABEL REFERENCE IN THE 
COOL STATUTE423 STATUTORY DEFINITION424 
Label A "United States Country of Origin" "beef [or] ... pork ... derived from an animal 
that was ... exclusively born, raised, and slaughtered in the United States" 
Label B "Multiple Countries of Origin" "beef [or] ... pork ... derived from an animal 
that is –  (i)  not exclusively born, raised and slaughtered in the United States; (ii) born, raised or slaughtered in the United States;  and (iii) not imported into the United States for immediate slaughter" 
Label C "Imported for Immediate Slaughter" "beef [or] ... pork ... derived from an animal 
that is imported into the United States for immediate slaughter" 
Label D "Foreign Country of Origin" "beef [or] ... pork ... derived from an animal ... 
not born, raised, or slaughtered in the United States" 
 
7.285  Given the distinction under the COOL measure between the labelling regimes applicable to 
muscle cuts and ground meat, we addres s these two labelling regimes separately. 
Muscle cut labels 
The relationship among the muscle cu t labels under the COOL measure 
7.286  The definitions of the four muscle cut labe ls under the COOL measure are mutually 
exclusive, and they distinguish between Label A and the rest of the muscle cut labels (Labels B-D) as 
regards the origin of livestock.  Label A refers  to muscle cuts from livestock born, raised and 
                                                      
421 7 U.S.C. § 1638a(a)(2)(E). 
422 74 FR 2671. 
423 7 U.S.C. §§ 1638a(a)(2)(A)-(D). 
424 7 U.S.C. §§ 1638a(a)(2)(A)-(D).  WT/DS384/R 
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  slaughtered in the United States;  in other words, livestock with no imported element.  Conversely, the 
other three muscle cut labels, Labels B-D, all identify livestock with some imported element.  
Under these three labels, at least one (for Labels B-C) but possibly all three (for Label D) livestock 
processing steps determining origin (i.e. birth,  raising and slaughtering), as defined by the 
United States, have taken place outside of the United States. 
7.287  The COOL measure provides some – albeit limited  – flexibility between the use of Label A 
and the rest of the labels.  First, Label A cannot be  used for meat eligible for the other three labels 
(Labels B-D), i.e. for meat from livestock for which at least one  of the three processing steps 
determining origin under the COOL measure has ta ken place outside the United States.  In other 
words, there is no flexibility under the COOL measure allowing for meat from imported livestock to 
carry Label A.  This is underscored by the word "e xclusively" in the statutory definition of Label A. 
7.288  As regards the other three labels, Label D is not interchangeable with any other muscle cut 
labels, whereas the COOL measure allows for cer tain flexibilities betwee n Labels B and C.  
Specifically, the 2009 Final Rule (AMS) explicitly allows for affixing Label B on Labels B and C 
meat commingled on a single production day.425  Further, Labels B and C may overlap in practice 
since "the countries of origin may be listed in any order"426 on Label B.  Thus, specific Labels B 
and C may look the same, provided that the countries involved in the production of the Label B and C muscle cuts in question are the same. 
7.289  In any event, flexibilities between Labels B and C have limited relevance for the 
complainants' claims under Article 2.1 of the TB T Agreement.  In the context of these claims, 
the focus of our analysis is the distinction betw een Label A, defined as "United States Country of 
Origin" in the COOL statute, and the rest of the labels, which all involve livestock with an imported 
element. 
7.290  In this regard, we note that there was a major fl exibility in that, prior to the 2009 Final Rule 
(AMS), it was possible to use Label B for muscle cuts eligible for Label A (but not vice versa ) – even 
without commingling.  By using "and/or", the In terim Final Rule (AMS) of August 2008 explicitly 
allowed using Label B for Labe l A meat without limitations: 
"If an animal was born, raised and/or slaughtered in the United States and was not 
imported for immediate slaughter as defined in § 65.180, the origin of the resulting meat products derived from that animal  may be designated as Product of the 
United States, Country X, and/or (as applicable) Country Y, where Country X and Y 
represent the actual or possible countries of origin."
427  (emphasis added) 
7.291  In fact, at least two major US meat processors declared in 2008 that they would be complying 
with the COOL requirements by "offering the majo rity of [their] beef and pork cuts under the 
multi-country Category B label"428, with one of them pointing out that "the complexity, costs, and 
                                                      
425 74 FR 2659. 
426 74 FR 2659. 
427 73 C.F.R. § 65.300(e)(1)(i) (Exhibits CDA-3 and MEX-4).  This was also possible in part because 
the COOL statute uses the word "may" in regard to designating products with Labels A and B.  Under the 
COOL statute, "[a] retailer of a covered commodity may designate the covered co mmodity as exclusively 
having a United States country of origin only if the covered commodity is derived from an animal that [fulfils 
the requirements for Label A]."  Further, "a retailer of  a covered commodity that [fulfils the requirements for 
Label B] may designate the country of origin of such covered commodity as all of the countries in which the 
animal was born, raised or slaughtered."  7 U.S.C. §§ 1638a (a)(2)(A) and 1638a(a)(2)(B)(i) (emphasis added). 
428 Exhibits CDA-36 and 38, MEX-33.  See also Exhibits CDA-21 to 23, 39, 77 (BCI), MEX-55, 57 
and 83. WT/DS384/R 
WT/DS386/R Page 82 
 
 
  incremental record keeping associated  with sorting livestock and finished product into both categories 
#1 [Label A] and #2 [Label B] [would be] extremely costly".
429 
7.292  This predominantly Label-B approach involved a significant proportion of meat that would 
have been otherwise only eligible for Label A.  As the US Congressional Research Service explained: 
"[a]fter issuance of the interim rules in August 2008, many retailers and meat 
processors reportedly had planned to use the 'catch-all' label ... [i.e. Label B] on as 
much meat as possible – even products that would qualify for the U.S.-only label, because it was both permitted and the easiest requirement to meet."
430 
7.293  This flexibility, however, ended with the 2009 Final Rule (AMS).  The 2009 Final Rule 
(AMS) recorded "extensive f eedback from livestock producers, members of Congress, and other 
interested parties expressing concern about the provi sion in the [I]nterim [F]inal [R]ule [(AMS) of 
August 2008] that allowed U.S. origin [i.e. Label A]  product to be labeled w ith a mixed origin label 
[i.e. Label B]".431  The 2009 Final Rule (AMS) added that "[ i]t was never the intent of the Agency 
[i.e. USDA] for the majority of product eligible to bear a U.S. origin declaration to bear a multiple 
origin designation".432 
7.294  Thus, the 2009 Final Rule (AMS) removed th e unlimited possibility of using Label B for 
Label A muscle cuts, and allowed such use only when the two types of meat are commingled on a 
single production day: 
"For muscle cut covered commodities deri ved from animals born, raised, and 
slaughtered in the U.S. that are commingled during a production day with muscle cut 
covered commodities derived from animals that  were raised and slaughtered in the 
United States, and were not derived from animals imported for immediate slaughter 
as defined in § 65.300(e)(1), the origin  may be designated as Product of the 
United States, Country X, and (as applicable) Country Y."433 
7.295  In other words, under the COOL measure, in particular the 2009 Final Rule (AMS), Label B 
may be used for Label A meat but only in the case of commingling on a single production day.  Under 
the COOL measure, therefore, imported livestock is ineligible for the label reserved for meat from 
                                                      
429 Exhibit CDA-21. 
430 Exhibits CDA-117, 199 and MEX-53. 
431 74 FR 2659. 
432 74 FR 2659. 
433 74 C.F.R. § 65.300(e)(2).  See also 74 FR 2659.  This is also confirmed by the industry guidance 
provided by USDA.  In dealing with Frequently Asked Questions on COOL, USDA issued three publications on 
11 (Exhibit CDA-29), 19 (Exhibit CDA-30) and 26 September 2008 (Exhibit CDA-31), respectively.  The first 
two publications posed the question whether "a retailer, like a meat packer, [can] label meat products derived 
from livestock born, raised, and slaughtered in the United States (i.e. Product of USA) as having a mixed origin 
(e.g., Product of the United States, Canada, and Mexico)?", and responded without reservations in the 
affirmative:  "Yes.  Retailers are permitted to market U.S. produced meat products under a mixed origin label 
declaration." (Exhibits CDA-29 and 30) 
Conversely, in response to the same question, the third publication, dated 26 September 2008, reduced 
this possibility to Label A and B meat commingled on a single production day: 
"Similar to packers and intermediary suppliers, retailers are permitted to market U.S. produced meat products under a mixed origin label (e.g., Product of U.S., Canada and Mexico)  if they 
are commingled with meat of mixe d origin. That is, if a retailer further processes meat at the 
store and the resulting package includes meat of both U.S. origin and mixed origin (e.g., Product of U.S., Canada and Mexico), the origin declaration can read Product of U.S., 
Canada and Mexico."  (Exhibit CDA-31)  WT/DS384/R 
 WT/DS386/R 
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  exclusively US-origin livestock, whereas in certain  circumstances meat from domestic livestock is 
eligible for a label that involves imported livestock. 
7.296  We consider this difference only as "the starting point"434 of our analysis of the complainants' 
national treatment claims under Article 2. 1 of the TBT Agreement.  Indeed, in Korea – Various 
Measures on Beef,  the Appellate Body held that differential treatment does not necessarily violate 
Article III:4 of the GATT 1994:  "[a] measure that provides treatment to imported products that is 
different  from that accorded to like domestic products is not necessarily inconsistent with Article III:4, 
as long as the treatment provided by the measure is 'no less favourable'".435 
7.297  Further, the complainants are not contesting an y formal difference in the treatment accorded 
to domestic and imported livestock per se , nor the existence or exte nt of the flexibility of 
commingling domestic with imported livestock.  In stead, they argue that th e COOL measure accords 
de facto less favourable treatment to imported livestock.436  This raises the threshold question whether 
Article 2.1 of the TBT Agreement covers both de jure and de facto discrimination. 
De jure  versus de facto  discrimination 
7.298  In Canada – Autos, the Appellate Body held that "Ar ticle III:4 of the GATT 1994 covers both 
de jure and de facto inconsistency.437"438  In Korea – Various Measures on Beef,  the Appellate Body 
added that: 
"A formal difference in treatment betwee n imported and like domestic products is ... 
neither necessary, nor  sufficient to show a violation of  Article III:4.  Whether or not 
imported products are treated 'less favourab ly' than like domestic products should be 
assessed instead by examining whether a measure modifies the conditions of 
competition  in the relevant market to th e detriment of imported products."439 
7.299  Similarly, we read Article 2.1 of the TBT Agreement as prohibiting both de jure  and de facto 
less favourable treatment for like imported products .  In fact, like Article III:4 of the GATT 1994, 
Article 2.1 of the TBT Agreement lays down the na tional treatment obligation with language that is 
silent on any distinction between de jure  and de facto  discrimination.  In EC – Bananas III,  the 
Appellate Body held that Artic le II of the GATS covers both de jure and de facto discrimination since 
that provision, in particular the phrase "treatment no less favourable", is silent on such a distinction: 
"The obligation imposed by Article II is unqualified.  The ordinary meaning of this 
provision does not exclude de facto  discrimination."440 
7.300  To effectively ensure equality  of competitive conditions, Article 2.1 of the TBT Agreement 
cannot exclude measures that discriminate in effect .  Limiting Article 2.1 of the TBT Agreement to 
                                                      
434 Panel Report, EC – Trademarks and Geographical Indications (Australia) , para. 7.464. 
435 Appellate Body Report, Korea – Various Measures on Beef , para. 135 (original emphasis).  See also 
ibid., paras. 136-137. 
436 See Canada's response to Panel question Nos. 42 and 46 and Mexico's first written submission, 
paras. 218, 220 and 263. 
437 (footnote original)  See, e.g. Panel Report, Italian Discrimination against Imported Agricultural 
Machinery , L/833, BISD 7S/60, adopted 23 October 1958, para. 12. 
438 Panel Report, Canada – Autos , para. 140. 
439 Appellate Body Report, Korea – Various Measures on Beef , para. 137 (original emphasis). 
440 Appellate Body Report, EC – Bananas III , para. 233.  See also Appellate Body Report, Canada – 
Autos , para. 141. WT/DS384/R 
WT/DS386/R Page 84 
 
 
  de jure discrimination would facilitate circumvention.
441  As the Appellate Body explained in EC – 
Bananas III with regard to Article II of the GATS: 
"[I]f Article II was not applicable to de facto  discrimination, it would not be difficult 
– and, indeed, it would be a good deal easier in the case of trade in services, than in 
the case of trade in goods – to de vise discriminatory measures aimed at 
circumventing the basic purpose of that Article."442 
7.301  As the TBT Agreement serves "to further the objectives of GATT 1994", it would be 
incongruous to interpret Article 2. 1 of the TBT Agreement as excluding de facto  discriminatory 
treatment, while the corresponding national treatment  provision in Article III:4 of the GATT 1994 
covers that type of discrimination. 
7.302  Accordingly, we continue our analysis by a ddressing whether the muscle cut labels under the 
COOL measure accord de facto less favourable treatment to import ed than to domestic livestock and 
de facto modify the conditions of competition  in the US market to the detriment of imported 
livestock.443  The complainants allege this is the c ase because in general the COOL measure entails 
higher costs for handling imported than domestic livestock.  We now turn to this issue. 
Costs of compliance with the COOL measure 
7.303  The complainants argue, and the United Stat es does not contest, that the COOL measure 
involves compliance costs.  In fact, in the 200 9 Final Rule (AMS), USDA indicated that the 
COOL measure entails compliance costs for all pa rticipants in the livestock and meat sector: 
"[F]irms and establishments throughout th e supply chain for affected commodities 
will incur costs associated with the im plementation of COOL.  This includes 
producers, intermediaries, and retailers."444 
7.304  The 2009 Final Rule (AMS) includes a dedicated section analysing the benefits and costs of 
the COOL measure for various st ages of the meat supply chain.445  As regards cattle and beef, for 
"retail stores", the USDA cost analysis identifies the following as "cost drivers":  "individual package 
labels or other point-of-sale materials", pot ential "additional labor and personnel training", 
"modification of existing recordkeeping systems", possibly involving "software programming and ... 
additional computer hardware".446 
7.305  The analysis then turns to "dis tribution centers or warehouses", explaining that "[d]irect store 
deliveries (such as when a local truck farmer deliver s fresh produce directly to a retail store) are an 
exception".  For the distribution segment, the USDA cost analysis identifies the following as cost 
drivers:  the "modification of existing recordkeep ing processes", "additional labor and training" and 
"new processes and procedures needed to maintain the flow of country of origin ... information 
through the distribution system".  Moreover, accordi ng to the USDA cost analysis, "[t]here may be a 
                                                      
441 See Appellate Body, Canada – Autos , para. 142 and Appellate Body Report, EC – Bananas III , 
para. 233. 
442 Appellate Body Report, EC – Bananas III , para. 233. 
443 In light of the complainants' arguments, we re frain from addressing whether the COOL measure 
involves de jure less favourable treatment for imported Canadian and Mexican livestock. 
444 74 FR 2680.  See also Exhibits CDA-72 (BCI) and US-18. 
445 See 74 FR 2682 et seq . 
446 74 FR 2684-2685.  WT/DS384/R 
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  need to further separate products within the warehouse, add storage slots, and alter product stocking, 
sorting, and picking procedures".447 
7.306  Turning to beef "packers and processors", the USDA cost analysis points out that 
"[t]he efficiency of operations may be affected  as products move through the receiving, storage, 
processing, and shipping operations".448  Finally, at "the productio n level", according to the USDA 
cost analysis, "additional producer costs incl ude the cost of modifying and maintaining a 
recordkeeping system for country of origin informat ion, animal or product identification, and labor 
and training".  The USDA cost analysis adds that: 
"[T]o estimate the direct cost of this rule , the focus is on those units of production 
that are affected ... For livest ock, the relevant unit of pr oduction is an animal because 
there will be costs associated  with maintaining country of origin information on each 
animal.  These costs may include recordkeep ing, ear tagging, and other related means 
of identification on either an individual animal or lot basis."449 
7.307  The USDA cost analysis of the COOL measur e points to increasing costs as livestock and 
meat move downstream in the supply and marketing chain, based on "the expectation of relatively 
small implementation costs at the cow-calf level of production, but relatively higher costs each time 
cattle are resold".  As regards intermediaries, the 2009 Final Rule (AMS) expects "increased costs 
associated with tracking cattle and the covered beef commodities produced from these animals and 
then providing this information to subsequent purchasers, which may be other intermediaries or 
covered retailers".  According to the 2009 Final Ru le (AMS), "[i]ncremental costs for beef packers 
may include additional capital and labor expenditures to enable cattle from different origins to be 
tracked for slaughter, fabrication and processing".  Fo r retailers, the 2009 Final Rule (AMS) takes into 
account specific: 
"[C]osts for individual package labels, m eat case segmentation, record keeping and 
information technology changes, labor, trai ning, and auditing.  In addition, there 
likely will be increased costs for in-store butcher depart ment operations related to 
cutting, repackaging, and grinding operations."450 
7.308  For hogs, the 2009 Final Rule (AMS) depicts a similar situation.  It estimates that "[c]osts for 
all pork sector intermediaries (including handlers, processors, and wholesalers) should be similar to 
costs for beef sector intermediaries".  As regards pork retailers, the 2009 Final Rule (AMS) estimates 
costs being "lower than for beef" retailers but this difference is primarily due to "higher costs incurred 
by in-store grinding operations to produce ground beef", whereas "most ground pork is processed into 
sausage and other products not covered by the [2009 Final R]ule [(AMS)]".451 
7.309  Canada submitted a cost assessment of the COOL  requirements prepared by a consultancy, 
Sparks Companies Inc., in 2003.452  Further, both complainants su bmitted an updated version of this 
cost assessment prepared by Informa Economics, the successor to Sparks Companies Inc., in 2010 on 
the basis of 2009 data.453 
                                                      
447 74 FR 2685. 
448 74 FR 2685. 
449 74 FR 2685. 
450 74 FR 2687. 
451 74 FR 2687. 
452 See Exhibit CDA-70. 
453 See Exhibits CDA-64 and MEX-24. WT/DS384/R 
WT/DS386/R Page 86 
 
 
  7.310  Although the United States has called into ques tion the underlying data and methodology of 
these studies, these criticisms relate primarily to th e specific cost estimates in the studies and the 
comparison between the costs incurred by handling on ly US-origin versus ha ndling both domestic and 
imported livestock and meat.
454  The United States has not contested the findings of the Sparks and 
Informa reports regarding the existence of the co sts incurred as a result of the country of origin 
labelling requirements at the various livestock and meat  processing stages.  Like the cost analysis of 
the 2009 Final Rule (AMS), the Informa Report finds that, in general, costs of compliance with the 
requirements arise at every stage of the livestock and meat supply chain, and that these costs increase 
as livestock and meat move downstream in the chain.  The United States has not contested these 
aspects of the Informa Report.  In fact, as Canada points out455, already the 2003 Proposed Rule relied 
on the Sparks Report to assess the costs associated with the adoption of country of origin labelling 
requirements.456  Accordingly, we consider that these repor ts confirm the general observations of the 
2009 Final Rule (AMS) with regard to the existence of costs involved in the COOL measure.457 
7.311  The United States argues that any regulation potenti ally involves costs.  But it is not the costs 
of the COOL measure in itself that the complainants contest in this dispute.  Rather, they argue that 
the compliance costs of the COOL measure are di stributed differentially between domestic and like 
imported livestock, to the detriment of the latter. 
7.312  The United States also argues that any regulati on may involve differential costs for different 
types of market participants.458  In support of this contention, the United States references the 
OECD Council Recommendation on Improving th e Quality of Government Regulation459 and the 
OECD Guiding Principles for Regulatory Quality and Performance.460 
7.313  As we explained461, like Article III:4 of the GATT 1994, Article 2.1 is concerned with the 
equality of competitive conditions between domes tic and imported products.  This has been 
interpreted as meaning that "a measure accords less favourable treatment to imported products if it 
gives domestic like products a competitive advant age in the market over imported like products".462  
The flip side of this is that, under Article  III:4 of the GATT 1994 and Article 2.1 of the 
TBT Agreement, no competitive disadvantage shall be  accorded to imported products as compared to 
like domestic products.  A cost resulting from a (technical) regulation may qualify as a competitive 
disadvantage if it is incurred only by importe d and not like domestic products.  The OECD 
Recommendation and Guiding Principles referenced by the United States do not suggest that higher costs for foreign products are an attribut e or acceptable effect of sound regulation. 
7.314  Accordingly, we turn to whether the costs of  the COOL measure are higher for imported than 
for domestic livestock, and result in less favourable treatment for imported livestock.  In light of the 
complainants' arguments, we first assess whether the COOL measure involves segregation of meat 
and livestock according to origin. 
                                                      
454 See Exhibit US-43. 
455 See Canada's opening oral statement at the fi rst substantive meeting of the Panel, para. 41. 
456 See 68 FR 61962 (Exhibit CDA-11). 
457 For a more detailed summary and analysis of the Informa Report, see paras. 7.489-7.499 below. 
458 See United States' first written submission, paras. 193-194. 
459 See Exhibit US-45.  S ee also Exhibit US-66. 
460 See Exhibit US-44. 
461 See para. 7.276 above. 
462 Appellate Body Report, Dominican Republic – Import and Sale of Cigarettes , para. 93.  See also 
Panel Report, Mexico – Taxes on Soft Drinks , para. 8.117.  WT/DS384/R 
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  Segregation 
7.315  Turning to whether the COOL measure requires segregation according to origin, we note that 
the COOL measure does not explicitly require segre gation, let alone the segregation of domestic and 
imported livestock.  In relevant pa rt, it sets out labelling requirement s for muscle cuts of meat, namely 
beef and pork, at the retail stage, i.e. "at the final point of sale to consumers".463  However, as we 
explained above, the COOL measure requires labelling of meat based on the origin of an animal from 
which meat is derived, and upstream stages of livest ock and meat production are directly relevant for 
determining the origin of meat. 
7.316  To accurately label muscle cuts under the COOL  measure, a covered retailer needs to possess 
information on where livestock processing steps dete rmining origin under the COOL measure have 
taken place with regard to each muscle cut.  This  information can be obtained only from the upstream 
livestock and meat supply chain.  This is why, as explained above464, the COOL measure establishes 
recordkeeping requirements – as well as sanctions fo r violating these – for both retailers and any 
"person engaged in the business of supplying a c overed commodity to a retailer".  In fact, the 
2009 Final Rule (AMS) elaborates on the "Responsibilities of Retailers and Suppliers " and references 
a "recordkeeping provision concerning livestock ".465  In addition, the COOL measure requires "[a]ny 
person engaged in the business of supplying a c overed commodity to a retailer [to] provide 
information to the retailer indicating the country of origin of the covered commodity".466 
7.317  Hence, as a matter of principle, the COOL m easure prescribes an unbroken chain of reliable 
country of origin information with regard to every an imal and muscle cut.  In other words, to comply 
with the COOL measure, livestock and meat processors  need to possess, at each and every stage of the 
supply and distribution chain, the kind of origin in formation required by the various COOL labels for 
which each animal or portion of meat is eligible, a nd they need to transmit such information to the 
next processing stage.  The 2009 Final Rule (AMS) str esses that "it is necessar y to ensure information 
accurately reflects the origin of any group, lot, bo x, or package in accordance with the intent of the 
statute ...".467  Further, under the 2009 Final Rule (AMS),  as a general rule, "[l]abeling of covered 
commodities offered for sale whether individually, in a bulk bin, carton, crate, barrel, cluster, or 
consumer package must contain country of origin as set forth in this regulation".468 
7.318  Further, in its analysis of the costs and be nefits of the COOL measure, the 2009 Final Rule 
(AMS) points out that the COOL measure creates costs throughout the supply chain by requiring an 
unbroken chain of reliable country of origin information: 
"[T]his [Final R]ule directly regulates the ac tivities of retailers (as defined by the law) 
and their suppliers.  Retailers are required by  the rule to provide country of origin 
information for the covered commodities that they sell, and firms that supply covered 
commodities to these retailers must provide them  with this information.  In addition, 
virtually all other firms in the supply chain for the covered commodities are 
potentially affected by the rule because country  of origin information will need to be 
maintained and transferred along the entire supply chain."469 
                                                      
463 7 U.S.C. § 1638a(a)(1). 
464 See paras. 7.116-7.122 above. 
465 74 FR 2660 (emphasis added). 
466 7 U.S.C. § 1638a(e). 
467 74 FR 2684. 
468 74 C.F.R § 65.300(a). 
469 74 FR 2684. WT/DS384/R 
WT/DS386/R Page 88 
 
 
  7.319  As regards ensuring this unbroken chain of relia ble country of origin information, the 2009 
Final Rule (AMS) explains that "the COOL  program is ... [not] a traceability program"
470, and the 
COOL statute prohibits USDA from imposing "a mandatory identification system to verify the country of origin of a covered commodity".
471  Further, the recordkeeping obligations for retailers and 
their suppliers under the COOL statute are limited to  "records maintained in the normal conduct of the 
business of such person, including animal health papers, import or customs documents, or producer 
affidavits"472, and the COOL statute explicitly prohibits USDA from requiring retailers and suppliers 
to maintain any "additional records".473  For instance, the COOL measure allows the use of 
established identification numbers or ear tags  to identify the origin of live animals.474 
7.320  Accordingly, a practical way to ensure that the chain of reliable information on country of 
origin required by the COOL measure remains unbroken is the segregation of meat and livestock 
according to origin as defined by the COOL measure. 
7.321  This is confirmed by the Country of Origin Labeling Compliance Guide revised by USDA in 
May 2009, which was issued after the entry into force of the 2009 Final Rule (AMS).  This USDA 
Compliance Guide mentions a " segregation plan" as one of the  "examples of records and activities 
that may be useful" to comply with the COOL measure.475 
7.322  In regard to " Cattle, Beef, Muscle Cuts of Beef, Ground Beef ", the same USDA Compliance 
Guide references a "segregation plan " specifically for each type of participant in the meat supply 
chain from "[s]eed [s]tock/[c]ow [c]alf" all the way to "[d]istributor".476  Further, it refers to the 
"[r]esponsibility" of each type of participant fo r identifying the origin of all products processed, 
including meat and animals, and segregating or at least providing or maintaining origin information: 
TYPE OF PARTICIPAN T RESPONSIBILITY 
"Seed Stock/Cow Calf" "Provide enough information for an auditor to verify 
the origin and ownership of the animals identified and to verify the stated designation.  Properly identify and 
record all animals  according to the designation." 
"Stocker/Backgrounder" "Identify and segregate animals as to the origin 
designation .  Properly identify all  animals sold.  
Maintain the integrity of the identification .  Maintain 
ownership transfer."  
"Preconditioning/Feedlot" " Upon receipt properly identify animals  according to 
their designation.  Segregate  and control animals .  
Properly identify all animals sold.  Maintain 
ownership records. " 
                                                      
470 74 FR 2679. 
471 7 U.S.C. § 1638a(f)(1).  See also Exhibit MEX-101. 
472 7 U.S.C. § 1638a(d)(2)(A). 
473 7 U.S.C. § 1638a(d)(2)(B). 
474 See 74 FR 2660. 
475 Exhibits CDA-65 and MEX-41. 
476 Exhibits CDA-65 and MEX-41.  WT/DS384/R 
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  TYPE OF PARTICIPAN T RESPONSIBILITY 
"Slaughter/Fabricator" " Segregate animals according to the country 
designation .  Segregate and control carcasses 
throughout the system and properly label product according to the country designation.  Document origin of all products ." 
"Fabricator/Processor" " Transfer labels and identification of all products 
processed.   Operate under a labeling program.  
Inventory all products according the origin ." 
"Distributor" " Maintain the integrity of labeled product.  
If repackaged, transfer the original identification. "477 
 
7.323  For " Hogs, Pork, Muscle Cuts of Pork, Ground Pork ", the USDA Compliance Guide similarly 
refers to "segregation plans" in regard to partic ipants in the meat supply chain from "Feeder/Finish" 
onward.  In addition, the USDA Compliance Guide lists the following as the "[r]esponsibility" of each 
type of participant: 
TYPE OF PARTICIPAN T RESPONSIBILITY 
"Nursery" "Identify animals as to the sow/farrow origin.  
Maintain the integrity of the identification system .  
Document all movements of animals."  
"Feeder/Finish" " Upon receipt properly id entify animals according to 
their designation.  Segregate  and control animals.  
Properly identify all animals sold.  Maintain 
ownership records. " 
"Slaughter/Processor" " Segregate animals according to the country 
designation.  Segregate and control carcasses throughout the system and properly label product according to the country designation.  Document origin of all products. " 
"Processor" " Transfer labels and identification of all products 
processed.   Operate under a SOP the [ sic] addresses 
labeling.  Inventory all products according to the 
origin. " 
"Distributor" " Maintain the integrity of the product.  If repackaged, 
transfer the original identification. "478 
 
7.324  These passages also underscore that the COOL measure involves not only initial adjustment 
costs but also regular costs that participants in the supply and distribution chain will incur in their 
daily operations.  As the 2009 Final Rule (AMS) e xplains, "[t]he costs of production for directly 
affected firms increase due to the costs of implementing the COOL programme"479, and "[t]he rule 
increases the operating costs for the supply chains of  the covered commodities".480 
                                                      
477 Exhibits CDA-65 and MEX-41 (emphasis added). 
478 Exhibit CDA-65 (emphasis added). 
479 74 FR 2683. 
480 74 FR 2691. WT/DS384/R 
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  7.325  Various entities in the United States have expr essed the view that the COOL measure will 
necessarily lead to segregation in the meat suppl y chain.  The US Congressional Research Service 
explained that among the various commodities covere d by the COOL measure, "[t]he meat labeling 
requirements have proven to be among the most co mplex and controversial areas of rulemaking, in 
large part because of the steps that U.S.  feeding operations and packing plants must  adopt to 
segregate, hold, and slaughter foreign-origin livestock from U.S. livestock".
481  Further, a 
backgrounder on the COOL measure by the Food  Marketing Institute (FMI), whose members 
represent  "three-quarters of all retail food store sales in the United States", explains that "[t]he law 
requires  the entire supply chain — from the farm to the retail store — to segregate, track and 
document the origin of hundreds of foods, including those produced in the U.S. and imported from 
more than 50 countries".482  The same FMI backgrounder adds that "[the] labeling and segregation 
systems [entailed in the COOL measure] will be ex tremely costly and complex for the large quantities 
of beef and produce that are multinational in their origin, processing and packaging".483 
7.326  Under the provisions of the COOL statute, th e COOL requirements are enforced by USDA, 
which can eventually also impose a fine "for each violation" on a retailer or  a person engaged in the 
business of supplying the covered commodity to a retailer.484  Lack of segregation is not identified as 
a violation of the COOL measure subject to a fine.  Yet, the COOL measure does set out the 
possibility of USDA imposing a fine on a reta iler or supplier breaching the recordkeeping 
requirements (which may be complied with, for instance, by means of a "segregation plan") or on a supplier breaching the requirement to provide accurate information on country of origin.
485 
7.327  In light of these considerations, we c onclude that, for all practical purposes, 
the COOL measure necessitates segregation of meat  and livestock according to origin, even though 
this segregation is subject to certain flexibilities,  which we have described above, and the cost 
implications of which we address in more detail further below. 
7.328  In any event, the complainants are not ar guing, and we do not find, that segregation per se  
would be a violation of Article 2.1 of the TBT Agreement.  As the Appellate Body held in Korea – 
Various Measures on Beef , the "separation [of imported and domestic products], in and of itself , does 
not necessarily compel the conclusion that the treatment  thus accorded to imported [products] is less 
favourable than the treatment accorded to domestic [products]".486  Rather, the question is whether 
such separation "modifies the conditions of competition  ... to the disadvantage of the imported 
product"487 by imposing higher costs on imported than on domestic livestock. 
7.329  We therefore turn to whether the segregation of livestock – to the exte nt it is necessitated by 
the COOL measure, and taking also into consid eration the commingling flexibility – imposes higher 
costs on imported livestock than on like domestic livestock. 
                                                      
481 Exhibits CDA-117, CDA-199 and MEX-53 (emphasis added). 
482 Exhibit CDA-192 (emphasis added).  See also Exhibits CDA-69, 75, 76, 81, 90 (all BCI), 
MEX-37 and 97 (both BCI). 
483 Exhibit CDA-192.  See also Exhibits CDA-69, 75, 76, 81, 90 (all BCI). Exhibits MEX-33 and 55.  
See also Exhibits, MEX-37, 42 and 97 (all BCI). 
484 See 7 U.S.C. § 1638b(b). 
485 See also the USDA Compliance Guide, which explicitly identifies "Failure to Maintain Records" 
and "Failure to Provide COOL Information" as violations, and explicitly references the table listing 
"segregation plans" as one of the " examples of the types of records that ma y be useful to comply with the record 
keeping requirements for County of Origin labeling."  ( Exhibit CDA-65). 
486 Appellate Body Report, Korea – Various Measures on Beef , para. 144 (original emphasis). 
487 Appellate Body Report, Korea – Various Measures on Beef , para. 144 (original emphasis).  WT/DS384/R 
 WT/DS386/R 
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  Whether segregation entails higher costs for imported livestock 
7.330  The segregation involved in the COOL measu re does not necessarily impose differential 
implementation costs on imported and domestic products.  If importe d and domestic livestock are 
being processed, in principle, these need to be equally  segregated from each other according to origin.  
In principle, the resulting implementation costs ar e the same for both imported and domestic products. 
7.331  Yet, it is evident that the more origins and the more types of muscle cut labels involved, the 
more intensive the need for segregation throughout  the livestock and meat supply and distribution 
chain.  In turn, more intensive segregation leads to higher compliance costs with the COOL measure. 
7.332  As the Chief Economist of USDA explained in his statement to the Committee on Agriculture 
of the US House of Representatives: 
"Regarding the costs of country of origin la beling, they depend on the extent to which 
firms have to implement new control and verification systems including recordkeeping, reconfiguring processing and handling, producing signage and labels 
and training and educating their staff. 
... 
Several studies have estimated the costs fo r the cattle/beef and hog/pork sectors at up 
to several billion dollars annually, after examining all costs for the entire supply 
chain, including segregation and identity preservation."
488 
Segregation costs under five business scenarios 
7.333  In the context of the COOL measure, there ar e five possible business scenarios in terms of 
whether the livestock being processed has domestic or imported origin: 
(a) processing domestic and imported livestock and meat irrespective of origin and solely 
according to price and quality; 
(b) processing meat from exclusively domestic livestock; 
(c) processing meat from exclusively imported livestock; 
(d) processing exclusively domestic and exclusively imported livestock at different 
times;  or 
(e) processing both domestic and imported meat by commingling the two on the same 
production day. 
7.334  These business scenarios involve different levels  of segregation and, accordingly, different 
relative compliance costs. 
                                                      
488 Exhibit MEX-51. WT/DS384/R 
WT/DS386/R Page 92 
 
 
  Processing domestic and imported livestock and meat solely 
according to price and quality 
7.335  The COOL measure does not prohibit processing domestic and imported livestock and meat 
solely according to the price and quality of the products, i.e. based on purely competitive 
considerations and irrespective of the origin of livestock. 
7.336  This, however, seems a rather costly way of co mplying with the COOL measure.  Muscle cuts 
processed under this scenario are eligible for at le ast two different labels.  To ensure the unbroken 
chain of reliable country of origin informati on required under the COOL measure, this business 
scenario involves the identification by origin of each and every livestock and piece of meat 
throughout the supply and distribution chain.  This  entails extensive segregation, and relatively high 
compliance costs at every stage. 
Processing exclusively domestic or exclusively imported livestock 
7.337  The United States argues that segregation for muscle cuts may be avoided by processing 
livestock of either exclusively domestic or exclusively foreign origin.
489  Yet, these two scenarios are 
forms of separating imported and do mestic products.  Indeed, either  scenario involves an absolute 
form of segregation in that it reflects a choice of  not processing any domestic or foreign livestock at 
all. 
7.338  Undoubtedly, these two business scenarios involve  lower costs of compliance with the 
COOL measure, since there are fewer origins in volved, and thus less intensive segregation is 
necessary throughout the operation of the market pa rticipant in question.  Further reductions of 
compliance costs may be realized if entire supply chains switch to processing livestock and meat of 
exclusively domestic or exclusively foreign origin. 
Processing exclusively domestic and exclusively imported livestock at 
different times 
7.339  Market participants might also choose to  segregate imported and domestic livestock 
according to time, namely by processing exclus ively domestic livestock at certain times, and 
processing exclusively imported livestock at other times.   Under this scenario, segregation takes place 
by shifts or days. 
7.340  This approach, however, appears more costly than processing either exclusively foreign or 
domestic livestock.  Overall, this scenario still invol ves processing more than one origin by the same 
market participant.  Further, while segregation by time might reduce COOL compliance costs for 
individual market participants, e.g. a slaughterhou se, it does not reduce costs for suppliers, who need 
to segregate livestock by origin to allow meaningful segregation by time at a later stage.  In fact, one 
US hogs processor procuring imported hogs on specific days of the week indicated to its livestock 
suppliers that "[t]o clarify these limited delivery times , if you have Canadian born hogs, they must be 
segregated, therefore we can only accept them certain times during the week as listed".490 
7.341  This business scenario involves additional cost s for livestock suppliers as they can only 
supply specific origin meat at specific times.  As explained further below491, the complainants have 
                                                      
489 See United States' first written submission, para. 159. 
490 Exhibit CDA-105.  See also Exhibit MEX-106 (BCI). 
491 See paras. 7.345-7.372 below.  WT/DS384/R 
 WT/DS386/R 
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  submitted extensive evidence of the negative impact s of segregating imported livestock by time under 
the COOL measure. 
7.342  Nor is this scenario less costly for downstream  market participants, e.g. distributors and 
retailers, who need to segregate if they choose to handle the different origin meat processed at 
different times and carry ing different labels. 
Commingling domestic and imported livestock and meat on the same 
production day 
7.343  Market participants might also benefit from the above-mentioned commingling flexibility.  
This, however, allows the reduction of segregation costs only to a certain extent. 
7.344  Even at the stage where commingling takes plac e, it is limited to a single production day.  
Any commingled meat carrying, for instance, Labe l B still needs to be segregated at the processing 
stage and further downstream from Label A meat that was processed by the same slaughterhouse on 
another day.  Also, commingling still requires keep ing "accurate records" as well as maintaining the 
accuracy of country of origin information on mixe d-origin labels.  As the 2009 Final Rule (AMS) 
explains: 
"[t]he initiator may elect to segregate and specifically classify each different category 
within a production day or mix differe nt sources and provide a mixed label as long as 
accurate records are kept .  Likewise, if a retailer wants to mix product from multiple 
categories, it can only be done in multi- product packages and then only when product 
from the different categories is represented in  each package in order to correctly label 
the product."492 
Overall assessment of the costs of seg regation under the different business 
scenarios 
Incentive to process domestic livestock 
7.345  The above five business scenarios involve segrega tion of livestock and meat of domestic and 
imported origin at different levels of intensity and at different compliance costs.  Three of the five 
scenarios involve processing meat from both domestic and imported livestock;  one involves meat from exclusively domestic livestock;  and another i nvolves meat from exclusively imported livestock. 
7.346  As noted above, the more origins and labels i nvolved, the more intensive the segregation and 
the higher the compliance costs with the COOL measure throughout the livestock and meat supply 
chain.  Commingling might reduce these costs at specific stages, but overall it still involves higher 
costs than processing single origin livestock only. 
7.347  Accordingly, as a direct result of the COOL measure, business scenarios involving more than 
one origin or muscle cut label result in genera lly higher costs than scenarios involving only one 
origin.  The relatively less costly business scenar ios are the ones that in volve processing meat from 
either exclusively domestic or exclus ively foreign livestock at all times. 
7.348  As the 2009 Final Rule (AMS) explained: 
                                                      
492 74 FR 2670. WT/DS384/R 
WT/DS386/R Page 94 
 
 
  "[I]n the case where products of different origins are segregated, our analysis 
indicates costs are likely to increase.  The rule  requires that records be maintained to 
ensure that accurate country of origin in formation is retained throughout the process 
and available to permit compliance and enforcement reviews. 
Processors handling only domestic origin products or products from a single country 
of origin may have lower implementation costs compared with processors handling 
products from multiple origins, although such  costs would likely be mitigated in those 
cases where firms are only using covered commodities which are multiple-origin labeled."
493 
7.349  Turning to the scenario s involving either exclusively domestic or exclusively imported 
livestock, it seems logical that the scenario of pro cessing exclusively domestic livestock and meat is 
in general less costly and more viable th an processing exclusively imported livestock.  
Livestock imports have been a nd remain small compared to overall US livestock production and 
demand, and US livestock demand cannot be fulf illed with exclusively foreign livestock.494  And even 
if it could be, in light of the evidence before us, it appears that this scenario would in all likelihood 
involve more than one foreign origin, and thus in  general more segregati on and higher compliance 
costs than processing exclusively domestic livestoc k, which by definition has one single origin.  
Also, in general, US livestock is often geographically  closer to most if not all US domestic markets, 
so processing exclusively imported livestock and me at remains a relatively less competitive option. 
7.350  As a result, overall, the least costly way of complying with the COOL measure is to rely on 
exclusively domestic livestock.  Thus, in genera l, business scenarios involving imported livestock, 
including the scenario involving exclusively impor ted products, are overall more costly than the 
exclusively Label A approach. 
7.351  Livestock and muscle cuts are agricultural commodity products, and the various business 
scenarios are in competition with each other.  Th e compliance costs of the COOL measure, in 
particular the higher costs arising from the use of imported livestock, are at least in part passed on to 
upstream or downstream market participants, or both.   As a major US meat processor explained, when 
moving from a predominantly Label B to a mostly Label A approach: 
"[I]ncreased costs will resu lt from these changes.  Ultimately, we believe these 
additional expenses will have to be passed on through higher finished product prices 
or reduced prices for livestock."495 
7.352  In other words, under the COOL measure and all other things being equal, either consumers 
pay more or livestock producers receive l ess for the livestock they sell to processors. 
7.353  Indeed, it appears that the additional costs of the COOL measure cannot be fully passed on to 
consumers.496  As the 2009 Final Rule (AMS) explains, at least some of the compliance costs of the 
COOL measure will arise at the level of suppliers of covered commodities:  "[w]hile some of the 
increase in their costs will be offset by reduced production and higher prices over the longer term, the 
suppliers of the covered commodities will still bear direct implementation costs".497 
                                                      
493 74 FR 2685. 
494 See 74 FR 2690. 
495 Exhibits CDA-36 to 38, CDA-24 (BCI), MEX-33, 35, 55, 56 and 57. 
496 See, for instance, Exhibits MEX-58, 70 and 101. 
497 74 FR 2690.  WT/DS384/R 
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  7.354  The fact that consumers are not ready to bear all the costs of country of origin labelling of 
beef and pork is also demonstrated by the lack of interest in a voluntary COOL regime.  This is 
acknowledged by USDA itself in the 2009 Final Rule (AMS): 
"While USDA recognizes that there appears to  be consumer interest in knowing the 
origin of food based on the comments r eceived, USDA finds little evidence that 
private firms are unable to provide cons umers with country of origin labeling 
(COOL) consistent with this regulation, if consumers are willing to pay a price 
premium for it.  USDA also finds little evid ence that consumers are likely to increase 
their purchase of food items bearing the Unite d States origin label as a result of this 
rulemaking.  Current evidence does not s uggest that United States producers will 
receive sufficiently higher prices for Unite d States-labeled products to cover the 
labeling, recordkeeping, and other related cost s.  The lack of widespread participation 
in voluntary programs for labeling products of United States origin provides evidence that consumers do not have strong enough pr eferences for products of United States 
origin to support price premiums suffi cient to recoup the costs of labeling."
498 
7.355  In his statement to the Committee on Agriculture  of the US House of Representatives, the 
Chief Economist of USDA offered a similar explanation on the lack of  consumer interest in voluntary 
country of origin labelling.499  He pointed out that at least some of the compliance costs of the 
COOL measure would be borne by livestock producers: 
"Generally, when there is an increase in ma rketing costs like this rule would require, 
those costs would get passed on to consumers, and they would get passed back to 
suppliers – passed back to suppliers in the form of decreased demand for their 
product.  That is one possible conseque nce livestock producers face, decreased 
demand because of increased marketing costs.  Then they have their own direct increase in costs themselves that will be for ced on them by suppliers.  The prospect is 
that livestock prices would be the same or d ecline and profits probably decline.  The 
only thing that would overcome that is de mand in retail expands far out to overcome 
these effects, and as I stated, I think the prospects of that are low."
500 
7.356  In fact, there is direct evidence of ma jor slaughterhouses applying a considerable 
COOL discount of USD 40-60 per head for imported livestock.501  This proves that major processors 
are passing on at least some of the additional cost s of the COOL measure upstream to suppliers of 
imported livestock.502  We have no evidence of a similar di scount being applied to suppliers of 
domestic livestock, nor has the United States res ponded to the evidence submitted by Canada and 
Mexico in this respect. 
                                                      
498 74 FR 2682. 
499 The Chief Economist of USDA stated that "the re is evidence that consumer preference for 
domestic product is weak.  This evidence is the lack of voluntary programs that provide 
products labeled as domestic origin.  USDA has been offering the opportunity for a U.S.-origin meat labeling program for y ears and there have been no takers. 
If consumers distinguish goods depending on their country of origin, mark et incentives exist 
for suppliers to act without Government intervention, just as they do under voluntary certification programs such as for organic food s.  There, consumers willing to pay a premium 
sufficient to cover the additional costs of the program. [ sic]  While the market has given us 
evidence that consumers would be willing to pay for organic, if [ sic] has not done so for 
U.S. origin."  Exhibit MEX-51. 
500 Exhibit MEX-51. 
501 See Exhibits CDA-57 and 81 (both BCI), MEX-37, 46, 64, 97 and 105 (all BCI). 
502 See Exhibits MEX-37, 46,  97 and 105 (all BCI). See also Exhibit MEX-101. WT/DS384/R 
WT/DS386/R Page 96 
 
 
  7.357  The COOL measure creates an incentive for pa rticipants to process domestic rather than 
imported livestock because, under the COOL meas ure, processing meat from exclusively domestic 
livestock is less costly than other business scenario s.  Passing on these costs at least in part to 
imported livestock in turn creates a reduction in the competitive opportunities of imported livestock, 
relative to domestic livestock. 
7.358  In previous disputes, government measures creating an incentive to use domestic over 
imported input products were found inconsistent with Article  III:4 of the GATT 1994.  In US – FSC 
(Article 21.5 – EC) , for example, the Appellate Body reviewed a "beneficial tax exemption" under a 
government measure "provid[ing] a considerable impe tus, and, in some circumstances, in effect, a 
requirement, for manufacturers to use domestic i nput products, rather than like imported ones".  
The Appellate Body concluded that this measure "treats imported products less favourably than like 
domestic products".
503  Likewise, in China – Auto Parts,  the Appellate Body held that a government 
measure that created an incentive fo r automobile manufacturers to use exclusively domestic auto parts 
was inconsistent with Ar ticle III:4 of the GATT 1994.504  Further, the panel in Mexico – Taxes on Soft 
Drinks  reviewed a government measure "creating an  economic incentive for producers to use cane 
sugar as a sweetener in the production of soft dr inks and syrups, instead of other non-cane sugar 
sweeteners such as beet sugar or HFCS".505  Since "[d]omestically produced sweeteners in Mexico 
consist overwhelmingly of cane sugar", that pa nel concluded that, "although on their face the 
challenged measures do not distingui sh between imported and domestic  sweeteners, the distinction 
they make between the use of cane sugar and n on-cane sugar sweeteners is, in fact, one that 
distinguishes between imported and domestic sweeteners".506 
7.359  A similar incentive to use dom estic input exists under the COOL measure, as explained 
above. 
7.360  The existence of such an incentive is confirme d by evidence on the relative use of the muscle 
cut labels under the COOL measure.  As described below507, several leading cattle and hog processors 
in the United States decided to affix exclusively Label A on their meat products as a result of the 
labelling requirements under the COOL measure, desp ite the limited commingling flexibility.  This 
appears to have been the case particularly after the unqualified flexibility to use Label B for Label A 
meat, originally contained in the Interim Fi nal Rule (AMS) of August 2008, was removed. 
7.361  In fact, several major US meat processors indicated that they would move to using Label A 
for the vast majority of their beef and pork pr oducts, given the end of  the previous unqualified 
                                                      
503 Appellate Body Report, US – FSC (Article 21.5 – EC) , para. 220. 
504 The Appellate Body held that "[t]he use by an automobile manufacturer, in a given vehicle 
model, of certain key assemblies or combinations of assemblies that are imported means that a 
higher (25%) charge will be payable on all imported parts than would be the case if those 
combinations of imported assemblies were not used and the thresholds were not met, in which 
case any imported parts used in the vehicle model would be subject to only a 10% duty.  This 
creates an incentive for manufacturers to limit their use of imported parts relative to domestic 
parts.  In addition, the measures at issue in this dispute impose administrative procedures, and 
associated delays, on automobile manufacturers using imported parts, which could be avoided 
entirely if a manufacturer were to use exclusively  domestic auto parts.  These incentives 
'affect' the conditions of competition for imported auto parts on the Chinese internal market."  
Appellate Body Report, China – Auto Parts , para. 195 (original emphasis;  footnote omitted). 
505 Panel Report, Mexico – Taxes on Soft Drinks,  para. 8.117. 
506 Panel Report, Mexico – Taxes on Soft Drinks,  para. 8.119. 
507 See paras. 7.361-7.363 below.  WT/DS384/R 
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  flexibility to use Label B for Label A meat and its  replacement with the commingling flexibility.508  
For instance, Tyson notified its fresh meats hog a nd cattle suppliers that "[its] goal is to label 
substantially all beef and pork from livestock born,  raised and processed in the U.S. with the 
Category A label by the middle of 2009", and "estim ate[d] around 90% of all of the fresh, retail beef 
and pork cuts produced in the U.S. w ould qualify for the Category A label".509  Cargill was reported 
as moving in the same direction, with around 70% of its meat carrying Label A.510  JBS indicated in a 
standard letter addressed to its customers that it woul d "transition[] to a 'Product of U.S.A.' label [i.e. 
Label A] on the majority of [its] beef products", a nd that "[t]he majority of [its] pork products will 
continue to be produced as 'Product of U.S.A'".511  Smithfield, a major pork processor, even 
announced that "effective April 2009 [it] intends to procure only hogs born and raised in the U.S. for 
processing at its U.S. fresh meat facilities and will  label fresh pork for retail as born, raised and 
processed in the USA".512 
7.362  Whilst most of these major US meat processors i ndicated that they would continue processing 
"some" Label B and C meat, they are silent on any intention of commingling.  Rather, the chief 
executives of these three US meat producers are repor ted to have expressed at the annual convention 
of the Texas Cattle Feeders' Association held in November 2008 that their "chief concern was the 
ability to ensure that cattle coming into  their plants are properly segregated".513 The chief executive of 
the meat processor with the highest market share among the three top US beef packers514 expressed in 
the press release of the Texas Cattle Feeders' Associ ation that in order "to avoid passing higher costs 
[of the COOL measure] onto consumers", the three beef packers in question "[we]re going to ask your 
(cattlemen's) help to make sure that cattle  are not commingled when they get to us".515  The same 
chief executive added that "[w]hen they get to the plan ts, we have to make sure  that we can keep them 
separate, so that we can run th e cattle as cheaply as we can to get (product) to the consumers".516  
The chief executive of the sec ond biggest US beef packer517 explained that the major outstanding 
question was whether segregation under the COOL law w ould happen in terms of place or time.  He is 
reported as having said that one of the uncertainties associated with the COOL law, is whether the 
effort to minimize costs will "require segme ntation of plants or days to harvest".518 
7.363  Even by the United States' own indication, Ca rgill, JBS and Tyson were the three top beef 
packers in 2009519, representing a total market share of above 65% in 2008.520  Further, Smithfield 
described itself as "the leading processor and mark eter of fresh pork and packaged meats in the 
United States, as well as the largest producer of hogs"521, and the United States identified Smithfield, 
                                                      
508 This commingling flexibility was mentioned for the first time in the above-mentioned USDA FAQ 
Publication of 26 September 2008.  See Exhibit CDA-31. 
509 See Exhibits CDA-36 to 38 and CDA-24 (BCI).  See also Exhibits CDA-71 (BCI), MEX-33, 55 and 
64 (BCI). 
510 See Exhibits CDA-41 and CDA-77 (BCI). 
511 Exhibits CDA-39 and MEX-57. 
512 Exhibit CDA-40. 
513 Exhibit CDA-71. 
514 See Exhibit US-37.  See al so Exhibit US-152 (BCI). 
515 Exhibit CDA-71. 
516 Exhibit CDA-71. 
517 See Exhibit US-37.  See al so Exhibit US-152 (BCI). 
518 Exhibit CDA-71. 
519 See Exhibit US-37.  See al so Exhibit US-152 (BCI). 
520 See Exhibits US-152 (BCI) and ME X-111.  See also Exhibit MEX-55. 
521 Exhibit CDA-40.  See also Exhibit CDA-215. WT/DS384/R 
WT/DS386/R Page 98 
 
 
  Tyson, JBS, and Cargill as the top four commercia l hog packers for most of the period between 2002 
and 2008.
522 
7.364  Although it appears that some commingling is taking place, it is difficult to establish its 
precise extent.  The United States submitted an a ffidavit from a person working in the US meat 
industry indicating that at least one major US processor is commingling Canadian, Mexican and US 
origin meat at one of its facilities.523  We accept this as showing that commingling has been taking 
place, although we note that this piece of evidence do es not specify the extent of commingling either 
at the facility in question, let alone by the US process or concerned or in the US meat industry at large. 
7.365  All three parties reference a letter from the Amer ican Meat Institute (AMI) anticipating that 
"[w]hen the final rule becomes effective, ... almost 95% of beef and pork products eligible to bear a 
'Product of the USA' label will bear such labeling".524  This AMI letter indicates that even by the US 
meat industry's calculations, only some 5% of domestic meat might actually be commingled with imported meat.  However, this evidence is silent on whether in practice less than 5% of domestic meat ends up being commingled.  It does not specify eith er in what proportion such domestic meat might 
be commingled with imported meat, i.e. the quantities and share of non-US origin meat involved in 
any commingling. 
7.366  The United States submitted photographs of Labe l B suggesting that these labels had been 
affixed on commingled meat.
525  However, photographs of Label B merely demonstrate that there are 
muscle cuts carrying Label B.  Labe l B, and in particular the photos of such labels submitted by the 
United States, provide no information on whet her the muscle cuts in question result from 
commingling Label A and B meat on a single production day. 
7.367  Further, the United States references an exhib it submitted by Canada to demonstrate that one 
of the complainants even recognizes that  commingling is actually taking place.526  However, the 
Canadian exhibit in question onl y indicates that some US processing plants are accepting Label B 
meat, but not that these plants are necessarily co mmingling it with Label A meat.  As regards 
commingling proper, this Canadian exhibit refers only to the commingling "flexibility" between meat 
eligible for Labels B and C, but not for Label A meat. 
7.368  Finally, the United States submitted a producer affidavit declaring that livestock supplied to a 
major US meat processor is eligible for Label B.527  This affidavit, however, is silent on whether such 
Label B livestock ends up being commingled, or whet her livestock eligible for Labels A and B are 
being processed on separate production days. 
7.369  The above relative proportions of the use of the various labels are largely confirmed by the 
United States, as well.  In response to a question from the Panel, the United States explained that 
"approximately 71 percent of the beef sold at th e retail level is being labeled as Category A", and 
"70 percent of the pork sold at the reta il level is being labeled as Category A".528  The United States 
                                                      
522 See Exhibit US-38.  See also Exhibits MEX-43, 44 and 45. 
523 See United States' second written submission, para. 57 and Exhibit US-102 (BCI). 
524 Exhibit MEX-67.  See also United States' second written submission, para. 57, Canada's response to 
Panel question No. 91, Mexico's response to Panel question No. 91 and United States' response to Panel 
question No. 91. 
525 See Exhibits US-95, 96 and 98. 
526 See Exhibit CDA-41. 
527 See United States' second written submission, para. 57 and Exhibit US-101 (BCI). 
528 United States' response to Panel question No. 91.  See also United States' response to Panel question 
No. 90.  WT/DS384/R 
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  added that "up to 14 percent of Ca tegory A beef muscle cuts might be  labeled as Category B or C beef 
and up to 20 percent of Category A muscle cu ts might be labeled as Category B or C pork".529 
7.370  The complainants contest the US figures arguing that the US estimates on the use of Label A 
are too low and that those on commingling are exaggerated.530  According to the complainants, the 
proportion of meat that carries Label A is closer to 90%.531  Indeed, several major US meat processors 
indicated that, with the entry into force of the 2009 Final Rule (AMS), "around 90 percent of all of the 
fresh, retail beef and pork cuts produced in th e U.S. would qualify for the Category A label".532  
Nonetheless, the complainants do not contest the US  argument that, despite commingling, the use of 
Label A affects the vast majority of meat labelled under the COOL requirements.533 
7.371  Likewise, the complainants do not contest the US argument that the use of category C and D 
labels remains "small".534  Rather, Mexico contests the justifi cation advanced by the United States for 
the limited use of Label D.535 
7.372  In light of the foregoing, we preliminarily conclude that the COOL measure creates an 
incentive to use domestic livestock – and a disin centive to handle imported livestock – by imposing 
higher segregation costs on imported livestock th an on domestic livestock.  Consequently, 
the COOL measure affects competitive conditions in  the US market to the detriment of imported 
livestock. 
Reduction in the competitive opportunities of imported livestock 
7.373  As noted above, in Korea – Various Measures on Beef , the Appellate Body found a 
"reduction of competitive opportunit[ies]"536 for imported products relativ e to domestic like products. 
7.374  We are faced with the same situation in the current dispute.  The competitive opportunities of 
imported livestock are reduced as the additional cost s of compliance with the COOL measure incurred 
when handling imported livestock are, at least in part, passed on to suppliers of imported livestock.  
We referenced in this regard direct evidence of  a considerable COOL discount being applied by 
several major processors to imported livestock and th e absence of evidence of a similar discount being 
applied to domestic livestock.537 
7.375  Further evidence of the reduction of competitiv e opportunities for imported livestock includes 
statements by imported livestock suppliers that some  plants and companies are simply refusing to 
process any imported livestock any more.538  For instance, a major US hog processor informed its 
                                                      
529 United States' response to Panel question No. 91.  See also United States' response to Panel question 
No. 90. 
530 See Mexico's comments on United States' response to Panel question Nos. 90 and 91 and Canada's 
comments on United States' response to Panel question Nos. 90 and 91. 
531 See Canada's response to Panel question No. 90 and Mexico's response to Panel question No. 90.  
See also Exhibits CDA-198 (BCI) and CDA-211. 
532 Exhibits CDA-36 to 38 and CDA-24 (BCI).  See also Exhibit MEX-33. 
533 United States' response to Panel question No. 91. 
534 United States' response to Panel ques tion No. 90.  See also Exhibit US-146. 
535 Mexico's comments on United States ' response to Panel question No. 90. 
536 Appellate Body Report, Korea – Various Measures on Beef , para. 147.  See also ibid., para. 146. 
537 See para. 7.363 above. 
538 See Exhibits CDA-56 (non-BCI), CDA-57, 66 to 69, 76, 81, 88 (all BCI).  See also 
Exhibit CDA-89. WT/DS384/R 
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  Canadian livestock suppliers that "[d]ue to Coun try of Origin Labeling (COOL)", it will only process 
US-born, raised and slaughtered hogs.
539 
7.376  Moreover, as a result of the COOL measure, fewer US processing plants are accepting 
imported livestock than before.540  The complainants have submitted maps and lists of US processing 
facilities showing how US processing plants have be come less accessible for imported cattle and hogs 
under the COOL measure.541  Although the United States contests the specific figures submitted by 
the complainants in this regard542, it does not call into question the complainants' case on the overall 
reduction in the number of plants processing imported livestock as a result of the COOL measure. 
7.377  We also have evidence before us showing th at, as a result of the reduction of available 
processing plants, certain suppliers had to transpor t imported livestock longer distances than before 
the COOL measure.543  Further, several plants that conti nue to process imported livestock do so at 
specific, limited times544, namely only on specific days of the week (typically at most one or two days 
per week)545, or only after specific hours of the day.546  Processing imported livestock only at specific 
times as a result of the COOL measure has created l ogistical problems and additional costs for certain 
imported livestock suppliers.547  Due to the congestion resulting from limited specific-time deliveries, 
certain imported livestock suppliers find it more difficu lt to obtain trucks for their deliveries or to use 
their trucks in an efficient way.548  Congestion has also increased waiting time for imported livestock 
crossing the border, and thus created transporta tion delays for certain suppliers of imported 
livestock.549  In turn, these have increased the transporta tion costs of certain suppliers of imported 
livestock550, and have had a negative impact on the we lfare and quality of imported livestock as a 
result of long waiting times in extreme temperatures and shrinkage551, sometimes leading even to 
increased mortality.552  Also, transportation of imported livestock has become less efficient in that 
certain suppliers can make fewer deliveries due to  longer distance transpor t and less turn-around 
time.553  Further, certain slaughterhouses accepting imported livestock only on Monday has resulted in 
increased costs for veterinary check s of imported livestock on Sunday.554 
7.378  Contractual terms for suppliers  of imported livestock have also changed as a result of the 
COOL measure.  We have evidence that several major processors introduced a COOL opt-out clause 
allowing them to unilaterally terminate or ame nd their contracts with suppliers of imported 
livestock.555  In certain other situations, supply contr acts for imported livestock have been cancelled 
or terminated556, or simply not renewed.557  Sometimes, the contractual relationship has survived the 
                                                      
539 See Exhibit CDA-92.  See also Exhibits CDA-107 (BCI) and CDA-109. 
540 See Exhibits CDA-56 (non-BCI), CDA-57, 72, 75, 80, 81 and 94 (all BCI), MEX-37, 42, 97 and 
106 (all BCI).  See also Exhibit CDA-90 (BCI). 
541 See Exhibits CDA-95 to 103 and MEX-98. 
542 See Exhibits CDA-41, US-102 and 152 (both BCI). 
543 See Exhibits CDA-57, 66, 67, 69, 81, and 85 to 87 (all BCI). 
544 See Exhibits CDA-77, 87 and 88 (all BCI). 
545 See Exhibits CDA-55, 57, 66, 75, 80, 84, 90 (all BCI) and CDA-105 (non-BCI), MEX-97 and 
106 (both BCI). 
546 See Exhibit CDA-85 (BCI). 
547 See Exhibit CDA-57 (BCI). 
548 See Exhibits CDA-55 to 57 and 80 (all BCI). 
549 See Exhibits CDA-55, 57, 66, 80 and 85 (all BCI). 
550 See Exhibits CDA-57, 67, 68, 75, 80, 81, 85 and 87 (all BCI). 
551 See Exhibits CDA-55, 66 and 85 (all BCI).  See also Exhibits CDA-93 and CDA-106. 
552 See Exhibit CDA-85 (BCI). 
553 See Exhibit CDA-68 (BCI). 
554 See Exhibit CDA-80 (BCI). 
555 See Exhibits CDA-67 and CDA-108 (both BCI). 
556 See Exhibits CDA-86, 88 (BCI) and 108 (all BCI).  WT/DS384/R 
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  COOL measure, although at terms less fa vourable for imported livestock suppliers.558  For instance, 
in certain cases, former long-term contracts have be en replaced with spot contracts at lower purchase 
prices.559  In at least one case, a former automatically  renewed, "evergreen" contract was replaced 
with a contract involving less favourable terms.560  Further, we have evidence of 14 days' advance 
notice being required for supplies of Mexican  cattle at various US processing facilities.561 
7.379  Certain suppliers of imported liv estock have also suffered significant financial disadvantages 
resulting from the COOL measure.  Several supplie rs reported that the price difference between 
imported and domestic livestock has become larger to the detriment of domestic livestock562, and that 
discounts for imported livestock appeared or existing ones increased as a result of the 
COOL measure.563  Further, in several cases, financial in stitutions are reported to have refused to 
provide credits and loans to Canadian livestoc k producers due to the risks resulting from the 
COOL measure.564 
7.380  Finally, we have evidence before us – undisput ed by the United States – that imported cattle 
have been excluded from premium beef programmes,  such as the Certifie d Angus Beef programme 
and other programmes, as a result of the COOL measure.565  In general, these premium programmes 
are particularly profitable for operators in the supply chain, including livestock suppliers. 
7.381  In light of the above considerations, we pr eliminarily conclude that the COOL measure 
reduces the competitive opportunities of imported livest ock relative to domestic livestock.  Before 
making a definitive finding on this matter, though, we need to address the counterarguments advanced 
by the United States in this regard. 
Arguments by the United States 
7.382  The United States argues that various phenom ena prevent the COOL measure from creating 
the above-described negative incentives and from reducing the competitive opportunities of imported 
livestock.  We have already addressed some of these arguments, e.g. the United States' arguments that 
any (technical) regulation creates cost s and that costs might be distributed differently among market 
participants.  We now turn to the additional arguments raised by the United States, namely: 
(a) the continued processing of imported livestock; 
(b) the lack of a legal necessity for private market participants to choose Label A; 
(c) the influence of factors distinct from the COOL measure; 
(d) pre-existing segregation programmes;  and 
(e) exceptions from the COOL measure. 
                                                                                                                                                                     
557 See Exhibits CDA-67 and 88 (both BCI). 
558 See Exhibit CDA-56 (BCI). 
559 See Exhibits CDA-68, 69, 82, 88 (all BCI).  See also Exhibit CDA-66 (BCI). 
560 See Exhibit CDA-86 (BCI). 
561 See Exhibits MEX-37, 46 , 97 and 105 (all BCI). 
562 See Exhibits CDA-55 and 94 (both BCI). 
563 See Exhibits CDA-55 to 57, 66 to 69, 75, 80, 83, 84, 86, 87, 89, 94, 108, 198 (all BCI), MEX-37, 
97 and 105 (all BCI). 
564 See Exhibits CDA-67, 69, 83, 85 and 86 (all BCI). 
565 See Exhibits CDA-36 and 38 and MEX-33.  See also Exhibits CDA-41, 55 to 57, 81 (all BCI), 
MEX-57 and 64 (both BCI). WT/DS384/R 
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  The continued processing of imported livestock 
7.383  The United States argues that not all beef and pork covered by the COOL measure carries 
Label A, as there is continued processing of imported livestock.  We do not see the need to assess whether this contention is in fact supported by the evidence, for even if the US argument is correct, it 
would not change our preliminary conclusion that the COOL measure creates an incentive to process 
exclusively domestic livestock and reduces the competitive opportunities of imported livestock. 
7.384  As the Appellate Body explained in US – FSC (Article 21.5 – EC) , less favourable treatment 
of imported products may exist even if a measure "will not give rise to less favourable treatment for like imported products in each and every case".
566  Further, like Article III:4 of the GATT 1994, 
Article 2.1 of the TBT Agreement does not serve to protect "expectations ... of any particular trade 
volume".567 
7.385  The United States also argues that even if th e number of US plants processing Canadian and 
Mexican livestock has diminished, these plants have  the capacity to process all the livestock that 
Canada and Mexico export to the United States.568  We do not consider that the capacity of the 
US plants in question is particularly re levant.  As the Appellate Body held in Korea – Various 
Measures on Beef , "the reduction of competitive opportunity through the restriction of access to 
consumers .... is not a function of the limited vol ume of foreign [products] actually imported":  
"the fact the that the WTO-consistent quota ... has ... been fully utilized does not detract from the lack 
of equality of competitive conditions entailed by the [measure]".569 
The legal necessity of making a choice 
7.386  The United States argues that the COOL measu re does not create a legal necessity for 
differential and less favourable treatment;  if i ndividual market participants happen to process 
predominantly Label A meat, that is due to their private business decisions.570 
7.387  We note that the United States does not contest the complainants' descrip tion of the situation 
preceding the COOL measure.  According to the complainants, prior to the COOL measure, 
conditions of competition were the same  for imported and domestic products:571 there was an 
integrated NAFTA livestock and meat market, in which livestock and meat products were processed 
together, without any major segregation due to orig in but purely on the basis of considerations of 
price and quality.572 
7.388  The US Congressional Research Service described the pre-COOL North American livestock 
and meat market as follows: 
"The animal products industries have become increasingly integrated across all three 
North American countries in recent years, particularly after the onset in 1994 of the 
North American Free Trade Agreement (NAFTA) and, before that, the Canada-U.S. Free Trade Agreement in 1988.  These agreements , along with the global Uruguay 
Round Agreements under the World Trade Organization (WTO), by helping to 
                                                      
566 Appellate Body Report, US – FSC (Article 21.5 – EC) , para. 221. 
567 Appellate Body Report, Japan – Alcoholic Beverages II , p. 16.  See also Appellate Body Report, EC 
– Asbestos , para. 93. 
568 See United States' opening oral statement at the first substantive meeting of the Panel, para. 25. 
569 Appellate Body Report, Korea – Various Measures on Beef , para. 147. 
570 See United States' first written submission, paras. 147 and 150. 
571 See Appellate Body Report, Korea – Various Measures on Beef , para. 145. 
572 See Exhibit CDA-50, p. 20.  See also See Exhibits CDA-192, MEX-35, and 37 (BCI).  WT/DS384/R 
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  reduce tariff and nontariff barriers to trade, have enabled animals or their products to 
move across borders more freel y, based on market demands. "573  (emphasis added) 
7.389  Likewise, a backgrounder on the COOL measure  by the Food Marketing Institute, whose 
members represent  "three-quarters of all retail food store sales in the United States", explained that 
"[e]ver since the North American Free Trade Agre ement was ratified in 1993 , cattle and produce have 
moved freely among Canada, Mexico and the U.S".574 
7.390  It is the COOL measure, and not solely the priv ate decisions of market participants, that has 
had a decisive impact in changing this pattern , by creating an economic incentive to process 
exclusively domestic livestock.  In this regard, th e COOL measure is similar to the dual beef retail 
distribution system reviewed in Korea – Various Measures on Beef .  In that dispute, the 
Appellate Body made a distinction between the "leg al necessity of making the choice imposed by the 
measure itself" and differential treatment that is "solely the result of private entrepreneurs acting on 
their own calculations of comparative costs and be nefits of differentiated distribution systems": 
"We are aware that the dramatic reduction in  number of retail outlets for imported 
beef followed from the decisions of individual retailers who could choose freely to 
sell the domestic product or the imported pr oduct.  The legal necessity of making a 
choice was, however, imposed by the measure itself.  The restricted nature of that 
choice should be noted.  The choice given to the meat retailers was  not  an option 
between remaining with the pre-existing unified distribution set-up or going to a dual retail system.  The choice was limited to selling domestic beef only or imported beef 
only.  Thus, the reduction of access to normal retail channels is, in legal 
contemplation, the effect of that measure.  In these circumstances, the intervention of 
some element of private choice does not relieve Korea of responsibility under the GATT 1994 for the resulting establishment of competitive conditions less favourable for the imported product than for the domestic product. 
... 
We are not holding that a dual or parallel distribution system that is  not  imposed 
directly or indirectly by law or governmental  regulation, but is rather solely the result 
of private entrepreneurs acting on their own calculations of comparative costs and benefits of differentiated distribution syst ems, is unlawful under Article III:4 of the 
GATT 1994.  What is addressed by Article III:4 is merely the governmental   
intervention that affects the conditio ns under which like goods, domestic and 
imported, compete in the market within a Member's territory."
575 
7.391  Indeed in the dispute before us, like in Korea – Various Measures on Beef , the 
COOL measure does not allow non-compliance.  A lthough, as explained above, the COOL measure 
does not prohibit the processing of domestic and imported livestock irrespective of origin, 
the COOL measure itself makes this business scenar io more costly than other business scenarios.576  
Further, in the dispute before us, like in Korea – Various Measures on Beef , any decisions by private 
market participants are not "solely" the result of their independent business calculations, but are 
attributable in large part to the economic incentiv e and disincentive created by the provisions of the 
COOL measure. 
                                                      
573 Exhibits CDA-117, 199 and MEX-53. 
574 Exhibit CDA-192.  See also Exhibits CDA-69, 75, 76, 81, 90 (all BCI), MEX-37 and 97 (both BCI). 
575 Appellate Body Report, Korea – Various Measures on Beef , paras. 146 and 149 (original emphasis). 
576 See para. 7.333. WT/DS384/R 
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  7.392  In particular, we disagree with the Un ited States that the distinction under Korea – Various 
Measures on Beef is between legal and economic aspects of a measure.  We have already noted that 
the complainants argue de facto  discrimination in this dispute.  In the context of such a claim of 
de facto discrimination, contrary to what the United States suggests, the distinction should be made 
between (i) a measure of a WTO Member creating a sufficiently strong incentive, including possibly 
an economic incentive, for private market participants to act in a particular way;  and (ii) business 
decisions of private market participants based  "solely" on private economic considerations.
577 
Factors distinct from the COOL measure 
7.393  The United States argues, referencing the Appellate Body report in Dominican Republic – 
Import and Sale of Cigarettes , that the COOL measure does not involve less favourable treatment 
because any detrimental effects on imported livestock ar e attributable to economic factors, and not to 
the foreign origin of such livestock per se .578 
7.394  Unlike in Dominican Republic – Import and Sale of Cigarettes , the current dispute does not 
focus on the unit costs entailed by the contest ed measure for imported and domestic products.  
The complainants do not claim less favourable tr eatment due to increased unit costs for imported 
livestock.  Likewise, our analysis concentrates on the relative overall costs of the different business 
scenarios that market participants may choose in  order to comply with the COOL measure.  
Further, unlike the bond requirement review ed in the Appellate Body report in Dominican Republic – 
Import and Sale of Cigarettes , the COOL measure is directly concerned with the origin of meat and 
livestock.  Thus, the incentive created by the COOL measure in favour of processing domestic-origin meat is clearly related to the origin of livestock. 
7.395  We agree that this incentive is partly due to  the relatively small market share of imported 
livestock compared to domestic livestock.  In f act, as we explained above, faced with the choice 
between the two business scenarios of absolute  segregation, namely the scenario involving 
exclusively domestic livestock and the scenario i nvolving exclusively imported livestock, one reason 
for choosing the former scenario is that in most cases the latter is not viable due to the smaller 
proportion of imported livestock. 
7.396  It is appropriate to consider this economic factor in determ ining whether the COOL measure 
has a de facto  negative impact on the competitive conditions  of imported livestock.  The dictionary 
defines " de facto " by creating a link to factual circumstances:  "in fact, in reality, in actual existence, 
force, or possession, whether by right or not".
579  Likewise, the Appellate Body defined de facto 
                                                      
577 See Panel Report, Mexico – Taxes on  Soft Drinks,  paras. 8.116-8.117. 
578 United States' first written submission, para. 146.  In Dominican Republic – Import and Sale of 
Cigarettes  the Appellate Body stated: 
"The Appellate Body indicated in Korea – Various Measures on Beef  that imported products 
are treated less favourably th an like products if a measure modifies the conditions of 
competition in the relevant market  to the detriment of imported products .  However, the 
existence of a detrimental effect on a given imported product resulting from a measure does not necessarily imply that this measure accords less favourable treatment to imports if the 
detrimental effect is explained by factors or ci rcumstances unrelated to the foreign origin of 
the product, such as the market share of the importer in this case."  (Appellate Body Report, 
Dominican Republic – Import and Sale of Cigarettes , para. 96 (footnote omitted;  original 
emphasis)). 
579 The Shorter Oxford English Dictionary , (Sixth Edition) Oxford Univer sity Press, Vol. I, p. 626 
(2007).  WT/DS384/R 
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  discrimination under Article III:4 of the GATT 1994 by referring to conditions "in the relevant 
market".580 
7.397  The very essence of the de jure / de facto dichotomy is that the first involves an analysis 
focussing on the language of the measure at i ssue, whereas the second entails assessing how a 
measure with language that is not discriminatory on its face plays out in actual circumstances.  In the context of Article III:4 of the GATT 1994 and Article  2.1 of the TBT Agreement, assessing whether a 
measure has actual discriminatory effects cannot be dissociated from the circumstances prevailing in 
the market at issue.  Indeed, taking into account th e circumstances in which the measure in question is 
applied is essential for an objective assessment of a claim of de facto discrimination. 
7.398  The COOL measure creates a de facto incentive in favour of domestic , and to the detriment of 
imported, livestock in the particular circumstances of the US livestock and meat market.  The small market share of imported livestock is an element of these market circumstances. 
7.399  As explained, before the COOL measure, the North American livestock and meat market was 
highly integrated.  In the US market, domestic a nd imported livestock were processed according to 
competitive considerations of price and quality, irrespective of origin. 
7.400  The Interim Final Rule (AMS) of August 2008 did not completely disrupt this pattern, even if 
it introduced certain compliance costs.  This is  because, under the Interim Final Rule (AMS), 
it remained possible to process domestic and importe d livestock together on a large scale and to affix 
one single label, Label B, on these products.  As rega rds the magnitude of this flexibility, it is telling 
that the National Farmers Union criticised it as "a loophole big enough to drive a truck through".
581  
Since a single-label approach is in general less co stly than business scenarios involving more labels, 
as explained above582, industry chose to follow a predominantly  Label B approach for all livestock, 
including both imported livestock and the majority of livestock that would have otherwise qualified 
for Label A. 
7.401  The 2009 Final Rule (AMS) changed this by reducing the unqualified possibility of affixing 
Label B on meat otherwise eligible for Label A to  the limited flexibility of commingling on a single 
production day.  Indeed, the 2009 Final Rule (AMS) i ndicates that the majority of meat eligible for 
Label A should be carrying that label:  "[i]t was ne ver the intent of the Agency for the majority of 
product eligible to bear a U.S. origin declaration to bear a multiple origin designation".583 
7.402  As a result of the 2009 Final Rule (AMS),  the meat supply chain is faced with the 
requirement to affix Label A on the majority of meat eligible for that label, which involves a 
significant reduction in the amount of domestic me at and livestock being processed together with 
imported meat and livestock.  This, in turn, cr eates the necessity for the supply chain to choose 
between a single-origin, Label A business scenario and the scenario of processing both Label A and 
imported meat and livestock.  A single-origin approach  is less costly, and given the high market share 
of domestic livestock, it is also generally viable. 
7.403  It is the result of the COOL measure, in par ticular the 2009 Final Rule (AMS), that in the 
circumstances of the US market, market participan ts, when faced with the choice between a scenario 
involving exclusively domestic livestock and a scenario involving both domestic and imported 
                                                      
580 Appellate Body Report, Korea – Various Measures on Beef , para. 137.  See also Panel Report, 
Canada – Pharmaceutical Patents , para. 7.101. 
581 Exhibit CDA-28. 
582 See para. 7.357 above. 
583 74 FR 2659. WT/DS384/R 
WT/DS386/R Page 106 
 
 
  livestock, opted predominantly for the former.  Wh ile the small market share of imported livestock 
influenced this choice, that very choice was ma de necessary by the COOL measure.  Indeed, as the 
history of the COOL measure shows, market partic ipants would not have opted this way, and the 
small market share of imported livestock per se did not dictate such an option either. 
7.404  Thus, in the circumstances of the US market, the COOL measure, in particular the 2009 Final 
Rule (AMS), creates an incentive in favour of  domestic livestock and negatively affects the 
competitive conditions of imported livestock.  Hence,  we disagree with the United States that this 
effect is attributable exclusively to factors distinct from the COOL measure. 
Pre-existing segregation 
7.405  The United States argues that various pre-existing segregation programmes preceded the 
COOL measure, namely USDA grade labels, priv ate premium label programmes, animal production 
and raising label programmes, and export market requirements.  According to the United States, these 
programmes allowed market participants to gain experience with segregation, and their continued 
existence reduces the costs of any additi onal segregation under the COOL measure.
584 
7.406  While pre-existing segregation might have allo wed certain market participants to gain 
experience with segregation, we observe that not all market participants are necessarily involved in all 
of the pre-existing segregation programmes evoke d by the United States.  Whereas USDA grade 
labels are affixed on the majority of beef slaughter ed in the United States, private premium labels and 
animal production and raising labels affect a smaller proportion of beef marketed in the United States.  
Likewise, given the small proportion of US exports relative to US beef consumption585, export 
programmes do not involve the majority of  beef marketed in the United States. 
7.407  More importantly, most pre-existing segregati on programmes are not concerned with country 
of origin but rather with quality or producti on processes.  Even among the export programmes, 
which involve some segregation according to origin, not all are foreclosed for Canadian or Mexican 
livestock and beef.  In fact, some export programme s allow Canadian or Mexican-origin beef to be 
exported along with US beef586, whereas some other export programmes cover cattle that spent at least 
100 days before slaughter in the United States, in cluding feeder cattle born in Canada and Mexico.587 
7.408  As most pre-existing programmes do not necessa rily entail segregation of Canadian and 
Mexican beef from US beef, the COOL measure adds an additional layer of segregation to 
pre-existing segregation programmes.  In practice, after the COOL measure, beef that qualifies, for 
instance, for a specific premium programme needs to be additionally segregated according to origin as 
defined by the COOL measure.  This involves additional segregation and costs specific to the 
COOL measure. 
7.409  The 2009 Final Rule (AMS) explains that: 
"[I]n [certain] cases ... firms may need to revamp current operating processes to 
implement the rule.  For example, a pro cessing or packing plant may need to sort 
incoming products by country of origin and,  if applicable, method of production, in 
                                                      
584 See United States' first written submission, para. 169, United States' second written submission, 
paras. 59-60, and United States' response to Panel question No. 46.  See also Exhibit US-43. 
585 See Exhibits US-28 and 71.  See also Exhibits CDA-207 and 209, Canada's response to Panel 
question No. 109, Exhibit MEX-104, Mexico's response to Panel question No. 109, Exhibits US-150 and 151, 
United States' response to Panel question Nos. 30 and 109. 
586 See Exhibits MEX-75 and US-81. 
587 See Exhibits MEX-76, 77 and US-82.  WT/DS384/R 
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  addition to weight, grade, color, or other quality factors.  This may require 
adjustments to plant operations, line pr ocessing, product handling, and storage."588 
7.410  Several major US beef processors declined to b ear such additional costs, and informed their 
suppliers that, due to the entry into force of the COOL measure589, they would not include Canadian 
and Mexican beef in their Certified Angus Beef an d other premium beef programmes.  For instance, 
Tyson issued a standard letter to its fresh meat ca ttle suppliers informing them that "[o]ur approach 
will be to use the 'U.S.' or Category A label on all of our premium beef programs beginning early 
2009", following the replacement of the former unqua lified possibility of affixing Label B on Label A 
meat with the more restri ctive commingling flexibility.590 
7.411  Further, unlike the COOL measure, the pre- existing segregation programmes evoked by the 
United States are voluntary and exist to the extent that  they meet consumer demand, i.e. they are also 
contingent upon consumers' willingness to pay for the type and quality of beef covered by such 
programmes. 
7.412  Finally, as Canada points out, none of the pre-existing segregation programmes evoked by the 
United States relates to hogs.591 
7.413  Accordingly, we are not persuaded by the ar gument that the pre-existence of segregation 
programmes reduces the costs of any additional orig in-based segregation under the COOL measure.  
Thus, we maintain our view that the COOL measu re involves costs that are apportioned differently 
between the business scenario involving only domest ic livestock and the scenarios involving imported 
livestock. 
Exceptions under the COOL measure 
7.414  The United States argues that it had narrowed th e originally envisaged coverage of the 
COOL measure to reduce compliance costs.592 
7.415  The COOL measure requires "retailers" to  affix labels on the "covered commodity"593, which 
in relevant part is defined as "muscle cuts of  beef... and pork" and "ground beef ... and ground 
pork".594  However, as the United States points out, th e COOL measure excludes from its scope any 
otherwise covered commodities that serve as an "ingredient to a processed food item".595 
7.416  Further, not all actors selling beef and pork at retail level are subject to the COOL measure.  
As described above596, in the context of the COOL measure, an individual "retailer" is covered only 
when the invoice cost of all of its purchases of perishable agricultural commodities exceeds $230,000 
during a calendar year.597  "Food service establishments" are also exempt from the COOL measure.598 
                                                      
588 74 FR 2689. 
589 See CDA-56 (BCI). 
590 See Exhibits CDA-36, 38 and MEX-33.  See also Exhibits CDA-41, 55, 56, 57 and 81 (all BCI), 
MEX-57 and 64 (both BCI). 
591 See Canada's response to Panel question No. 43.  See also Exhibit CDA-179. 
592 See United States' second written submission, para. 153.  See also United States' first written 
submission, para. 185;  United States' second written submission, para. 89;  and Exhibit US-43. 
593 7 U.S.C. §§ 1638(2) and 1638a(a)(1). 
594 7 U.S.C. §§ 1638(2)(A)(i) and (ii). 
595 7 U.S.C. § 1638(2)(B) and 74 C.F.R § 65.135(b). 
596 See paras. 7.101, 7.106 above. 
597 See Exhibit CDA-7.  See also 74 C.F.R. § 65.240. WT/DS384/R 
WT/DS386/R Page 108 
 
 
  7.417  Evidence submitted by the parties indicates that, as a result of these exceptions, a 
considerable proportion of beef and pork is exempted from the COOL measure.
599  The exact 
proportion or magnitude of the exceptions and excl usions is irrelevant for our review of the 
complainants' claims under Article  2.1 of the TBT Agreement.  In fact, when asked about the 
relevance of these exceptions in terms of pr actical compliance with the COOL measure, 
the United States indicated that: 
"[It] is not aware of any evidence to sugg est that meat producers in the distribution 
chain – feed lot operators and slaughterhou ses – are systematically separating source 
animals or meat products depending on wh ether the ultimate meat products derived 
from those animals are subject to the 2009 Final Rule.  This is due to the fact that the 
ultimate disposition of a meat product is of ten not known at any particular stage of 
the production chain."600 
7.418  The complainants' answers to the same ques tion confirm that there is no systematic 
differentiation based on the ultimate destination of the meat produced.601 
7.419  Accordingly, we conclude that the exceptions  to the coverage of the COOL measure do not 
alter the distribution of compliance costs for liv estock and meat producers and processors in a way 
that would modify the incentives created by the COOL measure. 
Conclusion with regard to the muscle cut labels 
7.420  In light of our analysis of the parties' argumen ts, we find that, in the context of the muscle cut 
labels, the COOL measure creates an incentive in favour of processing exclusively domestic livestock 
and a disincentive against handling imported livestock.  Accordingly, we also find that, in the context 
of muscle cut labels, the COOL measure de facto discriminates against imported livestock by 
according less favourable treatment to Canadian cat tle and hogs, and to Mexican cattle, especially 
Mexican feeder cattle, than to like domestic livestock. 
Ground meat label 
7.421  Unlike for muscle cuts, there is one single la bel for ground meat under the COOL measure.  
This label applies equally to ground me at of imported and domestic origin. 
7.422  Pursuant to the COOL measure, the ground meat la bel must list "all of the countries of origin 
of ... ground beef [or] ... pork".602  According to the 2009 Final Rule  (AMS), this means that "if a 
country of origin is utilized as a raw material s ource in the production of ground meat, it must be 
listed on the label".603 
7.423  To ensure that the ground meat label carries this  information, the meat which has been ground 
needs to be segregated according to origin.  In fact, the above-quoted COOL Compliance Guide 
issued by USDA references "segregation" and a "seg regation plan" not just for muscle cuts, but also 
in the context of ground meat.  Like for muscle cuts, this segregation involves costs and, as a matter 
                                                                                                                                                                     
598 7 U.S.C. § 1638a(b). 
599 See Canada's response to Panel question No. 92, Exhibit CDA-199, Mexico's response to Panel 
question No. 92, Exhibits MEX-99, MEX-100 and MEX-101, United States' response to Panel question 
Nos. 92-101, Exhibits US-147 and 148. 
600 United States' response to Panel question No. 93. 
601 See Canada's response to Panel question No. 93 and Mexico's response to Panel question No. 93. 
602 7 U.S.C. § 1638a(a)(2)(E). 
603 74 FR 2671.  WT/DS384/R 
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  of logic, the fewer origins involved, the less co stly compliance with the COOL measure is in the 
context of ground meat. 
7.424  The United States explains that in its final form, the COOL measure does not prescribe any 
order for listing the countries of origin of ground meat.604  The complainants have not contested this.  
In fact, evidence from Canada confirms this.605 
7.425  Further, the ground meat label might list "all of the reasonably possible countries of origin of 
... ground beef [or] ... pork".606  The 2009 Final Rule (AMS) defines this as follows:  "when a raw 
material from a specific origin is not in a processor's inventory for more than 60 days, that country 
shall no longer be included as a possible country of origin".607 
7.426  The 2009 Final Rule (AMS) explains that: 
"[t]he 60-day in inventory allowance speaks only to when countries may no longer be 
listed.  The 60-day inventory allowance is  an allowance for th e Agency' enforcement 
purposes for when the Agency would deem  ground meat products as no longer 
accurately labeled."608 
7.427  This 60-day "inventory allowance" allows fl exibility from the segregation involved in the 
ground meat label under the COOL measure.  In effe ct, it allows a processor to reference a country of 
origin on its ground meat label even if the pro cessor has not had ground meat from that particular 
country in its inventory for the last 60 days or l ess.  Thus, a processor may use the same label for all 
of its ground meat, provided that the label lists all countries of origin of the meat ground by the 
processor, and that the processor has had in its inve ntory meat for grinding of each origin at least 
every 60 days. 
7.428  In fact, comments on the 60-day "inventory a llowance" under the Interim Final Rule (AMS) 
of August 2008 included the following: 
"The commenters stated that in practical terms, this provision appears to allow a 
processor to have 60 days to correct the label of a product to delete specific 
country(s), even though that country's product may no longer exist in its inventory. 
The commenters provided the example that a processor on day one could have product from the U.S. and Canada, and th en on day 7 run out of product from the 
U.S., and yet could continue using the 'Pr oduct of U.S. and Canada' label for another 
53 days.  Commenters feared this provision could be easily abused by meat processors."
609 
7.429  In response, USDA did not deny this possibility or that the provision might be "abused" in 
specific instances.  USDA merely indicated that "it does not believe widespread abuses of this 
provision will occur and will address any issues with this provision during routine compliance 
reviews".610  There is no indication in the evidence pl aced before us of USDA having addressed any 
potential "abuses" of the 60-day "inventory allowan ce" in any routine compliance reviews it might 
have conducted. 
                                                      
604 See United States' first written submission, para. 78. 
605 See Exhibit CDA-41. 
606 7 U.S.C. § 1638a(a)(2)(E). 
607 74 C.F.R. § 65.300(h). 
608 74 FR 2671. 
609 74 FR 2670. 
610 74 FR 2671 (emphasis added). WT/DS384/R 
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  7.430  The flexibility under the 60-day "inventory allowance" was also confirmed by 
Secretary Vilsack, who explained in his letter that: 
"[t]he language in the Final Rule allows a label for ground meat product to bear the 
name of a country, even if product from that country was not present in a processor's 
inventory, for up to 60 days.  This provision allows for labels to be used in a way that 
does not clearly indicate the product's country of origin."
611 
7.431  Another commenter on the Interim Final Rule (AMS) of August 2008 argued that the 60-day 
"inventory allowance" "was intended to reflect th e sourcing processes of commercial grinders and not 
to require them to change their labels simply because the market had changed and source product was 
more expensive from one country than another".612  USDA essentially confirmed this: 
"The Agency arrived at the 60-day allowance during its analysis of the ground meat 
industry.  In this analysis, the Agency determined that in the ground beef industry a common practice is to purchase lean beef  trimmings from foreign countries and mix 
those with domestic beef trimmings before grinding into a final product.  Often those 
imported beef trimmings are not purchased w ith any particular regard to the foreign 
country, but the cost of the trimmings due to currency exchange rates or availability 
due to production output capacity of that fo reign market at any particular time.  
Because of that, over a period of time, the imported beef trimmings being utilized in the manufacture of ground beef can and does change between various foreign 
countries. 
As large scale beef grinders can have in  inventory at any one time, several days' 
worth of beef trimmings (materials to be processed into ground beef) from several different countries and have orders from ye t other foreign markets, or from domestic 
importers, trimmings from several foreign countries that will fu lfill several weeks' 
worth of ground beef production, the Agency determined that it was reasonable to 
allow the industry to utilize labels representing that mix of countries that were commonly coming through their inventory during what was determined to be a 
60-day product inventory and on order supply. "
613 (emphasis added) 
7.432  Further, USDA explained that it did not consid er it necessary to change the existing "normal 
business practices" in the grinding industry: 
"To require beef grinders to completely change their production system into grinding 
beef based on specific batches was determ ined to be overly burdensome and not 
conducive to normal business practices, which the Agency believes was not the intent 
of the statute."614 
7.433  USDA added that it did not intend to modify the grinding industry's pre-existing bulk 
labelling policies: 
"[B]ecause beef grinders often purchase thei r labeling material in bulk, if a given 
foreign market that a beef grinder is s ourcing from is no longer capable of supplying 
                                                      
611 Vilsack letter, pages 1-2. 
612 74 FR 2671. 
613 74 FR 2671. 
614 74 FR 2671.  WT/DS384/R 
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  product, the interim final rule allowed that  grinder a period of time to obtain new 
labels with that given country of  origin removed from the label."615 
7.434  Finally, in response to another comment, USDA confirmed that the 60-day "inventory 
allowance" flexibility is available not only for meat grinders, but for market participants at every stage 
of meat supply and distribution: 
"With regard to if this 60-day inventor y allowance is made for retailers or for 
suppliers of covered commodities, the Agency  has made no distinction in this final 
rule and, as such, the same requirements would apply."616 
7.435  Thus, the 60-day "inventory allowance" provides for significant flexibility with respect to the 
segregation entailed by the ground meat label under the COOL measure.  This flexibility appears to us 
to render redundant certain aspects of ground meat segr egation, and thus limits any additional costs of 
implementing the COOL measure with regard to ground meat. 
7.436  The complainants have not made specific ar guments in response to the United States' 
contentions regarding this flexibility, nor as to how any remaining costs would affect imported 
livestock less favourably in the context of ground meat.617 
7.437  Accordingly, we find that the complainants have  not demonstrated that the ground meat label 
under the COOL measure results in less favourable treatment for imported livestock. 
(c) Actual trade effects 
7.438  We have reached our conclusi ons on less favourable treatment under Article 2.1 of the 
TBT Agreement without examining in detail the act ual trade effects of the muscle cuts and ground 
meat labels under the COOL measure.  Instead , by assessing segregation and the resulting cost 
implications of the COOL measure, we have followed the Appellate Body's approach in Korea – 
Various Measures on Beef .  As suggested by the Appellate Body in that dispute, there is a "more 
direct, and perhaps simpler approach" to assessing a national treatment claim by "focus[sing] on what appears ... to be the fundamental thrust and effect of the measure itself".
618 
7.439  As the Appellate Body explained in US – FSC (Article 21.5 – EC)  this examination does not 
involve the actual effects of the measure in the marketplace: 
"This examination cannot rest on simple assertion, but must be founded on a careful 
analysis of the contested measure and of its implications in the marketplace.  At the same time, however, the examination need not be based on the actual  effects of the 
contested measure in the marketplace."
619 
7.440  Further, the Appellate Body noted in EC – Bananas III (Article 21.5 – US) that the absence of 
"actual trade effects" of a measure does not prevent a Member from bringing a successful claim of 
                                                      
615 74 FR 2671. 
616 74 FR 2671. 
617 See United States' first written submission, paras. 78 and 159. 
618 Appellate Body Report, Korea – Various Measures on Beef , para. 142. 
619 Appellate Body Report, US – FSC (Article 21.5 – EC) , para. 215 (footnote omitted). WT/DS384/R 
WT/DS386/R Page 112 
 
 
  violation under the covered agreements.
620  Likewise, the GATT panel in US – Superfund held in 
regard to the national treatment provision of the first sentence of Article III:2 of the GATT that: 
"[It] cannot be interpreted to protect e xpectations on export volumes;  it protects 
expectations on the competitive relati onship between imported and domestic 
products.  A change in the competitive rela tionship contrary to that provision must 
consequently be regarded ipso facto as a nullification or impairment of benefits 
accruing under the General Agreement."621 
7.441  The GATT panel based this finding on the fact that "[u]nlike some other provisions in the 
General Agreement, [the first sentence of Article III:2] does not refer to trade effects".622  T h i s  i s  
equally valid for Article III:4 of the GATT and Article  2.1 of the TBT Agreement.  In fact, in the 
context of Article III:4 of the GATT, the panel in Korea – Various Measures on Beef held that 
"the jurisprudence on Article III makes it clear that no  consideration needs to be given to the effects of 
any less favourable treatment or the impact of such discriminatory regulation on trade volume".623 
7.442  The parties agree that we do not need to verify  the actual trade effects of the COOL measure 
in assessing the complainants' claims under Article 2.1 of the TBT Agreement.624 
7.443  Yet, the parties have extensively argued the alleged actual economic and trade effects of the 
COOL measure, and whether such effects are attribut able to the COOL measure or to other factors.  
For this purpose, they have submitted economic figures and analyses as well as econometric studies, which we consider relevant fact ual evidence in this dispute. 
7.444  Whether the COOL measure has negative trade a nd economic effects is an important factual 
matter in this dispute.  It is linked to the conclusions  of our above analysis in regard to a violation of 
Article 2.1 of the TBT Agreement. 
7.445  Accordingly, we consider it important to ma ke findings on the actual trade effects of the 
COOL measure, even if, under the legal standard  we have identified for Article 2.1 of the 
TBT Agreement, these findings are not indispensable for the analysis of th e complainants' claims. 
7.446  Indeed in Korea – Dairy,  the Appellate Body emphasised the unique role of panels in making 
factual findings by reviewing the totalit y of the evidence in the panel record: 
"[U]nder Article 11 of the DSU, a panel is charged with the mandate to determine the 
facts of the case and to arrive at factual findings.  In carrying out this mandate, a panel has the duty to examine and consider all the evidence before it, not just the 
evidence submitted by one or the other part y, and to evaluate the relevance and 
probative force of each piece thereof. 
In European Communities – Hormones , we had occasion to stress that: 
                                                      
620 Appellate Body Report, EC – Bananas III (Article 21.5 – US) , para. 469.  See also Appellate Body 
Report, EC – Bananas III (Article 21.5 – Ecuador II) , para. 469. 
621 GATT Panel Report, US – Superfund , para. 5.1.9. 
622 GATT Panel Report, US – Superfund , para. 5.1.9. 
623 Panel Report, Korea – Various Measures on Beef , para. 637. 
624 See Canada's opening oral statement at the first substantive meeting of the Panel, para. 19, Mexico's 
response to Panel question No. 21 and United States' response to the Panel's second set of questions to the 
parties, para. 34.  WT/DS384/R 
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  'The duty to make an objective assessment of the facts is, among 
other things, an obligation to c onsider the evidence presented to a 
panel and to make factual findings on the basis of that evidence.  
The deliberate disregard of, or re fusal to consider, the evidence 
submitted to a panel is incompatible with a panel's duty to make an 
objective assessment of the facts.625' "626 
7.447  Importantly, this review of the factual eviden ce does not mean that "panels ... are ... required 
to accord factual evidence the same m eaning and weight as do the parties".627  Further, as the 
Appellate Body explained in EC – Hormones , "it is generally within the discretion of the Panel to 
decide which evidence it chooses to utilize in making findings".628 
7.448  The United States contends that our review of the econometric studies submitted by Canada 
raises systemic concerns, as traditionally econometri c analysis has been employed in arbitrations 
under Article 22.6 of the DSU to determine the level of nullification or impairment of benefits as a 
result of a WTO-inconsistent measure.  According to the United States, Canada's approach risks 
conflating these two different inquiries and processes.   In particular, the United States questions 
whether panel findings with respect to such an ec onometric model might prejudice any findings by the 
same persons possibly acting as arbitrators under Article 22.6 of the DSU.629 
7.449  Clearly, panels are not arbitrators and arbitrator s are not panels, even if in a given dispute 
these bodies might comprise the same persons.  Panels and Article 22.6 arbitrators operate on the basis of different procedures and legal provisions, a nd at different stages of WTO dispute settlement.  
Their roles and mandates are also different.  As the arbitrator in EC – Hormones (Article 22.6 – EC) 
pointed out, panels and arbitrators have different tasks: 
"There is ... a difference between  our task here and the task given to a panel.  In the 
event we decide that the [original compla inant's] proposal [concerning the level of 
suspension of concessions or other obligations] is not WTO consistent, i.e. that the 
suggested amount is too high, we should not  end our examination the way panels do, 
namely by requesting the DSB to reco mmend that the measure be brought into 
conformity with WTO obligations.  Following the approach of the arbitrators in the Bananas case – where the proposed amount of US$ 520 million was reduced to 
US$ 191.4 million – we would be called upon to go further.  In pursuit of the basic 
DSU objectives of prompt and positive settle ment of disputes, we would have to 
estimate the level of suspension we consider to be equivalent to the impairment 
suffered.  This is the essential task and responsibility conferred on the arbitrators in 
order to settle the dispute.  In our view, such approach is implicitly called for in 
Article 22.7."
630 
7.450  In light of the above-quoted interpretation of  Article 11 of the DSU, entitled "Function of 
Panels", we consider that we have the right, a nd in fact the duty, to make the factual findings 
necessary to carry out an objective analysis of the dispute and all of the evidence before us. 
                                                      
625 (footnote original)  Appellate Body Report,  EC – Measures Concerning Meat and Meat Products 
(Hormones)  ("European Communities – Hormones "), WT/DS26/AB/R, WT/DS48/AB/R, adopted 
13 February 1998, para. 133. 
626 Appellate Body Report, Korea – Dairy , para. 137. 
627 Appellate Body Report, Australia – Salmon , para. 267. 
628 Appellate Body Report, EC – Hormones , para. 135. 
629 See United States' response to the Panel's seco nd set of questions to the parties, para. 33. 
630 Decision by the Arbitrators, EC – Hormones (US) (Article 22.6 – EC) , para. 12 (footnotes omitted) 
and Decision by th e Arbitrators, EC – Hormones (Canada) (Article 22.6 – EC) , para. 12 (footnotes omitted). WT/DS384/R 
WT/DS386/R Page 114 
 
 
  7.451  In doing so, we certainly do not intend to usur p the role of arbitrators under Article 22.6 of 
the DSU.  We are not assessing any level of nullifica tion or impairment, let alone whether there is any 
equivalence with any suggested level of suspension of concessions or other obligations.  We have no 
mandate to do so – either under the DSU, or according to our own specific terms of reference.
631  
These matters are left to be decided by an eventual arbitration under Article 22.6 of the DSU and on 
the basis of evidence submitted in the context of such  arbitration – provided such arbitration actually 
becomes necessary. 
7.452  Also, there is no reason to consider ec onomic or econometric evidence inappropriate  per se , 
let alone exempt from panels' review.  The ultimate role of panels is to conduct the necessary factual 
and legal review of the arguments and evidence adva nced by the parties, and thus to carry out an 
objective assessment of the matter brought before the panel.  This basic function of panels does not 
exclude – and may, in fact, necessitate – the review of economic and econometric evidence and 
arguments. 
7.453  Accordingly, in the following sections we exam ine the basic trade flows in livestock between 
Canada and the United States, and Mexico and the Unite d States.  In particular, we cover fluctuations 
in import volumes and shares betwee n 2000 and 2010, with particular emphasis on the second half of 
this period.  Subsequently, we examine the cost s involved in the COOL measure in light of the 
economic studies submitted by the parties.  Finally, we assess whether, in light of the econometric 
studies submitted by Canada and the United States,  the COOL measure had a negative and significant 
impact on the price and volume of imported livestock. 
(i) Trade volumes in the North American livestock market 
Cattle 
7.454  The parties provide figures on the import volum e of Canadian and Mexican cattle into the 
United States during the last five to ten years.   Despite certain divergences among some of these 
figures, it is possible to establish the main tre nds of overall US cattle imports from Canada and 
Mexico. 
Imports of Canadian cattle into the United States 
Overall imports from 2000 to 2009 
7.455  Between 2000 and 2009, Canada exported to the United States an annual average of about 
950,000632 or 1,000,000633 head of cattle, according to the Unite d States and Canada, respectively.  
There were significant fluctuations in annual export fi gures.  In particular, in 2004 overall imports of 
Canadian cattle dipped to a few thousand634 or a few hundred635 head of cattle, according to the 
United States and Canada, respectively.  This was mainly due to the discovery of Bovine Spongiform Encephalopathy ("BSE") in Ca nada, which resulted in significant US import 
restrictions for Canadian cattle from 2003 to 2005.
636 
7.456  Canada and the United States provide figures of US  imports of Canadian cattle using statistics 
from the Animal and Plant Health Inspection Service ("US APHIS") and the US Bureau of the Census 
                                                      
631 See para. 1.6 above. 
632 United States' first written submission, para. 89 (Exhibit US-28, table 3). 
633 Exhibit CDA-208. 
634 See Exhibit US-28, table 3. 
635 See Exhibit CDA-208. 
636 United States' first written submission, paras. 99- 105  (Exhibit US-28, table 3;  Exhibit CDA-208).  WT/DS384/R 
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  ("US Census Bureau") for the period starting in 20 05.  The parties' figures from the two sources, and 
in certain cases even from the same source, are not  identical.  However, the figures show similar 
overall patterns in the development of the imports  of Canadian cattle into the United States. 
7.457  Both parties' statistics show an increase in imports of Canadian cattle between 2005 and 2007 
and a considerable decrease in 2009 vis-à-vis  2008.  The main difference is that the data submitted by 
Canada show a decline in the number of cattle im ports starting already in 2008, whereas the data 
submitted by the United States point to a decrease only for 2009. 
Imports of Canadian cattle 
Source:  US APHIS  2005 2006 2007 2008 2009 
Data submitted by Canada637 518,287 1,025,522 1,379,105 1,252,279 797,638 
Data submitted by the United States638 518,287 993,620 1,397,156 1,407,081 999,045 
 
Imports of Canadian cattle 
Source:  US Census Bureau  2005 2006 2007 2008 2009 
Data submitted by Canada639 555,528 1,030,790 1,386,745 1,301,910 812,108 
Data submitted by the United States640 559,134 1,031,870 1,404,871 1,581,303 1,061,005 
 
                                                      
637 Exhibit CDA-223. This information presented by Canada excludes cows, bulls and breeding 
animals. 
638 Exhibit US-28, Table 3.  This information presented by the United States excludes breeding 
animals. 
639 Exhibit CDA-223.  This information presented by Canada excludes cows, bulls and breeding 
animals. 
640 Exhibit US-150. WT/DS384/R 
WT/DS386/R Page 116 
 
 
  
 
 
Overall imports during 2010 
7.458  Canada and the United States have only submitte d partial import volume figures for the year 
2010 as this period partly coincided with the proceedi ngs of this dispute.  The United States compares 
the import volume of Canadian cattle from January to September 2010 with figures for the 
corresponding period of 2009.  This comparison s hows that the number of imported Canadian cattle 
increased from 809,513 head between January and Se ptember 2009 to 864,579 in the same period of 
2010.641  There is, however, no evidence before us on  whether this upward trend continued in the 
remaining months of 2010. 
7.459  In the absence of data for the corresponding period of 2009, no similar comparison is possible 
for the other partial import figures submitted by Cana da and the United States for specific periods of 
2010.  Canada has submitted US APHIS statistics s howing 765,248 heads of imported Canadian cattle 
in the first 11 months of 2010.642  Further, on the basis of data from the US Census Bureau, Canada 
submits that imports of Canadian cattle from January to October 2010 reached 756,275 animals, 
whereas the United States argues that from January  to September 2010 Canadi an cattle imports were 
864,579.643  All these partial data for 2010 show that in the first 11 months of 2010 imports of 
Canadian cattle did not surpass the import levels for 2009 as a whole. 
Further data 
7.460  Canada also presents more detailed data sp ecifying the import volume depending on the 
category of animal examined, i.e. feeder or fed cattle, cows, bulls and, in  general, animals for 
breeding purposes.  This is because Canada and th e United States disagree whether certain categories 
of cattle should be excluded from the data set  used to measure import volume fluctuations.  
Canada argues that its economic evidence appropria tely excludes cows and bulls from the data set 
                                                      
641 Exhibit US-150. 
642 Exhibit CDA-223. 
643 Exhibit US-150.  WT/DS384/R 
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  because these animals are used primarily for breeding,  rather than for producing muscle cuts of meat 
subject to the COOL measure.644  The United States submits that cows and bulls over 30 months of 
age account for a large portion of Canada's exports to the United States.645 
7.461  Canada files evidence from Agriculture and Agri-Food Canada646 showing that the number of 
Canadian animals imported into the United States,  excluding animals for breeding, from 2006 to 2009 
gradually increased until 20 08, followed by a significant reduction in 2009. 
 2006 2007 2008 2009 
Imports of Canadian cattle 
excluding animals for breeding 
(Source:  Agriculture and Agri-Food 
Canada)647 1,031,767 1,402,172 1,557,910 1,054,596 
 
7.462  Canada also submits statistics from US APHIS and the US Census Bureau to compare data 
including and excluding cows and bulls.  For that purpose, the information is subdivided into slaughter cattle, a category potentially including cows  and bulls over 30 months of age, and feeder 
cattle imports:
648 
 2007 2008 2009 2010 
(Jan.-Aug.) 
Imports of Canadian slaughter cattle 
not including cows and bulls 
(US APHIS)  840,015 644,360 523,635 418,864 
Imports of Canadian slaughter cattle 
not including cows and bulls 
(US Census Bureau)  838,495 661,028 523,474 437,375 
Imports of Canadian slaughter cattle 
including cows and bulls 
(US APHIS)  858,060 844,667 755,817 565,305 
Imports of Canadian slaughter cattle 
including cows and bulls 
(US Census Bureau)  849,315 895,643 763,145 588,810 
Imports of Canadian feeder cattle 
(US APHIS)  539,090 607,919 274,003 158,785 
Imports of Canadian feeder cattle 
(US Census Bureau)  548,250 640,882 288,634 180,779 
 
7.463  Based on the above data, we find that the main trend of imports of Canadian cattle is not 
affected by whether cows and bulls are included or no t.  In fact, imports of slaughter and feeder cattle, 
whether cows and bulls are included or excluded, follow the same general trend from year to year 
under the US APHIS and US Census Bureau data.  The only exception in the comparison is the data 
on slaughter cattle including cows and bulls in 20 07 and 2008;  APHIS figures, which follow the 
trend shown in the other slaughter cattle data, decr ease during that period, whereas US Census Bureau 
data show an increase.  Importantly, all the sources  and data in the above table show a substantial 
decrease in imports of Canadian cattle in 2009, wh ether it involves feeder or slaughter cattle, and 
                                                      
644 Canada's opening oral statement at the second substantive meeting of the Panel, para. 43. 
645 United States' second written submission, para. 95. 
646 Exhibit CDA-110. 
647 Exhibit CDA-110. 
648 Exhibit CDA-196. WT/DS384/R 
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  whether or not the latter excludes cows and bulls.  Be ing limited to the first eight months, the data for 
2010 do not show a clear trend in the absence of data for the same period of previous years. 
Imports of Mexican cattle into the United States 
Overall imports from 2000 to 2009 
7.464  From 2000 to 2009, Mexico exported to the Un ited States an average of approximately 
1.1-1.2 million head of cattle per year.
649 
7.465  The data presented by Mexico and the United States for the period starting in 2003 show a 
similar trend in the development of import volum es of Mexican cattle into the United States.  
Imports of Mexican cattle fluctuated between a pproximately 1,239,000 and 1,370,000 head during the 
2003-2006 period.650  In 2007 the import volume decreased below 1,100,000 head of Mexican cattle, 
with a further drop to 700,000 head in 2008.  In 2009 the number of Mexican cattle imported into the 
United States increased to 940,000.651 
Imports of 
Mexican cattle 2003 2004 2005 2006 2007 2008 2009 
Data submitted 
by Mexico 
(US International 
Trade 
Commission)652 1,239,220 1,370,259 1,256,351 1,256,996 1,090,094 702,651 940,851 
Data submitted 
by the US 
(US Census 
Bureau)653 1,239,531 1,370,476 1,256,404 1,256,973 1,090,094 702,661 940,869 
 
                                                      
649 Mexico's first written submission, para. 114 and United States' first written submission, para. 108 
(Exhibits MEX-36, 79, 104; US-28, table 13, US-150). 
650 Exhibits MEX-36 and US-150. 
651 Exhibits MEX-36 and US-150. 
652 Exhibit MEX-36. 
653 Exhibit US-150.  WT/DS384/R 
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Imports during 2010 
7.466  Mexico and the United States compare import volumes of Mexican cattle during the first 
seven months of 2009 and 2010 on the basis of data from the Mexican Secretaría de Hacienda y 
Crédito Público  and the US Census Bureau, respectively.  These figures show an increase in the 
import volume of Mexican cattle between January and July 2010 with respect to the same period in 
2009. 
7.467  Mexico provides January-July data since 2007, which allows for a more thorough comparison 
with the figures for the same period in 2010.  Th is comparison shows that Mexican cattle imports 
have increased during the first seven months of 2010 vis-à-vis  the same period in all three previous 
years. 
Imports of 
Mexican cattle  2007 
(Jan.-Jul.) 2008 
(Jan.-Jul.) 2009 
(Jan.-Jul.) 2010 
(Jan.-Jul.) 
Data submitted 
by Mexico654 583,829 421,266 496,214 648,143 
Data submitted by 
the United States655   478,694 628,817 
 
7.468  The United States also provides US Census Bur eau data comparing the number of Mexican 
cattle head imports from January to September of 2009 and 2010.  Accordi ng to this data, import 
volumes increased from 569,405 in the first nine months of 2009 to 737,644 in the same period of 
                                                      
654 Exhibit MEX-79. 
655 Exhibit US-71. WT/DS384/R 
WT/DS386/R Page 120 
 
 
  2010.
656  This confirms the above upward trend from th e relevant period of 2009 to the same period in 
2010. 
Canadian hogs 
Overall imports from 2000 to 2009 
7.469  Imports of Canadian hogs into the United States increased from 4.2 million head in 2000 to 
approximately 4.7 million head in  the first ten months of 2010657, peaking at approximately 10 million 
head in 2007658, with a continuous increase from 2000 to 2007.   Imports of Canadian hogs slightly 
dropped in 2008 and further declined in 2009. 
7.470  Canada's statistics from Agriculture and Agri-Food659 and data submitted by the United States 
from US APHIS and the US Census Bureau for th e period starting in 2005 provide further detail on 
the evolution of imports of Canadi an hogs.  Although the data are not identical, they show an increase 
in imports of Canadian hogs between 2005 and 2007, followed by a two-year decrease in 2008 and 
2009. 
Imports of Canadian 
hogs 2005 2006 2007 2008 2009 
Canada's Agriculture 
and Agri-food660  8,647,391 9,894,930 9,270,268 6,306,919 
US APHIS661 7,911,137 8,494,939 9,907,316 9,072,783 6,169,537 
US Census Bureau662 8,190,467 8,763,378 10,004,317 9,347,951 6,364,553 
 
Imports during 2010 
7.471  Evidence submitted by the United States shows th at imports of Canadian hogs from January 
to September 2010 remain slightly below the leve ls of the same period in 2009.  Specifically, the 
number of Canadian hogs imported into the Unite d States from January to September in 2009 was 
4,892,846, compared to 4,332,342 during the same period of 2010.663 
7.472  Canada provides further evidence showing that during the January-October period, imports of 
Canadian hog reached 4,788,520.664  However, Canada has not submitted comparable data for the 
same ten-month period of calendar years preceding 2010. 
Further data 
7.473  Canada also submits data including figures for slaughter hog665 and feeder hog imports, and 
comparable data from US APHIS and the US Census Bureau.666  This comparison shows that 
                                                      
656 Exhibit US-150. 
657 Exhibits CDA-210 and US-151. 
658 Canada's first written submission, para. 34 and United States' first written submission, para. 116 
(Exhibits CDA-47, 49 and 111; US-28, table 10 and US-72). 
659 The figures from Agriculture and Agri-Food Canada exclude Canadian breeding hogs imported into 
the United States. 
660 Exhibit CDA-111. 
661 Exhibit US-28, Table 10. 
662 Exhibit US-151. 
663 Exhibit US-151. 
664 Exhibit CDA-210. 
665 The slaughter hog category includes sows and boars.  WT/DS384/R 
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  slaughter hog imports started decreasing in 2008,  whereas feeder hog imports only dropped in 2009.  
Being limited to the first eight months, the data for 2010 do not show a clear trend in the absence of 
data for the same period in previous years. 
 2007 2008 2009 2010 
(Jan-Aug.) 
Imports of Canadian slaughter hogs 
(US APHIS)667 3,292,100 2,334,367 1,191,944 673,250 
Imports of Canadian slaughter hogs 
(US Census Bureau)668 3,174,415 2,234,238 1,085,480 641,126 
Imports of Canadian feeder hogs 
(US APHIS)669 6,602,321 7,065,734 5,099,259 2,962,822 
Imports of Canadian feeder hogs 
(US Census Bureau)670 6,736,221 7,055,529 5,246,057 3,143,804 
 
 
 
 
(ii) Share of imported livestock in the United States 
7.474  Overall, the share of Canadian and Mexican livestock in the United States has been small 
between 2005 and 2010.  Canadian cattle im ports as a share of US cattle slaughter671 and Mexican 
                                                                                                                                                                     
666 Exhibit CDA-196. 
667 Exhibit CDA-196. 
668 Exhibit CDA-196. 
669 Exhibit CDA-196.  US APHIS provides statistics both with and without an eight-week lag.  The 
figures provided in the table are th e ones without an eight-week lag. 
670 Exhibit CDA-196. 
671 Exhibit CDA-46. WT/DS384/R 
WT/DS386/R Page 122 
 
 
  cattle imports as a share of US feed placements
672 during that period have been below 5% for each 
category.  Canadian hogs imported into the United States never exceeded a 10% share of US hog slaughter between 2005 and 2009.
673 
Cattle 
Share of Canadian cattle imports in the United States 
Overall share of Canadian cattle imports 
7.475  The share of Canadian cattle imports to the Unite d States has been small over the past decade.  
On the basis of APHIS statistics, Canada submits information on the total im ports of Canadian cattle 
as a share of US cattle slaughter, showing an upward trend from 2005 to 2008, followed by a drop in 
2009.674 
Source:  US APHIS 2005675 2006 2007 2008 2009 
Total imports of Canadian cattle 
as a share of US slaughter676 0.016% 3.1% 4.2% 4.2% 3.1% 
 
 
 
                                                      
672 Exhibit US-86.  This exhibit contains a chart showing the monthly fluctuations on imports of 
Mexican feeder cattle as a share of US feed placemen ts.  The Panel calculates the annual average from 2007 to 
2009 on the basis of this information. 
673 Exhibit US-86.  This exhibit contains a chart showing the monthly fluctuations on imports of 
Mexican feeder cattle as a share of US feed placemen ts.  The Panel calculates the annual average from 2007 to 
2009 on the basis of this information. 
674 Exhibit CDA-46. 
675 The low figure for 2005 is mostly due to the impor t restrictions of Canadian cattle imposed by the 
United States between 2003 and 2005 because of Bovine Spongiform Encephalopathy (BSE) being detected in 
Canada. 
676 Exhibit CDA-46.  WT/DS384/R 
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  7.476  Canada and the United States have also submitte d figures on feeder and fed cattle as a share 
of US feed placements and US slaughter placements, respectively.  The data show that the share of 
imports of Canadian feeder cattle compared to US feed placements increased from 2007 to 2008, but 
dropped considerably in 2009. 
Source:  USDA/USDC 2007 2008 2009 2010 
(Jan.-Aug.) 
Imports of Canadian feeder 
cattle as a share of US feed 
placements (Canada)677 2.29% 2.71% 1.22% 1.14% 
Imports of Canadian feeder 
cattle as a share of US feed 
placements (US)678 2.65% 3% 1.41%  
 
7.477  The share of Canadian fed cattle compared to  US cattle slaughter placements has steadily 
decreased since at least 2008. 
Source:  USDA/USDC 2007 2008 2009 2010 
(Jan.-Aug.) 
Imports of Canadian fed cattle 
as a share of US slaughter 
(Canada)679 3.1% 2.4% 2% 2.4% 
Imports of Canadian fed cattle 
as a share of US slaughter 
(US)680 2.54% 1.86% 1.73%  
 
7.478  As regards the first eight months of 2010, data submitted by Canada indicates that the share of 
Canadian feeder cattle dropped vis-à-vis 2009, while the share of Canadian fed cattle recouped to the 
level of 2008. 
Concerns raised by the parties 
7.479  Canada and the United States disagree on two aspects of the methodological approach for 
calculating the share of Canadian cattle and hog imports  in the US livestock market:  the choice of the 
denominator and the unit of time. 
7.480  As regards the denominator, the United States ar gues that "the import ratio that Canada uses 
to illustrate market share uses the amount of U.S. slaughter or placements in any given year as the 
                                                      
677 Exhibit CDA-159. 
678 Exhibit US-86.  This exhibit contains two charts showing the monthly fluctuations on imports of 
Canadian feeder and fed cattle as a share of US feed  placements and US cattle slaughter, respectively.  
The Panel calculates the annual average from 2007 to 2009 on the basis of this information. 
679 Exhibit CDA-159. 
680 Exhibit US-86.  This exhibit contains two charts showing the monthly fluctuations on imports of 
Canadian feeder and fed cattle as a share of US feed  placements and US cattle slaughter, respectively.  
The Panel calculates the annual average from 2007 to 2009 on the basis of this information. WT/DS384/R 
WT/DS386/R Page 124 
 
 
  denominator, and thus, captures larger trends in the U.S. market that have nothing to do with 
Canadian imports".
681  Canada justifies this with the need to disregard market factors that do not have 
a differential impact on imported livestock, such as a general increase in grain prices.682  We note that 
the United States did not provide any alternative methodology for calculating the shares, and its own 
evidence uses the same denominator as Canada's.  In  any event, given the use of the same numerator 
and denominator, the data allow for a useful comparison, irrespective of the parties' disagreement on the denominator. 
7.481  As regards the unit of time, the United States submits that the data presented by Canada 
"is inappropriate because of the significant 'noise ' associated with using weekly data instead of 
monthly data".
683  Accordingly, the United States presents  estimates on the basis of monthly data.  
Canada replies that "[b]y using monthly observations  rather than weekly data from the U.S.-APHIS, 
the United States reduces the size of the available data set and reduces the precision with which the 
effects of the COOL measure may be measured".684  Canada further submits that the statistics 
prepared by US APHIS and the US Census Bureau are similar, with an expected variation attributable 
to weekly data not aligning exactly with monthly data.685  As explained above, the general trend 
shown by both parties' data is quite simila r, irrespective of the unit of time chosen. 
Share of Mexican cattle imports in the United States 
7.482  The share of Mexican cattle imports in the Un ited States has remained small over the past 
decade.  According to the United States, imports of  Mexican cattle as a share of US slaughter have 
represented between 3% and 5% from 2000 to 2009.686 
7.483  Data submitted by the United  States for the period between 2007 and 2009 show that imports 
of Mexican feeder cattle as a share of US feed placements have fluctuated in the same range:687 
Source:  Department of 
Commerce and USDA 2007 2008 2009 
Imports of Mexican feeder 
cattle as a share of US feed 
placements 4.75% 3.6% 4.95% 
 
                                                      
681 United States' second written submission, para. 73. 
682 Canada's opening oral statement at the second substantive meeting of the Panel, para. 49. 
683 United States' second written submission, para. 74. 
684 Canada's second written submission, para. 42. 
685 Canada's opening oral statement at the second substantive meeting of the Panel, para. 43. 
686 United States' first written submission, para. 108 (Exhibit US-28, Tables 5 and 13). 
687 Exhibit US-86.  This exhibit contains a chart showing the monthly fluctuations on imports of 
Mexican feeder cattle as a share of US feed placemen ts.  The Panel calculates the annual average from 2007 to 
2009 on the basis of this information.  WT/DS384/R 
 WT/DS386/R 
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Canadian hogs 
7.484  Canada provides data showing that total impor ts of Canadian hogs as a share of US hog 
slaughter increased continuously between 2005 and 2007, followed by two consecutive years of 
reduction:688 
Source:  US APHIS 2005 2006 2007 2008 2009 
Total imports of Canadian 
hogs as a share of US 
slaughter 7.7% 8.3% 9.2% 7.8% 5.5% 
 
                                                      
688 Exhibit CDA-47. WT/DS384/R 
WT/DS386/R Page 126 
 
 
  
 
7.485  Canada also submits more deta iled data showing that Canadian  feeder hogs as a share of US 
hog production689 declined in 2009 and in the first eight months of 2010, and that the number of 
Canadian slaughter hogs as a share of US hog sl aughter has been steadily decreasing since at least 
2008:690 
Source:  USDA 2007 2008 2009 2010 
(Jan.-Aug.) 
Imports of Canadian feeder hogs 
as a share of US hog production 4.9% 5% 3.6% 3% 
Imports of Canadian slaughter 
hogs as a share of US hog 
slaughter 3.1% 2% 1.1% 1% 
 
(iii) Costs of the COOL measure 
7.486  As explained above, the COOL measure enta ils compliance costs, including segregation 
costs.691  In fact, all parties agree on the existence of compliance costs associated  with the introduction 
of the COOL measure.  However, parties' views di ffer on the extent of these costs.  While Canada and 
Mexico argue that the costs of segregation are signi ficant, the United States claims they remain small 
thanks to the flexibilities contained in the COOL requirements. 
                                                      
689 Canada provides this information with and without an eight-week lag between the imports of 
Canadian hog and total US hog production.  According to  Canada's response to Panel question No. 21, Canadian 
hogs are approximately eight weeks older than the US pig crop as a whole.  Therefore, argues Canada, in order 
to compare the two groups of hogs with  greater accuracy, it is necessary to use the eight-week lag.  As an 
example, Canada states that under this scenario Cana dian hog exports to the United States in week 9 are 
compared to the US hog crop in week 1. 
690 Exhibit CDA-159. 
691 See paras. 7.330-7.372 above.  WT/DS384/R 
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  7.487  The structure of segregation costs can be comple x depending on whether the structure of the 
supply chain is highly integrated and on consumers' willingness to pay a premium for country of origin labelling.  These costs have to be covered by  some participants along the supply chain either by 
setting a higher sale price or by imposing a discounted purchasing price.  As a result, prices and 
quantities are likely to be affected. 
7.488  Besides affidavits indicating price discounts for imported animal and meat as a result of the 
COOL requirements
692, Canada provides two economic studies on the segregation costs of the 
COOL measure.  The first one, prepared by Informa Economics693 ("Informa Report") in June 2010, 
assesses the implementation costs of the supply chai n in the United States.  The second one is an 
economic simulation model by Professor Sumner ("Sumner Simulation Study") published in 
June 2010, which measures the impact of the C OOL measure on the willingness of operators along 
the supply chain to pay for imported Canadian an imals based on the estimated segregation costs 
provided by the Informa Report. 
Informa Report 
Summary of the study 
7.489  The Informa Report provides a descriptive asse ssment of the costs associated with the 
implementation of the 2009 Final Rule (AMS).  It updates a previous assessment of the country of origin labelling as established in the 2002 Farm Bill published in April 2003.
694  The report analyses 
the US cattle and beef supply chain as well as th e hog and pork supply chain, by comparing two 
supply chain configurations:  production processes in volving only US-origin animals or mixed-origin 
animals. 
7.490  The Informa Report identifies various types of compliance costs of the COOL measure and it 
provides figures suggesting that the costs under th e mixed origin configuration are substantially 
higher than the ones associated with the supply chain configured to handle only US-origin products.  
These costs flow from the adaptations which operators  in the supply chain need to make to comply 
with the COOL measure. 
7.491  The Informa Report explains that the magnitude  of these costs depends on the stage of the 
supply chain and whether mixed-origin products are being processed.  The segregation costs are 
particularly high at the packer/processing and distribution/retail level for operators accepting 
mixed-origin livestock and meat. 
7.492  The Informa Report compares the estimated co sts under the 2002 Farm Bill and the costs 
under the 2009 Final Rule (AMS) and finds that de spite the flexibilities under the latter instrument, 
e.g. the possibility of commingling and the interc hangeable use of Labels B and C, operators 
processing animals and products with mixed origin c ontinue to bear additional costs of segregation 
and compliance compared with a supply chain configured to process only US-origin animals. 
7.493  Based on an industry survey and an analysis of the retail meat sector, the Informa Report 
concludes that the COOL measure had different cost impacts in the beef and pork sectors. 
7.494  In the supply chain of cattle and beef, a large number of operators adopted a configuration 
that can handle one or more of the labels desp ite high segregation costs associated with the use of 
                                                      
692 See para. 7.356 above. 
693 Exhibit CDA-64. 
694 Exhibit CDA-70. WT/DS384/R 
WT/DS386/R Page 128 
 
 
  animals and products of mixed origin.  Concerns  over long-term supply availability explain why 
operators decided to bear the segregation costs.  Slaughterhouses were aware that there might not be 
enough US-born animals to satisfy a high utiliza tion rate necessary to ensure minimum production 
costs and, thus, decided to handle both domestic and foreign-born cattle. 
7.495  The Informa Report indicates that, unlike the b eef sector, the costs of segregation in the hog 
industry are particularly complex and depend on the type of production configuration and the degree 
of vertical integration.  In fact, the Informa Report distinguishes between integrated hog production 
and packer/processor, large scale production not in tegrated into the packer/processor, and small 
independent hog producers.  The report concludes that many operators in the hog and pork supply 
chain opted to handle only US-origin hogs to avoi d large and complex segregation costs and, thus, 
remain competitive. 
Criticisms by the United States 
7.496  The United States argues that the lack of tran sparency of the methodology of the Informa 
Report calls into question the validity of the estimated costs presented by the report.
695  Further, 
according to the United States, the Informa Re port failed to account for previously occurring 
segregation and for the flexibilities provided by th e 2009 Final Rule (AMS).  The Informa Report 
suggests that no livestock imports should occur but  this is rebutted by actual market trends.  
Accordingly, the United States argues, the Informa Report overestimates the costs of compliance with 
the COOL requirements. 
7.497  In response, Canada submits a follow-up letter from the Vice President of Informa 
Economics, explaining that the Informa Report is based on information gather ed from interviews and 
firm-level cost data.696  The sensitive nature of the data and th e confidentiality agreements with survey 
participants explain why the sources cannot be di sclosed.  According to the follow-up letter, the 
Informa Report was able to distinguish between the costs associated with the COOL measure and 
those occurring for other reasons like the BSE, other labels or export requirements.  The flexibilities 
provided for in the 2009 Final Rule (AMS) were also  included in the cost estimates and explain why 
some compliance costs decreased. 
Analysis by the Panel 
7.498  The Informa Report provides insights on how the different types of compliance and 
segregation costs are allocated in the supply chain.  The Report demonstrates that compliance costs of 
the COOL measure faced by operators depend on a large number of determinants, including the 
decision to process only US-origin or mixed-origin pr oducts, the stage of the supply chain, the size of 
the firm, the geographical location of operators and the time of the year.  The Report also shows that, 
in general, COOL costs arise at every stage of the livestock and meat supply chain, and that these 
costs increase as livestock and meat move downstream on the chain. 
7.499  However, the Informa Report is silent on  its methodology and the sample considered 
(i.e. time period, geographical zone, number of firms surveyed).  Accordingly, we cannot assess with 
sufficient certainty whether the Informa Report is reliable and precise as regards its exact 
quantification of the costs of the COOL measure. 
                                                      
695 Exhibit US-43. 
696 Exhibit CDA-174.  WT/DS384/R 
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  Sumner Simulation Study 
Summary of the Study 
7.500  The economic simulation study undertaken by Professor Daniel A. Sumner697 applies 
economic reasoning to explain some of the descripti ve facts on segregation costs highlighted in the 
Informa Report.  In particular, Professor Sumner compares the situations with and without the 
COOL measure, and develops an economic model of the US livestock sector (feeder pigs, fed hogs 
and pork, feeder cattle, fed cattle and beef) to illust rate how the differential implementation costs of 
the COOL measure are distributed among market pa rticipants through market forces.  Like the 
Informa Report, the Sumner Simulation Study consid ers operators that process either only US-origin 
or mixed-origin animals.  The Study presents the results of the economic model simulation which 
assesses the reduction in the demand for Canadian lives tock, in terms of willingness to pay, following 
the implementation of the COOL measure. 
7.501  The Sumner Simulation Study lays down the economic competitive mechanism that explains 
how the implementation of the COOL measure affect s Canadian cattle and hogs compared with US 
domestic production.  According to the Study, the competitive market pressure of the 
COOL requirements starts at the end of the supply chain.  Retailers who propose mixed-origin meat 
need to sell this meat at a price at least equal or lower than the price of US-origin meat in order to 
remain competitive with other retailers selling only  US-origin meat.  Yet, retailers selling mixed-
origin meat face additional labelling costs related to  segregation by origin.  According to the Study, 
these additional costs cannot be passed on to custom ers, who can buy US-origin meat that does not 
face segregation costs.  Thus, the Study considers th at the only option for these retailers is to pay to 
their suppliers, i.e. feeding operators and packers, a price for mixed-origin meat below the price paid 
for US-origin meat.  Faced with this market pressu re, the Study considers that feeding operators and 
packers processing Canadian cattle and hogs are unable to pass their additional segregation and 
compliance costs on to the retailer s or the suppliers of US cattle and hogs.  In order to remain 
competitive, the Study concludes that the only opti on for these operators is to either avoid using 
imported feeder and fed animals or to request a lo wer import price for Canadian livestock and meat in 
order to offset additional segregation and complia nce costs.  In both cases, strong market pressure 
leads most implementation costs of the COOL measure to be borne by livestock and meat importers/suppliers through a reducti on of Canadian imports and/or price.  Since Canadian livestock 
already represented a small share in the US market  before the implementation of the COOL measure, 
and the switch to only US-origin products can be  done at little or no cost, the Study expects the 
reduction of Canadian imports a nd/or price to be significant.
698 
7.502  The Sumner Simulation Study proceeds with the derivation of a mathematical representation 
of the economic competitive mechanisms.  In order fo r the model to remain tractable and to limit the 
number of equations involved, Professor Sumner introduces several assumptions to define the 
relationship of market forces in the supply chai n and to isolate the changes caused by the 
implementation of the COOL requirements.  Ulti mately, the economic model depends on a set of 
parameters representing the market shares, the techni cal mark-up (i.e. difference between the cost and 
the selling price of the product) and the costs of  segregation.  To quantify the impacts of the 
                                                      
697 Professor Daniel A. Sumner is Director of the University of California Agricultural Issues Center 
and the Frank H. Buck Jr. Professor in the Department of Agricultural and Resource Economics, University of 
California, Davis. 
698 Similar economic reasoning is described in a spring 2003 economic study provided by Mexico 
(cf. Exhibit MEX-88).  This study assesses the implemen tation costs associated with the 2002 Farm Bill based 
on two methods of implementation:  a "certification with an audit" or a "traceback" system.  We are not 
reviewing this study. WT/DS384/R 
WT/DS386/R Page 130 
 
 
  COOL measure at each stage of the supply chain, the model is then simulated by introducing data 
from the Informa Report, USDA and Statistics Cana da.  The results of the Study show how the 
implementation of the COOL requirements, thr ough market forces, leads to a reduction of the 
willingness to pay by the operators along the supply chain for given quantities of Canadian cattle and 
hogs 
Criticisms by the United States 
7.503  The United States questions the accuracy of the simulated figures of the Study, since it relies 
extensively on data from the Informa Report, which, according to the United States, lacks 
transparency and relies on a model based on too restrictive and unrealistic assumptions.
699  
For instance, according to the Unite d States, the Sumner Simulation Study failed to account for the 
increase in the cost of procuring cattle resulting from the switch to a US-only process.700  Furthe r ,  
according to recent trade data, the United States cont inues to import Canadian and Mexican livestock, 
which suggests that the additional costs resulti ng from the COOL measure are being absorbed.701 
7.504  The US criticisms relating to the use of the Informa Report are addressed by Canada in the 
follow-up letter from the Vice President of Informa Economics.702  However, Canada does not address 
in detail the United States' criticisms relating to  the assumptions of the model in the Sumner 
Simulation Study. 
Analysis by the Panel 
7.505  As explained in the Sumner Simulation Study, the simulation results cannot be viewed as 
projections of market price outcomes.  Rather, the study provides an example of how demand for 
imported products compared to demand for US-o rigin products could be affected by the 
COOL measure at each stage of the supply chain.  Although it is reasonable to expect that operators 
processing only US-origin products face lower complian ce costs of COOL, it is extremely difficult to 
draw reliable conclusions from the Sumner Si mulation Study as regards the precise level of 
segregation costs and their specific impact on price and quantities.  In fact, the economic model 
derived by Professor Sumner is a simplificati on to illustrate the complex economic mechanism 
underlying the impact of the COOL measure, whic h by definition introduces additional uncertainty 
into the estimated figures. 
Conclusion on the Informa Report and the Sumner Simulation Study 
7.506  Although we cannot rely directly on the figures included in the Informa Report and the 
Sumner Simulation Study, both studies shed some light on the different types of segregation and 
compliance costs encountered at different stages of the supply chain.  Given that these costs have to 
be borne somewhere in the system, it all comes down to economic competition pressure.  The Sumner Simulation Study shows how market-force mechanisms  allocate these costs along the supply chain.  
In the absence of a large share of US consumers willing to pay a price premium for country of origin 
labelling, the cheapest way to comp ly with the COOL measure is to  process only US-origin livestock, 
all other things being equal.  The other possib ility is to continue processing imported livestock 
through segregation, which entails additional costs in  virtually all cases.  Either process configuration 
is likely to cause a decrease in the volume and price of imported livestock. 
                                                      
699 See Exhibit US-43;  United States' first written submission, para. 188;  and United States' second 
written submission, para. 91. 
700 See Exhibit US-43. 
701 See Exhibit US-43. 
702 See Exhibit CDA-174.  WT/DS384/R 
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  (iv) Whether the COOL measure had a negative and significant impact on imported Canadian 
livestock volumes and prices 
Introduction 
7.507  Canada and the United States also submit eco nometric analyses to determine if the 
implementation of the COOL measure affected prices and shares of imported livestock. 
7.508  As discussed above, the economic analyses su bmitted by Canada and the United States cannot 
be relied upon exclusively in order to establish whether any negative trade and economic effects are 
attributable specifically to the COOL measure.  We have found that these descriptive analyses have 
shortcomings both in terms of the reliability of  the underlying data and in the methodological 
approach.  Although tables and graphs provide some insights, making an inference of the impact of 
the COOL measure based solely on this type of in formation can be misleading or inaccurate.  This is 
because, as the United States argues, many factors can explain the evolution of market shares and 
prices, including the general economic situation, a specific event (e.g. BSE), seasonal effects, changes 
in transportation costs, fuel prices and livestock i nventories, and exchange ra te fluctuations.  Failing 
to consider and give proper weight to these factor s would invalidate any conc lusions with regard to 
whether any negative effects on the price and shar e of imported livestock are attributable to the 
COOL measure.  This is particularly important because the COOL measure started to develop its 
effect in 2008, shortly after the US economic recession started in December 2007.703 
7.509  Unlike descriptive analyses, econometric studies are able to isolate and quantify the different 
factors at play.  Specifically, the econometric appr oach permits a distinction and assessment of the 
impact of the COOL measure, economic recession a nd other determinants on the quantity and price of 
imported livestock.  To be accurate, the assessment of the estimated causal relationship between two 
given variables should rely on the level of statis tical significance.  Statistical significance provides 
information on the degree of confidence and reliab ility of the estimated value of each parameter. 
7.510  The level of significance is important because th e sign of the estimated coefficient of the 
variable is not sufficient to interpret the empi rical results.  Technically speaking, statistical 
significance is a mathematical t ool to assess the probability that the relationship between specific 
variables (for instance the impact of the COOL m easure on the import share or price basis) is the 
result of chance.704  Typically, a variable is said to be st atistically significant when there is a 95% 
probability that the coefficient of a given variable (for instance the COOL measure) is different from 
zero.  Conversely, there is only a 5% probability that  the value of the estimated coefficient is due to 
chance or random error.  The 95% probability has been widely adopted to accept or reject the 
reliability of estimates.705 
7.511  In order to infer any conclusion on the empirica l estimates, the results should also remain 
qualitatively similar to a series of robustness checks,  such as the inclusion of additional explanatory 
variables or the extension of the time period. 
General observations on the econometric studi es submitted by Canada and the United States 
7.512  Both Canada and the United States submitted an  econometric study to assess the impact of the 
COOL measure on the imports of Canadian cattle as a share of US feed or slaughter placements and 
on the price difference between imported Canadi an and US livestock (also known as the "price 
                                                      
703 Exhibit US-156. 
704 R.A. Fisher, Statistical Methods for Research Workers , 1st ed. (Oliver & Boyd, 1925). 
705 R.A. Fisher, Statistical Methods for Research Workers , 1st ed. (Oliver & Boyd, 1925). WT/DS384/R 
WT/DS386/R Page 132 
 
 
  basis").  In addition, the econometric study submit ted by Canada also analyses the impact of the 
COOL measure on the imports of Canadian hogs as a sh are of US feed or slaughter placements.  Both 
econometric studies are based on an equation, where the dependent variable, namely the import ratio or the price difference, is a function of several e xplanatory variables and an error term.  The error 
term reflects the fact that the model does not fully represent the actual relationship between the 
dependent variables and the explanatory variables.  In other words, all the factors not explicitly 
controlled in the model specification are included in what is called the error term.  The estimation in 
the two econometric studies submitted by Canada and the United States consists of minimizing such 
error term. 
7.513  Although the econometric studies submitted by Ca nada and the United States estimate the 
same types of impact of the COOL measure, they reach different conclusions.  Since both studies rely 
on the same standard estimation method (i.e . so-called "ordinary least squares method"
706), these 
opposite estimates result from the us e of different types of data (weekly or monthly), time period and 
model specifications.  It is not our task to establis h a unified econometric report or to conduct our own 
econometric assessment;  instead we wi ll assess the robustness of each study. 
Summary of the Sumner Econometric Study submitted by Canada 
Main findings of the Sumner Econometric Study 
7.514  The econometric study prepared by Professor Sumner on behalf of Canada 
("Sumner Econometric Study") is composed of two elements:  a theoretical economic model and an 
empirical econometric study.707 
7.515  The theoretical economic model part of the Sumner Econometric Study derives a partial 
equilibrium model of the impact of the COOL m easure on the US market for Canadian fed cattle, 
feeder cattle, fed hogs and feeder pigs.  The partial equilibrium nature of the model implies that the 
impact of the COOL measure in a given market, in this case the US market, is analysed independently 
from prices and quantities demanded and supplied in ot her markets, e.g. the Canadian market.  The 
model suggests that, under perfect competition, the impact of the implementation of the 
COOL measure will depend on the price elasticity of Canadian import suppl y, which corresponds to 
the responsiveness of the import quantity to a change in the import price.  Based on the actual market 
conditions determining the price elasticity of th e cattle and hog sectors, the Sumner Econometric 
Study concludes that the implementation of the COOL measure is more likely to lead to a decrease in 
Canadian imports than to a price reduction.  The Sumner Econometric Study expects a significant 
price reduction only in the US fed cattle market.  These theoretical findings are used by Professor 
Sumner to interpret the empirical findings of the econometric model. 
7.516  The second part of the Sumner Econometric Stud y estimates empirically the impact of the 
COOL measure on the share of Canadian cattle and hogs relative to US feed or slaughter placements 
and price basis based on weekly data.  Unlike a th eoretical model, this econometric model does not 
rely on any specific assumptions on market structure and consumer or producer behaviour.  The study 
performs its econometric estimations  separately for the US fed cattle, feeder cattle, fed hogs and 
feeder pigs markets for the period between September 2005 and September 2009.  The impact of the COOL measure is represented by a so-called dummy variable, which is an indicator variable that 
takes the value of zero before the implementation of the COOL measure and one afterwards to represent its existence in the model. 
                                                      
706 William H. Greene, Econometric Analysis , 5th ed. (Prentice Hall, 2000), pp. 19-38. 
707 Exhibits CDA-64, 174.  WT/DS384/R 
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  7.517  The empirical findings suggest that the COOL measure did have a negative and significant 
impact on the import share of Canadian livestock and the price basis of Canadian fed cattle.  In other 
words, the introduction of the COOL measure seem s to have reduced significantly the share of 
imports of Canadian cattle and hogs as well as the price of Canadian fe d cattle with resp ect to the US 
livestock.  These results suggest th at in the absence of the COOL measure and all other things being 
equal, the price basis for Canadian fed cattle w ould have been smaller and the import share of 
Canadian cattle and hogs would have been higher.   The evidence of a negative impact of the 
COOL measure on the price basis is partially in lin e with the empirical findings provided by another 
econometric study from CanFax submitted by Canada.708 
Criticisms by the United States 
7.518  The United States raised some concerns relati ng to certain aspects of the Sumner Econometric 
Study, which in their view invalidate the study's main findings.709  Besides the issues related to the 
choice of the denominator of the import share710 and the unit of time (monthly instead of weekly)711, 
the United States questioned the use of a redu ced form model to determine whether the 
COOL measure had price and export effects given the complexity of the North American livestock 
market.  In particular, the United States argued that  the Study yields misleading results because it fails 
to account for important factors unrelated to the C OOL measure, such as exchange rate fluctuations, 
changes in livestock inventories, transport costs and fuel prices.  Further, the United States argued that 
the negative impact established by the Study is at tributable to economic recession and not to the 
COOL measure.  The United States added that the Study fails to address the BSE period between 
2003 and 2005 and the long-term structural change  until November 2007, when imports of Canadian 
cattle over 30 months were allowed again.  As a r esult, according to the United States, the conclusions 
reached by the Sumner Econometric Study are unreliable and misleading. 
Canada's response 
7.519  Although Canada argues that the US criticisms are unfounded, in response to these criticisms, 
Canada updates its econometric analysis to include  more recent data and account for transport costs.712  
Since these updated empirical results remain qualitativ ely similar to the initial estimates, Canada 
argues that the impact of the COOL measure con tinues to be negatively significant on import share 
and price basis.713  Canada further claims that the Sumner Econometric Study already takes into 
account pre-existing trends relating to inventories.714  More generally, Canada argues that the 
inclusion in the model specification of variables th at are affected by the COOL measure/requirements 
(i.e. endogenous variables) would be a mistake.715 
7.520  Regarding the impact of economic recession, Cana da agrees that this can have an effect on 
livestock demand in North America.  Canada claims , however, that the United States failed to provide 
any arguments to explain why economic recession woul d affect differentially Canadian imports with 
respect to US production.716 
                                                      
708 Exhibit CDA-114. 
709 Exhibit US-43. 
710 United States' second written submission, para. 73. See para. 7.480 above. 
711 United States' response to Panel questions following the second substantive meeting, paras. 45-46. 
See para. 7.481 above. 
712 Exhibit CDA-152. 
713 Canada's opening oral statement at the first substantive meeting of the Panel, para. 37. 
714 Canada's opening oral statement at the second substantive meeting of the Panel, para. 36. 
715 Canada's opening oral statement at the second substantive meeting of the Panel, para. 52. 
716 Canada's opening oral statement at the first substantive meeting of the Panel, para. 44. WT/DS384/R 
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  7.521  Canada explains that the Sumner Econometric Study deliberately does not consider the BSE 
period (2003-2005), because the integration of the Canada-US cattle market temporarily suffered 
structural disruption during that period.  However, Canada points out, the Study takes into account the effects of BSE through a 0-1 indicator variable fo r the fact that between July 16, 2005 and November 
19, 2007 imports of Canadian cattle over 30 months were banned.
717 
Further updates of the Sumner Econometric Study 
7.522  Canada submits a further updated version of  the Sumner Econometric Study which addresses 
economic recession and BSE more extensively.718  The period analysis was accordingly extended 
from December 2003 to November 2010 to include th e 2003-2005 BSE period a nd more recent data, 
explicitly including a dummy variable equal to one until November 2007 and zero afterwards to 
account for the import ban on cattle over 30 months.  Economic recession is also included in the 
updated model specification either through a 0-1 indicat or variable or the rela tive unemployment ratio 
between Canada and the United States. 
7.523  Canada argues that these further updated resu lts are robust and qualitatively similar to the 
estimates of the original Sumner Econometric Study.  In particular, the impact of the COOL measure 
remains negative and significant after controlling for economic recession that started a few months 
prior to the entry into force of the COOL measure .  Although not always significant, BSE reduced the 
Canadian import share and increased the price basis.   More generally, despite economic recession, the 
updated results suggest that prices and quantities of imported Canadian liv estock would have been 
higher in the absence of the COOL measure. 
7.524  Canada subsequently provides another set of estimates, where the import shares and price 
basis are based on monthly data.719  In most specifications, the impact of the COOL measure on price 
and import quantities of Canadian livestock is negati ve and significant.  According to Canada, these 
findings confirm that the COOL measure affected  the conditions of competition for Canadian 
livestock in the US market in a negative and significant manner. 
7.525  According to the United States, the adjustme nts undertaken in these further updates of the 
Sumner Econometric Study do not address the flaws of the econometric model contained in the original Sumner Econometric Study.  In particular, the use of the unemployment ratio is not adequate, 
because it does not capture the impact of the economic recession on the labour market
720;  in addition, 
it is often a lagging indicator of the economic activity.  The United States also questions how weekly unemployment rates were computed by these furthe r updates.  Instead, the United States proposes to 
consider overall trade in agriculture co mmodities as a measure of economic recession.
721 
7.526  Regarding BSE, the United States argues that the period during the BSE-related US import 
ban cannot be considered as normal or representative to  undertake any analysis of the trade effects of 
the COOL measure on the US market.722  Consequently, the United States rejects these new results.723 
                                                      
717 Canada's opening oral statement at the first substantive meeting of the Panel, para. 45. 
718 Exhibit CDA-174. 
719 Exhibit CDA-228 
720 United States' comments on Canada's response to Panel questions following the second substantive 
meeting, paras. 28-30. 
721 United States' comments on Canada's response to Panel questions following the second substantive 
meeting, para. 30. 
722 United States' comments on Canada's response to Panel questions following the second substantive 
meeting, paras. 32-33.  WT/DS384/R 
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  Summary of the USDA Econometric Stud y submitted by the United States 
Main findings of the USDA Econometric Study 
7.527  The United States argues that, as the respondent, it need not develop a competing econometric 
model.724  Yet, the United States submits an alternativ e econometric study prepared by the Office of 
the Chief Economist of USDA ("USDA Econometric Study").725  Unlike the Sumner Econometric 
Study, the USDA Econometric Study only focuses on th e Canadian and Mexican fed and feeder cattle 
import markets.  The period of analysis covers July 2003 to April and May 2010 for import shares and 
for price difference, respectively.  Further, the USDA Econometric Study provides estimates using 
data between January 199 7 and April/May 2010.  Although the USDA Econometric Study considers 
the same definition of the import share and price basis as the Sumner Econometric Study, it calculates 
the import quantity share and price basis on monthly, not weekly data.  Further, the USDA Econometric Study includes additional explanatory variables (e.g. gasoline prices) in the model 
specification not present in the initial Sumner Econ ometric Study.  Nonetheless, the United States 
follows the same approach as the Sumner Econometri c Study and also represents the impact of the 
COOL measure as a 0-1 indicator variable. 
7.528  Nonetheless, the USDA Econometric Study reaches different conclusions from the Sumner 
Econometric Study regarding the impact of the COOL measure on the import ratio and the price basis between imported Canadian and domestic US lives tock.  On the one hand, the USDA Econometric 
Study finds that in some specifica tions the impact of the COOL measure on the price basis is positive 
and significant.  This suggests that the COOL me asure reduced the price gap between the Canadian 
and US livestock.  The United States attributes this to the substitution effect in the US market from 
more expensive high-grade US meat (Choice) to lo w-grade Canadian meat (Select) resulting from the 
economic recession.
726  The higher demand for Canadian livestock led to an increase in its price and a 
decrease in the price of US cattle.  As a result,  according to the USDA Econometric Study, the price 
difference between Canadian and the US livestoc k decreased following the implementation of the 
COOL measure. 
7.529  The empirical results of the USDA Econometric St udy indicate that there is a negative but not 
significant impact of the COOL measure on the import ratio of Canadian livestock.  Since this impact 
is not significantly different from zero, the United St ates infers that the COOL measure had no impact 
on Canadian imports.  In addition, the United States  argues that when the COOL variable is replaced 
by an economic recession dummy variable in th e model specification, economic recession has a 
significant negative impact on the import share in some specifications.  This result, argues the 
United States, corroborates its claim that the econo mic recession was the main determinant in any 
decline in import shares. 
7.530  With respect to the hogs sector, the USDA Econometric Study concludes, without providing 
an econometric analysis, that the main factor e xplaining the reduction in Canadian imports is the 
decline in Canadian hog inventories which began be fore the implementation of the COOL measure.  
The United States claims that this f actor is so strong that no econometric analysis is needed to explain 
the drop in Canadian hog imports. 
                                                                                                                                                                     
723 United States' comments on Canada's response to Panel questions following the second substantive 
meeting, para. 34. 
724 United States' response to Panel questions following the second substantive meeting, para. 35.  See 
also para. 7.518 above. 
725 Exhibits US-42 and 149. 
726 United States' response to Panel questions following the second substantive meeting, para. 49. WT/DS384/R 
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  Canada's criticisms 
7.531  Canada argues that the USDA Econometric Study has failed to address the criticisms 
formulated by the United States against the Sumner Econometric Study.
727  In particular, the use of a 
constant measure of economic recession, such as the dummy variable, in the USDA Econometric 
Study is not appropriate, because the economic recession and its recovery fluctuate over time.728  
In addition, Canada claims that the USDA Ec onometric Study relies on a misdefined recession 
dummy variable, which continues to take the value of one after the end of the economic recession in 
June 2009.  With respect to BSE, Canada clai ms that including the BSE period in the USDA 
Econometric Study is inappropriate because the structur al disruptions are associated with a large price 
basis and zero import shares.729  Canada also criticises the use of a single variable to account for the 
full range of structural changes resulting from the BSE-related import ban.730 
7.532  Further, Canada argues that the USDA Ec onometric Study relies on the wrong index to 
measure transport costs.  Instead of representing the transport costs faced by producers with the 
"Producer Price Index for Trucking", the United States considers the "Consumer Price Index for 
Transportation", which includes amounts paid by consumers for new cars, parking fees, airline fares 
and tickets for public transport.   Accordingly, Canada argues that the USDA Econometric Study 
applies a wrong economic analysis.731 
7.533  Turning to the hog analysis in the USDA Econometric Study, Canada rejects the gradual 
decline in hog inventories in Canada as the sole explanation of the drop in Canadian hog imports.732  
Canada notes that while the decline in hog inventor ies began in 2005, Canadian hog imports increased 
before the implementation of the COOL measure.  In  fact, the drop in Canadian hog imports in levels 
and as a percentage of US slaughter began in 2008, at the same time as hog inventories in the United States started to decrease. 
The United States' response 
7.534  The United States responds that the aim of the USDA Econometric Study was not to address 
the flaws of the Sumner Econometric Study, but ra ther to demonstrate how the inclusion of more 
relevant variables produced contradictory results.
733  More generally, the United States claims, the 
estimation of a "reduced form model", where a system  of equations (i.e. dema nd and supply) is solved 
to express the endogenous variable (import share or price basis) as a function of explanatory 
variables, is not appropriate, because the results associated with the "reduced form model" depend 
mostly on the variables chosen.  Moreover, a larg e number of variables are necessary to quantify any 
potential effects with a sufficient level of confidence. 
7.535  The United States argues that the decision to om it the empirical econometric analysis of the 
hog sector from the USDA Econometric Study is based on the specific characteristics of the Canadian hog sector.  Besides the decline in Canadian hog inventories, the United States notes that the 
Canadian hog price is based on the US price, thus there is not a unique "Canadian hog price" per se .
734 
                                                      
727 Canada's opening oral statement at the second substantive meeting of the Panel, para. 39. 
728 Canada's opening oral statement at the first substantive meeting of the Panel, para. 44. 
729 Canada's comments on the United States' response to Panel questions following the second 
substantive meeting, para. 15. 
730 Canada's opening oral statement at the first substantive meeting of the Panel, paras. 45-46. 
731 Canada's opening oral statement at the first substantive meeting of the Panel, para. 47. 
732 Canada's opening oral statement at the second substantive meeting of the Panel, para. 35. 
733 United States' response to Panel question No. 106.  
734 United States' response to Panel questions following the second substantive meeting, para. 51.  WT/DS384/R 
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  Updated USDA Econometric Study 
7.536  The United States provided an updated version of  the USDA Econometric Study in response 
to questions from the Panel.735  In the updated study the United States considers the same period of 
analysis and specification but includes the COOL a nd economic recession variables at the same time. 
7.537  In this modified specification, the impact of the COOL measure and economic recession are 
no longer significant when both variables are included at the same time in the model specification.  
The United States explains that it initially did not introduce both variables in the same specification because the overlap between the COOL measure a nd the period of economic recession would lead to 
multicollinearity.
736  (Multicollinearity arises when two or more explanatory variables convey the 
same information.)  According to the Un ited States, although ec onomic recession and 
COOL variables represent two different events, both variables are expressed as a 0-1 indicator.  The economic recession variable takes a value of 1 af ter December 2007, while the COOL variable is 
equal to 1 after August 2008.  Therefore, argues the United States, the only difference between the 
two variables is the value of 1 taken by the ec onomic recession variable be tween January and August 
2008.  In the presence of multicollinearity, the pred ictive power of the model remains unchanged, but 
the confidence interval of the estimated coeffici ents of the variables subject to multicollinearity 
becomes larger.  As a consequence, the United States contends, the estimation of the impact of the COOL measure and economic recession variables become less accurate. 
7.538  According to Canada, multicollinearity is not a significant issue because the dates of the 
economic recession and the implementation of the C OOL measure do not match exactly.  Further, the 
Sumner Econometric Study did not suffer from any multicollinearity with respect to the two dummy 
variables.
737 
Analysis by the Panel 
7.539  As already explained, the econometric studies su bmitted by Canada and the United States rely 
on different data and methodology, and it is not our ta sk to establish a unified econometric report or to 
conduct our own econometric assessment.  Inst ead, we examine the robustness of each study 
separately. 
7.540  We consider that the Sumner Econometric Study  is sufficiently robust for several reasons.  
First, the empirical evidence of a significant negativ e impact of the COOL measure is robust due to 
the inclusion of additional explanatory variables such as transport costs, the BSE import ban and 
economic recession.  Second, the use of a dummy variable and the unemployment ratio for measuring 
the economic recession confirms that the findings ar e independent of the definition of the economic 
recession variable.  Third, the dynamic specification of the model through the inclusion of the lagged 
dependent variable (i.e. import shares or price basis) reduces any variable omission bias, such as changes in inventories.  Fourth, the use of weekly  data increases the sample size and thus reduces any 
multicollinearity between the COOL and the economic re cession variables.  Fifth, the inclusion of the 
BSE period and the recovery period from economic recession confirms that the evidence of the impact 
of the COOL measure is not specific to a given analysis period. 
7.541  Overall, the updates to the Sumner Econometri c Study and Canada's responses to questions 
from the Panel and to criticisms by the United Stat es improve the soundness of the Study's findings, 
                                                      
735 Exhibit US-149. 
736 United States' response to Panel questions following the second substantive meeting, para. 42. 
737 Canada's comments on the United States' response to Panel questions following the second 
substantive meeting, para. 14. WT/DS384/R 
WT/DS386/R Page 138 
 
 
  namely that the COOL measure had a negative a nd significant impact on Canadian import shares and 
price basis.  In fact, the vast majority of th e 103 estimated equations provided in the Sumner 
Econometric Study indicate a negative and significant co efficient of the COOL variable.  Therefore, 
the impact of the COOL measure h as been properly defined.  As a result, the COOL measure still has 
a negative and significant impact even if other, dist inct factors may positively affect Canadian imports 
and prices. 
7.542  Accordingly, the Sumner Econometric Study makes a prima facie  case that the 
COOL measure negatively and significantly affected the import shares and price basis of Canadian livestock. 
7.543  Conversely, the USDA Econometric Study lacks sufficient robustness both taken on its own 
and in comparison with the Sumner Econometric Stud y.  In fact, the 13 estimated equations for the 
cattle analysis do not show sufficient consistency to reach a robust conclusion.  According to the 
USDA Econometric study, the COOL variable and its  impact are never significant.  However, the 
impact of economic recession is only negative a nd significant in a limited number of specifications 
and even in those cases only at a relatively low level of precision, i.e. at a 90% instead of the usual 
95% level of confidence.  This means that the USDA Econometric Study does not provide a sufficiently robust explanation that any negative imp act is attributable to economic recession rather 
than to the COOL measure.  In addition, any finding  of the USDA Econometric Study with regard to 
the economic recession variable and its impact is called into question by potential multicollinearity, 
which the study failed to address. 
7.544  As regards hogs, the USDA Econometric Study me rely refers to certain features of the hog 
market, i.e. US-based pricing and Canadian hog's i nventory decline, but this cannot substitute for a 
proper and robust econometric analysis. 
7.545  Hence, the USDA Econometric Study does not rebut the prima facie  case for a negative and 
significant COOL impact established by the Sumner Econometric Study. 
7.546  This significant and negative impact of the COOL measure demonstrated by the Sumner 
Econometric Study, and not refuted by the USDA Econometric Study, concurs with our finding that 
the COOL measure, in particular in regard to mu scle cuts, accords less fa vourable treatment within 
the meaning of Article 2.1 of the TBT Agreement. 
(d) Conclusion on the complainants' claims under Article 2.1 of the TBT Agreement 
7.547  We have found above that the complainants have  demonstrated that th e COOL measure fulfils 
all three elements of the legal test under Article 2.1 of the TBT Agreement. 
7.548  Accordingly, we conclude that the COOL measure , in particular in regard to muscle cuts, 
violates Article 2.1 of the TBT Agreement. 
3. Article 2.2 
(a) Legal framework for the analysis of th e complainants' claim under Article 2.2 
7.549  Article 2 sets out certain obligations that th e WTO Members must respect in preparing, 
adopting or applying technical regulations.  Article 2.2 provides: 
"Members shall ensure that technical regula tions are not prepared, adopted or applied 
with a view to or with the effect of creating unnecessary obstacles to international  WT/DS384/R 
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  trade.  For this purpose, technical regulations shall not be more trade-restrictive than 
necessary to fulfil a legitimate objective, taking account of the risks non-fulfilment 
would create .  Such legitimate objectives are, inter alia :  national security 
requirements; the prevention of deceptive practices; protection of human health or 
safety, animal or plant life or health, or the environment.  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."  
(emphasis added) 
7.550  The complainants' claim under Article 2.2 raises an initial question on the legal test to be 
applied in assessing the COOL measure's compliance with the specific obligations therein.  We 
observe that we do not have the benefit of prior panels' or the Appellate Body's analysis on this 
question.738 
7.551  We understand, and the parties agree, that the first sentence of Article 2.2 sets out a general 
principle, namely not to create unnecessary obstacles to  international trade.  The Preamble of the 
TBT Agreement confirms this understanding:  The 5th recital in the Preamble states, "Desiring 
however to ensure that technical regulations  ... marking and labelling requirements, ... do not create 
unnecessary obstacles to trade".   This principle is also reflected in Article 2.5:  "[W]henever a 
technical regulation is prepared, adopted or appl ied for one of the legitimate objectives explicitly 
mentioned in paragraph 2, and is in accordance with  relevant international standards, it shall be 
rebuttably presumed not to create an unnecessary obstacle to international trade ".739 
7.552  We consider, and the parties further agree, that  the conformity of a measure with the general 
principle reflected in the first sentence of Article 2. 2 must be established based on the elements of the 
second sentence.740  In other words, the second sentence expl ains what the first sentence means.  As 
the parties observe, the phrase "[f]or this purpose"  introducing the second sentence indicates that the 
second sentence explains the meaning of the general pr inciple reflected in the first sentence by laying 
down the specific obligation that Members must observe.741  We will therefore focus on the content of 
                                                      
738 Although Article 2.2 of the TBT Agreement was pr esented as a claim in several previous disputes, 
neither those panels nor the Appellate Body had the opp ortunity to provide a substantive analysis of the 
provision.  For example, the panel in EC – Trademarks and Geographical Indications (Australia) was presented 
with a claim under Article 2.2, but did not proceed with a substantive analys is of the claim because the measure 
in question was found not to be a technical regulation within the m eaning of Annex I.1 of the TBT Agreement. 
See also EC – Asbestos , EC – Sardines , and EC – Approval and Marketing of Biotech Products.    
739 The fact that Article 2.5 refers only to the langua ge in the first sentence of Article 2.2 supports our 
understanding that the first sentence embodies the general principle of the obligation under Article 2.2.  In our 
view, interpreting the first sentence of Article 2.2 as embodying a separate obligation would be incongruous 
with Article 2.5, which serves as context, for it wo uld mean that the rebuttable presumption of compliance 
prescribed under Article 2.5 is applicable only with re spect to the first sentence of Article 2.2.  We do not 
consider this to be a reasonable interpretation, especia lly given that the second sentence starts with the words 
"For this purpose", referring back to the objective in th e first sentence of not creati ng unnecessary obstacles to 
international trade. 
Article 12.3 also contains a clause reflecting this general principle under Article 2.2: "Members shall, 
... take account of the special development, financial an d trade needs of developing country Members, with a 
view to ensuring that such technical regulations, standards and conformity assessment procedures do not create 
unnecessary obstacles  to exports from developing country Members." (emphasis added) 
740 Parties' responses to the Panel question No. 51. 
741 The European Union considers that  there is a connection between th e first and the second sentences 
of Article 2.2 of the TBT Agreement by the use of the term "[f]or this purpose" (European Union's third party 
written submission, para.54).  Australia also considers that the second sentence of Article 2.2 explains what the 
first sentence means (Australia's thir d party written submission, para. 66). WT/DS384/R 
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  the second sentence to derive a lega l framework necessary fo r the analysis of the complainants' claim 
under Article 2.2. 
7.553  The second sentence of Article 2.2 reads as follows: "[f]or this purpose, technical regulations 
shall not be more trade-restrictive than necessary to  fulfil a legitimate objective, taking account of the 
risks non-fulfilment would create".  The text of th e second sentence sets out an obligation that can be 
parsed into several elements, each of which we discuss below.  Our approach to reviewing the 
COOL measure's compliance with the obligation unde r the second sentence of Article 2.2, as outlined 
below, reflects to a certain extent the manner in wh ich the parties framed their arguments in light of 
the facts peculiar to this dispute.  While the oblig ation contained in the second sentence of Article 2.2 
remains the same in all cases, we do not consider that the analysis of these elements needs to be 
structured and organized in the same manner for every situation. 
7.554  In this case, all parties agree that a complainan t must first demonstrate that a given technical 
regulation is trade-restrictive.
742  We agree.  It is self-evident that a measure must be "trade-
restrictive" in some way in order to be  "more trade-restrictive than necessary". 
7.555  If the technical regulation is found to be trade-r estrictive within the meaning of Article 2.2, 
logically, the next step of the analysis under the second sentence will be to identify the objective 
pursued by the technical regulation in question a nd examine its legitimacy within the meaning of 
Article 2.2. 
7.556  Subsequently, if we determine that the objectiv e of that technical regulation is legitimate 
within the meaning of Article 2.2, we will address the question whether the technical regulation fulfils 
the identified objective.743 
7.557  If the answer is in the affirmative, we would th en proceed with an examination of whether the 
technical regulation in question is not more trad e-restrictive than necessary to fulfil the objective 
concerned.  This would entail an analysis of th e availability of less trad e-restrictive alternative 
measures that can equally fulfil the objective, taking into account the risks non-fulfilment would 
create. 
7.558  In the present dispute, the complainants argue that the COOL measure is inconsistent with 
Article 2.2 because it fails to meet the requireme nts under the second sentence.  As confirmed by the 
Appellate Body in EC – Sardines , the burden of establishing a prima facie case for a measure's 
inconsistency with Article 2.2 rests with the complainants.744  Therefore, based on the elements of the 
                                                      
742 In response to Panel question No. 52, the United St ates emphasizes that the trade-restrictiveness of 
the measures at issue is a threshold matter that the compla inants must first establish and that if the measures are 
not trade-restrictive, they will not breach a Member's obligations under Article 2.2. 
743 The parties agree that the starting point is wh ether the technical regulation at issue fulfils a 
legitimate objective, which is an analytical step require d to examine whether that t echnical regulation is more 
trade-restrictive than necessary.  The Un ited States in particular explains that it is appropriate to analyse whether 
the measure in question fulfils a legiti mate objective first because an analys is of "more trade-restrictive than 
necessary", which often includes a consideration of the existence of alternative measures, would not be possible 
without first establishing the responding party's objectiv e.  Further, according to  the United States, "taking 
account of the risks non -fulfilment would create" in Article 2.2 is  an element considered by Members in 
determining the appropriate level for the particular legitimate objective at issue. 
744 The Appellate Body confirmed that the same principle on the burden of proof that applies under 
other WTO covered agreements is equally applicable in the context of the TBT Agreement.  See the Appellate 
Body Report, EC – Sardines , para. 275.  WT/DS384/R 
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  second sentence of Article 2.2 as hi ghlighted above, we will review  in this section whether the 
complainants have established the following:745 
 The COOL measure is trade-restrictive within the meaning of Article 2.2; 
 The objective pursued by the United States through the COOL measure is not legitimate;  and 
 If the objective is legitimate, the COOL measure  is more trade-restrictive than necessary to 
fulfil a legitimate objective(s). 
(b) Whether the COOL measure is trade-restri ctive within the meaning of Article 2.2 
(i) Main arguments of the parties 
7.559  Canada  submits that technical regulations are not by definition trade-restrictive and that if a 
technical regulation imposes any restriction on interna tional trade, it meets this element of the test.746  
If a technical regulation does not restrict international trade, however, it cannot violate Article 2.2 since such a measure would never create "unnecessary  obstacles to international trade" or be "more 
trade-restrictive than necessary". 
7.560  In the case of the COOL measure, th ere is evidence that it has rest ricted international trade by 
reducing the possibility of livestock born in Canada to  be exported to the Unite d States.  The evidence 
provided by the complainants to establish that th e conditions of competition were modified by the 
COOL measure shows that the COOL measure restri cts international trade for purposes of the first 
step of the Article 2.2 analysis.
747  That same evidence is also relevant in assessing whether alternative 
measures are available that would be less trade -restrictive, taking into account the risks of non-
fulfilment. 
7.561  Mexico  also submits that technical regulations ar e not by definition "trade-restrictive" under 
Article 2.2 of the TBT Agreement.748  According to Mexico, certain t echnical regulations could in fact 
facilitate trade.  The COOL measure is, however, a technical regulation that restricts trade.  Trade 
restriction could be reflected in a reduction of competitive opportunities for imported products as well 
as in restrictions on trade flows.  This is consiste nt with the view that the GATT disciplines on the use 
of restrictions are meant to protect the competitive opportunities of imported products. 
7.562  Mexico is therefore of the view that the argumen ts and evidence raised by the complainants in 
the context of their claims under Article 2.1 also  demonstrate the trade-restrictiveness of the 
COOL measure.749  Specifically, the COOL measure has alte red US beef production so as to restrict 
Mexican feeder cattle access to th e US market and deny competitive opportunities to Mexican feeder 
cattle in that market. 
7.563  The United States  agrees that, to establish the inconsistency of the COOL measures with 
Article 2.2, the complainants must first show that the COOL measures restrict trade.750 
                                                      
745 Parties' responses to Panel question No. 52. 
746 Canada's response to Panel question No. 66; second written submission, paras. 48-49. 
747 Canada's response to Panel question No. 60. 
748 Mexico's response to Panel question No. 66. 
749 Mexico's response to Panel question No. 60. 
750 United States' second written submission, para. 103. WT/DS384/R 
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  7.564  The United States submits that the complainants ' arguments in this regard rest on their 
erroneous assertions that the COOL measures require segregation and that high costs associated with 
that practice have forced US processors to comp letely reject foreign livestock.  Additionally, the 
complainants ignore recent trade data that illustra te a significant increase in Canadian and Mexican 
livestock exports in 2010 and thereby directly unde rmine their arguments.  Thus, the complainants 
have not substantiated their claims about the COOL measures' impact on trade, much less 
demonstrated that any such impact restricts trade more than is necessary.
751 
(ii) Analysis by the Panel 
7.565  The complainants assert that the arguments and evidence submitted with regard to their claim 
under Article 2.1, namely a reduction of competitiv e opportunities for imported products compared to 
like domestic products as well as restrictions on trad e flows, equally establish that the COOL measure 
is trade-restrictive within the meaning of Article 2.2.752 
7.566  To determine whether the COOL measure is tr ade-restrictive, we will first examine the 
ordinary meaning of the term "restrictive" and how the term has been understood in previous disputes. 
7.567  The ordinary meaning of the term "restrictiv e" is "[i]mplying, conveying, or expressing 
restriction or limitation" and "[h]aving the nature or  effect of a restriction;  imposing a restriction".753  
The term "restriction" in turn is defined as "[a] thing which restricts someone or something, a limitation on action, a limiting condition or regulation". 
7.568  As evidenced above, the dictionary defines "restrictive" and "restriction" broadly.  There are 
no specific thresholds to be met in order to characterize a certain measure as a "restriction" or qualify 
it as "restrictive".  A "restriction" can also be an ything which restricts something, any limitation on 
action, or a limiting condition.  Furthermore, base d on the meaning of "restrictive", a measure "having 
the nature or effect of a restriction" can be considered as a "restrictive" measure. 
7.569  The broad scope of the terms "restrictive" or "r estriction" is confirmed by the findings of the 
panels in previous disputes. 
7.570  The panel in India – Quantitative Restrictions  concluded in the context of Article XI of the 
GATT 1994 that "[t]he scope of the term 'restriction' is also broad, as seen in its ordinary meaning, 
which is 'a limitation on action, a limiting condition or regulation'".
754  Subsequently, the panel in 
India – Autos  endorsed this view in the context of the same provision.755  More recently, in Colombia 
– Ports of Entry , the panel agreed with the interpretation of  the term "restriction" given by previous 
panels.756 
7.571  As highlighted by the panel in Colombia – Ports of Entry , previous WTO and GATT panels 
also determined a measure's rest rictiveness based on the impact of the measure on the competitive 
opportunities available to imported products.757  In particular, the panel in Argentina – Hides and 
                                                      
751 United States' opening oral statement at the fi rst substantive meeting of the Panel, para. 49. 
752 Australia agrees with the complaining parties that trade-restrictive measures include those that 
impose any form of limitation of imports, discriminate against imports or deny competitive opportunities to 
imported product (Australia's third party written submission, para. 71). 
753 The Shorter Oxford English Dictionary , (Sixth Edition) Oxford Univers ity Press, Vol. I, p. 2553 
(2007). 
754 Panel Report,  India – Quantitative Restrictions , para. 5.128. 
755 Panel Report,  India – Autos , paras. 7.269-2.270. 
756 Panel Report, Colombia – Ports of Entry , para. 7.241. 
757 Panel Report, Colombia – Ports of Entry , para. 7.236.  WT/DS384/R 
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  Leather  found that, in determining whether a measure ma kes effective a restriction in the context of 
Articles I, II, III and XI:1 of the GATT 1994, th e focus is on the competitive opportunities of 
imported products, not the trade effects.  That pane l therefore considered that the complaining party 
claiming the existence of a restriction need not prove actual trade effects.758 
7.572  Based on the foregoing, we conclude that the scope  of the term "trade-restrictive" is broad.  
We also understand that the concept of "trade -restrictiveness" under provisions of the GATT 1994 
does not require the demonstration of any actual trade effects, as the focus is on the competitive 
opportunities available to imported products.  We see no reason to depart from this understanding in 
the context of reviewing the "trade-restrictiveness" of the technical regulation at issue in this dispute 
under Article 2.2 of the TBT Agreement. 
7.573  Having reached this conclusion, we do not find it necessary to define the exact scope of the 
term "trade-restrictive" under the second sentence of Ar ticle 2.2.  Particularly, we are aware that the 
question remains whether a technical regulation's non- conformity with Article 2.1 has any bearing on 
the trade-restrictiveness element of Article 2.2.  Fo r the purpose of this dispute, we will proceed with 
our analysis of the COOL measure under Article 2.2 on the assumption 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. 
7.574  Turning to the technical regulation in question in  the current dispute, we found in the previous 
section that the COOL measure negatively affects imported livestock's conditions of competition in 
the US market in relation to like domestic livest ock by imposing higher segregation costs on imported 
livestock.759 
7.575  We therefore conclude that the complainants have demonstrated that the COOL measure is 
"trade-restrictive" within the meaning of Article  2.2 by affecting the competitive conditions of 
imported livestock.  In reaching this conclusion, we are not making a finding on the level of trade-
restrictiveness of the COOL measure .  This question will be addressed, if  necessary, in an analysis of 
whether the COOL measure is more  trade-restrictive than necessary. 
(c) Whether the objective pursued by the United Stat es through the COOL measure is legitimate 
7.576  Canada and Mexico argue that the true objectiv e of the COOL measure is to protect domestic 
industry. 
7.577  The United States identifies providing consumer information on origin760 as the objective that 
it seeks to achieve thro ugh the COOL measure. 
7.578  Canada submits that, even if the US stated objective were accepted as the true objective, the 
United States has failed to prove why that objective is  legitimate within the meaning of Article 2.2.  
Mexico asserts that, in the factual circumstances of this dispute, the declared objective by the 
United States is not legitimate. 
                                                      
758 Panel Report, Argentina – Hides and Leather , para. 11.20. 
759 See Section VII.D.2.  Further, we observed in  Section VII.D.2(c)(iv) that the COOL measure 
brought about actual negative trade effects on imported livestock as shown by a significant and negative impact 
on import shares and prices. 
760 See para. 7.617. WT/DS384/R 
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  7.579  To address the issue before us, we will first ex amine whether the complainants are correct in 
identifying that protection of the domestic industr y is the objective pursued by the United States 
through the COOL measure.  We will then revi ew the legitimacy of the identified objective. 
(i) Identification of the objecti ve pursued by the United States through the COOL measure 
Main arguments of the parties 
7.580  Canada  and Mexico allege that the objective of the COOL requirements is trade 
protectionism.761 
7.581  The United States submits that the objective it pursues through the COOL measure is to 
"provide consumer info rmation about origin".762  The United States confirms that human health and 
safety are not part of the objec tives pursued by the COOL measure.763 
7.582  Canada  submits that the Panel should determin e the objective of a measure by focusing on 
the "design, the architecture and the structure" of  that measure, supplemented as necessary with 
additional information, including its legislative history.764  According to Canada, the design, the 
architecture and the structure of the COOL measure rev eal that its objective is protectionist in nature.  
Canada submits that this is also confirmed by the in tent of legislators.  Canada argues that the Panel 
should consider evidence that speaks to the motiv ations of the main legislative designers and 
promoters of the legislation.  Unlike in the c ontext of Article III:2 of the GATT 1994, intent is 
important in the context of Article 2.2 of th e TBT Agreement because Article 2.2 requires an 
assessment not only of the effect of a measure, but  also its "objective" – something not required in 
Article III:2.765 
7.583  If however the Panel were to accept the objectiv es as identified by the United States, Canada 
submits that the Panel should begin its analysis w ith the idea that the objective of the COOL measure 
is to "provide information to consumers about  where livestock used to produce meat in the 
United States was born, raised, and slaughtered so that consumers may [make decision X]".  Canada 
argues that the reasons for providing the information are important.766  All evidence adduced to this 
point in the current dispute shows that the few consumers who supported the COOL measure did so 
because of its protectionist objectives or because of objectives not addressed by the COOL measure. 
                                                      
761 Canada's first written submission, paras. 158- 175; second written submission, paras. 57-68; 
Mexico's first written submission, paras. 279-283. 
762 United States' first written submission, paras. 206-225; second written submission, para. 106; 
opening oral statement at the second substantive meeting of the Panel, para. 38. See para. 7.616-7.617. 
763 United States' response to Panel ques tion No. 17;  Exhibit CDA-5, p.2677. 
764 Canada's second written submission, paras. 50-54, 57-68. 
765 Canada's second written submission, para. 52; respon se to Panel question No. 126.  In light of this, 
Canada contests the United States' proposition based on the Appellate Body's findings in Chile – Alcoholic 
Beverages and Japan – Alcoholic Beverages  that statements of intent by legislators and regulators should be 
ignored in determining the objective in this dispute.  Further, in response to the United States' reference to 
certain decisions from US courts for the proposition that domestic tribunals refuse to look to statements of 
legislators in interpreting statutes, Canada asserts that us e of legislative history in statutory interpretation is not 
the same as using legislative history to determine the objective of a measure for purposes of Article 2.2.  To the 
extent that there is an anal ogy, the use of legislative history, Canada argues, is in keeping with the modern 
practice of statutory interpretation of many domestic tribunals as well as the interpretation of treaty obligations 
in international law (Canada's second written submission, para. 53). 
766 Canada's opening oral statement at the first substantive meeting of the Panel, paras. 49-53; second 
written submission, para. 69.  WT/DS384/R 
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  7.584  Mexico  asserts that an objective of a Member in the context of Article 2.2 is not self judging 
and is part of a Panel's obj ective assessment of facts.767  Accordingly, the Panel must determine all 
relevant details of the objectives of the technical regul ation, not just its stated objective, as reflected in 
the design and structure of the measure and co rroborated by other evidence.  While Mexico 
acknowledges the right of every WTO Member to est ablish for itself the objectives of its technical 
regulations, this does not mean that another Memb er cannot question the "stated" or "acknowledged" 
objectives or challenge those stated or acknowle dged objectives before a panel and request an 
objective assessment of the relevant facts.768 
7.585  Mexico argues that the design, architecture and structure of the COOL measure show that its 
objective is not to provide consumer information, but rather to protect the US cattle producers by 
altering the operation of the US beef industry in fav our of US feeder cattle.  Its protectionist purpose 
is reflected in the limitation to certain commoditi es, the targeting of the principal downstream 
products and distribution networks, the exclusion of small retailers and the US processed food 
industry, and the departure from the establishe d system for regulating consumer information.769 
7.586  In the United States ' view, the objective and the measure are distinct, as one is the objective 
or goal that is sought to be achieved and the ot her is the means for doing so.  The United States 
therefore argues that the Panel should first assess wh ether the Member's legitimate objective is what 
the Member asserts it is and then whether th e technical regulation fulfils that objective.770 
7.587  The United States submits that the text, design, ar chitecture, and structure of the statute, along 
with the 2009 Final Rule (AMS), all clearly indi cate that the objective is to provide consumer 
information about the country of origin of the cove red commodities at the retail level and to prevent 
consumer confusion regard ing the origin of meat.771 
7.588  Specifically, the objective of the measure is to  provide consumers with as much clear and 
accurate information as possible about the country or countries origin of the meat products that they buy at the retail level.
772  This includes information on the countries, where the animal from which the 
meat was derived was born, raised, and slaughtered. 
7.589  Regarding prevention of consum er confusion, the United States points to two types of 
consumer confusion.773  First, many consumers in the Unite d States mistakenly believed that meat 
products affixed with a USDA grade label were deri ved from animals born, raised, and slaughtered in 
the United States when this was not the case.774  Second, many US consumers may also have been 
misled by the FSIS "Product of the U.S.A." labelling system, which allowed producers to voluntarily 
use this label if the meat products received minimal processing in the United States.775  To further 
explain the confusion caused by the FSIS "Product of the U.S.A." labelling system, the United States 
                                                      
767 Mexico's response to Panel question No. 54; second written submission, paras. 155-157. 
768 Mexico's response to Panel question No. 54; second written submission, paras. 149-150. 
769 Mexico's first written submission, paras. 168-176; second written submission, para. 61. 
770 United States' response to Panel question No. 126.  See paras. 7.582-7.585 for the complainants' 
contrasting view in this regard. 
771 United States' response to Panel question No. 3. 
772 United States' responses to Panel question Nos. 24, 58. 
773 United States' response to Panel question No. 56. 
774 United States' first written submission, para. 29; United States' response to Panel question No. 56;  
Exhibit CDA-10, p.p. 24, 71. 
775 United States' first written submission, paras. 30-31; United States' response to Panel question 
No. 56;  Exhibits US-17, MEX-32. WT/DS384/R 
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  refers to a letter from the Consumers Federati on of America of the 17 September 2001 to USDA 
during the FSIS rule making on "Product of U.S.A.".
776 
Analysis by the Panel 
7.590  In this dispute, the complainants contest the existence of a "legitimate objective" pursued by 
the United States through the COOL measure.  The comp lainants argue that trade protectionism is the 
objective pursued by the United States through th e COOL measure, which cannot be a legitimate 
objective within the meaning of Article 2.2. 
7.591  The United States, on the other hand, submits that its objective is to provide consumer 
information on origin.777 
7.592  As recognized by the panel in EC – Sardines , a Member implementing a certain measure 
would normally be in a position to identify and elaborate the objective it pursues through the measure adopted.
778  However, given the allocation of the burden of proof under Article 2.2 as further clarified 
by the Appellate Body in EC – Sardines , Canada and Mexico must identify the objective pursued by 
the United States based on the information obtaine d prior to or during the dispute settlement 
proceeding. 
7.593  Specifically, the Appellate Body in EC – Sardines stated: 
"The TBT Agreement  acknowledges the right of every WTO Member to establish for 
itself the objectives of its technical regula tions while affording every other Member 
adequate opportunities to obtain information about these objectives. That said, part of 
the reason why the Panel concluded that th e burden of proof under Article 2.4 is on 
the respondent is because, in the Panel's view, the complainant cannot 'spell out' the 
'legitimate objectives' of the technical regulation. ...  
In our opinion, these two concerns are not justified.  The TBT Agreement  affords a 
complainant adequate opportunities to obtain information about the objectives of technical regulations or the specific consid erations that may be relevant to the 
assessment of their appropriateness."
779 
7.594  In light of the parties' contrasting views on the objective pursued by the United States through 
the COOL measure, we must first determine the "objective" that the United States pursues through the 
COOL measure. 780 
                                                      
776 United States' second written submission, para. 131; Exhibit US-84. 
777 United States' first written submission, paras. 68, 201, [heading above para. 227], 228; response to 
Panel question No. 17; second written submission, paras. 97, 106, 107, 147. 
778 We agree with the panel's statement in EC – Sardines that "only the Member pursuing the legitimate 
objective is in a position to elaborate the obj ective it is trying to accomplish."  (Panel Report, EC – Sardines , 
para. 7.121) 
779 Appellate Body Report, EC – Sardines,  paras. 276-277. 
780 The parties generally agree that the Panel shoul d determine the objective of a measure.  See 
Canada's second written submission, para. 50, footnote 61; Mexico's first written submission, para. 279; 
United States' opening oral statement at the first substant ive meeting of the Panel, para. 39; response to Panel 
question No. 3.  See also the European Union's third-part y oral statement at the firs t substantive meeting of the 
Panel, paras. 19-22;  response to Panel question No. 10.  WT/DS384/R 
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  Nature of a legitimate "objective" under Article 2.2 
7.595  To determine the objective that the United St ates pursues through the COOL measure, we 
find it useful to start with a review of what is meant by a "legitimate objec tive" in the context of 
Article 2.2. 
7.596  The complainants' position is that the text as well as the design, architecture, and structure of 
the COOL measure reveal its protectionist intent.  We consider the complainants' argument to be 
misplaced on several grounds. 
7.597  First, in advancing this argument, the complain ants appear to conflate the objective pursued 
by a technical regulation and the technical regulation itself.  In fact, in response to a question from the 
Panel, the complainants state that the term "object ive" in Article 2.2 refers to the objective of the 
technical regulation and not to any "general policy objective" that a Member may have.781  For the 
following reasons, we consider that a legitimat e "objective" under Article 2.2 needs to be 
distinguished from a specific technical regulation adopted by a Member to pursue the objective. 
7.598  The distinction is important because it is the obj ective that leads to a Member's determination 
to adopt a technical regulation, not vice versa . 
7.599  A policy objective pursued by a government w ould normally precede the establishment of a 
technical regulation to be introduced or mainta ined.  Article 2.3 of the TBT Agreement provides 
contextual guidance for this understanding:  "[t]echni cal regulations shall not be maintained if the 
circumstances or objectives giving rise to  their adoption no longer exist or if the changed 
circumstances or objectives can be addressed in a less trade-restrictive manner".  The phrase 
"circumstances or objectives giving rise to  [technical regulations'] adoption" indicates that 
"circumstances" or "objective(s)" are not identical to technical regulations and logically precede the adoption of technical regulations. 
7.600  The text of the preamble of the TBT Agreem ent also expresses the Members' right to adopt 
technical regulations to achieve their policy objectives.
782  The Appellate Body in EC – Sardines also 
confirmed that "the TBT Agreement acknowledges th e right of every WTO Member to establish for 
itself the objectives of its technical regulations".783 
                                                      
781 Canada's response to Panel question No. 126;  Mexico's response to Panel question No. 126. 
782 The 6th preambular recital states, "no country should be prevented from taking measures necessary 
to ensure the quality of its exports, or for the protection of human, animal or plant life or health, of the 
environment, or for the prevention of deceptive practices, at the leve ls it considers appropriate. ..." 
The panel in EC – Sardines stated: 
"Article 2.2 and this preambular text affirm that it is up to the Members to decide which 
policy objectives they wish to pursue and the leve ls at which they wish to pursue them. At the 
same time, these provisions impose some limits on the regulatory autonomy of Members that decide to adopt technical regulations: ... Th us, the TBT Agreement,  like the GATT 1994, 
whose objective is to further, accords a degree  of deference with respect to the domestic 
policy objectives which Members wish to pursue. At the same time, however, the TBT Agreement, like th e GATT 1994, shows less deferen ce to the means which Members 
choose to employ to achieve their domestic policy goals. We consider that it is incumbent 
upon the respondent to advance the objectives  of its technical regulation which it considers 
legitimate."  (Panel Report, EC – Sardines , para. 7.120). 
783 Appellate Body Report, EC – Sardines , para. 276. WT/DS384/R 
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  7.601  The complainants do not contest either that th e United States has the right, in principle, to 
establish for itself certain policy objectives.
784  To that extent, what the complainants actually argue is 
that the United States adopted th e COOL measure with the intent  to protect the US domestic livestock 
industry, not for consumer information.785 
7.602  As noted above, a technical regulation, including  the alleged intent behind the enactment of 
the particular technical regulation, however must  be distinguished from a policy objective that is 
pursued by a Member.  Whether a Member pursues a "legitimate objective" within the meaning of 
Article 2.2 is a separate issue from whether the measure in question was in fact adopted to fulfil and 
does fulfil that objective. 
7.603  What needs to be identified as an objective within the meaning of Article 2.2, therefore, is the 
objective that preceded and led to the adoption by the United States of the COOL measure. 
7.604  We find support for our view in this regard in  the clarification by the Appellate Body of the 
relationship between the "appropriate leve l of protection" and the SPS measure in Australia – Salmon .  
In that dispute, the Appellate Body stated that "to imply the appropriate level of protection from the 
existing SPS measure would be to assume that the measure always achieves the appropriate level of 
protection determined by the Member".786  Similarly, in our view, the objective pursued through a 
technical regulation cannot be necessarily imp lied from that technical regulation itself. 
                                                      
784 The panel in Brazil – Retreaded Tyres stated in para. 7.97: 
"[W]e note that we are not, in our view, required to examine the desirability of the declared 
policy goal as such.  In other words, we are not required to assess the policy choice declared 
by Brazil to protect human, animal or plant life or  health against certain risks, nor the level of 
protection that Brazil wishes to achieve." 
We also recall in this respect that in the EC – Asbestos case, the Appellate Body asserted clearly that it 
was each WTO Member's "... right to dete rmine the level of protection of health  that [it] consider[s] appropriate 
in a given situation."  (Panel Report, Brazil – Retreaded Tyres , para. 7.97, citing to the Appellate Body Report, 
EC – Asbestos , para. 168.)  The Appellate Body stated: 
"[A]s to Canada's third argument, relating to the level of protection, we note that it is 
undisputed that WTO Members have the right to determine the level of protection of health 
that they consider appropriate in a given s ituation. France has determined, and the Panel 
accepted, that the chosen level of health protec tion by France is a "halt" to the spread of 
asbestos -related health risks. By prohibiting all forms of amphibole asbestos, and by severely 
restricting the use of chrysotile asbestos, the measure at issue is clearly designed and apt to achieve that level of health protection. ...". 
785 Canada's first written submission, paras. 160-161;  Mexico's first written submission, 
paras. 279-283. 
786 The Appellate Body in Australia – Salmon states: 
"The correlation between the "appropriate leve l of protection" and the "SPS measure" is 
perhaps shown most clearly in Article 5.6 of the SPS Agreement which reads: ... when 
establishing or  maintaining sanitary or phytosanitary measur es to achieve the appropriate 
level of sanitary or  phytosanitary protection, Members shall ensure that such measures are not 
more trade-restrictive  than required to achie ve their appropriate level of sanitary or 
phytosanitary protection ... (emphasis added)  The words of Article 5.6, in particular the terms "when establishing or maintaining sanitary ... protection", demonstrate that the determination 
of the level of protection is an element in the decisionmaking process which logically 
precedes and is separate from the establishment or maintenanc e of the SPS measure. It is the 
appropriate level of protection which determin es the SPS measure to be introduced or 
maintained, not the SPS measure introduced or mainta ined which determines the appropriate 
level of protection. To imply the appropria te level of protection from the existing SPS 
measure would be to assume that the measur e always achieves the appropriate level of 
protection determined by the Member. That clearly cannot be the case. (para. 203)"  WT/DS384/R 
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  7.605  Second, the complainants' argument implies that what the United States has expressly 
identified as the objective pursued in its official WT O notification of the COOL measure is not true.  
The United States' notification to the TBT Comm ittee of the COOL measure indicates "consumer 
information" as the objective.787  While we are not saying that this constitutes definite and 
determinative evidence that the objective pursu ed through the COOL measure is not trade 
protectionism, we do consider that it is one of the objective circumstances that will inform the 
complainants of the objective of the COOL measu re.  Moreover, according to the Appellate Body, 
under the principle of good faith under general in ternational law as embodied in Article 26 of the 
Vienna Convention on the Law of Treaties, parties to an international agreement enjoy a presumption 
that they will perform their treaty obligations in good faith, including their WTO obligations.788  Thus, 
the United States must be presumed to have truthful ly notified the TBT Committee of the objective it 
was seeking to pursue through its COOL measure.  The presumption of good faith can, of course, be 
rebutted by solid evidence, in this case demonstrati ng that trade protectionism is indeed the objective 
pursued by the United States through the COOL measur e.  However, we have not been presented with 
such evidence. 
7.606  In addition to considerations of good faith, the Appellate Body recalled in EC – Sardines  that 
the TBT Agreement "affords a complainant adequa te opportunities to obtain information about the 
objectives of technical regulations" and made specific reference to certain provisions of the TBT Agreement requiring Members to supply informa tion about their technical regulations to other 
Members.  Official notifications made pursuant to Article 2.9 of the TBT Agreement (which must 
contain a brief indication of the technical regulation's "objective") fall into the category of provisions 
referenced by the Appellate Body. 
7.607  Third, the complainants' argument regarding th e protectionist intent of the COOL measure 
relates to the general principle contained in the firs t sentence of Article 2.2, read in isolation from the 
second sentence of Article 2.2.  The first sentence reads, "[M]embers shall ensure that technical 
regulations are not prepared, adopted  or applied with a view to  or with the effect of creating 
unnecessary obstacles to international trade".  As we cl arified above, and as the parties agree, the first 
sentence of Article 2.2 sets out a general principle, a separate violation of which is not required.  The second sentence of Article 2.2 sets out the specific elements of the oblig ations that must be respected 
in order to comply with the general principle set  out in the first sentence.  The complainants' 
arguments based on the "design, architecture, and structure" of the COOL measure do not have a 
particular bearing on our analysis of the identif ication of the objective that gave rise to the 
COOL measure. 
7.608  In our view, the characteristics of the m easure, including its design, architecture, and 
structure, and legislative history such as legislat ors' statements, may be more properly addressed in 
the context of whether the COOL measure fulfils th e identified objectives.  For example, Canada also 
clarified that it is not challenging country of orig in information generally, but it is challenging the 
COOL measure because of its particular characteristics including its structure and objective and the 
limited information it provides.
789  As explained above, a technical regulation, including its specific 
characteristics and features, must be distinguish ed from the objective pursued by the technical 
regulation itself.  In this respect, we note that the Appellate Body, in addressing a claim under Article XIV(a) of the GATS in US – Gambling , also stated: 
"[A] Member's characterization of a measure's objectives and of the effectiveness of 
its regulatory approach – as evidenced, for ex ample, by texts of statutes, legislative 
                                                      
787 G/TBT/N/USA/281 and G/TBT/N/USA/281/Add.1. 
788 Appellate Body Report, EC – Sardines , para. 278. 
789 Canada's opening oral statement at the second substantive meeting of the Panel, para. 68. WT/DS384/R 
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  history, and pronouncements of government ag encies or officials – will be relevant in 
determining whether the measure is, objectively, 'necessary'.  A panel is not bound by these characterizations [footnote omitted], however, and may also find guidance in the structure and operation of the measure a nd in contrary evidence proffered by the 
complaining party.  In any event, a pane l must, on the basis of the evidence in the 
record, independently and objectively assess  the 'necessity' of the measure before 
it."
790 
7.609  The European Union in Brazil – Retreaded Tyres made a similar argument as the 
complainants in this dispute that the real objective of Brazil's import ban, the measure at issue in that 
dispute, was to protect Brazil's domestic industry, and not to achieve the objectives declared by Brazil 
under Article XX(b) of the GATT 1994 (i.e. to protect human, animal or plant life or health).  The panel in that dispute did not find it necessary to  consider the European Union's argument "in 
determining under paragraph (b) of  Article XX whether the declared  policy objective of a measure 
falls within the range of policies under that paragraph".
791  We agree with the Brazil – Retreaded 
Tyres panel and take the same approach in this case.  T hus we are of the view that in identifying the 
objective of the COOL measure under Article 2.2, we need not consider the alleged intent behind the 
implementation of the COOL measure. 
7.610  We therefore consider it inapposite to address at this stage of our analysis the complainants' 
arguments in support of their position that tr ade protectionism is the objective of the 
COOL measure.792  We will address these arguments, to the extent necessary, in the context of our 
analysis of whether the COOL measure fulfils the identified objective.793 
7.611  Fourth, the complainants' argument appears to be  based on an overly liberal interpretation of 
the requirement, found in Article 11 of the DSU, that the Panel conduct an "objective assessment" of 
the facts of the case.  The complainants emphasi ze the obligation imposed on WTO dispute panels 
under Article 11 to make an objective assessment of the facts of the case, including the "objective" set 
by the responding Member.  To the extent that the complainants are challenging the objective(s) that 
the United States has set for itself, which is separate from its legitimacy, we find no support for such 
an approach in Article 11.  In this regard, the Appellate Body observed in Australia – Salmon : 
"We do not believe that Article 11 of the DSU, or any other provision of the DSU or 
of the SPS Agreement , entitles the Panel or the Appellate Body, for the purpose of 
applying Article 5.6 in the present case, to substitute its own reasoning about the 
implied level of protection for that e xpressed consistently by Australia. The 
determination of the appropriate level of protection, a notion defined in paragraph 5 
of Annex A, as 'the level of protection deemed appropriate by the Member establishing a sanitary … measure', is a prerogative of the Member concerned and not 
of a panel or of the Appellate Body. 
                                                      
790 Appellate Body Report, US – Gambling , para. 304.  The United States claimed in that dispute that 
the measures at issue were necessary to protect public morals or maintain public order under Article XIV(a) of 
the GATS. 
791 Panel Report, Brazil – Retreaded Tyres , para. 7.101 (original footnote omitted).  The panel stated, 
"In the Panel's view, what is relevant at this stage of th e analysis is the existence of  a risk and whether the policy 
objective to reduce such a risk, as decl ared by the Member taking the measure, falls within the scope of policies 
to protect human, animal or plant life or health." 
792 The parties do not dispute that trade protectionism, if proved to be the objective pursued through a 
technical regulation, cannot be a legitimate objective within the meaning of Article 2.2. 
793 See paras. 7.692-7.719.  WT/DS384/R 
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  The 'appropriate level of protection' esta blished by a Member and the 'SPS measure' 
have to be clearly distinguished.  They are not one and the same thing. The first is an 
objective , the second is an instrument chosen to attain or implement that objective."794 
7.612  Although addressed in the context of the SPS Agre ement, the Appellate Body's statement has 
a bearing on the question before us.  The objectiv e pursued through a technical regulation, clearly 
distinguished from the technical regulation chosen to  attain that objective, is a prerogative of the 
Member concerned and not of a panel.  The importance of recognizing the prerogative of the Members to pursue their own policy goals has also  been observed by the Appellate Body in the 
context of the obligations under the GATT 1994.
795 
7.613  We find no basis to deviate from the above a pproach developed by the Appellate Body in 
determining the objective pursued by the United States through the COOL measure within the 
meaning of Article 2.2.  The TBT Agreement purpor ts to further the objectives of the GATT 1994.  
The WTO Members are just as free to adopt tec hnical regulations as they are free to set the 
appropriate level of protection through an SPS me asure or to legislate on internal taxation or 
regulation.796  Accordingly, the identification of the obj ective pursued through a technical regulation 
must be based on the information provided by the Member implementing the technical regulation 
concerned.797  However, as the panel in EC – Sardines noted, the legitimacy  of the objectives pursued 
by a Member must be determined by panels.798 
7.614  That said, we must identify the objectiv e that the United States pursues through the 
COOL measure. 
                                                      
794 Appellate Body Report, Australia – Salmon , paras. 199-200. 
795 The Appellate Body in Japan – Alcoholic Beverages observed: 
"Members of the WTO are free to pursue their own domestic goals through internal taxation 
or regulation  so long as they do not do so in a way that violates Article III or any of the other 
commitments they have made in the WTO Agreement "  (emphasis added) 
Moreover, the Appellate Body further stated in Chile – Alcoholic Beverages : 
"Members of the WTO have sovereign authority to  determine the basis or bases on which they 
will tax goods, such as, for example, distilled al coholic beverages, and to classify such goods 
accordingly, provided of cour se that the Members respect their WTO commitments. The 
reference in Ad Article III:2, second sentence, of the GATT 1994 to "not similarly taxed" is 
not in itself a prohibition against classifying goods for revenue and regulatory purposes that 
Members set for themselves as legitimate and desirable . Members of the WTO are free to tax 
distilled alcoholic beverages on the basis of their alcohol content and price, as long as the tax classification is not applied so as to protect domestic production over imports. Alcohol 
content, like any other basis or criterion of taxation, is subject to the legal standard  embodied 
in Article III:2 of the GATT 1994." (para. 60) (emphasis added) 
796 Several third parties submit that WTO Members are free to decide which policy objectives they 
wish to pursue.  For example, Australia states: "It is Austra lia's view that ... it is up to the United States to decide 
which policy objectives they wi sh to pursue and the levels at which they  wish to pursue them...";  (Australia's 
third-party oral statement at the second  substantive meeting of the Panel, para. 22);  Brazil establishes that "[a] 
Member imposing a technical regulation is entitled to define its objective or objectives." (Brazil's third party 
written submission, para. 12);  and New Zealand submits th at "[a]s the list in Article 2.2 is non-exhaustive, New 
Zealand recognises that a Member may demonstrate that  other legitimate objectives also justify technical 
regulations." (New Zealand's third party written submission, para. 32). 
797 The European Union is of the view that in the present dispute the Panel should not find that the 
objective is something other than the provision of consumer information (European Union's third party oral 
statement at the second substantive meeting of the Panel, para. 10). 
798 See footnote 825 for the panel's statement in this regard in EC – Sardines . WT/DS384/R 
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  Identification of the objective pursued by the United States through the 
COOL measure 
7.615  In light of our decision to accept the objective as  identified by the United States, we continue 
our analysis on that basis. 
7.616  In the course of this proceeding, the United States has variously identified its objective as 
follows:  "to provide consumer information [on origin]"
799;  "to achieve the legitimate objective of 
providing consumer information, information th at, among other things, helps prevent consumer 
confusion related to the use of USDA grade labels"800;  "providing consumer information and 
preventing consumer confusion"801;  "to provide information to consumers about the origin of the 
covered commodities they buy at the retail level, which for meat products includes listing the names 
of the countries in which the animal was bor n, raised, and slaughtered.  In doing so, the 
COOL measures also help prevent consumer confusion"802. 
7.617  As shown in the references a bove, the United States' formulation of its objective has varied 
somewhat throughout its written submissions.  We ob serve, however, that the main element that the 
United States has consistently highlighted is "to provide consumer in formation on origin".  
Accordingly, we will proceed on the understanding that this is the objective pursued by the 
United States through the COOL measure. 
7.618  In this regard, the United States further elabor ated on the identified objective with respect to 
meat products.  Regarding the exact information on or igin that it wants to provide to consumers, the 
United States points to "information on the count ries, where the animal from which the meat was 
derived was born, raised, and slaughtered".803  Through this information, the United States also 
purports to prevent confusion relating to a USDA gr ade label, which led consumers to mistakenly 
believe that meat products affixed with a USDA gr ade label were derived from animals born, raised, 
and slaughtered in the United States, and the prev ious FSIS "Product of the U.S.A." labelling system, 
which allowed this label on meat products if su ch products received minimal processes in the 
United States.804 
7.619  The United States used the following descriptions to indicate the level at which it aims to 
achieve the identified objective:  "providing  as much consumer information as possible"805;  "to 
provide consumers with as much clear and accurate  information as possible about the origin of the 
meat products"806;  "to provide as much information as possible to consumers about the country of 
origin of the food products that they buy at the re tail level and to minimize confusion about the origin 
of meat products to the maximum extent possible".807 
7.620  Based on these references, we conclude that the objective pursued by the United States 
through the COOL measure is to provide as much cl ear and accurate origin information as possible to 
consumers. 
                                                      
799 United States' first written submission, paras. 68, 201, [heading above para. 227], 228; response to 
Panel question No. 17; second written submission, paras. 97, 106, 107, 147. 
800 United States' first written submission, para. 201. 
801 United States' opening oral statement at the fi rst substantive meeting of the Panel, para. 41. 
802 United States' response to Panel question No. 74. 
803 United States' response to Panel question No. 58. 
804 United States' response to Panel question No. 56(a). 
805 United States' first written submission, para. 7. 
806 United States' response to Panel question No. 24. 
807 United States' response to Panel question No. 142(a).  WT/DS384/R 
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  7.621  The complainants argue that, if we were to accept the objectiv e as declared by the 
United States ("consumer information on origin"), such objective is not legitimate.  We examine the 
legitimacy of the objective as identified by  the United States in the next section. 
(ii) Legitimacy of the identified objective within the meaning of Article 2.2 
Main arguments of the parties 
7.622  Canada  submits that since the alleged objective of the COOL measure is not listed in 
Article 2.2, the United States must prove based on clear and compelling evidence that the concerned 
objective is legitimate.808  This proof cannot be based on mere assertion and must include evidence of 
a wider intent to implement a particular policy goal.809  Canada argues that it is therefore necessary to 
look to the specifically listed legitimate objectives in  Article 2.2 to determine whether an objective 
not specifically listed in Article 2.2 is a legitimate objective.  Canada points out that, as the objectives 
listed in Article 2.2 are reflected in general exce ptions in other covered agreements, it would be 
reasonable to conclude that the type of items list ed covers objectives set out as general exceptions or 
other similar situations in  the covered agreements.810 
7.623  Canada alleges that the United States has not demonstrated that providing "information about 
country of origin as defined by COOL" is a legitim ate objective.  Canada clarifies that it is not 
challenging country of origin information on m eat generally;  rather, it is challenging the 
COOL measure because of its particular characteris tics including its structure and objective, and the 
limited information it provides.811  Specifically, Canada argues that the United States has not 
explained why the information provided by the COOL  measure is important for consumers to have or 
why consumers need that information.  Canada considers that there are some potential purposes for 
providing information to consumers that are, or coul d be, legitimate when the objective is sufficiently 
specific, such as to allow consumers to make  decisions and choices based on food safety or 
environmental protection considerations, obj ectives closely linked to the listed objectives.812  Canada 
contests the assertion by the United States that the reasons why consumers want information about 
origin are not relevant to determine the legitimacy of the measure's objective.813  Rather, consumers' 
desire to purchase food produced in their own count ry, without evidence that consumers perceive a 
qualitative difference due to that f act, cannot form the basis of a legitimate objec tive within the 
meaning of Article 2.2 of the TBT Agreement.814 
7.624  Mexico  argues that the provision of consumer info rmation can be a legitimate objective, but 
not in all circumstances.815  Whether the objective is legitimate will depend on the specific type of 
information being provided to consum ers and whether the provision of th at information is "justifiable" 
                                                      
808 Canada's second written submission, paras. 70-76.  We note that Canada initially argued that it did 
not take a stance on whether providing information to c onsumers is legitimate and that it was unnecessary for 
the Panel to determine whether consumer information is legitimate for the purpose of examining its claim under 
Article 2.2, because the measure does not satisfy othe r elements of that provision. (Canada's first written 
submission, para. 176) 
809 Canada refers to New Zealand's third party written submission (para. 32) and its response to Panel 
question No. 24. 
810 Canada's second written submission, para. 72, footnote 124.  Canada re fers to Colombia's third party 
written submission, paras. 43-47.  Colombia sugges ts GATT, GATS, and TRIPS as potential sources of 
reference for determining whether an objective is legitimate. 
811 Canada's opening oral statement at the second substantive meeting of the Panel, para. 68. 
812 Canada's second written submission, para. 76. 
813 Canada's comments on United States' response to question No. 136. 
814 Canada's response to Panel question No. 136. 
815 Mexico's first written submission, paras. 284-295; response to Panel question No. 55. WT/DS384/R 
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  in the light of all relevant circumstances relating to  that information.  This will require an assessment 
of the character and the intrinsic value of the in formation given to the consumers.  According to 
Mexico, the objective of consumer protection is not  legitimate in the circumstances of this dispute.
816  
The character  of the information given to consumers unde r the COOL requirements (i.e. US origin 
beef is produced from cattle that are "born, rai sed, slaughtered and processed" in the United States) 
has only one purpose, which is inherently protecti onist.  To support its position, Mexico distinguishes 
the nature of the information provided under th e COOL measure from the type of information 
required, for example, for health or safety pur poses or for making choices according to cultural or 
religious beliefs or dietary choices.817 
7.625  Mexico argues that the COOL measure is app lied in a manner which constitutes a means of 
arbitrary or unjustifiable discrimination between c ountries where the same conditions prevail and it is 
a disguised restriction on international trade, in line with the preamble to the TBT Agreement.  
According to Mexico, such objectives cannot be "l egitimate" within the meaning of Article 2.2 
because they go against the fundamental object an d purpose of the WTO Agreements.  Further, 
Mexico submits that consumer demand for the specific type of information provided by the 
COOL measure is relevant to the circumstances in  which the measure was introduced and, therefore, 
to the protectionist intent of the measure.818 
7.626  The United States  submits that providing consumer in formation about origin and preventing 
consumer confusion are legitimate objectiv es within the meaning of Article 2.2.819  Specifically, the 
United States asserts that providing consumers with  country of origin information about the food 
products they buy so as to help them make info rmed purchasing decisions is always a legitimate 
objective within the meaning of Article 2.2.820  As this provision contains a non-exhaustive list of 
legitimate objectives, objectives not explicitly listed in  the list may also be legitimate.  Furthermore, 
the legitimacy of providing consumer information a bout origin and preventing  consumer confusion as 
objectives are supported by their connection to an obj ective listed in TBT Article 2.2 – the prevention 
of deceptive practices.821  The United States also points out that the complaining parties have not 
directly challenged the United States' argument that providing consumer information about origin and 
preventing consumer confusion are legitimate objectives.822  Neither Canada nor Mexico argues that 
country of origin labelling is per se inconsistent with the WTO Agreements. 
7.627  The United States further submits that the st rong consumer support for country of origin 
labelling in the United States, as well as the fact that many WTO Members have notified their country 
of origin labelling requirements to the TBT Co mmittee identifying their objective as consumer 
information, also support the conclusion that pr oviding consumer information about origin and 
preventing consumer confusion are legitimate objec tives within the meaning of Article 2.2.  The 
United States refers to examples of comments expr essed by certain consumer organizations in the 
United States regarding country of origin information on the food products.823  The United States 
therefore contests that it attempted to "shape cons umer perception through regulatory intervention", a 
concern raised by the panel in EC – Sardines .824  On the contrary, the design of the measures 
                                                      
816 Mexico's first written submission, para. 287; response to Panel question No. 55. 
817 Mexico's first written submission, paras. 287-289; response to Panel question No. 55. 
818 Mexico's second written submission, paras. 67-69;response to Panel question No. 135. 
819 United States' second written submission, paras. 106-117; opening oral statement at the second 
substantive meeting of the Panel, para. 38;  Exhibit US-69. 
820 United States' response to Panel question No. 132. 
821 United States' first written submission, para. 229. 
822 United States' second written submission, para. 107. 
823 United States' second written submission, para. 110;  response to Panel question Nos. 129 and 132;  
Exhibits US-17, 49, 61, 85, 113 to 115, 119 to 125. 
824 Panel Report, EC – Sardines , paras. 7.127-7.129;  United States' first written submission, para. 234.  WT/DS384/R 
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  themselves and the role of consumer advocacy gr oups in urging their adoption reveal that the 
regulatory intervention was a response to consumer perception and misperception. 
Analysis by the Panel 
7.628  Having determined the objective pursued by th e United States, we proceed to examine its 
legitimacy.825  We recall that the object of our review in this context is the identified objective 
(providing consumer information on origin) pursu ed through the technical regulation, not the 
technical regulation itself (the COOL measure). 
7.629  As a party challenging the legitimacy of the id entified objective, the complainants bear the 
burden to establish that the objective concerned is no t legitimate within the meaning of Article 2.2. 
7.630  The word "legitimate" is defined as "2. a. Conformable to, sanctioned by or authorized by, 
law or principle;  lawful;  justifiable;  proper.   b. Normal, regular;  conformable to a recognized 
standard type"826  Based on the ordinary meaning, ther efore, we need to assess whether "providing 
consumer information on origin " is  "conformable to law or principle", "justifiable and proper", or 
"conformable to a recognized standard type". 
7.631  This understanding is supported by the panel's analysis in this respect in EC – Sardines .  
Touching upon the meaning of the term "legitimate" in the context of a legitimate objective as referred to in Articles 2.2 and 2.4, the panel in EC – Sardines suggested that the term "legitimate" 
refers to the genuine nature of the objective.
827  It further noted the statement of the panel in Canada – 
Pharmaceutical Patents , in defining the term "legitimate interest s" in the context of Article 30 of the 
TRIPS Agreement, that it must be defined "as a nor mative claim calling for protection of interests that 
are 'justifiable' in the sense that they are supporte d by relevant public policies or other social 
norms".828 
7.632  The third sentence of Article 2.2 provides a non-exhaustive list of legitimate objectives under 
Article 2.2:  national security requirements; th e prevention of deceptive practices; protection of 
human health or safety;  animal or plant life or h ealth;  or the environment.  The use of the term " inter 
alia" in Article 2.2 of the TBT Agreement indi cates that the objectives covered extend beyond the 
objectives specifically mentioned in Article 2.2.829  The type of objectives explicitly listed in 
Article 2.2 nonetheless demonstrates that the legitim acy of a given objective must be found in the 
"genuine nature" of the objective, which is "justifiable" a nd "supported by relevant public policies or 
other social norms" . 
                                                      
825 We note that there is no dispute that panels are required to determine the legitimacy of an objective 
pursued by a Member under Article 2.2 of the TBT Agreement.  The panel in EC – Sardines stated that "panels 
are ... required to determine the legitimacy of those objectives" (Panel Report, EC – Sardines , para. 7.121). 
Australia and Peru also agree that  the Panel should examine the legitimacy of the objective pursued by 
the United States through the COOL measure. (Australia's  third party written submission, paras. 58, 60;  Peru's 
third-party oral statement at the first su bstantive meeting of the Panel, para.7) 
826 The Shorter Oxford English Dictionary , (Sixth Edition) Oxford Univers ity Press, Vol. I, p. 1577 
(2007). 
827 Panel Report on EC – Sardines , para. 7.121. 
828 Panel Report on EC – Sardines , para. 7.121, referring to Panel Report on Canada – Pharmaceutical 
Patents , para. 7.69.  The Panel also refers to the Panel in US – Section 110(5) Copyright Act , which stated that 
the term has "the connotation of legitimacy from a more normative perspective, in the context of calling for the 
protection of interests that are justifiable in the light of  the objectives that underlie the protection of exclusive 
right" (para. 6.224). 
829 Appellate Body Report, EC – Sardines , para. 286. WT/DS384/R 
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  7.633  As noted by the United States, the complainants do not contest that "consumer information" 
on country of origin at a general level can constitute a legitimate objective under Article 2.2.
830  
Canada, however, considers that there are some potential purposes for providing information to 
consumers that are, or could be, legitimate when th e objective is sufficiently  specific as to the purpose 
of having the information, such as to allow c onsumers to make decisions and choices based on food 
safety or environmental protection considerations, objectives closely linked to the listed objectives.  
Mexico also agrees that the nature (character an d intrinsic value) of the information that the 
United States purports to convey to consumers must  be distinguished from the type of information 
required, for example, for health or safety pur poses or for making choices according to cultural or 
religious beliefs or dietary choices. 
7.634  In addressing the complainants' position on this issue, we must bear in mind, as pointed out 
above, that Article 2.2 of the TBT Agreement pr ovides a non-exhaustive, open list of legitimate 
objectives.  This can be contrasted, for instance,  with the specific categories of policy objectives 
stipulated in the subparagraphs of Article XX of the GATT 1994.  In our view, the fact that 
Article 2.2 refers to an open list of objectives wit hout any modifying language initially indicates that a 
wide range of objectives could potentially fall w ithin the scope of legitimate objectives under 
Article 2.2.  We do not find in the text of Article  2.2 or any other provision of the TBT Agreement an 
explicit requirement that a policy objective pursued by a technical regulation must be specifically 
linked in nature to those objectiv es explicitly listed in Article 2.2. 
7.635  Canada submits, on the basis of the ejusdem generis  principle, that, in order to be legitimate, 
the objective pursued by the United States must be  of the type of items specifically listed in 
Article 2.2 of the TBT Agreement.  Canada argues that, according to this principle, when a general 
term such as " inter alia " is followed by specific terms (i.e. the list of legitimate objectives), such term 
must be limited to the type of items listed in the specific terms.831  Based on the ejusdem generis  
principle, Canada further argues that the objective pursued by the United States is expressed in a level 
of generality that is not as specific as the explicitly listed objectives in Article 2.2.832  According to the 
evidence submitted by Canada, this principle estab lishes that when general words follow special 
words, the general words are limited by the genus  (class) indicated by the special words.  For 
example, in the phrase "any nuclear weapon test explosion or any other nuclear explosion ", the scope 
of the italicised words is limited by the preceding words.833 
                                                      
830 See, for example, Canada's opening oral statemen t at the second substantive meeting of the Panel, 
paras. 58-59 ("...Canada's challenge pe rtains specifically to the COOL meas ure and its discriminatory impacts 
on Canadian-born livestock. ... But a country of origin  labelling measure may well be consistent with the 
TBT Agreement and the GATT 1994 if ... it fulfils a legitimat e objective in the least trade-restrictive way. ..."); 
62, 68 ("...Canada is challe nging the COOL measure under TBT Article 2.2 because of its particular 
characteristics including its structure, its objective, and the limited information it provides. ...";  Mexico's first 
written submission, paras. 284-285 ("...Mexico is of the view that while in certain circumstances providing 
consumer information can be a legitimate objective within the meaning of the provision, it is not a legitimate 
objective in all circumstances".);  Mexico's response to Panel question No. 55 ("It is not Mexico's position that 
consumer information is never a legitimate objective when the information supplied pertains to origin").  We 
also note the comments of third parties.  Australia's thir d-party oral statement at the first substantive meeting of 
the Panel, para. 22 ("In Australia's view, the United St ates, through the COOL measur e, is seeking to provide 
consumers with additional useful information.  Australi a considers that such an objective is a legitimate 
objective, and accepts the US view that  this objective is "closely related" to preventing dece ptive practices"); 
European Union's third-party oral statement at the second substantive meeting of the Panel, para. 12 ("We 
consider that the objective of pr oviding consumer information about origin is a legitimate one"). 
831 Canada's second written submission, paras. 71-72. 
832 Canada's response to Panel question No. 127. 
833 Exhibit CDA-186, 190-191.  WT/DS384/R 
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  7.636  In the present dispute, we do not find that the principle of ejusdem generis  is helpful for 
determining whether the objective pursued by the United States is legitimate.  While the term 
"legitimate objectives" might be regarded as a genus  (or superordinate) and the list of objectives 
specifically mentioned in the provision as examples  (or hyponyms), all of the listed examples are 
expressed at a high level of generality.  Thus, assuming for the sake of argument that the ejusdem 
generis principle has a bearing on the level of specificity  that an objective must have in the context of 
Article 2.2 of the TBT Agreement – a position the Panel doubts – it is difficult to see how the 
application of this principl e advances Canada's argument. 
7.637  Given that legitimate objectives under Article 2.2 are not confined to those explicitly listed in 
the provision.  In our view, therefore, the fact that  the objective of the COOL measure is not related to 
health, safety or environmental objectives, does not in itself provide a sufficient basis for finding the 
objective in question to be not legitimate.  In this connection, the United States points out that nearly 
70 other WTO Members maintain some form of mandatory country of origin labelling for food and other products intended for human consumption.
834  Many of these mandatory labelling systems apply 
to food products at the retail level.835  According to the United States, among the WTO Members with 
mandatory labelling systems, many explicitly identifi ed consumer information as the objective of their 
labelling requirements in their TBT notifications.836  The United States also notes that many other 
WTO Members have also indicated that their manda tory country of origin labelling requirements for 
food products were adopted to pr event deceptive practices or prevent consumers from being misled or 
confused.837  The United States considers that to conclu de that consumer information and preventing 
consumer confusion are not legitimate objectives would suggest that none of these regimes was 
adopted to achieve a legitimate objective. 
7.638  We have reviewed examples of the mandatory  labelling requirements maintained by the 
complainants838 and by third parties to this dispute.839  We observe that many of these labelling 
                                                      
834 See Exhibit US-68 (listing Argentina, Australia, Barbados, Brazil, Canada, China, Chile, Costa 
Rica, Colombia, Dominica, the Domi nican Republic, Egypt, El Salvador, the European Union and its 27 
Member States (Austria, Belgium, Bu lgaria, Cyprus, the Czech Republic, Denmark, Estonia, Finland, France, 
Germany, Greece, Hungary, Italy, La tvia, Lithuania, Luxembourg, Malta, the Netherlands, Poland, Portugal, 
Republic of Ireland, Romania, Slovakia, Slovenia, Spain, Sweden, and the United Kingdom), Ghana, the six 
members of the Gulf Cooperation Council (Bahrain, Kuwa it, Oman, Qatar, Saudi Arabia, and the United Arab 
Emirates), India, Indonesia, Israel , Japan, Kenya, Korea, Malaysia, Mexico, New Zealand, Nigeria, Panama, 
Peru, the Philippines, Singapore, South Africa, Switzer land, Chinese Taipei, Thailand, and Vietnam as WTO 
Members with mandatory country of origin labelling requ irements.)  In addition to these 67 WTO Members, the 
United States has learned that Guatemala also has ma ndatory country of origin labelling requirements (as 
confirmed by Guatemala's respons es to the Panel's questions). 
835 Many of the country of origin labelling systems that the United States identified in Exhibit US-68 
apply at the retail level.  Among the third parties, Australia, Brazil, Colombia, the EU, Japan, Guatemala, Korea, 
and Chinese Taipei all maintain mandatory country of origin labelling requirements that apply at the retail level.  
Others with such requirements include Chile, Malaysia, the Philippines, and Vietnam, among other WTO 
Members. 
836 This includes Australia, Barbados, Brazil, Chile , Dominica, the EU, Korea, and Chinese Taipei 
(Exhibit US-69). 
837 Among those Members are Colombia, Dominica, the EU, Malaysia, Qatar, and Switzerland 
(Exhibit US-69). 
838 Canada submits that "meat that is derived from animals slaughtered in Canada is not required to 
have a country of origin label"; rather, voluntary country of origin claims are governed by the "Product of 
Canada guidelines (Canada's response to Panel quest ion No. 40).  However, Canada maintains various 
mandatory country of origin requirements for dairy products (Exhibit CDA-164), eggs (Exhibit CDA-165) and 
processed eggs (Exhibit CDA-166).  There are also several mandatory country of origin requirements for 
imported products, such as maple products (Exhibit CDA-167), processed fish (Exhibit CDA-168), processed 
products (Exhibit CDA-169), brandy (Exhibit CDA-170), organic products (Exhibit CDA-171), fresh fruit and WT/DS384/R 
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  requirements purport to provide cons umer information on origin of food products.  This suggests that 
consumer information on country of  origin is considered by a considerable proportion of the WTO 
Membership to be a legitimate objective under th e TBT Agreement.  For example, among the third 
parties, Australia notified the TBT Committee of  its "Final Assessment Report Proposal P292 – 
Country of Origin Labelling of Food" whose objec tive is ensuring "that adequate information is 
provided about the origin of food products to  enable consumers to make informed choices".
840 
7.639  Further support for our understanding can be f ound in the context of the GATS.  Specifically, 
the Accountancy Disciplines , developed in accordance with Article VI :4 of the GATS, also refers to 
the "protection of consumers" as an example of  "legitimate objectives" in Section II, paragraph 2 
(General Provisions).  The Accountancy Disciplines , as the first disciplines developed under the 
mandate of Article VI:4 of the GATS, have an almost identical text to that of Article 2.2.  Section II, 
paragraph 2 of the Accountancy Disciplines states: 
"Members shall ensure that measures ..., relating to licensing requirements and 
procedures, technical standards and qualification requirements and procedures are not 
prepared, adopted or applied with a view to or with the effect of creating unnecessary 
barriers to trade in accountancy services .  For this purpose, Members shall ensure 
that such measures are not more trade-rest rictive than necessary to fulfil a legitimate 
objective.   Legitimate objectives are, inter alia, the protection of consumers  (which 
includes all users of accounting services and the public generally), the quality of the service, professional competence, and the integrity of the profession."
841 (emphasis 
added) 
7.640  We are mindful that, given the different types of measures falling within the scope of the 
TBT Agreement and Article VI:4 of the GATS,  legitimate objectives pursued through measures 
                                                                                                                                                                     
vegetables (Exhibit CDA-172) and honey (Exhibit CDA-173).  With the exception of the regulation on organic 
products, all of the other measures pre-date the estab lishment of the WTO.  Mexico imposes certain mandatory 
country of origin labelling requirements for prepackaged food and non-alcoholic beverages through the measure 
Especificaciones generales de etiquetado para alimen tos y bebidas no alcohólicas preenvasados-Información 
commercial y sanitaria  (NOM-051-SCFI/SSA1-2010).  The objective set out in the measure is to establish the 
commercial and sanitary information for the labelling of prepackaged food and non-alcoholic beverages of 
domestic or foreign origin (Exhibits MEX-72 and 73;  G/TBT/N/MEX/178/Add.2.) 
839 The European Union notified the TBT Committee of its Proposal for Regulation Establishing a 
System for the Identification and Registration of Bovine Animals and Regarding the Labelling of Beef and Beef 
Products and Repealing Council Regulation (EC) No 820 /97 (as amended) whose objective is establishing a 
compulsory labelling system in the beef sector based on  objective criteria of the origin of the beef and to 
continue the voluntary labelling arrangements for labels containing indications other than those provided for in 
the compulsory system (Exhibit US-68;  G/TBT/Notif.00/289 (20 June 2000)).  Korea has notified several 
instruments to the TBT Committee establishing provisions  regarding the country of origin labelling of certain 
meat products sold in restaurants.  Within the variou s measures notified there are four main objectives:  (i) 
ensuring the consumers' right-to-know and right-to-choose;   (ii) the prevention of deceptive practices;  (iii) 
establishing market and distribution order of agricultural and livestock products and providing correct 
information for purchase to consumers;  and (iv) enhanci ng the credibility of beef products (Exhibit US-68;  
G/TBT/N/KOR/111 (22 June 2006);  G/TBT/N/KOR/156 (18 September 2007) and G/TBT/N/KOR/202 – 
Addendum (20 January 2009);  G/TBT/N/KOR/173 (7 May 2008);  G/TBT/N/KOR/181 (7 August 2008);  
G/TBT/N/KOR/202 (20 January 2009);  G/TBT/N/KOR/291 (23 September 2010)). 
840 The notified Proposal recommends, inter alia , expanding the scope of country of origin labelling 
beyond fish, fruit and vegetables for certain processed foods, such as fruit and vegetables and pork, which are 
displayed for retail sale unpackaged (Australia's third pa rty response to Panel question No. 1;  Exhibit US-68;  
G/TBT/N/AUS/45). 
841 The Council for Trade in Se rvices adopted the concerned Accounting Disciplines on 
14 December 1998.  WT/DS384/R 
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  falling under each agreement might not always be iden tical.  Nonetheless, the reference to protection 
of consumers as one example of legitimate object ives in the context of the GATS, which has the 
language almost identical to Article 2.2, sugg ests to us that objectives relating to consumer 
information or consumer protection can in prin ciple constitute a legitimate objective under the WTO 
covered agreements. 
7.641  As already noted above842, there is a basic agreement among the parties that consumer 
information concerning country of origin can constitute  a legitimate objective.  At the same time, the 
complainants underline that its legitimacy should be determined based on the factual circumstances of 
each case.  In their view, the United States' stat ed objectives in this dispute should not be found 
legitimate unless the United States can prove that it is important for consumers to be provided with 
that information or why consumers need that information.  Specifi cally, Canada points out that the 
United States has provided very limited evidence of consumer desire for information related 
specifically to the origin of meat derived from impor ted livestock.  It maintain s that "[t]he 'consumer 
interest' expressed in that limited evidence is prot ectionist, based on a false premise, or concerned 
with an objective the COOL measure does not seek to achieve".843 
7.642  The United States argues that the origin info rmation in question helps consumers make 
informed choices and prevents consumer confus ion caused by the FSIS "Product of the U.S.A." 
labelling system and the USDA grade labelling system.844 
7.643  In addressing the parties' arguments in this regard, we recall the concern expressed by the 
panel in EC – Sardines : 
"If we were to accept that a WTO Member can 'create' consumer expectations and 
thereafter find justification for the trade-restrictive measure which created those consumer expectations, we w ould be endorsing the permissibility of 'self-justifying' 
regulatory trade barriers.  Indeed, the danger is that Members, by shaping consumer 
expectations through regulatory intervention in the market, would be able to justify 
thereafter the legitimacy of that very same regulatory intervention on the basis of the 
governmentally created consumer expectations . ..."
845 (emphasis added) 
7.644  In the context of the present dispute, the complain ants are of the view that the United States is 
trying to shape consumer perception through regulator y intervention and to justify the legitimacy of 
this intervention on the basis of a gove rnmentally created consumer perception.846  We bear this in 
mind in proceeding with our analysis. 
7.645  The United States maintains that there is st rong evidence showing US consumer demand for 
country of origin information of the kind covered by the stated objective.847  The United States 
submits that leading consumer organizations in th e United States have expressed support for country 
of origin labelling for consumer information purposes and as a means of preventing consumer 
confusion.  As one example, the United States re fers to Consumers Federa tion of America, which 
indicated that it "has long supported a mandatory country of origin labelling (COOL) program as a 
                                                      
842 See para. 7.633. 
843 Canada's opening oral statement at the first substantive meeting of the Panel, para. 49. 
844 See paras. 7.587-7.589. 
845 Panel Report, EC – Sardines , para. 7.127. 
846 Mexico's first written submission, paras. 294-295. 
847 United States' response to Panel question No. 129; Exhibits US-17, 49, 61, 85, 113 to 115, 
119 to 125. WT/DS384/R 
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  means of providing consumers with important information about the source of their food".
848  In a 
joint letter with the National Consumers League and Public Citizen – two other leading US consumer 
organizations, the Consumers Federa tion of America also wrote that "[w]ithout country of origin 
labelling, these consumers are unable to make an in formed choice between US and imported products.  
In fact, under the Agriculture Depart ment's grade stamp system, they could be misled into thinking 
some imported meat is produced in this country".849  Similarly, the Consumers Union wrote that "it is 
clear that consumers desire to know where their food is coming from".850 
7.646  The United States also refers to the followi ng to demonstrate consumer support for the 
country of origin information of meat:  (i) exhi bits showing individual c onsumers who have expressed 
support for country of origin labelling to provide  consumer information and prevent consumer 
confusion851;  (ii) thousands of other consumers who e xpressed a similar view during the rule-making 
process, urging USDA to adopt the COOL implementing regulations for these purposes852;  and (iii) 
numerous polls that indicate consumer support for mandatory country of origin labelling.853 
7.647  This evidence generally refers to comments ma de during the legislative process, hence it may 
not necessarily prove the existence of public polici es or consumer demand calling for the pursuit of 
the stated objective that led to the introduction of the COOL measure.  The absence of evidence 
independent of the legislative process showing c onsumer desire for the information on origin as 
defined by the United States, however, is not in itsel f sufficient to prove that providing such consumer 
information on origin is not a legitimate obj ective within the meaning of Article 2.2. 
                                                      
848 Exhibit US-5 (20 August 2007).  In their comments on mandatory country of origin during the 
legislative history of the COOL measure Consumers Federation of America defines itself as "a non-profit 
association of more than 300 organizations with a combined membership of over 50 million Americans 
nationwide (...) to a dvance the consumer interest s through research, educati on and advocacy" (Exhibit US-5, 
page 1). 
849 Exhibit US-61, p. S13275. 
850 Exhibit US-4 (20 August 2007).  The United St ates argues that the su pport of pro-consumer 
organizations for country of origin labelling for consumer  information purposes is also found internationally.  
For example, the Trans Atlantic Consumer Dialogue ("TACD"), a forum of 27 U.S. consumer organizations 
(Exhibit US-110), 49 EU consumer organizations (Exhibit US-110), and 3 observer organizations from Canada 
and Australia (Exhibit US-110), adopted a resolution on co untry of origin labelling stating that "consumers have 
repeatedly and overwhelmingly expressed their support for country of origin labelling of food products both in 
the United States and in European countries." (TACD Resolution on Country of Origin Labelling, Doc. No. 
Food 29-08 (March 2008) (Exhibit US-111), p. 1)  TACD's objective is to develop policy recommendations for 
the US government and the EU to promote consumer interest and the organizations often adopt 
recommendations and resolutions by consensus of its members (TACD Annual Recommendations 
(Exhibit US-112).  The United States points out that in TACD's resolution on country of origin labelling, these 
79 different consumer organizations espoused the benefits of country of origin labelling (Exhibit US-111, p. 2).  
It states in relevant part, "[C]ountry of origin labeling can provide consumers with additional information to 
make informed choices about the food they wish to purchase and consume.  Many consumers may wish to 
purchase food from producers in their own country or may wish to purchase food products from another country 
known for producing a particular food.  Reasons for this vary from environmental and ethical principles to food 
quality and food standard choices. Without labeling that identifies where that food has been produced, 
consumers are unable to make those choices in an inform ed manner when they are at  the point of purchase." 
851 For example, Gregory Cook of Fircrest, Washington wrote to USDA:  "I am writing in support of 
regulations requiring country of origin labelling (COOL) of meats sold in the U.S.  I believe that we – 
consumers and citizens – should be able to make informed choices when purchasing meat and other foods.  
Labels stating country of origin would be a big help in those choices." (Comments submitted by Gregory Cook 
to USDA (July 18, 2007) (Exhibit US-113)); and Becky McManus of Volin, South Dakota wrote to USDA:  "I 
completely support country of origin labelling.  As c onsumers we have the right to know where the food we 
consume comes from" (Comments submitted by Becky McManus to USDA (July 2007) (Exhibit US-114)). 
852 Exhibits US-17, 49, 61, 85, 113 to 115, 119 to 125. 
853 Exhibit US-5.  WT/DS384/R 
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  7.648  Clearly, if consumers know the country of origin, they will be able to make informed choices 
with respect to origin of products, including meat .  Some consumers may indeed have preferences for 
products produced by or originating in particular countries for a variety of reasons. 
7.649  We also acknowledge that Members have certain  policy space in determining their objectives.  
There are therefore circumstances in  which Members may decide to a dopt particular regulations even 
in the absence of a specific dema nd from their citizens, and may do so without in fact shaping 
consumer expectations through re gulatory intervention.  We also note the panel's statement in Korea – 
Various Measures on Beef  that "there can be good reasons – apart from any protectionist motives – 
why a WTO Member might want information to be provided as to the origin of products, and 
particularly meat products, at the retail level".854 
7.650  We are persuaded, based on the evidence before  us regarding US consumer preferences as 
well as the practice in a considerable proportion of WTO Members, that consumers generally are 
interested in having information on the origin of th e products they purchase.  We also observe that 
many WTO Members have responded to that inter est by putting measures in place to require the 
provision of such information, albeit with different definitions of "origin".  In this regard, we once 
again recall the words of the panel in EC – Sardines referring to the conclusion of the panel in 
Canada – Pharmaceutical Patents that a legitimate objective refers to "protection of interests that are 
'justifiable' in the sense that they are supported by relevant public policies or other social norms".855  
In our view, whether an objective is legitimate can not be determined in a vacuum, but must be 
assessed in the context of the world in which we live.856  Social norms must be accorded due weight in 
considering whether a particular objective pursued by a government can be considered legitimate.  It 
seems to us, based on the evidence be fore us, that providing consumers with information on the origin 
of the products they purchase is in keeping with the requirements of current social norms in a 
considerable part of the WTO Membership. 
7.651  In light of the foregoing, we conclude that providing consumer information on origin is a 
legitimate objective within the meaning of Article 2.2. 
(d) Whether the COOL measure is more trade-rest rictive than necessary to  fulfil the legitimate 
objective 
7.652  In this section, we assess whether the complain ants have established that the COOL measure 
is more trade-restrictive than necessary to fulf il the identified objective of providing consumer 
information on origin.  The complainants' positi on on this issue is based on the following two 
elements:  (i) the COOL measure does not fulfil the objective;  and (ii) even if the COOL measure 
were found to fulfil the objective, it is more trade-restrictive than necessary because there are 
alternative measures that are less trade-restrictiv e than the COOL measure, but which equally fulfil 
the objectives. 
                                                      
854 Panel Report, Korea – Various Measures on Beef , para. 655. 
855 Panel Report on EC – Sardines , para. 7.121, referring to Panel Report on Canada – Pharmaceutical 
Patents , para. 7.69.  The Panel also refers to the Panel in US – Section 110(5) Copyright Act , which stated that 
the term has "the connotation of legitimacy from a more normative perspective, in the context of calling for the 
protection of interests that are justifiable in the light of  the objectives that underlie the protection of exclusive 
rights" (para. 6.224). 
856 The Appellate Body in EC – Hormones states: 
"It is essential to bear in mind that the risk that is to be evaluated in a risk assessment under 
Article 5.1 is not only risk ascertainable in a science laboratory operating under strictly 
controlled conditions, but also risk in human societies as they actually exist, in other words, the actual potential for adverse effects on human health in the real wo rld where people live 
and work and die" (Appellate Body Report, EC – Hormones , para. 187). WT/DS384/R 
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  (i) Main arguments of the parties 
7.653  Canada  submits that, to fulfil its stated objective,  the information available as a result of the 
COOL measure would have to be clear and accurate.
857  The COOL requirements can, however, 
provide consumers with inaccurate or misleading info rmation.  For example, the label information for 
muscle cuts is confusing because the meaning of th e labels is not easily deciphered by consumers.  
Specifically, where meat products carrying labels B and C are put next to each other at the retail level, 
it is a reasonable inference that a consumer would not be able to appreciate the distinction between 
them.858  Therefore, they are not provided with accurate information about the country of origin of the 
muscle cuts of the meat that they are purchasing.859  Canada asserts that, even if consumers did 
understand the difference between labe ls A, B, and C, the information on a label provides virtually no 
useful information because of the way the COOL measure operates.860  Moreover, with regard to 
ground meat, labels consistent with the requirements under the 2009 Final Rule (AMS) may indicate 
that a package of ground meat contains meat from a specified country when in fact it does not.  Furthermore, the COOL measure requires limited information to be put on the labels because 
countries are mentioned without any explicit link to place of birth, raising, or slaughter of the 
livestock used to produce meat.
861  Specific information on the amount of time that the animal spent in 
the United States is not provided. 
7.654  Canada further submits that to fulfil the objec tive of providing consumers with information, 
the information must be "meaningful" by providing consumers with information that is desired by 
them, or at least information on which they are willing to act. 862  The COOL measure, however, 
provides information that US consumers generally are not interested in knowing and thus is not 
meaningful. 
7.655  Canada argues that, if the commingling prov isions and exceptions were removed, the 
COOL measure would come closer towards fulfilling the objective.  However, the COOL requirements would still not fulfil the objec tive because there is no evidence that consumers 
understand the meaning of labels B and C.
863 
7.656  Canada contests the United States' allegation th at consumers of meat obtained from Canadian-
born cattle or hogs are confused by the USDA grade labelling.  Canada recalls  that pork is not USDA 
graded and thus, any confusion c ould only apply to beef.  Even assu ming that consumers are confused 
about the meaning of the USDA grading, the C OOL measure will not remove that confusion.864 
7.657  Mexico  submits that in examining whether the me asures fulfil the objective, the Panel must 
consider not only the express legal provisions of the measures, but also their design, architecture and 
structure.  The COOL measures have substantial ga ps in coverage and impo se confusing labels which 
create ambiguity and uncertainty.865  Thus, they cannot fulfil a legitimate consumer information 
objective. 
                                                      
857 Canada's second written submission, paras. 78-80. 
858 Canada's response to Panel question No. 65; second written submission, para. 79. 
859 Canada's first written submission, paras. 178-181. 
860 Canada's second written submission, para. 80. 
861 Canada's response to Panel question No. 64(a). 
862 Canada's second written submission, paras. 81-82,  referring to exhibits CDA-177, 192; US-87; 
opening oral statement at the seco nd substantive meeting, para. 69. 
863 Canada's response to Panel question No. 143; second written submission, para. 79. 
864 Canada's response to Panel question No. 138. 
865 Mexico's first written submission, paras. 296-302; second written submission, para. 164.  WT/DS384/R 
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  7.658  Mexico asserts that while th ere have been no studies on the extent of consumer knowledge 
about the labels under the COOL measure, labe ls B and C are prima facie incomplete and 
misleading.866  Mexico argues that consumers would need a matrix to determine even roughly where 
their meat products originated under the COOL requirements.  This scheme does not and cannot 
enlighten consumers.  Its only consequence is to  create extra costs for foreign cattle.  Mexico 
highlights the situation where a US consumer would not be able to tell if the animal from which the 
beef was derived was born and raised in the US, an d then slaughtered in Mexico, because such beef 
would be labelled as Category D ("Product of Mexico") .  Mexico contends that the average consumer 
would not be able to understand the exact meani ng of the information on the labels under COOL.867  
Mexico argues that the only label giving accura te information to the consumer is Label A.868 
7.659  Mexico  submits that the COOL measure provides inform ation on the labels with regard to the 
possible origin of the product, but not specific information on the amount of time that the animal spent in the United States.
869  Like Canada, Mexico suggests that the COOL requirements would 
better fulfil the stated objective if the comming ling provisions and exceptions were removed.  
However, the COOL measure would still have an  illegitimate objective and would be more trade-
restrictive than necessary to fulf il that objective.  In addition, the removal of the commingling 
flexibilities would not remedy the modification of  conditions of competition, underlying the non-
discrimination claims brought by Mexico.870 
7.660  Further, the COOL measure does not alleviate the alleged consumer confusion derived from 
the USDA grade label.871 
7.661  The United States  argues that the COOL measures fu lfil the legitimate objectives of 
providing consumers with additional information about the origin of the food that they buy at the 
retail level and of helping to prevent consumer c onfusion related to the la belling of certain products 
not entirely produced in the United States and which still carry a USDA grade label. 
7.662  Regarding the complainants' position that the m eat labels are confusing, the United States 
submits that the complainants have provided no evidence demonstrating that the current labelling 
scheme has caused or will cause any consumer c onfusion.  Concerning whether average US 
consumers are able to tell the difference between la bel categories B and C, the United States submits 
that a consumer is likely to believe that the meat  is most closely affiliated with the name of the 
country that appears first on the label.872  Further, USDA has undertaken several efforts to educate 
consumers on the COOL requirements.873 
7.663  As regards whether the COOL requirements c onvey accurate information in light of the 
COOL provisions on commingled commodities, the United States emphasizes that meat derived from livestock imported for immediate slaughter will not be labelled as solely of US origin (i.e. "Product of 
the U.S.A.") regardless of whether the animal was commingled with other animals on a single 
                                                      
866 Mexico's response to Panel question No. 65. 
867 Mexico's response to Panel question No. 75; opening oral statement at the second substantive 
meeting, paras. 49-51. 
868 Mexico's opening oral statement at th e second substantive meeting, para. 51. 
869 Mexico's response to Panel question No. 64(a). 
870 Mexico's response to Panel question No. 143. 
871 Mexico's response to Panel question No. 138. 
872 United States' response to Panel question No. 65. 
873 The United States points out that a significant amount of information on the COOL measures is 
posted on USDA's website, including a brochure for consumers and retailers to educate them about the different 
COOL labels (Exhibit US-88).  The United States also re fers to a questions and answers page for consumers, 
and an explanatory video about the programme (United States' response to Panel question No. 71). WT/DS384/R 
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  production day.
874  Consistent with consumer expectations , only meat derived from animals that were 
born, raised, and slaughtered in the United States will be designated as of US origin.  The United States concedes that while it is true that the COOL requirements could have been designed to 
provide even more specific information in certa in circumstances (requiring the labelling of each 
production step or not permitting commingling), it ar gues that measures designed in this way would 
also have been much more burdensome.
875  The envisaged measures were altered during the rule-
making process in response to comm ents received from interested parties, including Canada and 
Mexico, and added flexibilities to help reduce compliance costs while providing greater information than previously available.  Thus, the C OOL measures achieve their stated objectives.
876 
7.664  The United States argues that certain gaps ex isting in the coverage  of products under the 
measures do not mean that the measures do not fulfil the stated objective.  Article 2.2 does not require 
that a Member pursue the particular objective to th e maximum possible degree without regard to costs 
or other considerations.  Nor does Article 2.2 precl ude a Member from striking a balance between the 
level at which a technical regulation achieves a pa rticular legitimate objective and the costs that a 
technical regulation imposes on market participants.  The United States clarifies that taking costs into 
consideration does not reflect a lowering of the leve l at which it decided to fulfil its objectives of 
providing consumer information about orig in and preventing consumer confusion.877  I n  f a c t ,  t h e  
commingling provisions criticized by the complainants  were specifically included at the request of the 
Canadian Pork Council and the Canadian government.878 
7.665  Furthermore, the United States submits that th e COOL requirements help prevent consumers 
from being misled about the origin of meat in two different ways.879  First, by ensuring that all meat 
sold at the retail level has an origin label, the COOL requirements prevent c onsumer confusion related 
to the appearance of a USDA grade label on meat th at is not US origin, while also allowing both 
domestic and imported products to benefit from the use of these grade labels.  Second, the 
COOL requirements prevent the confusion that may have occurred when produc ts that were derived 
from animals born and/or raised in another country  and then slaughtered in the United States were 
labelled as a "Product of the U.S.A."  Under the COOL requirements, these products will now be 
labelled as mixed origin products a nd consumers will not mistakenly believe that they are products 
derived from animals born, raised, and slaughtered  in the United States when that is not the case.880 
(ii) Analysis by the Panel 
7.666  In assessing the COOL measure's fulfilment of the objective, we start by recalling the 
objective pursued by the United States and the core features of the country of origin labelling 
requirements. 
7.667  In conducting this assessment, we  will also refer to the legal test established under relevant 
provisions of other covere d Agreements, including both Article XX of the GATT 1994881 and 
                                                      
874 United States' response to Panel question No. 64(b). 
875 United States' first written submission, paras. 62 -66; responses to Panel questions Nos. 58, 73. 
876 United States' first written submission, paras. 23 4-241; response to Panel question No. 24; second 
written submission, paras. 101-102; opening oral statemen t at the second substantive meeting, paras. 48-49. 
877 United States' response to Panel question No. 142. 
878 United States' second written statement, footnot e 32; opening oral statement at the second 
substantive meeting, para. 44, referring to Exhibit US-44. 
879 United States' response to Panel question No. 56;  Exhibit US-84. 
880 United States' response to Panel question No. 56. 
881 We are aware that Article 2.2 of the TBT Ag reement sets out a provision setting out specific 
obligations, whereas Article XX of the GATT 1994 provides for general exceptions to obligations.  This has an 
important implication regarding the allocation of the burden of proof between the complainants and the  WT/DS384/R 
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  Article 5.6 of the SPS Agreement,  to the extent appropriate.882  In this connection, we find support for 
our approach in the Appellate Body's statement in Australia – Apples .  In the context of analysing a 
provision under the SPS Agreement, the Appella te Body found interpre tative assistance in the 
meaning attributed to a provision of the GATT 1994, based on the fact that both provisions form 
integral parts of the same Agreement by virtue of Article II:2 of the WTO Agreement.883   
7.668  Although the United States agrees that the lega l interpretative approach undertaken by the 
Appellate Body in the context of Article 5.6 of  the SPS Agreement provides useful insights for the 
interpretation of Article 2.2 of the TBT Agreement884, it has argued that the legal interpretive 
approach developed by previous panels and the Appe llate Body in the context of Article XX of the 
GATT 1994 is not relevant to Artic le 2.2 in the present dispute.885  In essence, the United States puts 
forward the following arguments to support its position.   First, the United States contrasts the context 
in which the word "necessary" is used and the lega l question under Article 2.2 of the TBT Agreement 
with that under Article XX of the GATT 1994.  Specifically, the United States describes the question 
under Article 2.2 of the TBT Agreement as whethe r a measure is "more trade restrictive than 
necessary to fulfil a legitimate objective", where as under Article XX of the GATT 1994 the question 
is whether it is necessary to br each the obligation(s) under the GATT 1994 to pursue one or more of 
the policy objectives under Article XX.  Second, th e United States highlights the difference in the 
allocation of the burden of proof under Article 2.2 of the TBT Agreement and Article XX of the 
GATT 1994.886  Third, the United States argues that the language in Article 5.6 of the SPS Agreement 
is much more similar to the langua ge in Article XX of the GATT 1994, and there is no textual basis to 
apply the legal interpretive approach unde r Article XX to Article 2.2.     
7.669  We do not consider the United States' argume nts as supporting its position that the legal 
interpretive approach under Article XX is not relevant to Article 2.2.  We agree that Article 2.2 of the 
TBT Agreement and Article XX of the GATT 1994 are two independent provisions under two 
                                                                                                                                                                     
respondent.  Thus, the complainants in the current dispute must establish a prima facie case that the 
COOL measure is more trade-restrictive than necessary to fulfil a le gitimate objective with in the meaning of 
Article 2.2.  In contrast, it would be the respondent un der Article XX of the GATT 1994 who must establish a 
prima facie case that the measure is n ecessary to [achieve] certain objectives within the scope of the provision. 
882 Several third parties submit that the Panel should refer to the extent necessary to the legal tests 
developed under Article XX of the GATT 1994 or Article  5.6 of the SPS Agreement.  However, all these third 
parties agree that, in the context of Article 2.2 of the TB T Agreement, it is not necessary for the complainants to 
provide a less trade-restrictive alternative measure which is significantly  less trade-restrictive, as is the case 
under Article 5.6 of the SPS Agreement.  See, for exampl e, Australia's third party written submission, paras. 74, 
76; Brazil's third party written submission, paras. 7-8;  Japan's third party written submission, para.27;  and New 
Zealand's third-party oral statement at th e second substantive meeting, para. 7. 
883 Appellate Body Report, Australia – Apples , para. 173, footnote 285. In finding interpretative 
assistance in the meaning that has been attributed to a ph rase in Article III:1 of the GATT 1994 in relation to its 
analysis of a phrase contained in Annex A(1)(a) of the SPS Agreement, the Appellate Body noted that both 
provisions form part of the same Agreement by virtue of Article II:2 of the WTO Agreement and thus each 
constitutes context relevant to the interpretation of the other. 
884 United States' second written submission, paras. 102-105. 
885 United States' second written submission, paras. 104-105, also referring to Guatemala's response to 
Panel third party question No. 5. 
The United States also referred to a letter from the Director-General of the GATT to the Chief 
Negotiator as evidence confirming that Article 2.2 of the TBT Agreement should be interpreted similarly to 
Article 5.6 of the SPS Agreement (United States' first written submission, para. 248; second written submission, 
para. 105; Exhibit US-53).  Although it focuses on the similar interpretive approaches that should be taken 
between Article 2.2 of the TBT Agreement and Article 5.6 of the SPS Agreement, the United States has not 
elaborated on how the letter supports its position that the interpretive approach under Article XX of the 
GATT 1994 is irrelevant to Article 2.2 of the TBT Agreement. 
886 See footnote 881 for our observation in this regard. WT/DS384/R 
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  different WTO covered agreements.  This does no t mean, however, that the legal interpretive 
approach under one provision and the legal interpre tive approach under another cannot inform each 
other.  In our understanding, the United States hi ghlights the differences between these provisions 
without explaining why such differences render the legal test under Article XX irrelevant for an 
analysis under Article 2.2. 
7.670  The following considerations further support th e view that the legal interpretive approach 
under Article XX is relevant to Article 2.2.  First, the 2
nd recital in the Preamble of the 
TBT Agreement prescribes the WTO Members' desire  to "further the objectives of GATT 1994".  
This indicates a close connection between the TBT Agreement and the GATT 1994.  Second, 
Article 2.2 of the TBT Agreement is textuall y similar to Article XX of the GATT 1994.  The 
examples of legitimate objectives explicitly liste d in Article 2.2 resemble the types of policy 
objectives prescribed under Article XX of the GATT 1994.887  Further, the wording of the 6th recital in 
the Preamble of the TBT Agreement is also simila r to that of the chapeau of Article XX of the 
GATT 1994.  We therefore disagree with the United States. 
7.671  The objective that the United States pursues through the COOL measure is to provide 
consumers with information on the origin of produc ts they consume.  Specifically with respect to 
meat products, the United States describes its objec tive in more detail as follows:  (i) consumer 
information – the COOL measure purports "to provi de consumers with as much clear and accurate 
information as possible about the country or countries of origin of meat products that they buy at the retail level", particularly "information on the count ries, where the animal from which the meat was 
derived was born, raised, and slaughtered";  an d (ii) prevention of consumer confusion – the 
COOL measure purports to prevent confusion rela ting to a USDA grade label and the previous FSIS 
"Product of the U.S.A." labelling system, which al lowed this label if the meat products received 
minimal processes in the United States. 
7.672  As explained in detail in Section VII.C.1(b)(i ) above, under the COOL measure, retailers of 
covered commodities are required to  inform consumers of the country of origin of the covered 
commodity according to the labelling requirements under the measure.  Muscle cuts of meat must fall under one of the four categories for labelling (i.e. Labels A, B, C, and D) based on the countries 
where the animal from which meat was derived w as born, raised, and slaughtered.  The 2009 Final 
Rule (AMS) allows the use of Labels B or C inte rchangeably when any combination of meat falling 
under category A, B, and/or C is commingled on a single production day. 
7.673  The United States defines the origin of meat based on the place where an animal from which 
meat is derived was born, raised, and slaughtered.
888  In this context, the United States elaborates that 
the COOL measure adopts a definition of origin that  avoids misleading consum ers into believing that 
                                                      
887 The examples of legitimate objectives explicitly listed in Article 2.2 of the TBT Agreement are as 
follows:  national security requirements; the prevention of deceptive practices; protec tion of human health or 
safety, animal or plant life or health, or the environmen t.  The policy objectives falling within the scope of 
Article XX of the GATT include the following:  protection of public morals; protection of human, animal or 
plant life or health; the compliance with laws or regula tions relating to customs enforcement or the prevention 
of deceptive practices; and the conservation of exhaustible natural resources. 
The term "necessary" in Article XX of the GATT 1994 follows the term "measures" and is followed by 
the phrases such as " to protect  human … life or health" and " to secure  compliance with laws or regulations".  
The same term "necessary" in Article 2.2 of the TBT Agre ement follows the phrase "not more trade restrictive 
than" and is followed by the phrase " to fulfil a legitimate objective". 
888 We are not presented with evid ence showing that any other Member has adopted the same definition 
of the origin of meat as the United States.  WT/DS384/R 
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  the meat they are buying was derived from an animal  that was born, raised, and slaughtered in the 
United States when this is not the case.889 
7.674  We are aware that the US definition of orig in for labelling purposes is different from that 
employed for customs purposes.  For customs pur poses, the United States relies on the rules of 
substantial transformation for determining the orig in of products imported into the United States.890  
For imports from a NAFTA country, there are two sets of rules regarding NAFTA qualification – one 
set for preference purposes and another for marking purposes.  Usually they have the same outcome.  The NAFTA Marking Rules are based on the tariff-shift  principle. Thus, the tariff classification of the 
imported product is compared to the tariff classificat ion of the finished product to determine whether 
a sufficient shift has occurred. 
7.675  There is no basis, however, for us to find th at the United States is prohibited from adopting 
for labelling purposes an origin definition which is different from that for customs purposes.  We thus 
carry out our analysis of the COOL measure and its  fulfilment of the stated objective on the basis of 
the definition of origin for meat products as dete rmined by the United Stat es.  We recall that the 
United States defines the origin of meat based on the places where animals used to produce meat were 
born, raised and slaughtered. 
7.676  The complainants argue that the COOL measure was designed to protect the domestic 
industry.  Even if the objective were to provide consumer information on origin as claimed by the 
United States, according to the complainants, th e COOL measure does not fulfil the identified 
objective, essentially because the country of origin  information provided according to the labelling 
requirements is confusing and insufficient. 
7.677  In light of the complainants' argument and of our earlier decision to examine this argument in 
the context of whether the COOL meas ure fulfils the identified objective
891, we first examine whether 
the identified objective is indeed the objective of the COOL measure. 
Whether consumer information on origin is the objective of the COOL measure 
7.678  The complainants contend that the COOL measure is designed to protect the domestic 
industry.  According to the complainants, this mu st be confirmed based on not only the text of the 
measure, but also the design, architecture and struct ure of the COOL measure.  In this context, the 
complainants have also referred to various stat ements made by legislators during the legislative 
process for the COOL statute.  We will address the se elements in turn, starting with the text of the 
COOL measure. 
7.679  We first turn to the text of the COOL measure.892 
7.680  The text of the COOL statute and the 2009 Fi nal Rule (AMS) contains provisions on the 
country of origin labelling requirements, in cluding the product scope and nature of the 
requirements.893  We find that while the text of these pr ovisions does not describe the objective of the 
                                                      
889 United States' opening oral statement at the second substantive meeting, para. 42. 
890 Canada's response to Panel question No. 59;  Mexico's response to Panel question No. 59. 
891 See para. 7.608. 
892 Australia agrees that the Panel should start its analysis for determining the objective of the 
COOL measure with the text of the measure (Australia's  third-party oral statement at the second substantive 
meeting, para. 10). 
893 The main requirement ("Notice of Country of Origin" – "In General") under the 2002 Farm Bill, as 
amended and the 2008 Final Rule is the following:  "a retailer of a covered commodity shall inform consumers, WT/DS384/R 
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  measure, it is devoted exclusively to the labelling requirements on origin.  The summary part of the 
2009 Final Rule (AMS) also states that the COOL stat ute requires retailers to notify their customers of 
the country of origin of covered commodities.
894  As part of the agency response to comments from 
the public, USDA further explains that "[w]ith regard  to producer benefits, while some U.S. producers 
may hope to receive benefits from the COOL program for products of U.S. origin, the purpose of the 
COOL program is to provide consumers with origin information".895  Therefore, the text of the 
COOL measure confirms that the objective of the CO OL measure is to provide consumer information 
on origin. 
7.681  To support their position that the objective of th e COOL measure is not consumer information 
as stated by the United States, the complainants al so point to the measure's design and structure, 
particularly the coverage of commodities and exemptions, of the COOL measure. 
7.682  The scope of covered commodities under the measu re is defined in 7 U.S.C. §1638(2)(A) of 
as follows:  "[t]he term 'covered commodity' means– (i) muscle cuts of beef, lamb, and pork;  (ii) 
ground beef, ground lamb, and ground pork;  (iii) farm-raised fish;  (iv) wild fish;  (v) a perishable 
agricultural commodity;  (vi) peanuts;  and [foot note omitted] (vii) meat produced from goats;  (viii) 
chicken, in whole and in part;  (ix) ginseng;  (x) pecans;  and (xi) macadamia nuts".896  T h e  
complainants argue that the United States limite d the product scope of the COOL measure to US 
products threatened by foreign competition.  The complainants highlight the fact that various 
products897 that are produced in the United States, but that face little or no competition, are not subject 
to the COOL measure.898 
7.683  The complainants further submit that the tr ue objective of the COOL measure is trade 
protectionism as demonstrated by the fact that the COOL measure excludes from its scope covered 
commodities that are an ingredient in a processed food item or that undergo processing899, as well as 
certain entities (e.g. se rvice food establishments900, entities selling perishable agricultural 
commodities below US$230,000 per year901).  In fact, argue the compla inants, if the objective of the 
COOL measure were to provide origin information,  it would have to apply on a more widespread 
basis.902 
7.684  We are not persuaded by the complainants' arguments.  We consider that merely because the 
COOL measure does not apply to all food products and all relevant entities does not necessarily mean 
that the measure is designed for a protectionist purpose.  In fact, it is not atypical for any kind of 
                                                                                                                                                                     
at the final point of sale of the covered commodity to consumers, of the country of origin of the covered 
commodity." 
894 74 FR 2658. 
895 74 FR 2670. 
896 Exhibits CDA-1; MEX-9. 
897 Canada argues that the products that face little or  no import competition, include almonds (with a 
market share of 99.5%), walnuts (with  a market share of 99.1%), pistachio s (with a market share of 99%) and 
turkey (with a market  share of 99.9%). 
898 Canada's first written submission, paras. 161-170; Mexico's first written submission, paras. 171-172. 
899 7 C.F.R. §65.220. 
900 7 U.S.C. §1638a (b). 
901 Mexico's first written submission, para. 10; Un ited States' first written submission, para. 49;  
Exhibit CDA-5, p. 2705;  7 U.S.C. 499a(b)(11) of the PACA defines a retailer as "a person that is a dealer 
engaged in the business of selling any perishable agricultural commodity at retail."  Then, 7 U.S.C. 499a(b)(6) 
defines the term "dealer" as follows: "(B) no person buying  any such commodity solely for sale at retail shall be 
considered as a 'dealer' until the invoice costs of his purchases of perishable agricultural commodities in any 
calendar year are in excess of $230,000". 
902 Canada's second written submission, para. 57;  Me xico's first written submission, paras. 173-174.  WT/DS384/R 
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  regulation to have exceptions in term s of the products and entities that are subject to it.  Some of such 
exceptions might be justifiable for practical reasons  and simply facilitate the implementation of the 
measure at issue without necessarily in volving protectionist intent.  We also consider that the scope of 
the COOL measure is broad enough to cover a signi ficant range of food products and entities handling 
these products. 
7.685  Our assessment of the COOL measure, based on its text, and design and structure, is that its 
objective is consumer information on orig in as declared by the United States. 
7.686  Finally, we turn to the issue of meaning and legal relevance of various statements made by 
legislators during the legislation process for the COOL measure to confirm its objective.903  We are 
aware of the Appellate Body's statement in Japan – Alcoholic Beverages addressing the prohibition in 
Article III against applying internal taxes and other charges "so as to afford protection to domestic 
production", indicating that it is "not necessary for a pa nel to sort through the many reasons legislators 
and regulators often have for what they do and we igh the relative significance of those reasons to 
establish legislative or regulatory intent".904  I n  Chile – Alcoholic Beverages , the Appellate Body 
explained that "[t]he subjective  intentions inhabiting the minds of individual legislators or regulators 
do not bear upon the inquiry, if only because they  are not accessible to treaty interpreters".905  The 
same logic could be applied to Article 2.2 of th e TBT Agreement when inquiring into a Member's 
measure setting out its stated legitimate objective.  In  this case, we have evidence before us purporting 
to demonstrate the legislators' intentions.  Accord ing to the Appellate Body, it is possible to have 
recourse to "the statutory purposes or objectives – that is, the purpose or objectives of a Member's 
legislature and government as a whole – to the extent that they are given objective expression in the 
statute itself".906  Thus, although the Appellate Body has indicated that it is not necessary for a panel 
to conduct the inquiry, we will examine the statem ents referred to by the parties to assess whether 
they are given objective expression in the COOL measure itself. 
7.687  The complainants presented several statemen ts from Members of the US Congress with a 
view to demonstrating that the objective of  the COOL measure is trade protectionism.907  T h e  
United States argues in response that statements by Members of Congress confirm that the objective 
of the COOL measure is "to provide consumers with  additional information regarding the origin of 
the covered commodities".908 
7.688  Canada submits that the intent of the COOL m easure is to protect US ranchers from foreign 
competition by recapturing market share for US cattle.909  Examples of statements identified by 
Canada include the following:  (i) "I want to cap ture that 22 percent of the beef market for our 
                                                      
903 Korea considers that reference to only certain chos en statements from legislators may not be able to 
convey the legislative background accurately (K orea's third party written submission, para. 18). 
904 Appellate Body Report, Japan – Alcoholic Beverages , p. 27. 
905 Appellate Body Report, Chile – Alcoholic Beverages , para. 62 (emphasis in or iginal).  See also the 
Appellate Body Report, US – Offset Act (Byrd Amendment) , para. 259. 
906 Appellate Body Report, Chile – Alcoholic Beverages , para. 62. 
907 Canada's first written submission, paras. 13 , 172-174; Mexico's second written submission, 
paras. 79-80.  The complainants also refer to statements by an interest group, R-CALF.  In particular, a letter 
from R-CALF to the US Secretary of  Agriculture and US Trade Representa tive states the following: "[l]acking 
any affirmative action on the part of USDA or USTR to mitigate this untenable but prolonged trade imbalance 
that continues to drive tens of thousands of U.S. cattle  farmers and ranchers out of  business each year, COOL is 
the only available tool that the U.S. cattle industry has to even begin to rebalance the lopsided trade relationships 
with Canada and Mexico." (Canada's first written subm ission, para. 171, referring to Exhibit CDA-145;  
Mexico's first written submission, para. 182, referring to Exhibit MEX-50). 
908  United States' first written submission, para. 28 (Exhibit US-12). 
909 Canada's first written submission, paras. 13, 172-174. WT/DS384/R 
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  American producers"
910;  (ii) "I am perfectly willing to put ba rriers at the borders so I just want to 
clear that up"911;  (iii) "[the COOL measure would] gi ve our independent producers a leg up".912 
7.689  Mexico also puts forward statements by Member s of the US Congress in the context of the 
2002 Farm Bill allegedly showing protectionist inte nt.  These include the following statements:  (i) 
"[p]roducers pushed Congress to include a country of origin labeling and their work paid off. When 
given this option, I believe consumers will pick  American produce over our foreign competitors"913;  
(ii) "Western South Dakota cow-calf ranchers will be  proud to know that the standard for 'U.S. beef' 
under my provision will require it to come from cattle born, raised, and slaughtered in the United States, despite a last-minute campaign by op ponents to allow foreign cattle to qualify as U.S. 
beef"
914;  (iii) "[t]his program will specifically inform consumers right at their local markets whether 
they are eating U.S. products, or products produced under the laws of another nation (...) U.S. origin 
labeling is important because it will allow consumers to vote with  their wallets to support U.S. 
farmers, ranchers, and fishermen"915;  (iv) "Country of Origin Labeling for fresh meats, fruits, 
vegetables and fish will help Oregon's producers".916 
7.690  The United States submits statements by tw o Congressmen which support their position that 
the COOL measure provides information to consumers about the origin of their food.  One of them 
states that this legislation is important mainly917 because "[f]irst, consumers ha ve the right to know the 
origin of the meat that they buy in the grocery st ore.  Second, ranchers d eserve to have their product 
clearly identified.  Third, current law creates a false impression about the origin of USDA grade 
meat".918  Another Member of Congress advances that "[t] he country of origin of their food is as 
important as knowing the country of origin of any other product they might buy as a consumer in the 
United States".919 
7.691  We have examined all of the statements by i ndividual legislators submitted by the parties in 
this respect and conclude that, while the sentime nt in some of them finds expression in the 
COOL measure, the sentiment in others does not.  On balance, we do not  find this evidence of 
assistance in our inquiry into the objective of the COOL  measure.  In fact, it is not inconceivable that 
parliaments and governments pursue more than one  objective through a certain measure.  Different 
constituencies and legislators may have different obj ectives, which nonetheless lead to the adoption of 
a particular measure.  In such cases, a panel should not be second-guessing va rious intents behind the 
introduction of that measure.  The above statements  therefore do not affect our conclusion that the 
objective of the COOL measure is to pr ovide consumer information on origin. 
                                                      
910 Hearing before the Sub-committee of livestock and horticulture of the Committee on Agriculture, 
House of Representatives, 26 September 2000 (Exhibit CDA-10, p.6). 
911 Hearing before the Sub-committee of livestock and horticulture of the Committee on Agriculture, 
House of Representatives, 26 September 2000 (Exhibit CDA-10, p.42). 
912 Congressional Record, Farm Security and Rural Investment Act, 7 May 2002 (Exhibit CDA-146, 
S3918). 
913 Mexico's second written submission, para. 80;  Exhibit MEX-89. 
914 Mexico's second written submission, para. 80;  Exhibit MEX-91. 
915 Mexico's second written submission, para. 80;  Exhibit MEX-92. 
916 Mexico's second written submission, para. 80;  Exhibit MEX-93. 
917 The same Congressman advances two additional reasons why the COOL measure should be 
enacted:  (i) "Most other consumer products are labeled as to country of origin.  Meat should be no different";  
and (ii) "Numerous countries already are imposing country of origin labeling requirements, including Canada, 
Mexico, and the European Union" (Exhibit US-13). 
918 United States' first written submission, footnote 31; Exhibit US-13. 
919 United States' first written submission, footnote 31; Exhibit US-14.  WT/DS384/R 
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  Whether the COOL measure fulfils the objective of  providing consumer information on origin 
7.692  The term "fulfil" can be defined as "2. Provide fully with what is wished for;  satisfy the 
appetite or desire of;  3. Make complete, supply w ith what is lacking;  replace (something);  ... 6. 
Carry out, perform, do (something prescribed)".920  The ordinary meaning of "fulfil", therefore, 
indicates that to meet the requirement in Article 2.2 of the TBT Agreement, the COOL measure must 
carry out and perform the objective of provi ding origin information to consumers. 
7.693  Before starting our analysis, it is useful to r ecall the Appellate Body's clarification in the 
context of Article XX(b) of the GATT 1994 that in assessing whether a measure makes a contribution to the objective pursued under Article XX(b), pane ls are not required to apply a particular 
methodology.  The Appellate Body considered that a contribution exists when there is a genuine 
relationship of ends and means between the objective pursued and the measure at issue.
921  I n ou r  
view, this approach is also relevant for analysin g a measure under Article 2.2 of the TBT Agreement, 
specifically with respect to whether it fulfils th e objective for which it was put in place.  As noted 
above922, we consider that the legal interpretive a pproach under Article XX(b) of the GATT 1994 is 
relevant to our analysis of Ar ticle 2.2 of the TBT Agreement. 
7.694  Bearing this in mind, we now turn to the partie s' specific arguments on the fulfilment by the 
COOL measure of the identified objectives. 
7.695  The parties do not dispute that information on the origin of products must be clear and 
accurate for it to be able to convey meaningful information to consumers.923  Under a labelling regime 
adopted for this purpose, the fulfilment of this objective will depend on the capability of labels to 
convey clear and accurate information on origin.  To determine whether clear and accurate country of 
origin information of meat produc ts is conveyed to consumers u nder the COOL measure, we must 
examine how the specific labelling scheme under the COOL measure, particularly the content and 
categorization of different categories of labels, is set out in the measure itself. 
7.696  The complainants argue that country of orig in labels under the COOL measure can provide 
consumers with inaccurate or misleading informat ion.  Their position is largely based on the 
following contentions:  (i) the meaning of the labels , particularly labels B and C for muscle cuts, is 
                                                      
920 The Shorter Oxford English Dictionary , (Sixth Edition) Oxford University Press, Vol. I, p.1053 
(2007). 
921 The Appellate Body in Brazil – Retreaded Tyres  stated: 
"We turn to the methodology used by the Panel in analyzing the contribution of the Import Ban to the achievement of its objective.  Such a contribution exists when there is a genuine 
relationship of ends and means between the objective pursued and the measure at issue .  The 
selection of a methodology to assess a measure's contribution is a function of the nature of the 
risk, the objective pursued, and the level of protection sought.  It ultimately also depends on 
the nature, quantity, and quality of evidence existing at the time the analysis is made.  Because the Panel, as the trier of the facts, is in a position to evaluate these circumstances, it should 
enjoy a certain latitude in designing the appropriate methodology to use and deciding how to 
structure or organize the analysis  of the contribution of the meas ure at issue to the realization 
of the ends pursued by it.  This latitude is not, however, boundless.  Indeed, a panel must 
analyze the contribution of the measure at issue to the realization of the ends pursued by it in 
accordance with the requirements of Article XX of the GATT 1994 and Article 11 of the 
DSU." (Appellate Body Report, Brazil – Retreaded Tyres , para. 145) 
922 See paras. 7.667-7.670. 
923 Canada's first written submission, paras. 178, 210-211;  Mexico's response to Panel question 
Nos. 64 and 105;  United States' first written submission, paras. 85, 154, 155, 210-211, 240.  Australia and New 
Zealand agree that the information co nveyed through the COOL measure must  be accurate.  (Australia's third 
party written submission, para. 68;  New Zeala nd, third party written submission, para. 40.). WT/DS384/R 
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  confusing and cannot be easily understood by cons umers; and (ii) the flexibility accorded to 
processors and retailers to use labels B and C inte rchangeably for all categories of muscle cuts upon 
commingling, makes origin informati on even more confusing for consumers.
924 
7.697   We start with the meaning of different categori es of labels under the measure.  We recall that 
meat falling within the scope of categories B and C is required to carry labe ls indicating "product of 
the US, Country X" (Label B) and "product of Count ry X, the US" (Label C).  As described above in 
Section VII.C.1(b)(i), Label B refers to meat deri ved from animals born in Country X, and raised and 
slaughtered in the United States, whereas Label C re fers to meat derived from animals imported for 
immediate slaughter (i.e. animals born and raised outside the Unite d States).  Labels B and C are 
therefore differentiated by the order of  country names indicated on the label. 
7.698  The complainants argue that the descripti on of origin under Label B and Label C are 
confusing.  For example, a meat product with a B or C label will indicate multiple countries of origin 
(i.e. "Product of the US, Country X" and "Product of  Country X, the US").  This is confusing because 
consumers will not understand the meaning of these labels in terms of the countries where specific 
production steps took place.925  Particularly, in Mexico's view, a label marked with "product of the 
US, Country X" might lead consumers to think th at a package contains both muscle cuts of meat 
produced in the United States and muscle cuts pr oduced in Mexico when this is not the case.926 
7.699  As described above, the US definition of origin involves information on the places where 
animals from which meat is derived were born, raised , and slaughtered.  Thus the labels identifying 
origin refer to several elements.  As a result, it a ppears to us, the description of origin on Label B and 
Label C does not, in fact, deliver origin informati on as defined under the measure or as the consumer 
might understand it. 
7.700  For example, a label "Product of the US, Mexico" does not describe what "the US and 
Mexico" means as far as origin of the meat is concerned.  As Mexico suggests, on its face, these names could be understood as meaning products comprising meat originating in both the 
United States and Mexico.  This may be the case pa rticularly for meat sold in a bulk display.  
However, confusion is also likely in a case wher e a consumer-ready package contains only a single 
piece of meat, as the meaning of the two country names listed on the label is not clear.  Indeed, in order for the average consumer to understand the me aning of a specific COOL label on meat products, 
he would also need to understand the definition of  each category of labels  as prescribed in the 
measure. 
7.701  Furthermore, the complainants argue that the meaning of Label B and Label C is not easily 
distinguishable.  The descriptions on Labels B and C are differentiated based on the order of country 
name, which is determined by whether animals were raised in the United States (Label B) or whether 
imported right before slaughter (Label C).  For example, if an animal from which meat was derived was raised in the United States (not born in the Un ited States), the first country name on the label is 
the United States ("Product of the US, Country X").    It is far from clear to us that differentiation of 
origin based on the order of country names will ind eed communicate accurate origin information.  For 
example, if two packages of steak on a store shelf respectively carrying the labels of "product of the 
                                                      
924 Most of the third parties agree with the view that certain aspects of the COOL measure might 
provide inaccurate information to consumers.  See, fo r example, Australia's third party written submission, 
para.70; European Union's third-party oral statement at  the first substantive meeting, para. 41; Guatemala's 
third-party oral statement at the first substantive meeting,  p. 2; Japan's third-party oral statement at the second 
substantive meeting, para. 7. 
925 Canada's first written submission, para. 181;  Mexi co's first written submission, para. 301;  second 
written submission, para. 46. 
926 Mexico's first written submission, para. 301; second written submission, para. 46.  WT/DS384/R 
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  US, Mexico (or Canada)" and "product of Mexico (or Canada), the US", in our view the similarity in 
content between these two labels will render it very  unlikely that the average consumer in the 
United States will be able to distinguish between th ese two labels in terms of  origin as defined under 
the COOL measure.927  The United States argues that, generally  speaking, a consumer is likely to 
think that the meat is most closely affiliated with  the name of the country that appears first on the 
label.928  We are not presented with any evidence to support this assertion and hence must set it aside 
for the purpose of our decision. 
7.702  Even if we were to conceive of a perfect cons umer who is fully informed of the meaning of 
different categories of labels under the COOL meas ure, she may never be assured that the label 
precisely reflects the origin of meat as defined und er the COOL measure.  This is because of the 
manner in which the labelling requirements under the measure operate, inter alia , in connection with 
the interchangeable use of Label B a nd Label C allowed for commingled meat.929  We turn to consider 
this aspect of the measure now. 
7.703  Under the 2009 Final Rule (AMS), when cat egories A and B, categories A and C, or 
categories A, B, and C animals are commingled in a single production day, meat produced from those 
animals may be labelled as either category B or C.  Mexico describes different possible combinations 
of meat with different origins under the commingling provisions as follows:  "A & B = B or C;  A & C = B or C;  B & C = B or C;  A & B & C = B or C".
930  Therefore, a B or C label affixed to a meat 
product may not necessarily correspond to the definition of  origin under the measure.  This is the case 
even with meat derived from animals born, raised, and slaughtered in the United States (i.e. category 
A meat) as it may be carrying Labels B or C ra ther than Label A acco rding to the commingling 
provisions. 
7.704  We also note that commingling can take pl ace in multiple stages of the meat production 
process (e.g. processors and packers), including at the retail level.931  This, we understand, may reduce 
                                                      
927 Canada submits in response to a question from the Panel that it is a reasonable inference that a 
consumer would not be able to appreciate the distinction between meat products labelled as B and C 
respectively (Canada's response to Pa nel question No. 65).  Mexico argues that there is no evidence that US 
consumers either can or do perceive the vast implications of this minute change in word order  and that 
consumer would need a matrix to determine even roughly where their meat products originated under the 
COOL regime (Mexico's response to Panel question No. 65). 
928 United States' response to Panel question No. 65.  In response to a similar question from the Panel 
that addressed two separate packages of beef, one labelled as "Product of the US, Canada, and Mexico" and 
another labelled as "Products of Mexico, Canada, and the US", the United States referred to three circumstances 
in which beef could be labelled as described in the ques tion:  (i) ground beef from a processor who had all three 
types of beef in its inventory in the last 60 days; (ii) a mu scle cut of beef derived from  an animal th at spent time 
in all three countries (i.e. born in Canada, raised in Me xico, and slaughtered in the United States); or (iii) a 
muscle cut of beef from a processor who commingled multiple types of animals in a single production day.  
The United States adds that in none of these circumst ances does the 2009 Final Ru le (AMS) require the names 
of these countries to be listed in a particular order. 
We note that the United States also asserts that the USDA has provided a significant amount of 
information on the COOL requirements, mainly directed to consumer education.  Among the different types of 
information that can be found on the website there is a brochure for consumers and retailers to educate them 
about the different COOL labels (Exhibit US-88), a question and answer page for consumers and an explanatory 
video about the program. (United States' response to Panel question No. 71). 
929 We also note that the 2009 Final Rule (AMS) allows category B meat to list country names in any 
order. 
930 Mexico's second written submission, footnote 39.  Me xico also provides a matr ix of labels under the 
COOL measure (Mexico's response Q. 65). 
931 For example, a brochure on COOL prepared by USDA explains COOL for commingled 
commodities as follows:  "[M]eat covered commodities (e.g., rib eye steaks) derived from  U.S. and mixed origin WT/DS384/R 
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  compliance costs to a certain extent.
932  At the same time, it further diffuses the content and impact of 
origin labels as defined by the measure.  If a retaile r were to decide to commingle meat products that 
had already been commingled during the production process, the resulting labels affixed to these 
products would be even less accurate in terms of the origin of such products as defined by the 
United States. 
7.705  As an example, if Category A and B animals are commingled at the slaughterhouse, the meat 
derived thereof should, in principle, use Label B.  If this Label B meat is commingled at the retail 
level with Label C meat, the resulting group can use La bel B or C.  Assuming that the retailer decides 
to use Label C for that group of meat, the consumer  has no certainty as to the origin of meat as 
defined by the United States.  In this scenario, the co nsumer could alternatively believe that this meat 
comes from any of the following:  (i) animals born and raised in country X and slaughtered in the United States; (ii) animals born in country X and rai sed and slaughtered in the United States that were 
commingled with animals born and raised in country X and slaughtered in the United States;  or (iii) animals born in country X and raised and slaughtered in the United States that simply list the country 
names in any order.  As this example shows, the COOL measure creates a framework in which 
consumers make their purchasing decisions with little,  if any, additional certainty as to the accurate 
origin of meat products. 
7.706  Furthermore, as discussed in paragraphs 7.4 21-7.430 in the context of Article 2.1, the 
COOL measure allows the ground meat label to list "all of the reasonably possible countries of origin 
of … ground beef [or] … pork" and to reference a country of origin even if the processor has not had 
ground meat from that particular country in its inventory for the last 60 days or less. Because of this 
so-called "60-day inventory allowance" in the 2009 Final Rule (AMS), the ground meat label is likely 
to convey inaccurate origin information as a pro cessor may use the same label for all of its ground 
meat listing all countries of origin of the ground meat that the processor has had in its inventory at least for 60 days.  In other words, an origin la bel affixed on ground meat could be listing a country 
name of meat that the processor might not even have  used to produce the specific ground meat in that 
package.  In fact, the Vilsack letter contains a st atement confirming this:  "[t]his provision [60-day 
inventory allowance] allows for labels to be used  in a way that does not clearly indicate the product's 
country of origin". 
7.707  Therefore, for the reasons explained above, the labelling under the COOL measure in our 
view provides information on meat with regard to the possible , but not necessarily actual, or for that 
matter accurate,  origin as defined by the measure. 
7.708  The United States points out that the complain ants provided no evidence demonstrating any 
confusion was caused by the labelling scheme under the COOL measure.
933  Although quantitative 
evidence based on market surveys, for example, could have been helpful in assessing consumers' 
understanding of the meaning of different categori es of labels, we do not consider the presence of 
such quantitative evidence necessary in assessing the m easure's contribution to the stated objective.  
As noted in paragraph 7.693 above, a certain degree of latitude is afforded to panels in adopting 
methodology to assess a measure's fulfilment of the obj ective.  We are thus free to rely on either 
quantitative or qualitative evidence, or both.  We are therefore allowed to determine whether the 
                                                                                                                                                                     
animals that are commingled du ring a production day may carry the mixed origin claim, Product of the U.S., 
Country X, Country Y . ..." (Exhibit, US-88) 
932 See paragraph 7.343. 
933 United States' first written submission, para. 239.  WT/DS384/R 
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  COOL measure fulfils the objective on the basis of the complainants' arguments on how the labelling 
provisions under the COOL measure operate.934 
7.709  The United States further argues that, "in general", the COOL requirements satisfy the US 
definition of origin.935  The United States explains that meat  derived from mixed origin animals will 
always receive either a category B or C label that informs consumers of all the countries in which the 
animal from which the meat is derived had spent time. 
7.710  We are not convinced by the United States' argu ments.  As described above, the United States 
has defined the origin of meat based on the pl ace where animals from which meat was derived were 
born, raised, and slaughtered.  The United States fu rther submits that, in respect of meat products, 
providing origin information based on this specific de finition forms part of the objective of providing 
consumer information on origin within the meani ng of Article 2.2.  We do not see how providing 
general information about the various countries in wh ich an animal has spent time and slaughtered is 
in keeping with the objective that the Unite d States claims the measure seeks to achieve. 
7.711   Further, the United States created exceptions  and added flexibility into the regulations 
because the United States strived to  reduce the costs of compliance, and it wanted to provide as much 
consumer information as possible.936  The United States argues that it had to strike a balance between 
providing consumer information and re ducing the compliance costs for indus try.  Of course, it is often 
necessary and important for governments to take c onflicting interests into account in implementing 
laws and regulations to fulfil policy objectives.  The act of balancing conflicting interests cannot, 
however, justify any inconsistency found in the impugned measure with the obligations of the 
respondent under the covered agreem ents.  In the factual circumstan ces of the present dispute, the 
pertinent question for us is whether the COOL measure is fulfilling the identified objective in 
accordance with the obligations under Article 2.2 of the TBT Agreement. 
7.712  The United States further emphasizes that in no circumstances will anim als that spent their 
entire life in another country before being importe d to the United States for immediate slaughter be 
listed as a "Product of the US" under the measure.  The United States highlights that "[c]onsistent 
with the expectations of the US consumer, only meat  derived from animals that were born, raised, and 
slaughtered in the United States will be designated as U.S. origin". 937  This, in the United States' 
view, fulfils the objective of preventing consumer confusion relating to a USDA grade label and the 
previous FSIS voluntary "Product of the U.S.A." la belling system, which allowed this label if the 
meat products received minimal pro cesses in the United States.  Th e United States underlines that, by 
ensuring that all meat sold at the retail level h as an origin label, the COOL requirements prevent 
consumer confusion relating to the appearance of a USDA grade label on meat that is not US origin 
while also allowing both domestic and imported pr oducts to benefit from the use of these grade 
labels.938 
7.713  In essence, the specific objective pursued by th e United States through the COOL measure as 
explained above, namely the prevention of confusion caused by the previous CO OL regime as well as 
USDA grade labelling, is that the United States aims  to prevent meat derived from animals of non-US 
origin from carrying a US-origin label under any circ umstances.  To that extent, the COOL measure 
appears to fulfil the objective becau se the measure prohibits such meat from carrying a Label A even 
though the same meat may still carry a USDA grade label. 
                                                      
934 See paragraph 7.693. 
935 United States' response to Panel question No. 73. 
936 United States' opening oral statement at the first substantive meeting, para. 44. 
937 United States' response to Panel question No. 64(b). 
938 United States' response to Panel question No. 56(d). WT/DS384/R 
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  7.714  Finally, the United States emphasizes that th e COOL measure ensures that consumers have 
much more information available to them about origin than they previously did.
939 According to the 
United States, the COOL measure reduces the lik elihood of consumer confusion in certain 
circumstances.940  Therefore, in the United States' view , the COOL measure fulfils the legitimate 
objectives at the level that the United States deemed appropriate. 
7.715  However, as clarified in paragraph 7.620 above, the United States aims to achieve its stated 
objective by providing as much clear and accurate origin information as possibl e.  Considered against 
this level of fulfilment of its objective and in light  of the nature of the objective (i.e. to provide 
accurate origin information), merely providing more information than under the previous labelling 
regime or fulfilling only a limited aspect of th e identified objective does not contribute in a 
meaningful way to fulfilling the objective.  As di scussed above, the different and complex categories 
of labels under the COOL measure and the operati on of the COOL regime based on the commingling 
provisions render origin information contai ned in labels inaccurate and confusing.941 
Overall assessment 
7.716  Overall, the mandatory labelling scheme under th e COOL measure falls short of providing 
consumers with information on the country of or igin of meat products in an accurate and clear 
manner. 
7.717  We acknowledge that labels re quired to be affixed to meat products according to the 
requirements under the measure provide additional country of origin information that was not 
available prior to the COOL measure.  We also  agree that the labelling requirements under the 
COOL measure may have reduced consumer confus ion that existed under the pre-COOL measure and 
USDA grade labelling system. 
7.718  However, we agree with the complainants that  origin information on labels as prescribed by 
the measure does not ensure meaningful informa tion for consumers, except origin information on 
Label A.  Specifically, considered in light of the or igin definition as determined by the United States 
for meat products, the description of origin for La bel B and Label C is confusing in terms of the 
meaning of multiple country names listed in these labels.  Moreover, the possibility of 
interchangeably using Label B and Label C for all categories of meat based on commingling does not 
contribute in a meaningful way to providing consum ers with accurate information on origin of meat 
products. 
7.719  We therefore conclude that the COOL measure does not fulfil the identified objective within 
the meaning of Article 2.2 because it fails to convey meaningful origin information to consumers.  
Given this conclusion, we do not consider it necessary to proceed with the next step of the analysis, 
                                                      
939 United States' response to Panel question Nos. 58 , 64(b).  The United States emphasizes that the 
COOL measure has provided millions of US consumers with information that was previously unavailable to 
them (United States' opening oral statement at  the first substantive meeting, para. 43). 
940 United States' response to Panel question Nos. 64(b ), 73.  The United States characterizes country of 
origin information under the COOL measure as meaningful by distinguishing it from the allegedly misleading 
information that would be provided about meat products under a labelling system solely based on substantial 
transformation. 
941 According to Canada, data collected during the firs t quarter of 2010 show that the different labelling 
categories for muscle cuts of beef were supplied in majo r supermarkets as follows:  Label A 78.6%;  Labels A 
and B 6.3%;  Label B 14.2%;  and La bels B and C 0.9% (Exhibit CDA-211).  According to the United States, as 
of July 2009 the different origin declarations for muscle cuts of beef were used in the following percentages:  
US 71%;  US, Canada 5%;  US, Mexico 0.5%;  Cana da, US 0.5%;  US, Canada, Mexico 22%;  and foreign 
(category D) 0.3% (Exhibit US-145).  WT/DS384/R 
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  namely whether the COOL measure is "more tr ade-restrictive than necessary" based on the 
availability of less trade-restrictive alternativ e measures that can equally fulfil the identified 
objective.942 
(e) Conclusion on the complainants' claims under Article 2.2 of the TBT Agreement 
7.720  For the foregoing reasons, we conclude that th e complainants have demonstrated that the 
COOL measure does not fulfil the objective of providing consumer  information on origin, particularly 
with respect to meat products, within the meani ng of Article 2.2.  We therefore find that the 
United States has acted inconsistently with Article 2.2. 
4. Mexico's claim under Article 2.4 
(a) Introduction 
7.721  Article 2.4 provides: 
"Where technical regulations are required and relevant inte rnational standards exist or 
their completion is imminent, Members shall use them, or the relevant parts of them, 
as a basis for their technical regulations ex cept when such international standards or 
relevant parts would be an ineffective or inappropriate means for the fulfilment of the 
legitimate objectives pursued, for instance  because of fundamental climatic or 
geographical factors or fundamental technological problems." 
7.722  Mexico submits that the COOL measure is inconsistent with Article 2.4 because the 
United States failed to base its regulation on the Ge neral Standard for the Labelling of Prepackaged 
Foods ("CODEX-STAN 1-1985"), an international standa rd that is an effectiv e and appropriate means 
for the fulfilment of the legitimate objective pursued by the United States.943 
7.723  The United States argues that Mexico has failed to  meet its burden to show that any of the 
COOL measures breach Article 2.4.  In particular, Mexi co has failed to show that this standard is not 
an ineffective or inappropriate means for achievi ng the legitimate objective of the United States.944 
7.724  The United States therefore does not contest that CODEX-STAN 1-1985 was not used as a 
basis for the COOL measure.  Given that the Unite d States has not rebutted Mexico's argument on this 
point, we will be able to find that the United Stat es acted inconsistently with its obligations under 
Article 2.4 if we conclude that Mexico has estab lished that CODEX-STAN 1-1985 is an effective and 
appropriate means for the fulfilment of the le gitimate objective pursued by the United States. 
(b) Whether CODEX-STAN 1-1985 is not an ine ffective or inappropriate means for the 
fulfilment of the legitimate objective pursued 
(i) Main arguments of the parties 
7.725  Mexico  submits that if the Panel concludes th at the COOL measure pursues a legitimate 
objective, CODEX-STAN 1-1985 is an effective and appropriate means for the fulfilment of such 
legitimate objective.  According to Mexico, CODEX-STAN 1-1985 is an "effective" means of 
fulfilling the US objective because:  (i) it seeks to:  protect consumers from deceptive practices;  and 
                                                      
942 See the Appellate Body Reports, Brazil – Retreaded Tyres , paras. 156, 178; and China – 
Publications and Audiovisual Products , paras. 237-249. 
943 Mexico's first written submission, para. 321. 
944 United States' second written submission, para. 173. WT/DS384/R 
WT/DS386/R Page 178 
 
 
  (ii) it conveys information on the c ountry of origin through a label.
945  In support of its position, 
Mexico points to several comments that the USDA r eceived during the revision of the Interim Final 
Rule (AMS), suggesting that CODEX-STAN 1-1985 shoul d continue to apply instead of the proposed 
COOL measure.946  Mexico adds that CODEX-STAN 1-1985 is "appropriate", because the rules on 
country of origin contained therein are specially designed, and thus suitable, for achieving the purpose 
of informing consumers about the country of origin of prepackaged foods.947 
7.726  The United States  argues that basing the COOL measures on CODEX-STAN 1-1985 is both 
an "ineffective" and "inappropriate" means of fulfilling the legitimate objective of providing 
consumer information on origin.948  Regarding the exact information on origin that it seeks to provide 
to consumers, the United States refers to "informa tion on the countries where the animal from which 
the meat was derived was born, raised and slaughtered"949.  In particular, CODEX-STAN 1-1985, 
which appears to be based on substantial transfor mation, does not meet the objective of providing 
information about the different countries in which an animal was born, raised and slaughtered.950  
Moreover, CODEX-STAN 1-1985 would provide misl eading information to consumers when meat 
derived from an animal that spent a portion of its lif e in another country before being brought into the 
United States for slaughter is labelled US-origin.951 
7.727  Mexico rejects this argument and highlights that the only example of such situation provided 
by the United States is when cattle enters the US te rritory one day prior to slaughter.  In Mexico's 
view, that is exactly the opposite situation of Mexi can cattle, which gains 70% of their weight in the 
United States.952 
(ii) Analysis by the Panel 
7.728  In EC – Sardines , the Appellate Body established that under Article 2.4 of the 
TBT Agreement the complaining party bears the burden of demonstrating that the relevant 
international standard at issue is appropriate and effective to fulfil the legitimate objectives pursued 
by the responding party through its regulation.953  Thus, we will examine whether Mexico has 
established that CODEX-STAN 1-1985 is an effective or  appropriate means for the fulfilment of the 
legitimate objectives pursued by the Unit ed States through the COOL measure. 
7.729  We are mindful that the parties disagreed on whether CODEX-STAN 1-1985 is a relevant 
international standard within the meaning of Article  2.4 of the TBT Agreement.  In this context, 
we also recall that the SPS Agreement recogni zes the relevance of the Codex Alimentarius 
Commission by acknowledging that for food safety , international standards, guidelines and 
recommendations are the ones established by the Codex Alimentarius Commission.954  We also 
recognize that CODEX plays a crucial role in food saf ety and quality.  For our analysis of Mexico's 
claim under Article 2.4 of the TBT Agreement, however, we find it sufficient to assess whether CODEX-STAN 1-1985 is an effective and appropriate means to fulfil the identified objective pursued 
by the United States.  "To enhance simplicity and efficiency" in our decision-making in the present 
                                                      
945 Mexico's first written submission, para. 351;  response to Panel question No. 78. 
946 Mexico's first written submission, paras. 352-355. 
947 Mexico's first written submission, para. 357;  response to Panel question No. 78. 
948 United States' first written submission, paras. 68, 201, 228; response to Panel question No. 17; 
second written submission, paras. 97, 106, 107, 147. 
949 United States' response to Panel question No. 58. 
950 United States' opening oral statement at the first substantive meeting, paras. 51, 54. 
951 United States' first written submission, para. 268; second written submission, para. 176. 
952 Mexico's second written submission, paras. 176-177. 
953 Appellate Body Report, EC – Sardines , para. 282. 
954 Annex A(3)(a) of the SPS Agreement.  WT/DS384/R 
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  case955, we carry out this analysis on the assumption that CODEX-STAN 1-1985 is a relevant 
international standard within the meaning of Article 2.4.956 
7.730  The panel in EC – Sardines  established that "in the context of Article 2.4, an ineffective 
means is a means which does not have the functi on 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".957  In that dispute, the Appellate Body found that, in that case, a 
consideration of the appropriateness  of the standard and a consideration of the effectiveness  of the 
standard were interrelated due to  the nature of the objectives of the regulation under examination.958 
7.731  We recall our findings above that the objective pursued by the United States through the 
COOL measure is providing cons umer information on origin.959  We also recall that the exact 
information on origin that the United States wants to provide to consumers through the COOL measure is the countries where the animal from which the meat is derived was born, raised and 
slaughtered.
960 
7.732  Turning to the matter of effectiveness  and appropriateness , CODEX-STAN 1-1985 would be 
effective  if it had the capacity to accomplish the objective, and it would be appropriate  if it were 
suitable for the fulfilment of the objective. 
7.733  We consider that in this case a consideration of the effectiveness  and a consideration of the 
appropriateness  of CODEX-STAN 1-1985 are interrelated, due  to the nature of the objective of the 
COOL measure. 
7.734  In our view CODEX-STAN 1-1985 does not have the function or capacity of accomplishing 
the objective of providing information to consumers about the countries in which an animal was born, 
raised and slaughtered.  The reason is  that the standard confers origin exclusively  to the country where 
the processing of food took place.  In other word s, it is based on the principle of substantial 
transformation.  This means that no more than  one country can claim origin under CODEX-STAN 
1-1985;  even when an animal is born and raised in a third country and then slaughtered in the 
                                                      
955 In China – Publications and Audiovisual Products , the Appellate Body provided guidance on the 
use of arguendo  assumptions by panels as follows: 
 
"We observe that reliance upon an assumption arguendo is a legal technique that an 
adjudicator may use in order to enhance simp licity and efficiency in  decision-making.  
Although panels and the Appellate Body may choose to employ this technique in particular 
circumstances, it may not always provide a solid foundation upon which to rest legal 
conclusions.  Use of the technique may detract from a clear enunciation of the relevant WTO law and create difficulties for implementation.  Recourse to this technique may also be 
problematic for certain types of legal issues, for example, issues that go to the jurisdiction of a 
panel or preliminary questions on which the substance of a subsequent analysis depends." (Appellate Body Report, China – Publications and Audiovisual Products , para. 213) 
 
956 In light of the guidance provided by the Appellate Body, our approach will not potentially affect our 
legal conclusions for two reasons.  First, our assump tion creates no difficulties for the implementation of DSB 
recommendations and rulings; and, second, the question of whether or not CODEX-STAN 1-1985 is an 
effective and appropriate means for the fulfilment of th e objective pursued by the Un ited States does not fall 
under our jurisdiction nor as a preliminary question on which the substance of our subsequent analysis depends. 
957 Panel Report, EC – Sardines , para. 7.116. 
958 Appellate Body Report, EC – Sardines , para. 289. 
959 United States' first written submission, paras. 68, 201, 228;  response to Panel question No. 17; 
second written submission, paras. 97, 106, 107, 147. 
960 United States' response to Panel question No. 58. WT/DS384/R 
WT/DS386/R Page 180 
 
 
  United States, the origin would exclusively  be the United States.  Thus, the exact information that the 
United States wants to provide to consumers cannot be conveyed through CODEX-STAN 1-1985.  For the same reasons, we find that CODEX-ST AN 1-1985 is an inappropriate means for the 
fulfilment of this objective, as it is not specially su itable for providing this type of information to the 
consumer. 
7.735  Based on the above, we find that CODEX-STAN 1-1985 is ineffective  and inappropriate  for 
the fulfilment of the specific objectiv e as defined by the United States. 
(c) Conclusion on Mexico's claim under Article 2.4 
7.736  In light of the foregoing, we find that Mexi co has not established that the COOL measure 
violates Article 2.4. 
5. Mexico's claims under Articles 12.1 and 12.3 
(a) Main arguments of the parties 
7.737  Mexico  argues that the COOL measure is incons istent with Articles 12.1 and 12.3 of the 
TBT Agreement.  It claims that the United States did not take into account Mexico's special needs as a 
developing country when preparing and applying the COOL measure, with a view to ensuring that no 
unnecessary obstacles are created to Mexico's  cattle exports to the United States. 
7.738  According to Mexico, Article 12.3 of the TBT Agreement contains two separate obligations 
in the context of the COOL measure:  (i) to "tak e account of" the special development, financial and 
trade needs of Mexico as a developing country Memb er;  and (ii) to ensure that the COOL measure 
does not create unnecessary obstacles to Mexico's cattle exports as a developing country.
961 
7.739  As regards the first type of action, Mexico contends that in the preparation of the 
COOL measure, the United States did not take into  account the special development, financial and 
trade needs of Mexico as a developing country.962  According to Mexico, 56% of its territory 
(110 million hectares, equalling 1.1 million km2) is used for cattle production, involving over 
1 million direct and over 2 million indirect j obs at 1.132 million bovine production facilities, 
65 federally inspected and 940 municipal slaughter houses, and approximately 100 packing plants 
specialized in processing beef.963  Of the approximately 30 million head of Mexican domestic cattle 
inventory, about 6 million are destined for domestic  consumption and 1.2 million for exports to the 
United States.964  Cattle production represents about 33% of Mexican agriculture and animal 
production GDP, and 1.3% of Mexico's overall GDP.965  Export sales of feeder cattle to the 
United States amount to USD 400-600 million annually.966 
7.740  According to Mexico, the term "take into account " means "consider", and "the requirement to 
'consider' evidence would not be satisfied by simply 'receiving evidence' or merely 'tak[ing] notice of 
evidence'".967  Mexico suggests that compliance with Ar ticle 12.3 of the TBT Agreement could be 
proven by showing that the United States consider ed (i) "how the measure may impact developing 
                                                      
961 Mexico's first written submission, para. 362. 
962 Mexico's first written submission, para. 364. 
963 Mexico's first written submission, para. 365. 
964 Mexico's first written submission, para. 366. 
965 Mexico's first written submission, para. 366. 
966 Mexico's first written submission, para. 366. 
967 Mexico's response to Panel question No. 82, para. 218 (citing Appellate Body Report, US – 
Softwood Lumber V , para. 133).  WT/DS384/R 
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  countries";  (ii) possible steps to "minimize the im pact of the measure on developing countries";  and 
(iii) "discussion on less onerous alternatives considered".968 
7.741  Mexico references the Summary of Comments on the Interim Final Rule (AMS) contained in 
the 2009 Final Rule (AMS), arguing that USDA anticipated, but did not address, some of the potential 
effects to trade of feeder cattle from Mexico.969  Mexico alleges that it had the opportunity to 
comment on the development of the 2009 Final Rule (AMS) "when the COOL provisions were 
already established and only needed to be implem ented".  At this stage of development of the 
COOL measure, there was no flexibility for change s in the regulation.  Thus, Mexico's comments 
were merely received, but not "taken into account " by the United States in the preparation and 
application of the COOL measure.970 
7.742  Mexico adds that developing countries ha ve no obligation under Article 12.3 of the 
TBT Agreement to identify and convey to the devel oped country the specific nature and character of 
their special needs.  Nonetheless, Mexico contends  that it explained to the United States that the 
COOL measure was going to have a dispropor tionately negative impact on Mexican cattle.971 
7.743  With regard to the second type of action allegedly required under Article 12.3 of the 
TBT Agreement, Mexico contends that, as expl ained in the context of Article 2.2 of the 
TBT Agreement, the COOL measure creates unnecess ary obstacles to trade.  Therefore, the 
United States also failed to comply with its oblig ation to ensure that the COOL measure does not 
create unnecessary obstacles to Mexico's exports as a developing country Memb er under Article 12.3. 
7.744  Mexico submits a consequential claim of viol ation under Article 12.1 of the TBT Agreement 
in that it argues that the COOL measure's incons istency with Article 12.3 of the TBT Agreement 
results also in its inconsistency with Article 12. 1 of the TBT Agreement.  According to Mexico, 
Article 12.3 must be interpreted a nd applied together with Article 12.1, since "Article 12.1 requires 
that the United States provide differential and more favourable treatment to Mexico through, 
inter alia , Article 12.3".972 
7.745  In response to Mexico's arguments, the United States  contends that the COOL statute and 
2009 Final Rule are not inconsistent with Article 12.1 or 12.3 of the TBT Agreement.973 
7.746  According to the United States, there is one  single obligation under Article 12.3 of the 
TBT Agreement, and Mexico must demonstrate the fo llowing to establish a violation of that Article:  
(i) "that [Mexico] is a developing country";  (ii) "that the [United States] did not take account of its 
special development, financial or trade needs during the preparation and application of [the 
COOL measure]";  and (iii) "that the [Unite d States] did not take account of these needs with a view to 
ensuring that the technical regulation do es not create unnecessary obstacles to export".974 
7.747  The United States submits that Mexico failed to  prove any of these three elements.  Not only 
did Mexico not demonstrate that it is a developing c ountry, but it also did not show evidence that it 
communicated its special needs to the United States or  that the United States did not "take account of" 
these needs in the preparation and application of the COOL Statute and 2009 Final Rule.  Hence, and 
                                                      
968 Mexico's reponse to Panel question No. 82. 
969 Mexico's first written submission , para. 368 (citing Exhibit MEX–7). 
970 Mexico's second written submission, paras. 181-182. 
971 Mexico's response to Panel question No. 154. 
972 Mexico's first written submission, paras. 372-373  (original emphasis) and Mexico's response to 
Panel question No. 82, paras. 216-218. 
973 United States' first written submission, para. 271. 
974 United States' first written submission, para. 274. WT/DS384/R 
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  given that Mexico bears the burden of pr oof, Mexico did not establish a prima facie  case of violation 
under Article 12.3 of the TBT Agreement.
975 
7.748  Even if Mexico had shown sufficient eviden ce for the above, the United States argues that, 
in fact, Mexico had many opportunities to comment  on the development of the COOL measure.  
The United States responded to Mexico's co mments, and changed the 2002 Farm Bill and 
implementing regulations in accordance with suggesti ons provided by Mexico to minimize the impact 
of the COOL measures on trade and facilitate comp liance with record-keeping and audit verification 
requirements.976  The United States argues that the term "take account of" in Article 12.3 of the 
TBT Agreement does not require a Member to  "accept every recommendation presented by the 
developing country Member", and notes that "a de veloped country [Member]  developing a regulation 
is expected to balance developing country considerati ons against the views of other interested parties, 
such as consumers and retailers".977 
7.749  With regard to the alleged third element of Ar ticle 12.3, the United States contends that the 
term "with a view to ensuring" does not contain a substantive obligation prohibiting the creation of 
unnecessary obstacles to trade.  The Member in question is required merely to attempt not to create 
unnecessary obstacles to developing country exports when preparing and applying a technical regulation.  Thus, there is no obligation under Artic le 12.3 of the TBT Agreement contemplating the 
actual effects of the COOL measure on developing countries' exports. 
7.750  On the relationship between Articles 12.3 and 2. 2 of the TBT Agreement, the United States 
explains that Article 2.2 provides for a broader oblig ation as it also uses the term "with the effect of" 
creating unnecessary obstacles to trade.  According to the United States, "a measure that is in 
compliance with TBT Article 2.2 would also be in compliance with TBT Article 12.3"; however, 
"a Member may violate TBT Article 2.2 without breaching TBT Article 12.3".
978 
7.751  As a result of Mexico's failure to demonstrate that the COOL measures are inconsistent with 
Article 12.3 of the TBT Agreement, the United Stat es concludes that the Panel should also reject 
Mexico's consequential claim of inconsiste ncy with Article 12.1 of the TBT Agreement.979 
(b) Analysis by the Panel 
7.752  In light of the parties' arguments, we turn fi rst to Mexico's claim under Article 12.3 of the 
TBT Agreement.  Article 12.3 reads: 
"Members shall, in the preparation and app lication of technical regulations, standards 
and conformity assessment procedures, take  account of the special development, 
financial and trade needs of developing country Members, with a view to ensuring 
that such technical regulations, standards and conformity assessment procedures do not create unnecessary obstacles to exports from developing country Members." 
7.753  Before analysing the substance of Mexico's claim, we assess three points of disagreement 
concerning the legal test under Article 12.3 of the TBT Agreement, namely: 
                                                      
975 United States' first written submission, para. 275 and United States' response to Panel question 
No. 82. 
976 United States' first written submission, para. 275. 
977 United States second written submission, para. 185 (citing Panel Report, EC – Approval and 
Marketing of Biotech Products , para. 7.1621). 
978 United States' response to Panel question No. 83. 
979 United States' first written submission, para. 277.  WT/DS384/R 
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  (a) whether Article 12.3 involves one or two legal obligations; 
(b) the distribution of the burden of proof under Article 12.3;  and 
(c) the meaning of the term "take account of". 
(i) Whether Article 12.3 of the TBT Agreement involves one or two legal obligations 
7.754  The first question regarding the legal test under Article 12.3 of the TBT Agreement is 
whether, as Mexico argues, this provision invo lves two legal obligations, or only one, as the 
United States contends.  As an interpretive issu e, the question boils down to the function of the 
following clause at the end of Article 12.3:  "with a view to ensuring that such technical regulations, 
standards and conformity assessment procedures do not create unnecessary obstacles to exports from 
developing country Members". 
7.755  The dictionary defines the term "with a view to" as "with the aim or object of attaining, 
effecting, or accomplishing something".980  Therefore, in the context of Article 12.3, the term "with a 
view to" introduces an objective. 
7.756  The first part of Article 12.3 prescribes that "Members shall, in the preparation and 
application of technical regulations, standards and conformity assessment procedures, take account of 
the special development, financial and trade needs of developing country Members".  This language 
uses the word "shall" and lays down an  obligation addressed to all Members. 
7.757  We read this first part of Article 12. 3 as the operative part of that provision. 
7.758  This reading of Article 12.3 is confirmed by EC – Approval and Marketing of Biotech 
Products , where the panel found that the various para graphs of Article 12 contain a number of 
separate obligations (as opposed to a single oblig ation), and described the "obligation" under 
Article 12.3 as follows: 
"Article 12.3 requires that in preparing a nd applying technical regulations, standards 
and conformity assessment procedures, Member s take account of the special needs of 
developing country Members."981 
7.759  Further, according to the same panel, "Article 12.3 is a specific application of the obligation 
in Article 12.2 to take account of developing  country needs in the implementation of the 
TBT Agreement at the national level".982 
7.760  Indeed, the final clause of Article 12.3 starting w ith "with a view to" is a specific formulation 
in favour of developing countries of the more ge neral principle expressed in the preamble to the 
TBT Agreement as follows: 
"Desiring  … to ensure that technical regulati ons and standards, including packaging, 
marking and labelling requirements, and pr ocedures for assessment of conformity 
with technical regulations and standards do not create unnecessary obstacles to international trade." 
                                                      
980 Mexico's response to Panel question No. 82 (citing Exhibit MEX–82). 
981 Panel Report, EC – Approval and Marketing of Biotech Products , para. 7.47, subpara. 75. 
982 Panel Report, EC – Approval and Marketing of Biotech Products , para. 7.47, subpara. 77. WT/DS384/R 
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  7.761  This principle is also reflected in other provisions of the TBT Agreement.
983 
7.762  In light of the above, we conclude that Artic le 12.3 of the TBT Agreement lays down only 
one of the two legal obligations argued by Mexico, namely the one spelt out in the operative part of 
that provision:  "Members shall, in the preparation and application of technical regulations, standards 
and conformity assessment procedures, take account of  the special development, financial and trade 
needs of developing country Members".  The second half of the sentence lays down the objective of 
this obligation, namely to "ensur[e] that such  technical regulations, standards and conformity 
assessment procedures do not create unnecessary obstacles to exports from developing country Members". 
7.763  In finding that Article 12.3 of the TBT Agreemen t lays down only one legal obligation that is 
limited to the operative part of that sentence, we  are not suggesting that the final clause of the 
sentence starting with "with a view to" should be r ead out of Article 12.3 or rendered ineffective. 
7.764  An assessment of a claim under Article 12.3 en tails a review of whether the respondent's 
relevant action or inaction with regard to the opera tive part of Article 12.3 fulfils, or is carried out 
with, the objective of ensuring that technical regulations, standards and conformity assessment 
procedures do not create unnecessary obstacles to exports from developing country Members. 
7.765  This assessment, however, necessa rily follows the review of whether the respondent has 
complied with the operative part of Article 12.3. 
7.766  Accordingly, we turn to whether the United St ates has complied with the operative part of 
Article 12.3 of the TBT Agreement.  We start this assessment by reviewing two major issues of 
disagreement in regard to this operative part, namely:  (i) the distribution of the burden of proof;  and 
(ii) the meaning of the term "take account of". 
(ii) Burden of proof under Article 12.3 of the TBT Agreement 
7.767  Mexico's claims under Articles 12.1 and 12.3 of  the TBT Agreement raise the question as to 
which party has the burden to prove inconsiste ncy with these provisions, in particular with 
Article 12.3. 
7.768  The United States suggests that the burden of proof  in this regard rests with Mexico as the 
complainant.  In contrast, in its third-party writte n submission, Colombia argues that the burden is 
entirely on the United States to prove th at it has complied with these provisions.
984  Mexico does not 
explicitly argue that the burden is on the United St ates; nevertheless, it specifies the kind of evidence 
the United States should be submitting in order to  show that it has complied with Article 12.3.985 
7.769  Articles 12.1 and 12.3 of the TBT Agreement are phrased like other classical obligations in 
the covered agreements.  This suggests that, in prin ciple, the established normal approach to burden of 
proof applies in regard to these provisions, too.  In EC – Sardines , the Appellate Body referenced this 
established approach in the context of the TBT Agreement: 
"We recall that, in United States – Measure Affecting Imports of Woven Wool Shirts 
and Blouses from India , we said the following about the burden of proof: 
                                                      
983 See, for instance, Articles 2.2, 2. 4, and 5.1.2 of the TBT Agreement. 
984 Colombia's third party written submission, paras. 64-65. 
985 See Mexico's response to Panel question No. 82 and Mexico's second written submission, para. 183.  WT/DS384/R 
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  … the burden of proof rests upon the party, whether complaining or 
defending, who asserts the affirmative of a particular claim or defence.  If that party adduces evidence sufficient to raise a 
presumption that what is claimed is true, the burden then shifts to the 
other party, who will fail unless it adduces sufficient evidence to 
rebut the presumption. 
In the context of the GATT 1994 and the WTO Agreement, precisely 
how much and precisely what kind of evidence will be required to establish such a presumption will n ecessarily vary from measure to 
measure, provision to provision, and case to case.  
(footnote omitted)"
986 
7.770  Article 12 addresses the "Special and Differential Treatment of Developing Country 
Members", and its beneficiaries are limited to a su bcategory of WTO Members.  However, neither 
this in itself nor the level of development of th e WTO Members in the subcategory should turn around 
the established normal distribution of burden of proof. 
7.771  Articles 12.3 and 12.1 are not termed as ex ceptions from other obligations in the 
TBT Agreement.  These Articles contain obligations additional to the rest of the Articles in the 
TBT Agreement.  And even if Articles 12.3 and 12 .1 of the TBT Agreement could be described as 
exceptions from other obligations, this in itself  would not be sufficient to shift the initial burden of 
proof to the respondent. As the Appellate Body e xplained in the context of the SPS Agreement, and 
later confirmed in the context of the TBT Agreement:987 
"The general rule in a dispute settlement proceeding requiring a complaining party to 
establish a prima facie  case of inconsistency with a provision of the SPS Agreement  
before the burden of showing consistency with that provision is taken on by the 
defending party, is not avoided by simply describing that same provision as an 
'exception'."988 
7.772  The panel in EC – Approval and Marketing of Biotech Products  also held that in the context 
of Article 10.1 of the SPS Agreem ent, which the panel described as the "equivalent provision" to 
Article 12.3 of the TBT Agreement989, the burden was clearly on the complaining party to prove that 
its development needs had not been taken into account: 
"Argentina argues that the European Comm unities has not provided any evidence 
which would prove that it has taken into account Argentina's special needs as a 
developing country Member.  This argument lacks merit, for it is incumbent on 
Argentina as the Complaining Party to a dduce evidence and argument sufficient to 
raise a presumption that the European Communities has failed to take into account Argentina's special needs as a developing country Member."
990 
7.773  Accordingly, we see no reason to depart from the established normal distribution of burden of 
proof in assessing Mexico's Article 12.1 and 12.3 claims .  It is not the respondent, the United States, 
                                                      
986 Appellate Body Report, EC – Sardines , para. 270 (footnote omitted).  See also, Panel Report, EC – 
Sardines , paras. 7.48-7.50. 
987 Appellate Body Report, EC – Sardines , para. 271. 
988 Appellate Body Report, EC – Hormones , para. 104. 
989 Panel Report, EC – Approval and Marketing of Biotech Products , footnote 1330. 
990 Panel Report, EC – Approval and Marketing of Biotech Products , para. 7.1622. WT/DS384/R 
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  that needs to establish that it has "take[n] account of [Mexico's] special development, financial and 
trade needs" "in the preparation and application of  [the COOL measure]".  In saying this, however, 
we are not calling into question that Article 12 impos es substantive obligations on the United States as 
a Member, and as a respondent in the current dispute. 
7.774  In line with the established normal distribution of the burden of proof, it is Mexico, the 
complainant bringing a claim under Article 12.3, th at bears the initial burden to make a prima facie  
case that the United States did not "take account of [Mexico's] special development, financial and trade needs" "in the preparation and applicati on of [the COOL measure]".  Once Mexico has 
succeeded in making a prima facie case, the burden is  on the United States, the respondent, to refute 
this. 
(iii) Meaning of the term "take account of" 
7.775  As regards the meaning of "take account of", the first question is whether, in general, 
this term involves a requirement for a Member to merely consider specific needs, views or positions, 
or also to act upon, and in accordance with, them. 
7.776  The dictionary defines "to take account of", as well as the similar term "to take into account" 
as:  "to take into consideration as an existing element, to notice".
991  This suggests that "to take 
account of" and "to take into account" mean to cons ider, but not necessarily to act in line with the 
specific need, view or position under consideration. 
7.777  This is confirmed by the meaning the panel in US – Continued Suspension gave to the term 
"take into account" in Article 5.2 of the SPS Agreement: 
"As noted above in the context of risk assessment techniques, taking available 
scientific evidence into account does not require that a Member conform its actions to 
a particular conclusion in a particular scientific study .  The available scientific 
information may contain a multiplicity of views and data on a particular topic.  It is 
the view of the Panel that the requirement in Article 5.2 is to ensure that a Member, 
when assessing risk with the aim of formulating an appropriate SPS measure, has as 
wide a range as possible of scientific informa tion before it to ensure that its measure 
will be based on sufficient scientific data  and supported by scientific principles."992  
(emphasis added) 
7.778  In EC – Approval and Marketing of Biotech Products , Argentina also made a claim under 
Article 10.1 of the SPS Agreement, which the pa nel described as the "equivalent provision" to 
Article 12.3 of the TBT Agreement.993  Like Article 12.3 of the TBT Agreement, the key obligation 
under Article 10.1 of the SPS Agreement is "to take  account of" the special needs of developing 
countries: 
"In the preparation and application of sanitary or phytosanitary measures, Members 
shall take account of  the special needs of developing country Members, and in 
particular of the least-developed country Members." (emphasis added) 
                                                      
991 See United States' second written submission, para. 178 and Exhibit US-140. 
992 Panel Report, US – Continued Suspension , para. 7.480. 
993 Panel Report, EC – Approval and Marketing of Biotech Products , footnote 1330.  WT/DS384/R 
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  7.779  The panel in EC – Approval and Marketing of Biotech Products emphasized that the 
obligation in Article 10.1 of the SPS Agreement is  to "take account of" the needs of developing 
countries, and interpreted this term in a restrictive manner: 
"Argentina's argument impli es that when an importing Member applies a measure 
which (i) treats exports originating in the territory of developing country Members in 
the same way as exports originating in th e territory of developed country Members 
and (ii) has a significant adverse effect on the developing countries' exports, the importing Member is acting inconsistently with its obligation under Article 10.1.  
Argentina suggests that in such situations  the exports of developing country Members 
are entitled under Article 10.1 to sp ecial and differential treatment vis-à-vis  the 
exports of developed country Members.  However, the obligation laid down in 
Article 10.1 is for the importing Member to 'take account' of developing country Members' needs.  The dictionary defines the expression 'take account of' as 'consider 
along with other factors before reaching a decision'.
994  Consistent with this, 
Article 10.1 does not prescribe a specific result to be achieved.   Notably, Article 10.1 
does not provide that the importing Memb er must invariably accord special and 
differential treatment in a case where a measure has lead [sic], or may lead, to a 
decrease, or a slower increase, in developing country exports. "995  (emphasis added) 
7.780  The same panel added that the needs of deve loping countries may be balanced against other 
interests: 
"While the European Communities must take account of the interests of developing 
country Members in applying its approval legislation, the European Communities may at the same time take account of other legitimate interests, including those of its 
own consumers, its environment, etc.  There is nothing in Article 10.1 to suggest that 
in weighing and balancing the various in terests at stake, the European Communities 
must necessarily give priority to the needs of Argentina as a developing country. "
996  
(emphasis added) 
7.781  Based on the approach to Article 10.1 of the SPS Agreement by the panel in EC – Approval 
and Marketing of Biotech Products and the interpretation of the term "take into account" by the panel 
in US – Continued Suspension , we find that Article 12.3 of the TBT Agreement does not amount to a 
requirement for WTO Members to conform their acti ons to the special needs of developing countries 
but merely to give consideration to such needs along with other factors before reaching a decision. 
7.782  We reach this conclusion in pa rt based on the panel report in EC – Approval and Marketing of 
Biotech Products .  Mexico points out the textual di fference between Article 10.1 of the 
SPS Agreement and Article 12.3 of the TBT Agreement,  in particular the absence from the former of 
the clause starting with "with a view to".  Accordi ng to Mexico, this makes the findings of the panel 
in EC – Approval and Marketing of Biotech Products  irrelevant in the context of Mexico's claim 
under Article 12.3 of the TBT Agreement in the current dispute.997 
7.783  However, as we explained above, the final cl ause of Article 12.3 of the TBT Agreement 
starting with the term "with a view to" is outside the operational part of that provision, and merely 
                                                      
994 (footnote original)  The Concise Oxford Dictionary , 10th edn., J. Pearsall (ed.) (Clarendon Press, 
1999), p. 8. 
995 Panel Report, EC – Approval and Marketing of Biotech Products , para. 7.1620. 
996 Panel Report, EC – Approval and Marketing of Biotech Products , para. 7.1621. 
997 See Mexico's response to Panel question Nos. 82 and 152. WT/DS384/R 
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  specifies the objective to be achieved by the ob ligation contained in the operational part.  
Accordingly, we reach our conclusion with regard to the specific meaning of the term "take account 
of" in Article 12.3 of the TBT Agreement independently  of the separate, final clause of that provision.  
Even considering that final clause together with  the operational part does not make a difference, 
in that it does not change the nature or scope of the action required under Article 12.3 but merely 
specifies its objective. 
7.784  Accordingly, we consider that the findings of the panel in EC – Approval and Marketing of 
Biotech Products,  on the meaning of "take account of the special needs of developing country 
Members" in Article 10.1 of the SPS Agreement, ar e relevant for interpreting the meaning of the 
clause "take account of the special development, financial and trade needs of developing country 
Members", in particular the term "take account of". 
7.785  As regards the practical meaning of the term "t ake account of", Mexico also references other 
WTO disputes interpreting the terms "acc ount shall be taken of" and "consider".
998  In particular, 
Mexico quotes US – Softwood Lumber V , where the Appellate Body held that, in the context of 
Article 2.2.1.1 of the Anti-dumping Agreement, "the  requirement to 'consider' evidence would not be 
satisfied by simply 'receiving evidence' or  merely 'tak[ing] notice of evidence'".999  Mexico also 
quotes US – Softwood Lumber VI , where the panel held that the term "consider" in Article 15.7 of the 
SCM Agreement entails that "consideration must go be yond a mere recitation of the facts in question, 
and put them in context".1000  Further, Mexico quotes the follo wing passage from the panel report on 
EC and certain member States – Large Civil Aircraft  on the meaning of the phrase "account shall be 
taken of" in Article 2.1(c) of the SCM Agreement: 
"To take something into account means to take something into reckoning or 
consideration;  to take something on notice.1001  Therefore, in the context of the third 
specificity factor, the last sentence of Article 2.1(c) requires that the length of time during which the relevant subsidy programme has been in operation must form part of 
the consideration or reckoning  of whether the amount of a subsidy granted to certain 
enterprises pursuant to that same subsidy programme is disproportionately large."
1002 
7.786  We agree with these interpretations of the term s "consider" and "take account of".  They show 
that the Member bound by these terms needs to accord active and meaningful consideration to certain 
factors.  Thus, in the context of Article 12.3 of th e TBT Agreement, the term "take account of" entails 
that Members are obliged to accord active and meani ngful consideration to the special development, 
financial and trade needs of developing country Members. 
7.787  As to what such active and meaningful consider ation means in practical terms, we do not read 
Article 12.3 of the TBT Agreement as prescribing any specific way.  In particular, while not excluding it, Article 12.3 does not specifically require WTO Members to actively reach out to developing countries and collect their views on their sp ecial needs.  Further, we do not interpret the 
term "take account of" in Article 12.3 of the TB T Agreement as an explicit requirement for Members 
to document specifically in their legislative process and rule-making process how they actively 
considered the special development, financial a nd trade needs of developing country Members.  
                                                      
998 See Mexico's response to Panel question No. 152. 
999 Mexico's response to Panel question No. 82 (citing Appellate Body Report, US – Softwood 
Lumber V , para. 133).  See also Mexico's response to Panel question No. 152. 
1000 Mexico's response to Panel question No. 82 (citing Panel Report, US – Softwood Lumber VI , 
para. 7.67).  See also Mexico's response to Panel question No. 152. 
1001 (footnote original)  The New Shorter Oxford Dictionary, Fourth Edition, p. 15. 
1002 Panel Report, EC and certain member States – Large Civil Aircraft , para. 7.969.  WT/DS384/R 
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  Indeed, the panel in EC – Approval and Marketing of Biotech Products  held that "it is not sufficient, 
for the purposes of establishing a claim under Article 10.1 [of the SPS Agreement], to point to the absence in the EC approval legislation of a re ference to the needs of developing country 
Members".
1003 
7.788  Indeed, there are a variety of ways in whic h Members may take account of the special 
development, financial and trade needs of developi ng country Members.  As explained above, this 
requires Members to accord active and meaningful consideration to such needs, entailing a positive 
obligation for the WTO Membership.  We now turn  to whether the United States has fulfilled its 
obligation in regard to the COOL measure. 
(iv) Assessment of Mexico's claim under Article 12.3 
7.789  Mexico argues that the United States breached  Article 12.3 of the TBT AGREEMENT by not 
having given Mexico an opportunity to comment  on the preparation of the COOL measure, 
in particular the 2002 Farm Bill. 
7.790  As explained above, however, we do not consid er that the United States had an explicit 
obligation, enforceable in WTO dispute settlement, to  reach out and collect Mexico's views during the 
preparation and application of the COOL measu re.  The United States is merely required under 
Article 12.3 to "take account of [Mexico's] special development, financial and trade needs" "in the 
preparation and application of [the COOL measu re]".  This means giving active and meaningful 
consideration to such needs. 
7.791  Mexico has not demonstrated that the United St ates failed to do this.  Mexico argues that the 
United States ignored Mexico's comments and the im pact that it knew the COOL measure would have 
on Mexican exports.1004  However, Mexico does not prove this.  In particular, we have no evidence 
from Mexico demonstrating that the United States h as failed to "take account of [Mexico's] special 
development, financial and trade needs" "in the pr eparation and application of [the COOL measure]" 
in the above sense. 
7.792  In fact, Mexico does not contest the United Stat es' arguments and evidence showing that the  
United States actively reached out to discuss the de velopment of the COOL measure with Mexico at 
the following occasions: 
(a) at least four opportunities for interested parties to provide formal comments on the 
COOL regulations1005; 
(b) a USDA briefing on 27 August 2008 on th e Interim Final Rule (AMS) for embassy 
officials1006; 
(c) a meeting on 11 September 2008 between AMS Administrator Lloyd Day and 
officials from the Mexican Embassy  to discuss COOL rule-making1007; 
                                                      
1003 Panel Report, EC – Approval and Marketing of Biotech Products , para. 7.1623. 
1004 See Mexico's opening oral statement at the fi rst substantive meeting, para. 48, opening oral 
statement at the second substantive meeting. para. 62 an d closing oral statement at  the second substantive 
meeting, para. 39. 
1005 See United States' first written submission, para . 60, United States' second written submission, 
para. 183 and Exhibits CDA-13, MEX-13, MEX-14, MEX-15, MEX-16, MEX-17, MEX-18, MEX-19 and 
MEX-20. 
1006 See United States' first written submission, para. 274 and United States' second written submission, 
para. 183.  WT/DS384/R 
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  (d) meetings of the United States – Mexico Consultative Committee on Agriculture, 
chaired by USDA and USTR officials, in October 2002, April 2003, May 2004, May 2007 and January 2008 to discuss COOL rule-making.
1008 
7.793  Nor does Mexico contest the United States' argu ments and evidence demonstrating that, in the 
context of the above consultations, Mexico  submitted comments on key elements of the 
COOL measure on 23 February 2004 and 15 August 20081009, and that high-level USDA officials 
indicated that Mexico's input will be taken into acc ount.  In particular, we have evidence before us 
that, in September 2003, the USDA Undersecretary sent a letter to the Secretary of Agriculture of Mexico stating that "[w]e will fully consider your comments ... as we develop the final rule".
1010  
Similarly, in October 2008, the USDA Secretary sent a letter to the Secretary of the Mexican 
Association of Secretaries of Rural Development requesting additional input on the rule-making as 
part of the Canada-Mexico Working Group by "e ncourag[ing] the Canada-Mexico Working Group to 
submit comments on this COOL regulation so that we can implement the program in a way that incorporates your input".
1011 
7.794  Further, Mexico does not dispute that the Un ited States introduced certain modifications to 
elements of the COOL measure in response to c oncerns expressed by Mexico, namely by softening 
the record-keeping requirements and by introducing th e commingling flexibility in part in response to 
Mexico's comments.1012 
7.795  We also note that the United States made  a public invitation to comment on the 2002 
Guidelines for the Interim Voluntary Country of  Origin Labeling of Beef, Lamb, Pork, Fish, 
Perishable Agricultural Commodities, and Peanuts (AMS).  The 2003 Proposed Rule (AMS) of 
October 2003 records this commenting process, and references inter alia "[t]estimony [by at least one 
commenter] that this law may violate United St ates trade obligations under the World Trade 
Organization".1013  Further, as regards the Interim Final Rule (AMS) of August 20081014, the 
comments section of the 2009 Final Rule (AMS)1015 explicitly references the United States' "trading 
partners" and responds to at least one concern expressed by them.1016 
7.796  Mexico argues that the United States failed to "take account of [Mexico's] special 
development, financial and trade needs" in partic ular in regard to the 2002 Farm Bill since the 
United States did not consult Mexico when developing that bill.1017  As we explained, however, under 
Article 12.3 of the TBT Agreement, the United Stat es did not have an explicit obligation to initiate 
such consultation. 
                                                                                                                                                                     
1007 See United States' first written submission, para. 274 and United States' second written submission, 
para. 183.  
1008 See United States' second written submission, para. 183.  
1009 See United States' second written submission, para. 184 and Exhibits US-19 and 127. 
1010 Exhibit US-141.  See also United States' second written submission, para. 183. 
1011 Exhibit US-142.  See also United States' second written submission, para. 183. 
1012 See United States' response to Panel question No. 84, United States' second written submission, 
para. 184 and Exhibits US-19 and 127. 
1013 68 FR 61945.  See also United States' opening or al statement at the first substantive meeting, 
para. 55. 
1014 See Exhibit CDA-4. 
1015 74 FR 2678 and 2679. 
1016 74 FR 2678.  See also Mexico's first written submission, para. 368 (citing 74 FR 2669). 
1017 Mexico's second written submission, paras. 180-182, opening oral statement at the second 
substantive meeting, para. 61, closing oral statement at the second substantive meeting, para. 40 and Mexico's 
response to Panel question Nos. 153-155.  WT/DS384/R 
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  7.797  Although the COOL measure was introduced in its initial form by the 2002 Farm Bill, it took 
effect as a fully developed and enforceable legal requ irement for the products at issue in this dispute 
only on 30 September 2008.  Mexico does not contest that it was consulted by the United States well 
before this later date.1018  Mexico even recognizes that it expressed its views both to USDA and the 
US Congress:  "[d]uring the preparation process of the COOL measure, both the United States 
Congress and the USDA were made aware that the COOL measure would harm imports of Mexican 
feeder cattle".1019  The 2008 Farm Bill significantly amende d the 2002 Farm Bill.  Therefore, any 
opportunity to comment on the 2008 Farm Bill effec tively involved an opportunity to express views 
on the 2002 Farm Bill as it was being developed by the United States towards what finally became 
what we address as the statutory part of the C OOL measure in this dispute.  In fact, the 
2002 Farm Bill introduced specific rules only with re gard to beef and pork exclusively born, raised 
and slaughtered in the United States.1020  The specific provisions on what became Labels B, C and D 
and the ground meat label under the final version of the COOL measure, were introduced only by the 
2008 Farm Bill, following consultati ons with Mexico on various occasions.1021 
7.798  It is the finalized version of the COOL measure th at Mexico calls into question in its claims in 
the current dispute, including in its claim under Arti cle 12.3 of the TBT Agreement.  In fact, Mexico 
argues that we should treat the various instrument s challenged in this dispute as a single measure.  
We have chosen to do that for the most part.  Acco rdingly, it is inappropriate for Mexico to single out 
one of the earliest instruments comprised in the C OOL measure, and it would be inadequate also for 
us to review whether the United States violated Artic le 12.3 of the TBT Agreement with regard to that 
single instrument. 
7.799  In light of the above considerations a nd the various documents showing how the 
United States considered Mexico's special developm ent, financial and trade needs in an active and 
meaningful way, we conclude that Mexico has not demonstrated  that the United States failed to "take 
account of [Mexico's] special development, fina ncial and trade needs" "in the preparation and 
application of [the COOL measure]". 
7.800  In light of this finding, we refrain from a ddressing other aspects of Mexico's Article 12.3 
claim, and turn to Mexico's claim unde r Article 12.1 of the TBT Agreement. 
(v) Assessment of Mexico's claim under Article 12.1 
7.801  Article 12.1 of the TBT Agreement stipulates that: 
"Members shall provide differential and mo re favourable treatment to developing 
country Members to this Agreement, th rough the following provisions as well as 
through the relevant provisions of other Articles of this Agreement." 
7.802  As explained above, Mexico claims that the United States violated this provision by having 
breached Article 12.3 of the TBT Agreement. 
7.803  Given that Mexico has failed to establish the viol ation of Article 12.3 of the TBT Agreement, 
we need not pursue Mexico's claim under Article 12.1 of the TBT Agreement;  we conclude that 
Mexico has also failed to demonstrate the violation of Article 12.1. 
                                                      
1018 United States' second written submission, para. 183. 
1019 Mexico's first written submission, para. 367.  See also Mexico's response to Panel question No. 82. 
1020 See 7 U.S.C. § 1638a(a)(2). 
1021 See 7 U.S.C. § 1638a(a)(2). WT/DS384/R 
WT/DS386/R Page 192 
 
 
  (c) Conclusion on Mexico's claim under Articles 12.1 and 12.3 
7.804  Accordingly, we find that Mexico has not  established that the United States acted 
inconsistently with Article 12.3 of the TBT Agreement. 
E. C
LAIMS UNDER THE GATT 1994 
1. The complainants' claims under the GATT 1994 
7.805  The complainants advance claims against the measures at issue under Articles III:4 
and X:3(a) of the GATT 1994. 
7.806  We note that there is a distinction between Articl es III:4 and X:3(a) in respect of the type of 
measures subject to the obligations under th e respective provisions.  The obligation under 
Article X:3(a) applies to the administration of the laws, regulations, decisions and rulings of the kind 
falling within the scope of Article X:1, but not to such laws and regulations themselves.1022  T h e  
consistency of laws and regulati ons themselves should be examined  under the relevant provisions of 
the GATT 1994, such as Article III:4, and not Article X:3(a).1023 
7.807  The complainants' claims under Article III:4 c oncern both the COOL measure and the Vilsack 
letter.1024  In accordance with our deci sion to examine the COOL meas ure separately from the Vilsack 
letter, however, we examined the COOL measure unde r Article 2.1 of the TBT Agreement.  As we 
found that the Vilsack letter was not a technical re gulation, we did not proceed to examine the letter 
under Article 2.1.  The COOL measure was then found inconsistent with the national treatment 
obligation under Article 2.1.1025  Given the close connection between Article 2.1 of the 
TBT Agreement and Article III:4 of the GATT 1994 w ith respect to the nature of the obligations1026 
and in light of our findi ng under Article 2.1 of the TBT Agreement, we consider it unnecessary to 
examine the complainants' claims in respect of the COOL measure under Article III:4 of the 
GATT 1994.1027 
7.808  As regards the Vilsack letter, Canada challeng es it under Article X:3(a).  Mexico also brought 
a claim under Article X:3(a) against the alleged shif ts in the interpretation of the COOL measure as 
reflected in the USDA's guidelines, non-public pressure by the US government on individual 
                                                      
1022 Appellate Body Reports, EC – Bananas III , para. 200; EC – Poultry , para. 115.  In this regard, the 
Appellate Body held in EC – Bananas III  that "[t]he text of Article X:3(a) clearly indicates that the requirements 
of "uniformity, impartiality and reasonableness" do not apply to the laws, regulations, decisions and rulings 
themselves , but rather to the administration  of those laws, regulations, decisions and rulings." (para. 200).  The 
Appellate Body reiterated this view in EC – Poultry , where it held that "Article X relates to the publication  and 
administration  of "laws, regulations, judicial decisions and administrative rulings of general application", rather 
than to the substantive content  of such measures." (para.115). 
1023 Appellate Body Report, EC – Bananas III , para. 200. 
1024 Canada's first written submission, para. 219;  Mexico's first written submission, para. 225.  See 
paras. 3.1-3.3. 
1025 See paras. 7.420, 7.547-7.548. 
1026 See Section VII.D.2. 
1027 In addressing the principle of judicial economy, the Appellate Body clarified that panels need not 
examine all legal claims made by a complaining party.  The Appellate Body stated that, in line with the aim of 
the WTO dispute settlement system as set out in Article s 3.4 and 3.7 of the DSU, panels may make findings 
only on those claims that such panels concluded were n ecessary to resolve the particular matter (Appellate Body 
Report, US – Wool Shirts and Blouses , pp. 17-20). 
Considered against the standard applied for the panels' exercise of judicial economy, we consider that, 
in this dispute, given our finding under Article 2.1 of the TBT Agreement, we need not make findings on the 
national treatment obligation embodied in Article III:4 of the GATT 1994.  WT/DS384/R 
 WT/DS386/R 
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  companies, and the Vilsack letter.1028  Accordingly, in this section, we will examine the complainants' 
claims concerning the United States' act of admini stering the COOL measure under Article X:3(a).  
If the Vilsack letter is found not to fall within the sc ope of Article X:3(a), we will proceed to examine 
whether it falls within the scope of Article III:4. 
2. Article X:3(a) 
7.809  Canada and Mexico claim that the United States  acted inconsistently with its obligations 
under Article X:3(a) with respect to its administ ration of the COOL measure.  Canada's claim is 
confined to a "reasonable" administration of the COOL measure, whereas Mexico's claim concerns all 
requirements under Article X:3(a), namely a "reasonable", "uniform", and "impartial"1029 
administration of the COOL measure. 
7.810  Article X:3(a) provides: 
"Each contracting party shall administer  in a uniform, impartial and reasonable 
manner all its laws, regulations, decisions  and rulings of the kind described in 
paragraph 1 of this Article." 
7.811  Article X:1 in turn reads: 
"Laws, regulations, judicial decisions and administrative rulings of general 
application, made effective by any contracting party, pertaining to the classification or the valuation of products for customs purposes, or to rates of duty, taxes or other 
charges, or to requirements, restrictions or prohibitions on imports or exports or on 
the transfer of payments therefore, or affecting their sale, distribution, transportation, 
insurance, warehousing inspection, exhibiti on, processing, mixing or other use, ..." 
7.812  To establish a violation of Article X:3(a), a co mplaining party must show that the responding 
Member administers  the legal instruments of the kind described in Article X:1 in a manner that does 
not meet the standard of uniformity , impartiality , or reasonableness set out in Article X:3(a).
1030 
7.813  In the current dispute, for the complainants to prove their claim under Article X:3(a), they 
must establish the following elements:  (i) the C OOL measure falls within the scope of laws, 
regulations, decisions and rulings of the kind described in Article  X:1;  (ii) the United States 
"administered" the COOL measure;  and (iii) the administration of the COOL measure by the United States was not uniform, impartial or reasonable. 
(a) Laws, regulations, decisions and rulings of the kind described in Article X:1 
7.814  The parties do not dispute that the COOL me asure falls within the category of "laws, 
regulations, decisions and rulings of the kind d escribed in paragraph 1" of Article X of the 
GATT 1994 and referenced in Article X:3(a).
1031 
                                                      
1028 Canada's first written submission, para. 227;  opening oral statement at the first substantive 
meeting, para. 2;  second written submission, para. 108;  opening oral statement at the second substantive 
meeting, paras. 73-75.  Mexico's fi rst written submission, para. 378;  opening oral statement at the first 
substantive meeting, paras. 49-51;  second written submission, paras. 185-189;  opening oral statement at the 
second substantive meeting, paras. 65-68. 
1029 Mexico's second written submission, paras. 18 5 and 189.  Mexico's claim on the partial 
administration by the United States of  the COOL measure is presented for the first time in its second written 
submission. 
1030 Panel Report, Thailand – Cigarettes (Philippines) , para. 7.866. WT/DS384/R 
WT/DS386/R Page 194 
 
 
  7.815  We agree with the parties' view on this issue.   For the purposes of this dispute, we use the 
term "COOL measure" to refer to the COOL statute and the 2009 Final Rule (AMS).  These are formal legal instruments, which qualify as either "laws" or "regulations" within the meaning of 
Article X:1 of the GATT 1994. 
7.816  We therefore proceed to the next element of Article X:3(a), namely whether the complainants 
properly identified an act of the United States that amounts to the "administration" of the 
COOL measure. 
(b) "Administer" its laws and regulations 
(i) Main arguments of the parties 
7.817  Canada  argues that the exact "US government act of administration" in the present case is the 
Vilsack letter, because it is a means of "putting into practical effect, or applying" the 2009 Final Rule 
(AMS) and the underlying statutory provisions, which corresponds to the definition of the term "administer".
1032  The Vilsack letter created uncertainty as to the precise requirements of the 
COOL measure, thereby administering the COOL measure in an unreasonable manner.1033  According 
to Canada, the requirements in  the Vilsack letter went be yond the requirement of the 
COOL legislation and the 2009 Final Rule (AMS):1034  it encouraged industry to take action that was 
not required by the COOL legislation and the 2009 Final Rule (AMS).1035  This was accompanied by a 
threat to US market participants who were followi ng the letter of the COOL legislation and the 2009 
Final Rule (AMS).  The threat involved the imposit ion of even more onerous requirements if market 
participants did not go beyond the law's requireme nts by complying with the Vilsack letter's 
"suggestions for voluntary action".1036 
7.818  Mexico argues that the act of administration lies in the different changes made to the 
COOL measure during the implementation of the regu lations, as reflected in the associated guidelines 
issued by USDA1037, non-public pressure by the US government on individual companies1038, and the 
Vilsack letter.1039  According to Mexico, acts taken by US DA regarding changes in the criteria of 
compliance are actions taken "for purposes of the administration" of the measure.1040  Mexico submits 
that the inconsistent and unpredictable guidance from USDA was not part of the legislative or 
rulemaking process, but the action of an agency not reflected in statutes or regulations.1041  Mexico 
contends that the continuing changes in USDA policy,  first indicating that mi xed origin labels were 
permissible, then discouraging them, contributed to the disruptions experienced by the Mexican 
                                                                                                                                                                     
1031 Canada's first written submission, para. 226;  Mexico's first written submission, para. 376.  The 
United States does not contest that th e COOL measure is qualified as "laws,  regulations, decisions and rulings of 
the kind described in paragraph 1" of Article X of the GATT 1994. 
1032 Canada's response to Panel question No. 85. (italics in the original). 
1033 Canada's first written submission, paras. 228-231. 
1034 Canada's first written submission, para. 228. 
1035 Canada's first written submission, para. 229. 
1036 Canada's first written submission, para. 230. 
1037 Mexico's second written submission, para. 187, referring to Exhibit CDA-29. 
1038 Mexico's first written submission, paras. 258-259;  second written submission, para. 188 
(Exhibits MEX-33, MEX-55, 56 and 57). 
1039 Mexico's first written submission, para. 378;  re sponse to Panel question No. 85; second written 
submission, para. 185. 
1040 Mexico's opening oral statement at the s econd substantive meeting, paras. 67-68. 
1041 Mexico's response to Panel question No. 86.  WT/DS384/R 
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  industry.1042  The COOL measure has not been administ ered in a uniform, impartial and reasonable 
manner, contrary to Article X:3(a) of the GATT 1994.1043 
7.819  The United States argues that the complainants have fa iled to provide any evidence relating 
to the administration of the COOL measures at all.1044  The United States submits that the 
complainants cannot base their claims on the Vilsack letter because the issuance of that letter does not 
fall within the scope of Article X:3(a).1045  That provision applies to the manner in which WTO 
Members "administer" their laws, regulations, decisi ons and rulings referred to in Article X:1.  The 
United States contests that the Vilsack letter would ha ve "put into practical effect" or "applied" the 
COOL requirements.1046  Instead of dealing with the administration of either the statute or the 2009 
Final Rule, the Vilsack letter merely suggests that certain market participants can voluntarily take 
actions that would go beyond what the COOL statute or 2009 Final Rule (AMS) require.1047 The 
statement in the letter that "it pertains to the implementation of the Mandatory Country of Origin 
Labelling (COOL) Final Rule" merely indicates that the letter addresses the implementation of the 2009 Final Rule.
1048 
7.820  The United States also calls into question Mexico's characterization of the term 
"administration" because that term does not extend to the steps and actions related to the making of an 
administrative decision.  The actions leading to th e 2009 Final Rule (AMS) do not "put into practical 
effect" or "apply" the COOL requirements, because  they occurred before the enactment of the 2009 
Final Rule (AMS).1049 
(ii) Analysis by the Panel 
Canada's argument 
7.821  The term "administer" in Article X:3(a) refers to "putting into practical effect or applying" a 
legal instrument of the kind described in Article X:1.1050  We also recall the panel's observation in 
Argentina – Hides and Leather regarding the proper scope of Article X:3(a) that the relevant question 
is "whether the substance of such a measure is administrative in nature or, instead, involves 
substantive issues more properly dealt with  under other provisions of the GATT 1994".1051 
7.822  Canada argues that the Vilsack letter is an act of administration because it is a means of 
"putting into practical effect or applying" the COOL measure. 
                                                      
1042 Mexico's response to Panel question No. 85;  Mexico's second written submission, para. 188. 
1043 Mexico's second written submission, para. 189. 
1044 United States' first written submission, para. 289. 
1045 United States' first written submission, para. 291. 
1046 United States' first written submission, paras, 291-292 (citing Appellate Body Report, EC –  
Bananas III , para. 200); and second written submission, paras. 187-189. 
1047 United States' first written submission, para. 292; opening oral statement at the first substantive 
meeting, para. 59; and second written submission, paras. 187-188. 
1048 United States' response to Panel question No. 87. 
1049 United States' second written submission, paras. 187-189. 
1050 Appellate Body Report, EC – Selected Customs Matters , para. 224.  See also Canada's second 
written submission, para. 108, footnote 164.  In EC – Selected Customs Matters , the Appellate Body clarified 
that "the term 'administer' may include administrative processes", which can be understood "as a series of steps, 
actions, or events that are taken or occur in relation to the making of an administrative decision" (Appellate 
Body Report, EC – Selected Customs Matters , para. 224). 
1051 Panel Report, Argentina – Hides and Leather , para. 11.70 (emphasis added). WT/DS384/R 
WT/DS386/R Page 196 
 
 
  7.823  We clarified above that the legal instrument  being administered within the meaning of 
Article X:3(a) in this case is the COOL measu re (i.e. the COOL statute and the 2009 Final Rule 
(AMS)).  We must determine therefore whether Ca nada has demonstrated that the United States put 
into practical effect or applied the COOL measure by issuing the Vilsack letter. 
7.824  As previously noted
1052, the Vilsack letter starts with the statement that it pertains to the 
implementation of the 2009 Final Rule (AMS).  The essence of the Vilsack letter is that Secretary Vilsack announced that the 2009 Final Rule (AMS) would enter into force as scheduled by the 
previous administration and, at the same time , suggested that, based on "concerns" with the 
requirements set out in the 2009 Final Rule (AMS),  industry take more stringent voluntary actions. 
7.825  Regarding the circumstances surrounding the issuan ce of the Vilsack letter, the United States 
explains that, in accordance with the White Hou se directive issued by the new administration, 
Secretary Vilsack reviewed the Interim Final Rule (AMS), which is one of the regulations developed 
by the previous administration that had not yet taken effect.
1053  Having reviewed the 2009 Final Rule 
(AMS), Secretary Vilsack sent the letter to US in dustry indicating that the 2009 Final Rule (AMS) 
would take effect without modifications and in cluding certain suggestions that companies could 
follow on a voluntary basis to provide even more information to consumers.  Assuming that, as the 
United States submits, Secretary Vilsack intended to allow the regulations to go into effect as drafted 
by the previous administration, it is not clear wh y the letter included suggestions for more stringent 
voluntary action by the industry than is required under the 2009 Final Rule (AMS).  According to the United States, Secretary Vilsack chose to issue th e letter instead of amending the 2009 Final Rule 
(AMS), because he did not intend to change US law but to allow the regulations to go into effect as 
drafted by the previous administration.
1054 
7.826  The United States put forward that other US secretaries and high-ranking administration 
officials have also issued letters of this kind to industry or made similar announcements to interested 
parties.  Such other communications as presented by the United States – a podcast by the Interior 
Secretary on the importance of protecting polar bears; a letter from the Food and Drug Administration 
on the potential danger of an unsafe amount of vitami n D for infants;  and a letter from the Secretary 
of Health and Human Services to CEOs of insura nce companies to justify premium hikes – do not 
suggest, in our view, any particular similarity in  nature or in content to the Vilsack letter.1055  They 
nonetheless show the authority and discretion grante d to heads of US administrative agencies in 
general, and confirm the administrative authority of Secretary Vilsack. 
7.827  The contents of the Vilsack letter and th e circumstances surrounding its issuance, as 
explained by the United States, therefore indicate th at the issuance by Secretary Vilsack of the letter 
to the US industry falls within the broad scope of  administrative authority given to USDA regarding 
the application of the COOL measure, including an y guidance on the specific requirements under the 
measure to be provided to the public. 
7.828  In fact, as noted above, the letter was issued to  confirm the implementation of the 2009 Final 
Rule (AMS) after having reviewed the issues of law and policy relating to the requirements, in 
accordance with the mandate given by the new presi dent.  The directive issued by the White House 
indicates the possibility of revisiting laws and po licies of new and pending regulations, including the 
                                                      
1052 See para. 7.123. 
1053 United States' response to Panel question No. 4, referring to the directive from the White House 
(Exhibit US-62).  The directive states that as way of managing the federal regulatory process at the beginning of 
his Administration, President Obama sought to review and approve any new or pending regulations. 
1054 United States' response to Panel question No. 4. 
1055 Exhibits US-63, 65.  WT/DS384/R 
 WT/DS386/R 
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  2009 Final Rule (AMS).  Therefore, in the case of  the 2009 Final Rule (AMS), the Vilsack letter 
effectively confirmed the application of the 2009 Fi nal Rule (AMS), which we consider falls within 
the scope of the administration of the COOL measure. 
7.829  In coming to this conclusion, we are well aware that the issuance of the concerned letter is 
distinguishable from situations where USDA "applies" the specific requirements under the 
COOL measure in particular instances.  Despite th e absence of any specific instance of application, 
the context in which the letter was issued by S ecretary Vilsack to industry in general shows a 
sufficient basis for the letter to constitute an act of administering the COOL measure. 
7.830  We therefore conclude that the issuance of the Vilsack letter falls within the scope of the term 
"administer" under Article X:3(a). 
Mexico's argument 
7.831  Unlike Canada, Mexico does not focus only on  the Vilsack letter to identify acts of 
administration of the COOL measure.  It is our u nderstanding of Mexico's argument that the guidance 
from USDA on the labelling requirements under th e COOL measure, which allegedly changed 
throughout the rule-making process, is an act taken for the purposes of administering the 
COOL measure.  According to Mexico, the con cerned guidance from USDA is reflected in the 
associated guidelines issued by USDA, the "non-publ ic pressure by the US government on individual 
companies"1056, and the Vilsack letter. 
7.832  The following table summarizes the evidence re ferenced by Mexico to demonstrate the 
guidance by USDA, and how this evidence relates to  the regulatory rule-making process (highlighted 
in grey in the table) concerning the implementation of the COOL statute. 
Categorization 
by Mexico Exhibit Date Content 
Interim Final Rule (AMS) issued (01/08/2008) 
USDA 
guidelines USDA guidelines 
(FAQ) 
(CDA-29)1057  11/09/2008 USDA advised that Label B can be used for Label A meat 
                                                      
1056 We note that the so-called "non-public pressu re" is Mexico's own characterization of certain 
evidence  as described in the table in paragraph 7.832. 
1057 In its second written submission, Mexico refers to the concerned exhibit submitted by Canada 
(Mexico's second written submission, para. 187 ). WT/DS384/R 
WT/DS386/R Page 198 
 
 
  Interim Final Rule (AMS) en tered into force 30/09/2008 
USDA 
guidelines Farm and Dairy 
website 
 (MEX-83) 30/09/2008 Article referring to the US DA guidelines of 11 September 2008  
Non-public 
pressure "Tyson Cool 
With Federal 
Labeling Law" 
(MEX-55) 16/10/2008 Article referring to the USDA's intention of closing a "loophole" 
that allowed meat processors to  use Label B for most of their 
products. 
Non-public 
pressure 
 "The Pig Site" 
(MEX-56) 16/10/2008 "Reuters reports that the leading U.S. beef and No. 2 pork producer 
had initially planned on categorizi ng its beef and pork cuts with 
Label B, but abandoned that plan after receiving feedback from 
government officials and some industry groups". 
Non-public 
pressure 
 JBS letter 
(MEX-57) 23/10/2008 JBS letter to customers explaining that their initial intention was to 
label the majority of their product under the category B label, but 
that due to the evolving interpretation of the COOL measure they 
would opt for producing the majority  of meat under the category A 
label.  
2009 Final Rule (AMS) issued (15/01/2009)  
Vilsack letter sent to industry (20/02/2009) 
2009 Final Rule (AMS) entered into force (16/03/2009)   
Non-public 
pressure Tyson brochure 
to costumers 
(MEX-33) April 2009 Tyson letter to customers explai ning that although their initial 
compliance approach was using Label B for most of their products, 
input from government officials led th em to shift to Label A for the 
majority of products. 
 
7.833  We consider that the act of providing guidance on the meaning of specific requirements of a 
measure amounts to an act of administering such measu re within the meaning of Article X:3(a).  It is 
within the right of government agencies to provi de businesses and the public with the guidance on the 
meaning of the specific requirements under the releva nt regulations.  In our view, USDA "put into 
practical effect" the COOL measure by providing guidance on the labelling requirements.  As the 
authority implementing the COOL measure, USDA advised the subjects of the COOL requirements 
on how to comply with the specific labelling requirements. 
7.834  We proceed to examine whether Mexico has est ablished that USDA provided such guidance 
with respect to the COOL measure.  Specifically , Mexico submitted three categories of evidence, 
namely the USDA guidelines, the non-public pressure, and the Vilsack letter, arguing that these show 
the act of USDA providing guidance to the industry. 
7.835  First, regarding the USDA guidelines, Mexico re fers to a list of "frequently asked questions" 
published by USDA on 11 September 2008 and the Fa rm and Dairy website in which the same 
guidelines were referenced.1058  Specifically, Mexico argues that the administrative guidance at issue 
is the following: 
"Q. Can a retailer, like a meat packer, declar e the origin of meat products derived 
from livestock born, raised, and slaughtered  in the United States (i.e. Product of 
                                                      
1058 Exhibits CDA-29, MEX-83.  Canada presents further evidence on other USDA guidelines.  See 
Exhibits CDA-7, 30 and 31.    WT/DS384/R 
 WT/DS386/R 
 Page 199 
 
 
  USA) as a mixed origin label such as Product of the United States, Canada, and 
Mexico?  A. Yes. Retailers are permitt ed to market U.S. produced meat products under a 
mixed origin label declaration."
1059 
 
7.836  As regards the second category of guidance by USDA, described by Mexico as the so-called 
"non-public pressure" from the US government, Mexico  refers to two articles and two letters from 
meat producers.  Mexico submits that these exhibits demonstrate that USDA subsequently reversed 
the initial guidance provided in the USDA guidelines of 11 September 2008 and privately contacted major US meat processors to advise th em not to use mixed origin labels.  We note that the two letters 
from meat producers indicate their intention to la bel the majority of their meat products under 
Label A in light of certain input from the US government.
1060  Both letters show that, to comply with 
the COOL requirements, these companies had initially intended to label the majority of their products 
under Label B.  However, this initial compliance approach changed afterwards to labelling the 
majority of their meat products under Label A.  Specifically, the letter from Tyson Fresh Meats, Inc. 
to customers states in relevant part: 
"[The initial approach] involved offering the majority of our beef and pork cuts under 
the multi-country Category B label ... Based on the input we have since received from 
government officials and various industr y groups, we now believe this initial 
compliance approach will not be viable in the longterm. ... Our approach will be to 
use the "U.S." or Category A label on a ll of our premium beef programs beginning 
early 2009".1061 
7.837  The letter from JBS USA, Inc. to cu stomers similarly establishes that: 
"During the development of our policy on  Country of Origin Labeling (COOL) for 
beef products JBS made the decision to label the majority of our products under the Category B label ... [A]s the interpretation of  Country of Origin Labeling continues to 
evolve, we feel it is essential that we ad apt to the most current understanding of the 
regulation. ... JBS has elected to begin tr ansitioning to a "Product of U.S.A." label on 
the majority of our beef products. This change will occur during the next several 
months".
1062 
7.838  Mexico further refers to two press articl es, one written by Tom Johnston and another 
published on a website called the "Pig Site".  These articles describe the chang es in Tyson's approach 
in how to comply with the COOL measure.1063  One article reports that the initial compliance 
approach was abandoned after receiving feedb ack from the government and industry groups.1064  The 
other article indicates that USDA worked to clos e the "loophole" reflected in the first compliance 
approach by the industry, consideri ng that "the law seeks to differen tiate US meat products from those 
of other countries".1065 
                                                      
1059 Mexico's second written submission, para. 187, referring to Exhibit CDA-29. 
1060 Exhibits MEX-33, 55, 56 and 57. 
1061 Exhibit MEX-33. 
1062 Exhibit MEX-57. 
1063 Exhibits MEX-55 and 56. 
1064 Exhibit MEX-56. 
1065 Exhibits MEX-55 and 83. WT/DS384/R 
WT/DS386/R Page 200 
 
 
  7.839  Of the above evidence referenced by Mexico , the USDA guidelines of 11 September 2008 
and the Vilsack letter are instruments issued by the US government, whereas press articles and letters 
from meat producers are not. 
7.840  We consider that the issuance by the US government of instruments such as the USDA 
guidelines of 11 September 2008 and the Vilsack letter constitutes acts of administering the 
COOL measure.  As stated above, the act of providing guidance on the meaning of specific requirements under a measure, for instance by publishi ng "frequently asked questions", is an act of 
administering such measure within the meaning of Article X:3(a).  We also recall our earlier conclusion that the issuance of the Vilsack letter is an act of administration under Article X:3(a).
1066 
7.841  We are further provided with press articles and indus try letters to their customers.  In this set 
of evidence, references are made to certain feedb ack and input from the US government regarding the 
labelling requirements under the COOL measure.  Me xico attempts to show that certain contacts 
between meat producers and USDA, as referenced  in these exhibits, have guided these meat 
producers' decision on how to comply with the labe lling requirements.  Specifically, the initial USDA 
guidance as illustrated in the USDA guidelines of 11 September 2008 appears to have led meat 
producers to decide to label most of their products  under category B.  The evidence implies that, in 
light of a subsequent change in the guidance from the US government, certain producers chose to 
adopt a different labelling policy, na mely to label the majority of muscle cut meats under category A.  
Despite the absence of evidence demonstrating sp ecific contacts between USDA and meat producers 
as referenced in these exhibits, we can noneth eless infer from them that USDA provided meat 
producers with certain input or guidance on the la belling requirements.  We also note that the 
United States has not put forward an argument that  such input or guidance from USDA as mentioned 
in these exhibits did not exist. 
7.842  The evidence as a whole therefore shows that USDA provided guidance to meat producers.  
This, in our view, constitutes an act of admini stration within the meaning of Article X:3(a). 
(c) "Not reasonable" administrati on of laws and regulations 
(i) Main arguments of the parties 
7.843  According to Canada , the Vilsack letter constitutes unreasonable administration of the 
COOL statute and the 2009 Final Rule (AMS).1067 
7.844  Canada argues that the Vilsack letter constitut es government action that lies outside of the 
normal enforcement of laws and regulations in the United States and therefore is unreasonable.1068  
The Vilsack letter addresses the implementation of the Final Rule and amounts to "regulation-
making" through a public letter invoking the intent of the US Congress.1069  Canada emphasizes that 
threatening the US industry with the possibility of reopening the 2009 Final Rule (AMS) and 
                                                      
1066 See para. 7.830. 
1067 Canada's first written submission, para. 231.  Canada quotes Dominican Republic – Import and 
Sales of Cigarettes , where based on the dictionary definition, the panel interpreted the term "reasonable" as 
referring to notions such as "in accordance with reason",  "not irrational or absurd",  "proportionate", "having 
sound judgement", "sensible", "not asking for too much", "within the limits of reason, not greatly less or more 
than might be thought likely or appropriate", "artic ulate" (Canada's first written submission, para. 231, 
footnote 262, referencing Panel Report, Dominican Republic – Import and Sales of Cigarettes , para. 7.385 and 
footnote 589). 
1068 Canada's first written submission, para. 231. 
1069 Canada's second written submission, para. 111.  WT/DS384/R 
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  imposing more onerous requirements if the indus try did not comply with Secretary Vilsack's 
"suggestions for voluntary action" amounts to unr easonable administration of the COOL measure. 
7.845  Canada submits that the available evidence in th e form of witness statements, letters from US 
slaughterhouses and econometric analyses demonstrates compliance with the Vilsack letter.1070  
Canada maintains that the Vilsack letter had an impact on the industry, because of its timing and 
circumstances, the position of the person who signed the letter, the public nature of the letter, the 
directions given to US industry, and the explicit threat backing up Secretary Vilsack's directions.1071  
Therefore, according to Canada, the United States h as violated its obligation under Article X:3(a) of 
GATT 1994  to administer its laws, regulations and admini strative rulings of general application in a 
reasonable manner.1072 
7.846  Mexico  argues that the administration of the CO OL measure, characterized by shifts in 
interpretation and guidance by USDA on its statutory and regulatory provisions, has been anything but predictable and reasonable.
1073  Mexico argues that the administration of the details of the 
COOL measure changed over the course of the In terim Final Rule (AMS) and the 2009 Final Rule 
(AMS) and the associated guidelines issued by USDA ove r this period.  The recurrent changes of the 
USDA policy, which first allowed the use of mixed or igin labels and then discouraged it, are further 
evidence of unreasonable administration.1074 
7.847  These uncertainties continued with the Vilsack letter, which suggested additional practices 
and threatened to modify the COOL measure if such  practices were not followed.  Mexico contends 
that the Vilsack letter is part of a series of ac tions taken by the US government to preclude the 
industry from using foreign cattle.  As a clear sign of  effect of government input through the Vilsack 
letter, certain US meat processors have cha nged their initial compliance approach to the 
COOL requirements.1075  Thus, the administration of a law or regulation in such a manner cannot 
amount to uniform (i.e. predictable) and reas onable administration within the meaning of 
Article X:3(a) of the GATT 1994. 
7.848  The United States  contends that Canada and Mexico ha ve failed to demonstrate that the 
COOL measures have been administered in an unreasonable manner, either through the issuance of 
the Vilsack letter or via the changes made to the implementing regulations during their 
development.1076  According to the United States, the complainants have not presented evidence 
establishing behaviour by USDA in administering th e COOL measures that has been unreasonable in 
any sense.1077  Since the Vilsack letter does not admi nister the COOL measures at all, the 
complainants are wrong to argue that the letter is an  "unreasonable" administration of those measures.  
Further, Mexico has adduced no evidence to suggest  that any decisions made to the implementing 
regulations as they evolved through the regulat ory process were "irrational" or "absurd". 
                                                      
1070 Canada's second written submission, para. 106. 
1071 Canada's second written submission, para. 103. 
1072 Canada's first written submission, para. 232. 
1073 Mexico's first written submission, paras. 377, 378, referring to the Panel Report, Dominican 
Republic – Import and Sales of Cigarettes , para. 7.385 and footnote 589; second written submission, 
paras. 185-186. 
1074 Mexico's second written submission,  para. 188, referring back to its first written submission, 
para. 258 (Exhibits MEX-33, 55, 56, 57 and 83); opening oral statement at the second substantive meeting, 
paras. 67-68. 
1075 Mexico's opening oral statement at the first su bstantive meeting, paras. 50-51. (Exhibit MEX-33) 
1076 United States' first written submission, para. 297. 
1077 United States' first written submission, para. 299. WT/DS384/R 
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  7.849  The United States considers that the complainants have failed to demonstrate that the issuance 
of the Vilsack letter or the development of the 200 9 Final Rule were unreasonable.  The Vilsack letter 
was issued in accordance with a directive from the Obama Administration to review all pending 
regulations of the previous Administration.  Some  of the changes during the development of the 2009 
Final Rule (AMS), such as the flexibility on commi ngling, served to address the concerns of the 
complainants.
1078 
(ii) Analysis by the Panel 
7.850  The term "reasonable" is defined as "in accordan ce with reason", "not irrational or absurd", 
"proportionate", "sensible", and "within the limits of  reason, not greatly less or more than might be 
thought likely or appropriate".1079  We assess the parties' claims of not reasonable administration in 
light of these definitions. 
7.851  In our view, whether an act of administrati on can be considered reasonable within the 
meaning of Article X:3(a) entails a consideration of  factual circumstances specific to each case.  This 
is confirmed by previous disputes where the requi rement of reasonable administration was understood 
as requiring the examination of the features of the ad ministrative act at issue in the light of its 
objective, cause or the rationale behind it.1080 
Canada's argument – the Vilsack letter 
7.852  We first recall the United States' explanation on the circumstances under which the letter was 
issued.1081  It was issued in the context of the Dir ective from the new administration to review the 
laws and policies of the new and pending regulati ons that had been enacted by the previous 
administration.  In essence, the Directive indicates th at the new administration wanted to review these 
regulations to decide whether to maintain them  without any change.  As for the 2009 Final Rule 
(AMS), Secretary Vilsack confirms in the letter th e new administration's intention to implement it as 
originally scheduled by the previous administration and includes certain voluntary suggestions to industry. 
                                                      
1078 United States' second written submission, para. 191. 
1079 Panel Report, Dominican Republic – Import and Sale of Cigarettes , para. 7.385 referring to the The 
New Shorter Oxford English Dictionary , (Fifth Edition) Oxford University Press, Vol. II, p. 2482 (2002). 
1080 In Argentina – Hides and Leather , for example, the panel cons idered access to confidential 
information by a competitor in the market to be a relevant factor in determining reasonableness of the 
administrative action in that dispute (para. 11.86).  We further recall the Appellate Body's analysis in Brazil – 
Retreaded Tyres that "the analysis of whether the application of  a measure results in ar bitrary or unjustifiable 
discrimination should focus on the cause of the discrimination, or the rationale put forward to explain its 
existence" (Appellate Body Report, Brazil – Retreaded Tyres , para. 226;  Panel Report, Thailand – Cigarettes , 
para. 7.291).  In Thailand – Cigarettes (Philippines),  the Philippines claimed that the appointment of dual 
function officials as directors of a company under administrative proceedings constituted unreasonable 
administration because the officials were in a position where they could gather and reveal confidential 
information on Philippines industries' direct competitors.  The panel found that Thailand did not act 
inconsistently with Article  X:3(a).  However, the overall delays in the administrative proceedings shown 
throughout the course of the review process of customs valuation were considered by the panel " not appropriate 
or proportionate" considered against the nature of the circumstances concerned, and therefore, the 
administration was considered to be "unreasonable" (Panel Report, Thailand – Cigarettes , para. 7.969).  In 
Dominican Republic – Import and Sale of Cigarettes , the Panel found that the Dominican Republic had 
administered the provisions governing the Selective Consumption Tax in a manner that was "unreasonable" and 
therefore inconsistent with Article X:3(a) of GATT 1994 (paras. 7.365-7.394). 
1081 See paras. 7.39-7.42 above.  WT/DS384/R 
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  7.853  The letter, however, suggests that the industry voluntarily adopt stricter labelling practices 
concerning origin information than those required under the 2009 Final Rule (AMS).  Specifically, the 
Vilsack letter asks the industry to voluntarily foll ow three recommendations for the labelling of meat 
products that are not contained in the COOL measure. 
7.854  The first recommendation in the Vilsack letter is  the inclusion of information about what 
production step occurred in each country when multip le countries appear on the label.  The Vilsack 
letter gives the following examples about how such information could be included in the labels:  
"Born and Raised in Country X and Slaughtered in Country Y" or "B orn in Country X and Raised and 
Slaughtered in Country Y".1082  This suggestion goes beyond the la belling requirements set out in the 
COOL measure.  Under the COOL measure, the country of origin declaration for meat products 
derived from livestock of multiple countries of origin (Label B) or imported for immediate slaughter (Label C) need not determine the countries where su ch livestock were born, raised and slaughtered.  
For Label B meat the producer only needs to labe l "Product of the United States, Product of 
country X", whereas for Label C the information is "Product of country X, Product of the 
United States".
1083 
7.855  The second recommendation in the Vilsack letter is that even when products are subject to 
curing, smoking, broiling, grilling, or steaming,  voluntary labelling should be provided.  This 
recommendation goes beyond the COOL measure, which clearly exempts from the general obligation of providing country of origin information c overed commodities that undergo any of the above-
mentioned processing steps.
1084 
7.856  Third, as regards ground meat, the COOL measure  establishes that processors shall list all 
countries of origin that may have reasonably been  contained in their inventory during the 60 days 
prior to the country of origin declaration.  The Vilsack letter suggests that the industry reduce that 
time allowance from 60 days to ten days.1085 
7.857  The above comparison shows that the voluntary actions suggested in the Vilsack letter go 
beyond certain obligations and reduce certain fl exibilities foreseen in  the COOL measure. 
7.858  Canada does not challenge, and we see no issue per se  with a new administration reviewing 
regulations and policies de veloped by a previous administration.  Based on its assessment, the new 
administration may decide to change existing regula tions or adopt new regula tions making use of the 
latitude accorded to the executive branch of th e government within the legislative framework. 
7.859  However, as regards the Vilsack letter, we do not  find any justifiable rationale for suggesting 
stricter labelling practices than the ones required by the 2009 Final Rule (AMS) while at the same 
time allowing the 2009 Final Rule (AMS) to enter into fo rce.  If anything, the suggestions in the letter 
– even if they concern voluntary action by indu stry – undermine the labelling requirements in the 
2009 Final Rule (AMS).1086  In fact, the letter addresses issues that do not directly emanate from the 
actual labelling requirements at issue under the 2009 Fi nal Rule (AMS).  Importantly, this is done in 
the very same letter announcing the entry into fo rce of the 2009 Final Rule (AMS) as a result of 
Secretary Vilsack's having reviewed it.  Although the suggested actions in the letter are only for 
                                                      
1082 Vilsack letter. 
1083 7 C.F.R. § 65.300 (e). 
1084 7 C.F.R. § 65.220. 
1085 7 C.F.R. § 65.300 (h). 
1086 United States' first written submission, para. 29 3; United States' second written submission, 
para. 188.   
The United States itself states that  the Vilsack letter's recommendations  are inconsistent with the 2009 
Final Rule (AMS) (United States' comments on Canada's and Mexico's responses to Panel question No. 96).  WT/DS384/R 
WT/DS386/R Page 204 
 
 
  voluntary action, the language of the letter may still have caused uncertainty and confusion as to the 
consequences of the letter, including possible modi fications to the 2009 Final Rule (AMS) should the 
industry not follow Secretary Vilsack's sugg estions for additional voluntary action. 
7.860  Furthermore, the Vilsack letter was issued less th an one month prior to the entry into force of 
the 2009 Final Rule (AMS).  This may have caused further confusion for industry in terms of the 
specific labelling requirements to be observed.  In particular, what we are addressing here is a letter 
issued by the head of a government  agency to the industry in general.   Compared to situations where 
the administration applies the COOL measure to partic ular individual entities, this type of letter can, 
in our view, have a broader impact on the industr y because the letter was issued to the industry in 
general, not to specific entities. 
7.861  Although, in general, a WTO Member has the discretion to administer its laws and 
regulations in the manner it deems fit, it equally has the responsibility to respect "certain minimum 
standards for transparency and pr ocedural fairness" as regards its actions.  As the Appellate Body 
observed, Article X:3(a) of the GATT 1994 establish es certain minimum standards for transparency 
and procedural fairness in the administration of trade regulations.
1087 
7.862  This responsibility, in our view, applies to all types of actions falling within the broad scope 
of the term "administer" under Article X:3(a).  We consider that the Vilsack letter did not meet these 
minimum standards of procedural fairness in relati on to the implementation of the 2009 Final Rule by 
both allowing the 2009 Final Rule (AMS) to enter into force and, at th e same time, suggesting 
industry compliance with stricter labelling requireme nts than those contained in the 2009 Final Rule 
(AMS). 
7.863  Based on the manner in which the Secretary of Agriculture addressed the decision to 
implement the 2009 Final Rule (AMS), taken togeth er with the circumstances under which the letter 
was issued, we consider that the Vilsack letter was not "appropriate", and thus does not meet the 
requirement of reasonable administration of the COOL  measure within the meaning of Article X:3(a). 
7.864  We therefore conclude that Canada has demonstrated that the United States acted 
inconsistently with Article X:3(a) by failing to administer the COOL measure in a reasonable manner 
through the issuance of the Vilsack letter. 
Mexico's argument – shifts in interpretation and guidance by USDA 
7.865  As explained above, unlike Cana da, Mexico did not focus its argument exclusively on the 
issuance of the Vilsack letter.  In Mexico's vi ew, the alleged unreasonable administration of the 
COOL measure is reflected in shifts in the guida nce and interpretation by USDA on its statutory and 
regulatory provisions, which culmin ated in the Vilsack letter. 
7.866  To the extent that Mexico's claim is based on the issuance of  the Vilsack letter, we have 
already concluded that the issuance of the Vilsack  letter was not a reasonable administration of the 
COOL measure within the meaning of Article X:3( a).  We note that Mexico did not develop its 
argument relating to the Vilsack letter as extensivel y as Canada.  In our view, however, Mexico has 
adduced sufficient evidence to dem onstrate that the Vilsack letter created uncertainties for industry 
                                                      
1087 Appellate Body Report, US – Shrimp , para. 183.  The Appellate Body also underlined that 
"inasmuch as there are due process requirements gene rally for measures that are otherwise imposed in 
compliance with WTO obligations, it is only reasonabl e that rigorous complian ce with the fundamental 
requirements of due process  should be required in the application and administration of a measure ... " 
(Appellate Body Report, US – Shrimp , para. 182) (emphasis added).  WT/DS384/R 
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  regarding how to comply with the specific labe lling requirements contained in the 2009 Final Rule 
(AMS).1088  In particular, Mexico highlights that the Vilsack letter suggested practices additional to 
the ones foreseen under the 2009 Final Rule (AMS), and threatened to modify the 2009 Final Rule 
(AMS) if such practices were not followed.  It is essentially for these same reasons that we found that 
Canada has demonstrated that the Vilsack letter is  inconsistent with the requirement of reasonable 
administration under Article X:3(a) of the GATT 1994.  Accordingly, we find that Mexico has 
demonstrated that the Vilsack letter does not meet the standard of reasonable administration of the COOL measure within the meaning of Article X:3(a). 
7.867  Regarding Mexico's argument that the Unite d States changed its interpretation of the 
COOL measure too frequently to render the admini stration reasonable, Mexico presented the evidence 
summarized in the table in paragraph 7.832 above. 
7.868  In our understanding, Mexico is referring to these exhibits as a whole as evidence to assert 
that USDA has been providing inconsistent implem entation guidance to industry over time.  We can 
infer from the content of these exhibits that th e industry was indeed provided with evolving 
interpretations regarding the labelli ng requirements under the COOL measure. 
7.869  At the same time, we note that the changes in  guidance, particularly regarding the use of 
different labels for different categories of meat, re flect the very modifications made to the Interim 
Final Rule (AMS) prior to the issuance of th e 2009 Final Rule (AMS).  As explained in 
Section VII.C.1(a)(ii), the main changes from the Interim Final Rule (AMS) to the 2009 Final Rule 
(AMS) are the removal of the possibility of using Label B for category A meat and the addition of the 
commingling provisions.  The USDA administrative gui dance, as illustrated in the USDA guidelines 
of 11 September 2008 and as implied in news articles a nd industry letters after the entry into force of 
the Interim Final Rule (AMS), th erefore corresponded to the chang es made to the substance of the 
COOL implementing regulations during the rule-m aking process as envisaged under the US legal 
system.  To the extent that the differences in the guidance by USDA were due to the changes made to 
the substantive law or regulations at issue, we do not find such administrative acts irrational or 
inappropriate within the meaning of Article X:3( a).  USDA was acting within its authority and 
mandate to provide interpretations of th e labelling requirements under the applicable 
COOL implementing regulations at a given time. 
7.870  Accordingly, we find that, unlike with regard to  the Vilsack letter, Mexico has not established 
that the United States failed to administer the COOL measure in a reasonable manner through the 
shifts in the guidance by USDA on the labe lling requirements under the COOL measure. 
(d) "Non-uniform" administration of laws and regulations 
(i) Main arguments of the parties 
7.871  Mexico  argues that "uniform" administration requires that Members ensure that their laws are 
applied consistently and predictably.
1089  Mexico  affirms that the "non-uniform" administration is due 
to the significant changes on requirements and in terpretation during the implementation of the 
statutory and regulatory provisions.1090  The administration of the details of the COOL measure 
changed over its implementation and review process es and the associated guidelines issued by USDA 
                                                      
1088 See paras. 7.846-7.847. 
1089 Mexico's first written submission, para. 377 (citing Panel Report, Argentina – Hides and Leather , 
para 11.83). 
1090 Mexico's second written submission, paras. 188-189. WT/DS384/R 
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  over this period created uncertainties, which c ontinued with the Vilsack letter issued on 
20 February 2009. 
7.872  The United States submits that Mexico has failed to demonstrate that the COOL measures 
have been administered in a non-uniform  manner because of changes to the rule over time.
1091  
Mexico has not produced evidence to prove this asser tion either with regard to changes made to the 
implementing regulations or concerning the issuance of the Vilsack letter.1092  The changes to which 
Mexico refers merely reflect the notice-and-comment system of US rule-making, and do not represent the application of the statute or the 2009 Final Rule (AMS).
1093  The United States references the 
panel report in Argentina – Hides and Leather1094, according to which "uniform" administration 
requires that Members ensure that their laws  are applied consistently and predictably.1095 
7.873  The United States adds that in US – Stainless Steel , the panel noted that, "the requirement of 
uniform administration of laws and regulations must  be understood to mean uniformity of treatment in 
respect of persons similarly situated;  it cannot be understood to require identical results where 
relevant facts differ".  That panel clarified that Ar ticle X:3(a) does not require that the administration 
of a regulation be fixed and unvarying over time;  the administration of a regulation must only be 
uniform at a given time.1096  The United States argues that Mexi co has not provided evidence to 
demonstrate that the COOL statute or the 2009 Fina l Rule has been administered in a way that 
affected similarly situated persons in a non-uniform manner.1097  At all times the United States has 
maintained a single set of regulations implementin g the COOL Statute, and these regulations have 
been administered in a uniform fashion.  The United States adds that Mexico has not adduced 
evidence to suggest that the 2009 Final Rule has affect ed persons similarly situated in different ways 
with respect to the period after that date.1098 
(ii) Analysis by the Panel 
7.874  Mexico claims that the alleged "non-uniform " administration arises because of the significant 
changes to the guidance on the labelling requirem ents under the COOL measure.  According to 
Mexico, these changes contributed to disr uptions experienced by Mexican industry. 
7.875  The United States argues that Mexico has not provided evidence to demonstrate that the 
COOL statute or the 2009 Final Rule (AMS) has been  administered in a way that affected similarly 
situated persons in a non-uniform manner.1099  At all times the United St ates has maintained a single 
set of regulations implementing the COOL statute, and these regulations have been administered in a uniform fashion.  The United States adds that Me xico has not adduced evid ence to suggest that the 
2009 Final Rule (AMS) has affected persons similarly situated in different ways with respect to the 
period after that date.
1100 
                                                      
1091 United States' first written submission, para. 296. 
1092 United States' first written submission, para. 293. 
1093 United States' opening oral statement at the first substantive meeting, para. 60. 
1094 Panel Report, Argentina – Hides and Leather , para. 11.83. 
1095 United States' first written submission, para. 294. 
1096 Panel Report, US – Stainless Steel (Korea) , para. 6.51. 
1097 United States' first written submission, para. 294. 
1098 United States' first written submission, para. 295. 
1099 United States' first written submission, para. 294. 
1100 United States' first written submission, para. 295.  WT/DS384/R 
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  7.876  The term "uniform" is defined as "of one unchanging form, character, or kind; that is or stays 
the same in different places or circumstances, or at different times".1101  We find guidance for the 
meaning of "uniform" under Article X:3(a) in the findings by panels in previous disputes.  For 
instance, the panel in Argentina – Hides and Leather  stated that "uniform administration" requires that 
Members ensure that their laws are applied consistently and predictably.1102  Additionally, in US – 
Stainless Steel , the panel noted that, "the requirement of uniform administration of laws and 
regulations must be understood to mean uniformity of treatment in respect of persons similarly 
situated".1103  Based on the dictionary meaning and guid ance provided by previous panels, we will 
assess whether Mexico has established that the con cerned shifts in the guidance provided by USDA 
constitute a non-uniform administration of the COOL measure. 
7.877  In the current dispute, as the United States poi nts out, Mexico has not presented facts or 
evidence showing that at any specific point in tim e USDA treated persons sim ilarly situated in a non-
uniform manner when putting into practical effect the labelling requirements under the COOL measure.  Rather, the evidence submitted by Mexico shows that USDA provided guidance on 
the labelling requirements which was applicable to the US industry in general.
1104 
7.878  Turning to the changes in USDA guidance ove r time challenged by Mexico as being non-
uniform, we note that, as the panel in EC – Selected Customs Matters states, the interpretation of the 
term "uniform" in Article X:3(a) does not nece ssarily entail instantaneous uniformity.  Rather, 
uniformity must be attained within a period of time th at is reasonable.  What is reasonable will depend 
on the form, nature and scale of the administration at  issue, as well as on the complexity of the factual 
and legal issues raised by the act of administration that is being challenged.1105 
7.879  The shifts in the guidance on the labelling re quirements under the COOL measure, evoked by 
Mexico, took place between September 2008 and Apr il 2009.  As observed above, these changes or 
shifts during this period are related to the modifi cations made to the substance of the regulations 
themselves in the context of rule-making over a relatively short period of time.  The form and 
structure of the changes in the guidance and interpretation, which Mexico argues culminated in the 
Vilsack letter, do not demonstrate an act "of changing form" or act which is "not the same at different 
times" so as to render it a "non-uniform" administ ration within the meaning of Article X:3(a). 
7.880  In fact, the publication of the administra tion's guidance on the COOL implementing 
regulation through frequently asked que stions can be considered as an example of an industry-friendly 
action by the administration, which can enhance the transparency of the government's administration 
of the regulations. 
7.881  For the foregoing reasons, we conclude that Me xico has not established that the United States 
acted inconsistently with Article X:3(a) by ad ministering the COOL measure in a non-uniform 
manner. 
                                                      
1101 The Shorter Oxford English Dictionary , (Sixth Edition) Oxford University Press, Vol. II, p. 3440 
(2007);  Panel Report, EC- Selected Customs Matters , para. 7.124. 
1102 Panel Report, Argentina – Hides and Leather , para. 11.83. The panel found that the measures at 
issue were inconsistent with Argentina's oblig ations under Article X:3(a) of GATT 1994. 
1103 Panel Report, US – Stainless Steel (Korea) , para. 6.51. 
1104 See Exhibits CDA-29;  MEX-33, 55, 56, 57 and 83;  Table in page 182.  
1105 Panel Report, EC – Selected Customs Matters , para. 7.135. WT/DS384/R 
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  (e) "Partial" administration of laws and regulations 
(i) Main arguments of the parties 
7.882  Mexico  argues that the administration of the COOL measure was partial as the final 
interpretation of the USDA on the implementation of  the regulation and its provisions was in favour 
of US producers of cow-calves.
1106 
7.883  The United States does not address Mexico's argument regarding the "partial" administration. 
(ii) Analysis by the Panel 
7.884  Mexico presented its claim on the United States' alleged partial administration of the 
COOL measure for the first time in its second written submission by merely asserting the lack of 
impartial administration.  Mexico, however, fails to explain in what way the administration of the 
COOL measure was partial by favouring US cow-calf producers. 
7.885  Accordingly, we find that Mexico has not estab lished a prima facie case that the United States 
administered the COOL measure in a partial manner within the meaning of Article X:3(a). 
(f) Conclusion on the complainants' claims under Article X:3(a) 
7.886  In light of the foregoing, we find that Ca nada and Mexico have established that the 
United States acted inconsistently with Article X:3( a) by failing to administer the COOL measure in a 
reasonable manner through the issuance of the Vilsack letter. 
7.887  We find, however, that Mexico has not demonstr ated that the concerned shifts in the USDA 
guidance on the labelling requirements under the COOL measure is not a reasonable administration of the COOL measure within the meaning of Article X:3( a).  Further, we find that Mexico has failed to 
establish that the United States ad ministered the COOL measure in a non-uniform and partial manner 
inconsistently with Article X:3(a). 
3. Non-violation claim under Article XXIII:1(b) 
7.888  We are turning to the complainants' non-violation claims after having addressed their claims 
of violation.  This follows the sequence of the parties'  arguments in the current dispute.  It is also in 
line with the general priority to be accorded to dealing with violation as opposed to non-violation 
claims, enunciated by the panel in Japan – Film : 
"[T]raditionally in cases involving both violation and non-violation claims, panels 
first address claims of inconsistency with a covered agreement pursuant to 
Article XXIII:1(a), before moving on to cons ider claims of non-violation nullification 
or impairment under Article XXIII:1(b)."
1107 
(a) Main arguments of the parties 
7.889  Mexico  and Canada  submit that the application of the COOL requirements nullifies or 
impairs benefits accruing to them under successi ve rounds of multilateral trade negotiations.1108  
According to the complainants, by applying the COOL requirements, the United States is upsetting 
                                                      
1106 Mexico's second written submission, paras. 185 and 189. 
1107 Panel Report, Japan – Film , para. 10.26. 
1108 Canada's first written submission, para. 237 and Mexico's first written submission, para. 379.  WT/DS384/R 
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  the competitive relationship and frustrating the co mplainants' legitimate market access expectations 
with respect to live cattle and hogs from Canada1109, and live cattle from Mexico.1110 
7.890  All three parties agree1111 that the following three-pronged test established by the panel in 
Japan – Film  for addressing non-violation claims is a pplicable also in the current dispute: 
"The text of Article XXIII:1(b) establishes three elements that a complaining party 
must demonstrate in order to make out a cognizable claim under Article XXIII:1(b):  
(1) application of a measure by a WTO Member;  (2) a benefit accruing under the relevant agreement;  and (3) nullification or impairment of the benefit as the result of 
the application of the measure."
1112 
7.891  As regards the first element of this legal test, the complainants submit th at the application by 
the United States of various aspects of the COOL requirements fulfils this element.1113 
7.892  The United States  responds that not all elements of  the COOL requirements challenged by 
the complainants are eligible for a non-violatio n claim.  According to the United States, a non-
violation claim is possible only with regard to  measures that are currently being applied; 
consequently, only the COOL statute and the 2009 Final Rule (AMS) may be subject to a claim under 
Article XXIII:1(b) of the GATT 1994 in this dispute.1114 
7.893  As regards the second element of the legal t est under Article XXIII:1(b) of the GATT 1994, 
the United States contends that the complainants  have no legitimate expectations, since various 
country of origin labelling rules on meat at the reta il level have existed in the United States since as 
far back as the 1930s, a long time before the Urugua y Round.  Thus, the complainants could have 
reasonably anticipated at the time of these tariff ne gotiations that the United States would modify or 
supplement country of origin labelling rules as it has been doing since the 1960s, contemplating various pieces of legislation on country of origin la belling with additional requirements for meat at the 
retail level.
1115 
7.894  In response, the complainants maintain that thei r expectations of market access are legitimate 
as they could not have reasonably anticipated the application by the United States of the mandatory 
COOL requirements or any other measure regarding or igin labelling with such drastic implications on 
the market access of cattle and hogs from Canada , and cattle from Mexico.  Although there were 
voluntary country of origin labelling regulations in  force at the time of the negotiation of tariff 
concessions subsequently incorporated  in the WTO Agreement, these regulations were not specific to 
cattle and hogs, and they did not have such r estrictive provisions as the COOL requirements.1116 
7.895  With regard to the second element of the lega l test, the United States also argues that the 
benefits invoked by the complainants accrue from tariffs under NAFTA because it is not the 
concessions made under the WTO that they are bene fiting from, but the lower tariff rate negotiated 
                                                      
1109 Canada's first written submission, para. 239. 
1110 Mexico's first written submission, para. 379. 
1111 Canada's first written submission, para. 235, Mexico's first written submission, para. 385 and 
United States' first written submission, para. 303. 
1112 Panel Report, Japan- Film , para. 10.41. 
1113 Canada's first written submission, para. 235 and Me xico's first written submission, paras. 386-392. 
1114 United States' first written submission, para. 305, footnote 348. 
1115 United States' first written submission, paras. 309-310 and United States' second written 
submission, para. 195. 
1116 Canada's first written submission, paras. 237-239; Mexico's first written submission, paras. 388-390 
and second written submission, para. 193. WT/DS384/R 
WT/DS386/R Page 210 
 
 
  under NAFTA, which entered into force at the beginni ng of 1994.  Hence, the United States argues, 
these benefits cannot be enforced unde r Article XXIII:1(b) of the GATT 1994.
1117 
7.896  In response, the complainants assert that th ey are entitled to expect market access to the 
United States in accordance with the tariff bindi ngs negotiated under the WTO, even though their 
current tariff concessions for livestock are based on NAFTA.  In particular, Canada points out that the 
current MFN bound tariff of the United States for cattle  other than dairy or breeding is 1 cent/kg for 
tariff line 0102.90.40.  This tariff is in the Unite d States' schedule of concessions negotiated in the 
Uruguay Round.  In addition, Canada notes that all 8-digit tariff lines under Live Swine (tariff 
line 0103) in the same tariff schedule of the United States show an ad valorem bound duty of 0%, and 
the free import of hogs to the United States pre-dates the WTO Agreement (and also the 
Canada-United States Free Trade Agreement  and NAFTA).1118  Mexico adds that its non-violation 
claim is based on the United States' MFN bound tariff of 1 cent/kg of cattle negotiated under 
WTO.1119  Hence, the complainants had a benefit accr ued to them from legitimate market access 
expectations based on the United States schedule under the WTO. 
7.897  As regards the third element of the legal test under Article XXIII:1(b) of the GATT 1994, 
the complainants maintain that the COOL requireme nts drastically restrict their market access as 
compared to the level of market access negotia ted during the WTO Uruguay Round.  Canada submits 
that by requiring US retailers to la bel beef and pork in a manner that is fundamentally at odds with the 
normal practice applied in other areas of United Stat es customs law, the United States has nullified the 
unrestricted market access that  Canada was entitled to expect for its cattle and hogs exports.1120 
7.898  Mexico contends that the COOL measure created a new series of restrictions to cattle 
exported from Mexico.  It reduced the number of US plants processing Mexican cattle, limited the 
days on which those plants receive cattle from Mexico, introduced new requirements of advance 
notice, and US processors imposed a discount on imports of Mexican cattle.1121  The actual price 
discount created by the COOL measure is from USD 40 to USD 60 for the same 300-400 pound 
animal, and the competitive disadvantage and level of protection reflected in this price discount vastly 
exceeds Mexico's legitimate expectation of USD 1.36 to 1.81 tariff per an imal negotiated under the 
WTO.1122  According to Mexico, this competitive relationship with domestic livestock in the 
United States was upset by the application of the COOL requirements.1123 
7.899  The United States responds that the complainants  failed to demonstrate, "with the required 
'detailed justification'" and with clear and solid ev idence, that they have suffered a nullification or 
impairment of benefits "as a result of the application" of the COOL measure.1124  According to the 
United States, the complainants did not demonstrat e or provide evidence of a "clear correlation" 
between the COOL measure and the alleged adver se effects on imports of livestock from Mexico and 
Canada.  The United States maintains that other ma rket forces, including the financial crisis and 
animal diseases, had a serious negative impact on livestock markets in the United States, Canada and 
                                                      
1117 United States' second written submission, para. 194. 
1118 Canada's response to Panel question No. 88. 
1119 Mexico's response to Panel question No. 88. 
1120 Canada's first written submission, para. 239, Canada's response to Panel question No. 88 and 
Canada's second written submission, paras. 45-46. 
1121 Mexico's opening oral statement at the first substantive meeting of the Panel, para. 55. 
1122 Mexico's response to Panel question No. 88. 
1123 Mexico's first written submission, paras. 391-392, Mexico's response to Panel question No. 88 and 
Mexico's second written submission, para. 191. 
1124 United States' first written submission, para. 317 and United States' second written submission, 
para. 196.  WT/DS384/R 
 WT/DS386/R 
 Page 211 
 
 
  Mexico.  Thus, the adverse effects on livestock cannot be exclusively attributed to the 
COOL requirements.1125 
(b) Analysis by the Panel 
7.900  At the outset of our analysis of the complainants' non-violation claims, we recall that the 
panel in Japan – Film  explained that the non-violation nullifi cation or impairment remedy should be 
treated with caution and as an exceptional concept: 
"Although the non-violation remedy is an important and accepted tool of 
WTO/GATT dispute settlement and has been 'on the books' for almost 50 years, we note that there have only been eight cases in  which panels or working parties have 
substantively considered Article XXIII:1(b) claims.
1126  This suggests that both the 
GATT contracting parties and WTO Members have approached this remedy with 
caution and, indeed, have treated it as an exceptional instrument of dispute settlement.  We note in this regard that both the European Communities and the United States in the EEC – Oilseeds  case, and the two parties in this case, have confirmed that the 
non-violation nullification or impairment re medy should be approached with caution 
and treated as an exceptional concept.
1127  The reason for this caution is 
straightforward.  Members negotiate the rules that they agree to follow and only 
exceptionally would expect to be challenged for actions not in contravention of those 
rules."1128 
7.901  The Appellate Body confirmed this in EC – Asbestos  by holding that, "[l]ike the panel in  ... 
Japan – Film  ... , we consider that the remedy in Article XXIII:1(b) 'should be approached with 
caution and should remain an exceptional remedy'".1129 
7.902  We also note that in Japan – Film  the panel stressed that the need for analysing a non-violation 
claim in a specific case "should be examined on it s own merits", and should involve a case-specific 
assessment.1130 
                                                      
1125 United States' first written submission, paras. 314-316. 
1126 (footnote original)  Report of the Working Party on Australian Subsidy on Ammonium Sulphate , 
adopted on 3 April 1950, BISD II/188;  Panel Report on Treatment by Germany of Imports of Sardines  ("Germany 
– Sardines "), G/26, adopted on 31 October 1952, BISD 1S/53;  Uruguayan Recourse , adopted on 16 November 
1962, BISD 11S/95;  Panel Report on EC – Tariff Treatment on Imports of Citrus Products from Certain Countries 
in the Mediterranean Region  ("EC – Citrus Products "), GATT Doc. L/5576, dated 7 February 1985 (unadopted);  
Panel Report on EEC – Production Aids Granted on Canned Peache s, Canned Pears, Canned Fruit Cocktail and 
Dried Grapes  ("EEC – Canned Fruit "), GATT Doc. L/5778, dated 20 February 1985 (unadopted);  Japan – Semi-
conductors , adopted on 4 May 1988, BISD 35S/116;  EEC – Oilseeds , adopted on 25 January 1990, BISD 37S/86;  
United States – Agricultural Waiver , adopted on 7 November 1990, BISD 37S/228. 
1127 (footnote original)  In EEC – Oilseeds , the United States stated that  it "concurred in the proposition 
that non-violation nullification or impa irment should remain an exceptional concept.  Although this concept had 
been in the text of Article XXIII of the General Agreement from the outset, a cautious approach should continue to be taken in applying the concept".  EEC – Oilseeds , BISD 37S/86, 118, para. 114.  The EEC in that case stated that 
"recourse to the 'non-violation' concept under Article XXIII:1(b) should remain exceptional, since otherwise the trading world would be pl unged into a state of precariousness and uncertainty".  Ibid, para. 113. 
1128 Panel Report, Japan – Film , para. 10.36.  See also ibid., para. 10.37. 
1129 Appellate Body Report, EC – Asbestos , para. 186 (footnote omitted). 
1130 Panel Report, Japan – Film , para. 10.37. WT/DS384/R 
WT/DS386/R Page 212 
 
 
  7.903  In the current dispute, we have  already found that the COOL meas ure violates Articles 2.1 and 
2.2 of the TBT Agreement, and that the Vilsack letter is in violation of Article X:3(a) of the GATT 1994. 
7.904  The GATT panel in EEC – Oilseeds I  set out the following test for assessing whether it is 
necessary to turn to the complainant's non-violation claim in light of a finding of inconsistency with 
Article III:4 of the GATT: 
"The Panel first examined whether its finding  that the payments to the processors are 
inconsistent with the Genera l Agreement might make an examination of the question 
of the nullification or impairment of the tariff concessions unnecessary.  The Panel 
noted that this would be the case if compliance by the Community with the finding on 
Article III:4 would necessarily remove th e basis of the United States claim of 
nullification or impairment ."
1131  (emphasis added) 
7.905  In the current dispute, compliance by the Un ited States with the above-mentioned findings of 
violation would remove the basis of the compla inants' non-violation claims of nullification or 
impairment.  Indeed, the panel in Japan – Film  identified a parallelism between key elements of the 
legal tests under Articles III:4 and XXIII:1(b) of the GATT 1994: 
"[I]t could be argued that the sta ndard we enunciate d and applied under 
Article XXIII:1(b) – that of 'upsetting the competitive relationship' – may be different 
from the standard of 'upsetting effectiv e equality of competitive opportunities' 
applicable to Article III:4.  However, we do not see any significant distinction 
between the two standards apart from the fact that this Article III:4 standard calls for 
no less favourable treatment for imported products in general, whereas the Article XXIII:1(b) standard calls for a comparison of the competitive relationship 
between foreign and domestic products at tw o specific points in time, i.e. when the 
concession was granted and currently."
1132 
7.906  Arguably, a similar relationship exists be tween Article XXIII:1(b) of the GATT 1994 and 
Article 2.1 of the TBT Agreement.  Indeed, we ha ve noted the resemblance between key language in 
Article III:4 of the GATT 1994 and Article 2.1 of th e TBT Agreement;  hence, we have recognized a 
similarity between relevant portions of  the legal tests under these two provisions.1133 
7.907  Accordingly, we stop our analysis of the complainants' non-violation claims here.  
Compliance by the United States with our findi ng of violation under Article 2.1 of the 
TBT Agreement would remove the basis of the comp lainants' non-violation claims of nullification or 
impairment.  This also would be ensured by US  compliance with our findings of violation under 
Article 2.2 of the TBT Agreement a nd Article X:3(a) of the GATT 1994. 
                                                      
1131 GATT Panel Report, ECC – Oilseeds I , para. 142. 
1132 Panel Report, Japan – Film , para. 10.380. 
1133 See paras. 7.228-7.234 above.  WT/DS384/R 
 WT/DS386/R 
 Page 213 
 
 
  VIII.  FINDINGS AND RECOMMENDATIONS 
8.1 We recall the United States' request that we issue our findings in the form of a single 
document containing two separate reports with se parate findings and recommendations for each 
complainant.  We also recall that Canada agreed , and Mexico did not object, to the United States' 
request.1134  Accordingly, we provide two separate sets of findings and recommendations, with 
separate numbers/symbols for each complainant (W T/DS384 for Canada and WT/DS386 for Mexico). 
 
                                                      
1134 See para. 2.11 above. WT/DS384/R 
Page 214A  
 
  A. C
OMPLAINT BY CANADA (DS384):   FINDINGS AND RECOMMENDATION  
 8.2 Canada has made claims with regard to the COOL measure and the Vilsack letter under 
Articles 2.1 and 2.2 of the TBT Agreement and Articles III:4, X:3(a) and XXIII:1(b) of the 
GATT 1994. 
8.3 With respect to Canada's claims under the TBT Agreement, we conclude that: 
(a) the COOL measure is a "technical regulation" within the meaning of Annex 1.1 to the 
TBT Agreement, whereas the Vilsack letter is not; 
(b) the COOL measure, particularly in regard to the muscle cut meat labels, violates 
Article 2.1 because it affords imported livest ock treatment less favourable than that 
accorded to like domestic livestock;  and 
(c) the COOL measure violates Article 2.2 b ecause it does not fulfil the objective of 
providing consumer information on origin  with respect to meat products. 
8.4 With respect to Canada's claims under the GATT 1994, we conclude that: 
(a) we need not make a finding on the COOL measure under Article III:4 in light of our 
finding that the same measure violated  the national treatment obligation under 
Article 2.1 of the TBT Agreement; 
(b) the Vilsack letter violates Article X:3(a)  because it does not constitute a reasonable 
administration of the COOL measure;  and 
(c) having found that the Vilsack letter falls within  the scope of Article X:3(a), we refrain 
from examining whether it is inc onsistent with Article III:4. 
8.5 Finally, in light of the above findings of violation, we have refrained from examining 
Canada's non-violation claim under Article XXIII:1(b) of the GATT 1994. 
8.6 Under Article 3.8 of the DSU, in cases where there is an infringement of the obligations 
assumed under a covered agreement, the action is considered prima facie  to constitute a case of 
nullification or impairment of bene fits under that agreement.  Accord ingly, we conclude that to the 
extent that the United States has acted inconsistent ly with Articles 2.1 and 2.2 of the TBT Agreement 
and Article X:3(a) of the GATT 1994, it has nullifie d or impaired benefits accruing to Canada under 
these agreements. 
8.7 Pursuant to Article 19.1 of the DSU, having found that the United States has acted 
inconsistently with Articles 2.1 and 2.2 of the TBT Agreement and Article X:3(a) of the GATT 1994, 
we recommend that the Dispute Settlement Body requ est the United States to bring the inconsistent 
measures into conformity with its obligati ons under the TBT Agreement and the GATT 1994. 
 
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  WT/DS386/R 
 Page 214B 
 
 
  A. C OMPLAINT BY MEXICO (DS386):   FINDINGS AND RECOMMENDATION  
 8.2 Mexico has made claims with regard to the COOL measure and the Vilsack letter under 
Articles 2.1, 2.2, 2.4, 12.1 and 12.3 of the TBT Agreement and Articles III:4, X:3(a) and XXIII:1(b) 
of the GATT 1994. 
8.3 With respect to Mexico's claims under the TBT Agreement, we conclude that: 
(a) the COOL measure is a "technical regulation" within the meaning of Annex 1.1 to the 
TBT Agreement, whereas the Vilsack letter is not; 
(b) the COOL measure, in particular in regard  to the muscle cut meat labels, violates 
Article 2.1 because it affords imported livest ock treatment less favourable than that 
accorded to like domestic livestock; 
(c) the COOL measure violates Article 2.2 b ecause it does not fulfil the objective of 
providing consumer information on origin  with respect to meat products; 
(d) Mexico has not established that the COOL measure violates Article 2.4; 
(e) Mexico has not established that the Un ited States acted inconsistently with 
Article 12.3;  and 
(f) in light of our finding on Mexico's claim under Article 12.3, Mexico has not 
established its claim under Article 12.1. 
8.4 With respect to Mexico's claims under the GATT 1994, we conclude that: 
(a) we need not make a finding on the COOL measure under Article III:4 in light of our 
finding of violation by the same measure of the more specific national treatment 
obligation under Article 2. 1 of the TBT Agreement; 
(b) the Vilsack letter violates Article X:3(a)  because it does not constitute a reasonable 
administration of the COOL measure; 
(c) Mexico has not established that the United States administered the COOL measure in 
a non-uniform and partial manner inconsistently with Article X:3(a) through the shifts 
in the guidance by USDA on the COOL measure;  and 
(d) having found that the Vilsack letter falls within  the scope of Article X:3(a), we refrain 
from examining whether it is inc onsistent with Article III:4. 
8.5 Finally, in light of the above findings of violation, we have refrained from examining 
Mexico's non-violation claim under Article XXIII:1(b) of the GATT 1994. 
8.6 Under Article 3.8 of the DSU, in cases where there is infringement of the obligations assumed 
under a covered agreement, the action is considered prima facie to cons titute a case of nullification or 
impairment of benefits under that agreement.  Acco rdingly, we conclude that to the extent that the 
United States has acted inconsistently with  Articles 2.1 and 2.2 of the TBT Agreement 
and Article X:3(a) of the GATT 1994, it has nullifie d or impaired benefits accruing to Mexico under 
these agreements. WT/DS386/R 
Page 215B  
 
  8.7 Pursuant to Article 19.1 of the DSU, having found that the United States has acted 
inconsistently with Articles 2.1 and 2.2 of the TBT Agreement and Article X:3(a) of the GATT 1994, 
we recommend that the Dispute Settlement Body requ est the United States to bring the inconsistent 
measures into conformity with its obligati ons under the TBT Agreement and the GATT 1994. 
 
_______________