UNITED STATES – CERTAIN COUNTRY OF ORIGIN LABELLING (COOL) REQUIREMENTS
Document: Appellate Body Report
Date: 29 June 2012
Document codes: WT/DS384/AB/R; WT/DS386/AB/R; WT/DS386/AB; WT/DS384/AB/R; WT/DS386/AB/R
Complainant: Mexico
Respondent: U.S.
Third parties: Argentina, Australia, Brazil, Canada, China, Colombia, EU, Guatemala, India, Japan, South Korea, New Zealand, Peru, Taiwan
Dispute stage: Implementation & Compliance
Agreements cited: Art. III, X:3(a), IX  GATT 1994Art. 2, 12  Technical Barriers to Trade (TBT)Art. 2, 5, 7  Sanitary and Phytosanitary Measures (SPS)Art. 2  Rules of Origin

UNITED STATES – CERTAIN COUNTRY OF ORIGIN
LABELLING (COOL) REQUIREMENTS

AB-2012-3

Reports of the Appellate Body

Note:

The Appellate Body is issuing these Reports in the form of a single document constituting
two separate Appellate Body Reports: WT/DS384/ AB/R; and /R. The cover page,
preliminary pages, sections I through VIII, and the annexes are common to both Reports. The page
header throughout the document bears two document symbols, and
, with the following exceptions: section IX on pages CDA-219 to CDA-221, which
bears the document symbol for and contains the A ppellate Body's findings and conclusions in the
Appellate Body Report ; and sec tion IX on pages MEX-219 to MEX-221, which
bears the document symbol for and contains the A ppellate Body's findings and conclusions in the
Appellate Body Report

(a) the Agricultural Marketing Act of 1946
4, as amended by the "2002 Farm Bill" and the
"2008 Farm Bill" (the "COOL statute")5;
(b) the Final Rule on Mandatory Country of Origin Labeling of Beef, Pork, Lamb,
Chicken, Goat Meat, Perishable Agri cultural Commodities, Peanuts, Pecans,
Ginseng, and Macadamia Nuts6 (the "2009 Final Rule (AMS)")7;
(c) a letter dated 20 February 2009 from the US Secretary of Agriculture, Thomas
J. Vilsack, to "Industry Representative[s]"8 (the "Vilsack letter")9; and
(d) the Interim Final Rule on Mandatory Count ry of Origin Labeling of Beef, Pork,
Lamb, Chicken, Goat Meat, Perishable Ag ricultural Commodities, Peanuts, Pecans,
Ginseng, and Macadamia Nuts10 (the "Interim Final Rule (AMS)").11
2. In addition to the above measures, Mexico also challenged the Interim Final Rule on
Mandatory Country of Origin Labeling of Muscle Cu ts of Beef (Including Veal), Lamb, Chicken,

460 Stat. 1087, United States Code , Title 7, section 1621 et seq. , as amended. See Panel Exhibits
MEX-1 and MEX-9.
5See Panel Reports, paras. 2.2(a), 2.3(a), 7.13, and 7.77. The statutory provisions of the COOL
measure were introduced in the US Congress through the Farm Security and Rural Investment Act of 2002,
Public Law No. 107-171, section 10816, 116 Stat. 134, 533-535 (Panel Exhibits CDA-1 and MEX-2) (the "2002
Farm Bill"), which was subsequently amended by the Food, Conservation, and Energy Act of 2008, Public Law
No. 110-234, section 11002, 122 Stat. 923, 1351-1354 (Panel Exhibits CDA-2 and MEX-3) (the "2008 Farm
Bill"). (Panel Reports, para. 7.77) Both Farm Bills subsequently became part of the Agricultural Marketing Act
of 1946, codified as United States Code , Title 7, section 1621 et seq. ( Ibid., para. 7.13) The COOL
requirements are contained in section 1638 of Title 7.
6Final Rule on Mandatory Country of Origin Labeling of Beef, Pork, Lamb, Chicken, Goat Meat, Wild
and Farm-Raised Fish and Shellfish, Perishable Agricultural Commoditie s, Peanuts, Pecans, Ginseng, and
Macadamia Nuts, published in United States Federal Register , Vol. 74, No. 10 (15 January 2009) 2704-2707,
codified as United States Code of Federal Regulations , Title 7, Part 65—Country of Origin Labeling of Beef,
Pork, Lamb, Chicken, Goat Meat, Perishable Agricultural Commodities, Macadamia Nuts, Pecans, Peanuts, and
Ginseng (Panel Exhibits CDA-5 and MEX-7).
7Panel Reports, paras. 2.2(b), 2.2(c), 2.3(c), and 7.14. The term "2009 Final Rule (AMS)" was used by
the Panel to distinguish this Rule, promulgated by the Agricultural Marketing Service of the US Department of
Agriculture (the "AMS"), from a separate Rule promulgated by the Food Safety and Inspection Service of the
US Department of Agriculture (the "FSIS"). For the sake of consistency, the Appellate Body will use this same
term. Under the 2002 Farm Bill, the AMS was vested with authority over the COOL rulemaking process,
complementing the work that the FSIS had been performing in the past. (Ibid., footnote 34 to para. 7.9)
8Panel Exhibits CDA-6 and MEX-8.
9Panel Reports, paras. 2.2(d) and 2.3(e).
10Published in United States Federal Register, Vol. 73, No. 149 (1 August 2008) 45106 (Panel Exhibits
CDA-3 and MEX-4).
11Panel Reports, paras. 2.2(b) and 2.3(b).

Goat, and Pork; Ground Beef, Ground Lamb, Ground Chicken, Ground Goat, and Ground Pork 12 (the
"Interim Final Rule (FSIS)").13
3. Generally speaking, the measures challenged by the complainants impose on retailers an
obligation to provide origin information on the c overed commodities that they sell, including a range
of meat products, as well as other agricultural product s. The measures also set out the criteria that
need to be met for the covered comm odities to be labelled as US origin. 14 Canada and Mexico
challenged the measures only insofar as they regulate the labelling of beef and pork. 15 For these meat
products, origin is defined according to the country or countries in which certain steps in the
production of the meat occurr. 16 US origin can only be granted to meat derived from an animal that
was exclusively born, raised, and slaughtered in the United States. 17 The measures further set out
rules for determining the country or countries of orig in of meat when some or all of the relevant
production steps (birth, raising, slaughter) involve d in the meat production process have taken place
outside the United States, and create four different labelling categories for muscle cut meat and one
for ground meat.
18 The measures also impose recordkeeping, auditing, and verification requirements
on producers along the meat production chain. 19 Different stages of North American livestock and
meat production are often performed in more than one country. Both Ca nada and Mexico export
cattle to the United States that are subsequently processed into beef. Canada additionally exports
hogs to the United States that are subsequently processed into pork. 20 The factual aspects of these
disputes are set forth in greater detail in paragr aphs 7.75 to 7.142 of the Panel Reports, and in
section IV of these Reports.
4. Both complainants claimed that the challenge d measures are inconsistent with Articles 2.1
and 2.2 of the Agreement on Technical Barriers to Trade (the " TBT Agreement "), and with
Articles III:4 and X:3(a) of the General Agreement on Tariffs and Trade 1994 (the "GATT 1994").
The complainants also raised a non-violation claim under Article XXIII:1(b) of the GATT 1994. 21
More specifically, they argued that the United States' measures accord imported livestock less

12Published in United States Federal Register , Vol. 73, No. 168 (28 August 2008) 50701 (Panel
Exhibits CDA-4 and MEX-5).
13Panel Reports, paras. 2.3(d) and 7.18. Although Canada also identified this measure in its request for
the establishment of a panel, it decided not to pursue it further in the Panel proceedings. ( Ibid., footnote 42 to
para. 7.18)
14Panel Reports, paras. 7.78, 7.81, and 7.89.
15Panel Reports, paras. 7.64-7.67.
16Panel Reports, para. 7.255.
17Panel Reports, para. 7.78.
18Panel Reports, paras. 7.81 and 7.89.
19Panel Reports, paras. 7.116-7.120.
20Panel Reports, para. 7.140.
21Panel Reports, paras. 3.1 and 3.3.

favourable treatment than that accorded to like domestic livestock in a manner inconsistent with
Article 2.1 of the TBT Agreement and Article III:4 of the GATT 1994. In their view, compliance with
the COOL requirements results in higher segregati on costs for imported livestock, which in turn
adversely affects the competitive conditions for imported livestock in the US market.
22 They also
claimed that the COOL requirements are inconsistent with Article 2.2 of the TBT Agreement because
their objective is to protect the domestic industry, which is not a legitimate objective, and because, in
any event, they do not fulfil the objective identified by the United States. 23 The complainants further
alleged that the United States' administration of the COOL requirements is inconsistent with
Article X:3(a) of the GATT 1994 24, and that the application of the COOL requirements nullifies or
impairs benefits accruing to them under successive rounds of multilateral trade negotiations within the
meaning of Article XXIII:1(b) of the GATT 1994. 25 Mexico additionally claimed that the COOL
requirements are inconsistent with Articles 2.4, 12.1, and 12.3 of the TBT Agreement.26
5. The Panel Reports were circulated to Members of the World Trade Organization (the "WTO")
on 18 November 2011. In its Reports, the Panel made procedural rulings regarding: (i) additional
procedures for the protection of business confidentia l information ("BCI"); (ii) procedures for open
hearings; and (iii) enhanced third party rights. 27 Furthermore, the Panel found the measures
identified in paragraphs 1 and 2 above to be within its terms of reference. 28 The Panel, however,
decided not to make findings or recommendations on the Interim Final Rule (AMS) and the Interim
Final Rule (FSIS), noting that they had e xpired before the establishment of the Panel. 29 The Panel
nonetheless stated that it would consider them, where re levant, in the context of its examination of the
parties' claims regarding the other three measures. 30 In addition, the Panel found that the Final Rule
on Mandatory Country of Origin Labeling of Muscle Cuts of Beef (Including Veal), Lamb, Chicken,
Goat, and Pork; Ground Beef, Ground Lamb, Ground Chicken, Ground Goat, and Ground Pork 31 (the

22Panel Reports, para. 7.2.
23Panel Reports, para. 7.3.
24Panel Reports, para. 7.4.
25Panel Reports, paras. 7.1 and 7.889.
26Mexico claimed that the COOL requirements are inconsistent with Article 2.4 of the TBT Agreement
because the United States failed to base its technical re gulation on a relevant intern ational standard. Mexico
also argued that the United States did not take into account Mexico's special needs as a developing country
when preparing and applying the COOL requirements, in contravention of Articles 12.1 and 12.3 of the
TBT Agreement. (Panel Reports, paras. 3.3 and 7.5)
27Panel Reports, paras. 2.4-2.8.
28Panel Reports, para. 7.21.
29The Panel found that making a finding or recommendation on these measures would not "contribute
to resolving the current dispute". (Panel Reports, para. 7.34)
30Panel Reports, para. 7.34.
31Published in United States Federal Register , Vol. 74, No. 53 (20 March 2009) 11837 (Panel Exhibit
MEX-6), codified as United States Code of Federal Regulations, Title 9, Parts 317 and 381.

"2009 Final Rule (FSIS)"), which Mexico sought to challenge, fell outside the Panel's terms of
reference because it was not mentioned in Mexico's request for the establishment of a panel.32
6. The Panel thus stated that it would examine, and make findings and recommendations, with
respect to the COOL statute, the 2009 Final Rule (AMS), and the Vilsack letter. 33 The Panel rejected
the contention of Canada and of Mexico that the V ilsack letter should be examined together with the
COOL statute and the 2009 Final Rule (AMS) as one single measure. Instead, the Panel decided 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 in tegral part" of one single measure (the "COOL
measure").34 As for the Vilsack letter, the Panel treated it as a separate measure distinguishable from
the COOL statute and the 2009 Final Rule (AMS) "[i] n light of its distinct legal and substantive
nature".35
7. With respect to Canada's and Mexico's claims under the TBT Agreement, the Panel concluded
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 not36;
(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 livestock37; and

32Panel Reports, para. 7.19.
33Panel Reports, para. 7.34.
34Panel Reports, para. 7.61.
35Panel Reports, para. 7.63. The Panel noted, first, that, whereas the COOL statute and the 2009 Final
Rule (AMS) are instruments of statutory and regulatory authorities, the Vilsack letter does not have such legal
status. Second, the COOL statute and the 2009 Final Rule (AMS) are closely connected to each other in that the
latter lays out specificities necessary to implement the contents of the former. By contrast, the Vilsack letter
does not have a formal legal link to either the COOL statute or the 2009 Final Rule (AMS). ( Ibid.,
paras. 7.53-7.55)
36Canada Panel Report, para. 8.3(a); Mexico Panel Report, para. 8.3(a). See also Panel Reports,
paras. 7.146-7.216.
37Canada Panel Report, para. 8.3(b); Mexico Panel Report, para. 8.3(b). See also Panel Reports,
paras. 7.275-7.420. The Panel found that the complainants had not established that "the ground meat label
under the COOL measure results in less favourable treatment for imported livestock." (Panel Reports,
para. 7.437)

(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.
38
8. With respect to Canada's and Mexico's cl aims under the GATT 1994, the Panel concluded
that:
(a) it need not make a finding on the COOL meas ure under Article III:4 in the light of its
finding that the same measure violates the national treatment obligation under
Article 2.1 of the TBT Agreement
39;
(b) the Vilsack letter violates Article X:3(a) because it does not constitute a reasonable
administration of the COOL measure40; and
(c) having found that the Vilsack letter falls within the scope of Article X:3(a), it
refrained from examining whether it is inconsistent with Article III:4.41
9. In the light of the above findings of violation, the Panel "refrained from examining [Canada's
and Mexico's] non-violation claim[s] unde r Article XXIII:1(b) of the GATT 1994". 42 The Panel
rejected Mexico's claims under Articles 2.4, 12.1, and 12.3 of the TBT Agreement , finding that
Mexico had not established either that the COOL measure violates Article 2.4 of the TBT Agreement
or that the United States acted inconsiste ntly with Articles 12.1 and 12.3 of the TBT Agreement.43 In
addition, the Panel also rejected Mexico's claim that the United States administered the
COOL measure in a non-uniform and partial manner inconsistently with Article X:3(a) of the
GATT 1994.44
10. At a special meeting held on 5 January 20 12, the Dispute Settlement Body (the "DSB")
adopted a decision to extend the time period for the adoption of the Panel Reports to no later than

38Canada Panel Report, para. 8.3(c); Mexico Panel Report, para. 8.3(c). See also Panel Reports,
paras. 7.565-7.720.
39Canada Panel Report, para. 8.4(a); Mexico Panel Report, para. 8.4(a). See also Panel Reports,
para. 7.807.
40Canada Panel Report, para. 8.4(b); Mexico Panel Report, para. 8.4(b). See also Panel Reports,
paras. 7.850-7.864.
42Canada Panel Report, para. 8.5; Mexico Panel Report, para. 8.5. See also Panel Reports,
paras. 7.900-7.907.
43Mexico Panel Report, para. 8.3(d), (e), and (f). See also Panel Reports, paras. 7.728-7.736
and 7.752-7.804.
44Mexico Panel Report, para. 8.4(c). See also Panel Reports, paras. 7.874-7.885.

23 March 2012. 45 The DSB adopted this decision following the joint requests by Canada and the
United States46, and by Mexico and the United States. 47 The joint requests were made in view of the
"current workload of the Appellate Body" and in order to "provide greater flexibility in scheduling
any possible appeal of the panel report[s] in this dispute".48
11. On 23 March 2012, the United States notified the DSB of its intention to appeal certain issues
of law covered in the Panel Reports and certain legal interpretations developed by the Panel, pursuant
to Articles 16.4 and 17 of the Understanding on Rules and Procedures Governing the Settlement of
Disputes (the "DSU"), and filed a Notice of Appeal 49 and an appellant's submission pursuant to
Rule 20 and Rule 21, respectively, of the Working Procedures for Appellate Review (the " Working
Procedures").50 On 28 March 2012, Canada and Mexico each notified the DSB of its intention to
appeal certain issues of law covered in the respec tive Panel Reports and certa in legal interpretations
developed by the Panel, pursuant to Articles 16.4 a nd 17 of the DSU, and each filed a Notice of Other
Appeal51 pursuant to Rule 23 of the Working Procedures. On the same day, Canada and Mexico each
filed an other appellant's submission. 52 On 10 April 2012, Canada, Mexico, and the United States
each filed an appellee's submission. 53 On 13 April 2012, Australia, Brazil, Colombia, the
European Union, and Japan each filed a third participant's submission.54 On the same day, Argentina,
China, Guatemala, India55, Korea, New Zealand, Peru, and the Separate Customs Territory of Taiwan,
Penghu, Kinmen and Matsu each notified its intenti on to appear at the oral hearing as a third
participant.56
12. On 5 April 2012, the Appellate Body received a joint communication from the participants.
In that communication, Canada and the United St ates requested that the Appellate Body allow

45The DSB decided that it would, no later than 23 March 2012, adopt the Panel Reports unless (i) the
DSB decided by consensus not to do so or (ii) Canada, Mexico, or the United States notified the DSB of its
decision to appeal pursuant to Article 16.4 of the Understanding on Rules and Procedures Governing the
Settlement of Disputes (the "DSU"). (WT/DSB/M/310, paras. 9-12)
46WT/DS384/11.
47WT/DS386/10.
48WT/DS384/11; WT/DS386/10.
49WT/DS384/12; WT/DS386/11 (attached as Annex I to these Reports).
50WT/AB/WP/6, 16 August 2010.
51WT/DS384/13 and WT/DS386/12 (attached as Annexes II and III, respectively, to these Reports).
52Pursuant to Rule 23(3) of the Working Procedures.
53Pursuant to Rules 22 and 23(4) of the Working Procedures.
54Pursuant to Rule 24(1) of the Working Procedures.
55Although India appears to have made its notification pursuant to Rule 24(2) of the Working
Procedures by stating that it would not file a written submission but would appear at the oral hearing, the
notification was not received before the 17:0 0 deadline specified in Rule 18(1) of the Working Procedures .
Accordingly, the Division treated it as a notification and request to make an oral statement at the hearing made
pursuant to Rule 24(4) of the Working Procedures.
56Pursuant to Rule 24(2) of the Working Procedures.

observation by the public of the oral hearing, w ith the understanding that any information that was
designated as confidential in the documents filed in the Panel proceedings would be adequately
protected in the course of the hearing. Mexico in dicated that it did not object to allowing public
observation of the oral hearing, but maintained that its position in these proceedings is without
prejudice to its systemic views on this matter. On the same day, the Appellate Body invited the third
participants to comment in writing on the requ est by Canada and the United States by noon on
12 April 2012. Australia, Brazil, China, Colombia , the European Union, Guatemala, India, and
New Zealand submitted comments. In their comm ents, Australia, Brazil, China, Colombia, the
European Union, and Guatemala did not object to opening the oral hearing to public observation in
these disputes. Nonetheless, Brazil, Colombia, an d Guatemala each maintained that its position in
these disputes is without prejudice to its systemic vi ews on this issue, and China indicated that it
wished to maintain the confidentialit y of its statements at the oral hearing. India expressed the view
that the DSU requires appellate proceedings to be confidential and therefore does not allow opening
oral hearings to public observation. India fu rther indicated that it wished to maintain the
confidentiality of its statements at the oral hearing. On 16 April 2012, the Division hearing this
appeal issued a Procedural Ruling accepting the joint request by Canada and the United States to open
the hearing to public observation and adopting additi onal procedures for the conduct of the hearing.
The Procedural Ruling is attached as Annex IV to these Reports.
57
13. In these appellate proceedings, certain filings were made outside of the deadlines prescribed
by the Working Procedures or by the Division hearing this appeal. 58 The Appellate Body stresses the
importance of all participants and third participan ts adhering to the time-limits for filing documents,
in the interests of fairness and the orderly conduct of appellate proceedings.
14. The oral hearing in this appeal was held on 2 and 3 May 2012. Public observation took place
via simultaneous closed-circuit television broadcast to a separate room. Transmission was turned off
during statements made by those third participants that had indicated their wish to maintain the
confidentiality of their submissions. The participants and eight of the third participants (Australia,
Brazil, China, Colombia, the European Union, Gu atemala, Japan, and Korea) made opening and/or

57The Panel adopted additional working procedures for the protection of BCI. (Panel Reports, para. 2.4
and Annex E) None of the participants requested the Appellate Body to adopt additional procedures for the
protection of BCI in these appellate proceedings, and the Appellate Body has not done so in this appeal.
58The Appellate Body notes, for example, that the hard copy of Canada's other appellant's submission,
and the electronic copies of Mexico's Notice of Other Appeal, other appellant's submission, and appellee's
submission, were not received before the 17:00 deadline specified in Rule 18(1) of the Working Procedures.

closing statements. 59 The participants and third participan ts responded to questions posed by the
Members of the Division hearing the appeal.
15. On 14 May 2012, the United States requested the Appellate Body to issue two reports in one
single document with common descriptive and analy tical sections, and separate sections containing
findings and conclusions for each complainant. Cana da and Mexico were afforded an opportunity to
respond to the United States' request, and neither raised any objection to that request.
16. By letter of 21 May 2012, the Chair of the Appe llate Body notified the Chair of the DSB that
the Appellate Body would not be able to circulat e its Reports within the 60-day period pursuant to
Article 17.5 of the DSU, which would expire on 22 May 2012. In the same letter, the Chair of the
Appellate Body also informed the Chair of the DSB that the Appellate Body would be unable to
circulate its Reports within the 90-day period provided for under the same provision. The Chair of the
Appellate Body explained that this was due in part to the size of this appeal, including the number and
complexity of the issues raised by the participants. She added that this was also due to the Appellate
Body's heavy caseload, scheduling difficulties resu lting from the overlap in the composition of the
Divisions hearing different appeals at the same time, as well as constraints resulting from the
relocation of the Appellate Body and its Secretar iat in the context of ongoing renovation work at the
Centre William Rappard. The Chair of the Appellate Body informed the Chai r of the DSB that the
Reports would be circulated no later than 29 June 2012.
II. Arguments of the Participants and the Third Participants
A. Claims of Error by the United States – Appellant
1. Article 2.1 of the TBT Agreement
17. The United States requests the Appellate Body to reverse the Panel's finding that the COOL
measure is inconsistent with Article 2.1 of the TBT Agreement with regard to muscle cuts of meat, in
particular the finding that the measure accords less favourable treatment to imported livestock than
domestic livestock. The United States argues that the Panel's finding was based on "a faulty and
unprecedented legal test"60 for the assessment of less favourable treatment and on a failure to make an
objective assessment of facts related to segregation, commingling, and the price differential in the
US livestock market.

59Canada attached two exhibits to the written copy of its opening statement, but withdrew the exhibits
upon objection by the United States. The hard copies of the exhibits were returned to Canada.

(a) The Interpretation and Applica tion of Article 2.1 of the
TBT Agreement
18. The United States submits that, in order to determine whether a measure accords less
favourable treatment to imported products under Article 2.1 of the TBT Agreement, the Panel should
have followed past Appellate Body and panel reports in Thailand – Cigarettes (Philippines) , Korea –
Various Measures on Beef , and Dominican Republic – Import and Sale of Cigarettes . According to
the United States, these reports generally focused on: (i) "whether the measure itself treats imported
products differently and less favorably than domes tic like products on the basis of their origin"
61; and
(ii) "to the extent that there are adverse effects on imported products, whether these effects are
attributable to the measure itself or are based on external non-origin related factors, such as
pre-existing market conditions and the indepe ndent actions of private market actors."
62 Such an
approach is consistent with the purpose of Article 2.1 of the TBT Agreement , which is to avoid
protectionism in the form of technical regulations th at apply different treatment on the basis of origin.
Moreover, it appropriately focuses the inquiry on whether the measure, including its different
treatment based on the origin of products, is the reason for any adverse effects on such products, in
the same way as the Appellate Body has found, in the context of Article III:4 of the GATT 1994, that
there must be a "genuine relationship" between the measure at issue and the adverse impact on
competitive opportunities for imported versus like domestic products.63
19. The United States maintains that the Panel erred in finding that the COOL measure on its face
accords different treatment to imported livestock when it stated that "imported livestock is ineligible
for the label reserved for meat from exclusively US -origin livestock, whereas in certain circumstances
meat from domestic livestock is eligible for a label that involves imported livestock." 64 T h e
United States emphasizes that the treatment of the products must be different to be less favourable
because, "as a matter of logic, treatment th at is identical cannot be less favorable". 65 Because the
COOL measure treats imported and domestic produc ts identically, however, no different treatment
exists, and therefore no less favourable treatment could have been found. The recordkeeping
requirements in the COOL measure, which are the only aspect of the measure that directly affects

61United States' appellant's submission, para. 68 (referring to Appellate Body Report, Korea –
Various Measures on Beef, paras. 143-148; and Appellate Body Report, Thailand – Cigarettes (Philippines),
paras. 128-140). (original emphasis)
62United States' appellant's submission, para. 68 (referring to Appellate Body Report, Dominican
Republic – Import and Sale of Cigarettes , para. 96; Panel Report, US – Tuna II (Mexico) , para. 7.334; and
Panel Report, Japan – Film, paras. 10.381 and 10.382). (original emphasis)
63United States' appellant's submission, para. 72 (quoting Appellate Body Report, Thailand –
Cigarettes (Philippines), para. 134).
64United States' appellant's submission, paras. 57 (quoting Panel Reports, para. 7.295) and 81.

livestock, apply to all US market participants regardless of where th ey are located and regardless of
the type or origin of livestock they produce. Moreover, pursuant to the labelling requirements,
retailers must label meat derived from both domest ic and imported livestock in the same conditions
(that is, they must affix a label to all categories of meat unless one of the exceptions applies). The
United States submits that livestock of different orig ins cannot be said to be treated differently simply
because the labels ultimately placed on the meat de rived from that livestock say different things. The
United States adds that the Panel reached its finding regarding the different treatment of livestock
based on the "commingling flexibility" affecting meat, and observes that meat is not a product at issue
in these disputes.66 The United States also points out that th e complainants never alleged that, on its
face, the COOL measure accords different treatment to imported livestock, and that the commingling
flexibilities that the Panel relied on as evidence of different treatment were included in the COOL
measure at the request of the complainants.
20. The United States alleges that, having wrongl y found different treatment, the Panel never
linked that finding to its subsequent finding of l ess favourable treatment. Instead, the Panel "quickly
pivot[ed]" to an assessment of whether there is de facto less favourable treatment 67, and based its
finding that the COOL measure modifies the conditions of competition to the detriment of imported
products on the following erroneous conclusions: (i) the COOL measure involves segregation and,
consequently, differential costs for imported livestock; and (ii) the compliance costs involved in the
COOL measure create an incentive to process domes tic livestock, thereby reducing the competitive
opportunities for imported livestock. In reaching these conclusions, the Panel failed to examine
whether the measure itself affected competitive opportunities to the detriment of imports. Instead, the
Panel erroneously assessed whether imported liv estock are equally competitive with domestic
livestock, notwithstanding that nothing in the TBT Agreement or the covered agreements requires
Members to ensure that imported products and like domestic products are equally competitive.
According to the United States, the ques tion for purposes of Article 2.1 of the TBT Agreement is
rather whether the technical regulation alters the conditions of competition so as to deny imported
products the ability to compete under the same conditions as like domestic products.
21. According to the United States, the Panel wrongly held that less favourable treatment could
be demonstrated where the detrimental impact expe rienced by imported products is caused solely by
the decisions of private market participants. The United States highlights the Panel's own finding that
segregation is not legally require d under the COOL measure. The United States explains that, in

66United States' appellant's submission, para. 57. For a detailed discussion on the commingling
provisions under the COOL measure, see section IV of these Reports.

promulgating the COOL requirements, it included the commingling provisions to help mitigate the
need to make any choices that could have an adverse effect on imports, and that, therefore, any market
participant's choice to segregate livestock instead of taking advantage of the commingling provisions
reflects solely the decision of a private market part icipant. Furthermore, any segregation that occurs
equally affects both imported and domestic liv estock, because segregation inherently involves
separating one type of animal from the other. Therefore, according to the United States, any choice to
pass the costs of segregation on to imported livestoc k, instead of distributing them equally between
imported and domestic livestock, is not a choice required by the measure.
22. The United States further contends that even if there were any incentive for market
participants to process exclusively domestic liv estock—which it contests—this is not due to the
COOL measure. The Panel itself essentially ackno wledged this in finding that the incentive to
process exclusively domestic livestock was related to the following factors: (i) "[l]ivestock imports
have been and remain small compared to overall [US] livestock pr oduction and demand, and
US livestock demand cannot be fulfilled with exclusively foreign livestock"
68; and (ii) "US livestock
is often geographically closer to most if not all US domestic markets, so processing exclusively
imported livestock and meat remains a relatively less competitive option." 69 Therefore, the United
States argues that, to the extent that they exis t at all, adverse effects on imports result from
pre-existing market conditions and not from the COOL measure. Thus, in the United States' view, the
Panel's analysis of less favourable tr eatment was "clearly … inappropriate" 70 because the Panel's
conclusion would have been different if these conditions had been different.
23. The United States takes issue with the Panel's efforts to fit its less favourable treatment
finding into "the paradigm established by past [panel] and Appellate Body reports". 71 M o r e
specifically, the United States argues that the Panel overlooked the fact that, in Korea – Various
Measures on Beef , the decisions made by private market pa rticipants were made on the basis of a
legal requirement, not on the basis of any economic incentive or disincentive. By contrast, in the
present dispute, market participants have a fr ee choice regarding how to respond to the COOL
measure. In addition, the United Stat es submits that, unlike the measure in Mexico – Taxes on Soft
Drinks, the complaining parties have not asserted that the COOL measure itself singles out imports

and discriminates against them on the basis of some neutral characteristic that serves as a "proxy" for
imports, and thus acts as a disguised restriction on trade.72
24. The United States considers the facts in the presen t disputes to be very similar to those in
Dominican Republic – Import and Sale of Cigarettes , in which the Appellate Body found that the
Dominican Republic's measure did not accord less favourable treatment to imports because any
adverse effects on imports were not compelled by the measure but resulted from the smaller market
share of the imported product. However, even t hough the Panel found the exact same factor to be
responsible for the alleged adverse effects on imports in these disputes—that is, smaller market share
of imported products—it reached the opposite conclusion to that of the Appellate Body in Dominican
Republic – Import and Sale of Cigarettes regarding less favourable treatment. Furthermore, the
United States recalls the Panel's finding that th e costs of segregation under the COOL measure are
higher for imports than for domestic products. This, in the United States' view, is simply another way
of saying that the unit cost of each import is highe r than the unit cost of each domestic like product.
Yet, the Appellate Body rejected a similar claim by Honduras in Dominican Republican – Import and
Sale of Cigarettes and should, for the same reasons, find in these disputes that the COOL measure
does not accord less favourable treatment to imports.
25. Finally, the United States contends that the Panel's "faulty legal test" could "have severe
unintended consequences" by potentially rendering "common technical regulations" inconsistent with
the TBT Agreement.73 This is because nearly all technical regulations impose compliance costs, and
such costs are almost never uniform, are affected by external factors, and also depend on how market
participants respond. The United States observ es that, under the Panel's "speculative cost
comparison-based approach", "any Member's C OOL requirement could be found to accord less
favorable treatment to imported products because it will always be more costly to process products of
more than one origin than a single origin (and it is likely that the domestic product in most countries
has the highest market share)."74 Overall, the United States submits that the Panel erred in adopting a
cost comparison-based legal framework to find that an origin-neutral measure that applies equally to
imported and domestic products accords less favourable treatment merely because the costs of
compliance may be higher for some participants due to external factors such as market share,
geographic location, and sourcing patterns.

72United States' appellant's submission, para. 95 (referring to Panel Report, Mexico – Taxes on Soft
Drinks, paras. 8.54-8.58).
74United States' appellant's submission, para. 100. (original underlining omitted)

(b) Article 11 of the DSU
26. The United States alleges that the Panel acted in consistently with its obligation to conduct an
objective assessment pursuant to Article 11 of the DSU in assessing the facts relating to segregation,
commingling, and the price differential for livestoc k in the US market, and relied on its erroneous
factual findings to reach its ultimate conclusion under Article 2.1 of the TBT Agreement.
27. The United States maintains that the Panel erred in finding that the COOL measure
necessitates segregation and that this, in turn, necessarily results in higher costs for imported
livestock. The COOL measure does not legally requi re producers to segregate livestock; rather,
segregation is but one means of facilitating complia nce with the recordkeeping requirements of the
COOL measure. The COOL measure also expressl y permits the commingling of livestock and meat
as an alternative to segregation. The United Stat es claims that, despite acknowledging this, the Panel
either ignored or disregarded evidence showing that producers are in fact taking advantage of the
commingling flexibilities contained in the measure in order to avoid segregation on a widespread
basis. The United States refers to a survey by the US Departme nt of Agriculture (the "USDA")
showing that 22% of beef muscle cuts and 4% of pork muscle cuts sold in the United States are
labelled "Product of the United States, Canada a nd Mexico". Given the negligible number of
livestock that are born in either Canada or Mexico, raised in the other country, and then slaughtered in
the United States—in which case the above label woul d also be applicable—this evidence shows that
"approximately 22 percent of beef sold and 4 percen t of the pork sold in the United States is derived
from commingled livestock or meat".
75 In addition, the United States alleges that the Panel
erroneously dismissed as inconclusive photographs 76 of commingled meat being sold at various
locations around the country and an exhibit subm itted by Canada showing that "processors are
commingling all types of livestock and meat on a wide scale to reduce compliance costs".77 Similarly,
the United States contends that the Panel misinterpr eted an affidavit submitted by the United States,
which demonstrates that one of the three major US livestock producers is processing commingled
animals. Given that the above evidence, toge ther, "indisputably shows significant use of the
commingling provisions"
78, the Panel erred in finding that: (i) the COOL measure "necessitates" 79

75United States' appellant's submission, para. 106 (referring to United States' response to Panel
Question 90, para. 10; and Panel Exhibits US-28, US-144, US-145, and CDA-211).
76United States' appellant's submission, para. 106 (referring to Panel Exhibits US-67, US-95, US-96,
and US-98).
77United States' appellant's submission, para. 106 (referring to CANFAX, "U.S. Packer procurements
policies for Canadian Cattle", updated 24 April 2009 (Panel Exhibit CDA-41)).

segregation; and (ii) the COOL measure involves "the identification by origin of each and every
livestock and piece of meat" throughout the supply chain.80
28. The United States asserts that the Panel also erred in finding that any costs of segregation
cannot be passed on to the consumer. In its view, most consumers do not have viable alternatives to
the purchase of labelled meat, and thus there is no r eason that the retailer cannot pass on at least some
portion of the compliance costs to the consumer. The United States alleges that the Panel ignored
evidence on the record related to this issue.81
29. The United States further challenges the Panel's determination that the COOL measure creates
a price differential in the US livestock market be tween domestic and imported livestock. According
to the United States, the Panel considered only th e evidence submitted by the complainants, and did
not discuss evidence submitted by the United States s howing that the prices paid for Canadian and
Mexican livestock had been increasing at levels that met or exceeded the price increase for
US livestock, and that the price differential betw een Canadian and US livest ock had narrowed, since
the adoption of the COOL measure. In addition, the United States argues that, contrary to the Panel's
finding, the "Sumner Econometric Study"82 submitted by Canada does not support the conclusion that
the COOL measure affected the price basis of Canadian livestock. Indeed, since the study did not find
any price effects on feeder cattle, feeder hogs, or sl aughter hogs, the Panel's findings in this respect
lack a factual basis.
(c) The Relevance of the Appellate Body Report in US – Clove
Cigarettes in this Appeal83
30. With respect to US – Clove Cigarettes, the United States contends that the Appellate Body in
that dispute found that there existed a detrimental impact on imported products as a result of the
measure at issue, and then inquired as to whether the measure itself provided different treatment to
imported products on the basis of their origin. In the United States' view, this inquiry was not meant
to provide an exception or to apply an additional test under Article 2.1 of the TBT Agreement. Rather,

added by the United States)
81United States' appellant's submission, para. 110 (referring to Panel Reports, paras. 7.352, 7.353,
and 7.487; and Panel Exhibit CDA-174).
82Daniel A. Sumner, "Econometric Analysis of the Differential Effects of Mandatory Country of Origin
Labeling in the United States on Canadian Cattle Prices and Imports of Canadian Cattle and Hogs into the
United States" (16 June 2010) (Panel Exhibit CDA-79) (the "Sumner Econometric Study").
83The United States' appellant's submission was filed prior to the circulation of the Appellate Body
report in US – Clove Cigarettes and therefore did not contain arguments relating to the Appellate Body's
findings in that case. The Unites States addres sed the relevance of the Appellate Body report in US – Clove
Cigarettes to these disputes in its oral statement and responses to questions during the oral hearing.

the inquiry performed in US – Clove Cigarettes is a way to illuminate the question of whether or not a
measure actually treats imports and like domestic pr oducts differently. Therefore, in applying the
Article 2.1 analysis set out by the Appellate Body, a panel will analyze whether a measure is
even-handed to determine whether the measure ha s a detrimental impact, as well as to determine
whether that impact stems exclusively from a legiti mate regulatory distinction rather than reflecting
discrimination. Ultimately, in the United States ' view, the question is whether the measure is
even-handed. If it is even-handed, b ecause it does not provide different treatment in fact , then it
would not breach Article 2.1.
31. Regarding the "legitimate regulatory distinction" , the United States points out that it is very
important not to confuse this notion with that of legitimate objectives. In its view, a Member could
have a legitimate objective underlying its measure, but th en make illegitimate distinctions within that
regulation. In applying this concept to the C OOL measure, the United States argues that its measure
does not contain a regulatory distinction because there are no different requirements imposed on
products, or requirements that some products be labelled and others not. In this respect, the
United States emphasizes that the mere fact that the measure identifies the origins of products in order
to label them accordingly at retail does not mean that there is a regulatory distinction made between
domestic and imported products . Rather, the labels are simply c onveying product information that is
relevant to the consumer, and different information is conveyed depending on the underlying product.
2. Article 2.2 of the TBT Agreement
32. In its analysis of Canada's and Mexico's claims that the COOL measure is inconsistent with
Article 2.2 of the TBT Agreement , the Panel adopted and applied a three-step test that entailed
consideration of whether the complainants had established each of the following:
(a) that the COOL measure is trade restrictive within the meaning of Article 2.2;
(b) that the objective pursued by the United States through the COOL measure is not
legitimate; and
(c) if the objective is legitimate, that the COOL measure is more trade restrictive than
necessary to fulfil a legitimate objective.84
Having conducted its analysis under each of these steps, the Panel found that the COOL measure is
inconsistent with Article 2.2.

84Panel Reports, para. 7.558.

33. In its appeal, the United States seeks reversal of the Panel's finding of inconsistency under
Article 2.2 on three main grounds. First, the Unite d States contests the Panel's finding, under its first
step, that the COOL measure is trade restrictive fo r purposes of Article 2.2. Second, with respect to
the second step of its analysis, the United States c ontends that the Panel mischaracterized its position
regarding the level of fulfilment of its objective by relying on partial quotes that omitted key elements
of the United States' description of the level at which the United States considers it appropriate to
fulfil its objective. In so doing, argues the Unite d States, the Panel "wilfully distort[ed]" and
"misrepresent[ed]" the United States' position as to its le vel of fulfilment, contrary to Article 11 of the
DSU.85 Third, the United States appeals the legal frame work adopted by the Panel under its third step
to determine whether a measure is more trade restrictive than necessary to fulfil a legitimate objective,
including its failure to require th e complaining parties to meet their burden to prove that the measure
is more trade restrictive than necessary based on the availability of a significantly less trade-restrictive
alternative measure. The United States further asserts that the Panel erred in applying its erroneous
legal framework by determining that the COOL me asure does not fulfil its objective at the level the
United States considers appropriate.
(a) Trade-Restrictiveness
34. The United States seeks reversal of the Panel's finding that the COOL measure is trade
restrictive. The United States refers to the arguments that it makes in the context of its appeal of the
Panel's finding under Article 2.1 of the TBT Agreement, namely, that the Panel erred in finding that
"the COOL measure negatively affects importe d livestock's conditions of competition in the
US market in relation to like domestic livestoc k by imposing higher segregation costs on imported
livestock."86 Because this finding is erroneous, it follows, according to the United States, that for the
same reasons, the Panel also erred in finding that the COOL measure is trade restrictive for purposes
of Article 2.2.
(b) The Objective Pursued and the Level at which the United States
Considers It Appropriate to Fulfil Its Objective
35. The United States considers the Panel to have committed two errors in its analysis of the
objective pursued by the United States through th e COOL measure and of the level at which the
United States considers it appropriate to fulfil that obj ective. The United States asserts that the Panel:
(i) acted inconsistently with Article 11 of the DSU because it wilfully distorted and misrepresented

86United States' appellant's submission, footnote 187 to para. 124 (referring to Panel Reports,
para. 7.574, in turn cross-referencing section VII.D.2 of the Panel Reports).

the United States' position as to the level at which th e United States considers it appropriate to fulfil
its objective; and (ii) failed to consider all relevant information regarding the level at which the
United States sought to achieve that objective.
36. The United States explains that, in addition to determining what objective a Member pursues,
a panel must determine the level at which that Member pursues that objective through the challenged
technical regulation. This is distinct from the objective itself. The United States highlights that the
sixth recital of the preamble of the TBT Agreement confirms that a Member need not achieve its
objective at 100%, but that it is up to Members "to decide which policy objectives they wish to pursue
and the levels at which they wish to pursue them ".
87 While this "level" is sometimes loosely referred
to as the "level of protection", it is more accurate to think of it as the "level of fulfilment (of the
objective)" since the objective may not be "protection" but some other legitimate objective.88
37. Referring to various elements of the Panel's analysis, the United States considers that the
Panel concluded, based on its characterization of several statements made by the United States, that
"the United States had identified in this proceedin g that the objective it pursues through the COOL
measure and the level at which the United States cons iders it appropriate to fulfill that objective [is]:
'to provide as much clear and accurate or igin information as possible to consumers '."89 The United
States argues that this identification of the "level of fulfilment" is erroneous because the Panel relied
on partial quotes that omitted key elements of the Un ited States' description of the level at which the
United States considers it appropriate to fulfil its obj ective. In particular, the United States points to
the complete versions of excerpts from its submissions to the Panel that, in its view, demonstrate that
the United States intended to strike a balance between providing information to consumers and
minimizing the costs to market participants of implementing the measure. 90 By "selectively editing"
the United States' statements, however, the Panel mischaracterized the United States' argument to
indicate that it aims to provide as much clear and accurate origin information as possible " without
regard to the cost of doing so ".91 In doing so, the Panel "wilfully distort[ed] and misrepresent[ed]"
the United States' position as to its desired level of fulfilment, contrary to Article 11 of the DSU.92

87United States' appellant's submission, para. 133 (quoting Panel Report, EC – Sardines , para. 7.120).
(emphasis added by the United States)
88United States' appellant's submission, para. 124 (referring to, inter alia, Panel Reports, para. 7.715).
added by the United States)
90United States' appellant's submission, paras. 139 and 140 (quoting United States' first written
submission to the Panel, paras. 7, 240, and 241; and United States' responses to Panel Question 24, para. 43,
91United States' appellant's submission, para. 142. (original emphasis)

38. The United States further asserts that the Panel er red in its application of Article 2.2 because
it failed to consider all of the relevant informa tion regarding the level at which the United States
sought to achieve its objective. According to the United States, the true balance between the costs and
consumer information provided under the COOL m easure is confirmed by the text, structure, and
design of the COOL measure, which provides certai n information on origin while also allowing
commingling, which reduces costs to the market par ticipants. The result of the balance is that the
COOL measure does not provide perfect information to consumers on origin in every conceivable
scenario, which the United States never maintained it did, or intended to do. Rather, the extent of the
information provided through the various labels under the COOL measure reflects the balance that the
United States strikes between the provision of informa tion and the costs of providing it. The fact that
other countries' country of origin labelling sch emes might provide more information does not
invalidate the COOL measure, but rather indicates th at such countries intended to strike a different
balance, as Members are entitled to do under Article 2.2.
(c) Whether the COOL Measure Is "More Trade-Restrictive than
Necessary to Fulfil a Legitimate Objective"
(i) The Panel's Legal Framework
39. The United States submits that the Panel erred in the legal framework that it employed at the
third step of its Article 2.2 analysis in order to determine whether the COOL measure is "more
trade-restrictive than necessary to fulfil a legitimate objective". The Panel effectively found that the
United States breached its international obligati ons because its measure does not fulfil its objective
"enough".93 Moreover, the Panel failed to require the complaining parties to meet their burden to
prove that the measure is "more trade-restrictiv e than necessary" based on the availability of a
significantly less trade-restrictive alternative measur e that also fulfils the objective at the level the
United States considers appropriate.
40. The United States agrees with the Panel that "t he 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. In other words, the second sente nce explains what the first sentence means." 94 In
the United States' view, if the measure pursues an objective considered "legitimate" for purposes of
Article 2.2, then that measure is inconsistent with Article 2.2 only if it is "more trade-restrictive than
necessary to fulfil" that legitimate objective. To establish that this is the case, a complaining Member

93United States' appellant's submission, para. 117. (original emphasis)
omitted)).

must demonstrate that: (i) there is a reasonably ava ilable alternative measure; (ii) that fulfils the
Member's legitimate objective at the level that th e Member considers appropriate; and (iii) is
significantly less trade restrictive. The United States asserts that, as with the "parallel provision" in
Article 5.6 of the Agreement on the Application of Sanitary and Phytosanitary Measures (the
"SPS Agreement"), "the key legal question for Article 2.2 is whether the importing Member could
have adopted a less trade-restrictive measure yet still achieve its objective at the chosen level."
95
41. The United States considers that the Panel erre d by adopting a two-stage approach involving,
first, an inquiry into whether the measure fulfils th e objective and, only if that measure does in fact
fulfil that objective, then moving to an examination of whether the measure is more trade restrictive
than necessary because there is a less trade-restrictive alternative measure available. According to the
United States, like the "parallel provision" in Article 5.6 of the SPS Agreement , Article 2.2 of the
TBT Agreement requires a "single analysis, containing three elements that are to be judged
cumulatively".96
42. The United States posits that the Panel arrived at its erroneous approach by mistakenly
drawing from the interpretative framework under Article XX(b) of the GATT 1994 and the
"necessity" case law developed thereunder. In the Un ited States' view, the jurisprudence developed
under Article XX is not a useful interpretative guide to the Article 2.2 inquiry. The United States
disagrees with the Panel that Article XX of the GATT 1994 is "textually similar" to Article 2.2 of the
TBT Agreement97, pointing out that the only similarity betw een the two texts is the use of the term
"necessary". Further, the United States highlight s three "important contextual differences" 98
distinguishing the use of the term "necessary" unde r these two provisions: first, while the question
under Article XX is whether the measure itself is necessary, Article 2.2 asks whether the amount of
trade-restrictiveness is necessary; second, while th e analysis under Article 2.2 involves a comparison
of two presumptively WTO-consistent measures, to the extent that alternatives are compared under
Article XX, the WTO-inconsistent measure (for whic h the exception is invoked) is compared to a
hypothetical measure that is WTO-consistent; and th ird, the burden of establishing that a measure is
more trade restrictive than necessary under Article 2. 2 is with the complainant, which has important
consequences given that the burden of proof may be dispositive.

95United States' appellant's submission, para. 123 (referring to Appellate Body Report, Australia –
Apples, para. 356). (original emphasis)

43. The United States also rejects a finding of the Pa nel that the second and sixth recitals of the
preamble of the TBT Agreement support the conclusion that the inte rpretation of Article XX of the
GATT 1994 is relevant to an analysis of Article 2. 2. While the United States agrees with the Panel
that a "close connection" exists between the TBT Agreement and Article XX, it is with the second and
sixth recitals of the TBT Agreement , not Article 2.2 in particular. 99 The reference to a "close
connection" is more appropriate in describing the connection between Article XX of the GATT 1994
and Article 5.6 of the SPS Agreement , since the SPS Agreement is explicitly a development of
Article XX(b). Yet, the Appellate Body has not required that the measure be proven "necessary",
consistent with Article XX(b), in order to meet the obligation in Article 5.6.100
44. The United States considers therefore that the Pane l's two-part test that entailed consideration
of whether the COOL measure contributed to or fulfilled the objective " enough" is in error. 101
Whether a measure makes a "material contribution" to its objective, in the sense that the Appellate
Body used the term in Brazil – Retreaded Tyres , is not the correct test for purposes of Article 2.2.
A measure is not inconsistent with Article 2. 2 solely because it fails to make some minimum
threshold of contribution to its objective. Rather, the measure is inconsistent only if the complaining
party is able to establish that a significantly less trade-restrictive alterna tive measure exists that also
makes at least the same level of contribution to the objective. The United States emphasizes that,
while a panel's determinations of the objective and of the level at which a Member seeks to fulfil that
objective are important for an Article 2.2 analysis, they are not an end in themselves. Rather, they are
relevant in order to assess whether the complaining party has met its burden of showing that the same
level of fulfilment could be achieved by a significantly less trade-restrictive alternative measure. The
United States stresses, in this regard, that the relevant question under Article 2.2 is whether the
Member could have adopted a less trade-restrictive measure that fulfils the objective at the chosen
level of fulfilment, and not whether the Member could have done a better job of designing its
measure. Panels are not equipped to undertake the latter type of inquiry. Nor is it appropriate for
panels to insert themselves in the place of Me mbers and make their own policy judgements and
assessment as to how best to achieve a particular objective within the circumstances of the Member
concerned.
45. Finally, with respect to the burden of proof, th e United States asserts that the Panel erred in
failing to require the complaining parties to meet their burden to prove that the measure is "more

99United States' appellant's submission, paras. 159 and 165 (referring to Panel Reports, para. 7.670).
100United States' appellant's submission, para. 166 (referring to Appellate Body Report, Australia –
101United States' appellant's submission, para. 167. (original emphasis)

trade-restrictive than necessary" based on the availability of a significantly less trade-restrictive
alternative measure that also fulf ils the objective at the level the United States considers appropriate.
According to the United States, such a requirement would be consistent with the Appellate Body's
analysis in Australia – Salmon of the parallel provision in Article 5.6 of the SPS Agreement.
102 In this
regard, the United States refers to footnote 3 to Article 5.6 of the SPS Agreement, which clarifies that
"a measure is not more trade-restrictive than required unless there is another measure, reasonably
available taking into account technical and economic feasibility, that achieves the appropriate level of
sanitary or phytosanitary protection and is significantly less restrictive to trade". 103 In support, the
United States refers to a 1993 letter from the Director-General of the GATT to the Chief
US Negotiator concerning the application of Article 2.2, stating that, inter alia, the TBT Agreement
"does not concern itself with insignificant trade eff ects nor could a measure be considered more trade
restrictive than necessary in the absence of a reasonably available alternative". 104 According to the
United States, this letter constitutes a supplementary means of interpretation, within the meaning of
Article 32 of the Vienna Convention on the Law of Treaties105 (the "Vienna Convention").
(ii) The Level of Fulfilment Achieved by the COOL Measure
46. Apart from the erroneous legal framework adopt ed by the Panel, the United States separately
appeals the Panel's determination that the COOL me asure does not fulfil its legitimate objective at the
level the United States considers appropriate.
47. The United States argues that the Panel failed to take into account that the COOL measure
"completely" fulfils its objective for meat that carries Label A. 106 According to the United States, it is
an "uncontested fact" that meat carrying Label A c onstitutes at least 71% of the meat sold in the
United States. 107 With respect to that label, the C OOL measure therefore provides "clear and
accurate" information for at least 71% of the meat. 108 Moreover, notwithstanding its various
criticisms of the information that Labels B and C provide, even the Panel acknowledged that those
labels "provide additional country of origin information that was not available prior to the COOL

102United States' appellant's submission, para. 179 (referring to Appellate Body Report, Australia –
Salmon, para. 194).
103Emphasis added by the United States.
104United States' appellant's submission, footnote 269 to para. 179 (referring to Letter from
Peter D. Sutherland, Director-General of the GATT to Ambassador John Schmidt, Chief US Negotiator, dated
15 December 1993 (Panel Exhibit US-53)).
105Done at Vienna, 23 May 1969, 1155 UNTS 331; 8 International Legal Materials 679.
106United States' appellant's submission, para. 172. (original emphasis)
107United States' appellant's submission, para. 172 (referring to Panel Reports, footnote 941 to
para. 7.715).

measure", and that "the COOL measure may have reduced consumer confusion that existed under the
pre-COOL measure and USDA grade labelling system". 109 It is also an "uncontested fact", argues the
United States, that meat carrying Labels B and C co nstitutes the vast majority of meat sold without
Label A (that is, between 21% and 29% of labelled beef). 110 According to the United States, these
contributions to an objective—under any definiti on—are "material, not merely marginal or
insignificant".111
48. Instead of taking account of this evidence and focusing on what the COOL measure could
contribute to its objective, the Panel focused on what the measure does not do vis-à-vis the
(erroneously identified) chosen level of fulfilment, that is, that the United States aims to provide
"as much clear and accurate origin information as possible ".112 This mistaken approach in turn
"forc[ed] the Panel to disregard entirely" the bala nce that the United States sought to strike between
the information provided and the cost of providing it, including the acknowledged fact that, where the
COOL measure provides less information, it does so to lower costs to market participants, including
Canadian and Mexican producers, which is "an entirely normal regulatory approach".113
B. Arguments of Canada – Appellee
1. Article 2.1 of the TBT Agreement
49. Canada requests the Appellate Body to reject th e United States' appeal of the Panel's finding
that the COOL measure is inconsistent with Article 2.1 of the TBT Agreement. Canada asserts that the
Panel was correct in arriving at this finding, and th at the United States' appeal "distorts the Panel's
methodical assessment of the COOL measure's effe cts on the conditions of competition by neglecting
key components of the Panel's analysis and misrepresenting others".114
(a) The Interpretation and Applica tion of Article 2.1 of the
TBT Agreement
50. Canada submits that the Panel followed the corr ect legal approach in its analysis regarding
whether the COOL measure accords to imported livestock treatment no less favourable than that

110United States' appellant's submission, para. 172 (referring to Panel Reports, footnote 941 to
para. 7.715).
111United States' appellant's submission, para. 173 (quoting Appellate Body Report, Brazil – Retreaded
Tyres, para. 210).
added by the United States)

accorded to domestic livestock, within the meaning of Article 2.1 of the TBT Agreement, and that the
Panel's approach is consistent with that of the Appellate Body in Korea – Various Measures on Beef .
The Panel's approach is also supported by th e recent report of the Appellate Body in US – Clove
Cigarettes, which notes that Article III:4 of the GATT 199 4 informs the analysis under Article 2.1 of
the TBT Agreement , and that the effects on the conditions of competition are the focus under both
provisions. Canada highlights that the United Stat es "agrees" that the focus of the analysis under
Article 2.1 of the TBT Agreement should be "whether the measure itself modifies the conditions of
competition to the detriment of imported livestock (i.e. whether the measure affects the terms under
which products compete in the market)".
115 Canada further alleges that, contrary to the United States'
argument, a panel is not required to determine whethe r detrimental impact on imports is related to the
origin of the imported product(s), or is a proxy fo r such origin, in order to find less favourable
treatment, as such an approach was rejected by the Appellate Body in US – Clove Cigarettes.
51. In Canada's view, by arguing that the COOL measure treats imported and domestic products
identically, the United States "conflates" different treatment with discriminatory or less favourable
treatment.116 Canada maintains that the design and structure of the measure, combined with economic
logic, "necessitate discriminatory treatment" of imported livestock. 117 Canada also contends that the
United States "distorts" the Panel's finding when asserting that the Panel relied on " the commingling
flexibility provided with regard to the labeling of meat " in reaching its finding that the COOL
measure, on its face, provides different tr eatment to imported and domestic livestock. 118 The Panel in
fact found that the definitions of the four muscle cut labels under the measure are mutually exclusive,
and went on to describe the limited flexibility provide d for between the use of Label A and the rest of
the labels when commingling is involved. Moreover, the Panel did not erroneously "pivot[]" from the
question of different treatment to an assessment of whether there is de facto less favourable
treatment.119 Rather, the Panel recognized that different ial treatment on the face of the measure does
not necessarily constitute less favourable treatment, as indicated by the Appellate Body's findings in
Korea – Various Measures on Beef. The Panel was correct, therefore, in going on to analyze whether,
on the basis of the facts of this case, the differe nt treatment negatively affects the conditions of
competition for imported cattle and hogs.

115Canada's appellee's submission, para. 36 (quoting United States' appellant submission, para. 62
(original emphasis)).
118Canada's appellee's submission, para. 62 (quoting United States' appellant's submission, para. 57).
(emphasis added by Canada)
119Canada's appellee's submission, para. 61 (quoting United States' appellant's submission, para. 58).

52. Canada maintains that, even if the COOL measu re did not treat importe d products differently
than domestic products on its face, in reviewing th e operation of the COOL measure "in practice", the
Panel correctly found that, "for all practical purpo ses, the COOL measure necessitates segregation of
meat and livestock according to origin". 120 This finding was the inevitable result of several factual
findings made by the Panel, including that the COOL measure, in principle, "prescribes an unbroken
chain of reliable country of origin information w ith regard to every animal and muscle cut", that
segregation is "a practical way to ensure" an unbrok en chain of reliable information, and that the
USDA's own Compliance Guide mentions a "segre gation plan" as an "example[] of records and
activities that may be useful" for compliance with the COOL measure. 121 The Panel, however, found
that this segregation was not per se a violation of Article 2.1, a nd properly moved on to determine
whether the COOL measure creates an incentive to process domestic livestock and thereby reduces
the competitive opportunities of imported livestock.
53. With respect to such incentive, Canada argues that the Panel correctly examined the impact of
the COOL measure on the market and compared the position of US livestock in the US market with
that of imported livestock. In Canada's view, th e United States mischaracterizes the Panel's reasoning
when it suggests that the Panel did not assess "whether the technical regulation alters the conditions of
competition so as to deny imported products the ability to compete under the same conditions as like
domestic products".122 On the contrary, the Panel examined whether the COOL measure modifies the
conditions of competition to the detriment of imported livestock. In this context, the Panel examined
extensive, uncontested evidence est ablishing that the COOL measure creates disincentives to use
Canadian-born or -raised cattle or hogs. The Panel then examined various arguments advanced by the
United States, but ultimately found that the C OOL measure creates an incentive in favour of
processing domestic livestock, and therefore de facto discriminates against imported livestock. The
Panel rightly considered that it is the "implicati ons" and operation of the c ontested measure "in the
marketplace" that will reveal whether the conditions of competition have been altered to the detriment
of imported livestock, and whether there has been a reduction in competitive opportunities for
imports.123 In this regard, Canada further submits that, in assessing the implications of the COOL

121Canada's appellee's submission, para. 64 (quoting Panel Reports, paras. 7.317, 7.320, and 7.321, in
turn quoting USDA, "Country of Origin Labeling Compliance Guide", revised 12 May 2009 (Panel Exhibits
CDA-65, at p. 17 and MEX-41)).
122Canada's appellee's submission, para. 68 (quoting United States' appellant's submission, para. 63
(original emphasis)).
123Canada's appellee's submission, para. 39 (quoting Appellate Body Report, US – FSC
(Article 21.5 – EC), para. 215).

measure in the marketplace, it was appropriate fo r the Panel to examine in detail the particular
implications of the COOL measure in the relevant market.
54. In Canada's view, the United States errs in asser ting that certain factors in the market will
negate a potential finding that a measure affects th e conditions of competition to the detriment of
imported products, including the market share held by imports, and the decisions of private market
actors. With respect to the market share held by imported livestock, Canada argues that the market
share is an appropriate factor for a panel to take into consideration when assessing whether a measure
changes the conditions of competition to the detriment of imported products. The Appellate Body has
taken the small market share of relevant products into account as a factor in assessing less favourable
treatment in several cases.
124 Canada posits that part of the evidence that the conditions of
competition were negatively affected in Korea – Various Measures on Beef was that the market share
of imported beef was small in that relevant market. In Mexico – Taxes on Soft Drinks , the fact that
imports of the product that was favoured (cane sugar sweeteners) had a negligible market share was a
relevant factor in the finding of less favourab le treatment on non-cane sugar sweeteners. In US –
Clove Cigarettes , in finding that a ban on all flavoured cigarettes (other than tobacco or menthol)
accorded less favourable treatment to imported clove-flavoured cigarettes, the panel and the Appellate
Body took into account the small market share of non-clove-flavoured cigarettes also banned under
the same measure.
55. Canada also argues that the United States cannot rely on Dominican Republic – Import and
Sale of Cigarettes to support the proposition that a product's market share should not be taken into
account in an analysis regarding less favourable treatment under Article 2.1 of the TBT Agreement. In
that case, the measure at issue was an origin-neutral bond that was imposed on all companies
regardless of where they sourced their product, and the differential unit cost accrued because a
particular company had a smaller market share and sourced imported products. Under the COOL
measure, by contrast, additional segregation costs w ill apply to all livestock processors who choose to
use the imported products regardless of their mark et share, whereas those processors who choose not
to use imported livestock will incur no additional costs.
56. Regarding the decisions of private market participants, Canada argues that the Panel was right
to determine, like the Appellate Body in Korea – Various Measures on Beef , that any decisions by
private actors made in order to comply with the COOL measure are not solely the result of their

124Canada's appellee's submission, para. 43 (referring to Appellate Body Report, Korea – Various
Measures on Beef, paras. 137 and 139; Panel Report, Mexico – Taxes on Soft Drinks , paras. 8.114-8.122; and
Appellate Body Report, US – Clove Cigarettes, paras. 222 and 224).

independent business calculations, but are attributab le in large part to the economic incentives and
disincentives created by th e COOL measure. Canada notes that the measure in Korea – Various
Measures on Beef required retailers to choose whether to sell domestic or imported beef, but allowed
them to choose freely between those two options. As the Appellate Body found in that case, however,
"the intervention of some element of private c hoice" did not preclude a finding of less favourable
treatment.125 Rather, it was the measure "itself" that caused private actors to change their behaviour in
a way that negatively impacted imported products. Ca nada emphasizes that, in this dispute, "[t]here
was an abundance of uncontradicted specific evidence before the Panel that the COOL measure 'itself'
caused private actors to change their behaviour to the detriment of imported cattle and hogs."126
(b) Article 11 of the DSU
57. Canada submits that the United States has not s ubstantiated its claims under Article 11 of the
DSU with respect to the facts underlying the Panel's finding of "treatment no less favourable".
According to Canada, the threshold for establishing a violation of Article 11 is high, and it is not
enough "to simply note a few pieces of evidence that the panel considered, ignore evidence that the
panel also considered, and ask the Appellate Body to come to a contrary conclusion" than the panel.
127
Therefore, the Panel's factual findings "must stand". 128 In any event, Canada argues, the Panel's
finding that the COOL measure had a negative impa ct on the conditions of competition for imported
cattle and hogs is not only supported by the design and operation of the COOL measure and economic
logic, but also by "an abundance" of "uncontested evidence" showing that the COOL measure caused
market participants to stop or reduce their purchases of Canadian-born or -raised cattle and hogs.129
58. Regarding the extent of commingling in the US market, Canada acknowledges that
commingling is happening "to some extent", and point s out that it did not argue otherwise before the
Panel.130 Canada argues that, even when commingling is used, however, this does not entirely remove

125Canada's appellee's submission, para. 47 (quoting Appellate Body Report, Korea – Various
Measures on Beef, para. 146).
126Canada's appellee's submission, para. 48 (referring to Panel Reports, paras. 7.374-7.380 and 7.420).
129Canada's appellee's submission, paras. 23 and 24. Canada emphasizes that the evidence shows that,
as a result of the COOL measure: (i) a considerable discount was applied by major processors to imported
livestock; (ii) important processing plants in the United States processed no or less imported livestock;
(iii) certain suppliers had to transport imported livestock for longer distances, and faced logistical problems and
additional costs; (iv) contractual terms and price diff erences between imported and domestic livestock changed
to the detriment of imported livestock; (v) financial institutions refused to provide credits and loans to Canadian
livestock producers; and (vi) imported cattle were excluded from profitable premium beef programmes. ( Ibid.,
para. 23 (referring to Panel Reports, paras. 7.363, 7.374-7.380, and 7.420))
130Canada's appellee's submission, para. 18 (referring to Panel Reports, paras. 7.364).

the discriminatory effect of the COOL measure, as the United States suggests. Furthermore, to the
extent the United States seeks to argue that comming ling is used on a widespread basis in order to
avoid segregation, this does not affect the Panel's fi nding that the COOL measure is inconsistent with
Article 2.1 in the many situations in which commi ngling is not used. Canada emphasizes in this
respect that a breach of the national treatment obligation does not depend on a showing that the
measure at issue results in less favourable treatment in every instance.
59. With respect to the United States' arguments that the Panel erred in its findings regarding the
price differential, Canada submits that the pri ce comparison presented by the United States wrongly
starts in 2009, after the COOL measure had alre ady severely depressed the market for imports.
Canada further contends that a moderating of the negative effects of the COOL measure during
periods of unusually tight supply is to be expect ed, and does not mean that the negative effects
attributable to the COOL measure have been e liminated. Moreover, Canada points out that the
Sumner Econometric Study was expressly found by the Panel to establish a prima facie case that the
COOL measure negatively and significantly aff ected the import shares and the price basis for
Canadian fed cattle.
131 In contrast, the Panel found that the "USDA Econometric Study" 132 put
forward by the United States lacked robustness and did not rebut that prima facie case.133
(c) The Relevance of the Appellate Body Report in US – Clove
Cigarettes in this Appeal
60. Canada maintains that the Appe llate Body's recent ruling in US – Clove Cigarettes , and its
finding that in some circumstances Article 2.1 of the TBT Agreement permits detrimental impact on
imports when it stems exclusively from a legitimate regulatory distinction, is unavailing to the United
States in this appeal. Canada considers that, while the Panel did not have the reasoning of US – Clove
Cigarettes before it, it nevertheless carried out a detailed analysis of the factors indicated by the
Appellate Body, and in making its findings "effec tively excluded the possibility" that the detrimental
impact on imported livestock was the result of le gitimate regulatory distinctions that were
even-handedly applied.134
61. Canada submits that the scope of the "legiti mate regulatory distinction" for purposes of
Article 2.1 of the TBT Agreement should not exceed those that can be justified under Article XX of
the GATT 1994. Otherwise, a measure able to survive a challenge under Article 2.1 because its

131Canada's appellee's submission, para. 26 (referring to Panel Reports, paras. 7.517 and 7.542).
132USDA Office of the Chief Economist, "Modeling the Impact of Country of Origin Labeling
Requirements on U.S. Imports of Livestock from Canada and Mexico" (Panel Exhibit US-42).
133Canada's appellee's submission, para. 26 (referring to Panel Reports, paras. 7.543-7.545).

detrimental impact is found to stem fr om a legitimate regulatory distinction not covered under
Article XX would nevertheless violate Article III:4 of the GATT 1994, and would not be justified
under Article XX. Therefore, an expansive read ing of what constitutes a legitimate regulatory
distinction "will not serve a useful purpose". 135 Canada also points out that, because, in US – Clove
Cigarettes, the United States had asserted a defence unde r Article XX of the GATT 1994 in response
to Indonesia's claims under Article III:4, it was "appr opriate in that case" to consider whether what
would otherwise have been a violation of the nati onal treatment obligation in Article 2.1 could be
justified because it pursued "an objective rec ognized in the GATT as meriting an exception". 136 The
United States, however, has raised no Article XX defence in this dispute.
62. Canada submits that, as a matter of logic, it would be incongruous for the United States to
claim on appeal that the COOL measure implements a legitimate regulatory distinction, because it did
not attempt to justify the measure on the ground of a legitimate objective under the GATT 1994.
Canada reiterates that the design, architecture, rev ealing structure, operation, and application of the
COOL measure show that its objective is protectioni sm, and argues that a regulatory distinction based
on such an objective is not legitimate. Even if the Appellate Body rejects this argument, Canada
claims that the concept of legitimacy in Article 2.1 does not extend to providing information to
consumers. Canada points out that, in US – Clove Cigarettes , the Appellate Body relied for its
interpretation of Article 2.1 on two "closed lists " of objectives, namely, the sixth recital of the
preamble of the TBT Agreement and Article XX of the GATT 1994, neither of which includes the
objective of providing information to consumers.137
63. Canada argues that the design, architecture, rev ealing structure, operation, and application of
the COOL measure establish that the discrimination it causes is not consistent with an even-handed
application of a legitimate regulatory distinction. The structure and design of the COOL measure is
such that imported livestock can only be used to produce Label B or C meat, whereas meat derived
from US-born and -raised animals have exclusive access to Label A, as well as limited access to
Label B or C. As a result, the segregation costs and reporting requirements create uneven costs that
affect only imported livestock. In addition, the detrimental impact incurred by imported livestock
cannot be said to stem exclusively from legitimate regulatory distinctions because the objective that
the United States claims to be pursuing—that is, providing consumers with information on where the

137Canada's appellee's submission, para. 56 (referring to Appellate Body Report, US – Clove Cigarettes,
paras. 96, 100, 101, and 173).

animal from which the meat is derived was born, raised, and slaughtered—is not reflected in the
COOL measure.
64. Canada points to five examples in support of this argument: (i) even though the United States
contends that the COOL measure addresses confusion with USDA grade labels, the COOL measure
applies to pork, which is not grade-labelled, and not to turkey, which is grade-labelled; (ii) the COOL
regime excludes many products from the scope of its coverage; (iii) except for meat produced from
certain livestock, almost all products undergoing a significant change in the United States are
excluded from the scope of the COOL measure; (iv) restaurants, specialty stores (including butchers),
and smaller stores are not subject to the COOL requirements; and (v) the information conveyed
varies depending on whether the animal was slaughter ed in the United States or in another country.
Specifically, absent commingling, an animal born and raised in Canada and slaughtered in the
United States must be labelled "Product of Canada and the USA", but an animal born and raised in the
United States and slaughtered in Canada must be labelled "Product of Canada", and cannot be labelled
"Product of Canada and the USA".
2. Article 2.2 of the TBT Agreement
65. Canada requests the Appellate Body to reject the United States' appeal in respect of the
Panel's analysis and conclusions under Article 2.2 of the TBT Agreement. In Canada's view, the Panel
correctly articulated the requisite steps of analysis and properly applied them to determine that the
COOL measure violates Article 2.2.
(a) Trade-Restrictiveness
66. According to Canada, the United States' appeal against the Panel's finding that the COOL
measure is trade restrictive is "extremely curs ory, consisting of one sentence and discussion in a
footnote … and does not address the legal reasoning of the Panel in its formulation of this test". 138
Moreover, Canada notes that the success of the Un ited States' appeal depends on the Appellate Body
reversing the Panel's finding under Article 2.1 of the TBT Agreement that the COOL measure
negatively affects the conditions of competition for imported livestock. Should the Appellate Body
uphold this finding of the Panel—as requested by Canada—it would not be necessary to undertake
any further analysis of the Panel's findings of trade-restrictiveness under Article 2.2.

138Canada's appellee's submission, para. 75 (referring to United States' appellant's submission, para. 120
and footnote 187 to para. 124).

67. Canada asserts, however, that the converse does not apply. Any reversal by the Appellate
Body of the Panel's finding under Article 2.1 woul d not automatically mean that the COOL measure
is not trade restrictive within the meaning of Article 2.2. A measure is trade restrictive if it imposes
any restriction on international trade, or restricts trade flows. Canada submits that there is no dispute
that the COOL measure imposes limitations on trade: it imposes recordkeeping requirements and
additional costs on market participants depending on various factors, and ha s required participants
either to segregate or commingle livestock based on or igin. Therefore, even if, contrary to Canada's
submissions, the Appellate Body finds that th e COOL measure does not negatively affect the
conditions of competition of imported products, it still restricts international trade.
(b) The Objective Pursued and the Level at which the United States
Considers It Appropriate to Fulfil Its Objective
68. Canada urges the Appellate Body to reject th e United States' attempts to characterize the
objective of the COOL measure as relating to costs. Canada notes that, while the United States
appears to appeal essentially the Panel's conclusion 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"
139, it frames its appeal as a mischaracterization of the "U.S. description of its level of
fulfillment".140 Canada observes that the United States does not specify precisely what the Panel
should have found the objective (or the "level of fulfilment") of the COOL measure to be, but
"appears to argue" that the objective includes an elem ent of cost assessment, and that therefore this
element of cost should be a factor in determining whether the COOL measure fulfils its objective.141
69. To the extent that the United States is arguing that there is a necessary additional step to
determine "level of fulfilment" under the third step of the Panel's analysis, Canada agrees with the
United States that the phrase "level of protection" used in other contexts—such as in Article XX of
the GATT 1994 and the SPS Agreement—is not appropriate under Article 2.2 of the TBT Agreement,
which instead requires an assessment of the level of fulfilment. Nonetheless, Canada explains that
there is no need to determine a theoretical level of fulfilment that the challenged measure is trying to
achieve. Rather, as the United States seems to acknowledge 142, the level of fulfilment of a measure
must be determined objectively by a panel based on the relevant facts, including the structure and
design of the measure, as well as other relevant eviden ce. Canada further asserts that the reference in

140Canada's appellee's submission, para. 77 (referr ing to United States' appellant's submission,
subheading IV.C.2.a).
142Canada's appellee's submission, para. 109 (referring to United States' appellant's submission,
paras. 126, 134, and 143).

the sixth recital of the preamble of the TBT Agreement to WTO Members "taking measures … at the
levels [they] consider[] appropriate" indicates that the drafters understood that measures would have
"gradations of levels" in attaining their objective.
143 Canada points out, however, that such context
should not be used in the way suggested by the United States, namely, to provide a right to WTO
Members to assert the level of fulfilment that a techni cal regulation "seeks" to achieve, rather than to
establish their desired level through the level of fulfilment that the technical regulation actually
achieves.
70. To the extent that the United States is seeking to change the objective that it identified at the
Panel stage, Canada submits that the Appellate Body should reject such attempt, just as the Panel
rightly did when the United States sought to do the same at the interim review stage.
144 C a n a d a
emphasizes that the United States never raised in its submissions the issue of costs prior to the interim
review.145 In any event, even the excer pts that the United States claims the Panel selectively quoted
did not include the issue of costs as part of the objective of the COOL measure. 146 Canada further
submits that even if, contrary to arguments in its other appeal 147, the Appellate Body were to uphold
the Panel's approach and determine that the objectiv e of the COOL measure is that stated by the
United States, it should reject the United States' attempt to revise the identified objective of the COOL
measure as relating to costs.
71. Finally, Canada rejects the United States' argume nt that the Panel failed to make an objective
assessment, as required under Article 11 of the DS U. The United States has not established that the
Panel failed to address particular evidence relating to the fulfilment of its objective, much less
evidence that has a bearing on the objectivity of the Panel's factual assessment, as it is required to do
under Article 11 of the DSU. As a result, there is no basis for the Appellate Body to interfere with the
Panel's discretion in its determination that the C OOL measure "fails to convey meaningful origin
information to consumers".148

144Canada's appellee's submission, para. 77 (referring to Panel Reports, paras. 6.110-6.113).
145Canada's appellee's submission, para. 79 (referring to Canada's comments on the United States'
comments on the Canada Interim Report, para. 40; Canada's oral statement at the first Panel meeting, para. 37;
Canada's second written submission to the Panel, p. 47, heading C, and para. 118; and Canada's oral statement
at the second Panel meeting, p. 12, heading B, and para. 40).
146Canada's appellee's submission, para. 80 (referr ing to United States' appellant's submission,
147See infra, paras. 115-124.

(c) Whether the COOL Measure Is "More Trade-Restrictive than
Necessary to Fulfil a Legitimate Objective"
72. Canada observes that much of the United States' appeal under Article 2.2 of the
TBT Agreement focuses on the question of whether a measure fulfils its objective. While agreeing
with the United States that this is a key issue under Article 2.2, Canada considers that the United
States' appeal must fail because the Panel's findings with respect to whether a measure must fulfil its
objective and whether the COOL measure does so were correct.
(i) The Panel's Legal Framework
73. Canada disagrees that the Panel adopted an err oneous legal approach under the third step of
its analysis under Article 2.2. Having correctly found that the COOL measure does not fulfil its
objective because it fails to convey meaningful inform ation, it was appropriate for the Panel to have
stopped its analysis there. However, if the Appe llate Body disagrees that, as a separate step, an
assessment of whether a challenged measure fulfils its objective is required, then Canada agrees that
the level of fulfilment found by the Panel is re levant for comparing the COOL measure with the
proposed alternatives.
74. Canada submits, as a preliminary matter, that the United States' attempt to revise the position
it took before the Panel—namely, that it is "appropr iate to analyse whether the measure in question
fulfils a legitimate objective first" 149—should be rejected. Canada cau tions that the Appellate Body
"should be particularly wary"150 of reversing the Panel's finding b ased on a new legal argument raised
by the United States for the first time on appeal. Canada argues that this new argument is in any event
not supported by the text of Article 2.2. According to the Panel's test, since a technical regulation will
already have been found to be trade restrictive under the first step of its test, it will by definition be
more trade restrictive than necessary if it does not actually fulfil its objective. Canada does not agree
that this is an assessment of whether a measure is "necessary", in the abstract. Rather, it is an
assessment of whether the measure does enough to achieve the objective to constitute "fulfilment".
75. Canada notes that the ordinary meaning of the wo rd "fulfil" used in Article 2.2, as well as its
French and Spanish equivalents (" réaliser" and " alcanzar", respectively), suggests that a measure
must achieve its objective at 100%. Canada submits, how ever, that, when read in its context, and, in
the light of the relevant object and purpose, a showing of something less than complete fulfilment

149Canada's appellee's submission, para. 83 (referring to Panel Reports, para. 7.556 and footnote 743
thereto).

may be sufficient. In support, Canada argues th at the Appellate Body has recognized, in an
assessment under Article XX of the GATT 1994, that measures may operate together to address a
policy objective, implying that a single measure n eed not fully achieve a particular objective by
itself.
151
76. Canada also sees a useful analogy in the term "necessary" in Article XX(d) of the
GATT 1994, which has been interpreted to encompas s something less than 100% achievement of the
objective.152 Canada disagrees with the United States that Article XX of the GATT 1994 is not useful
to interpret Article 2.2, and, in particular, to assess the COOL measure's fulfilment of its objective.
Canada agrees with the Panel that a cl ose connection between Article 2.2 of the TBT Agreement and
Article XX of the GATT 1994 is evidenced by the s econd and sixth recitals of the preamble of the
TBT Agreement; that the texts and structure of Article 2.2 and Article XX are similar; and that the
text of the sixth recital is similar to the chapeau of Article XX. The United States is therefore
incorrect that all that the two provisions have in common is the word "necessary".153
77. Canada notes that, while acknowledging a "clo se connection" between Article XX of the
GATT 1994 and the TBT Agreement, the United States confines this connection to the recitals of the
TBT Agreement , and suggests a "closer" connec tion "with Article 5.6 of the SPS Agreement ".154
However, the United States' reliance on Article 5.6 i gnores the fact that the three-part test under that
provision is derived from the text of footnote 3 ther eto. Canada asserts that omissions must have
meaning155, and the fact that Article 2.2 of the TBT Agreement does not contain a footnote similar to
footnote 3 of the SPS Agreement indicates that "significantly" should not be read into the "less
trade-restrictive" test of Article 2.2. 156 Moreover, the United States ignores that the SPS Agreement
addresses a more limited category of objectives.
78. Further, in response to the other arguments of the United States—that the two provisions ask
different questions; that Article 2.2 is concerned with the necessity of the trade-restrictiveness rather
than the measure itself; that Article XX is an exception; and that the allocation of the burden of proof

151Canada's appellee's submission, para. 95 (referring to Appellate Body Report, Brazil – Retreaded
Tyres, para. 151).
152Canada's appellee's submission, para. 96 (referring to Appellate Body Report, Korea – Various
Measures on Beef, paras. 160 and 161).
153Canada's appellee's submission, para. 100 (referring to United States' appellant's submission,
para. 160).
154Canada's appellee's submission, para. 99 (referr ing to United States' appellant's submission,
paras. 164-166).
155Canada's appellee's submission, para. 89 (referring to Appellate Body Report, Japan – Alcoholic
Beverages II, p. 18, DSR 1996:I, 97, at 111).
156Canada's appellee's submission, para. 89 (referring to Panel Report, US – Tuna II (Mexico) ,
para. 7.464).

is different—Canada submits that, while there are so me distinctions between the provisions, they do
not detract from the fact that there are common elements in Article XX of the GATT 1994, Article 2.2
of the TBT Agreement , and Article 5.6 of the SPS Agreement (excluding footnote 3 thereto).
Moreover, any distinctions do not displace the sim ilarity between the concept of "fulfilment" in
Article 2.2 and the related concepts in Article XX of the GATT 1994. Canada also disputes the
United States' invocation of the sixth recital of the preamble of the TBT Agreement as somehow
providing to WTO Members a right to assert the level of fulfilment that a technical regulation "seeks"
to achieve, rather than to establish their desired le vel through the level that the technical regulation
actually achieves.
79. Canada further asserts that the level of achie vement necessary to fulfil an objective depends
on the "risks that non-fulfilment would create", as provided for in Article 2.2. Relying on the
"necessity" case law developed under Article XX of the GATT 1994, Canada submits that a measure
will be easier to justify if it pursues an objective that is "vital" or "important". 157 The same analysis
applies under Article 5.6 of the SPS Agreement, although by definition SPS measures concern vital
and important matters (human and animal life and hea lth) where the risk of harm is greater. Canada
considers that a similar approach of ranking objec tives would be appropriate under Article 2.2, since
the range of potential objectives provided for under that provision is broad, and includes objectives of
less importance, such as those potentially covered in Article XX(d) of the GATT 1994 (necessary to
secure compliance with laws or regulations not incons istent with that Agreement), and those vital and
important in the highest degree, such as the protection of human life and health.
80. In Canada's view, it is unnecessary to speculate about or determine in the abstract the level of
fulfilment a WTO Member might have been striving to achieve, and, to the extent that it suggests
otherwise, the United States errs. What is necess ary is to determine the extent to which the
challenged measure itself fulfils its objective. The determination of the actual, as opposed to
theoretical, level of fulfilment of an objective is relevant for two reasons: first, in determining
whether the level of contribution meets the minimum level necessary for "fulfilment"; and second, if
it does meet or exceed that minimum level, the extent to which it does so is relevant for a comparison
with proposed less trade-restrictive alternative measures. Canada reiterates that the level of fulfilment
of a measure must be objectively determined by a pa nel, based on the relevant facts, including the
structure and design of the measure, as well as other relevant evidence. Such an assessment can be

157Canada's appellee's submission, para. 103 (quoting Appellate Body Report, Korea – Various
Measures on Beef , para. 162). See also para. 104 (referring to Appellate Body Report, Brazil – Retreaded
Tyres, paras. 150 and 179; Appellate Body Report, EC – Asbestos , para. 172; Appellate Body Report, US –
Gambling, paras. 301, 306, and 326; Appellate Body Report, China – Publications and Audiovisual Products ,
paras. 251 and 255; and Panel Report, Colombia – Ports of Entry, para. 7.566).

made quantitatively and qualitatively. This appro ach is supported by case law developed in similar
contexts.
158 A determination of a level of fulfilment that is not objective, and is instead based on the
statements of the defending Member, would give a Member every incentive to assert a high "level of
fulfilment" of a challenged measure, both to meet th e requirement that the measure itself "fulfil" its
objective, and to make it impossible for proposed alternative measures to compare favourably with
that level of fulfilment.
81. Canada notes that, while the United States agre es that the Panel's conclusion regarding the
information that the COOL measure provides is releva nt to the analysis of the United States' level of
fulfilment in terms of comparison with alternative m easures, it does not consider this to be a separate
step in a correct analysis under Article 2.2. Cana da disagrees and submits that in this dispute,
consistent with a proper approach to applying Artic le 2.2, the Panel carefully reviewed the operation
of the measure and related evidence and assessed the extent to which the COOL measure contributed
to the fulfilment of the objective of providing inform ation to consumers about origin. Canada notes
that the risks non-fulfilment would create in this case are minimal—a few consumers who want to
know particular origin information about a select group of products might not be able to find that
information in the limited retail outlets covered by the COOL measure—and that the COOL measure
restricts trade to a very significant extent. Therefore, in Canada's view, the level of fulfilment
required of the COOL measure is much higher th an it would be if the objective were of vital
importance—for instance, the protection of human life. In this regard, Canada submits that, in order
to "fulfil" the objective, the COOL measure mu st do more than provide an "insignificant"
contribution. Rather, something closer to "very ma terial", or "very significant" achievement of the
objective should be required.
159 Based on the above, Canada considers that the Panel properly
interpreted and applied Article 2.2 to the COOL measure.
82. If, however, the Appellate Body disagrees and c onsiders that a separate finding with respect
to the level of fulfilment is not required or provided for under Article 2.2, then Canada agrees with the
United States that the level of fulfilment assessed by the Panel is relevant for comparing the COOL
measure with the proposed alternative measures.

158Canada's appellee's submission, para. 115 (referring to Panel Report, EC – Tariff Preferences ,
paras. 7.210 and 7.211-7.218; Appellate Body Report, US – Gambling , para. 323; Panel Report, US –
Gambling, paras. 6.494, 6.500-6.504, 6.507, 6.508, 6.511, and 6.516-6.518; Panel Report, US – Shrimp
(Thailand), paras. 7.190-7.192; Panel Report, Mexico – Taxes on Soft Drinks, para. 8.189; and Appellate Body
Report, China – Publications and Audiovisual Products, paras. 252, 253, and 255-269).

(ii) The Level of Fulfilment Achieved by the COOL Measure
83. Canada disagrees with the United States that the Panel erred in its assessment of the level of
fulfilment achieved by the COOL measure. First, w ith respect to the United States' argument that
Label A "completely fulfils" the COOL measure's obj ective and that the Panel failed properly to take
this into account 160, Canada notes that the United States "considerably overstates" the limited Panel
finding, namely, that the COOL measure "appears to fulfil" its objective to a certain extent by
preventing certain confusion created under the USDA grade labelling. 161 First, this finding applies
only to beef, not pork, since, as the Pane l noted, pork does not carry USDA grade labelling. 162
Second, even with respect to beef, the finding is much more limited than suggested by the
United States. Canada recalls the Panel's finding that through the COOL measure the United States
"aims to prevent meat derived from animals of non-US origin from carrying a US-origin label under
any circumstances. To that extent, the COOL measure appears to fulfil the objective".163 In Canada's
view, the Panel found only that the COOL measure fulf ils an objective that not even the United States
suggested it did: to prevent meat from imported animals from ever carrying a US-origin label. The
Panel did not find, as the United States suggests, that the COOL measure provides "'clear and
accurate' consumer information" on Label A meat.
164
84. Second, Canada refers to the United States' argument that less information is provided for cost
reasons, and that this lowers costs to Canadian and Mexican producers. Canada responds that the
United States points to no factual findings, or evidence, to support this claim. The argument is flawed
because the major factor adding cost is the necessity to segregate, which remains. Moreover, even if
it is assumed, contrary to the facts accepted by th e Panel, that there were lower costs for producers of
imported products, unless the objective is modified to include a cost component (as Canada argues
above it should not), that does not affect a determinat ion of whether the measure fulfils its objective.
There is nothing in Article 2.2 that suggests that cost should be a factor in assessing whether the
challenged measure fulfils its objective. By analogy with Article XX of the GATT 1994 and
Article 5.6 of the SPS Agreement , it may be that a proposed alternative measure is disqualified

160Canada's appellee's submission, para. 120 (quoting United States' appellant's submission, para. 172).
162Canada's appellee's submission, para. 120 (referring to Panel Reports, paras. 7.272 and 7.656).
163Canada's appellee's submission, para. 120 (quoting Panel Reports, para. 7.713). (emphasis added by
Canada)
164Canada's appellee's submission, para. 120 (quoting United States' appellant submission, para. 177).

because it is "not reasonably available" for being too costly
165; however, in Canada's view, that is a
different determination.
C. Arguments of Mexico – Appellee
1. Article 2.1 of the TBT Agreement
85. Mexico requests the Appellate Body to reject th e United States' appeal of the Panel's finding
that the COOL measure is incons istent with Article 2.1 of the TBT Agreement. According to Mexico,
the Panel's finding is consistent with th e well-established body of WTO and GATT 1947
jurisprudence on the meaning of "treatment no less favourable" and with the Appellate Body's
interpretation and applicati on of Article 2.1 of the TBT Agreement in US – Clove Cigarettes .
Furthermore, Mexico requests the Appellate B ody to dismiss the United States' claims under
Article 11 of the DSU, arguing that the Panel' s finding was well supported by the evidence and
reflected an objective analysis.
(a) The Interpretation and Applica tion of Article 2.1 of the
TBT Agreement
86. Mexico contends that the United States propo ses a new test for "treatment no less favourable"
that has no basis in law, that fails to distinguish between de jure and de facto discrimination, and that
seeks to restrict the scope of the legal analysis unde r Article 2.1. Although the United States refers to
various Appellate Body reports in support of its test, it misinterprets and misapplies the findings of the
Appellate Body, and the various elements of the Un ited States' test find no support in those reports.
The United States asserts, for example, that, in order to accord less favourable treatment, "the measure
itself"
166 must treat imported products less favourably than domestic products. Although it references
various Appellate Body findings in setting out this requirement, the United States inserts the word
"itself" and thereby seeks to shift the focus of the examination to the measure and away from the
conditions of competition in the relevant market. In so doing, the United States significantly alters the
analysis articulated by the Appellate Body in disputes such as Korea – Various Measures on Beef, and
its emphasis on the conditions of competition in the relevant market. With regard to the United States'
contention that differential treatment must be "b ased on origin", Mexico argues that the Appellate
Body has recently rejected such an argument by finding that, once a detrimental impact on imports

165Canada's appellee's submission, para. 121 (referring to Appellate Body Report, US – Gambling ,
para. 308).
166Mexico's appellee's submission, para. 63 (quoting United States' appellant's submission, paras. 71
and 75 (original emphasis)).

has been established, a panel need not inquire further to determine whether that impact is unrelated to
the foreign origin of the product.167
87. Mexico recalls the United States' argument that the Panel erred in finding that the COOL
measure treats meat derived from imported and domestic livestock differently based on the definitions
of origin provided in the labelling requirements. Mexico contends that the United States' argument
that the COOL measure does not treat imported lives tock differently than domestic livestock focuses
on de jure discrimination. This is confirmed by the United States' argument that, "as a matter of logic,
treatment that is identical cannot be less favourable". 168 In this respect, Mexico emphasizes the
Appellate Body's findings in Korea – Various Measures on Beef that a formal difference in treatment
between imported and domestic products is "neith er necessary, nor sufficient" to demonstrate less
favourable treatment. 169 In any event, Mexico acknowledg es that the COOL measure does not
discriminate against Mexican products on its face, a nd emphasizes that the Panel did not rely on its
statement that certain labelling requirements reflect de jure different treatment for its finding on less
favourable treatment under Article 2.1 of the TBT Agreement. Rather, the Panel rightly found that the
complainants alleged that the COOL measure de facto discriminated against imported livestock, and
went on to perform a de facto analysis.
88. Turning to the United States' a llegations regarding the Panel's de facto analysis under
Article 2.1, Mexico submits that the Panel's le gal approach was correct. The United States
misrepresents the Panel's findings when it suggest s that the Panel in effect required the COOL
measure to "ensure that imported products are placed on an equal footing in terms of their ability to
compete".170 Rather, consistent with relevant jurisprudence under the TBT Agreement and the
GATT 1994, the Panel determined whether the COOL measure modified the conditions of
competition within the US market to the detriment of imported cattle. Moreov er, Mexico recalls the
United States' contention that "[t]he question for purposes of Article 2.1 of the TBT Agreement is
whether the technical regulation alters the conditions of competition so as to deny imported products
the ability to compete under the same conditions as like domestic products." 171 I n M e x i c o ' s v i e w ,
such a formulation changes the standard from a test of whether the measure modifies the conditions of

167Mexico's appellee's submission, para. 76 (referring to Appellate Body Report, US – Clove
Cigarettes, footnote 372 to para. 179).
168Mexico's appellee's submission, para. 73 (quoting United States' appellant's submission, para. 69).
169Mexico's appellee's submission, para. 68 (quoting Appellate Body Report, Korea – Various
Measures on Beef, para. 137).
170Mexico's appellee's submission, para. 85 (quoting United States' appellant's submission, para. 62
(original underlining)).
171Mexico's appellee's submission, para. 87 (quoting United States' appellant's submission, para. 63
(original emphasis)).

competition to the detriment of imported prod ucts, to a test of whether the measure denies imported
products the ability to compete under the same conditions as like domestic products. The
United States' proposed standard would create a narr ower scope of applicati on at a higher threshold
than that contemplated by the Appellate Body unde r Article 2.1. Thus, according to Mexico, the
United States' proposed approach must be rejected because it has no basis in law and is inconsistent
with the well-established principle of equality of competitive conditions.
89. Mexico submits that, in evaluating the conditions of competition in the US market, the Panel
correctly found that costs resulting from tec hnical regulations may qualify as a competitive
disadvantage if they are incurred only by impor ted and not like domestic products. The Panel
undertook a detailed examination of the costs of compliance of the COOL measure, including whether
the COOL measure required segregation and whethe r segregation entailed higher costs for imported
livestock. The Panel properly took a broad view of the costs that might be entailed by the measure,
and found that the costs incurred by imported livestock included "discriminatory price discounts, loss
of processing opportunities, increased logistical costs, prejudicial contractual treatment and notice
requirements, increased financing costs and hurdl es, and loss of premium market opportunities".
172
In Mexico's view, the Panel's analysis on this b asis clearly demonstrates a modification of conditions
of competition to the detriment of imported livestock. Mexico maintains that this conclusion becomes
even more evident when the situation under the CO OL measure is compared to the highly integrated
nature of the North American livestock and meat market prior to the measure.
90. Mexico contends that, as part of its argument that the measure itself must modify the
conditions of competition, the United States asserts th at the Panel erred by basing its finding of less
favourable treatment on "external factors" 173 "not under the Member's c ontrol, such as the market
share of imports or the independent actions of private market actors". 174 However, contrary to the
United States' argument, the Panel did not find that market effects that are "solely" the result of
independent decisions of private market participants would give rise to a violation of Article 2.1 of the
TBT Agreement. Rather, the Panel was correct to find th at a measure creating a sufficiently strong
incentive for private market participants to act in a particular way can properly be found to be
inconsistent with Article 2.1. In reaching this finding, the Panel prope rly relied on findings in
Korea – Various Measures on Beef and correctly found that, similar to the situation in that dispute,
"any decisions by private market participants are not 'solely' the result of their independent business

172Mexico's appellee's submission, para. 47 (referring to Panel Reports, paras. 7.373-7.381). See also
para. 34.
173Mexico's appellee's submission, para. 77 (quoting United States' appellant's submission, para. 75).
174Mexico's appellee's submission, para. 77 (quoting United States' appellant's submission, para. 71).

calculations, but are attributable in large part to the economic incentive and disincentive created by
the provisions of the COOL measure." 175 Thus, Mexico submits, the Pane l's finding, that "[i]t is the
result of the COOL measure" that US producer s "opted predominantly" to process exclusively
US-origin livestock, was properly based on the Panel' s determination that the COOL measure creates
an incentive to do so. 176 As the Panel correctly found, without the effects of the measure, "market
participants would not have opted this way".177
91. Mexico further argues that, by alleging that th e adverse effects of the COOL measure are the
result of external factors not related to the measure, the United States attempts to restrict the scope of
the legal analysis to exclude the indirect effects of the measure on the conditions of competition in the
US market, such as the measure's impact on market forces and market participants. Given that the
Panel was performing a de facto analysis, however, it was appropriate for it to take into consideration
all the relevant facts and circumstances in the market and to determine how the imposition of the
challenged measure affects competitive conditions in the light of those facts and circumstances,
including factors such as the smaller market sh are of imports and their longer distance from the
market. In Mexico's view, it is part of the character of de facto discrimination that the pre-existing
market factors play a role in the modification of the conditions of competition. In this case, the
COOL measure disrupts the facts and circumstances that normally occur in the marketplace.
92. Mexico adds that the United States' position is not supported by the Appellate Body's finding,
in Thailand – Cigarettes (Philippines) , that "there must be in every case a genuine relationship
between the measure at issue and its adverse im pact on competitive opportunities for imported versus
like domestic products to support a finding that imported products are treated less favourably". 178
Mexico points out that this finding related to a discu ssion of "the degree of likelihood that an adverse
impact on competitive opportunities would materialize", and not, as in this case, to an evaluation of a
modification of competitive opportunities that has already occurred. 179 In any event, Mexico argues,
there clearly is a genuine relationship between the COOL measure and the reduced competitive
opportunities for imported products. But for the COOL measure, the North American Free Trade
Agreement ("NAFTA") market would be fully integr ated, with market participants acting purely on
the basis of competitive considerations of price and quality.

(quoting Panel Reports, para. 7.390).
178Mexico's appellee's submission, para. 70 (quoting Appellate Body Report, Thailand – Cigarettes
(Philippines), para. 134; and United States' appellant's submission, paras. 72 and 89).
179Mexico's appellee's submission, para. 70 (referring to Appellate Body Report, Thailand – Cigarettes
(Philippines), para. 134).

93. Finally, with regard to the United States' contention that the Panel's findings would jeopardize
country of origin labelling regimes in other WTO Members, Mexico points out that it has not
challenged the validity of general country of origin labelling requirements. Furthermore, none of the
relevant labelling regimes in other WTO Members is similar to the United States' measure. Under
Australia's, Japan's, and Korea's regimes, meat derived from Mexican-born cattle would be labelled as
domestic meat; and "trace-back" systems, such as that applied in the European Union, impose equal
burdens on all products regardless of origin.
(b) Article 11 of the DSU
94. Mexico emphasizes the high legal threshold established by the Appellate Body under
Article 11 of the DSU, and contends that the United St ates' claims of error do not meet this standard.
The United States makes the same arguments on appeal as it made before the Panel with respect to
segregation, commingling, and the price differentia l, and essentially requests the Appellate Body to
make a de novo review of the facts.
95. As an initial matter, Mexico highlights that th e United States assumes that a finding of less
favourable treatment must be evaluated based on the actual trade effects of the measure, which
disregards the findings of both the Panel and th e Appellate Body in this respect. The Panel
specifically stated that it had already reached its conclusions on less favourable treatment under
Article 2.1 before examining the actual trade effect s resulting from the measure. Furthermore, the
United States focuses on evidence of commingling, and "leaps to the conclusion" that if commingling
were occurring on a widespread basis, there could not be less favourable treatment.
180 However, the
Panel's finding of less favourable treatment was based on a number of factors and not on a finding that
all imported cattle are segregated from all domestic cattle . In any event, Mexico recalls that, even in
instances where commingling could be present, segrega tion is still necessary in order to comply with
the COOL measure.
96. Notwithstanding the above deficiency underlyi ng the United States' claim, Mexico responds
to the United States' arguments concerning the Pa nel's treatment of the specific evidence on the
record. Mexico claims that th e United States acknowledges that the USDA survey of the use of the
different labels is not statistically reliable, a nd that, considering how much is not known about the
methodology of that survey, the Panel was not required to either discuss it or rely on it. Similarly, the
Panel's finding on the limited evidentiary value of photographs of labels submitted by the United
States showing labels for meat stating "U.S., Cana dian, Mexican Origin" was justified, because the

flexibilities in labelling rules mean that a label indicating multiple origins cannot be understood as
demonstrating that the labelled products have been commingled. The two remaining pieces of
evidence both contain information indicating how some producers are complying with the COOL
requirements, but neither clearly demonstrates that commingling is occurring, and the Panel's
conclusion that they did not provide compelling ev idence of the occurrence or extent of commingling
therefore is "entirely reasonable". 181 Mexico further asserts that the United States attempts to
obfuscate the effects of the COOL measure on the livestock market by claiming that the Panel
wrongly found that the COOL measure requires every muscle cut of meat to be traceable to a specific
origin. In fact, the Panel correctly found that compliance with the COOL measure requires that
suppliers and processors have information on the c ountry of birth of each animal, and that this
information must be passed on to retailers.
97. With respect to the United States' argument that the Panel erred in its findings regarding an
increase in the price differential between imported a nd domestic livestock, Mexico points out that it
presented direct evidence of a COOL discount being applied to imported cattle, including invoices,
statements of US processors, and other data s howing the price differential between Mexican and
US feeder cattle. The Panel's finding was therefor e well supported by the evidence, and reflected an
objective analysis.
(c) The Relevance of the Appellate Body Report in US – Clove
Cigarettes in this Appeal
98. Mexico recalls that the Appellate Body recently interpreted Article 2.1 of the TBT Agreement
in US – Clove Cigarettes . In Mexico's view, although the Pa nel did not have the benefit of the
Appellate Body Report in US – Clove Cigarettes , the Panel's finding of inconsistency under
Article 2.1 of the TBT Agreement is consistent with the Appellate B ody's test and is legally correct.
This is because it is evident from the Panel's findings that the United States' technical regulation is not
even-handed and that the detrimental impact on imported livestock does not stem exclusively from a
legitimate regulatory distinction. Rather, the loss of competitive opportunities resulting from the
COOL measure clearly reflects discrimination against the group of imported products.
99. Mexico observes that, in determining whet her the detrimental impact stemmed from a
legitimate regulatory distinction, the Appellate Body in US – Clove Cigarettes looked at: (i) the
proportion of imported and like domestic products adversely affected by the measure; and (ii) other
factors that indicated whether the detrimenta l impact on competitive opportunities for imported

181Mexico's appellee's submission, paras. 110 and 114.

products stemmed from a legitimate regulatory distin ction. Regarding the first element, Mexico
alleges that the COOL measure adversely affect s all or almost all imported products and does not
adversely affect all or almost all like domestic produc ts, and that there is an incentive to use domestic
cattle inputs and a disincentive to use imported cattle inputs. Mexico adds that a measure designed
and structured in such a way is not even-handed.
100. As regards other indicating factors, Mexico cau tions that considerable care must be taken
when evaluating the COOL measure, because distinc tions made under such a measure are inherently
linked to origin. In Mexico's view, Article 2.1 would be open to substan tial circumvention if the
detrimental impact incurred by imported products c ould be justified solely because it could be linked
to such a distinction. In any event, Mexico maintains that several factors establish that the detrimental
impact of the COOL measure does not stem exclusively from a legitimate regulatory distinction and is
not even-handed, but, rather, it reflects discriminati on against imported livestock. These factors are:
(i) that the COOL measure is mandatory despite low consumer demand for such information; (ii) that
the COOL measure is designed so that the least costly and most commercially desirable method of
compliance is to exclude imported livestock; (iii) that the COOL measure is designed to distinguish
between meat made from US-born cattle and meat made from foreign cattle rather than to give
information on origin, as is clear from the fact that only Label A provides meaningful information;
(iv) that the COOL measure includes "completely ar bitrary" flexibility allowing Label B to be used
for Category A meat when Category A and Categor y B meat are processed "on the same production
day"
182; and (v) that the COOL measure is not effec tive at achieving its objective, because very little
meat in the US market is accurately labelled under the COOL measure. Finally, Mexico asserts that
the sixth recital of the preamble of the TBT Agreement provides "an exhaustive list of the
justifications" that are available for measures that otherwise would violate Article 2.1 because they
qualify as legitimate regulatory distinctions, and none of those justifications are applicable to the
COOL measure.183
2. Article 2.2 of the TBT Agreement
101. Mexico asserts that the legal test adopt ed by the Panel under Article 2.2 of the
TBT Agreement was "appropriate"184 in this dispute, and submits that the United States' appeal of the
Panel's reasoning and findings under Article 2.2 is "without merit and should be rejected".185

(a) Trade-Restrictiveness
102. In response to the United States' appeal of the Panel's finding that the COOL measure is trade
restrictive within the meaning of Article 2.2, Me xico acknowledges that Articles 2.1 and 2.2 of the
TBT Agreement are two separate obligations that contain di fferent legal tests. Nonetheless, evidence
demonstrating the inconsistency of a measure with one obligation may be relevant for the analysis of
the same measure under the other obligation. In this case, Mexico considers the Panel's finding under
Article 2.1 that the COOL measure negatively a ffects the conditions of competition of imported
livestock to be legally and factually sound, and, for the same reason, submits that the Panel did not err
in finding the COOL measure to be trade restrictive under Article 2.2.
(b) The Objective Pursued and the Level at which the United States
Considers It Appropriate to Fulfil Its Objective
103. Mexico disagrees with the United States that an analysis of the objective pursued under
Article 2.2 should include a determ ination of "the level at which the United States considers it
appropriate to fulfil the objective". 186 In Mexico's view, the absence of the words "at the level a
Member considers appropriate" in Article 2.2 reinfor ces the view that there is no need to determine a
desired theoretical "level of fulfilment" for the legitimate objective. To the contrary, the level a
Member considers appropriate will be reflected in the technical regulation actually applied. This is to
be objectively determined by a panel and, if th e measure at issue does not fulfil the legitimate
objective, it is not necessary to continue the anal ysis and examine an alternative measure. If,
however, the interpretation of the United States were accepted, then the legal test under Article 2.2
would mean that, while a measure fails to achieve th e desired theoretical level of fulfilment of the
legitimate objective, an alternativ e measure must reach that theore tical level. Moreover, if a
determination of "the level of fu lfilment" were based on the statements of the defending Member, it
would give that Member every incentiv e to inflate the desired theoretical "level of fulfilment" so that
a proposed alternative measure would never achieve it, which could not possibly have been the
intention of the negotiators or a reasonable interpretation.
104. In any event, Mexico submits that, contrary to the United States' contention, the Panel's
identification of the objective pursued—namely, to provide as much clear and accurate origin
information as possible to consumers—was based on a complete and coherent assessment of the
relevant facts and arguments, including the United Stat es' indication of the level at which it aimed to
achieve the identified objective. Mexico argues that the statements relating to costs alleged by the

186Mexico's appellee's submission, para. 140 (quoting United States' appellant's submission, para. 124).

United States to have been selectively quoted by the Panel refer to explanations of why and how the
United States set its objectives and appropriate leve l, but not to the objectives and appropriate level
themselves.
105. Mexico disagrees with the United States' asser tion that the Panel wilfully distorted and
misrepresented the United States' position as to its le vel of fulfilment and thus acted inconsistently
with Article 11 of the DSU, and highlights that panels enjoy discretion in their assessment of the facts.
Mexico recalls the argument of the United States th at the Panel failed to take into account evidence
regarding the "true balance between costs and consumer information".
187 Mexico responds that the
Panel examined a similar argument by the United St ates and correctly concluded that "[t]he act of
balancing conflicting interests cannot … justify any inconsistency found in the impugned measure
with the obligations of the res pondent under the covered agreements." 188 In this dispute, the Panel
considered the United States' arguments, explained why it did not accept them, and, thereby, satisfied
its obligations under Article 11 of the DSU.
(c) Whether the COOL Measure Is "More Trade-Restrictive than
Necessary to Fulfil a Legitimate Objective"
(i) The Panel's Legal Framework
106. Mexico submits that the Panel did not err in a dopting the legal framework for its analysis of
the trade-restrictiveness of the COOL measure. Firs t, Mexico disagrees with the United States that a
technical regulation's conformity with th e first sentence of Article 2.2 of the TBT Agreement must be
established based on the elements of the second sentence. 189 As Mexico sees it, the second sentence
elaborates on the meaning of the first sentence, but does not define it exhaustively. By focusing only
on whether there is a less trade-restrictive alterna tive measure, the United States' interpretation of the
test under Article 2.2 attempts to "unilatera lly modify the language" of that provision. 190 I n
accordance with a proper interpretation, a panel shou ld consider first whether a technical regulation
fulfils the legitimate objective, based on a consideration of the risks at issue, the interests at stake, the
Member's policy objective, and whether the government 's interference in the market is unavoidable.
Once the technical regulation at issue is fully assessed, and only if the technical regulation fulfils the
legitimate objective, should the focus of the analysis shift to potential alternative measures. Mexico
considers the first step of this analysis essential because it is impossible to assess whether there is a

187Mexico's appellee's submission, para. 156 (quoting United States' appellant's submission, para. 143).
189Mexico's appellee's submission, para. 128 (referring to United States' appellant's submission,
para. 122).

less trade-restrictive alternative if the measure do es not fulfil the objective. Moreover, it would be
impossible to take account of the risks non-fulfilment would create if, in fact, non-fulfilment already
exists with the challenged measure. It follows th at a measure that does not fulfil the legitimate
objective is an unnecessary obstacle to international trade that is inconsistent with Article 2.2.
107. Mexico disagrees that a "material contribution" to fulfilling the legitimate objective is enough
to satisfy the strict test of Article 2.2 of the TBT Agreement. The standard "to fulfil" is close in its
degree to the standard "necessary", so the term "to fu lfil" in the context of Article 2.2 requires that a
technical regulation be located significantly closer to the pole of 100% fulfilment of the legitimate
objective.191 Mexico agrees that, consistent with th e Appellate Body's Article XX "necessity" case
law, "[t]he more vital or important those common interests or values are, the easier it would be to
accept" a measure as "necessary" for purposes of Article 2.2.192
108. Mexico notes the United States' argument that the "necessity" jurisprudence developed under
Article XX of the GATT 1994 is inapplicable to Article 2.2 of the TBT Agreement . For Mexico,
irrespective of whether the second sentence of Article 2.2 defines the first sentence (the interpretation
of the Panel and the United States) or whether th e first sentence could have a meaning that is
independent of the second sentence (a possibility for eseen by Mexico), what is clear from the context
provided by the first sentence is that, under Article 2.2, a technical regulation must not create an
unnecessary obstacle to trade. Therefore, the United States' argument that Article 2.2 does not ask the
question of "whether the measure itself is 'necessary'"193 is incorrect. The concept of necessity is used
in both the first and second sentences and must be given meaning in both sentences, that is, in the
context of the creation of an obstacle to trade and in the context of a less trade-restrictive alternative.
Thus, whether the technical regulation at issue is mo re trade restrictive than necessary is a "two-step"
analysis. Mexico considers this approach to be in line with the Appellate Body's clarification in US –
Gambling and in Brazil – Retreaded Tyres that weighing and balancing involves two steps: first, a
preliminary analysis of the necessity of the challenged measure on the basis of all relevant factors and,
second, the conclusion of the preliminary analysis mu st be confirmed by comparing the measure with
possible alternatives.

191Mexico's appellee's submission, paras. 177 and 178 (referring to Appellate Body Report, Korea –
Various Measures on Beef, para. 161 and footnote 104 thereto).
192Mexico's appellee's submission, para. 179 (quoting Appellate Body Report, Korea – Various
Measures on Beef, para. 162).
193Mexico's appellee's submission, para. 162 (quoting United States' appellant's submission, para. 161
(original emphasis)).

109. Mexico considers the "one-step" approach de veloped for claims under Article 5.6 of the
SPS Agreement, and advocated by the United States, to be inappropriate. First, a comparative analysis
of the SPS Agreement and the TBT Agreement highlights that they provide different regimes and rules,
their scope of application is mutually exclusive, and provisions of one Agreement should not be
automatically incorporated in the provisions of the other, because that was not intended by
Members.
194 Mexico notes that the United States seeks to incorporate footnote 3 to Article 5.6 of the
SPS Agreement into Article 2.2 of the TBT Agreement by referring to a letter from GATT
Director-General Sutherland to the US Chief Negotiator in 1993 as a supplementary means of
interpretation under Article 32 of the Vienna Convention .195 Mexico contests the need to employ
supplementary means of interpreta tion given that the text of Artic le 2.2 and the application of
Article 31 of the Vienna Convention make clear that, unlike in Article 5.6 of the SPS Agreement, in
Article 2.2 of the TBT Agreement, there is no footnote providing clarification on the meaning of the
phrase "more trade-restrictive than necessary". The absence of such a footnote must have meaning.
Indeed, even the letter relied upon by the United St ates indicates that it was not the common intention
of Members to incorporate such a footnote in the TBT Agreement. Therefore, in Mexico's view, there
is no legal basis for incorporating into Article 2.2 of the TBT Agreement the test in footnote 3 to
Article 5.6 of the SPS Agreement.
110. For these reasons, Mexico requests the Appellate Body to reject the United States' incorrect
interpretation of Article 2.2, and its attempt to sh ift the focus of the inquiry from the COOL measure
and its consistency with Article 2.2 to the " key legal question [of] whether the importing Member
could have adopted a less trade-restrictive measu re", and to whether the proposed alternative
measures would themselves be c onsistent with Article 2.2. 196 Instead, the Appellate Body should
recognize that an analysis of whether a measure is more trade restrictive than necessary involves a
two-step analysis: the first step is focused on the technical regulation at issue and the second step is
focused on an alternative measure. Only if a pa nel determines that a measure fulfils the legitimate
objective should it examine an a lternative measure. Otherwise, submits Mexico, the legal test under
Article 2.2 would mean "do as I say, not as I do".197

194Mexico's appellee's submission, para. 166 (highlighting the contents of Articles 1.4, 2.2, 3.3, 5,
and 5.6, and Annex A.1 to the SPS Agreement).
195Mexico's appellee's submission, paras. 184 and 185 (referring to United States' appellant's
submission, footnote 269 to para. 179).
196Mexico's appellee's submission, paras. 192 (quoting United States' appellant's submission, para. 181
(original emphasis)) and 194.
197Mexico's appellee's submission, para. 130. (original emphasis)

(ii) The Level of Fulfilment Achieved by the COOL Measure
111. Mexico argues that, having made an objective assessment of the facts, arguments, and
evidence, the Panel correctly found that the COOL measure does not make a material contribution to
or fulfil the objective of providing clear and accura te information on the places where animals were
born, raised, and slaughtered.
112. Regarding the United States' contention that th e Panel itself agreed that the COOL measure
conveys clear and accurate information, and its furt her assertion that "it is an uncontested fact that
meat carrying the A label constitutes at least 71% of the meat sold in the United States" 198, Mexico
responds that the United States "exaggerates or othe rwise takes liberties with the Panel's findings and
the evidence".199 What is uncontested is that, given that the COOL measure covers only about 55% of
the meat sold in the United States, the meat carryi ng Label A constitutes less than 39% (71% of 55%)
of the meat sold in the United States.200
113. Mexico further observes that, contrary to the suggestion of the United States, the Panel did
not make a clear finding endorsing the effectiveness of Label A. Although the United States quotes
the statement of the Panel that "the COOL measure appears to fulfil the objective because the measure
prohibits such meat from carrying a Label A even though the same meat may still carry a USDA
grade label" 201, Mexico refers to other conclusions of the Panel indicating that the information
provided through "all the labels" (that is, Labels A, B, C, and D), collectively, is confusing to
consumers.202 Moreover, although the Panel did find that origin information conveyed by Label A
may be meaningful, Mexico understands this to refer to the fact that Label A, unlike Labels B and C,
is defined in an unambiguous manner. However, this does not amount to a finding that, when Label A
is used, the COOL measure overall is effective to an y particular degree in fulfilling the United States'
objective. Finally, Mexico considers that, throug h its statement that the COOL measure does not
provide perfect information on origin in every conceivable scenario, the United States itself "concedes
that the COOL measure is unreliable even for the products to which it applies".203

198Mexico's appellee's submission, paras. 168 (referring to United States' appellant's submission,
200Mexico's appellee's submission, para. 169 (referring to, inter alia, United States' response to Panel
201Panel Reports, para. 7.713.
202Mexico's appellee's submission, paras. 170 and 171 (referring to Panel Reports, paras. 7.715
and 7.702).
203Mexico's appellee's submission, para. 173 (referring to United States' appellant's submission,
para. 144).

114. Mexico disagrees with the United States' argu ment that the ineffectiveness of the COOL
measure can be justified as an effort to avoid imposing excessive costs.
204 Mexico notes the Panel's
finding that the United States designed and impl emented the COOL measure in a manner that
imposed discriminatory higher costs on the use of imported livestock. 205 Mexico submits that
Article 2.2 does not suggest that cost should be a factor in assessing whether a challenged measure
fulfils its objective, and that the Panel therefore co rrectly concluded that the pertinent question for its
analysis was whether the COOL measure is fulfill ing the identified objec tive in accordance with
Article 2.2 of the TBT Agreement. Moreover, if the arguments of the United States were accepted, it
would imply that the United States' objective woul d have been redefined as to provide accurate
information regarding whether meat was produced from US-born cattle only, and not to provide
accurate information regarding meat from cattle of non-US origin. Such an objective would be
inherently arbitrary and not even-handed. Havi ng accepted the United States' characterization of its
objective—to provide as much clear and accurate or igin information as possible to consumers—the
Panel was correct to find that the COOL measure does not fulfil that objective.
D. Claims of Error by Canada – Other Appellant
1. "Legitimate Objective" under Article 2.2 of the TBT Agreement
115. In its other appellant's submission, Canada s upports the Panel's ultimate conclusion that the
COOL measure is inconsistent with Articles 2.1 and 2.2 of the TBT Agreement , and, in addition,
requests the Appellate Body: (i) to modify the reasoning of the Panel with respect to Article 2.2 while
upholding the Panel's finding of a violation of that provi sion; (ii) in the event that the Appellate Body
reverses the Panel's finding under Article 2.2, to complete the analysis and find, based on the evidence
on the record regarding less trade-restrictive a lternative measures, that the COOL measure is
inconsistent with Article 2.2; (iii) to find that the COOL measure and the Vilsack letter are
inconsistent with Article III:4 of the GATT 1994; and (iv) in the event that the Appellate Body
neither upholds the Panel's findi ng under Article 2.1 of the TBT Agreement, nor finds that the COOL
measure violates Article III:4 of the GATT 1994, to find that the COOL measure and the Vilsack
letter nullify and impair benefits a ccruing to Canada within the mean ing of Article XXIII:1(b) of the
GATT 1994. Canada clarified the scope of the last tw o of these grounds of appeal at the oral hearing.
First, Canada explained that its appeal of the Pa nel's exercise of judicial economy under Article III:4
and its request for a finding under that provision are conditional upon the Appellate Body reversing

204Mexico's appellee's submission, para. 174 (referring to United States' appellant's submission,
paras. 139, 140, and 142-144).
205Mexico's appellee's submission, para. 174 (referring to Panel Reports, paras. 7.347, 7.351,
and 7.372).

the Panel's finding of inconsistency under Article 2.1 of the TBT Agreement. Second, in the light of
the apparent withdrawal of the Vilsack letter by the United States, Canada no longer seeks findings
with respect to the Vilsack letter, although Canada maintains that the Appellate Body should take the
Vilsack letter into account in the event that it make s a ruling with regard to the COOL measure under
Article III:4 or Article XXIII:1(b) of the GATT 1994.
116. Canada claims that the Panel correctly found that the substantive obligation in Article 2.2 is
found in the second sentence of that provision, and that the following five-step test that it adopted for
its analysis under Article 2.2 was appropriate: (i ) determine if the technical regulation restricts
international trade; (ii) identify the objective pu rsued by the technical regulation in question;
(iii) determine if the objective of the technical regula tion is legitimate; (iv) determine if the technical
regulation fulfils the legitimate objective; and (v) assess alternative measures that would fulfil the
legitimate objective in a less trade-restrictive way, "taking account of the risks non-fulfilment would
create".206 Canada maintains, however, that the Panel erred in applying the second and third steps of
the above test in its analysis, in identifying th e objective pursued by the COOL measure, and in
finding that the objective pursued by the COOL measure is legitimate.
(a) The Identification of the Objective
(i) The Focus on a General Policy Objective
117. Canada argues that, in identifying the objective of the COOL measure, the Panel erred in
focusing its analysis on a general policy objective th at the COOL measure might pursue, as stated by
the United States, rather than the actual objective pursu ed by the measure. In so doing, the Panel also
erred in analyzing evidence relating to the design, arch itecture, structure, and legislative history of the
COOL measure only "as a secondary matter [and] as an alternative to the 'identified objective'".207
118. Canada considers that the Panel identified the objective "pursued by" the technical regulation
as "something different and more abstract" than the objective related to the technical regulation
itself.208 In Canada's view, however, the text of Article 2.2 directly links the objective of a technical
regulation with the legitimacy of that objective, and hence the focus of the inquiry is on the conduct of
a Member when it prepares, adopts, or applies a tec hnical regulation. Canada further argues that the
Panel's approach is "an unnecessary a nd unhelpful addition to the analysis" 209, because it is still

206Canada's other appellant's submission, para. 19 (referring to Panel Reports, paras. 7.554-7.556).
208Canada's other appellant's submission, para. 21.
209Canada's other appellant's submission, para. 21.

necessary to determine the objective of a particular technical regulation under the fourth step of the
test articulated by the Panel, namely, whether the measure fulfils a legitimate objective. Therefore,
"the separate step of assessing whether a theoretical objective is legitimate serves no purpose".
210
119. Canada asserts that, contrary to the Panel's suggestion, the Appellate Body's decision in
Australia – Salmon does not support the Panel's approach to determining an abstract objective for
purposes of an analysis under Article 2.2 of the TBT Agreement .211 In that dispute, the Appellate
Body relied on the words "when establishing or maintaining" in Article 5.6 of the SPS Agreement to
find that the determination of the level of protec tion "is an element in the decision-making process
which logically precedes and is separate from the establishment or maintenance of the
SPS measure".212 There is no similar language in Article 2.2 of the TBT Agreement to suggest that the
objective that a technical regulation pursues should be divorced from the objective of that technical
regulation itself. Moreover, whereas the concep t of "appropriate level of protection" in the
SPS Agreement refers to a "prerogative of the Member concerned" 213, the qualifier "legitimate" in the
term "legitimate objective" under Article 2.2 of the TBT Agreement does not refer to an objective
deemed legitimate by the Member. Rather, whether an objective pursued by a technical regulation is
legitimate within the meaning of Article 2.2 is a legal question to be answered by a panel following an
objective assessment of the evidence before it.
120. Canada further submits that a more fitting analogy in the SPS Agreement can be found in the
phrase "applied to protect" in Annex A(1)(a) to that Agreement. In interpreting the meaning of that
phrase, the Appellate Body found th at "[w]hether a measure is 'applied … to protect' in the sense of
Annex A(1)(a) must be ascertained not only from the objectives of the measure as expressed by the
responding party, but also from the text and st ructure of the relevant measure, its surrounding
regulatory context, and the way in which it is designed and applied."214
(ii) Article 11 of the DSU
121. Canada claims that, in examining evidence con cerning the design, architecture, and structure
of the COOL measure, as well as its legislative history, the Panel failed to find that the objective of

210Canada's other appellant's submission, para. 24.
211Canada's other appellant's submission, para. 25 (referring to Panel Reports, paras. 7.604 and 7.611).
212Canada's other appellant's submission, para. 25 (quoting Appellate Body Report, Australia – Salmon,
para. 203 (original emphasis)).
213Canada's other appellant's submission, para. 26 (quoting Appellate Body Report, Australia – Salmon,
para. 199). (original emphasis omitted by Canada)
214Canada's other appellant's submission, para. 27 (quoting Appellate Body Report, Australia – Apples,
para. 173).

the COOL measure is protectionism and thereby acted inconsistently with Article 11 of the DSU.
Canada maintains that, although it provided exte nsive evidence and arguments to the Panel
concerning the design, architecture, structure, and le gislative history showing that the objective of the
COOL measure is the protection of domestic livestock producers, the Panel did not reach the
appropriate conclusion based on that evidence and arguments. Canada highlights the following three
categories of evidence and arguments.
122. First, asserts Canada, the evidence concerning th e scope of the COOL measure shows that the
measure includes and excludes products in a way that demonstrates its protectionist objective. More
specifically, products that have little import competit ion are excluded from the scope of the measure,
including products carrying USDA grade labels, even though the United States alleged that the COOL
measure was designed to address the confusion cau sed by the USDA grade labels. The Panel,
however, set out the evidence "in a cursory manner" and "made no attempt to objectively assess" such
evidence.
215 Moreover, the Panel failed to "clearly men tion" Canada's argument that, except for meat
produced from certain livestock, almost all products that undergo a significant change in the United
States are excluded from the scope of the COOL measu re, and that such "singling out of livestock"
demonstrates protectionist intent.216
123. Second, according to Canada, in identifying th e objective, the Panel "did not appear to
consider" the evidence showing the COOL measure's inability to provide useful information to
consumers regarding meat deri ved from foreign-born livestock. 217 Third, the evidence regarding the
legislative history of the COOL measure, including the fact that the measure was introduced as part of
the 2002 Farm Bill, rather than with consumer information measures and statements by key
legislators, as well as the fact that producers rath er than consumer groups s upported the legislation,
show the "protectionist pur pose" of the COOL measure. 218 Yet, the Panel failed to consider the
probative value of this evidence that reveals the true objective of the COOL measure.
(iii) The Level of Detail of the Objective Identified
124. As an alternative to its claim that the Panel act ed inconsistently with Article 11 of the DSU,
Canada submits that the Panel erred in failing to characterize the objective of the COOL measure with
a sufficient level of detail for purposes of determini ng its legitimacy. Canada submits that the Panel
identified the objective of the COOL measure as providing "as much clear and accurate origin

215Canada's other appellant's submission, para. 36.
216Canada's other appellant's submission, para. 37.
217Canada's other appellant's submission, para. 38.
218Canada's other appellant's submission, para. 41.

information as possible to consumers"
219, but erred in failing to define the purpose for which this
information is provided. In order to examin e whether a government measure that requires the
provision of certain information to consumers pursues a legitimate objective, it is necessary to know
the purpose for which the government requires this in formation to be provided. This is because
information can be required to s upport a wide range of objectives, including legitimate ones, such as
allowing consumers to make informed decisions about health, and illegitimate ones, such as furthering
racial discrimination or favouring domestic producers.
(b) The Legitimacy of the COOL Measure's Objective
125. Canada claims that the Panel erred in finding that the objective of the COOL measure is
legitimate within the meaning of Article 2.2 of the TBT Agreement. The Panel failed to articulate the
correct legal test for determining legitimacy, and the a pplication of the correct legal test to the facts of
the case shows, in Canada's view, that the COOL measure's objective is not legitimate within the
meaning of Article 2.2.
126. Canada contends that the Panel discussed th e meaning of the word "legitimate" without
developing any principles that could guide its dete rmination of whether an objective is legitimate.
The Panel referred to the dictionary definition of the word in English, but that definition has "no
practical meaning" and is unhelpful for assessing legitimacy under Article 2.2 of the
TBT Agreement.
220 The Panel also referred to the finding of the panel in Canada – Pharmaceutical
Patents regarding the term "legitimate interests" in Article 30 of the Agreement on Trade-Related
Aspects of Intellectual Property Rights (the " TRIPS Agreement "). However, the legitimacy being
assessed in that dispute concerned the interests of certain private parties, whereas the legitimacy in
Article 2.2 of the TBT Agreement concerns a social value. Moreover, the term "legitimate" has a
different context in Article 30 of the TRIPS Agreement than in Article 2.2 of the TBT Agreement ,
because the former contains general language rather th an an illustrative list, but the latter contains an
illustrative list. Although the Panel noted that the illustrative list of legitimate objectives in
Article 2.2 of the TBT Agreement has interpretative value, the Panel did not conduct any further
analysis in this regard.
127. According to Canada, the Pane l wrongly concluded that any objective can be legitimate as
long as it has a genuine link to a public policy or social norm. Contrary to this conclusion, what can
be considered a "legitimate objective" should be in formed by the importance of the objectives listed

220Canada's other appellant's submission, para. 49.

under Article 2.2 and should be linked to common interests or values. Canada further submits that the
Panel erroneously rejected the relevance of the ejusdem generis principle to the interpretation of the
word "legitimate" in Article 2.2, stating that "all of the listed examples are expressed at a high level of
generality."221 In Canada's view, specific terms following a general term "provide[] a measure" of the
scope of the general term 222, and there are significant elements of commonality of the explicitly listed
objectives that can helpfully inform whether a particular objective is "legitimate".
128. Canada maintains that the TBT Agreement prioritizes the listed objectives by providing them
with a rebuttable presumption in Article 2.5, wher eby a measure will not be an unnecessary obstacle
to international trade if it is "prepared, adopted or applied" for one of the objectives listed in
Article 2.2, and by referencing them in the closed list of legitimate objectives in the sixth recital of its
preamble. Therefore, Canada contends that the correct test for determining the legitimacy of an
objective requires assessing, first, whether the objec tive is directly related to one of the listed
objectives in Article 2.2 and, if not, whether the objec tive is of the same type as the listed objectives.
This second step involves some difficulty, because it requires determining the legitimacy of an
unlisted objective. In this respect, Canada recalls th at each of the listed objectives is also protected in
Articles XX and XXI of the GATT 1994, which, in Canada's view, indicates that they are among the
social values that WTO Members agreed can outwei gh their obligations. Thus, objectives included in
Articles XX and XXI of the GATT 1994 could also be considered as "legitimate" within the meaning
of Article 2.2 of the TBT Agreement. Canada emphasizes, however, that it does not consider that the
scope of legitimacy within the meaning of Article 2.2 of the TBT Agreement is exhausted by
objectives explicitly included in ex ception provisions of the covered agreements. Other objectives
can also be shown to be legitimate, but that re quires greater specificity and "clear and compelling
evidence" of legitimacy.
223
129. Canada asserts that, even if the objective of the COOL measure is not protectionism but is, as
the Panel found, to provide as much clear and accura te origin information to consumers as possible,
application of the two-step test de scribed above shows that the objectiv e is not legitimate. First, the
objective does not directly relate to any of the list ed objectives in Article 2.2. Second, the objective
does not fall within the type of objectives that are legitimate, because the general purpose of providing
consumers with information is not an objective "pri vileged" in any of the covered agreements, and

222Canada's other appellant's submission, para. 52 (quoting Appellate Body Reports, China – Raw
Materials, para. 326).
223Canada's other appellant's submission, para. 59 (quoting New Zealand's oral statement at the first
Panel meeting, p. 3).

because the United States did not provide "clear and convincing evidence that indicates why [the]
objective is legitimate".
224
130. Canada additionally alleges that the Panel's finding that the COOL measure's objective is
legitimate is flawed for the following two reasons. Fi rst, the Panel referred to the existence of other
country of origin labelling measures that purport to provide consumer informa tion on origin of food
products, even though these measures are not analogous to the COOL measure and the Panel never
examined the purposes for which information is pr ovided under those measures. Second, the Panel
erred in relying on a reference to "protection of consumers" in Accountancy Disciplines, adopted in
accordance with Article VI:4 of the General Agreement on Trade in Services (the "GATS"), and, in
doing so, erroneously equated cons umer protection with providing consumers with information
generally. Canada adds in this regard that th e United States has not presented evidence of consumer
confusion with respect to the USDA grade labe ls and pre-COOL voluntary labelling programmes and
that, in any event, USDA grade labels apply only to beef, and not to pork.
2. Less Trade-Restrictive Alternative Measures
131. Canada submits that, in the event that the Appe llate Body reverses the Panel's finding that the
COOL measure does not fulfil a legitimate objective, the Appella te Body should complete the
analysis and find that the COOL measure is inconsistent with Article 2.2 of the TBT Agreement
because there are less trade-restrictive alternative measures reasonably available.
132. Canada suggests that the appropriate elements of the test for assessing a challenged measure
against an alternative measure are the following. First, the complaining party must propose one or
more alternative measures. Second, each propo sed alternative must be assessed against the
challenged measure to determine the extent of trad e-restrictiveness, that is, the extent to which a
measure discriminates against, or denies any compe titive opportunities to, imported products. Third,
the assessment of alternative measures must be done taking account of the risks that non-fulfilment
would create, that is, of the risks of harm that would arise from a failure to fulfil the legitimate
objective. Fourth, it is appropriate to take into ac count the extent of fulfilment of the objective by
both the challenged measure and the proposed alterna tive measure, even though the text of Article 2.2
does not explicitly envisage such a consideration. In Canada's view, the context provided by the
TBT Agreement and by similar balancing tests in Article 5.6 of the SPS Agreement and Article XX of
the GATT 1994 supports this approach.

224Canada's other appellant's submission, para. 62.

133. Canada further contends that determining the extent of fulfilment of the challenged and
proposed alternative measures requires an assessment of the extent to which each measure carries out
and performs its objective. That determination of fulfilment must be flexible and based on the
circumstances of the measures at issue. In Canada's view, a regulation that restricts trade will be more
or less justifiable depending in part on the risk of harm resulting from a failure to fulfil the objective it
pursues. Thus, where the risk that would arise fro m the failure to fulfil an objective is extremely
serious, a measure that restricts trade would be jus tifiable even if an alternative measure was much
less trade restrictive, because the significant reduc tion in trade-restrictiveness would not justify a
greater risk of non-fulfilment under the alternative me asure. Canada notes that this is the approach
taken in assessing proposed less trade-restrictiv e alternative measures under Article XX of the
GATT 1994. In that context, the Appellate Body has found that, if a value is "vital and important in
the highest degree", then the alternativ e measure must achieve the same end. 225 In so doing, Canada
submits, the Appellate Body has implicitly acknow ledged that, if the values are not vital and
important in the highest degree, an alternative measure need not achieve precisely the same end if it is
much less trade restrictive.
134. According to Canada, the application of this test to the COOL measure shows that it is
extremely trade restrictive and, if it does fulfil the objective, it does so at the lowest level. Canada
asserts that the lack of consumer interest in c ountry of origin information and the measure's poor
design show that the COOL measure provides little, if any, useful information that consumers want.
By contrast, the application of the test to the proposed alternative measures shows that they are less
trade restrictive and fulfil the objective at an equal or greater level than the COOL measure.
135. Canada proposes four alternative measures that are less trade restrictive than the COOL
measure. First, voluntary labelling can provide a far more effective means to inform interested
consumers where the objective pursued has no link to health and safety and the demand for the
information required by the impugned measure is li mited. Expanded as required to meet consumer
interest, voluntary labelling can provide as much consumer information on origin to interested
consumers as the COOL measure. Further, it coul d have a wider scope than the COOL measure and
apply to points of sale not covered by the COOL me asure, such as restaurants, small grocery stores,
and speciality meat stores.
136. Second, Canada alleges that a mandatory labelling system based on substantial transformation
is another alternative measure that avoids the tr ade-restrictiveness of th e COOL measure because it

225Canada's other appellant's submission, para. 74 (quoting Appellate Body Report, EC – Asbestos ,
para. 172).

does not impose differential costs on the use of impor ted livestock. Under this form of labelling,
where processing in a second country changes the nature of a product, the country of origin will be the
second country. According to Canada, such a labelling system provides accurate and easy to
understand information. Th rough labelling on the basis of substa ntial transformation, consumers are
provided concise and meaningful information on or igin without the confusion caused by the COOL
regime. This is because it would be clear that meat that says "product of X country" was derived from
livestock slaughtered in that country. This cont rasts with the COOL measure, where "product of X
country" means that slaughter took place in a foreign country if the meat is imported into the United
States (Label D), but something else if the meat is obtained from an animal slaughtered within the
United States.
137. Canada contends that a third alternative is a combination of the first two. Canada submits that
this combined option is less trade restrictive th an the COOL measure because it would not require
segregation for the portion of the market that did not demand voluntary labels. Further, a combined
system would ensure that all consumers have info rmation about the origin of meat and would permit
additional information for those that are interested . Canada adds that the greater flexibility of
voluntary labelling could also encourage participati on at points of sale currently not covered by the
COOL measure.
138. Lastly, Canada asserts that a mandatory trace- back system could be instituted to provide
extensive detailed information for each piece of meat. This information would not be restricted to
country, but could indicate the precise location of each processing step by state/province and
municipality. In Canada's view, if the objective of the COOL measure is to provide information to
consumers on where the animals from which the meat is derived are born, raised, and processed, this
alternative would contribute much more significantly to that objective. Canada acknowledges that
this system could also increase co sts, because there would need to be additional tracking throughout
the supply chain, but argues that such costs would be balanced by a greater contribution to the
objective of providing useful information to consumer s. Canada stresses that, under this alternative,
any additional costs would be distributed equally to all market participants, and that a trace-back
system would be much less restrictive of international trade because it would impose the same
obligation on producers and processors of both imported and domestic animals.
139. Canada further submits that, to the extent th at the proposed alternative measures might fulfil
the objective at a slightly lesser level than the COOL measure, they nevertheless demonstrate the
COOL measure's inconsistency with Article 2.2 b ecause they are much less trade restrictive, and
because the risk that non-fulfilmen t of the COOL measure's objective would create is very low.

Canada stresses that, in comparing the COOL meas ure with the proposed alternative measures, it is
important to take account of the minimal contribution that the COOL measure makes to its objective,
the vagueness of the information it pr ovides, the relative lack of harm caused by a failure to meet its
goal, and the fact that labelling on the basis of th e proposed alternative measures is significantly less
restrictive on trade. The COOL measure is not conc erned with food safety, environmental protection,
or deceptive practices. The benefit that it theoreti cally provides is to give those few consumers who
are interested more information on where the anim als from which their meat is derived are born and
raised. The USDA itself, however, acknowledges that consumer demand for this information is low.
Thus, the risk non-fulfilment would create is that a few consumers who want to know about origin
might not be able to find that information. Thus, according to Canada, when balancing the
comparable contribution that the alternative measu res could provide with the wide disparity in
trade-restrictiveness between those alternatives and the COOL measure, and in the light of the minor
consequences that non-fulfilment would create, th e Appellate Body should find that the proposed
alternative measures meet the test for a less trade-restrictive alte rnative under Article 2.2 of the
TBT Agreement.
3. Article III:4 of the GATT 1994
140. Canada argues that the Panel erred in exercisi ng judicial economy with respect to Canada's
claim under Article III:4 of the GATT 1994. Canada notes that the Panel did not address Article III:4
of the GATT 1994 because its finding that the COOL measu re is inconsistent with Article 2.1 of the
TBT Agreement "necessarily means that it also violates GATT Article III:4".226
141. In Canada's view, because the relationship between Article 2.1 of the TBT Agreement and
Article III:4 of the GATT 1994 "is not settled", the Panel's exercise of judicial economy in the
circumstances of this case risked providing only a par tial resolution of the matter at issue by failing to
address Canada's claim of discrimination under Article III:4 of the GATT 1994. 227 Canada clarified,
at the oral hearing, that this ground of its ot her appeal is conditional upon the Appellate Body
reversing the Panel's finding that the COOL measu re is inconsistent with Article 2.1 of the
TBT Agreement. Should this condition be satisfied, Cana da requests the Appellate Body to find,

226Canada's other appellant's submission, para. 93 (referring to Canada Panel Report, para. 8.4(a)).
227Canada's other appellant's submission, para. 96.

based on the evidence before the Pane l, that the COOL measure is inconsistent with Article III:4 of
the GATT 1994.
228
4. Article XXIII:1(b) of the GATT 1994
142. Should the Appellate Body reverse the Panel's finding of a violation of Article 2.1 of the
TBT Agreement and not find a violation of Article III:4 of the GATT 1994, Canada "requests a finding
by the Appellate Body, on the basis of the evid ence presented by Canada to the Panel, of
non-violation nullification or impairment under Article XXIII:1(b) of the GATT 1994". 229 Canada
argues that it presented evidence before the Panel sh owing that the application of the COOL measure
nullifies or impairs benefits accruing to Cana da under successive multilateral trade negotiations 230 by
"upsetting the competitive relationship and fr ustrating Canada's legitimate market access
expectations" regarding its exports of cattle and hogs to the United States.231
143. Canada further notes that the Panel stated, without further explanation, that compliance by the
United States with the Panel's findings of violation of Article 2.2 of the TBT Agreement and
Article X:3(a) of the GATT 1994 would eliminate the basis of the non-violation nullification or
impairment claim. In Canada's view, the Panel's statement was erroneous because compliance with
Article 2.2 of the TBT Agreement or removal of the Vilsack letter would not necessarily remove the
non-violation nullification or impairment.
E. Claims of Error by Mexico – Other Appellant
144. In its other appeal, Mexico advances a numb er of grounds of appeal, each of which is
conditional upon the Appellate Body reversing the Panel's findings that the COOL measure is

228In its other appellant's submission, Canada also requests the Appellate Body to find that the Vilsack
letter is inconsistent with Article III:4 of the GATT 1994 . (See Canada's other appellant's submission, para. 94)
At the oral hearing, noting that the Vilsack letter has be en withdrawn by the United States, Canada clarified that
it is not requesting the Appellate Body to make a speci fic finding under Article III:4 of the GATT 1994 with
respect to this measure. Canada, nonetheless, asked the Appellate Body to take the Vilsack letter into account in
the event it were to make a ruling regarding the COOL measure under Article III:4 of the GATT 1994.
(Canada's response to questioning at the oral hearing)
229Canada's other appellant's submission, para. 98. In its other appellant's submission, Canada also
requests the Appellate Body to find that the Vilsack letter nullifies and impairs benefits accruing to Canada
within the meaning of Article XX III:1(b) of the GATT 1994. (See ibid., paras. 7 and 99) At the oral hearing,
noting that the Vilsack letter has been withdrawn by the United States, Canada clarified that it is not requesting
the Appellate Body to make a finding under Article XXIII:1(b) of the GATT 1994 with respect to this measure.
Canada, nonetheless, asked the Appella te Body to take the Vilsack letter into account in the event it were to
make a ruling regarding the COOL measure under Article XXIII:1(b) of the GATT 1994. (Canada's response to
questioning at the oral hearing)
230Canada's other appellant's submission, para. 97 (referring to Panel Reports, paras. 7.889-7.891,
7.894, 7.896, and 7.897).
231Canada's other appellant's submission, para. 97.

inconsistent with Article 2. 1 and/or Article 2.2 of the TBT Agreement. More specifically, should the
Appellate Body reverse the Panel's finding that the COOL measure is inconsistent with Article 2.2,
then Mexico: (i) appeals the Panel's findings re garding the objective of the COOL measure, and
requests the Appellate Body properly to identify the true objective of the COOL measure
—namely, trade protectionism, which is not a leg itimate objective—and to find, therefore, that the
COOL measure is inconsistent with Article 2.2; a nd (ii) if the Appellate Body confirms the Panel's
findings regarding the objective of the COOL measure and its legitimacy, requests the Appellate Body
to complete the analysis and find that the COOL measure is inconsistent with Article 2.2 of the
TBT Agreement because there are alternative measures that ar e less trade restrictive and that fulfil the
legitimate objective taking into account the risks non-fu lfilment would create. In addition, should the
Appellate Body reverse the Panel's finding that the COOL measure is inconsistent with Article 2.1,
then Mexico: (i) appeals the Panel's decision to exercise judicial economy in respect of Mexico's
claim under Article III:4 of the GATT 1994 and requests the Appellate Body to complete the analysis
and find that the COOL measure is inconsistent with Article III:4; and (ii) in the event that the
Appellate Body does not find a violation of Article III:4, appeals the Panel's decision to exercise
judicial economy with respect to Mexico's claim of non-violation nullification or impairment and
requests the Appellate Body to complete the anal ysis and find that the COOL measure nullifies or
impairs benefits accruing to Mexico under the GA TT 1994 within the meaning of Article XXIII:1(b)
of that Agreement.
1. "Legitimate Objective" under Article 2.2 of the TBT Agreement
145. Should the Appellate Body reverse the Panel's fi nding that the COOL measure is inconsistent
with Article 2.2 of the TBT Agreement, Mexico appeals the Panel's finding that the objective of the
COOL measure is to "provide as much clear and accurate origin information as possible to
consumers"232 and that "providing consumer information on origin is a legitimate objective within the
meaning of Article 2.2" of the TBT Agreement.233 In Mexico's view, the Panel committed legal error
and failed to make an objective assessment of the matter as required by Article 11 of the DSU in
identifying the objective of the COOL measure. Mexi co, thus, requests the Appellate Body to reverse
the Panel's finding in this regard and to complete the analysis and find that the objective of the COOL
measure is not legitimate.

(a) The Identification of the Objective
(i) The Focus on a General Policy Objective
146. Mexico submits that the Panel erred in its approach to identifying the objective pursued by the
United States through the COOL measure, because the Panel relied solely on the United States'
characterization of that objective. Mexico generally agrees that the identification of the objective of a
technical regulation is the prerogative of the Member establishing the measure, and that there is a
presumption of good faith in favour of a Member as regards the objective identified in a notification
to the TBT Committee. However, determining the objective of a measure solely on the basis of a
Member's characterization could undermine the ef fectiveness of the disciplines in Article 2.2 and
open them to circumvention. Mexico further submits that, as recognized by the Panel, the
presumption of good faith is rebuttable. Thus, the Panel should have verified the objective identified
by the United States and ensured that it was congruent with the design, structure, and architecture of
the COOL measure, as well as its legislative history and surrounding circumstances.
147. Mexico maintains that its view is supported by the findings of the panels in certain recent
disputes. The panel in US – Tuna II (Mexico) stated that its determination regarding the objectives of
the measures at issue was "guided by the description of the objectives of the measures by both parties,
as well as by the structure and design of the U.S. dolphin-safe provisions".
234 I n US – Clove
Cigarettes, notwithstanding the parties' agreement on the objective of the measure at issue, the panel
examined relevant evidence to confirm the objective identified by the parties.235 Furthermore, Mexico
notes that, in this dispute, the Panel relied in part on Article 5.6 of the SPS Agreement and the
Appellate Body report in Australia – Salmon to support its view that the objective should be
determined by the Member and cannot necessarily be implied from that technical regulation itself. 236
However, the Appellate Body's finding in Australia – Salmon concerns Article 5.6 of the
SPS Agreement which, unlike Article 2.2 of the TBT Agreement , entails a specific requirement for
Members to determine their appropriate level of san itary and phytosanitary protection with sufficient
precision. Moreover, even in the context of Article 5.6 of the SPS Agreement, the Appellate Body has

234Mexico's other appellant's submission, para. 36 (quoting Panel Report, US – Tuna II (Mexico) ,
para. 7.406).
235Mexico's other appellant's submission, para. 36 (referring to Panel Report, US – Clove Cigarettes ,
paras. 7.336-7.343).
236Mexico's other appellant's submission, para. 37 (referring to Panel Reports, para. 7.604).

found that the appropriate level of protection may be established by panels on the basis of the level of
protection reflected in the SPS measure actually applied.237
(ii) Article 11 of the DSU
148. Mexico further submits that, due to the legal erro rs in the Panel's approach to identifying the
COOL measure's objective, the Panel failed to take into account the facts presented by Mexico
regarding the protectionist objective of the COOL me asure, and thereby failed to comply with its duty
to conduct an objective assessment of the matter befo re it, as required under Article 11 of the DSU.
Instead, the Panel focused on the objective as de scribed by the United States and "deliberately
disregarded and excluded" Mexico's arguments and evidence relating to the design and architecture of
the COOL measure, as well as its legislative history and surrounding circumstances.238
149. Mexico contends that the evidence it presented to the Panel shows that the COOL measure
arbitrarily targets certain commodities, retailers, a nd meat products, and prohibits the creation of any
tracing system for US cattle. 239 The evidence also demonstrates that US cattle producers wanted
country of origin labelling as a means to regain market share taken by Mexican producers and to
discourage use of foreign cattle. 240 Had the Panel properly examined such evidence, it would have
found that the COOL measure's objective is protecti onism. Consequently, the Panel would have also
found that the COOL measure's objective is not leg itimate within the meaning of Article 2.2 of the
TBT Agreement.
150. On this basis, Mexico requests the Appellate Body to find that the Panel erred in its "refusal"
to consider relevant evidence.241 Mexico further requests the Appellate Body to complete the analysis
by considering the relevant evidence and by conc luding that the real policy objective of the COOL
measure was not to provide consumer information, but to protect the US cattle industry.

237Mexico's other appellant's submission, para. 37 (referring to Appellate Body Report, Australia –
Salmon, para. 207).
238Mexico's other appellant's submission, para. 40.
239Mexico's other appellant's submission, para. 43 (refe rring to Mexico's first written submission to the
Panel, paras. 279, 280, and 296-302; Mexico's second written submission to the Panel, paras. 70-78; and Panel
Exhibits MEX-87 and MEX-88).
240Mexico's other appellant's submission, para. 43 (refe rring to Mexico's first written submission to the
Panel, paras. 168-191 and 280-283; Me xico's second written submission to th e Panel, paras. 79-83; and Panel
Exhibits MEX-49 through MEX-51, MEX-89, and MEX-91 through MEX-96).
241Mexico's other appellant's submission, para. 44.

(b) The Legitimacy of the COOL Measure's Objective
151. Mexico submits that, if the Appellate Body agrees with Mexico that the objective of the
COOL measure is protectionism, it would automatically follow that trade protectionism cannot be a
legitimate objective.
2. Less Trade-Restrictive Alternative Measures
152. Should the Appellate Body reverse the Panel's fi nding that the COOL measure is inconsistent
with Article 2.2 of the TBT Agreement and confirm the Panel's finding that the objective of the COOL
measure is legitimate, then Mexico appeals the Pa nel's decision to exercise judicial economy in
respect of the existence of a less trade-restrictive alternative. Mexico further requests the Appellate
Body to complete the anal ysis and find that the COOL measure is inconsistent with Article 2.2 of the
TBT Agreement.
153. Mexico submits that the "necessity test" in Article 2.2 of the TBT Agreement reflects a
balance between the freedom of Members to set and achieve their legitimate objectives through
technical regulations and the goal of discouraging Members from preparing, adopting, and applying
technical regulations that create unnecessary obstacles to international trade. A technical regulation
that restricts trade is permissible only if it is "n ecessary" to fulfil the Member 's legitimate objective,
taking account of the risks non-fulfilment would create . In Mexico's view, jurisprudence on the term
"necessary" in the context of Article XX(b) and (d) of the GATT 1994 and Article XIV of the GATS
is useful for the interpretation of the same term in Article 2.2 of the TBT Agreement. In the light of
such jurisprudence, in order to determine whether the COOL measure is more trade restrictive than
necessary to fulfil the legitimate objective, the following factors must be examined: (i) the
importance of the interests or values at stake; (ii) the extent of the contribution of the measure to the
achievement of the measure's obj ective; (iii) the trade-restri ctiveness of the measure; and
(iv) whether there are reasonably available altern ative measures that may be less trade restrictive
while providing an equivalent contri bution to the achievement of the objective. Mexico stresses that
Article 2.2 of the TBT Agreement "has an additional requirement", namely, "to take into account the
risks of non-fulfilment of the legitimate objective".242
154. With respect to the trade-restrictiveness of a measure, Mexico points out that the Panel
accepted that measures that are trade restrictive are those that deny competitive opportunities to
imports and that a complaining party need not pr ove actual trade effects. As for the "risks

242Mexico's other appellant's submission, para. 51.

non-fulfilment would create", Mexico emphasizes th at the risks of non-fulfilment of technical
regulations applied with the goal of protecting human, animal, or plant life or health will be different
from the risks of non-fulfilment of technical regulat ions applied with the goa l of providing consumer
information. In assessing such risks, the Appellate Body should consider, in particular, available
scientific and technical information. In addition, Mexico notes that Article 2.3 of the TBT Agreement
requires periodical re-assessment of the necessity of technical regulations, and submits that
consideration of whether the circumstances giving rise to the adoption of the COOL measure still
exist, or have changed and could be addressed in a less trade-restrictive manner, should be part of a
process of weighing and balancing a series of factors.
155. On the basis of the foregoing, Mexico contends that the value of the information provided by
the COOL measure and its contribution to the needs of US consumers is minimal. The possibility of
adverse consequences arising should th e objective not be fulfilled is low, and, to the extent that these
consequences arise, they will be restricted to a lim ited subset of US consumers. Furthermore, Mexico
argues, the COOL measure is highly trade restrictive, as evidenced, for example, by its adverse effect
on imports of Mexican feeder cattle.
156. Moreover, Mexico submits that there are at least four alternative measures that are reasonably
available and provide an equivalent contribution to the objective. The first alternative is a voluntary
country of origin labelling scheme, which, in Mexico's view, could maintain the same labelling
criteria on origin as the COOL me asure—that is, born, raised, and slaughtered—and would allow
market forces to fill consumer demand for this a dditional information to the extent such demand
exists.
157. The second alternative is a labelling regime base d on substantial transformation or a change
in nature. According to Mexico, this option would eliminate the discrimination and trade restrictions
affecting imports of Mexican feeder cattle. It would also be consistent with the origin rules applied to
imported meat products under the COOL measure and thus would avoid confusion.
158. A third alternative would be a combination of the previous two. Mexico contends that such a
combined system would ensure that consumers are provided with information on the origin of meat
products in accordance with the traditional standard while allowing retailers to provide additional
information if consumers indicated an interest.

159. Mexico submits as a fourth alternative a trace- back regime. Referring to a paper presented to
the Panel
243, Mexico notes that two alternative compliance mechanisms could have been employed by
the COOL measure, namely, "certification and audit" or "trace back". 244 The United States chose the
certification and audit mechanism, which involves costs being disproportionately born by Mexican
animals, because the easiest way to comply with it is by excluding all non-US animals or by
maintaining strict segregation of foreign-produced animals. 245 However, a trace-back system, which
Mexico argues is technically and economically feasi ble in the United States, would impose the same
requirements on both domestic and imported animal s and, therefore, the economic incentive to
discriminate against Mexican cattle would likely be el iminated. Mexico adds that, under a trace-back
scheme, consumers would be provided with much mo re precise information than is possible under the
COOL measure.
160. In view of these four alternative measures that are less trade restrictive while fulfilling the
objective of providing consumer information, Mexico submits that the COOL measure is more trade
restrictive than necessary within th e meaning of Article 2.2 of the TBT Agreement and hence
inconsistent with this provision.
3. Article III:4 of the GATT 1994
161. Should the Appellate Body reverse the Panel's fi nding that the COOL measure is inconsistent
with Article 2.1 of the TBT Agreement, then Mexico appeals the Panel's exercise of judicial economy
regarding Mexico's claim under Article III:4 of the GATT 1994 and requests the Appellate Body to
complete the analysis and find that the COOL measure is inconsistent with that provision.
162. In Mexico's view, since the Panel's decision not to address Mexico's claim under Article III:4
of the GATT 1994 was contingent upon its finding that the COOL measure is inconsistent with
Article 2.1 of the TBT Agreement , if this finding is reversed, the Panel's legal basis for exercising
judicial economy will no longer exist. Accordingly, Mexico contends, completion of the analysis by
the Appellate Body under Article III:4 of the GAT T 1994 would be necessary to facilitate the prompt
settlement of this dispute pursuant to Article 3.3 of the DSU. Mexico further asserts that there are
sufficient factual findings by the Panel and undisput ed facts on the record to enable the Appellate
Body to complete the legal analysis.

243Mexico's other appellant's submission, para. 65 (referring to Dermot J. Hayes and Steve R. Meyer,
"Impact of Mandatory Country of Origin Labeling on U.S. Pork Exports" (Panel Exhibit MEX-88)).
244Mexico's other appellant's submission, para. 65 (referring to Panel Exhibit MEX-88, p. 7).
245Mexico's other appellant's submission, para. 66 (referring to Panel Exhibit MEX-88, p. 7).

163. Mexico argues that the COOL measure is inc onsistent with Article III:4 of the GATT 1994
because it accords Mexican feeder ca ttle treatment less favourable than that accorded to US feeder
cattle. Mexico notes, in this regard, the Appellate Body's statement in Japan – Alcoholic Beverages II
that "Article III obliges Members of the WTO to provide equality of competitive conditions for
imported products in rela tion to domestic products." 246 Moreover, Article III:4 is informed by the
general principle in Article III:1 that internal measures should not be applied so as to afford protection
to domestic production. According to Mexico, th e COOL measure is "fundamentally incompatible"
with this general principle because it has "both the purpose and effect" of affording protection to
US cattle producers.247
164. In Mexico's view, the three elements that must be established in order for a Member's
measure to be inconsistent with Article III:4 are me t in the present case. First, Mexico argues that the
Panel's finding under Article 2.1 of the TBT Agreement that Mexican and US feeder cattle are "like
products"248 is equally applicable to the determinati on of "like products" within the meaning of
Article III:4 of the GATT 1994. Second, Mexico cont ends that the COOL me asure falls within the
category of laws, regulations, and requirements covered by Article III:4 and affects the internal sale,
offering for sale, purchase, transportation, distribution, or use of feeder cattle. Mexico notes that the
term "affecting" has been interpreted as having a broad scope of application. Accordingly, despite the
fact that the COOL measure does not directly apply to feeder cattle, Mexico argues that it affects the
internal sale, offering for sale, purchase, transportati on, distribution or use of feeder cattle by means
of regulating the retail beef that is derived from t hose cattle. In this regard, Mexico points to the
Panel's finding that, although the labels at issue must be affixed on muscle cuts of meat and ground
meat, these labels are "difficult to dissociate from ups tream stages of meat production" since they are
intended to convey information on the origin of the livestock from which the meat is derived.
249
165. Third, Mexico submits that the COOL measure accords less favourable treatment to imports.
Recalling the Appellate Body's findings in Korea – Various Measures on Beef and Dominican
Republic – Import and Sale of Cigarettes, Mexico submits that the COOL measure denies competitive
opportunities to Mexican feeder cattle. 250 Although the COOL measure does not de jure distinguish
between Mexican and US feeder cattle, a formal di fference in treatment is not necessary to show a

246Mexico's other appellant's submission, para. 75 (quoting Appellate Body Report, Japan – Alcoholic
Beverages II, p. 16, DSR 1996:I, 97, at 109).
247Mexico's other appellant's submission, para. 76.
249Mexico's other appellant's submission, para. 88 (referring to Panel Reports, paras. 7.282 and 7.283).
250Mexico's other appellant's submission, para. 90 (referring to Appellate Body Report, Korea –
Various Measures on Beef , para. 137; and Appellate Body Report, Dominican Republic – Import and Sale of
Cigarettes, para. 93).

violation of Article III:4 of the GATT 1994. Instead , the focus is on whether the measure modifies
the conditions of competition. In this regard, Mexi co argues that several factual findings of the Panel
"clearly demonstrate that the COOL measure denies competitive opportunities in such a manner".
251
4. Article XXIII:1(b) of the GATT 1994
166. Should the Appellate Body decide that the Pane l erred in finding that the COOL measure is
inconsistent with Article 2.1 of the TBT Agreement and not make a finding that the COOL measure is
inconsistent with Article III:4 of the GATT 1994, Me xico appeals the Panel's decision to exercise
judicial economy in respect of Mexico's claim under Article XXIII:1(b) of the GATT 1994, and
requests the Appellate Body to co mplete the analysis and find th at the COOL measure nullifies and
impairs benefits accruing to Mexico within the m eaning of Article XXIII:1(b). Mexico also recalls
the Panel's statement that compliance by the United St ates with the Panel's findings of violation of
Article 2.2 of the TBT Agreement and Article X:3(a) of the GATT 1994 would eliminate the basis of
the non-violation nullification or impairment claim.
252 According to Mexico, this statement is
erroneous since measures taken to comply with t hose findings would not necessarily eliminate all of
the discrimination and resulting nullification and im pairment of tariff concessions. Accordingly,
regardless of the Appellate Body's decision under Article 2.2 of the TBT Agreement, if the Appellate
Body does not uphold the Panel's finding under Article 2.1 of the TBT Agreement, Mexico requests a
finding under Article XXIII:1(b) of the GATT 1994. Me xico highlights that the Appellate Body may,
upon reversing a particular legal finding of a panel, proceed to examine and complete the analysis of a
claim that was not specifically addressed by the panel in order to resolve the dispute.
167. Mexico submits that the COOL measure nullifi es and impairs tariff concessions made by the
United States and inscribed in its WTO tariff bi ndings. More specifically, the United States' bound
tariff for live cattle is 1 cent per kilogram, which is about $1.36 to $1.81 per h ead of feeder cattle.
However, the actual price discount created by the COOL measure "has been up to $60" 253 for such
animals. Moreover, the COOL measure reduced the number of US plants processing Mexican cattle,
limited the number of days on which other plants would accept Mexican cattle, and resulted in new
requirements for advance notice of delivery. In Mexico's view, the competitive disadvantage reflected
in the price discount and other restrictions "vastly exceeds Mexico's legitimate expectation of a $1.36
to $1.81 tariff disadvantage per animal". 254 Mexico emphasizes that its complaint does not concern

251Mexico's other appellant's submission, para. 93 (referring to Panel Reports, paras. 7.357, 7.372,
7.374-7.380, and 7.420).
252Mexico's other appellant's submission, para. 100 (referring to Panel Reports, para. 7.907).
253Mexico's other appellant's submission, para. 97.
254Mexico's other appellant's submission, para. 97 (referring to Panel Reports, para. 7.898).

origin marking requirements in general, but concer ns the particular features of the COOL measure
that are discriminatory and arbitrary and that coul d not reasonably have been anticipated at the time
the tariff concessions were negotiated.
168. Mexico further contends that the Panel's findi ngs that the COOL measure has the effect of
discouraging the use of Mexican cattle provides a su fficient basis upon which the Appellate Body can
complete the analysis and find that the COOL measure results in non-violation nullification or
impairment within the meaning of Article XXIII:1(b) of the GATT 1994.
F. Arguments of the United States – Appellee
169. The United States requests the Appellate Body to reject all of the appeals and conditional
appeals contained in Canada's and Mexico's other a ppellant's submissions. With respect to the claims
that the Panel erred in its identification of the obj ective of the COOL measure and its assessment of
the legitimacy of that objective, the United States asserts that Mexico's appeal overlooks the Panel's
analysis of the text, design, architecture, and stru cture of the COOL measure, while Canada's rests
solely on a contention that the Panel did not condu ct its analysis in the correct order and on the
mistaken suggestion that it was inappropriate for the Panel even to consider the objective as expressed
by the United States. Moreover, the complaining pa rties have not established that the Panel failed to
comply with Article 11 of the DSU, and their ar guments in this regard simply reflect their
disappointment that the Panel did not accord to thei r evidence the same weight that they do. The
United States rejects Canada's proposed test of "legitimacy" under Article 2.2 of the TBT Agreement,
asserts that there is no basis on the record for the Appellate Body to complete the analysis as to
whether the COOL measure is more trade restrictive than necessary, and adds that, in any event, the
tests proffered by Canada and Mexico as to how su ch an analysis should be undertaken are erroneous.
With respect to Article III:4 of the GATT 1994, th e United States asserts that neither Canada nor
Mexico has explained why the Panel's exercise of judicial economy was err oneous or explained how
an assessment under that provision would diffe r from an assessment under Article 2.1 of the
TBT Agreement. With respect to the Vilsack letter, the United States also considers that, absent an
appeal of the Panel's finding under Article X:3(a) of the GATT 1994, it is unnecessary for the
Appellate Body to undertake an Article III:4 asse ssment and, in any event, there are insufficient
factual findings or undisputed facts to enable it to do so. As for the conditional appeals with respect
to Article XXIII:1(b) of the GATT 1994, the United States considers that Canada and Mexico have
failed to explain why it is necessary for the Appella te Body to make a non-violation nullification or
impairment finding on the COOL me asure, and have failed to make a prima facie case with regard to

their claims. In any event, adds the United States, there are insufficient factual findings by the Panel
or undisputed facts on the record to provide a basis for completion of the analysis.
1. "Legitimate Objective" under Article 2.2 of the TBT Agreement
170. The United States contends that the Appellate Body should reject th e complainants' other
appeals regarding the Panel's identification of the objective of the COOL measure and its finding that
the objective is legitimate. The United States furt her alleges that the co mplainants' claims under
Article 11 of the DSU are unfounded in the light of the Panel's proper evaluation of the evidence on
the record, and should also be rejected.
(a) The Identification of the Objective
(i) The Focus on a General Policy Objective
171. The United States characterizes as "fundamentally in error" 255 Mexico's view that "the Panel
should have verified [the] objective [stated by th e United States] and ensured that it was congruent
with the design, structure, and architecture of the COOL measure as well as its legislative history and
surrounding circumstances".256 The United States also disagrees with Mexico that the Panel's "failure
to do this was a legal error and was inconsiste nt with its obligations under Article 11 of the DSU".257
In the United States' view, Canada concedes that the Panel did in fact verify the "identified" objective
on the basis of an analysis of the text, design, arch itecture, and structure of the COOL measure in the
Panel Reports.258 Accordingly, for the United States, "the entirety of Mexico's appeal" in this respect
rests on an erroneous factual premise.259
172. The United States recalls Canada's argument that the Panel's consideration of a general policy
objective as stated by the Un ited States was "an unnecessary an d unhelpful addition to the
analysis".260 The United States considers this argument "surprising" 261, given that Canada agrees that,
in applying the phrase "applied … to protect" in Annex A(1)(a) to the SPS Agreement , it is

256United States' appellee's submission, para. 15 (quoting Mexico's other appellant's submission,
para. 41).
257United States' appellee's submission, para. 15 (quoting Mexico's other appellant's submission,
para. 41).
258United States' appellee's submission, para. 17 (referring to Canada's other appellant's submission,
para. 19(2), footnote 43 to paragraph 20, heading III.A.2, and para. 29, in turn referring to Panel Reports,
paras. 7.608 and 7.678-7.691).
259United States' appellee's submission, para. 17. (original emphasis)
260United States' appellee's submission, para. 16 (quoting Canada's other appellant's submission,
para. 21).

appropriate to take into account both the objec tive of a measure "as expressed by the responding
party" and the text and structure of the measu re to determine whether that measure is an
SPS measure.262 Moreover, noting that the Member maintain ing a measure is well situated to express
the objective of that measure, the United States c ontends that Canada fails to explain why a panel
should disregard the responding party's expression of the objective of the measure at issue. The
United States emphasizes that, before the Panel, it explained the COOL measure's objective in
response to Canada's and Mexico's erroneous asserti ons that the measure's objective is protectionism,
and that the Panel correctly assessed the merits of the competing assertions against evidence regarding
the design, structure, and architecture of the measure.
173. The United States adds that Canada misundersta nds the Panel's analysis insofar as Canada
suggests that the Panel committed legal error by undertaking its analysis regarding the design,
structure, and architecture of the measure "only as a secondary matter as an alternative to the
'identified objective'".263 On the contrary, this was a significant element of the Panel's overall analysis
as to whether the measure actually achieves its identified objective at its identified level of fulfilment.
(ii) Article 11 of the DSU
174. The United States maintains that, contrary to Canada's and Mexico's claims, the Panel
objectively assessed the relevant evidence relating to the COOL measure, consistent with Article 11
of the DSU. The United States recalls the Appellate Body's articulation of the legal standard for
identifying a breach of Article 11, and contends that Canada and Mexico have failed to show that the
Panel deliberately disregarded or wilfully distorted their evidence, or failed to refer to evidence that
was material to its conclusion. Rather, the Pa nel carefully considered, assessed, and weighed the
evidence presented by all of the parties related to the COOL measure's text, its design, architecture,
and structure, and its legislative history. The Pa nel found that the text of the COOL measure is
"devoted exclusively to the labelling requirements on origin", and that the stated purpose of the
2009 Final Rule (AMS) is "to provide consumers with origin information".
264 Furthermore, the Panel
examined the evidence and arguments by Canada and Mexico regarding the design, architecture,
structure, and legislative history of the COOL measure, including the COOL measure's scope and
exceptions and various statements by legislators, be fore rightly concluding that it was not persuaded
that the COOL measure is designed for a protectionist purpose.

262United States' appellee's submission, para. 19 (quoting Canada's other appellant's submission,
263United States' appellee's submission, para. 21 (quoting Canada's other appellant's submission,

175. The United States contests Mexico's assertion th at the Panel "deliberately disregarded and
excluded Mexico's arguments and evidence based on the design, architecture, and structure of the
COOL measure as well as its legislative history" and surrounding circumstances.
265 Contrary to
Mexico's assertion, much of the argumentation a nd evidence that Mexico claims the Panel ignored,
which relates to the scope of the measure and its le gislative history, is explicitly cited in the Panel
Reports.266
176. The United States further contends that Canada's claims under Article 11 of the DSU are also
without merit and largely reflect dissatisfaction wi th the weight the Panel accorded to particular
arguments and evidence submitted by Canada. First, with respect to Canada's argument that the Panel
gave "cursory treatment" to the evidence and argu ments regarding the protectionist scope of the
COOL measure267, the United States submits that, as the Pa nel correctly concluded, the fact that the
COOL measure does not cover every possible product and point of sale is not necessarily evidence of
protectionism, because it is not atypical for regulati ons to have exceptions. Consistent with the
standard articulated by the Appellate Body under Ar ticle 11 of the DSU, the fact that the Panel may
not have set out all of the evidence proffered by Ca nada would not constitute a breach of Article 11.
The United States further asserts that Canada's cl aim that the COOL measure includes commodities
with import competition and excludes those without such competition is incorrect in the light of
relevant evidence.
177. Second, with regard to Canada's argument that all products that undergo a significant change,
except for meat from foreign livestock, are exclude d from the COOL measure's scope (the "processed
food exception"), the United States maintains that th e Panel correctly found that "merely because the
COOL measure does not apply to all food products ... does not necessarily mean that the measure is
designed for a protectionist purpose."268 In the United States' view, Canada's concern with the Panel's
finding appears to be that the Panel did not consider Canada's arguments in Ca nada's "desired order"
and failed to "clearly mention" the argument in its analysis. 269 However, the Appellate Body has
found that a panel has the discretion "to address onl y those arguments it deems necessary to resolve a

265United States' appellee's submission, para. 32 (quoting Mexico's other appellant's submission,
para. 40).
266United States' appellee's submission, para. 33 (referring to Panel Reports, paras. 7.683, 7.687,
and 7.689).
267United States' appellee's submission, para. 35 (quoting Canada's other appellant's submission,
para. 36).
269United States' appellee's submission, para. 39 (quoting Canada's other appellant's submission,
para. 37).

particular claim". 270 The United States adds that Canada 's argument reflects its fundamental
misunderstanding of the COOL measure, because the processed food exception applies equally to
meat derived from Canadian livestock.
178. Third, concerning Canada's argument that th e Panel did not consider evidence showing the
COOL measure's inability to provide useful inform ation to consumers, the United States maintains
that the Panel addressed such evidence when examining whether the COOL measure fulfils its
objective.271 In any event, Canada's argument in this respect is not persuasive, because "it overlooks
undisputed facts on the record that at least 71 percent of U.S.-origin meat products are receiving an
A label", and thus are carrying labels th at provide clear consumer information. 272 The United States
also "finds it ironic" that the aspect of the COOL measure that Canada claims to be evidence of the
purported protectionist intent of the COOL me asure—that is, the commingling provisions—was
specifically requested by Canada during the legislative process.273
179. Fourth, with respect to Canada's and Mexico 's argument that the Panel failed to examine
properly evidence regarding the legislative histor y of the COOL measure, the United States submits
that the Panel examined all of the statements by i ndividual legislators, including those referenced by
Canada and Mexico, and found that they did not affect its conclusion. The fact that the Panel did not
attribute the same weight to these statements as did the complainants does not give rise to a breach of
Article 11 of the DSU.
180. Finally, the United States stresses that the Pane l's finding that the COOL measure's objective
is consumer information on origin and not protec tionism is supported by the evidence on the Panel
record, including the statements of legislators involved with the measure 274, comments submitted by
individuals during the regulatory process 275, comments of support from leading consumer advocacy

270United States' appellee's submission, para. 39 (quoting Appellate Body Report, EC – Poultry ,
para. 135). (original emphasis omitted by the United States)
271United States' appellee's submission, para. 41 (referring to Panel Reports, paras. 7.695-7.719).
272United States' appellee's submission, para. 42 (referring to United States' appellant's submission,
para. 153).
274United States' appellee's submission, para. 44 (referring to Panel Reports, para. 7.690; United States'
second written submission to the Panel, para. 129; and Panel Exhibits US-13, US-14, US-48, and US-61).
275United States' appellee's submission, para. 44 (referring to Panel Reports, para. 7.646; United States'
second written submission to the Panel, paras. 133-13 6; and Panel Exhibits US-113 and US-119 through
US-126).

organizations
276, the evolution of the measure itself 277, and conference and committee reports
accompanying the COOL statute.278 The United States also disagrees with Canada's assertion that the
fact that the COOL measure was originally introd uced in the 2002 Farm Bill supports the conclusion
that the measure's objective is protectionism. Rather, US farm bills are omnibus measures that
include many items related to the production and sale of food products.
181. For these reasons, the United States requests the Appellate Body to reject the complainants'
claims that the Panel acted inconsistently with Article 11 of the DSU when finding that the objective
of the COOL measure is to provide consumers with information on origin.
(iii) The Level of Detail of the Objective Identified
182. The United States recalls that, as an "alternative" to its claim under Article 11 of the DSU,
Canada contends that the Panel committed legal error in identifying the objective as providing "as
much clear and accurate origin information as possi ble to consumers" without also "defin[ing] the
purpose for which this information is provided".
279 The United States maintains that this alternative
claim of Canada does not differ substantively from its claim under Article 11 of the DSU, and must
fail for the same reasons. The United States further contends that nothing in the TBT Agreement
requires the importing Member to define its objective in either a narrow or broad fashion. If anything,
the fact that the legitimate objectives listed in Ar ticle 2.2 are expressed at a high level of generality
supports a Member defining its objective in gene ral terms, as the Panel recognized. Moreover,
Canada's alternative claim suggests that the Panel should have examined why the government requires
the provision of the information under the COOL me asure. However, as the Appellate Body has
found, speculation on the subjective intent of a Memb er is not an appropriate form of analysis. 280 On
this basis, the United States requests the Appellate Body to reject Canada's alternative claim regarding
the Panel's identification of the objective of the COOL measure.

276United States' appellee's submission, para. 44 (referring to Panel Reports, para. 7.645; United States'
second written submission to the Panel, paras. 131 and 132; and Panel Exhibits US-4, US-5, US-61, US-84,
US-89, US-90, US-100, US-111, US-113, US-116, and US-119 through US-125).
277United States' appellee's submission, para. 44 (ref erring to United States' second written submission
to the Panel, para. 137).
278United States' appellee's submission, para. 44 (ref erring to United States' second written submission
to the Panel, para. 128; and Panel Exhibits US-11 and US-12).
279United States' appellee's submission, para. 46 (quoting Canada's other appellant's submission,
280United States' appellee's submission, para. 48 (referring to Appellate Body Report, Japan –
Alcoholic Beverages II, p. 27, DSR 1996:I, 97, at 119).

(b) The Legitimacy of the COOL Measure's Objective
183. The United States asserts that Canada's test for determining whether an objective is legitimate
within the meaning of Article 2.2 of the TBT Agreement lacks any basis in the text of Article 2.2, for
the following reasons. First, Article 2.2 contains a non-exhaustive list of legitimate objectives, as
indicated by the term " inter alia ". Thus, objectives not explicitly listed may be legitimate. For
example, the United States submits, the panel in EC – Sardines found that market transparency and
consumer protection—which are objectives not liste d in Article 2.2—were legitimate within the
meaning of that provision. 281 Moreover, Article 2.2 does not rank various objectives and does not
reference Articles XX and XXI of the GATT 1994. Thus, there is no basis in the text of Article 2.2 to
infer that objectives not listed therein enjoy a hi gher presumption of legitimacy simply because they
derive from Articles XX and XXI of the GATT 1994. Canada also fails to recognize that the COOL
measure's objective—that is, to provide consumers with informat ion on origin—has been recognized
under Article IX of the GATT 1994 as legitimate, and that nearly 70 WTO Members have country of
origin labelling requirements, including many that listed consumer information as the objective in
notifying these measures to the TBT Committee.
184. Second, the United States maintains that Canada mistakenly purports to rely on the principle
of ejusdem generis in proposing the test for "legitimacy" unde r Article 2.2. The United States asserts
that this principle is not one of the customary rules of interpretation of public international law
reflected in the Vienna Convention. Further, as the Panel correctly found, the principle is not "helpful
for determining whether the objective pursued by the United States is legitimate", given that "all of
the listed examples are expressed at a high level of generality". 282 Canada also fails to explain how
the enumerated objectives admit of a particular cl assification by "type". Mo reover, Canada's position
is at odds with the applicable rule on burden of pr oof, which requires Canada, as the complainant, to
prove that the COOL measure's objective is not le gitimate. Yet, the United States submits, according
to Canada, the burden would rest on the respondent to demonstrate with clear and compelling
evidence that the objective is legitimate.283
185. Third, the United States maintains that, by arguing that the listed objectives are more
important than unlisted ones, Canada's test is based on the false assumption that Article 2.2 prioritizes
the listed objectives over the unlisted ones. Contra ry to Canada's assertion, Article 2.2 requires

281United States' appellee's submission, para. 51 (referring to Panel Report, EC – Sardines, para. 7.123).
283United States' appellee's submission, para. 55 (referring to Canada's other appellant's submission,
para. 62).

technical regulations to pursue legitimate objectives , rather than "important " objectives, and panels
are not in a position to judge and rank the importance of various objectives.
186. Fourth, the United States asserts that, even under Canada's flawed approach, providing
consumers with information on origin would be a legitimate objective under Article 2.2 because it is
closely connected to the preventi on of deceptive practices, which is a legitimate objective listed in
that provision. This is because, like the preven tion of deceptive practices, provision of consumer
information is also intended to ensure that c onsumers have correct information about the products
they buy.
187. The United States maintains that the Panel prope rly based its finding regarding the legitimacy
of the COOL measure's objective on the evidence on the record, including the evidence showing "the
strong desire on the part of consumers to receive " the information required by the COOL measure,
and the "strong trend" of WTO Members requiring such information.
284 Although Canada asserts that
the Panel's approach would allow an illegitimate objective to be considered as "legitimate" under
Article 2.2, Canada fails to provide any reasons as to why this would be so. The Panel was also
correct that a determination of whether an objective is legitimate should not be made in a vacuum, but
in the context of "the world in which we live" 285, and in taking account of evidence as to whether the
objective is widely shared. On this basis, the United States requests the Appellate Body to uphold the
Panel's finding that providing consumer inform ation on origin is a legitimate objective under
Article 2.2 of the TBT Agreement.
2. Less Trade-Restrictive Alternative Measures
188. The United States maintains that the Panel reco rd does not contain a sufficient factual basis
for the Appellate Body to complete the analys is as to whether the COOL measure is "more
trade-restrictive than necessary", and that the Appellate Body should reject the flawed legal
frameworks proposed by Canada and Mexico for interpreting Article 2.2 of the TBT Agreement.
189. First, the United States notes that the Appellate Body may complete the Panel's analysis "only
if the factual findings of the panel and the undisputed facts in the panel record provide [the Appellate
Body] with a sufficient b asis for [its] analysis". 286 Although Mexico acknowledges this legal
standard, it "points to no factual findings by the Panel" or undisputed facts regarding the four

286United States' appellee's submission, para. 66 (quoting Appellate Body Report, EC – Asbestos ,
para. 78).

proposed alternative measures. 287 As for Canada's arguments in this regard, they " ignore[] the legal
standard, and its application to the basis of its own appeal, altogether". 288 The United States contends
that, "[i]n essence", Canada and Mexico are ask ing the Appellate Body to weigh and assess the
evidence "on a de novo basis", contrary to Articles 17.6 and 17.13 of the DSU.289
190. As regards the four alternative measures that Canada and Mexico both propose, the
United States contends that it responded in full with arguments before the Panel demonstrating that
none of the proposals is an acceptable alternative, and notes that there are no undisputed facts as to
any of these proposed alternatives. The United Stat es adds that the Panel made no findings of fact
with regard to these alternatives and neither complain ing party asserts otherwise. The United States
further notes that, with regard to the second altern ative proposed by Canada and by Mexico—that is,
labelling on the basis of substantial transformation—th e Panel found, in the context of Mexico's claim
under Article 2.4 of the TBT Agreement , that a Codex standard incorporating substantial
transformation is "an ineffective and inappropria te means for the fulfilment of the legitimate
objectives of the United States". 290 This finding, which has not been appealed, demonstrates, in the
United States' view, that labelling on the basis of substantial transformation is not an alternative
measure that would fulfil the United States' leg itimate objective at the level the United States
considers appropriate.
191. Accordingly, the United States contends, there is not an adequate basis on the record for the
Appellate Body to complete the analysis as Canada and Mexico have requested. The Appellate Body
should therefore reject these two conditional appeals which, in essence, request the Appellate Body to
engage in an inappropriate weighing and assessing of evidence.
192. Turning to the differing legal frameworks propo sed by Canada and Mexico to interpret
Article 2.2 of the TBT Agreement, the United States contends that these seem to derive largely from
the jurisprudence developed to interpret Article XX of the GATT 1994, which is not an appropriate
guidepost for interpreting the meaning of Article 2.2 of the TBT Agreement . In the United States'
view, Canada and Mexico contend that Article 2.2 calls for pane ls to conduct a wide-ranging,
intrusive test to balance different elements, incl uding the importance of the legitimate objective, the
trade-restrictiveness of the challenged measure, an d various aspects of the proposed alternative

287United States' appellee's submission, para. 66 (referring to Mexico's other appellant's submission,
paras. 62-68). (original emphasis)
288United States' appellee's submission, para. 66 (referring to Canada's other appellant's submission,
paras. 77-90). (original emphasis)
290United States' appellee's submission, para. 68 (referring to Panel Reports, paras. 7.734 and 7.735).

measures. Whereas Mexico styles its version of the balancing test as a "necessity test", Canada
adduces that where the value at issue is "'vital and important in the highest degree', then the
alternative measure must achieve the same end" as the challenged measure
291, but, where the value is
"not vital and important in the highest degree, an alternative measure need not achieve precisely the
same end".292 The United States argues that nothing in Article 2.2 of the TBT Agreement provides a
basis for such an approach.
193. According to the United States, there are "at l east four reasons" why Canada's and Mexico's
analyses are each "flawed". 293 First, both Canada and Mexico seek to define a "trade-restrictive"
measure as one that denies competitive opportunities. In doing so, they appear to be attempting to
import into Article 2.2 the analytical approach de veloped for purposes of Article 2.1, as well as for
less favourable treatment more generally. In the abse nce of a definition of the term "trade-restrictive"
in the TBT Agreement, however, the United States submits that the interpretation of this term should
be grounded in its ordinary meaning. Accordingly, a measure that is trade restrictive could include
one that limits, prevents, or confines trade, or restrains it by prohibition.
194. Second, the United States submits that the text of Article 2.2 of the TBT Agreement does not
create a balancing test. In particular, there is no textual support for requiring a panel to balance the
importance of the legitimate objective against the proposed alternative. According to the United
States, panels are not in a position to make subjectiv e determinations that some legitimate objectives
are more important than others. In its view, the inquiry under Article 2.2 of the TBT Agreement does
not call for "balancing" at all, but rather calls for a determination of whether a less trade-restrictive
alternative measure is available and fulfils the obj ective of the challenged measure at the level the
importing Member considers appropriate.
195. Third, the United States contends that Canada misreads the clause "taking account of the risks
that non-fulfilment would create". The United States objects to the no tion that, in some
circumstances, a complaining party can prove that the challenged measure is "more trade-restrictive
than necessary" by proposing an alternative measure that does not contribute to the fulfilment of the
objective at the same level the challenged measure does. Although Canada "claims support for its
position" in the jurisprudence of Article XX of the GATT 1994 and Article 5.6 of the SPS Agreement,
the United States contends that, in interpreting these provisions, the Appellate Body has never held

291United States' appellee's submission, para. 74 (quoting Canada's other appellant's submission,
292United States' appellee's submission, para. 74 (quoting Canada's other appellant's submission,
para. 74). (original emphasis omitted by the United States)

that panels are to apply a higher degree of scrutin y to measures that pursue objectives that are less
important.294 The United States considers that the clause "taking account of the risks non-fulfilment
would create" is better understood as an element that Members take into consideration in determining
the level that is appropriate for the particular leg itimate objective at issue. Lastly, the United States
stresses that, despite the elaborate balancing tests put forward by Canada and by Mexico, neither party
seems to use its respective test to analyze the proposed alternatives.
3. Article III:4 of the GATT 1994
196. The United States contends that the Panel acted within its discretion in exercising judicial
economy with respect to Canada's and Mexico's cl aims under Article III:4 of the GATT 1994. In its
view, regardless of how the Appellate Body di sposes of the appeal under Article 2.1 of the
TBT Agreement, findings by the Appellate Body under Article III:4 are unnecessary and will not help
to secure a positive resolution to these disputes. Ther efore, the Appellate Body need not complete the
legal analysis under Article III:4 of the GATT 1994 with respect to either th e COOL measure or the
Vilsack letter. In any event, adds the United States, there is not a sufficient factual basis for it to do
so.
197. With respect to the COOL measure, the United States argues that, given its recognition of the
close connection between Article 2.1 of the TBT Agreement and Article III:4 of the GATT 1994, the
Panel's decision to exercise judicial economy was appr opriate. In its view, Ca nada fails to explain
why that decision was in error, beyond an unclear assertion that "the relationship between [these
provisions] is not settled". 295 As for Mexico's conditional appeal, the United States asserts that the
facts cited by Mexico with respect to less favourable treatment are some of the very facts that the
United States has contended are insufficient to s upport a finding of a breach of Article 2.1 of the
TBT Agreement. Because the parties have all recognized that the less favourable treatment analysis
under Article 2.1 and Article III:4 "is similar" 296, there would be no basis for the finding that Mexico
seeks.
198. Regarding the Vilsack letter 297, the United States submits that, because the Panel found this
measure to be in breach of Article X:3(a) of th e GATT 1994, it appropriately determined that it is

295United States' appellee's submission, para. 87 (quoting Canada's other appellant's submission,
para. 96).
297Canada clarified at the oral hearing that it is not seeking a finding against the Vilsack letter. (See
supra, para. 115 and footnote 228 to para. 141) Mexico refers to only the COOL measure in its claims and
argument regarding Article III:4 of the GATT 1994. (See supra, paras. 161-165)

unnecessary to examine the Vilsack letter under Articl e III:4. The United States further asserts that
findings on the Vilsack letter under Article III:4 will not help secure a positive resolution to these
disputes for two reasons. First, since the United States has not appealed the Panel's findings on the
Vilsack letter, an additional finding against the m easure would contribute nothing to resolving these
disputes. Second, the United States contends th at it has already withdrawn the Vilsack letter by
means of a letter to industry representatives dated 5 April 2012. In addition, the United States argues,
the complaining parties have failed to establish that Article III:4 applies to the Vilsack letter and that
there are insufficient factual findings by the Panel or undisputed facts to provide a basis for finding
that the Vilsack letter falls within the scope of Article III:4 of the GATT 1994.
4. Article XXIII:1(b) of the GATT 1994
199. The United States contends that Canada's and Mexico's conditional claims that the COOL
measure nullifies or impairs their benefits unde r Article XXIII:1(b) of the GATT 1994 should be
rejected in the light of the "cursory explanation" each provides as to how the measure at issue results
in non-violation nullification or impairment. 298 The United States further contends that neither
complainant explains why compliance with Article 2.2 of the TBT Agreement or removal of the
Vilsack letter will not necessarily remove the non-viol ation nullification or impairment, contrary to
the Panel's findings.
200. Moreover, the United States alleges that, even if Canada and Mexico could somehow explain
why the Panel was required to make a non-violation finding under the circumstances of this case, or
the basis on which the Appellate Body could complete the analysis in the ab sence of such a finding,
they have failed to make a prima facie case with regard to their claims. First, Canada and Mexico
have failed to identify a relevant benefit accr uing to them under the GATT 1994. Whereas Canada
and Mexico identify the United States' WTO bound tariff rate for livestock as the benefit they are
entitled to, they have admitted that they do not in fact pay any tariff when their livestock enters the
United States because such products enjoy duty -free treatment under the NAFTA. Second, Canada
and Mexico have also failed to demonstrate that they could not have reasonably anticipated the COOL
measure, since the United States has long had some form of country of origin labelling requirements
in place and has long been considering enhanced requirements like those included in the COOL
measure. Third, Canada and Mexico have not demonstrated how the COOL requirements have
nullified or impaired their tariff concessions because they have not shown a clear correlation between
the harm they allege and the COOL measure.

201. Finally, the United States contends that there are insufficient factual findings by the Panel or
undisputed facts on the Panel record to provide the basis for an analysis of the non-violation claims,
because the Panel never directly assessed Canada's and Mexico's underdeveloped arguments as to
why the COOL measure nullified or impaired their benefits under the cove red agreements. Thus,
even if the Appellate Body were to overturn th e Panel's findings under Articles 2.1 and 2.2 of the
TBT Agreement and decide that the Panel erred in exercising judicial economy with respect to
Article XXIII:1(b) of the GATT 1994, it would not be appropriate for the Appellate Body to complete
the analysis on this issue.
G. Arguments of the Third Participants
1. Australia
202. While recognizing the right of Members to mainta in country of origin labelling requirements,
Australia draws the attention of the Appellate Body to specific aspects of the phrase "more
trade-restrictive than necessary to fulfill a legitimate objective" in Article 2.2 of the TBT Agreement.
Australia submits that a complaining party woul d succeed in its claim under Article 2.2 of the
TBT Agreement if it were able to demonstrate that the measure at issue is trade restrictive and any of
the following elements: (i) the objective being pursu ed is not legitimate; (ii) the measure does not
fulfil, or is not capable of fulfilling, the legitima te objective(s) at the level the Member considers
appropriate; or (iii) less trade-restrictive alterna tives are available and can fulfil, or are capable of
fulfilling, the objective(s) being pursued at the le vel the Member considers appropriate, taking into
account the risks that non-fulfilment would create.
203. Australia agrees with the Panel that, having decide d that the measure does not fulfil, or is not
capable of fulfilling, the stated objective, it w as not necessary for the Panel to proceed with an
examination of the third element described above . Australia disagrees with the United States'
argument that a complaining party must prove that there is a reasonably ava ilable alternative measure
that fulfils the Member's legitimate objective at the level the Member c onsiders appropriate, and
which is significantly less trade restrictive. 299 Accepting such an argument would lead to the
"anomalous" consequence of requiring a complaining party to demonstrate the existence of reasonably
available, less trade-restrictive alternative measur es even if the challenged measure does not fulfil, or
is not capable of fulfilling, the objective bei ng pursued at the level the Member considers

299Australia's third participant's submission, para. 9 (referring to United States' appellant's submission,
para. 123).

appropriate.
300 Moreover, while agreeing with the Unite d States that it is the prerogative of WTO
Members to decide which policy objectives they wish to pursue and the levels at which they wish to
pursue them, Australia considers that the United Stat es' argument "conflate[s]" the concept of "the
levels [the Member] considers appropriate" in the sixth recital of the preamble of the TBT Agreement
and the concept of "to fulfil" in Article 2.2 of that Agreement.301
204. Australia further submits that the interpretive framework developed in relation to Article XX
of the GATT 1994 concerning whether a measure is "necessary" within the meaning of that provision
provides useful guidance in understanding the term "more trade-restrictive than necessary" under
Article 2.2 of the TBT Agreement. Australia highlights, in this regard, the Appellate Body's finding in
US – Clove Cigarettes that "[t]he balance set out in the preamble of the TBT Agreement between, on
the one hand, the desire to avoid creating unnecess ary obstacles to international trade and, on the
other hand, the recognition of Members' right to re gulate, is not, in principle, different from the
balance set out in the GATT 1994" 302, and observes that, although Article XX of the GATT 1994 and
Article 2.2 of the TBT Agreement are independent provisions under two separate agreements, both
provisions require a determination of whether the measure or its trade-restrictiveness is necessary to
meet a particular objective.
205. With respect to a panel's assessment of the objective of a technical regulation, Australia
observes that, as a starting point, WTO Members must assume that other Members' characterizations
of their measures are provided in good faith. No netheless, consistent with the Appellate Body's
findings in prior disputes
303, a panel must make an objective assessment of the facts before it and is
not bound by a Member's characterizations of its measure. Thus, a panel may examine the structure
and operation of the measure, as well as evidence proffe red by the complaining party, and it would be
open to a panel to find that the actual objective of a measure is different from the stated objective(s).
Australia maintains that the non-exhaustive list of objectives in Article 2.2 of the TBT Agreement
informs what could be considered a legitimate object ive. In Australia's view, enabling consumers to
identify the source of a product by providing accurate information regarding its origin is a legitimate
objective, because it is closely related to preventi ng deceptive practices, one of the listed objectives in
Article 2.2. Nonetheless, in the context of the CO OL measure, Australia submits that, if the measure

300Australia's third participant's submission, para. 10 (referring to United States' appellant's submission,
para. 123).
301Australia's third participant's submission, para. 12.
302Australia's third participant's submission, para. 14 (quoting Appellate Body Report, US – Clove
Cigarettes, para. 96).
303Australia's third participant's submission, paras. 17 and 18 (referring to Appellate Body Report, EC –
Sardines, paras. 276-278 and 280; Appellate Body Report, US – Gambling , para. 304; and Appellate Body
Report, US – Clove Cigarettes, paras. 113 and 115).

results in the provision of information that is "mis leading, inaccurate and/or confusing", it cannot be
said to fulfil such a legitimate objective. 304 Finally, should the Appellate Body seek to complete the
analysis under Article 2.2 of the TBT Agreement and examine whether there are less trade-restrictive
alternatives to the COOL measure, Australia recalls the submissions that it made to the Panel in this
regard.305
2. Brazil
206. With respect to Article 2.1 of the TBT Agreement , Brazil submits that the Panel properly
recognized that, particularly in the context of a claim of de facto discrimination, the prevailing market
conditions are relevant to the de termination of whether an uneven distribution of compliance costs
between imported and domestic like products constit utes less favourable treatment. Brazil rejects the
apparent view of the United States that, if any fact or other than the foreign origin of the product is
found to be the basis for the discrimination, there wi ll be no violation of Article 2.1. Brazil considers
useful, in this regard, the guidance provided in th e extensive WTO case law under Article III of the
GATT 1994, and endorses the following definition provided by the panel in Canada –
Pharmaceutical Patents : " de facto discrimination is a general term describing the legal conclusion
that an ostensibly neutral measure transgresses a non-discrimination norm because its actual effect is
to impose differentially disadvantageous conse quences on certain parties, and because those
differential effects are found to be wrong or unjustifiable." 306 For Brazil, differential effects imposed
by a measure on imported and domestic like products can only be justified if they do not change the
conditions of competition to the detriment of the imported like products. Assessing whether a
measure modifies the conditions of competition requ ires "a comprehensive and objective analysis of
the structure and application of the measure in question on domestic as compared to imported
products".307
207. In Brazil's view, the Panel correctly found that "[a] cost resulting from a (technical) regulation
may qualify as a competitive disadvantage if it is incurred only by imported and not like domestic
products."308 In reaching this finding, the Panel did not, as the United States asserts, adopt an

304Australia's third participant's submission, para. 23.
305Australia's third participant's submission, paras. 24 and 25 (referring to Australia's third party
submission to the Panel, paras. 79-83). See also Panel Reports, Annex C-1, para. 23.
306Brazil's third participant's submission, para. 9 (quoting Panel Report, Canada – Pharmaceutical
Patents, para. 7.101).
307Brazil's third participant's submission, para. 12 (quoting Appellate Body Report, Japan – Alcoholic
Beverages II, p. 29, DSR 1996:I, 97, at 120).

"unprecedented" approach.
309 Brazil explains that, in Dominican Republic – Import and Sale of
Cigarettes, the Appellate Body found that a difference in compliance costs was not sufficient in itself
to establish a violation of Article III:4 of the GATT 1994, as long as such a difference does not alter
the conditions of competition in the relevant market. 310 Moreover, in Korea – Various Measures on
Beef, the Appellate Body found that a dual 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 co sts and benefits", is not inconsistent with
Article III:4 of the GATT 1994. 311 The Appellate Body, however, also emphasized that "the
intervention of some element of private choice do es not relieve [the Member] of responsibility under
the GATT 1994 for the resulting establishment of competitive conditions less favourable for the
imported product than for the domestic product".312
208. Brazil submits that the Panel rightly found that "assessing whether a measure has actual
discriminatory effects cannot be dissociated from the circumstances prevailing in the market at
issue."313 If account were not taken of the market c onditions prevailing before the enactment of a
technical regulation, a major loophole in the natio nal treatment obligation would exist, because a
Member with protectionist intent could simply exploit the prevailing conditions in the relevant market
to design a technical regulation under which compliance costs would be low for the domestic
industry, but high or even prohibitive for foreign produ cers. This does not mean that there must be an
equal distribution of compliance costs of a tec hnical regulation between domestic and imported like
products in order for a technical regulation to be consistent with Article 2.1 of the TBT Agreement.
Rather, as the Appellate Body stated in US – Clove Cigarettes, Article 2.1 of the TBT Agreement does
not prohibit detrimental impacts on imports that stem exclusively from a legitimate regulatory
distinction. For Brazil, this implies that Article 2.1 requires the distribution of compliance costs
among domestic and imported like products to be "e ven-handed" and, if one of the effects of a
measure is the imposition of disproportionately high costs on imported products, this should be
regarded as a strong indication of a lack of even-handedness.
314 Furthermore, in Brazil's view,

309Brazil's third participant's submission, para. 13 (quoting United States' appellant's submission,
para. 62).
310Brazil's third participant's submission, paras. 14-17 (referring to Appellate Body Report, Dominican
Republic – Import and Sale of Cigarettes , paras. 96 and 98; and Panel Report, Dominican Republic – Import
311Brazil's third participant's submission, para. 18 (quoting Appellate Body Report, Korea – Various
Measures on Beef, para. 149 (original emphasis)). (underlining added by Brazil)
312Brazil's third participant's submission, para. 19 (quoting Appellate Body Report, Korea – Various
Measures on Beef, para. 146).
314Brazil's third participant's submission, para. 24 (quoting Appellate Body Report, US – Clove
Cigarettes, para. 182).

regulatory distinctions that comply with the require ments of Article 2.2 and the sixth recital of the
preamble of the TBT Agreement could be considered legitimate, but a regulatory distinction is not
legitimate if it constitutes a means of arbitrary or unjustifiable discrimination between countries where
the same conditions prevail, or a disguised restriction on international trade.
209. Referring to the United States' argument that it is impossible for a Member to know, at the
time of developing a technical regulation, the pr ecise costs the measure will impose on each producer
in every Member, or the unique circumstances of every Member's industry 315, Brazil expresses the
view that it is irrelevant to the analysis of less favourable treatment whether the detrimental effects on
imported products were intended or foreseen by the Member applying the measure. Rather, what
matters for determining whether a measure is inconsistent with Article 2.1 of the TBT Agreement is
the application of the measure. 316 Brazil adds that, in any event, the Member applying a technical
regulation cannot evade its obligations under the TBT Agreement by simply stating that it did not
intend or foresee the detrimental impacts of the meas ure on imports, or that it would be difficult to
assess the potential detrimental effects of a technical regulation beforehand.
3. Colombia
210. Colombia disagrees with the United States' argument that, in reaching its finding under
Article 2.1 of the TBT Agreement , the Panel adopted "a radical and unprecedented test for less
favorable treatment that does not focus on whether the measure itself modifies the conditions of
competition to the detriment of imported livestock … but instead examines whether imported
livestock are equally competitive with domestic livestock". 317 In Colombia's view, the Panel's
approach in using economic analysis to compar e the different costs of processing domestic and
imported livestock is neither new, nor erroneous.
211. Colombia submits that it is a long-standing rule that the national treatment provisions of the
covered agreements, including Article 2.1 of the TBT Agreement, protect the equality of competitive
opportunities.318 Competitive opportunities in the marketplace refer to the economic, regulatory,
social, and cultural parameters that determine th e way in which market participants take their
decisions. Scrutiny of a technical regulation's c onsistency with Article 2. 1 is not limited to an

315Brazil's third participant's submission, para. 25 (re ferring to United States' appellant's submission,
para. 99).
316Brazil's third participant's submission, paras. 26-28 (referring to Appellate Body Report, Japan –
Alcoholic Beverages II, p. 28, DSR 1996:I, 97, at 119).
317Colombia's third participant's submission, para. 4 (quoting United States' appellant's submission,
para. 62 (original emphasis)).
318Colombia's third participant's submission, para. 10.

assessment of the impact the measure may have in abstract terms, but includes an assessment of the
potential consequences that can be expected from ma rket participants as a result of changes to, in
particular, the economic incentives in the marketpl ace that are introduced by such regulation.
Colombia maintains that this was expres sly recognized by the Appellate Body in China – Auto Parts
when it found that the administrative procedures imposed by the measures at issue on automobile
manufacturers using imported auto parts, but not on those manufacturers using domestic auto parts,
were incentives that adve rsely affected the conditions of co mpetition for imported auto parts.
Colombia adds that an examination of the way market participants behave in response to a measure is
relevant to an analysis of less favourable treatment even if a measure facially does not distinguish
between imported and domestic products.
212. Colombia posits that the changes in economic incentives must be attributable to the impugned
measure in order for that measure to be found to accord less favourable treatment to imports.
Colombia recalls the Appellate Body's finding in Korea – Various Measures on Beef that what is
addressed under a less favourable treatment analysis is "the governmental intervention" that affects
the conditions of competition.
319 Moreover, the Appellate Body has found that "the existence of a
detrimental effect" on imports "does not necessarily imply that this measure accords less favourable
treatment to imports if the detrimental effect is e xplained by factors or circumstances unrelated to the
foreign origin of the product". 320 On this basis, Colombia argues, a finding of violation under
Article 2.1 of the TBT Agreement requires: (i) a direct link between the measure and the detrimental
modification of conditions of competition; and (ii) that the detrimental effects are not explained by
factors or circumstances unrelated to the foreign or igin of the product. Colombia submits that there
was sufficient evidence in these disputes demonstrati ng these two elements with respect to the COOL
measure. More specifically, the COOL measure imposes higher costs on the processing of imported
livestock, thereby creating a disi ncentive to use such imported liv estock, and these disincentives are
related to the foreign origin of the livestock.
213. Turning to Article 2.2 of the TBT Agreement, Colombia contends that the Panel erroneously
transposed the necessity test under Article XX(b) of the GATT 1994, in its entirety, into its analysis
regarding whether the COOL measure is more trad e restrictive than necessary to fulfil a legitimate
objective. According to Colombia, the necessity test s in different covered agreements cannot be used
interchangeably but must be read in their context and in the light of the object and purpose of the

319Colombia's third participant's submission, para. 21 (quoting Appellate Body Report, Korea – Various
Measures on Beef, para. 149 (original emphasis)).
320Colombia's third participant's submission, para. 22 (quoting Appellate Body Report, Dominican
Republic – Import and Sale of Cigarettes, para. 96).

agreement concerned. Colombia notes that the Pane l's approach is "diametrically different" from that
taken by the panel in US – Clove Cigarettes.321 The latter panel recognized that there were "important
differences in the architecture of both provisions" 322 by stating that "[i]t may well be that there are
certain aspects of Article XX(b) jurisprudence that ar e not applicable in the context of Article 2.2 of
the TBT Agreement ".323 Colombia argues that key differences exist between Article XX of the
GATT 1994 and Article 2.2 of the TBT Agreement, including: (i) the fact that the former provides for
an exception, whereas the latter establishes an ob ligation; (ii) the different objectives of the
GATT 1994 and the TBT Agreement; and (iii) the specialized subject matter of the TBT Agreement.
214. Colombia clarifies that it is not suggesting th at determinations unde r Article 2.2 should be
subject to a completely different standard with respect to the word "necessary". Rather, the same
elements of the necessity test under Article XX of the GATT 1994 should be potentially applicable
throughout the covered agreements. Nonetheless, "the threshold of compliance for each of the
elements", or the "the degree of stringency" 324, should vary depending on the different objects and
purposes of the legal provisions c ontaining the term "necessity", as well as the fact that some of the
provisions are obligations while other are exceptions. Colombia draws an analogy, in this respect,
with the concept of the accordion of "likeness" as articulated by the Appellate Body in previous cases.
In Colombia's view, the provisions that provi de for exceptions, such as Article XX of the
GATT 1994, should be interpreted as having the highest degree of stringency. For these reasons,
Colombia agrees with the United States that the Pane l erred in transposing the standard of a material
contribution from the Article XX context into Article 2.2 of the TBT Agreement.
215. Colombia agrees with the Panel's fi nding that the use of the term " inter alia" in Article 2.2 of
the TBT Agreement indicates that the objectives that can be deemed legitimate extend beyond the
listed objectives in that provision.
325 Colombia disagrees with Canada's argument that a determination
of whether an objective is legitimate within the m eaning of Article 2.2 invol ves determining whether
an objective is directly related to one of those exp licitly listed in Article 2.2 and, if not, whether the
measure is of the same type as those listed. 326 In Colombia's view, Canada's interpretation imports
into Article 2.2 a requirement to establish a link between the objectives listed in that provision and the

321Colombia's third participant's submission, para. 40.
322Colombia's third participant's submission, para. 40.
323Colombia's third participant's submission, para. 39 (quoting Panel Report, US – Clove Cigarettes ,
para. 7.369).
324Colombia's third participant's submission, para. 53.
325Colombia's third participant's submission, para. 59 (referring to Panel Reports, paras. 7.632 and
7.634-7.636).
326Colombia's third participant's submission, para. 65 (referring to Canada's other appellant's
submission, paras. 53-59).

objectives pursued by the measure at issue, even though such a requirement has no textual basis in
Article 2.2. In addition, Canada's interpretation deprives the term " inter alia " of any effective
meaning, contrary to Article 31(1) of the Vienna Convention and the principle of effective treaty
interpretation. In Colombia's view, the explicit inclusion of the term " inter alia" shows that the
function of the list is to ensure beyond doubt the le gitimacy of the listed objectives, rather than to
limit the universe of different objectives that may be deemed legitimate. Moreover, Colombia argues
that the Panel did not err in finding that the le gitimacy of an objective must be determined by
assessing whether the objective is justifiable and suppor ted by relevant public policies or other social
norms.
327 The Panel examined the issue of legitim acy through the prism of "the requirements of
current social norms in a considerable part of the WTO Membership". 328 Thus, the Panel's approach
would not lead to the result, as Canada argues, that a measure designed to enhance racial
discrimination would be legitimate simply because it has a genuine link to a public policy of racial
discrimination.329
216. Finally, Colombia submits that the Panel erred in its exercise of judicial economy with regard
to Canada's claim that the Vils ack letter is inconsistent with Article III:4 of the GATT 1994.
Colombia recalls that the Panel excluded the Vilsac k letter from its Article 2.1 analysis because it
found that the Vilsack letter is not a technical re gulation. Subsequently, having found the COOL
measure to be inconsistent with Article 2.1 of the TBT Agreement, the Panel found it unnecessary to
rule on the claims regarding the COOL measure under Article III:4 of the GATT 1994 due to the
close connection between this provision and Article 2.1 of the TBT Agreement.330 However, the Panel
did not refer to the Vilsack letter in reaching this finding. Colombia contends that the Panel was
required to assess whether the Vilsack letter falls under the purview of the term "regulation" in
Article III:4 of the GATT 1994. This is because Article 2.1 of the TBT Agreement applies only to
"technical regulations", whereas Article III:4 app lies to a much broader range of instruments,
encompassing all laws, regulations, and requirements affecting the internal sale, offering for sale,
purchase, transportation, distribution, or use of the products at issue that might adversely modify the
conditions of competition between domestic and imported products. Colombia adds that, by
exercising judicial economy with regard to the Vilsack letter, the Panel did not secure a positive
solution to the dispute, as required by Article 3.7 of the DSU, and potentially diminished rights and
obligations of the complainants in these disputes.

327Colombia's third participant's submission, para. 77 (referring to Panel Reports, para. 7.632).
329Colombia's third participant's submission, para. 74 (referring to Canada's other appellant's
submission, para. 50).
330Colombia's third participant's submission, para. 90 (referring to Panel Reports, para. 7.807).

4. European Union
217. The European Union notes that the requests by both complainants for consultations and for
the establishment of a panel referenced Article IX of the GATT 1994 and certain provisions of the
Agreement on Rules of Origin 331, but that these provisions were not referenced in the parties'
arguments or the Panel's assessment. The European Union submits that there may be an interpretative
question regarding the re lationship between the Agreement on Rules of Origin and the
TBT Agreement. Article 1.2 of the Agreement on Rules of Origin defines the coverage of the
Agreement as "all rules of origin used in non-pref erential commercial policy instruments, such as in
the application of", inter alia, Articles III and IX of the GATT 1994. Although Article 1.2 does not
expressly reference the TBT Agreement, the list in Article 1.2 is not exhaustive and technical
regulations within the scope of the TBT Agreement are not, per se, excluded. Moreover, there may
also be a question regarding the relationship between the terms "mark" and "marking" in Article IX of
the GATT 1994 and the terms "label" and "labelling" in the TBT Agreement. Noting that Article 3(a)
of the Agreement on Rules of Origin requires Members to apply rules of origin equally for all
purposes as set out in Article 1, the European Union al so contends that there may be an interpretative
issue as to whether it is impermissible to use different origin rules with respect to the same product for
different purposes. The European Union submits that it may be appropriate to have recourse to the
principle of lex specialis derogat legi generali in case of conflict between the Agreement on Rules of
Origin and the TBT Agreement . In sum, the European Union maintains that the TBT Agreement
should not be used as an instrument to achieve indirectly harmonization of origin rules before
Members have completed the harmonization work pursuant to Part IV of the Agreement on Rules of
Origin.
218. With respect to the interpretation of Article 2.1 of the TBT Agreement, the European Union
recalls the Appellate Body's findings in US – Clove Cigarettes that the balance that the preamble of
the TBT Agreement strikes between the pursuit of trade liber alization and Members' right to regulate
is not, in principle, different from the balance that exists between the national treatment obligation of
Article III and the general exceptions provided unde r Article XX of the GATT 1994, that the same
balance is to be found in Article 2.1 of the TBT Agreement, and that Article 2.2 informs Article 2.1.
332

331European Union's third participant's submission, para. 6 (referring to Request for Consultations by
Canada, WT/DS384/1, and Addendum, WT/DS384/1/Add.1; Request for Consultations by Mexico,
WT/DS386/1, and Addendum, WT/DS386/1/Add.1; Request for the Establishment of a Panel by Canada,
WT/DS384/8; and Request for the Establishment of a Panel by Mexico, WT/DS386/7, and Corrigendum,
WT/DS386/7/Corr.1).
332European Union's third participant's submission, para. 27 (referring to Appellate Body Report, US –
Clove Cigarettes, paras. 96 and 109).

In the light of these findings, the European Union di sagrees with Canada's submission that the list of
potentially legitimate objectives is different for purposes of Article 2.1 than it is for Article 2.2 of the
TBT Agreement.
333
219. The European Union also disagrees with the United States' argument that, in finding that
imported livestock are accorded less favourable treat ment, the Panel erred in basing its analysis on
how the commingling flexibility under the measure a ffects a product not at issue in these disputes,
that is, meat. 334 In the European Union's view, if the facts demonstrate that regulation of the
downstream product has effects that are transmitted to an upstream product not directly subject to the
measure, the question of de facto discrimination against the upstream product can be analyzed on the
basis of an assessment of the downstream product.
220. The European Union agrees with the United States that compliance costs of any new
regulation may vary among different market actors with different sizes, structures, and operations, and
hence different economies of scale. The fact that such costs are not evenly distributed does not in
itself mean that there is a breach of the national tr eatment obligation, because this obligation concerns
equal competitive opportunities ra ther than equal competition per se. Furthermore, the interpretation
of the national treatment obligation should not l ead to a result whereby large Members are more
susceptible to a finding of violation simply because they have large markets in which indigenous
production often has a relative large market share. The European Union adds that it would seem
incongruous if a measure adopted in accordance with in ternational standards, and thus consistent with
Articles 2.2 and 2.5 of the TBT Agreement, would nevertheless be inconsistent with Article 2.1 simply
because it entails compliance costs that are not evenly distributed among market actors. Contrary to
the United States' argument, however, the Panel did not focus its "entire" less favourable treatment
inquiry on how compliance costs may differ for market actors. 335 Rather, the Panel's conclusion
"appears to have been that the measure does not seek to even-handedly inform consumers about
origin, but rather to facilitate or incentivise the sw itching of demand towards US products, and/or the
freezing of entrenched patterns of consumption".336
221. With regard to the interpretation of the second sentence of Article 2.2 of the TBT Agreement,
the European Union maintains that the "objective" of a measure within the meaning of that sentence is

333European Union's third participant's submission, para. 28 (referring to Canada's appellee's
submission, para. 56).
334European Union's third participant's submission, para. 32 (referring to United States' appellant's
submission, paras. 58 and 79).
335European Union's third participant's submission, para. 37 (quoting United States' appellant's
submission, para. 88).
336European Union's third participant's submission, para. 37.

to be discerned from an objective assessment of the terms of the measure and the surrounding
circumstances. The "legitimacy" of the objective under the second sentence is a matter with respect to
which WTO Members have considerable discretion, and the list of objectives in that sentence is not
exhaustive. WTO Members' discretion in this rega rd is not unfettered, however. For example, an
objective inconsistent with other provisions of th e covered agreements would not be "legitimate".
The European Union submits that the concept of "at the levels it considers appropriate" in the sixth
recital of the preamble of the TBT Agreement is analogous to the concept of "appropriate level of
protection" or "acceptable level of risk" under the SPS Agreement. Both Agreements make it clear
that such levels are a matter for the importing Memb er to decide, subject to certain disciplines. More
specifically, just as Article 5.5 of the SPS Agreement prohibits arbitrary or unjustifiable distinctions
when setting the level, the second sentence of Article 2.2 of the TBT Agreement requires a measure to
be no more trade restrictive than "necessary" to fulfil a legitimate objective. In the European Union's
view, whether one approaches the issue of necessity by examining the necessity of the measure taking
into account the objective, level, and trad e-restrictiveness, or by examining the necessity of the
trade-restrictiveness taking into account the objective and level of the measure, it is just two different
ways of approaching the same balancing issue. Assuming that the measure fulfils a legitimate
objective, the European Union agrees with the particip ants that an adjudicator must consider whether
there is an alternative measure that is less trade restrictive.
222. Moreover, in the European Union's view, it is also necessary to examine whether there are
less trade-restrictive alternatives even if a measure partially fulfils a legitimate objective, for the
following reasons. First, the second sentence of Ar ticle 2.2 does not impose the obligation that the
measure must fulfil 100% of its objective. Second, if the word "fulfil" in the second sentence of
Article 2.2 meant 100% fulfilment, the phrase "taking account of the risks non-fulfilment would
create" at the end of that sentence would be re duced to redundancy. This is because, once an
adjudicator ascertains that the measure does not fu lfil the objective 100%, this is the end of the
inquiry and the "risks of non-fulfilment" need not be taken into account. Third, the word "risks" in
the final phrase generally refers to a calibrated concep t. Fourth, the relevant context of Article 2.2 of
the TBT Agreement , including Articles 2.3, 2.4, and 2.7 of that Agreement, and footnote 3 of the
SPS Agreement support the view that the word "fulfil" enco mpasses partial fulfilment. Fifth, the texts
of several provisions in the covered agreements i ndicate that the concept of trade-restrictiveness is
calibrated. These include the phrases "more trade-r estrictive than necessary" in Article 2.2 of the
TBT Agreement, "less trade-restrictive" in Article 2.3 of that Agreement, and "minimize their negative
effects on trade" in the fourth recital of the preamble of the SPS Agreement . Because
trade-restrictiveness and fulfilment of legitimate objectives are two sides of the same balancing

equation, they must both be calibrated concep ts. Finally, the object and purpose of the
TBT Agreement calls upon a panel to strike a balance betw een competing interests by considering all
relevant factors, including less trade-restrictive alternatives.
223. On this basis, the European Union considers th at the Panel erred in not considering whether
less trade-restrictive alternatives existed, in reachin g its finding of inconsis tency under Article 2.2,
simply because it had found that the COOL measure did not fulfil a legitimate objective. In the
European Union's view, the Panel's approach imp lies that a measure that is only slightly trade
restrictive but fulfils 99% of a legitimate obj ective breaches Article 2.2, even if no less
trade-restrictive alternative is available that achieves the same result. Such an approach could lead to
the "perverse result" that the importing Member replaces the impugned measure with one that fully
achieves the legitimate objective but is much more restrictive of trade.
337 For the same reason, the
European Union maintains that Mexico's argument that the term "fulfil" in Article 2.2 of the
TBT Agreement means 100% fulfilment is also incorrect. 338 Furthermore, the European Union
disagrees with Canada's approach to draw upon the Appellate Body's findings regarding the issue of
necessity under Article XX of the GATT 1994 in arguing that the word "fulfil" refers to something
between material contribution and indispensable. To the European Union, Canada's approach fails to
take into account the particular wording of the various provisions of the TBT Agreement.339
224. Turning to the concept of "trade-restrictive" in Article 2.2 of the TBT Agreement , the
European Union submits that it is not the same as the concept of "effect on trade" that is relevant to an
inquiry under Article 2.9 of that Agreement or Article 1.1 of the SPS Agreement. There is a category
of regulations that are not trade restrictive, and therefore consistent with the covered agreements, even
if they affect trade.
225. With respect to the United States ' claim that the Panel acted inconsistently with Article 11 of
the DSU in its identification of the COOL measure 's objective by mischaracterizing the United States'
position regarding its level of fulfilment, the Europe an Union submits that the United States confuses
the concepts of "objective" and "level", which concern, respectively, what the importing Member
cares about and the degree of care. The European Uni on considers that the thrust of the United States'
argument relates to the concept of "fulfilment", that is, the extent to which the measure achieves the
objective at the desired level. Moreover, the European Union disagrees with the United States'

337European Union's third participant's submission, para. 55.
338European Union's third participant's submission, paras. 55-64 (referring to Mexico's appellee's
submission, paras. 129, 130, and 132).
339European Union's third participant's submission, para. 65 (referring to Canada's appellee's
submission, para. 90).

argument that the Panel should have framed the obj ectives of the COOL measure as both to provide
consumer information about origin and to lim it compliance costs for market participants. 340
The assessment of a measure under Article 2.2 of the TBT Agreement requires the balancing of, on the
one hand, the non-trade interest reflected in the me asure's objective and, on the other hand, the trade
interest including the measure's impact on market participants. By conflating these competing
interests into one objective, the United States' argumen t would defeat the need to strike a balance in
the interpretation and application of Article 2. 2, and would mean that the defending Member's
measure would never be found inconsistent with that provision.
226. Turning to the other appeals, the European Union disagrees with Canada and Mexico's
common claim that the Panel erred in finding that the COOL measure pursues a legitimate
objective.
341 Noting the Panel's reluctance to questi on the objective as stated by the United States 342,
the European Union expresses sympathy for Canada and Mexico's position that the text of the
measure is the correct starting point for determ ining the measure's objective. Nonetheless, the
European Union does not consider that the Panel committed legal error in its overall assessment and
identification of the objective of the COOL measure. The European Union adds that the provision of
information to consumers about origin may, in itsel f, be a legitimate objective within the meaning of
Article 2.2 of the TBT Agreement . The European Union also disagrees with the other appellants'
claim that the Panel should have determined that the objective of the measure is, at least in part,
protectionism.343 Whether a measure's trade-restrictiveness reflects protectionist intent or is
inadvertent is not pertinent to a finding that the measure breaches the second sentence of Article 2.2
of the TBT Agreement. The other appellants' position seems to "effectively short-circuit the full legal
framework of Article 2.2" because, where the obj ective of a measure is protectionism, such an
objective is by definition illegitimate. 344 As a result, the measure would be found to be inconsistent
with Article 2.2 without an inquiry into the more complex questions of whether the measure fulfils its
objective, what the less trade-restrictive alterna tives are, and whether such alternatives fulfil the
objective at the same level.

340European Union's third participant's submission, para. 51 (referring to United States' appellant's
submission, paras. 139 and 140).
341European Union's third participant's submission, para. 67 (referring to Canada's other appellant's
submission, section III; and Mexico's other appellant's submission, section III.A).
342European Union's third participant's submission, para. 66 (referring to Panel Reports,
paras. 7.590-7.621).
343European Union's third participant's submission, para. 67 (referring to Canada's other appellant's
submission, section III; and Mexico's other appellant's submission, section III.A).
344European Union's third participant's submission, para. 70.

227. Finally, the European Union recalls Canada and Mexico's common claim that, in the event the
Appellate Body finds that the COOL measure fulfils a legitimate objective, at least four less
trade-restrictive alternative measures exist that fulf il the same objective. These are: (i) voluntary
labelling; (ii) labelling based on s ubstantial transformation; (iii) a combination of (i) and (ii); and
(iv) a trace-back system.
345 With respect to voluntary labelling, the European Union maintains that
the essential difference between voluntary and mandato ry labelling is that an individual consumer
lacks the power to demand labelling with respect to particular information. Thus, the fact that a
domestic political process leads to legislation on mandatory origin labelling may indicate that
consumers indeed demand such labelling. Moreover, contrary to the complainants' assertions, there is
no obligation under the TBT Agreement on the defending Member to demonstrate that their consumers
want a particular technical regulation. With resp ect to labelling based on substantial transformation,
the European Union considers that this alternative concerns substantive rules of origin and refers to its
observation above regarding Artic le IX of the GATT 1994 and the Agreement on Rules of Origin .
As for the trace-back system, the European Union hi ghlights the distinction made in Article 3(b) of
the Agreement on Rules of Origin between "the country where the good has been wholly obtained"
and the situation in which more than one country is concerned in the production of the good. The
European Union adds that, under relevant EU law, where there is more than one country concerned,
the law requires that labels contain information about the country of birth, the country of fattening, the
country where slaughter occurred, and the place of cutting, but the law does not refer to "origin".346
5. Guatemala
228. At the oral hearing, Guatemala stated its vi ew that the term "necessary" under the second
sentence of Article 2.2 of the TBT Agreement must be assessed in the light of the importance of the
"legitimate objective". The importance of the legitimate objective, in turn, is to be determined by the
risks non-fulfilment of the objective would create. The higher the risks, the more important the
objective and, hence, the higher the degree of trade-restrictiveness that could be justifiable. As for the
identification of the objective of a measure, Guatem ala agreed with Mexico that the Panel should not
have relied solely on the responding party's description, but should have determined the objective in
the light of the architecture and structure of a technical regulation, as well as its legislative history and

345European Union's third participant's submission, para. 75 (referring to Canada's other appellant's
submission, section IV; and Mexico's other appellant's submission, section III.B).
346European Union's third participant's submission, para. 81 (referring to Regulation (EC)
No. 1760/2000 of the European Parliament and of the Council of 17 July 2000 establishing a system for the
identification and registration of bovine animals and re garding the labelling of beef and beef products and
repealing Council Regulation (EC) No 820/97, Official Journal of the European Communities , L Series,
No. 204 (11 August 2000), 1 (Panel Exhibit EU-4)).

surrounding circumstances. Guatemala did not c onsider, however, that protectionism could be
properly identified as the objective, because doing so conflates the objective of the measure with the
effects or the intent of that measure. Guatemal a further submitted that the legitimacy of the objective
could be decided by examining: first, whethe r the objective is included in the non-exhaustive list
under Article 2.2; second, whether the objective is not inconsistent with the covered agreements;
and, third, whether the objective can be "defended" or is "reasonable". 347 Finally, with respect to the
term "fulfil", Guatemala did not consider that Ar ticle 2.2 imposes an obligation to fulfil a legitimate
objective to a certain degree. Rather, the level of fulfilment has a consequence for the permitted level
of trade-restrictiveness, in that the poor fulfilment of a legitimate objective would not justify a high
degree of trade-restrictiveness.
6. Japan
229. Japan agrees with the Panel 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 phrase "treatment no
less favourable than that accorded to like products of national origin". 348 However, Article 2.1 of the
TBT Agreement does not prohibit a priori any obstacle to international tr ade. As the Appellate Body
recently found in US – Clove Cigarettes , "the existence of a detrimental impact on competitive
opportunities for the group of imported [products] vis- à-vis the group of domestic like products is not
dispositive of less favourable treatment under Article 2.1". 349 Rather, "a panel must further analyze
whether the detrimental impact on imports stems exclusively from a legitimate regulatory
distinction".350 Japan maintains that the notion of "legitimacy" contained in the Appellate Body's
above finding should not be confused with the concep t of "a legitimate objective" under Article 2.2 of
the TBT Agreement , in that the pursuit of a legitimate objective might result in the application of
either legitimate or illegitimate regulatory distinc tions. Moreover, Japan urges the Appellate Body to
be cautious in applying its recent findings in US – Clove Cigarettes in this appeal, because these
findings were not yet available to the Panel during its proceedings.
230. Japan argues that, in assessing whether the COOL measure accords less favourable treatment
to imported livestock, the Panel should have examined whether "the objective, design and structure of
the COOL measure itself" modifies the conditions of competition to the detriment of imported

347Guatemala's opening statement at the oral hearing.
348Japan's third participant's submission, para. 5 (referring to Panel Reports, para. 7.234).
349Japan's third participant's submission, para. 6 (quoting Appellate Body Report, US – Clove
Cigarettes, para. 182).
350Japan's third participant's submission, para. 6 (quoting Appellate Body Report, US – Clove
Cigarettes, para. 182). (emphasis added by Japan)

products.
351 Japan recalls that, in finding that the COOL measure accords less favourable treatment to
imported livestock, the Panel examined five busin ess scenarios for the processing of livestock, and
concluded that the scenario that involved processi ng exclusively imported livestock was more costly
than the one involving processing exclusively domestic livestock. 352 To Japan, the Panel "seemed to
have relied heavily" on the small market share of imported livestock in the US market and the
geographical closeness of domestic livestock to the US market. 353 In so doing, the Panel failed to
distinguish the effects of the objective, design, and structure of the COOL measure from those of
other factors, including pre-existing market cond itions. Thus, Japan urges the Appellate Body to
consider carefully whether the detrimental impact on imports stems exclusively from the legitimate
regulatory distinction created by the COOL measure.
231. Turning to Article 2.2 of the TBT Agreement , Japan submits that, in order to assess the
legitimacy of an objective, as well as whether a m easure is more trade rest rictive than necessary, a
panel must identify the objective of the measure in a sufficiently specific way. This means that not
only the general purpose, but also "the level of strictness" of the measure must be determined .354 In
Japan's view, the objective of the COOL measure identified by the Panel—that is, "to provide as much
clear and accurate origin information as possible to consumers" 355—does not specify how much
country of origin information the United States intends to deliver to consumers through the measure.
As the Panel's analysis reveals, a failure to identif y the "level of strictness" of a regulation affords a
panel much discretion in determining whether the legitimate objective is fulfilled. Moreover, the
Panel's approach would have made it difficult for th e Panel to have appropriately examined whether
the COOL measure was more trade restrictive than necessary to fulfil a legitimate objective, including
whether there were less trade-rest rictive alternatives in comparison to the COOL measure. Finally,
Japan submits that the Panel could have relied on th e development and history of the United States'
country of origin labelling scheme in order to de termine the specific level that the United States
pursues through the COOL measure, and urges the A ppellate Body to identify the objective of the
COOL measure more specifically than the Panel did.
7. Korea
232. At the oral hearing, Korea disagreed with the Panel's finding that, because processing meat
from exclusively domestic livestock is less costly in view of the need to segregate livestock under the

351Japan's third participant's submission, para. 6. (original emphasis)
352Japan's third participant's submission, para. 7 (referring to Panel Reports, paras. 7.333-7.336).
353Japan's third participant's submission, para. 7 (referring to Panel Reports, para. 7.349).
354Japan's third participant's submission, para. 10.

COOL measure, the measure reduced the compe titive opportunities of imported livestock vis-à-vis
domestic livestock. 356 In Korea's view, how compliance costs are distributed may have been
prompted by a wide spectrum of factors, such as consumer preference and choices by market
participants, which a government usually cannot contro l or reasonably predict. Thus, the Panel failed
to determine whether there was a causal link betw een the COOL measure and the detrimental impact
on imported livestock. Furthermore, Korea recalled that the Panel found that the level at which the
United States aims to achieve the identified objectiv e is "to provide as much clear and accurate origin
information as possible to consumers". Korea s ubmitted that, in reaching this finding, the Panel
should not have relied solely on the United States' description, but should have considered various
provisions of the COOL measure, the legislative history, and the stakeholders' statements.
III. Issues Raised in This Appeal
233. With respect to the Panel's findings that the COOL measure is inconsistent with Article 2.1 of
the TBT Agreement, the following issues are raised by the United States:
(a) whether the Panel erred in finding that the COOL measure treats imported livestock
differently than domestic livestock;
(b) whether the Panel erred in finding that the COOL measure accords less favourable
treatment to imported livestock than to like domestic livestock; and
(c) whether the Panel acted inconsistently with its obligation under Article 11 of the DSU
to make an objective assessment of the f acts in its findings with respect to
segregation, commingling, and the price differential between imported and domestic
livestock in the US market.
234. With respect to the Panel's findings under Article 2.2 of the TBT Agreement, the following
issues are raised by the participants:
(a) whether the Panel erred in finding that th e COOL measure is "trade-restrictive"
within the meaning of Article 2.2 (raised by the United States);
(b) whether the Panel failed to identify co rrectly the objective pursued by the
United States through the COOL measure (raised by Canada and by Mexico);

356Korea's opening statement at the oral hearing (referring to Panel Reports, para. 7.357).

(c) whether, in identifying the objective pursued by the United States through the COOL
measure, the Panel:
(i) acted inconsistently with its obligation under Article 11 of the DSU to make
an objective assessment of the facts:
- in failing to find that the objective of the COOL measure is
trade protectionism (raised by Canada and by Mexico); or
- in wilfully distorting and misrepresenting the United States' position
as to the level at which the United States considers it appropriate to
fulfil its objective (raised by the United States); or
(ii) failed to consider all relevant info rmation concerning the United States'
chosen level of fulfilment of its objective (raised by the United States);
(d) in the event that the Appellate Body does not find that the Panel acted inconsistently
with its obligations under Article 11 of the DSU in failing to find that the objective of
the COOL measure is trade protectionism, th en whether the Panel erred in failing to
characterize the objective of the COOL me asure in sufficient detail (raised by
Canada);
(e) whether the Panel erred in finding that th e provision of consumer information on
origin is a legitimate objective within the meaning of Article 2.2 (raised by Canada);
(f) whether, in its analysis of whether the C OOL measure is "more trade-restrictive than
necessary to fulfil a legitimate objective", the Panel:
(i) employed an erroneous legal framework by separately analyzing whether the
COOL measure fulfils its objective and by relieving the complaining parties
of their burden of proof with respect to the availability of less
trade-restrictive alternative measures (raised by the United States); or
(ii) erred in finding that the COOL meas ure does not fulfil the objective of
providing consumer information on origin with respect to meat (raised by the
United States); and

(g) in the event that the Appellate Body re verses the Panel's finding that the COOL
measure is inconsistent with Article 2. 2 because it does not fulfil the objective of
providing consumer information on origin with respect to meat products, then
whether the COOL measure is more trad e restrictive than necessary to fulfil a
legitimate objective because there are less tr ade-restrictive alternative measures
available to the United States (raised by Canada and by Mexico).
235. In the event that the Appellate Body reverses the Panel's finding that the COOL measure is
inconsistent with Article 2.1 of the TBT Agreement, then the following issues are raised by Canada
and by Mexico:
(a) whether the Panel erred in exercising judicial economy with respect to Canada's and
Mexico's claims that the COOL measure is inconsistent with Article III:4 of the
GATT 1994; and
(b) whether the COOL measure is inconsistent with Article III:4 of the GATT 1994.
236. In the event that the Appellate Body reverses the Panel's finding that the COOL measure is
inconsistent with Article 2.1 of the TBT Agreement , and does not find that the COOL measure is
inconsistent with Article III:4 of the GATT 1994, th en the following issues are raised by Canada and
by Mexico:
(a) whether the Panel erred in exercising judicial economy with respect to Canada's and
Mexico's claims under Article XXIII:1(b) of the GATT 1994; and,
(b) whether the application of the COOL measure nullifies or impairs benefits accruing
to Canada and to Mexico, within the meaning of Article XXIII:1(b) of the
GATT 1994.
IV. Background and Overview of the Measures at Issue
237. Before commencing our analysis of the issues of law and legal interpretations raised in this
appeal, we provide an overview of the measures at issue and briefly outline certain pertinent facts and
background information, as identified by the Panel. For additional details in this regard, recourse
should be had to the Panel Reports.357

357See, in particular, Panel Reports, paras. 7.75-7.142.

238. Before the Panel, Canada and Mexico challenged the following five measures: (i) the "COOL
statute"
358; (ii) the "2009 Final Rule (AMS)" 359; (iii) the "Vilsack letter" 360; (iv) the "Interim Final
Rule (AMS)"361, and (v) the "Interim Final Rule (FSIS)". 362 The Panel assessed the first two of these
instruments—the COOL statute and its implemen ting regulations, that is, the 2009 Final Rule
(AMS)—together as the "COOL measure". 363 The Panel determined, however, "that the Vilsack letter
should be considered as a separate measure distinguishable from the COOL statute and the 2009 Final
Rule (AMS)"364, and the complainants have not appealed such finding. The Panel decided not to
make findings or recommendations on the Interim Final Rule (AMS) or the Interim Final Rule (FSIS),
because they had expired prior to the establishment of the Panel. 365 This is also not appealed. The
principal measure at issue in this appeal is th e COOL measure. As explained further below, the
Vilsack letter also has some relevance in the c ontext of Canada's appeal regarding Articles III:4
and XXIII:1(b) of the GATT 1994 even though, accord ing to the United States, this measure was
"withdrawn" in the course of these appellate proceedings.366

358The Agricultural Marketing Act of 1946 (60 Stat. 1087, United States Code , Title 7, section 1621
et seq.) (see Panel Exhibits MEX-1 and MEX-9), as amended by the Farm Security and Rural Investment Act
of 2002, Public Law No. 107-171, section 10816, 116 Stat. 134, 533-535 (Panel Exhibits CDA-1 and MEX-2)
(the "2002 Farm Bill") and the Food, Conservation, and Energy Act of 2008, Public Law No. 110-234,
section 11002, 122 Stat. 923, 1351-1354 (Panel Exhibits CDA-2 and MEX-3) (the "2008 Farm Bill"). Through
the enactment of the 2002 and 2008 Farm Bills, the COOL requirements were inserted into the Agricultural
Marketing Act of 1946 as section 1638, and in turn codified as United States Code, Title 7, section 1638. (Panel
Reports, paras. 7.12, 7.13, and 7.77)
359Final Rule on Mandatory Country of Origin Labeling of Beef, Pork, Lamb, Chicken, Goat Meat,
Wild and Farm-Raised Fish and Shellfish, Perishable Agricultural Commodities, Peanuts, Pecans, Ginseng, and
Macadamia Nuts, published in United States Federal Register , Vol. 74, No. 10 (15 January 2009) 2704-2707,
codified as United States Code of Federal Regulations , Title 7, Part 65—Country of Origin Labeling of Beef,
Pork, Lamb, Chicken, Goat Meat, Perishable Agricultural Commodities, Macadamia Nuts, Pecans, Peanuts, and
Ginseng (Panel Exhibits CDA-5 and MEX-7).
360A letter dated 20 February 2009 from the US Secretary of Agriculture, Thomas J. Vilsack, to
"Industry Representative[s]" (Panel Exhibits CDA-6 and MEX-8).
361Interim Final Rule on Mandatory Country of Origin Labeling of Beef, Pork, Lamb, Chicken, Goat
Meat, Perishable Agricultural Commodities, Peanuts, Pecans, Ginseng, and Macadamia Nuts, published in
United States Federal Register, Vol. 73, No. 149 (1 August 2008) 45106 (Panel Exhibits CDA-3 and MEX-4).
362Supra, para. 2 and footnote 13 thereto.
363Panel Reports, para. 7.61. The Panel explained that it did not consider the "COOL measure" to
constitute a measure itself, but used the term to reflect "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". (Ibid.)
364Panel Reports, para. 7.63.
365Panel Reports, paras. 7.30, 7.33, and 7.34. The Panel nevertheless noted the "legal and substantive
connection between the Interim Final Rule (AMS) and the 2009 Final Rule (AMS)", which are both regulations
implementing the COOL statute, and st ated that it would take account of th e Interim Final Rule (AMS) in its
examination of the measures at issue. ( Ibid., para. 7.31. See also paras. 7.32, 7.34, 7.84, and 7.85) Pursuant to
the US rulemaking process, an interim rule is issued fo r comments, and then subsequently superseded by a final
rule. (Ibid., paras. 7.84 and 7.85)
366See infra, para. 251.

A. The COOL Measure
1. Introduction
239. The COOL measure comprises the COOL stat ute, passed by the US Congress, and its
implementing regulations, promulgated by the Secretary of Agriculture through the US Department of
Agriculture's (the "USDA") Agricultural Marketing Service ("AMS") (the 2009 Final Rule (AMS)).
The COOL measure is a US internal measure, as oppo sed to a customs or border measure. It imposes
an obligation on retailers selling specific products in the United States to label those products with
their country of origin. This obligation applies i rrespective of whether the products are imported or
domestically produced. Specifically, the COOL st atute provides that "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." 367 Both beef and pork are covered by the COOL
measure.368 The products at issue in these disput es are livestock, that is, cattle and hogs. 369 Although
"livestock" are not formally covered by the COOL measure, the Panel found that the COOL measure
"applies not only to beef and pork but also to cattle and hogs". 370 The Panel found that the COOL
measure is a technical regulation subject to the requirements of Article 2 of the TBT Agreement.371
This finding is not appealed.

367Panel Reports, para. 7.87 (quoting COOL statute, section 1638a(a)(1)).
368In addition to beef and pork, the COOL measure also applies to lamb, chicken, goat meat, wild and
farm-raised fish and shellfish, peri shable agricultural commodities, pean uts, pecans, ginseng and macadamia
nuts. (Panel Reports, para. 7.78 (referring to COOL statute, sections 1638(2)(A) and 1638a(a)(1)))
369Panel Reports, para. 7.64.
370Panel Reports, para. 7.246. The Panel noted that, "[f]ormally speaking, the category of 'covered
commodities' under the COOL measure includes only beef and pork, not livestock." However, "without
upstream livestock producers and processo rs providing the necessary informat ion on origin as defined by the
COOL measure, [the] retail labelling requirements are impossible to fulfil". ( Ibid.) The United States
acknowledges that the recordkeeping requirements un der the COOL measure affect livestock directly.
(United States' appellant's submission, para. 78) Hogs and pork are relevant only to the dispute initiated by
Canada. (See Panel Reports, footnote 196 to heading VII.C.3(a)(ii) at p. 52, and para. 7.140)
371Based on the three-pronged test articulated by the Appellate Body in EC – Sardines to establish
whether a document qualifies as a technical regulation, th e Panel found that the COOL measure is a technical
regulation within the meaning of Annex 1.1 to the TBT Agreement because: (i) compliance with the COOL
measure is mandatory; (ii) the COOL measure applies to an identifiable product or group of products, namely
beef and pork, and livestock (that is, cattle and hogs); and (iii) the COOL measure lays down one or more
product characteristics by imposing a country of origin labelling requirement. (Panel Reports, paras. 7.162,
7.207, and 7.214) See also Appellate Body Report, EC – Sardines, para. 176.

240. The COOL measure is concerned with "country of origin" labelling, and specifically defines
"origin" for purposes of this measure.
372 In the case of meat, including beef and pork 373, "origin" is
defined as a function of the country(ies) in which the production steps involving the animals from
which that meat is derived took place. 374 There are three relevant produc tion steps for this purpose:
birth, raising, and slaughter. 375 Meat labelled under the COOL measure may, therefore, have one or
more countries of origin depending on where these steps took place. 376 For other covered
commodities, such as perish able agricultural commodities, origin is defined as the single country in
which they have been "produced", which is defined as "harvested". 377 Throughout these Reports, and
except where the context clearly indicates otherwise, th e term "origin" refers to origin as defined by
the COOL measure for beef and pork, that is, th e country(ies) where the cattle and hogs from which
beef and pork are derived were born, raised, and slaughtered.
241. The definition of the "origin" of meat under the COOL measure differs from the conceptions
of "origin" generally employed by the United St ates and other Members for customs purposes. For
customs purposes, the United States relies on the rul es of substantial transformation for determining
the origin of products imported into the United States. 378 The substantial transformation criterion
confers origin exclusively to the country where th e processing of food took place, which, in the case

372The 2009 Final Rule (AMS) expressly refers to "origin … as defined by this law (e.g., born, raised,
and slaughtered or produced)". (2009 Final Rule (AMS), section 65.300(f))
373This definition of "origin" also applies to lamb, chicken, and goat meat. (2009 Final Rule (AMS),
section 65.260(a)) Furthermore, as explained further below, there are four different origin categories for muscle
cuts of meat under the COOL measure: (i) United States country of origin; (ii) multiple countries of origin;
(iii) imported for immediate slaughter; and (iv) foreign country of origin.
374Panel Reports, para. 7.89 (quoting United States Code, Title 7, section 1638a(2)(A)-(D)). Similarly,
in the case of farm-raised fish and shellfish, "origin" is defined as a function of the country(ies) in which fish or
shellfish were "hatched, raised, harvested, and processed". (Final Rule on Mandatory Country of Origin
Labeling of Beef, Pork, Lamb, Goat Meat, Wild and Farm -Raised Fish and Shellfish, Perishable Agricultural
Commodities, Peanuts, Pecans, Ginsen g, and Macadamia Nuts, published in United States Federal Register ,
Vol. 74, No. 10 (15 January 2009) 2701-2704, codified as United States Code of Federal Regulations , Title 7,
Part 60—Country of Origin Labeling for Fish and Shellfish (Panel Exhibits CDA-5 and MEX-7),
section 60.128(c))
375See infra, footnote 390.
376If, for example, an animal is born and raised in Canada, and then slaughtered in the United States,
according to the COOL measure, the coun tries of origin of the meat derive d from that animal are Canada and
the United States.
3772009 Final Rule (AMS), section 65.225. For th ese covered commodities, th ere is in principle a
single country of origin (that is, the country of harvesting) under the COOL measure. However, even for these
commodities a label may indicate multiple countries of origin when products of the same type but with different
origins are combined. (2009 Final Rule (AMS), section 65.300(g))
378Panel Reports, para. 7.674 (referring to Canada's and Mexico's responses to Panel Question 59). The
Panel also noted that for imports from a North Amer ican Free Trade Agreement (" 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, according to which the tariff classification of the imported product is compared to the tariff
classification of the finished product to determine whether a sufficient shift has occurred to warrant a change of
origin. (Ibid.)

of meat, is the country where the animal is slaught ered. Accordingly, for customs purposes, meat can
have no more than one country of origin.379
242. In addition to requiring retailers to provide information on the origin of the beef and pork that
they sell, the COOL measure requires upstream supplie rs to provide retailers with information on the
origin of the meat supplied. 380 The measure also imposes certain obligations with respect to the
manner in which information on origin is to be conveyed to consumers. 381 Furthermore, the COOL
measure imposes recordkeeping requirements on pr oducers along the livestock and meat production
chain as part of its "audit verification system" 382, and grants auditing authority and enforcement
powers to the Secretary of Agriculture.383 The retailers subject to the COOL requirements are defined
as those entities selling in excess of $230,000 worth of fruit and vegetables per year. 384 "Food service
establishments", such as restaurants, cafeterias, and enterprises providing ready-to-eat foods are
expressly exempted from the scope of the COOL requirements. 385 Any covered commodities that are
an "ingredient in a processed food item" are excluded from the scope of the COOL measure. 386
Origin information is not required to be provided in respect of such processed food items and, for beef
and pork, this exclusion encompa sses processing resulting in a change of their character—such as
cooking, curing, smoking, and restructuring.387

379If, for example, an animal is born and raised in Brazil, and then slaughtered in Argentina, according
to the substantial transformation rules, the country of origin of the meat derived from that animal is exclusively
380The COOL measure seeks to ensure that retailers ar e in possession of the information that they need
to convey to their customers, and therefore establishes that "[a]ny person engaged in the business of supplying a
covered commodity to a retailer shall provide information to the retailer indicating the country of origin of the
covered commodity". (Panel Reports, paras. 7.205, 7.212, and 7.316; COOL statute, section 1638a(e))
381The 2009 Final Rule (AMS) states that notification can be made in "the form of a placard, sign,
label, sticker, band, twist tie, pin tag, or other format that allows consumers to identify the country of origin",
and "must be legible and placed in a conspicuous location, so as to render it likely to be read and understood by
a customer under normal conditions of purchase". (Panel Reports, paras. 7.110 and 7.111; 2009 Final Rule
(AMS), section 65.400(a)-(b)) The Rule further states that the declaration of the country of origin may be made
in the form of a statement, such as "Product of USA", or may contain the name of the country only, such as
"USA" or "Mexico". (Panel Reports, para. 7.112; 2009 Final Rule (AMS), section 65.400(a))
382Panel Reports, para. 7.116.
383Panel Reports, paras. 7.116-7.122.
384Panel Reports, para. 7.101 (referring to 2009 Final Rule (AMS), section 65.205).
385Panel Reports, paras. 7.106, 7.107 (quoting COOL statute, section 1638(4)), and 7.108 (quoting
2009 Final Rule (AMS), section 65.140).
386Panel Reports, para. 7.104 and footnote 159 thereto (referring to 2009 Final Rule (AMS),
section 65.220)). See also 2009 Final Rule (AMS), section 65.135(b).
387Panel Reports, para. 7.105 (referring to 2009 Final Rule (AMS), section 65.220).

2. Categories of Origin for Meat
243. The COOL statute establishes four categories of origin for muscle cuts of meat.388
 Category A – United States country of origin : meat derived from animals that are
"exclusively born, raised, and slaughtered in the United States"389;
 Category B – Multiple countries of origin: 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".
 Category C – Imported fo r immediate slaughter : meat derived from animals
"imported into the United States for immediate slaughter"; and
 Category D – Foreign country of origin : meat derived from animals "not born,
raised, or slaughtered in the United States".
244. Category A is therefore reserved for meat derived from animals for which all production steps
(birth, raising, and slaughter) took place in the Un ited States. Both Categories B and C involve meat
of mixed origin, in the sense that they have more than one country of origin. For each of these
categories, at least one production step has taken place outside the United States, and at least one
production step has taken place within the United States. They are distinguished based on whether the
animals were born in a foreign country and then raised and slaughtered in the United States
(Category B), or raised outside the United Stat es and then imported into the United States for
immediate slaughter, that is, to be slaughtered within two weeks of the date the animal enters the

388See Panel Reports, para. 7.89; and COOL statute, section 1638a(2)(A)-(D). We do not address the
additional category for ground meat (Category E) and the associated labelling rules since the Panel concluded
that the complainants had not established that these result in less favourable treatment for imported livestock,
and no participant appeals this finding. (See Panel Reports, para. 7.437)
389The COOL statute also defines meat as qualifying for US origin when it is derived from animals that
were: (i) "born and raised in Alaska or Hawaii and transported for a period of not more than 60 days through
Canada to the United States and slaughtered in the United States"; or (ii) "present in the United States on or
before July 15, 2008, and once present in the United States, remained continuously in the United States". (Panel
Reports, para. 7.89; COOL statute, section 1638a(a)(2)(A)(ii) and (iii))

United States (Category C). 390 Category D is reserved for meat produced from animals that are
slaughtered outside the United States and imported into the United States in the form of meat.
3. Labelling
245. The COOL statute requires US retailers to pr ovide consumers with country or countries of
origin information for the meat they sell within the US market. The details as to how retailers are to
comply with this obligation are elaborated in the 2009 Final Rule (AMS). Category D meat must be
labelled according to the country of origin declared on import documentation for customs purposes. 391
Except where the flexibiliti es described in the next paragraph apply, Category A meat must be
labelled as US origin 392, and the labels for Category B and Cate gory C meat must reflect all of the
countries in which relevant production steps occu rred. For both Category B meat and Category C
meat, at least one production step will have occurred in the United States, meaning that the
United States is one of the countries of origin that must be indicated on the relevant label. Meat
derived from animals born outside the United States but raised and slaughtered in the United States
(Category B meat) must be labelled as a product of the United States and the foreign country in which
the animal was born, and the countries of origin may be listed in any order. 393 For meat derived from
animals imported into the United States for immedi ate slaughter (Category C meat), labels must
indicate all of the countries of origin of th e animal, but cannot list the United States first. 394 Because
the countries of origin for Category B meat can be lis ted in any order, the labels for Categories B and
C meat could look the same in practice.395
246. The 2009 Final Rule (AMS) includes certain flexibilities regarding the permitted origin
labelling of "commingled" meat. The implementing re gulations do not define the term "commingle".
They do, however, define "com mingled covered commodities" as "covered commodities (of the same
type) presented for retail sale in a consumer packag e that have been prepared from raw material

390Panel Reports, para. 7.92. 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, "the period of time from birth until date
of entry into the United States". (Ibid., para. 7.92; 2009 Final Rule (AMS), section 65.235) The term "imported
for immediate slaughter" refers to "c onsignment directly from the port of entry to a recognized slaughtering
establishment and slaughtered within 2 weeks from the date of entry". (Panel Reports, para. 7.92; 2009 Final
Rule (AMS), section 65.180)
391Panel Reports, para. 7.119. As explained above, th is means that the label will specify the country in
which the animal from which the meat was derived was slaughtered.
3932009 Final Rule (AMS), section 65.300(e)(1) and (4). Labels on Category B meat could state, for
example, "Product of the US and Mexico" or "Product of Mexico and the US".
3942009 Final Rule (AMS), section 65.300(e)(3). Labels following this rule would indicate "Product of
Canada and the US", for example.
395See Panel Reports, para. 7.97 and footnote 148 thereto (referring to 2009 Final Rule (AMS),
section 65.300(e)(4)) and footnote 929 to para. 7.702.

sources having different origins".
396 Under the 2009 Final Rule (AMS), additional labelling rules
apply in respect of meat that is commingled on a single production day. 397 Under these rules, when
commingling occurs, the resulting m eat may bear a different label from the one it should in principle
bear under the above rules. 398 More specifically, when Category A and Category B meat is
commingled during a single production day, all of the resulting meat may be labelled as if it were
Category B meat399, even though a particular piece of meat may have been derived from a Category A
animal.400 Further, when Category B and Category C meat is commingled during a single production
day, all of the resulting meat may be labelled as if it were Category B meat, even though a particular
piece of meat may have been derived from a Category C animal. 401 In both cases, since the resulting
meat may be labelled as if it were Category B meat, the declared countries of origin for all
commingled meat may be listed in any order.402

3962009 Final Rule (AMS), section 65.125.
397Panel Reports, paras. 7.93-7.95 (referring to 2009 Final Rule (AMS), sections 65.300(e)(2)
and 65.300(e)(4)). In response to Panel Question 29, the United States explained that US meat processors tend
to operate 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. (Panel
Reports, footnote 143 to para. 7.93)
398Panel Reports, para. 7.96.
399The Panel found that, under the Interim Final Rule (AMS)—not at issue in this appeal—there was a
"major flexibility", because it was possible to label Category A meat as if it were Category B meat, even without
commingling. (Panel Reports, para. 7.290 (quoting Interim Fi nal Rule (AMS), section 65.300(e)(1)(i))) This
flexibility, however, ended with the 2009 Final Rule (AMS). (Ibid., para. 7.293)
400Panel Reports, para. 7.96. Section 65.300(e)(2) of the 2009 Final Rule (AMS) provides the
following with regard to the commingling of Category A and Category B meat:
For muscle cut covered commodities derived from animals born, raised, and
slaughtered in the U.S. that are comm ingled 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.
401Panel Reports, para. 7.96. Section 65.300(e)(4) of the 2009 Final Rule (AMS) states, inter alia:
For muscle cut covered commodities derived from animals that are born in
Country X or Country Y, raised and slaughtered in the United States, that
are commingled during a production day with muscle cut covered
commodities that are derived from animals that are imported into the
United States 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.
402Panel Reports, para. 7.97; 2009 Final Rule (AMS), section 65.300(e)(4).

247. The Panel understood the different labelling possi bilities for muscle cuts of meat to be as
follows403:

248. The Panel included in its Reports some phot ographs submitted by the parties showing
samples of Labels A, B, and C.
Figure 1. Samples of Label A submitted by Mexico and by the United States404

403See Panel Reports, para. 7.100. We note that, although the COOL measure applies the same
labelling rules to meat that has three countries of or igin, this simplified table only presents the labelling
possibilities for meat that has one or two countries of origin.
404Panel Reports, para. 7.113; Panel Exhibits MEX-71 and US-67.
 100% of the meat is derived from Category B animals
 A & B meat is commingled on a single production day
 A & C meat is commingled on a single production day
 B & C meat is commingled on a single production day
 A, B & C meat is commingled on a single production day
 100% of the meat is derived from category C animals
 A & B meat is commingled on a single production day
 A & C meat is commingled on a single production day
 100% of the meat is derived from category B animals
 B & C meat is commingled on a single production day
 A, B & C meat is commingled on a single production day
 100% imported foreign meat
 100% of the meat is derived from Category A animals
Product of
Country X, US
Product of Country X
Product of the
US, Country X
Product of the US

Figure 2. Samples of Label B submitted by Canada and by the United States405

Figure 3. Sample of Label C submitted by the United States406

249. To label accurately muscle cuts of beef and pork under the COOL measure, a covered retailer
needs to possess information on where the releva nt production steps have taken place. This
information can be obtained only from the upstream livestock and meat supply chain.407 Accordingly,
the COOL measure requires "[a]ny person engaged in the business of supplying a covered commodity
to a retailer [to] provide information to the retaile r indicating the country of origin of the covered
commodity".408 The COOL measure thus prescribes an "unbroken chain of reliable country of origin
information" with regard to every animal and muscle cut. 409 In order to comply with the COOL
requirements, livestock and meat producers need to possess, at each and every stage of the supply and
distribution chain, information on origin, as defined by the COOL measure, and they need to transmit
such information to the next processing stage. 410 To verify compliance, the COOL measure imposes
certain recordkeeping requirements on producers along the meat production chain as part of its "audit

405Panel Reports, paras. 7.114 and 7.115; Panel Exhibits CDA-161 and US-67.
407Panel Reports, para. 7.316.
408Panel Reports, para. 7.316 (quoting COOL statute, section 1638a(e)).
409Panel Reports, para. 7.317.
410Panel Reports, para. 7.317.

verification system" 411, and 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". 412 The
Secretary is prohibited, however, from requiring any records other than those maintained in the course
of the normal conduct of business of the audited person 413, or from using a mandatory identification
system to verify the origin of meat. 414 The COOL measure also prescribes certain enforcement
procedures and sanctions for non-compliance.415
B. The Vilsack Letter
250. The Vilsack letter was distributed to industr y representatives on 20 February 2009 by the
newly appointed US Secretary of Agriculture, Th omas J. Vilsack. At the time, the 2009 Final
Rule (AMS) had been issued but had not yet entere d into force. In the letter, Secretary Vilsack
expressed concerns about certain aspects of the 2009 Final Rule (AMS), which had been promulgated
by the prior Administration. Accordingly, he suggested "that the industry voluntarily adopt" certain
practices in their implementation of the COOL requirements "to ensure that consumers are adequately
informed about the source of food products". 416 Among the three specific suggestions made were:
(i) "processors should voluntarily include informa tion about what production step occurred in each
country when multiple countries appear on the label" ; and (ii) given that "[t]he definition of
processed foods contained in the Final Rule may be too broadly drafted", "voluntary labeling would
be appropriate" for covered commodities processed by "curing, smoking, broiling, gr illing, or

411Panel Reports, para. 7.117. 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 pr evious source (if applicable) and i mmediate subsequent recipient of a
covered commodity for a period of one year from the date of transaction. ( Ibid., para. 7.118 (referring to 2009
Final Rule (AMS), section 65.500(b)(3))) In the case of beef and pork, the COOL measure provides that the
slaughterhouse is the supplier responsible for "initiating a country(ies) of origin claim", and must therefore
possess records to substantiate that claim for one year from the date of the transaction. ( Ibid., para. 7.118
(referring to 2009 Final Rule (AMS), section 65.500(b )(1))) With respect to imported commodities that fall
under Category D, the 2009 Final Rule (AMS) requires that records provide clear product tracking from the port
of entry into the United States to the immediate subsequent recipient, and accurately reflect the country of origin
as identified in relevant Customs and Border Protection entry documents. ( Ibid., para. 7.119 (referring to 2009
Final Rule (AMS), section 65.500(b)(4)))
412Panel Reports, para. 7.116; COOL statute, section 1638a(d)(1).
413Panel Reports, para. 7.117; COOL statute, section 1638a(d)(2)(B).
414Panel Reports, paras. 7.117 and 7.121; COOL statute, section 1638a(f)(1).
415If retailers or suppliers fail to comply with the COOL requirements, they are first given notice that
they have 30 days to remedy the non-compliance, after which, if they have not made a good faith effort to
comply with the COOL requirements and continue wilfully to violate them, the Secretary may impose a fine of
up to $1,000 per violation. (Panel Reports, para. 7.122; COOL statute, sections 1638b(a) and 1638b(b)) As of
October 2010, no fines for failure to comply had been imposed. (Panel Reports, para. 7.122 (referring to
United States' response to Panel Question 27))
416Panel Reports, para. 7.123 (quoting Vilsack letter, p. 1). (emphasis added by the Panel)

steaming".
417 The letter concludes with the following statement regarding compliance with the
Secretary's suggestions:
The Department of Agriculture will be closely reviewing industry
compliance with the regulation and its performance in relation 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.
418
251. According to the United States, the Vilsack letter was "withdrawn" on 5 April 2012. 419 This
measure was implicated only in Canada's appeal regarding Articles III:4 and XXIII:1(b) of the
GATT 1994. At the oral hearing, Canada stated that it was no longer seeking specific rulings from
the Appellate Body on this measure, but requested us to take the Vilsack letter into account in the
event that we rule on Canada's claims re garding the COOL measure under Articles III:4
and XXIII:1(b) of the GATT 1994.

C. Background Information
252. The market for livestock and meat in Cana da, Mexico, and the United States is highly
integrated, which means that different stages of liv estock and meat production are often performed in
more than one of these countries. 420 Canada and Mexico export cattl e, and Canada also exports hogs,
to the United States.421 The vast majority of Canada's and Me xico's livestock exports are destined for
the United States to be processed into meat. 422 However, Canadian and Mexican exports of cattle and
hogs account for only a small percentage of total livestock slaughter in the United States.423 Livestock
are classified as "fed" or "feeder" depending on whethe r they are ready for slaughter ("fed"), or are

417Vilsack letter, p. 1. See also Panel Reports, paras. 7.125 and 7.126. Secretary Vilsack further
suggested that, because th e 60-day rule applicable to the labelling of ground meat "a llows for labels to be used
in a way that does not clearly indicate the product's country of origin", producers should "[r]educ[e] the time
allowance to ten days" to "enhance the credibility of th e label". (Vilsack letter, pp. 1-2; Panel Reports,
para. 7.127) For additional information on labelling ru les for ground meat (Category E), see Panel Reports,
paragraphs 7.421-7.437.
418Vilsack letter, p. 2.
419United States' appellee's submission, para. 90 and footnote 193 thereto (referring to a USDA letter to
industry representatives, available at: <http://www.ams.usda.gov/AMSv1.0/cool>).
420Panel Reports, para. 7.140. In general, the production process from cattle to beef consists of four
stages: (i) the cow/calf stage; (ii) the backgrounding stag e; (iii) the feeding stage; and (iv) the slaughtering,
cutting, and packing stage. ( Ibid., para. 7.129) The production process from hogs to pork also involves four
stages: (i) the farrowing stage; (ii) the nursery stage; (iii) the feeding stage; and (iv) the slaughtering, cutting,
421Panel Reports, para. 7.140.
422Panel Reports, para. 7.142.
423Panel Reports, para. 7.142. The Panel found that, over the period 2005-2010, Canadian cattle
imports as a share of US cattle slaughter, and Mexican cattle imports as a share of US feed placements, were
both below 5%. It also found that Canadian hogs impor ted into the United States never exceeded a 10% share
of US hog slaughter between 2005 and 2009. (Ibid., para. 7.474)

still at the backgrounding or feed ing operations stage ("feeder"). 424 Most of the Canadian cattle
exported to the United States are fed cattle, which are born and raised in Canada and exported to the
United States for immediate slaughter. 425 Mexico, on the other hand, generally exports feeder cattle
to US backgrounding and feeding operations, where th ey are raised to be subsequently slaughtered. 426
The products at issue in these disputes are impor ted Canadian cattle and hogs and imported Mexican
cattle, which are used in the United States to produce beef and pork. 427 Muscle cuts of meat produced
from such cattle and hogs may fall into Category B or C, but can never fall into Category A
(exclusively US origin meat) or D (imported meat).
253. In addition to the COOL measure, the Unite d States has maintained several voluntary
labelling programmes for beef, such as the USDA gr ade labels, private premium label programmes,
and animal production and raising label programmes. 428 None of these labelling programmes relates
to hogs or pork.429 USDA grade labels relate to the quality of meat and are affixed on the majority of
beef derived from cattle slaughtered in the United States. 430 Other voluntary labelling programmes
affect a smaller proportion of beef marketed in the United States. 431 These include private premium
labelling programmes–such as the one for Certified Angus Beef. 432 Prior to the enactment of the
COOL measure, the USDA's Food Safety Inspection Service ("FSIS") regulations also allowed certain

424Panel Reports, para. 7.141. "Fed" cattle and hogs are also referred to as "slaughter cattle" and
"slaughter hogs". (See supra, footnote 420)
425Panel Reports, para. 7.141. A smaller but considerable portion of Canadian cattle are feeder cattle,
which are exported to the United States di rectly after the backgrounding stage. ( Ibid.) Canadian hog exports to
the United States involve a larger proportion of feeder than fed hogs. (Ibid.)
426Because of a lack of sufficient grasslands in Me xico and the general lack of well-developed feed
grains and cattle-feedlot sectors, Mexican cattle is generally exported to the United States immediately after the
cow/calf stage. (Panel Reports, para. 7.141)
427Panel Reports, para. 7.64.
428See Panel Reports, paras. 7.405-7.412. The Panel noted that these voluntary programmes "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". (Ibid., para. 7.411)
429Panel Reports, para. 7.412.
430Panel Reports, para. 7.406. According to the United States, under the USDA's quality grading
programme, the AMS assesses the quality and yield a ttributes of beef carcasses, and assigns them quality
grades, such as "USDA Prime", "USDA Choice", or "U SDA Select". (United States' response to Panel
Question 43, para. 77) The United States noted that , although the USDA grading programme is voluntary,
nearly 95% of the federally inspected meat is graded by the USDA, and the majority of this meat graded as
USDA Choice or Prime is subsequently labelled with its grade at the retail level. (United States' second written
submission to the Panel, para. 59; United States' response to Panel Question 43, para. 78)
431Panel Reports, para. 7.406.
432See Panel Reports, para. 7.410. The United States explained that, in addition to the USDA grading
programme, US meat packers have also established thei r own private "value added" or "premium" programmes
for higher quality meat, such as the Certified Angu s Beef programme. (United States' response to Panel
Question 43, para. 79 (referring to Panel Exhibit C DA-36); United States' sec ond written submission to the
Panel, para. 59)

animal production and raising labels to be approved for use on beef.
433 Thus, for example, meat could
be labelled "Fresh American Beef" when a ll relevant production steps took place in the
United States.434 Furthermore, under FSIS rules concerning export requirements, producers were
permitted to label beef "Product of the U.S.A." even when the meat products received only minimal
processing in the United States.
435 The Panel did not make specific findings with respect to the
operation of these voluntary labe lling programmes. However, it repeatedly took note of the
United States' argument that one of the objectives of the COOL measure is to prevent consumer
confusion with regard to USDA gr ade labels and the previous FSIS "Product of the U.S.A." labelling
system.436

433According to Mexico, this FSIS policy on "Product of the U.S.A." label has been cancelled to ensure
conformity with the COOL regulations. (Mexico's first wr itten submission to the Panel, para. 103) While the
Panel made no specific finding in this regard, it did refer to this labelling programme as part of the "previous
COOL regime", and to the United States' arguments about the "previous FSIS voluntary 'Product of the U.S.A.'
labelling system". (Panel Reports, paras. 7.713 and 7.712, respectively)
434With respect to animal production and raising labelling programmes, the United States explained that
the USDA's FSIS—which had the authority to approve meat product labels before the products could enter
commerce—evaluated label claims that highlighted certain aspects of the way in wh ich animals used as the
source for meat products are raised. (United St ates' response to Panel Question 43, para. 83) The FSIS
regulations permitted fresh beef to be labelled with term s such as "U.S. (Species)", "U.S.A. Beef", and "Fresh
American Beef" when cattle from which the final product derived were born, raised, slaughtered, and prepared
in the United States. (United States' first written submis sion to the Panel, para. 30; Mexico's first written
submission to the Panel, paras. 101 and 102 (referring to Panel Exhibit MEX-32))
435Panel Reports, para. 7.589 (referring to United States' first written submission to the Panel, paras. 30
and 31; United States' response to Panel Question 56; and Panel Exhibits US-17 and MEX-32). Mexico noted
that, according to FSIS regulations, meat satisfying the requirements for expo rt from the United States labelled
as "Product of the U.S.A." could also bear this label when sold within the US market. In order to qualify for the
"Product of the U.S.A." label, the meat must have been "prepared" in the United St ates. (Mexico's first written
submission to the Panel, para. 101 (referring to Panel Exhibit MEX-32)) The United St ates also noted that the
FSIS permitted a "Product of the U.S.A. " designation to be placed on any meat product as long as the animal
from which the meat was derived was prepared in some form in the United States. (United States first written
submission to the Panel, para. 30 and footnote 35 thereto (referring to Panel Exhibit MEX-32); United States'
response to Panel Question 56)
436The Panel explained that the United States pointed to the following two types of confusion prior to
the COOL measure:
First, many consumers in the United States mistakenly believed that meat
products affixed with a USDA grade label were derived from animals born,
raised, and slaughtered in the United States when this was not the case.
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. (footnotes omitted)
(Panel Reports, para. 7.589. See also, paras. 7.618, 7.642, 7.671, and 7.712)

V. Article 2.1 of the TBT Agreement
A. Introduction
254. Canada and Mexico claimed before the Panel that the COOL measure is inconsistent with the
United States' national treatment obligation under Article 2.1 of the TBT Agreement. The Panel found
that "the COOL measure, [particularly] in regard to the muscle cut meat labels, violates Article 2.1
because it affords imported livestock treatment less favourable than that accorded to like domestic
livestock."437 The United States appeals this finding, as well as the Panel's intermediate conclusion
that "the COOL measure on its face accords different treatment to imported livestock". 438 The United
States also asserts that the Panel acted inconsistently with its du ties under Article 11 of the DSU in
reaching certain factual findings on which, acco rding to the United States, the Panel's legal
conclusions under Article 2.1 are based.
255. In addressing the United States' appeal, we fi rst briefly describe the Panel's findings under
Article 2.1, followed by a summary of the United States' claims on appeal. We then provide an
interpretation of the "treatment no less fa vourable" requirement of Article 2.1 of the TBT Agreement,
followed by a review of the Panel's findings, in the light of the participants' arguments.
B. Summary of the Panel's Findings
256. In examining the consistency of the COOL measure with Article 2.1 of the TBT Agreement,
the Panel first found that the COOL measure is a "technical regulation" within the meaning of
Annex 1.1 to the TBT Agreement439, because it is "mandatory" 440, applies to an identifiable product or
group of products 441, and, by imposing a country of origin labelling requirement, lays down one or
more product characteristics.442 Subsequently, the Panel found that Canadian cattle and US cattle, and
Mexican cattle and US cattle, are "like products", an d that Canadian hogs and US hogs are also "like
products" for purposes of Article 2.1.443 These findings have not been appealed.
257. The Panel then identified three issues that it would address in its analysis of whether the
COOL measure affords less favourable treatment to imported livestock: (i) whether the different

437Canada Panel Report, para. 8.3(b); Mexico Panel Report, para. 8.3(b). See also Panel Reports,
paras. 7.420 and 7.548.
438United States' appellant's submission, para. 84. See also paras. 78 and 81 (referring to Panel Reports,
paras. 7.295 and 7.296).
439Panel Reports, para. 7.216.
440Panel Reports, para. 7.162.
441Panel Reports, para. 7.207.
442Panel Reports, para. 7.214.
443Panel Reports, para. 7.256.

categories of labels under the COOL measure accor d different treatment to imported livestock;
(ii) whether the COOL measure involves segrega tion and, consequently, differential costs for
imported livestock; and (iii) wh ether, through the compliance costs involved, the COOL measure
creates any incentive to process domestic livestoc k, thus reducing the competitive opportunities of
imported livestock.
444
258. With regard to whether the different categor ies of labels under the COOL measure accord
different treatment to imported livestock, the Pane l first considered the flexibilities that the measure
allows with respect to the use of the different labels.445 The Panel focused on "the distinction between
Label A, defined as 'United States Country of Origin' in the COOL statute, and the rest of the labels,
which all involve livestock w ith an imported element".
446 The Panel found that meat eligible for
Label A—that is, derived exclusively from lives tock born, raised, and slaughtered in the
United States—may, under the commingling flexibiliti es, carry Label B or C, which usually would
indicate meat derived from mixed-origin livestock, including livestock imported into the United States
for immediate slaughter. Meat derived from impor ted livestock, by contrast, can use only Label B
or C, even under the commingling flexibiliti es, and is never eligible for Label A.
447 The Panel
considered this "difference" in treatment, however, to be only "the starting point" for its analysis of
less favourable treatment.448
259. The Panel then found that Article 2.1 of the TBT Agreement, like Article III:4 of the
GATT 1994, prohibits not only de jure but also de facto less favourable treatment for imported like
products, and proceeded to analy ze whether the measure accords de facto less favourable treatment to
imported livestock.449 In this respect, the Panel analyzed th e complainants' arguments that the COOL
measure modifies the conditions of competition in the US market to the detriment of imported
livestock because it entails higher costs for handlin g imported livestock than for handling domestic
livestock.
260. With respect to the operation of the COOL me asure, the Panel found that, "[t]o accurately
label muscle cuts under the COOL measure, a cove red retailer needs to possess information on where

444Panel Reports, para. 7.279.
445For a full summary of the operation of the COOL measure, see section IV.A of these Reports.
446Panel Reports, para. 7.289.
447Panel Reports, para. 7.295.
448Panel Reports, para. 7.296 (quoting Panel Report, EC – Trademarks and Geographical Indications
(Australia), para. 7.464). The Panel further observed that formally different treatment of imported products
does not necessarily amount to less favourable treatment of such imports, and that, in any event, the
complainants were not challenging any formal difference in treatment under the COOL measure but instead
raised claims of de facto less favourable treatment. (Ibid., para. 7.296)
449Panel Reports, paras. 7.296, 7.299, and 7.302.

livestock processing steps determining origin under th e COOL measure have taken place with regard
to each muscle cut", and observed that "[t]his in formation can be obtained only from the upstream
livestock and meat supply chain." 450 Therefore, "as a matter of principle, the COOL measure
prescribes an unbroken chain of reliable country of origin information with regard to every animal and
muscle cut." 451 The Panel further reasoned that, although the COOL measure "does not explicitly
require segregation"452, "a practical way to ensure that the ch ain 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." 453 The Panel noted in this regard that the
COOL measure does not require traceability of livestock or impose any particular livestock
identification system, and prohibits USDA audito rs from requesting of producers any records not
maintained in the normal course of business.454
261. Regarding the costs associated with segrega tion, the Panel preliminarily found that, if
imported and domestic livestock are both being proc essed, in principle, they both equally necessitate
segregation, and therefore incur the same resulting im plementation costs. At the same time, however,
the Panel also considered it "evident that the more origins and … labels involved, the more intensive
the need for segregation throughout the livestock and meat supply and distribution chain", which
"leads to higher compliance costs".455
262. The Panel then analyzed five possible business scenarios for market participants subject to the
COOL measure456: (i) processing domestic and imported livestock and meat irrespective of origin and
solely according to price and quality; (ii) pr ocessing meat exclusively from domestic livestock;
(iii) processing meat exclusively from imported liv estock; (iv) processing exclusively domestic and
exclusively imported livestock at different times; and (v) processing both domestic and imported
meat by commingling the two on the same production day. Based on its review of these scenarios, the
Panel found the least costly scenarios to be those i nvolving either exclusively domestic livestock or
exclusively imported livestock. Comparing these two scenarios more closely, the Panel reasoned that
"it seems logical" that processing exclusively domestic livestock is in general less costly and more
viable than processing exclusively imported livestock.
457 The Panel considered this to be so because
livestock imports are small in comparison to domest ic livestock production, such that US demand

450Panel Reports, para. 7.316.
451Panel Reports, para. 7.317.
452Panel Reports, para. 7.315.
453Panel Reports, para. 7.320.
454Panel Reports, para. 7.319.
456Panel Reports, para. 7.333.
457Panel Reports, para. 7.349.

cannot be satisfied with exclusively foreign livestock, and because US livestock is often
geographically closer to US domestic markets than imported livestock.
458
263. In addition, the Panel found that the costs of compliance with the COOL measure "cannot be
fully passed on to consumers"459, citing evidence that consumers are unwilling to bear such costs460, as
well as "direct evidence of ma jor slaughterhouses applying a c onsiderable COOL discount of
USD 40-60 per head for imported livestock". 461 With regard to the United States' arguments that
producers are avoiding compliance costs by taking advantage of the commingling flexibilities built
into the COOL measure, the Panel recognized that some commingling appears to be taking place, but
found it difficult to ascertain its precise extent. 462 The Panel also noted additional evidence
demonstrating that: (i) fewer processing plants are accepting imported livestock, and those that do, do
so at specific, limited times463; (ii) contractual terms for suppliers of imported livestock have changed
as a result of the COOL measure 464; (iii) certain suppliers of imported livestock have suffered
significant financial disadvantages resulting from the COOL measure, including an increased price
difference between imported and domestic livestock and the refusal of financial institutions to provide
credits and loans 465; and (iv) imported cattle have been excluded from "particularly profitable"
premium beef programmes, such as the Certified Angus Beef programme. 466 Based on all of the
above findings, the Panel concluded that "the C OOL measure creates an incentive to use domestic
livestock—and a disincentive to handle imported livestock—by imposing higher segregation costs on
imported livestock than on domestic livestock", ther eby "affect[ing] competitive conditions in the
US market to the detriment of imported livestock".467
264. Having reached this conclusion, the Panel went on to examine the evidence of actual trade
effects submitted by the parties. It did so while stating that it already had reached its conclusions
under Article 2.1, and that an analysis of the actual trade effects was not "indispensable" to its
disposition of the complainants' Article 2.1 claims. 468 The Panel deemed the trade effects of the
COOL measure to be an "important factual matter " linked to its conclusions with respect to the

458Panel Reports, para. 7.349.
459Panel Reports, para. 7.353.
460Panel Reports, paras. 7.354 and 7.355.
462Panel Reports, paras. 7.364-7.370.
463Panel Reports, paras. 7.376 and 7.377.
464Panel Reports, para. 7.378.
465Panel Reports, para. 7.379.
466Panel Reports, para. 7.380.
467Panel Reports, para. 7.372. See also paras. 7.381, 7.420, and 7.548.
468Panel Reports, para. 7.445.

violation of Article 2.1469, and reviewed a substantial amount of data regarding the level and prices of
cattle and hog imports, including econometric studies submitted by both the United States and
Canada. The Panel concluded that the data, a nd in particular the "Sumner Econometric Study" 470
submitted by Canada, "concurs with our finding that the COOL measure … accords less favourable
treatment within the meaning of Article 2.1 of the TBT Agreement".471
C. Overview of the Issues Raised on Appeal
265. The United States requests us to reverse the Panel's finding that the COOL measure is
inconsistent with Article 2.1 of the TBT Agreement. According to the United States, in reaching its
findings under Article 2.1, the Panel relied upon a fl awed legal interpretation of that provision and
failed to make an objective assessment of the facts as required by Article 11 of the DSU. Specifically,
the United States argues that the Panel erred in fi nding that: (i) the COOL measure treats imported
livestock differently than domestic livestock; a nd (ii) the COOL measure accords less favourable
treatment to imported livestock than to like dome stic livestock by modifying the conditions of
competition to the detriment of imported livestock. The United States also identifies several findings
as having been made in a manner inconsistent with the Panel's duties under Article 11 of the DSU,
namely, its findings that: (i) the segregation of li vestock is "necessitated" by the COOL measure;
(ii) "commingling" is not occurring on a widespr ead basis; and (iii) the COOL measure had a
negative and significant impact on the prices of im ported livestock and resulted in an increased "price
differential" between domestic and imported livestock. 472 The United States further argues that the
COOL measure is "even-handed", and does not discrim inate against imported livestock in violation of
Article 2.1. After setting out our in terpretation of Article 2.1 of the TBT Agreement, we address each
of the United States' claims on appeal in the order discussed above.
D. Interpretation of Article 2.1 of the TBT Agreement
266. Article 2 of the TBT Agreement governs the "Preparation, Adoption and Application of
Technical Regulations by Central Government Bodies", and its firs t paragraph provides that, "[w]ith
respect to their central government bodies":
2.1 Members shall ensure that in respect of technical regulations,
products imported from the territory of any Member shall be

469Panel Reports, para. 7.444.
470Supra, footnote 82 (Panel Exhibit CDA-79).
471Panel Reports, para. 7.546.
472United States' appellant's submission, paras. 103-116 (referring to Panel Reports, paras. 7.316, 7.327,
7.336, 7.352, 7.353, 7.356, 7.364, 7.366-7.368, 7.379, 7.487, and 7.542).

accorded treatment no less favourable than that accorded to like
products of national origin and to like products originating in any
other country.
267. Article 2.1 contains both a national treatment obligation and a most-favoured nation ("MFN")
treatment obligation. The MFN treatment obliga tion prohibits discrimination through technical
regulations among like products imported from diffe rent countries, while the national treatment
obligation prohibits discrimination between domest ic and imported like products. In order to
establish a violation of the national treatment ob ligation in Article 2.1, a complainant must
demonstrate three elements: (i) that the measure at issue is a "technical regulation" as that term is
defined in Annex 1.1 to the TBT Agreement; (ii) that the imported and domestic products at issue are
"like products"; and (iii) that the measure at issue accords less favourable treatment to imported
products than to like domestic products.
473 The first two of these elements have previously been
addressed by the Appellate Body474, and are not at issue in this appeal.475
268. With regard to the national treatment obligation, which is the particular obligation before us
in these disputes, an analysis of less favourable treatment involves an assessment of whether the
technical regulation at issue modifies the conditions of competition in the relevant market to the
detriment of the group of imported products vi s-à-vis the group of like domestic products. 476 At the
same time, the specific context of Article 2.1 of the TBT Agreement —which includes Annex 1.1;
Article 2.2; and the second, fifth, and sixth r ecitals of the preamble—supports a reading that
Article 2.1 does not operate to prohibit a priori any restriction on international trade. 477 As the
Appellate Body has already observed, technical regul ations are measures that, by their very nature,
establish distinctions between products according to their characteristics, or related processes and
production methods, as reflected in Annex 1.1 to the TBT Agreement.478 Therefore, Article 2.1 should
not be read to mean that any distinct ions, in particular ones that are based exclusively on such

473Appellate Body Report, US – Clove Cigarettes, para. 87. The elements required to establish an MFN
violation are identified in paragraph 202 of the Appellate Body report in US – Tuna II (Mexico).
474The Appellate Body examined the fi rst element, whether a measure is a technical regulation, in its
reports in US – Tuna II (Mexico) (paras. 183-188); EC – Asbestos (paras. 63-70); and EC – Sardines
(paras. 175 and 176). It exam ined the second element, whether the products at issue are "like", in its report in
US – Clove Cigarettes (paras. 108-120).
475See Panel Reports, paras. 7.216 and 7.256; and United States' appellant's submission, para. 54.
476Appellate Body Report, US – Clove Cigarettes , para. 180; Appellate Body Report, US – Tuna II
(Mexico), para. 215.
477Appellate Body Report, US – Tuna II (Mexico), para. 212.
478Appellate Body Report, US – Tuna II (Mexico), para. 211.

particular product characteristics or on par ticular processes and production methods, would per se
constitute less favourable treatment within the meaning of Article 2.1.479
269. The Appellate Body recognized in US – Clove Cigarettes and US – Tuna II (Mexico) that
relevant guidance for interpreting the term "treatme nt no less favourable" in Article 2.1 may be found
in the jurisprudence relating to Article III:4 of the GATT 1994. 480 As under Article III:4, the national
treatment obligation of Article 2.1 prohibits both de jure and de facto less favourable treatment. 481
That is, "a measure may be de facto inconsistent with Article 2.1 even when it is origin-neutral on its
face."482 In such a case, the panel must take into cons ideration "the totality of facts and circumstances
before it"483, and assess any "implications" for competitiv e conditions "discernible from the design,
structure, and expected operation of the measure". 484 Such an examination must take account of all
the relevant features of the market, which may includ e the particular characteristics of the industry at
issue485, the relative market shares in a given industry 486, consumer preferences487, and historical trade
patterns.488 That is, a panel must examine the operation of the particular technical regulation at issue
in the particular market in which it is applied.
270. In the context of both Article III:4 of the GATT 1994 and Article 2.1 of the TBT Agreement,
for a measure to be found to modify the conditions of competition in the relevant market to the
detriment of imported products, there must be a "gen uine relationship" between the measure at issue
and the adverse impact on competitiv e opportunities for imported products. 489 In each case, the
relevant question is whether it is the governmental measure at issue that "affects the conditions under
which like goods, domestic and imported, compete in the market within a Member's territory". 490
While a measure may not require certain treatment of imports, it may nevertheless create incentives

479Appellate Body Report, US – Tuna II (Mexico) , para. 211; Appellate Body Report, US – Clove
Cigarettes, para. 169. See also Appellate Body Report, EC – Asbestos , para. 100 (where the Appellate Body
found, in the context of Article III:4 of the GATT 199 4, that a measure drawing distinctions between like
products will not, "for this reason alone", accord imported products less favourable treatment than that accorded
to the group of like domestic products).
480Appellate Body Report, US – Clove Cigarettes , paras. 100 and 176-180; Appellate Body Report,
US – Tuna II (Mexico), paras. 214, 215, and 236-239.
481Appellate Body Report, US – Clove Cigarettes, para. 175.
482Appellate Body Report, US – Tuna II (Mexico), para. 225.
483Appellate Body Report, US – Clove Cigarettes, para. 206.
484Appellate Body Report, Thailand – Cigarettes (Philippines), para. 130.
485Appellate Body Report, US – Tuna II (Mexico), para. 234.
486Panel Report, Mexico – Taxes on Soft Drinks, para. 8.119.
487Appellate Body Report, US – Tuna II (Mexico), para. 233.
488See, for example, Appellate Body Report, Korea – Various Measures on Beef, para. 145.
489Appellate Body Report, US – Tuna II (Mexico) , footnote 457 to para. 214 (referring to Appellate
Body Report, Thailand – Cigarettes (Philippines) , para. 134). See also Appellate Body Report, Korea –
490Appellate Body Report, Korea – Various Measures on Beef, para. 149.

for market participants to behave in certain ways, and thereby treat imported products less
favourably.
491 However, changes in the competitive conditions in a marketplace that are "not imposed
directly or indirectly by law or governmental regul ation, but [are] rather solely the result of private
entrepreneurs acting on their own calculations of co mparative costs and benefits", cannot be the basis
for a finding that a measure treats imported products less favourably than domestic like products. 492
In every case, it is the effect of the measure on the competitive opportunities in the market that is
relevant to an assessment of whether a challenged measure has a detrimental impact on imported
products.
271. If a panel determines that a measure has such an impact on imported products, however, this
will not be dispositive of a violation of Article 2.1. This is because not every instance of a detrimental
impact amounts to the less favourable treatment of imports that is prohibited under that provision.
Rather, some technical regulations that have a de facto detrimental impact on imports may not be
inconsistent with Article 2.1 when such impact stems exclusively from a legitimate regulatory
distinction.493 In contrast, where a regulatory distinction is not designed and applied in an
even-handed manner494—because, for example, it is designed or applied in a manner that constitutes a
means of arbitrary or unjustifiable discrimination—th at distinction cannot be considered "legitimate",
and thus the detrimental impact will reflect discr imination prohibited under Article 2.1. In assessing
even-handedness, a panel must "carefully scrutinize th e particular circumstances of the case, that is,
the design, architecture, revealing structure, operati on, and application of the technical regulation at
issue".495
272. With respect to the burden of proof under Article 2.1, the Appellate Body found in US –
Tuna II (Mexico) that, as with all affirmative claims, it is for the complaining party to show that the
treatment accorded to imported products is less favourable than that accorded to like domestic
products.496 Where the complaining party has met the burden of making its prima facie case, it is then
for the responding party to rebut that showing. If, for example, the complainant adduces evidence and
arguments showing that the measure is designed a nd/or applied in a manner that constitutes a means
of arbitrary or unjustifiable discrimination of the group of imported pro ducts and thus is not

491Appellate Body Reports, China – Auto Parts, paras. 195 and 196; Appellate Body Report, US – FSC
(Article 21.5 – EC), para. 212.
492Appellate Body Report, Korea – Various Measures on Beef, para. 149. (original emphasis) See also
Appellate Body Report, US – Tuna II (Mexico), para. 236.
493Appellate Body Report, US – Clove Cigarettes , para. 182; Appellate Body Report, US – Tuna II
(Mexico), para. 215.
494Appellate Body Report, US – Clove Cigarettes , para. 182; Appellate Body Report, US – Tuna II
(Mexico), para. 216.
495Appellate Body Report, US – Clove Cigarettes, para. 182.
496Appellate Body Report, US – Tuna II (Mexico), para. 216.

even-handed, this would suggest that the measure is inconsistent with Article 2.1. If, however, the
respondent shows that the detrimental impact on imported products stems exclusively from a
legitimate regulatory distinction, it follows that the challenged measure is not inconsistent with
Article 2.1.497
E. Application of Article 2.1 of the TBT Agreement: "Treatment No Less Favourable"
273. In analyzing the Panel's findings under Article 2.1 of the TBT Agreement with respect to
"treatment no less favourable", we first address the two claims of the United States relating to the
detrimental impact that the Panel found was caused by the COOL measure, which challenge: (i) the
Panel's intermediate conclusion that the labelling requirements under the COOL measure provide for
different treatment of meat derived from im ported livestock and meat derived from domestic
livestock; and (ii) the Panel's finding that the COOL measure has a detrimental impact on imported
livestock. We then examine the United States' claims under Article 11 of the DSU. Finally, we
review the Panel's factual findings as they relate to an assessment of whether any detrimental impact
caused by the COOL measure reflects discrimination in violation of Article 2.1 of the TBT Agreement.
1. Detrimental Impact
(a) "Different Treatment"
274. At the outset of its analysis of less favourable treatment, the Panel e xplained the relationship
among the muscle cut labels under the COOL measure. At the end of this short subsection, and
before turning to assess Canada's and Mexico 's claims that the COOL measure accords de facto less
favourable treatment to imported livestock, the Panel observed that:
… 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 exclusively US-origin livestock,
whereas in certain circumstances meat from domestic livestock is
eligible for a label that involves imported livestock.
498
The Panel cautioned, however, that "this difference" was just "the starting point" for its analysis of the
complainants' claims of less favour able treatment, and noted that th e complainants were not alleging

497Appellate Body Report, US – Tuna II (Mexico), para. 216.
498Panel Reports, para. 7.295.

there to be "any formal difference in the treat ment accorded to domestic and imported livestock
per se".
499
275. The United States argues on appeal that the Pa nel was wrong to conclude that "the COOL
measure on its face accords different treatment to imported livestock". 500 The United States
emphasizes that the COOL measure applies the same recordkeeping requirements to all US livestock
producers regardless of the origin of their livestock, and requires retailers to label meat derived from
both domestic and imported livestock "in the exact same set of conditions (i.e., retailers must affix a
label to all categories of meat unless one of the origin-neutral exceptions applies)". 501
The United States adds that the COOL measure also does not treat muscle cuts of meat differently
based on whether they are derived from imported or from domestic livestock. On the contrary, all
meat derived from both domestic a nd imported livestock must be labe lled with the same relevant
information. Even in the circumstance where the Panel suggested that ther e is different treatment
—that is, where commingling occurs—domestic and imported livestock are still being treated in the
same way, because the same label, that is, a B or C Label, is affixed to all meat derived from
commingled animals.
276. Canada and Mexico point out that the Pane l did not rely upon its "initial finding of de jure
different treatment"
502 in coming to its conclusion that the COOL measure is inconsistent with
Article 2.1. Rather, the Panel recognized that different treatment on the face of a measure does not
necessarily constitute less favourable treatment, as i ndicated by the Appellate Body's findings in
Korea – Various Measures on Beef .
503 The Panel was correct, therefore, in going on to analyze
whether, on the specific facts of this case, the COOL measure creates an incentive in favour of
processing exclusively domestic livestock and a disi ncentive against handling imported livestock.
Canada additionally contends that the United States "distorts the finding by the Panel" when it asserts
that the Panel relied on "the commingling flexibility pr ovided with regard to the labelling of meat" in
reaching its conclusion that the COOL measure, on its face, provides different treatment to imported
and domestic livestock. 504 Rather, the Panel found that the defi nitions of the four muscle cut labels
under the measure are mutually exclusive, and went on to describe the limited flexibility, provided for

499Panel Reports, paras. 7.296 and 7.297.
502Mexico's appellee's submission, para. 73. See also Canada's appellee's submission, paras. 61-63.
503See Mexico's appellee's submission, para. 68 (referring to Appellate Body Report, Korea – Various
Measures on Beef, para. 137); and Canada's appellee's submission, para. 63.
504Canada's appellee's submission, para. 62 (quoting United States' appellant's submission, para. 57).

under the measure, between the use of Label A and the rest of the labels when commingling is
involved.
277. As discussed above, a finding of formal differe nt treatment is not required for a finding of
de facto less favourable treatment to be made. In th e context of Article III:4 of the GATT 1994, the
Appellate Body has expressly found that "[a] fo rmal difference in treatme nt between imported and
like domestic products is … neither necessary, nor sufficient, to show a violation" of the national
treatment obligation.
505
278. In any event, we do not consider that the Panel in this case relied on any instance of different
treatment explicitly provided for under the COOL me asure to support its ultimate finding that the
COOL measure accords less favourable treatment to imported livestock than to like domestic
livestock. As described above, the statement challe nged by the United States was made as part of the
Panel's explanation of the terms and requirements of the COOL measure, and the Panel itself did not
characterize it as a finding or a legal conclusion. Indeed, the Panel expressly recognized that the
formally different treatment of imported and lik e domestic products does not necessarily constitute
less favourable treatment. 506 Moreover, the Panel stated that "this difference" under the COOL
measure was only "the starting point" of its analysis , and highlighted that the claims before it were
claims of de facto less favourable treatment.507
279. The statement challenged by the United States t hus forms part of an introductory section
setting out the Panel's understanding of the measure's de jure structure and operation, and precedes its
indepth analysis of de facto discrimination. We view the statement, made at this initial stage of the
Panel's reasoning, merely as a passing observation regarding the extent to which the COOL measure
de jure treats imported livestock differently than domest ic livestock. Furthermore, the Panel's later
conclusions with regard to the COOL measure's de facto inconsistency with Article 2.1 are not based
on this statement, or even directly connected to it. We also note that the United States does not
challenge under Article 11 of the DSU any of the e xplanations or assessments made by the Panel in
this initial section of its analysis setting out its understanding of the relationships among muscle cut
labels under the COOL measure. For these reasons, we find that the Panel did not err, in
paragraph 7.295 of the Panel Reports, in stati ng that the COOL measure treats imported livestock
differently than domestic livestock.

505Appellate Body Report, Korea – Various Measures on Beef, para. 137.
506Panel Reports, para. 7.296 (referring to Appellate Body Report, Korea – Various Measures on Beef ,
paras. 135-137).
507Panel Reports, paras. 7.296 and 7.297.

(b) Did the Panel Err in Finding that the COOL Measure Has a
Detrimental Impact on Imported Livestock?
(i) Arguments on Appeal
280. In appealing the Panel's ultimate finding of inconsistency under Article 2.1 of the
TBT Agreement, the United States submits that, in order to determine whether the COOL measure
accords less favourable treatment to imported pro ducts than to like domestic products, the Panel
should have followed past A ppellate Body reports in Thailand – Cigarettes (Philippines) , Korea –
Various Measures on Beef , and Dominican Republic – Import and Sale of Cigarettes . According to
the United States, these reports generally focused on: (i) whether the measure itself treats imported
products differently and less favourably than like domestic products on the basis of their origin ; and
(ii) to the extent that there are adverse effects on imported pr oducts, whether these effects are
attributable to the measure itself or are based on external non-origin-related factors, such as
pre-existing market conditions and the independent actions of private market actors.
508
The United States argues that the Panel, however , wrongfully assessed "whether imported livestock
are equally competitive with domestic livestock". 509 This "fundamental misunderstanding" led the
Panel to focus its entire analysis of less favourable treatment on "how compliance costs may differ for
market participants depending on their business models and sourcing patterns and how the
independent actions of these market participants in response to potential costs might hypothetically
affect imported livestock in light of pre-existing market conditions".510
281. The United States asserts that, under Article 2. 1, where imported products suffer detrimental
impact because of the decisions of private market actors, and not because of the challenged measure
itself, the measure cannot be found to accord less favourable treatment to imported products.
Furthermore, where a measure does not treat imported products less favourably than like domestic
products on the basis of origin , the measure cannot be found to violate the national treatment
obligation. The United States claims that, in pr omulgating the COOL requirements, it included the
commingling provisions "to help mitigate the need [f or private actors] to ever make any choices that
could potentially have an adverse effect on imports".
511 It insists, therefore, that any market

508United States' appellant's submission, para. 68 (referring to Appellate Body Report, Korea –
Various Measures on Beef , paras. 137 and 143-148; Appellate Body Report, Thailand – Cigarettes
(Philippines), paras. 128-140; Appellate Body Report, Dominican Republic – Import and Sale of Cigarettes ,
para. 96; Panel Report, US – Tuna II (Mexico) , para. 7.334; and Panel Report, Japan – Film, paras. 10.381
and 10.382).
509United States' appellant's submission, para. 62. See also paras. 63-65.
510United States' appellant's submission, para. 88. See also paras. 87 and 92.

participant's choice to segregate livestock instead of taking advantage of the commingling provisions
is not legally required by the measure. Similarly, "any choice to pass the costs of segregation on to
domestic or imported livestock instead of distribut ing them equally is not a choice required by the
measure."512 The United States also notes that, if segrega tion does occur, it will equally affect both
imported and domestic livestock since the act of seg regation inherently involves separating one type
of animal from another.
282. The United States suggests that the Panel acknowledged that the measure itself did not lead to
the detrimental impact on imports when the Pa nel found that the incentive to process exclusively
domestic livestock was related to the fact that "[ l]ivestock imports have been and remain small
compared to overall livestock production and demand", such that demand in the US market cannot be
fulfilled with exclusively foreign livestock513; and that, because "US livestock is often geographically
closer to most if not all US domestic markets, … processing exclusively imported livestock and meat
remains a relatively less competitive option". 514 In the United States' view, these facts demonstrate
that the Panel relied on factors external to the COOL measure to determine the existence of a
detrimental impact on imported livestock, instead of finding that the COOL measure itself had such a
detrimental impact.
283. Canada and Mexico assert that the Panel's legal approach to in terpreting and applying
Article 2.1 was correct, and that the Panel rightly found that the COOL measure itself treats imported
livestock less favourably than domestic livestock. Mexico argues that the United States' approach
would restrict the scope of the legal analysis to exclude indirect effects of the measure on the
conditions of competition in the market, such as th e measure's impact on market forces and market
participants. Canada and Mexi co both contend that, given that the Panel was performing a de facto
analysis, it was appropriate for the Panel to ta ke into consideration "all relevant facts and
circumstances in the market" to determine how the imposition of the COOL measure affects the
equality of competitive opportunities. 515 In their view, the Panel was therefore correct in considering
the low market share of imported livestock as part of its assessment under Article 2.1, as this factor

515Mexico's appellee's submission, para. 82. See also Canada's appellee's submission, para. 39.

has also been considered by panels and the Appe llate Body in cases dealing with "treatment no less
favourable" in the context of Article III:4 of the GATT 1994.
516
284. Regarding the decisions of private market participants, Canada and Mexico further argue that,
as the Panel found, any decisions made by private act ors in order to comply with the COOL measure
were not "solely" the result of their independent business calculations, but were attributable to the
economic incentives and disincentives created by the COOL measure. Canada adds that there was
"an abundance of uncontradicted specific evidence befo re the Panel" that the COOL measure "itself"
caused private actors to change their behaviour to the detriment of imported cattle and hogs.517
285. Finally, Canada and Mexico assert that Article 2. 1 does not require complainants to show that
the less favourable treatment accorded to imported products is expressly, or effectively, based on
origin. The United States' arguments in this respect are based on its reading of the Appellate Body's
findings in Dominican Republic – Import and Sale of Cigarettes , and in Canada and Mexico's view,
the United States' understanding of that case was rejected by the more recent findings of the Appellate
Body in US – Clove Cigarettes.518
(ii) Analysis
286. We first recall that, as explained above, Article 2.1 of the TBT Agreement prohibits both
de jure and de facto discrimination between domestic and like imported products. Therefore, where a
technical regulation does not discriminate de jure, a panel must determine whether the evidence and
arguments adduced by the complain ant in a specific case nevertheless demonstrate that the operation
of that measure, in the relevant market, has a de facto detrimental impact on the group of like
imported products. A panel's analysis must take into consideration the totality of the facts and
circumstances before it, including any implica tions for competitive conditions discernible from the
design and structure of the measure itself, as well as a ll features of the particular market at issue that
are relevant to the measure's operation w ithin that market. In this regard, " any adverse impact on
competitive opportunities for imported products vis-à-vi s like domestic products that is caused by a
particular measure may potentially be relevant" to a panel's assessment of less favourable treatment
under Article 2.1.519

516See Canada's appellee's submission, para. 43 (referring to Appellate Body Report, Korea – Various
Measures on Beef, para. 137; Panel Report, Mexico – Taxes on Soft Drinks , paras. 8.56, 8.119, and 8.120; and
Appellate Body Report, US – Clove Cigarettes, para. 222).
517Canada's appellee's submission, para. 48 (referring to Panel Reports, paras. 7.374-7.380 and 7.420).
518Canada's appellee's submission, para. 41; Mexico's appellee's submission, para. 76.
519Appellate Body Report, US – Tuna II (Mexico), para. 225. (original emphasis)

287. The United States is correct to point out that, as the Panel found, the COOL measure does not
legally compel market participants to choose be tween processing either exclusively domestic or
exclusively imported livestock. However, the Pane l also found that the design of the COOL measure
and its operation within the US market meant that segregation of livestock was "a practical way to
ensure [compliance]".520 In examining the various possible methods of compliance with the COOL
measure, the Panel found that the less costly methods would include an "absolute form of
segregation"521, whereby producers choose to process either exclusively domestic or exclusively
imported livestock. Given the particular circum stances of the US livestock market—including the
fact that "[l]ivestock imports have been and remain small compared to overall US livestock
production and demand, and US livestock demand cannot be fulfilled with exclusively foreign
livestock"522—the Panel concluded that the least costly way of complying with the COOL measure is
to rely exclusively on domestic livestock. 523 The Panel then relied on th is finding, together with its
finding that the costs of compliance cannot fully be passed on to consumers, to find that the COOL
measure creates an incentive for US market particip ants to process exclusively domestic livestock and
reduces the competitive opportunities of imported livestock as compared to domestic livestock.524
288. In our view, the circumstances of thes e disputes are similar to those in Korea – Various
Measures on Beef. In that case, Korea established a "dual retail system" that required small retailers
to sell either exclusively domestic beef or exclus ively imported beef. The Appellate Body held that
"the treatment accorded to imported beef, as a cons equence of the dual retail system established for
beef by Korean law and regulation, is less fa vourable than the treatment given to like domestic
beef".525 The Appellate Body did not find a detrimenta l impact on imported beef due only to "[t]he
legal necessity of making a choice" that the measure itself imposed. 526 Rather, it held that the
adoption of a measure requiring such a choice to be made had the "direct practical effect", in that
market, of denying competitive opportunities to imports. 527 Such an effect was not "solely the result
of private entrepreneurs acting on their own calcula tions of comparative costs and benefits", but was
the result of the governmental intervention that a ffected the conditions of competition for beef in
Korea.528 Thus, contrary to the United States' ar guments in this respect, the findings in Korea –
Various Measures on Beef do not stand for the proposition that private market participants must be

520Panel Reports, para. 7.320.
521Panel Reports, para. 7.337.
522Panel Reports, para. 7.349.
523Panel Reports, para. 7.350.
524Panel Reports, para. 7.357.
525Appellate Body Report, Korea – Various Measures on Beef, para. 148.
526Appellate Body Report, Korea – Various Measures on Beef, para. 146.
527Appellate Body Report, Korea – Various Measures on Beef, para. 145.
528Appellate Body Report, Korea – Various Measures on Beef, para. 149.

legally required to make a choice in order for the incentives that determine how such choice will be
exercised to be attributed to a governmental meas ure. The relevant question is whether it is the
governmental measure at issue that affects th e conditions under whic h like goods, domestic and
imported, compete in the market. While a measure may not legally require certain treatment of
imports, it may nevertheless create incentives for market participants to behave in certain ways, and
thereby have the "practical effect"
529 of treating imported products less favourably. 530 Thus, the
findings in Korea – Various Measures on Beef are consistent with, and support the proposition that,
whenever the operation of a measure in the market creates incentives for private actors systematically
to make choices in ways that benefit domestic products to the detriment of like imported products,
then such a measure may be found to treat imported products less favourably.
289. We furthermore agree with Canada and Mexico that the Panel's findings indicate that the
COOL measure itself, as applied in the US livest ock and meat market, creates an incentive for
US producers to segregate livestock according to origin, in particular by processing exclusively
US-origin livestock.531 We thus reject the United States' contention that the Panel wrongly attributed
to the COOL measure a detrimental impact on imports caused exclusively by factors "external" to that
measure.532 A market's response to the application of a governmental measure is always relevant to
an assessment of whether the operation of that measure accords de facto less favourable treatment to
imported products. That is, if a specific techni cal regulation adopted by a Member gives rise to
adverse effects in the market, which disparately impact imported products, such effects will be
attributable to the technical regulation for pur poses of examining less favourable treatment under
Article 2.1.
290. We understand the Panel to have c onsidered that, in this case, th e small market share held by
Canadian and Mexican livestock imports exacerbates the effects of the COOL measure. In making its
finding under Article 2.1, the Pa nel acknowledged that the incentive created by the COOL measure is
"partly due to the relatively small market share of imported livestock". 533 Such reasoning is not
inconsistent with a finding that it was the COOL me asure that caused the detrimental impact. Indeed,
the opportunity for a technical regulation to discrim inate may well derive from its operation within a

529Appellate Body Report, Korea – Various Measures on Beef, para. 145.
530See, for example, Appe llate Body Reports, China – Auto Parts , paras. 195 and 196; and Appellate
Body Report, US – FSC (Article 21.5 – EC), para. 212.
531The Panel found that US producers can also segr egate livestock according to origin by processing
foreign and domestic livestock on different days or at different times. (Panel Reports, paras. 7.333 and 7.339)
532We note that, in US – Clove Cigarettes , the Appellate Body "eschewed an additional enquiry" as to
whether detrimental impact was "related to the foreign origin of the products or explained by other factors or
circumstances". (Appellate Body Report, US – Clove Cigarettes, footnote 372 to para. 179)
533Panel Reports, para. 7.395.

given market that exhibits particular characteristi cs. In some instances, th e market share held by
imported products may be one such relevant characteristic.
291. We further emphasize that, while detrimental effects caused solely by the decisions of private
actors cannot support a finding of inconsistency with Article 2.1, the fact that private actors are free to
make various decisions in order to comply with a measure does not preclude a finding of
inconsistency. Rather, where private actors are i nduced or encouraged to take certain decisions
because of the incentives created by a measure, those decisions are not "independent" of that measure.
As the Appellate Body noted, the "intervention of some element of private choice does not relieve
[a Member] of responsibility … for the resultin g establishment of competitive conditions less
favourable for the imported product than for the domestic product", and thus does not preclude a
finding that the measure provides less favourable treatment.
534 In this case, the Panel expressly found
that "[i]t is the result of the COOL measure … that in the circumstances of the US market, market
participants, when faced with the choice between a scenario involving exclusively domestic livestock
and a scenario involving both domestic and im ported livestock, opted predominantly for the
former."535 Had it not been for the COOL measure, the Panel reasoned, "market participants would
not have opted this way". 536 We therefore find that the Panel properly examined whether the COOL
measure modifies the conditions of competition in the US market to the detriment of imported
livestock. We also disagree with the United States' characterization of the Panel's legal approach as
requiring that imported livestock be "equally competitive" with domestic livestock.
292. Based on the foregoing, we find that the Panel did not err, in paragraphs 7.372, 7.381,
and 7.420 of the Panel Reports, in finding that the COOL measure modifies the conditions of
competition in the US market to the detriment of imported livestock by creating an incentive in favour
of processing exclusively domestic livestock and a disincentive against handling imported livestock.
293. Although the Panel's legal approach to assessing detrimental impact was correct, the Panel
ended its analysis under Article 2.1 of the TBT Agreement there. The Panel seems to have considered
its finding that the COOL measure alters the cond itions of competition to the detriment of imported
livestock to be dispositive, and to lead, without more, to a finding of violation of the national
treatment obligation in Article 2.1. In this sen se, the Panel's legal analysis under Article 2.1 is
incomplete. The Panel should have continued its examination and determined whether the
circumstances of this case indi cate that the detrimental impact stems exclusively from a legitimate

534Appellate Body Report, Korea – Various Measures on Beef, para. 146.
535Panel Reports, para. 7.403.
536Panel Reports, para. 7.403.

regulatory distinction, or whether the COOL meas ure lacks even-handedness. As noted above, where
a regulatory distinction is not designed and applie d in an even-handed manner—for example, because
it is designed or applied in a manner that constitutes a means of arbitrary or unjustifiable
discrimination—that distinction cannot be considered legitimate and, thus, the detrimental impact will
reflect discrimination prohibited under Article 2.1. Therefore, we consider it appropriate to review
the Panel's findings as they relate to the design, architecture, revealing structure, operation, and
application of the COOL measure in order to dete rmine whether we can reach a conclusion in this
respect.
294. Before doing so, however, we will assess the United States' arguments as to whether the Panel
erred under Article 11 of the DSU in making its factual findings relating to the necessity of
segregation, the extent of commingling taking place in the US market, and the increase in the price
differential between imported and domestic livestock. Based in part on this examination, we will then
proceed to determine whether the detrimental impact occasioned by the COOL measure stems
exclusively from a legitimate regulatory distinction, or whether it reflects discrimination in violation
of Article 2.1 of the TBT Agreeement.
2. Did the Panel Err under Article 11 of the DSU in Making Certain Factual
Findings in the Course of Its Analysis under Article 2.1 of the
TBT Agreeement?
(a) Segregation and Commingling
(i) Arguments on Appeal
295. The United States argues that the Panel acted inconsistently with its obligations under
Article 11 of the DSU in finding that the COOL measure "necessitates" segregation, and in ignoring
evidence showing that producers are taking advant age of the commingling flexibilities contained in
the measure in order to avoid seg regation "on a widespread basis". 537 The United States presents
these claims as interconnected. That is, in its view , not only did the Panel err in finding that the
COOL measure "necessitates" segregation, but, had the Panel properly assessed the evidence before it
regarding the extent to which producers were taking advantage of the "commingling" flexibilities
as an alternative to segregation, it could not have found that segregation was necessary.538

538See United States' appellant's submission, para. 107.

296. The United States emphasizes the Panel's own finding that "the COOL measure does not
explicitly require segregation, let alone the segregation of domestic and imported livestock". 539 The
United States points to evidence showing that a significant proportion of muscle cuts of beef and pork
is labelled "Product of the United States, Canada and Mexico", to argue that US producers are
choosing to commingle, instead of segregate, their livestock. 540 The United States highlights, in this
regard, its exhibits containing p hotographs of such meat labels 541, as well as a USDA survey
indicating that "approximately 22 percent of beef so ld and 4 percent of the pork sold in the United
States is derived from commingled livestock or meat (i.e., some combination of Category A, B, and C
meat processed together on the same production day)". 542 Finally, the United States refers to two
producer affidavits that, in its view, provide furt her evidence of the occurrence of commingling on a
widespread basis.543
297. Canada submits that the United States has not s ubstantiated its claims under Article 11 of the
DSU. According to Canada, the threshold for establi shing a violation of Article 11 is high, and it is
not enough "to simply note a few pieces of evidence that the panel considered, ignore evidence that
the panel also considered, and ask the Appellate Body to come to a contrary conclusion". 544
Therefore, the Panel's factual findings must sta nd. Regarding the extent of commingling in the
US market, Canada acknowledges that commingling is happening "to some extent", but points out
that it did not argue otherwise before the Panel. It argues that, in any event, taking advantage of the
commingling flexibility does not eliminate the need for segregation.
298. Mexico emphasizes the "high legal threshold" established by the Appellate Body under
Article 11 of the DSU, and contends that the Un ited States' claims of error do not meet this
threshold.545 Mexico argues that the United States' ar gument focuses on evidence of commingling,
and leaps to the conclusion that because commi ngling is occurring there cannot be less favourable

539Panel Reports, para. 7.315.
540The United States claims that, "[g] iven the negligible number of livestock that are born in either
Canada or Mexico, raised in the other country, and then slaughtered in the United States (e.g., born in Mexico,
raised in Canada, slaughtered in the United States)", the use of a label indicating US, Canadian, and Mexican
origin necessarily indicates that the sources of these meat products were commingled. (United States' appellant's
541United States' appellant's submission, para. 106 (second bullet point (referring to Panel Exhibits
US-67, US-95, US-96, and US-98)).
542United States' appellant's submission, para. 106 (first bullet point (referring to Panel Exhibit
US-145)).
543United States' appellant's submission, para. 106 (t hird bullet point (referring to Panel Exhibits
US-101 (BCI) and US-102 (BCI))).

treatment. Mexico argues that there is a "defect in the underlying premise of the US claim".
546 This is
because, even in instances wher e commingling can be taken advantage of by slaughterhouses,
segregation is still necessary during the upstream st ages of production in order to comply with the
commingling provisions, which require that at least one foreign-born animal be commingled with at
least one US-born animal on a single production day. 547 Regarding the specific evidence of
commingling referred to by the United States, Mexico claims that the United States itself
acknowledged that the USDA survey on the use of the different labels is not "statistically reliable",
and that the Panel therefore was not required either to discuss it or to rely on it. 548 Similarly, the
Panel's finding on the limited evidentiary value of photographs of labels submitted by the United
States was "well justified" 549, because the flexibilities in the la belling rules mean that a label
indicating multiple origins cannot be understood as demonstrating that livestock have been
commingled. Other pieces of evidence referred to by the United States contain some information as
to how producers are complying w ith the COOL requirements, but do not clearly demonstrate that
they are commingling. According to Mexico, the Pa nel's conclusion that the evidence did not provide
compelling proof of the occurrence or extent of commingling is, therefore, "entirely reasonable".550
(ii) Analysis
299. We recall that, in accordance with Article 11 of the DSU, a panel is required to "consider all
the evidence presented to it, assess its credibility, determine its weight, and ensure that its factual
findings have a proper basis in that evidence". 551 It must further provide in its report "reasoned and
adequate explanations and coherent reasoning" to support its findings. 552 Within these parameters, "it
is generally within the discretion of the [p]anel to decide which evidence it chooses to utilize in
making findings."553 Although a panel must consider evidence before it in its totality, and "evaluate

547Mexico's appellee's submission, para. 100 (referring to Mexico's oral statement at the second Panel
548Mexico's appellee's submission, paras. 103-105.
550Mexico's appellee's submission, paras. 110 and 114.
551Appellate Body Report, Brazil – Retreaded Tyres, para. 185 (referring to, inter alia, Appellate Body
Report, EC – Hormones , paras. 132 and 133). See also Appellate Body Reports in Australia – Salmon ,
para. 266; EC – Asbestos, para. 161; EC – Bed Linen (Article 21.5 – India) , paras. 170, 177, and 181; EC –
Products II, paras. 141 and 142; Korea – Alcoholic Beverages , paras. 161 and 162; Korea – Dairy, para. 138;
US – Carbon Steel , para. 142; US – Gambling , paras. 330 and 363; US – Oil Country Tubular Goods Sunset
552Appellate Body Report, US – Upland Cotton (Article 21.5 – Brazil), footnote 618 to para. 293.

the relevance and probative force" of all of the evidence 554, a panel is not required "to discuss, in its
report, each and every piece of evidence" put before it 555, or "to accord to factual evidence of the
parties the same meaning and weight as do the parties".556
300. Not every error committed by a panel in the appreciation of the evidence will amount to
reversible legal error. 557 The Appellate Body will not "inte rfere lightly" with a panel's factual
findings558, and will find that a panel failed to comply with its duties under Article 11 of the DSU only
if it is satisfied that the panel has exceeded its authority as the initial trier of the facts.559 Thus, when a
participant claims that a panel "ignored" or "disrega rded" a particular piece of evidence, the mere fact
that a panel did not explicitly refer to that evid ence in its reasoning does not suffice to demonstrate
that the panel acted inconsistently with Article 11. Rather, a participant must explain why such
evidence is so material to its cas e that the panel's failure explicitly to address and rely upon it casts
doubt on the objectivity of the panel's factual assessment.560
301. We further recall that an appellant cannot succeed in an Article 11 claim by simply
"recast[ing]" its arguments before the panel "under the guise of an Article 11 claim" on appeal. 561
Rather, a claim that a panel failed to comply with its duties under Article 11 of the DSU must stand on
its own, and should not be made merely as a "subsid iary argument" in support of a claim that the
panel erred in its application of a WTO provision.562
302. The United States challenges the Panel's findi ng that the COOL measure "necessitates"
segregation. Given the nature of the United States' arguments, we consider it useful, at the outset, to
scrutinize the actual language used by the Panel in its reasoning to determine more precisely what the

554Appellate Body Report, US – Continued Zeroing, para. 331; Appellate Body Report, Korea – Dairy,
para. 137.
555Appellate Body Report, Australia – Apples, para. 271; Appellate Body Report, Brazil – Retreaded
Tyres, para. 202.
557Appellate Body Report, EC – Fasteners (China), para. 442; Appellate Body Report, EC and certain
member States – Large Civil Aircraft, para. 1318.
558Appellate Body Report, EC – Sardines , para. 299; Appellate Body Report, US – Carbon Steel ,
559Appellate Body Report, US – Wheat Gluten, para. 151.
560Appellate Body Report, EC – Fasteners (China), paras. 442 and 499; Appellate Body Report, US –
Clove Cigarettes , para. 154; Appellate Body Report, EC and certain member States – Large Civil Aircraft ,
para. 1318. See also paragraph 292 of the Appellate Body report in US – Upland Cotton (Article 21.5 – Brazil),
where the Appellate Body found that th e panel erred in disregarding "the central piece of evidence relied on by
the United States".
561Appellate Body Report, EC – Fasteners (China) , para. 442; Appellate Body Report, US – Clove
Cigarettes, para. 229.
562Appellate Body Report, EC – Fasteners (China) , para. 442. See also Appellate Body Report, US –
Steel Safeguards, para. 498; and Appellate Body Report, Chile – Price Band System (Article 21.5 – Argentina),
para. 238.

Panel found. The Panel stated 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".
563 Thus, while the Panel found that the operation and application of the COOL
measure "necessitates" segregation, it did not suggest that segregation is legally required, or is always
required to the same extent. We further understand th e Panel to have used the term "segregation" to
encompass a broad range of activities, including physi cally segregating animals into different pens or
fields or identifying each animal through the use of ear tags or other physical markings 564, temporally
segregating animals by processing livestock of differ ent origins on different days or at different
times565, and segregating animals completely in the sense of choosing to process only livestock of a
single origin.566
303. In finding that the COOL measure "necessitates segregation", the Panel relied on several
pieces of evidence. The Panel noted that the CO OL measure itself does not impose any particular
system of identification, such as a tracing system, and prohibits the USDA from requesting any
documentation not kept in the normal course of business.
567 Given this lack of specific requirements
as to how compliance must be achieved, the Panel found that "a practical way to ensure that the chain
of reliable information on country of origin requi red by the COOL measure remains unbroken is the
segregation of meat and livestock". 568 The Panel found confirmation that the COOL measure
necessitates segregation in its review of the USDA's Country of Origin Labeling Compliance Guide569
(the "Compliance Guide"). The Panel noted that the Compliance Guide mentions a "segregation plan"
as one of the "examples of records and activities that may be useful" for compliance with the
COOL measure.570 The Compliance Guide further mentions "segregation" of meat and livestock as a
"[r]esponsibility" of each type of market participant. 571 The Panel also referred to statements by other
US entities indicating that segregation is either required or necessary.572

563Panel Reports, para. 7.327. (emphasis added)
564See, for example, Panel Reports, paras. 7.319 and 7.322-7.325.
565Panel Reports, paras. 7.339-7.342.
566Panel Reports, paras. 7.337 and 7.338.
567Panel Reports, para. 7.319.
568Panel Reports, para. 7.320. (emphasis added)
569Revised 12 May 2009 (Panel Exhibit CDA-65).
570Panel Reports, para. 7.321 (referring to Compliance Guide, p. 17; and Panel Exhibit MEX-41).
571Panel Reports, paras. 7.322 and 7.323 (referring to Compliance Guide, p. 17; and Panel Exhibit
MEX-41).
572Panel Reports, para. 7.325 (referring to Pa nel Exhibits CDA-69 (BCI), CDA-75 (BCI),
CDA-76 (BCI), CD A-81 (BCI), CDA-90 (BCI), CDA-117, CDA-192, CDA-199, MEX-33, MEX-37 (BCI),
MEX-42 (BCI), MEX-53, MEX-55, and MEX-97 (BCI)).

304. We further note that the Panel qualified its finding that the COOL measure necessitates
segregation somewhat, by recognizing that "segregation is subject to certain flexibilities". 573 T h i s
suggests that the Panel understood that commingling or other flexibilities might relieve, at least in
part, the need for segregation. In fact, the Panel expressly acknowledged this when it found that
"[m]arket participants might also benefit from th e above-mentioned commingling flexibility", but that
this flexibility "allows the reduction of segregation costs only to a certain extent". 574 The Panel also
explained that:
[e]ven at the stage wh ere commingling takes place, it is limited to a
single production day. Any commingled meat carrying, for instance,
Label 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 keeping "accurate records" as well as maintaining the
accuracy of country of origin information on mixed-origin labels.
575
305. Regarding the extent of commingling occurring in the US market, the Panel discussed three
pieces of evidence in its Reports. First, the Panel reviewed an affidavit from a person working in the
US meat industry indicating that at least one ma jor US processor is commingling Canadian, Mexican,
and US origin meat at one of its facilities. About this affidavit the Panel stated:
We accept this as showing that comm ingling has been taking place,
although we note that this piece of evidence does not specify the
extent of commingling either at the facility in question, let alone by
the US processor concerned or in the US meat industry at large.
576
306. The Panel next reviewed a series of photographs submitted by the United States 577 portraying
actual meat labels seen in the US market, each i ndicating mixed US, Canadian, and Mexican origin.
Based on its review of these photographs, the Panel stated:
The United States submitted photographs of Label B suggesting that
these labels had been affixed on commingled meat. However,
photographs of Label B merely demonstrate that there are muscle
cuts carrying Label B. Label B, a nd in particular the photos of such

573Panel Reports, para. 7.327.
574Panel Reports, para. 7.343.
575Panel Reports, para. 7.344. The Panel also referred to the 2009 Final Rule (AMS), which explains
that a processor making a claim as to the origin of its products "may elect to segregate and specifically classify
each different category within a production day or mix different s ources and provide a mixed label as long as
accurate records are kept". (Ibid. (quoting Panel Exhibits CDA-5 and MEX-7, Agency response to comments on
Labeling Muscle Cut Covered Commodities of Multiple Countries of Origin That Include the United States , at
p. 2670))
576Panel Reports, para. 7.364 (referring to Written st atement of Larry R. Meadows, dated 28 October
2010 (Panel Exhibit US-102 (BCI))).
577See Panel Exhibits US-67, US-95, US-96, and US-98.

labels submitted by the United States, provide no information on
whether the muscle cuts in question result from commingling
Label A and B meat on a single production day.
578 (footnote omitted)
307. Finally, the Panel looked at a producer affidavit declaring the origin of livestock supplied to a
meat processor, which the Panel characterized as an affidavit that the livestock concerned were
"eligible for Label B". 579 Despite the United States' claim that th e origin indicated in the affidavit is
evidence that commingling is taking place, the Panel found this affidavit to be "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".580
308. The United States does not directly dispute the Panel's interpretation of the various pieces of
evidence, but seems to argue that, if they had b een assessed properly, this would inevitably have led
the Panel to the conclusion that widespread commingling is occurring in the US market. For example,
the United States argues that the Panel "miss[ed] the f act that all of the photographs show muscle cuts
labeled 'Product of the United States, Canada, and Mexico,' which is a label only used on commingled
meat given the nature of the North American market".581 It may well be that a muscle cut of meat will
not often derive from an animal that has underg one different production steps in three different
countries, but the United States does not point to any evidence submitted to the Panel or to Panel
findings that would corroborate this assertion. Moreover, the United States itself seems to
acknowledge that it is possible that a piece of meat could have three countries of origin under the
COOL measure. 582 For these reasons, the Panel's conclusion—namely, that a Category B label
displaying three countries of origin does not n ecessarily indicate that the package contains
commingled meat—does not seem to us to be in compatible with an objective assessment of the
evidence. Rather, because of its doubts as to the information that can meaningfully be gleaned from
these photographs, the Panel did not accord to them substantial evidentiary weight.
309. Furthermore, it seems to us that, based on th e totality of the evidence before it, the Panel
drew, at least in part, the conclusion the United St ates desired, that is, that "commingling has been
taking place".583 However, the Panel did not find that the specific evidence relied upon by the United

578Panel Reports, para. 7.366. One example of the Label B photographs referred to by the Panel is set
out supra, in paragraph 248 of these Reports.
579Panel Reports, para. 7.368 (referring to United States' second written submission to the Panel,
para. 57; and Producer Affidavits: Continuous Country of Origin Affidavit/Declarations Provided to USDA
in 2009/2010 (Panel Exhibit US-101 (BCI))).
580Panel Reports, para. 7.368.
581United States' appellant's submission, para. 106 (second bullet point).
582The United States argues that a "negligible number of livestock" are processe d in three countries,
and not that such livestock do not exist. (United States' appellant's submission, para. 106 (first bullet point))
583Panel Reports, para. 7.364.

States demonstrated that commingling was taking pl ace in the US market " on a widespread basis". 584
The fact that the Panel found this ev idence not to be probative as to the extent of commingling
occurring in the market as a whole, simply indicat es that the Panel declined to attribute to the
evidence the weight and significance that the United States considers it should have.
310. Based on the Article 11 standard articulated above, we do not believe that the Panel's
determinations regarding segregation and commingling evince a failure to assess the facts objectively.
While the United States argues that extensive co mmingling is taking place as an alternative to
segregation, it points to no evidence that it submit ted to the Panel demonstrating that the COOL
measure's recordkeeping and verifi cation requirements are being complied with by means other than
segregation. Nor does the United States refer to any evidence that US producers, in particular
upstream livestock producers, are not segregating their livestock according to the categories
established under the COOL measure. Rather, the evidence to which the United States refers was
expressly considered by the Panel and deemed inconc lusive in this regard. Based on the foregoing,
we find that the Panel did not act inconsistently with its duties under Article 11 of the DSU in finding
that, "for all practical purposes, the COOL measu re necessitates segregation of meat and livestock
according to origin, even though this segregation is subject to certain flexibilities".585
(b) The Existence of a Price Differential
(i) Arguments on Appeal
311. The United States also alleges that the Panel fa iled to make an objective assessment of the
facts relating to the price differential between domest ic and imported livestock in the US market. It
contends that the Panel "failed to consider all the evidence before it, considered only the evidence
submitted by the complainants, and failed to eval uate the relevance and probative force of the
US evidence related to the existence of a COOL discount being applied in the marketplace". 586 The
United States points to the Panel's statement that the United States did not respond to Canada's and
Mexico's evidence as to the COOL discount 587, which the United States considers to be a
mischaracterization.588 In fact, stresses the United States, it provided a "detailed response" 589 to this
evidence in its second written submission, and subm itted evidence showing that the price differential

585Panel Reports, para. 7.327.

between Canadian and US livestock has narrowed since the adoption of the COOL measure.
590
According to the United States, its evidence—Panel Exhibit US-108—directly contradicted Canada's
and Mexico's claims that the COOL measure is re sponsible for the widespread price discounting of
imported livestock. Even accepting the complainan ts' evidence, which shows only that selected
individual slaughterhouses are imposing a COOL discount, the evidence that the United States
submitted makes clear that overall prices in the US market did not show any such decrease in the
price of imported livestock relative to the price of domestic livestock. Yet, the Panel ignored this
evidence. The United States adds that the Panel al so failed to make an objective assessment of the
facts relating to prices in stating that the "Sumner Econometric Study" 591 "makes a prima facie case
that the COOL measure negatively and si gnificantly affected the import shares and price basis of
Canadian livestock". 592 According to the United States, this finding lacks a factual basis since the
Sumner Econometric Study did not find that the CO OL measure had any effects on prices for feeder
cattle, feeder hogs, or slaughter hogs.593
312. With respect to the price differential, Canada points out that the Sumner Econometric Study,
relied on by the Panel, was expressly found by the Panel to account for non-COOL related variations
in prices, such as those reflected in the one piece of evidence referred to by the United States. Canada
also contests the probative value of the price data contained in Panel Exhib it US-108. Canada points
out that the data show movements in the prices of imported and domestic livestock for a period that
began only after the COOL measure had alrea dy "severely depressed the market for imports".
594
Furthermore, Canada argues that it is "to be expected " that there will be "a moderating of the negative
effects of the COOL measure during periods of unus ually tight supply", and evidence of such effects
therefore does not mean that the negative impact of the COOL measure has been eliminated.595
313. For its part, Mexico argues that the Panel had direct evidence regarding the existence of a
COOL discount being applied to imported livestock, including invoices, a letter from a US producer,

590United States' appellant's submission, para. 114 (refe rring to Data on North American cattle and hog
prices (sourced from LMIC database for US and Canadian cattle, AMS data for Mexico feeder prices,
ERS Exchange Rate database, and Statistics Canada (Panel Exhibit US-108)).
591Daniel A. Sumner, "Econometric Analysis of the Differential Effects of Mandatory Country of
Origin Labeling in the United States on Canadian Cattle Prices and Imports of Canadian Cattle and Hogs into
the United States" (16 June 2010) (Panel Exhibit CDA-79).
592Panel Reports, para. 7.542. (emphasis added)
593United States' appellant's submission, para. 115 (referring to Sumner Econometric Study (Panel
Exhibit CDA-79); and Panel Exhibit CDA-206).

and pricing charts.596 In Mexico's view, the Panel's finding that such a discount existed was therefore
well supported by the evidence. Furthermore, the United States' claims incorrectly assume that a
finding of less favourable treatment must be evaluated based on the actual trade effects of the
measure. Therefore, Mexico maintains, even if th e Appellate Body considers that the Panel erred in
making its factual findings in this respect, this w ould not lead to a reversal of the Panel's legal
findings under Article 2.1 of the TBT Agreement.
(ii) Analysis
314. Before turning to assess this part of the United St ates' appeal, we briefly recall the parts of the
Panel's analysis to which it pertains. The Pane l discussed differences in the prices of imported
Canadian and Mexican livestock in two distinct parts of its reasoning. The Panel's statements
regarding the existence of a COOL discount being applied to imported livestock were first made in
the context of its analysis of the consistency of the COOL measure with Article 2.1 of the
TBT Agreement.597 There, having found that "the least costly way of complying with the COOL
measure is to rely on exclusively domestic livestock" 598, the Panel cited to evidence demonstrating
that slaughterhouses were passing the costs of processing imported livestock on to upstream
producers, stating that:
… there is direct evidence of major slaughterhouses applying a
considerable COOL discount of USD 40-60 per head for imported
livestock.[*] This proves that major processors are passing on at
least some of the additional costs of the COOL measure upstream to
suppliers of imported livestock.[* *] We have no evidence of a
similar discount being applied to suppliers of domestic livestock, nor
has the United States responded to the evidence submitted by Canada
and Mexico in this respect.
599
[*original footnote 501] See Exhibits CDA-57 and 81 (both BCI), MEX-37,
46, 64, 97 and 105 (all BCI).
[**original footnote 502] See Exhibits MEX-37, 46, 97 and 105 (all BCI).
See also Exhibit MEX-101.
315. Later in that same section of its analysis, af ter finding 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 than on domestic livestock" 600, the Panel identified
specific examples of a detrimental impact on the terms of trade offered to producers of imported

596Mexico's appellee's submission, para. 120 (referring to Panel Exhibits MEX-37 (BCI), MEX-47,
MEX-48, MEX-64 (BCI), and MEX-97 (BCI)).
597See Panel Reports, section VII.D.2(b).
598Panel Reports, para. 7.350.
599Panel Reports, para. 7.356.
600Panel Reports, para. 7.372.

livestock. One such example was that certain suppliers of imported livestock have suffered
significant financial disadvantages resulting from the COOL measure, including an increased price
difference between imported and domestic livestock and the refusal of financial institutions to provide
credits and loans.
601
316. After having concluded that the COOL measure " de facto discriminates against imported
livestock by according less favourable treatment to Canadian cattle and hogs, and to Mexican cattle,
especially Mexican feeder cattle, th an to like domestic livestock", the Panel went on to analyze, in a
separate subsection of its Reports602, the actual trade effects of the COOL measure. It was undisputed
by the parties that the Panel did not need to ve rify the actual trade effects of the COOL measure 603,
and the Panel itself considered that findings in this respect were "not indispensable" for its analysis
under Article 2.1. 604 The Panel nevertheless conducted an anal ysis of such effects, recognizing that
the existence of "negative trade and economic effects is an important factual matter in this dispute".605
317. As part of its analysis, the Panel compared two econometric studies submitted by Canada and
by the United States, each of which purported to demonstrate the effects—or lack thereof—of the
COOL measure on import shares and prices of cattle and hogs. The Panel reviewed the
methodologies and findings of each study, and fo und that the Sumner Econometric Study, submitted
by Canada, was "sufficiently robust" 606 to provide reliable evidence of the effects of the COOL
measure, and gave five specific reasons for this assessment. 607 It further found that the "USDA
Econometric Study"608 submitted by the United States "lack[ed] sufficient robustness both taken on its
own and in comparison with the Sumner Econometric Study". 609 It therefore concluded that the
Sumner Econometric Study made "a prima facie case that the COOL measure negatively and
significantly affected the import shares and price basis of Canadian livestock" 610, which was "not
refuted by the USDA Econometric Study".611
318. With respect to the existence of a COOL discount being applied to imported livestock, the
United States does not dispute on appeal the content of the Canadian and Mexican exhibits upon

601Panel Reports, para. 7.379.
602See Panel Reports, section VII.D.2(c).
603Panel Reports, para. 7.442.
604Panel Reports, para. 7.445.
605Panel Reports, para. 7.444.
606Panel Reports, para. 7.540.
607Panel Reports, paras. 7.540 and 7.541.
608Supra, footnote 132 (Panel Exhibit US-42).
609Panel Reports, para. 7.543.
610Panel Reports, para. 7.542.
611Panel Reports, para. 7.546.

which the Panel relied, but argues that other evidence that it put forward relating to prices contradicts
the Panel's finding. The United States' arguments re ly to a large extent on Panel Exhibit US-108.
This exhibit contains data comparing the prices of US and Canadian feeder and slaughter cattle, of
US and Mexican feeder cattle, and of US and Canadi an hogs, during the first nine months of 2010.
For each category, the data show a decrease in th e price differential between imported and domestic
livestock between January and September 2010.
319. As described above, in finding that US pr oducers were applying a COOL discount for
imported livestock, the Panel relied on numerous exhibits submitted by Canada and by Mexico which,
in its view, contained "direct evidence of majo r slaughterhouses applying a considerable COOL
discount of USD 40-60 per head for imported livesto ck", and showed that "major processors are
passing on at least some of the additional costs of the COOL measure upstream to suppliers of
imported livestock."612 These exhibits included: two affida vits submitted by Canada from exporters
of fed cattle to the United States describing declin es in cattle prices since the implementation of the
COOL measure 613; an affidavit from a Mexican industry group detailing the effects of the COOL
provisions for Mexican producers614; procurement documents from a US processor showing the terms
of trade for purchases of Mexican-born cattle 615; a 2009 letter from a US processor informing sellers
of the value differences between Mexican-born feed er cattle fed in the United States and US-born and
-fed cattle due to the costs of compliance with the COOL measure, which ranged from a $45 to
a $60 per head discount616; and several invoices indicating the sale prices of Mexican-born cattle sold
in the US market.617
320. The evidence contained in Panel Exhibit US-108, on the other hand, charts overall pricing
data. The figures that it contains, taken from several official US and Canadian sources, demonstrate
an overall decrease in the price differential betwee n imported and domestic lives tock, with prices for
Canadian cattle and hogs and for Mexican cattle incr easing at a higher rate than prices for US cattle
and hogs sold during the same period, that is, Ja nuary through September 2010. The United States

612Panel Reports, para. 7.356.
613Witness Statement of Harvey Dann, dated 22 February 2010 (Panel Exhibit CDA-57 (BCI));
Witness Statement of John Lawton, dated 22 February 2010 (Panel Exhibit CDA-81 (BCI)).
614Affidavit of the Chairman of the Confederación Nacional de Organizaciones Ganaderas (CNOG),
dated 17 May 2010 (Panel Exhibit MEX-37 (BCI)).
615Data on cattle procurement showing the terms of trade for Cargill's purchases of Mexican-born cattle
(March 2009) (Panel Exhibit MEX-46 (BCI)).
616Letter from a Tyson Fresh Meats, Inc. executive to the President of the Confederación Nacional de
Organizaciones Ganaderas (CNOG), dated 9 April 2009 (Panel Exhibit MEX-64 (BCI)).
617Affidavit of the Chairman of the Confederación Nacional de Organizaciones Ganaderas (CNOG),
dated 25 October 2010 (Panel Exhibit MEX-97 (BCI)); Affidavit of the Chairman of the Confederación
Nacional de Organizaciones Ganaderas (CNOG), dated 22 December 2010 (Panel Exhibit MEX-105 (BCI)).

also argued before the Panel, in its second written submission, that the data in Panel Exhibit US-108
"confirm[] that US feed lots and slaughter houses are not as a general matter discounting the price that
they pay for [Canadian and Mexican livestoc k] in response to the COOL measures".
618 The United
States noted that, due to transportation costs a nd possible quality discounts, "the prices paid for
Canadian and Mexican animals have historically b een discounted compared with the price paid for
US cattle."619 It also noted that, "[d]uring 2009, the pr ice differential between US cattle and imported
cattle widened slightly due to the economic downtur n, but this price differential has returned to
historic levels."620
321. We observe that the fact that the Panel did not refer to or discuss the evidence put forward by
the United States in Panel Exhibit US-108 could suggest that the Panel did not take account of this
evidence. The Panel did not explain why it did not cons ider this evidence to be relevant to its review
of livestock prices. However, we recall that the Ap pellate Body has found that a panel need not refer
to or discuss each and every piece of evidence put befo re it in order to comply with its obligations
under Article 11 of the DSU. 621 Therefore, the mere fact that the Panel did not refer to one specific
piece of evidence relating to prices is not dispositive of whether the Panel failed to make an objective
assessment of the facts. Rather, when a pane l makes no mention of a piece of evidence, the
participant raising a claim under Article 11 of the DSU must demonstrate that the evidence is so
material that the panel's failure to address it calls into question the objectivity of the panel's factual
assessment.
322. Based on its submissions before the Panel, we agree with the United States that the Panel
incorrectly stated that the United States had not responded to the evidence put forward by Canada and
by Mexico. We also cannot exclude that the Pane l may have ignored the evidence submitted by the
United States in its second written submission and, in particular, Panel Exhibit US-108. Even if this
is so, the United States does not explain in its su bmissions on appeal why these errors by the Panel
rise to the level of a violation of Article 11 of th e DSU. Instead, the United States argues that, despite
evidence that selected individual slaughterhou ses are imposing a COOL discount, Panel Exhibit
US-108 makes clear that this has not impacted overall prices in the market. In our view, the evidence
submitted by the United States was of a different na ture than the evidence submitted by Canada and
by Mexico, which referenced specific instance s of the application of a COOL discount by
US slaughterhouses. Furthermore, as Canada argue s, the data submitted by the United States reflect

618United States' second written submission to the Panel, para. 77.
619United States' second written submission to the Panel, para. 81.
620United States' second written submission to the Panel, para. 82.
621Appellate Body Report, Brazil – Retreaded Tyres, para. 202; Appellate Body Report, Chile – Price

changes in livestock prices during 2010, after the price effects of the COOL measure—implemented
in March 2009—would already have been felt. Th e data do not, therefore, compare livestock prices
before and after the implementation of the COOL me asure, or otherwise speak to the effect of the
COOL measure on prices of imported livestock.
323. Therefore, it does not seem to us that, on its face, the evidence set out in Panel Exhibit
US-108 vitiates the Panel's reliance on the evidence put forward by Canada and by Mexico. The
Panel may simply not have been pe rsuaded by that evidence. In any event, we recall that the Panel
was not required under the proper interpretation of th e national treatment obligation in Article 2.1 of
the TBT Agreement to find actual negative effects on the pr ices of imported livestock, and that the
Panel gave several other examples, in addition to the COOL discount, of the reduction in competitive
opportunities for livestock resulting from the COOL measure. 622 We thus do not consider that the
Panel's findings regarding a COOL discount were material to its overall legal findings under
Article 2.1. Nor do we consider that the fact th at the Panel did not specifically discuss Panel Exhibit
US-108, or the corresponding arguments set out in the United States' second written submission, casts
doubt on the objectivity of its factual findings regarding US livestock prices.
324. As for the Panel's findings regarding the Sumner Econometric Study, we recall that the Panel
assessed the content of both Canada's and the United States' econometric studies, and determined that
only the Sumner Econometric Study was "sufficiently robust" to account for price variations based on
factors not related to the COOL measure. 623 The Panel provided reas ons for this conclusion. 624 The
United States argues that the study does not suppor t the Panel's conclusion that the COOL measure
affected the price basis of Canadian livestock, a nd that in fact the study "does not find any price
effects on feeder cattle, feeder hogs, or slaughter hogs".625 The United States acknowledges, however,
that the study did show an impact on the prices for slaughter cattle, and we recall that the Panel found
that the majority of the cattle imported into the United States from Canada are in fact slaughter
cattle.
626

622That is, the Panel found that: (i) fewer processing plants are accepting imported livestock, and those
that do, do so at specific limited times; (ii) contractual terms for suppliers of imported livestock have changed
as a result of the COOL measure; (iii) certain suppliers of imported livestock have suffered significant financial
disadvantages resulting from the COOL measure, includi ng an increased price differential between imported
and domestic livestock and the refusal of financial institutions to provide credits and loans; and (iv) imported
cattle have been excluded from profitable premium beef programmes. (See Panel Reports, paras. 7.376-7.380)
623Panel Reports, para. 7.540.
624Panel Reports, paras. 7.540 and 7.541.
626Panel Reports, para. 7.141 (referring to United States' first written submission to the Panel, para. 89;
Panel Exhibit US-28, Table 3; and Panel Exhibit CDA-196).

325. In addition, as explained above, the Panel eval uated the Sumner Econometric Study as part of
its examination of the actual trade effects of the COOL measure. The Panel made explicit that its
finding of less favourable treatment was not depend ent on its examination of the actual trade effects
of the COOL measure and the evidence relating to such effects. Nor was the Panel required under
Article 2.1 to confirm its legal conclusions based on the actual trade effects of the measure in the
US market. We therefore consider that, even if the Panel were to have erred in its appreciation of the
Sumner Econometric Study, such an error would not have materially affected its ultimate legal
conclusion under Article 2.1 of the TBT Agreement.
326. We therefore find that the United States has not demonstrated that the Panel acted
inconsistently with Article 11 of the DSU in its assessment of the evidence relating to the price
differential between domestic and imported livestock.
3. Does the Detrimental Impact on Imported Livestock Violate Article 2.1?
327. Having evaluated and rejected the United States' challenge to the Panel's assessment of the
facts with respect to segregation, commingling, and the price differential between domestic and
imported livestock, we continue our analysis under Article 2.1 of the TBT Agreement. Only if we find
that the detrimental impact reflects discrimination in violation of Article 2.1, can we uphold the
Panel's finding that the COOL measure accords less favourable treatment to imported livestock than
to like domestic livestock. We begin by summarizi ng the participants' arguments on appeal in this
respect, and we then identify the relevant findings made by the Panel.
(a) Arguments on Appeal
328. With respect to US – Clove Cigarettes 627, the United States contends that the Appellate Body
found that the measure at issue in that dispute had a detrimental impact on imported products, and
then inquired as to whether the measure itself provided different treatment to imported products on the
basis of origin. In the United St ates' view, this inquiry was not m eant to provide an exception or to
apply an additional test under Article 2.1. Rather, the inquiry performed in US – Clove Cigarettes is a
way to illuminate whether a measure actually treat s imports and like domestic products differently.
Therefore, under Article 2.1, a panel should analy ze whether a measure is even-handed to determine
whether the measure has a detrimental impact, as well as to determine whether that impact stems

627The United States' appellant's submission was filed prior to the circulation of the Appellate Body
report in US – Clove Cigarettes and therefore did not contain arguments relating to the Appellate Body's
findings in that case. The United States addres sed the relevance of the Appellate Body report in US – Clove
Cigarettes in its oral statement and responses to questioning at the oral hearing.

exclusively from a legitimate regulatory distinction rather than reflecting discrimination. Ultimately,
then, the question is whether the measure is even -handed. If it is even-handed, because it does not
provide different treatment in fact, then it would not breach Article 2.1.
329. Regarding the "legitimate regulatory distinction", the United States points out that it is
important not to confuse this notion with that of legitimate objectives. In its view, a Member could
have a legitimate objective underlying its measure, but make illegitimate distinctions within that
regulation. In applying this concept to the C OOL measure, the United States argues that its measure
does not contain a regulatory distinction, because there are no differential requirements imposed on
products, or requirements that some products must be labelled and others not. In this respect, the
United States emphasizes that the mere fact that the measure identifies the origins of products in order
to label them accordingly at retail does not mean that there is a regulatory distinction made between
domestic and imported products . Rather, the labels are simply c onveying product information that is
relevant to the consumer, and different informa tion is conveyed depending on where the various
production steps took place for the particular product.
330. Canada submits that, "[a]s a matter of logic", it would be incongruous for the United States to
claim on appeal that the COOL measure implements a legitimate regulatory distinction, because,
before the Panel, it never sought to defend the asserted violation of the parallel obligation in
Article III:4 of the GATT 1994 on the grounds of a legitimate objective under Article XX of the
GATT 1994. 628 Canada contends that the design, archit ecture, revealing structure, operation, and
application of the COOL measure show that its objective is protectionism, and argues that a
regulatory distinction based on such an objective is not legitimate. Canada further argues that the
design, architecture, revealing structure, operati on, and application of the COOL measure establish
that the discrimination it causes is not consistent with an even-handed application of a legitimate
regulatory distinction. The structure and design of the COOL measure are such that imported
livestock can be used to produce only Label B or C meat, whereas meat derived from US-born and
-raised animals has exclusive access to Label A, as well as limited access to Labels B and C. As a
result, the segregation costs and reporting requireme nts create uneven costs that disproportionately
fall on imported livestock. In addition, the detrim ental impact incurred by imported livestock cannot
be said to stem exclusively from legitimate regulat ory distinctions, because the objective that the
United States claims to be pursuing—that is, providing consumers with information on where the
animal from which the meat is derived was born, raised, and slaughtered—is not reflected in the
COOL measure. Nor is this objective "legitimat e" for purposes of Article 2.1, because, in US – Clove

628Canada's appellee's submission, p. 25, heading IV.C.2.

Cigarettes, the Appellate Body's interpretation of leg itimacy in this context was limited to those
objectives contained in the "closed lists" of the sixth recital of the preamble of the TBT Agreement and
of Article XX of the GATT 1994.
629
331. In Mexico's view, although the Panel did not have the benefit of the Appellate Body report in
US – Clove Cigarettes, the Panel's finding of incons istency under Article 2.1 of the TBT Agreement is
consistent with the Appellate Body's test and is le gally correct. This is because it is evident from the
Panel's findings that the COOL measure is not even-handed and that the detrimental impact on
imported livestock does not stem exclusively from a legitimate regulatory distinction. Rather, the loss
of competitive opportunities resulting from the COOL measure clearly reflects discrimination against
the group of imported products. Mexico points to sever al factors in support of this argument, namely:
(i) that the COOL measure is mandatory despite low consumer demand for such information; (ii) that
the COOL measure is designed so that the least costly and most commercially desirable method of
compliance is to exclude imported livestock; (iii) that the COOL measure is designed to distinguish
between meat made from US-born cattle and meat made from foreign cattle rather than to give
information on origin, as is clear from the fact that only Label A provides meaningful information;
(iv) that the COOL measure includes "completely ar bitrary" flexibility allowing Label B to be used
for Category A meat when Category A and Categor y B meat are processed "on the same production
day"; and (v) that the COOL measure "is not e ffective at achieving its objective", because "very little
meat in the US market is accurately la belled for origin by the COOL measure".
630 Finally, Mexico
asserts that the sixth recital of the preamble of the TBT Agreement provides "an exhaustive list of the
justifications that are available for measures that otherwise would violate Article 2.1" because they
qualify as legitimate regulatory distinctions, and none of those justifications are applicable to the
COOL measure.631
(b) Relevant Panel Findings
332. We point out, as a preliminary matter, that th e Panel identified the objective pursued by the
United States through the COOL measure as being "to provide consumer information on origin" 632,
and that the origin of beef and pork is defined, under the COOL measure, as a function of the

629Canada's appellee's submission, para. 56 (referring to Appellate Body Report, US – Clove Cigarettes,
paras. 96, 100, 101, and 173).
632Panel Reports, paras. 7.617, 7.620, 7.671, and 7.685. The Panel also referred several times to the
additional objective of preventing consumer confusion. (S ee, for example, paras. 7.671 and 7.713) Each of the
participants has appealed certain legal and factual asp ects of the Panel's determination of the objective of the
COOL measure and of whether such objective is "leg itimate" within the meaning of Article 2.2 of the
TBT Agreement. Those grounds of appeal are dealt with in section VI of these Reports.

countries in which the cattle and hogs from which the meat is derived were born, raised, and
slaughtered.
333. In our view, the Panel's findings regarding the various origin categories for muscle cuts of
meat, and the labelling requirements applicable to each , are particularly relevant to an inquiry as to
the COOL measure's even-handedness. The Panel found that Category A refers to US origin meat,
derived from animals exclusively born, raised, and slaughtered in the United States. 633 Category B
refers to mixed origin meat, derived from animals not exclusively born, raised, and slaughtered in the
United States, and not imported into the United St ates for immediate slaughter—that is, to animals
born outside, but raised and slaughtered in the United States. 634 Category C also denotes meat of
mixed origin, but specifically refers to meat derived from animals born and raised in a foreign country
and imported into the United States for immediate slaughter. 635 Category D meat derives from
animals not born, raised, or slaughtered in the United St ates. This meat is considered to be of
"foreign" origin.
334. With respect to labelling, the Panel also made a number of relevant findings. First, the Panel
made findings regarding the products that must be labelled, and the retail entities that are required to
label the covered commodities. The Panel found that the COOL measure applies to muscle cuts of,
and ground, beef and pork sold at the retail leve l, but excludes certain products and entities from its
coverage. By its terms, the COOL measure appli es only to "retailers", which are defined as those
entities selling in excess of $230,000 worth of fruit and vegetables per year. 636 Therefore, the COOL
measure does not apply to smaller retail grocery st ores, or to retailers who do not sell fruit and
vegetables.637 The Panel also found that "the COOL statute excludes from its scope any of the
covered commodities that are an 'ingredient in a processed food item'". 638 Based on the 2009 Final
Rule (AMS), such processing includes "cooking, curing, smoking and restructuring". 639 Further, the

633Panel Reports, para. 7.89 (referring to COOL statute, section 1638a(2)(A)); 2009 Final Rule (AMS),
section 65.260.
634Panel Reports, para. 7.89 (referring to COOL statute, section 1638a(2)(B)); 2009 Final Rule (AMS),
section 65.300(e)(1).
635Panel Reports, para. 7.89 (referring to COOL statute, section 1638a(2)(C)); 2009 Final Rule (AMS),
section 65.300(e)(3).
636Panel Reports, para. 7.101 (referring to 2009 Final Rule (AMS), section 65.205). See also 2009
Final Rule (AMS), section 65.240.
637As Canada and Mexico point out in their submissions, by virtue of this definition of "retailer", the
COOL measure does not apply to butcher shops—no matter how large—because they do not sell fruit and
vegetables. (Canada's appellee's submission, para. 59 (fourth bullet point); Mexico's other appellant's
submission, para. 15; Mexico's appellee's submission, paras. 58 (fifth bullet point) and 169 (second bullet
point))
638Panel Reports, para. 7.104 (quoting COOL statute, section 1638(2)(B)).
639Panel Reports, para. 7.89 (referring to 2009 Final Rule (AMS), section 65.220).

COOL statute provides that it "shall no t apply to food service establishments".
640 The COOL statute
defines a "food service establishment" as "a restau rant, cafeteria, lunch room, food stand, saloon,
tavern, bar, lounge, or other similar facility ope rated as an enterprise engaged in the business of
selling food to the public". 641 The 2009 Final Rule (AMS) furt her specifies that "[s]imilar food
service facilities include salad bars, delicatessens, and other food enterprises located within retail
establishments that provide ready-to-eat foods that are consumed either on or outside of the retailer's
premises".642
335. Given the above exemptions and exclusions, the Panel found that "a considerable proportion
of beef and pork is exempted from the COOL measure". 643 Regarding the "relevance of these
exceptions in terms of practical compliance with the COOL measure", the Panel noted the United
States' response that:
[it] is not aware of any evidence to suggest that meat producers in the
distribution chain—feed lot operators and slaughterhouses—are
systematically separating source animals or meat products depending
on whether 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 pr oduct is often not known at any
particular stage of the production chain.
644
The Panel found that the "complainants' answers to the same question confirm that there is no
systematic differentiation based on the ultimate destination of the meat produced".645
336. The Panel further observed that the COOL measur e specifies how each of the origins of meat
must be labelled in various circumstances. The COOL measure requires Category A meat to be
labelled as US origin, except when it is commingled on a single production day with Category B
and/or Category C meat, in which case it may be la belled as mixed origin, for example, "Product of
Mexico and the United States".
646 Category B meat must always be labelled as having more than one
country of origin, with the countries listed in any order, even when it is commingled with Category A
and/or C meat. 647 Category C meat also must be labelled as mixed origin, and the United States
cannot be listed first, except when it is commingled with Category A and/or B meat, in which case the

640Panel Reports, para. 7.106.
641Panel Reports, para. 7.107 (quoting COOL statute, section 1638(4)).
642Panel Reports, para. 7.108 (quoting 2009 Final Rule (AMS), section 65.140).
643Panel Reports, para. 7.417.
644Panel Reports, para. 7.417 (referring to United States' response to Panel Question 93).
645Panel Reports, para. 7.418 (referring to Canada's and Mexico's responses to Panel Question 93).
646Panel Reports, paras. 7.94, 7.96-7.98, and 7.100.
647Panel Reports, paras. 7.94-7.100.

countries may be listed in any order. 648 By contrast, Category D meat must be labelled with its
"country of origin", as identified in the relevant customs entry documents649, for example, "Product of
Brazil".
337. The Panel found that, due to the comming ling flexibilities under the COOL measure,
"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". 650 It relied on this fact in reaching its later conclusion that "a B or C label
affixed to a meat product may not necessarily co rrespond to the definition of origin under the
measure".651 It noted that this is the case even w ith meat derived from animals born, raised, and
slaughtered in the United States (that is, Category A meat), as it may be carrying Label B or Label C
rather than Label A, due to the commingling provisions.652
338. In terms of the information to be communicate d to consumers through the COOL labels, the
Panel considered that "several elements" were involved, based on "the US definition of origin [which]
involves information on the places where animals from which meat is derived were born, raised, and
slaughtered".653 This being the case, the Panel considered a "Product of the United States" label, that
is, Label A, to be the only label that provides "meaningful information for consumers", because all of
the production steps in fact took place in the United States. 654 It found, however, that the descriptions
of origin on Label B a nd Label C are "confusing" 655, and "do[] not, in fact, deliver origin information
as defined under the measure or as the consumer might understand it". 656 A label stating "Product of
the US, Mexico", for example, "does not describe what 'the US and Mexico' means as far as origin of
the meat is concerned". 657 Furthermore, given "the intercha ngeable use of Label B and Label C
allowed for commingled meat", the Panel found that even "a perfect consumer who is fully informed

648Panel Reports, paras. 7.95-7.100.
649Panel Reports, paras. 7.99, 7.100, and 7.119. See also para. 7.674.
650Panel Reports, para. 7.97. (original emphasis)
651Panel Reports, para. 7.703.
652Panel Reports, para. 7.703.
653Panel Reports, para. 7.699.
654Panel Reports, para. 7.718.
655Panel Reports, para. 7.718.
656Panel Reports, para. 7.699.
657Panel Reports, para. 7.700. The Panel explained that such a label could be understood as meaning
products comprising meat originating in both the United States and Mexico. The Panel added that, where such a
label is affixed to a package containing a single piece of meat, the meaning of the two country names listed on
the label is not clear, and the average consumer woul d be unable to understand the meaning of a specific
COOL label without also understanding the definition of each labe lling category under the COOL measure.
(Ibid.)

of the meaning of different categories of labels … may never be assured that the label precisely
reflects the origin of meat as defined under the COOL measure".
658
339. Finally, with respect to the recordkeeping a nd verification requirements, the Panel found that,
in order "to comply with the COOL measure, livest ock and meat processors need to possess, at each
and every stage of the supply and distribution chain, the kind of origin information required by the
various COOL labels for which each animal or portion of meat is eligible, and they need to transmit
such information to the next processing stage".
659 Based on this finding, the Panel noted that, where a
producer chooses to purchase and process both domestic and imported livestock without regard to
origin, it must nevertheless "identif[y] by orig in … each and every livestock and piece of meat
throughout the supply and distribution chain". 660 The Panel further quoted the following from the
AMS' analysis of the costs and benefits of the COOL measure:
[T]his [Final R]ule directly regulates the activities of retailers (as
defined by the law) and their supplie rs. 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, virtuall y 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.
661
340. In our view, these findings provide a sufficien t basis for us to determine whether the
detrimental impact on Canadian and Mexican livestock stems exclusively from a legitimate regulatory
distinction. That is, these findings allow us to pronounce on whether the COOL measure is designed
and applied in an even-handed manner, or whethe r it lacks even-handedness, for example, because it
is designed or applied in a manner that constitutes a means of arbitrary or unjustifiable discrimination,
and thus reflects discrimination in violation of Article 2.1 of the TBT Agreement. If we determine that
the regulatory distinctions drawn by the COOL me asure are designed or applied in a manner that
constitutes arbitrary or unjustifiable discriminati on, those distinctions cannot be considered
"legitimate", and the COOL measure will be inconsiste nt with Article 2.1. In order to make this
determination, we proceed to scrutinize "the particular circumstances" of this case, including "the
design, architecture, revealing structure, operation, and application" of the COOL measure.

658Panel Reports, para. 7.702.
659Panel Reports, para. 7.317.
660Panel Reports, para. 7.336.
661Panel Reports, para. 7.318 (quoting Panel Exhibits CDA-5 and MEX-7, AMS' "Analysis of Benefits
and Costs", at p. 2684).

(c) Does the Detrimental Impact Reflect Discrimination?
341. We first identify the relevant regulatory distinction. The COOL measure defines the origin of
beef and pork as a function of the countries in wh ich certain steps of the production process (birth,
raising, and slaughter) take place. The COOL measur e also requires retailers of muscle cuts of beef
and pork to label that meat with one of four mandatory labels. We consider that it is the distinctions
between the three production steps, as well as between the four types of labels that must be affixed to
muscle cuts of beef and pork, that constitute th e relevant regulatory distinctions under the COOL
measure. Accordingly, we must examine, based on the particular circumstances of this case, whether
these distinctions are designed and applied in an even-handed manner, or whether they lack
even-handedness, for example, b ecause they are designed or app lied in a manner that constitutes
arbitrary or unjustifiable discrimination.
342. We start by considering the recordkeeping and verification requirements imposed by the
COOL measure, which the Panel found to be the source of the incentive for US producers to process
exclusively domestic livestock. As already explained, the Panel found that, at each and every stage of
the supply and distribution chain, livestock and m eat producers need to possess information sufficient
to identify by origin each and every animal and piec e of meat, and must transmit such information to
the next processing stage. 662 Producers must maintain such reco rds for a period of one year from the
date of their purchase or sale of the livestock or meat663, and be able to provide these records verifying
origin to the Secretary of Agricu lture in the event of an audit. 664 In other words, the recordkeeping
and verification requirements of the COOL measure require livestock and meat producers to track and
transmit to their downstream buyers information regarding the countries in which each production
step took place for the animals and/or meat that they process. 665 Thus, for example, a livestock
producer must maintain and transmit information suffi cient to enable its customers to differentiate
between cattle born and raised in the United States , and cattle born in Mexico and raised in the
United States. Similarly, a slaughterhouse must main tain information sufficient to enable it to
differentiate between Canadian-born but US-ra ised hogs, and hogs imported from Canada for

662Panel Reports, paras. 7.317 and 7.336.
663Panel Reports, para. 7.118. See also 2009 Final Rule (AMS), section 65.500(b)(1) and (3).
664Panel Reports, para. 7.117. See also COOL statute, section 1638a(d); and 2009 Final Rule (AMS),
section 65.500(a).
665Specifically, the Panel found that, in principle:
… 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 information required by the various COOL labels for which
each animal or portion of meat is elig ible, and they need to transmit such
information to the next processing stage.
(Panel Reports, para. 7.317)

immediate slaughter in the United States, as these two types of hogs would fall within different origin
categories under the COOL measure.
343. As designed and applied, however, the COOL measure does not impose labelling
requirements for meat that provide consumers with origin information commensurate with the type of
origin information that upstream livestock producers and processors are required to maintain and
transmit. Rather, the origin information that must be conveyed to consumers is less detailed, and will
often be less accurate. This is because the COOL measure requires the labels to list the country or
countries of origin, but does not require the labels to mention production steps at all. If, for example,
the relevant production steps took place in more than one country, the relevant label (B or C) will
identify more than one country, but will not identify which production step took place in which of
those countries.
666 Under the labelling rules, labels for Ca tegory B meat may also list countries of
origin in any order 667, such that the order of countries liste d on the labels cannot be relied upon to
indicate where certain production steps took place. Furthermore, due to the additional labelling
flexibilities allowed for commingled meat, a retail la bel may indicate that meat is of mixed origin
when in fact it is of exclusively US origin, or that it has three countries of origin when in fact it has
only one or two.
668 For Category D meat, the COOL measure requires only that the customs
designation of origin be indicated.669 Given that the United States does not use the same definition of
"origin" for customs purposes as it does for the COOL measure 670, a D Label will not convey
information on the countries of birth or raising of the livestock from which the imported meat was
derived. Even Label A, indicating "Product of th e USA", which the Panel found to be the only label
that provides "meaningful information for consumers" 671, is not required to refer explicitly to the
productions steps of birth, raising, and slaughter.672
344. In comparing the origin information require ments imposed on upstream producers with the
origin information conveyed to consumers, we also consider relevant the fact that the COOL measure
exempts from its labelling requirements muscle cuts of beef and pork that are "ingredient[s] in a
processed food item", or are sold in a "food service esta blishment" or in an establishment that is not a

666See Panel Reports, paras. 7.89-7.100.
667Panel Reports, para. 7.97. See also 2009 Final Rule (AMS), section 65.300(e)(4).
668Panel Reports, paras. 7.93-7.100. See also 2009 Final Rule (AMS), section 65.300(e)(2) and (4).
669Panel Reports, para. 7.119 and footnote 179 thereto. See also 2009 Final Rule (AMS),
section 65.300(f).
670See Panel Reports, para. 7.674.
671Panel Reports, para. 7.718.
672Panel Reports, para. 7.100. See also 2009 Final Rule (AMS), section 65.300(d).

"retailer".673 As noted above, upstream producers do not, and likely could not, distinguish between
livestock that will be used to produce a product ex empt from the labelling requirements, and livestock
that will be used to produce covered commodities that must be labelled when sold at retail. This is
because "the ultimate disposition of a meat product is often not known at any particular stage of the
production chain". 674 This means that, generally speaking, information regarding the origin of all
livestock will have to be identified, tracked, and transmitted through the chain of production by
upstream producers in accordance with the recordkeeping and verification requirements of the COOL
measure, even though "a considerable proportion" 675 of the beef and pork derived from that livestock
will ultimately be exempt from the COOL requirements and therefore carry no COOL label at all.
345. We also recall that the Panel considered that the burden of the recordkeeping and verification
requirements, the consequent need for segregation, and the associated compliance costs, are all lower
when a given producer processes single origin livestock only. 676 Conversely, the more origins
involved, the higher the burden and the associated costs. 677 Given the particular circumstances of the
US market678, the least costly way of complying with th e COOL measure is to rely exclusively on
domestic livestock.679 It follows from these findings that the least costly way of complying with the
COOL measure is to process exclusively livestock that are eligible for an A Label, that is, for the only
label that conveys meaningful information to co nsumers. When a producer nevertheless chooses to
use livestock of different origins, compliance with the COOL measure will not only be more costly, it
will also entail the subsequent use of Label B and/ or C, which are labels that the Panel found to
convey confusing information to consumers.
346. Taking account of the overall architecture of the COOL measure and the way in which it
operates and is applied, we consid er the detail and accuracy of the origin information that upstream
producers are required to track and transmit to be sign ificantly greater than the origin information that

673Panel Reports, paras. 7.103-7.108. See also COOL statute, sections 1638(2)(B) and 1638a(b); and
2009 Final Rule (AMS), sections 65.140, 65.220, and 65.240. As explained supra, at footnote 637, the
definition of a "retailer" does not encompass butcher shops or small grocery stores.
675Panel Reports, para. 7.417.
676Panel Reports, paras. 7.346 and 7.347.
677The Panel considered it "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", which "leads to higher compliance costs". (Panel Reports, para. 7.331. See also para. 7.346)
678The Panel reasoned that processing exclusively domestic livestock is in general less costly and more
viable than processing exclusively imported livestock, because livestock imports are small in comparison to
domestic livestock production, such that US demand cannot be satisfied with exclusively foreign livestock, and
because US livestock are often geographically closer to US domestic markets than imported livestock. (Panel
Reports, para. 7.349)
679Panel Reports, para. 7.350.

retailers of muscle cuts of beef and pork are required to convey to their customers. That is, the labels
prescribed by the COOL measure reflect origin in formation in significantly less detail than the
information regarding the countries in which the liv estock were born, raised, and slaughtered, which
upstream producers and processors are required to be ab le to identify in their records and transmit to
their customers. Furthermore, upstream produ cers will be subject to the COOL measure's
recordkeeping and verification requirements even when the meat derived from their animals is
ultimately exempt from the labelling requirements of the COOL measure, for example, due to the type
of establishment in which the meat is sold. Lastly, a processor's deci sion to use livestock of different
origins rather than exclusively US origin livestock will not only be more costly, it will also lead to
confusing information being conveyed to consumers.
347. For all of these reasons, the informational requirements imposed on upstream producers under
the COOL measure are disproportionate as compared to the level of information communicated to
consumers through the mandatory retail labels. That is, a large amount of information is tracked and
transmitted by upstream producers for purposes of provi ding consumers with information on origin,
but only a small amount of this information is actually communicated to consumers in an
understandable manner, if it is communicated at all. Yet, nothing in the Panel's findings or on the
Panel record explains or supplies a rational basis for this disconnect. Therefore, we consider the
manner in which the COOL measure seeks to provide information to consumers on origin, through the
regulatory distinctions described above, to be arb itrary, and the disproportionate burden imposed on
upstream producers and processors to be unjustifiable.
348. We emphasize that this lack of corresponden ce between the recordkeeping and verification
requirements, on the one hand, and the limited c onsumer information conveyed through the retail
labelling requirements and exemptions therefrom, on the other hand, is of central importance to our
overall analysis under Article 2.1 of the TBT Agreement. This is because, in reaching its finding of
detrimental impact, the Panel found that it is th e recordkeeping and verification requirements that
"necessitate" segregation
680, and that create an incentive for US producers to process exclusively
domestic livestock and a disincentive to process importe d livestock. That is, the Panel found that the
recordkeeping and verification requirements im posed under the COOL measure lead to the
detrimental impact on imported livestock in the US market.681 We have affirmed this finding above.
349. In sum, our examination of the COOL me asure under Article 2. 1 reveals that its
recordkeeping and verification requirements impose a disproportionate burden on upstream producers

680Panel Reports, para. 7.327.
681Panel Reports, para. 7.372. See also paras. 7.381, 7.420, and 7.548.

and processors, because the level of information conveyed to consumers through the mandatory
labelling requirements is far less detailed and accurate than the information required to be tracked and
transmitted by these producers and processors. It is these same recordkeeping and verification
requirements that "necessitate" segregation, meaning that their associated compliance costs are higher
for entities that process livestock of different origins. Given that the least costly way of complying
with these requirements is to rely exclusively on domestic livestock, the COOL measure creates an
incentive for US producers to use exclusively domestic livestock and thus has a detrimental impact on
the competitive opportunities of imported livestock. Furthermore, the recordkeeping and verification
requirements imposed on upstream producers and pro cessors cannot be explained by the need to
convey to consumers information regarding the countries where livestock were born, raised, and
slaughtered, because the detailed information re quired to be tracked and transmitted by those
producers is not necessarily conveyed to consumers through the labels prescribed under the COOL
measure. This is either because the prescribed labels do not expressly identify specific production
steps and, in particular for Labels B and C, cont ain confusing or inaccurate origin information, or
because the meat or meat products are exempt from the labelling requirements altogether. Therefore,
the detrimental impact caused by the same re cordkeeping and verification requirements under the
COOL measure can also not be explained by the need to provide origin information to consumers.
Based on these findings, we consider that the regulat ory distinctions imposed by the COOL measure
amount to arbitrary and unjustifiable discrimination against imported livestock, such that they cannot
be said to be applied in an even-handed manner. Ac cordingly, we find that the detrimental impact on
imported livestock does not stem exclusively from a legitimate regulatory distinction but, instead,
reflects discrimination in violation of Article 2.1 of the TBT Agreement.
350. We therefore uphold, albeit for different reasons, the Panel's ultimate finding, in
paragraph 7.548 of the Panel Reports, that the COOL measure, particularly in regard to the muscle cut
meat labels, is inconsistent with Article 2.1 of the TBT Agreement because it accords less favourable
treatment to imported livestock than to like domestic livestock.
682
VI. Article 2.2 of the TBT Agreement
A. Introduction
351. We turn now to the appeals relating to th e Panel's finding that the COOL measure is
inconsistent with Article 2.2 of the TBT Agreement. In ruling on the claims raised by Canada and by
Mexico under Article 2.2 of the TBT Agreement , the Panel found that the COOL measure is

682See also Canada Panel Report, para. 8.3(b); Mexico Panel Report, para. 8.3(b).

"trade-restrictive"
683; that the objective pursued by the Un ited States through the COOL measure is
"to provide consumer information on origin" 684; and that this objective is "legitimate" within the
meaning of Article 2.2. 685 Ultimately, the Panel sustained the claims of the complainants and found
that "the COOL measure violates Article 2.2 because it does not fulfil the objective of providing
consumer information on origin with respect to meat products".
686
352. Each of the participants challenges aspects of the Panel's interpretation of Article 2.2 of the
TBT Agreement and the application of its chosen lega l framework to the COOL measure. The
United States requests us to reverse the Panel' s ultimate conclusion that the COOL measure is
inconsistent with Article 2.2, whereas both Canada and Mexico request us to uphold this finding. In
the event that we accept the United States' app eal and reverse the Panel's finding that "the
COOL measure violates Article 2.2 because it does not fulfil the objective of providing consumer
information on origin with respect to meat products" 687, both Canada and Mexico request us to
complete the analysis and find that the COOL measur e is inconsistent with Article 2.2 because it is
more trade restrictive than necessary to fulfil a legitimate objective.
353. The United States seeks reversal of the Panel's ultimate conclusion that the COOL measure is
inconsistent with Article 2.2 on three main grounds. First, the United States challenges the Panel's
finding that the COOL measure is "trade-restrictive". 688 Second, the United States submits that the
Panel wilfully distorted and misrepresented the United States' position as to its chosen "level of
fulfilment" of the objective, contrary to Article 11 of the DSU, and further, failed to consider all the
relevant information regarding that "level of fulfilment".689 Third, the United States appeals the legal
framework adopted by the Panel to determine whet her a measure is more trade restrictive than
necessary "to fulfil" a legitimate objective, as well as the Panel's application of that framework to the
COOL measure.690
354. While supporting the Panel's overall conclusion that the COOL measure is inconsistent with
Article 2.2 of the TBT Agreement , Canada seeks modification of certain elements of the Panel's

683Panel Reports, para. 7.575.
684Panel Reports, para. 7.617. See also paras. 7.620 and 7.715. We recall in this respect that the COOL
measure defines the "origin" of beef and pork as a function of the country or countries in which the livestock
from which the meat is derived were born, raised, and slaughtered.
685Panel Reports, para. 7.651.
686Canada Panel Report, para. 8.3(c); Mexico Panel Report, para. 8.3(c). See also Panel Reports,
para. 7.720.
687Canada Panel Report, para. 8.3(c); Mexico Panel Report, para. 8.3(c). See also Panel Reports,
para. 7.720.

analysis. Specifically, Canada challenges the Pane l's approach to identifyi ng the objective of the
COOL measure.691 Canada further argues that, in its assess ment of Canada's arguments and evidence
adduced to show that the objective of the COOL measure is trade protectionism, the Panel acted
inconsistently with its duties under Article 11 of the DSU. 692 Canada further contests the Panel's
finding that the objective of providing consumer information on origin is "legitimate", within the
meaning of Article 2.2. 693 Finally, should the United States be successful in obtaining reversal of the
Panel's finding that the COOL measure is inconsis tent with Article 2.2 because it does not fulfil its
objective, then Canada requests us to complete th e analysis and find that the COOL measure does not
comply with Article 2.2 because there are less trade-restrictive alternative measures available.694
355. Each of the grounds raised by Mexico in its ot her appeal is conditional upon our reversal of
the Panel's finding that the COOL measur e is inconsistent with Article 2.2. 695 In that event, Mexico
seeks modification of certain aspects of the Panel's reasoning and an ultimate finding that the COOL
measure is inconsistent with Article 2.2. Mexico challenges the Panel's approach to identifying the
objective pursued through the COOL measure, and asserts that the "real" objective of the COOL
measure is the protection of the US domestic cattle industry. 696 In the event that we reverse the
Panel's Article 2.2 finding of incons istency, but confirm the Panel's findings that the objective of the
COOL measure is to provide consumer information on origin and that such objective is legitimate,
then Mexico requests us to complete the analysis and find that the COOL measure is inconsistent with
Article 2.2. In this regard, Mexico contends that there are less trade-restrictive alternative measures
available to the United States to fulfil its objective, taking into account the risks non-fulfilment would

691Canada alleges that the Panel erred in three ways: (i) by focusing on a general policy objective that
the COOL measure might pursue, as articulated by the United States, rather than on the actual objective pursued
by the COOL measure; (ii) by not considering the desi gn, architecture, and structur e of the COOL measure as
relevant; and (iii) by failing to identify the objective in sufficient detail to determine its legitimacy. (Canada's
692Canada's other appellant's submission, paras. 32 and 33.
693Canada's other appellant's submission, para. 47.
694Canada's other appellant's submission, para. 69. As discussed further below, Canada identifies four
possible alternative measures that, in its view, demonstrate that the COOL measure is more trade restrictive than
necessary to fulfil its objective.
695Mexico's other appellant's submission, paras. 28 and 47. At the oral hearing, Mexico explained that,
if the Appellate Body accepts the objective as defined by the Panel, and further accepts that it is legitimate, then
its appeal should be considered as a conditional appeal. However, if the Appellate Body overturns either of
these findings, then its arguments would be more akin to a request for completion of the analysis.
696Mexico's other appellant's submission, para. 44. Mexico contends that, in concluding otherwise, the
Panel committed legal error and, in addition, failed to conduct an objective assessment of the matter, as required
under Article 11 of the DSU. (Mexico's other appellant's submission, para. 40)

create.
697 While we take note of the conditional nature of Mexico's other appeal, we will consider its
arguments together with Canada's when we review the relevant portions of the Panel's analysis.
356. Below, we set out an overview of the Panel's findings before turning to assess the merits of
the participants' arguments on appeal.
B. The Panel's Analysis
357. The Panel began by setting out the legal frame work that it would apply in assessing the
complainants' claims that the COOL measure is inconsistent with Article 2.2 of the TBT Agreement.
The Panel understood that "the first sentence of Artic le 2.2 sets out a general principle", reflected in
the fifth recital of the preamble of the TBT Agreement, as well as in Article 2.5 of the TBT Agreement,
namely, that Members are not to create unnecessary obs tacles to international trade through technical
regulations.698 The Panel explained that the conformity of a measure with that "general principle"
must be ascertained based on the elements of the sec ond sentence of Article 2.2, because, in its view,
the second sentence explains what the first sentence means.699
358. The Panel observed that the second sentence of Article 2.2 comprises "several elements" 700,
and that an analysis under that sentence could vary depending on the circumstances of a given
dispute.701 The Panel explained that its assessment of the Article 2.2 claims in these disputes would
entail consideration of whether the complainants had established the following:
(i) that the COOL measure is trade restrictive within the meaning of Article 2.2;
(ii) that the objective pursued by the United States through the COOL measure is not
legitimate; and
(iii) if the objective is legitimate, that the COOL measure is more trade restrictive than
necessary to fulfil a legitimate objective.702
359. With respect to the first step, the Panel consid ered it unnecessary to define the exact scope of
the term "trade-restrictive" under Article 2.2. Noneth eless, it did consider the scope of this term to be

697Mexico's other appellant's submission, para. 47.
698Panel Reports, para. 7.551.
699Panel Reports, para. 7.552.
700Panel Reports, para. 7.553.
701Panel Reports, para. 7.553.
702Panel Reports, para. 7.558.

"broad".703 For the Panel, a demonstration of a measure's trade-restrictiveness does not require a
demonstration of any actual trade effects. Ra ther, the focus is on the competitive opportunities
available to imported products. 704 The Panel declined to express a general view on the relationship
between a technical regulation's non-conformity with Article 2.1 and the assessment of
"trade-restrictiveness" under Article 2.2. 705 For purposes of these disputes, the Panel recalled its
earlier finding that the COOL measure "negativel y affects imported livestock's conditions of
competition in the US market in relation to lik e domestic livestock by imposing higher segregation
costs on imported livestock". 706 On this basis, the Panel concluded that the complainants had
demonstrated that the COOL measure is "trade-restri ctive" within the meaning of Article 2.2. The
Panel also explained that it was not making a finding on the level of trade-restrictiveness of the COOL
measure, as this question would be addressed, if necessar y, at the third step in its analysis of whether
the COOL measure is more trade restrictive than necessary.707
360. Under the second step of its test, the Panel be gan by seeking to identify the objective pursued
by the United States through the COOL measure. The Panel noted that, while Canada and Mexico
argued that the "true objective of the COOL measure is to protect domestic industry", the United
States responded that its objective is to provide consumer information on origin.
708 The Panel found
the complainants' arguments to be "misplaced on several grounds". 709 On the basis of the information
provided by the United States when it notified the COOL measure to the TBT Committee, as well as
the United States' declared objective, as reflected in its submissions to the Panel during the course of
the Panel proceedings, the Panel identified the obj ective pursued by the United States as being "to
provide consumer information on origin" 710 and, further, as being "to provide as much clear and
accurate origin information as possible to consumers".711
361. Turning to the question of whether the objective pursued by the United States is "legitimate",
the Panel stated that Article 2.2 demonstrates that the legitimacy of a given objective must be found in
the "genuine nature" of the objective, which is "justifiable" and "supported by relevant public policies
or other social norms".712 The Panel further stated that "providing consumers with information on the

703Panel Reports, para. 7.572.
704Panel Reports, para. 7.572.
705Panel Reports, para. 7.573.
706Panel Reports, para. 7.574.
707Panel Reports, para. 7.575.
708Panel Reports, paras. 7.576 and 7.577.
709Panel Reports, para. 7.596.
710Panel Reports, para. 7.617.
711Panel Reports, para. 7.620.
712Panel Reports, para. 7.632. (original emphasis) See also para. 7.631 (referring to Panel Report, EC –

origin of the products they purchase is in keeping w ith the requirements of current social norms in a
considerable part of the WTO Membership"
713, and concluded that "providing consumer information
on origin is a legitimate objective within the meaning of Article 2.2".714
362. Under the third step of its test, the Panel considered whether the COOL measure is more trade
restrictive than necessary to fulf il the legitimate objective of providing consumer information on
origin. At the outset, the Panel found useful guida nce in the legal tests established under Article XX
of the GATT 1994 and Article 5.6 of the SPS Agreement715, and rejected the United States' contention
that Article XX is not relevant to th e interpretation of Article 2.2 of the TBT Agreement.716 The Panel
began this part of its assessment by considering th e objective of the COOL measure, as revealed in its
text, design, architecture, and structure, as well as through various statements made by legislators
during the legislative process leading to its enactment. The Panel concluded that these elements
confirmed that the objective of the COOL measure "is consumer information on origin as declared by
the United States".
717 The Panel then proceeded to examine whether the COOL measure fulfils this
objective, explaining that this involved scrutiny of whether the COOL measure carries out and
performs the objective of providing origin information to consumers.
718 The Panel found that the
ability of a labelling regime to fulfil this objectiv e will depend on the capability of labels to convey
clear and accurate information on origin. 719 The Panel therefore stated that it would examine the
specific labelling scheme under the COOL measure, "p articularly the content and categorization of
different categories of labels".720
363. The Panel noted that, under the COOL measure, the definition of "origin" involves
information on the places where animals from which meat is derived were born, raised, and
slaughtered, and that the labels identifying origin, th erefore, refer to several elements. However, it
found that Labels B and C did not deliver origin information as defined under the measure or as the
consumer might understand it. 721 First, the Panel noted that, "in order for the average consumer to
understand the meaning of a specific COOL label on m eat products, he would also need to understand

713Panel Reports, para. 7.650.
714Panel Reports, para. 7.651.
715Panel Reports, para. 7.667.
716Panel Reports, paras. 7.669 and 7.670.
717Panel Reports, para. 7.685.
718Panel Reports, para. 7.692 (referring to the dictionary definition of "fulfil"—"2. Provide fully with
what is wished for; satisfy the appetite or desire of; 3. Make complete, supply with what is lacking; replace
(something); ... 6. Carry ou t, perform, do (something prescribed)"—as provided in Shorter Oxford English
Dictionary, 6th edn, A. Stevenson (ed.) (Oxford University Press, 2007), Vol. 1, p. 1053).
719Panel Reports, para. 7.695.
720Panel Reports, para. 7.695.
721Panel Reports, para. 7.699.

the definition of each category of la bels as prescribed in the measure." 722 Second, while Labels B
and C are differentiated by the order in which the c ountries are listed on the label, it was not clear to
the Panel that this information would be communicate d to consumers or that they would be able to
distinguish between these two labels in terms of origin. 723 The Panel also took note of the effect of
the measure in respect of commingled meat, and observed that, even if there were "a perfect consumer
who is fully informed of the meaning" of Labels B and C, "she may never be assured that the label
precisely reflects the origin of meat as defined under the COOL measure" due to, inter alia , "the
interchangeable use of Label B and Label C allowed for commingled meat".724
364. The Panel thus considered that the COOL me asure "falls short" of fulfilling its objective. 725
While acknowledging that the COOL measure's la belling requirements pr ovide some additional
country of origin information, and may have reduced consumer confusion as compared to the situation
prior to the COOL measure 726, the Panel nevertheless found that "origin information on labels as
prescribed by the measure does not ensure meaningf ul information for consumers, except origin
information on Label A."727 Having determined that "the COOL measure does not fulfil the identified
objective within the meaning of Article 2.2" 728, the Panel found it unnecessary to proceed to analyze
whether the COOL measure is "more trade-rest rictive than necessary" based on the alleged
availability of less trade-restrictive alternativ e measures that could equally fulfil the identified
objective.729

722Panel Reports, para. 7.700. In this regard, the Panel observed that, with respect to mixed origin
labels, that is, Labels B and C:
… a label "Product of the US, Mexico" does not describe what "the US and
Mexico" means as far as origin of th e meat is concerned. As Mexico
suggests, on its face, these names coul d be understood as meaning products
comprising meat originating in both the United States and Mexico. This
may be the case particularly for meat sold in a bulk display. However,
confusion is also likely in a case where a consumer-ready package contains
only a single piece of meat, as the mean ing of the two country names listed
on the label is not clear.
(Ibid.)
723Panel Reports, para. 7.701.
724Panel Reports, para. 7.702.
725Panel Reports, para. 7.716.
726Panel Reports, para. 7.717 reads:
We acknowledge that labels required 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 confusion that existed under the pre-COOL measure
and USDA grade labelling system.
727Panel Reports, para. 7.718.
729Panel Reports, para. 7.719.

365. The Panel therefore concluded that:
… the 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 meaning of
Article 2.2. We therefore find that the United States has acted
inconsistently with Article 2.2.
730 (original emphasis)
C. Analysis
366. The participants' appeals relate to discrete aspects of the framework adopted by the Panel in
its analysis of Article 2.2 of the TBT Agreement and require us to consider a number of issues relating
to the interpretation of that provision. Accordingl y, we begin with an overview of the elements
involved in an Article 2.2 analysis, drawing in par ticular on the guidance provided in the recent report
of the Appellate Body in US – Tuna II (Mexico).
367. Thereafter, we address the specific arguments raised by the participants in their appeals. We
consider first the United States' appeal of the Panel's finding that the COOL measure is trade
restrictive, after which we assess the merits of th e participants' arguments relating to the Panel's
identification of the objective of the COOL measure and Canada's arguments relating to the Panel's
finding that that objective is legitimate. We then proceed with an analysis of the appeal of the
United States concerning the approach taken by th e Panel in its examination of whether the COOL
measure is more trade restrictive than necessary to fulfil its objective, including the Panel's decision to
end its Article 2.2 analysis after having conclude d that the COOL measure does not "fulfil" its
objective.
1. Article 2.2 of the TBT Agreement
368. The text of Article 2.2 of the TBT Agreement reads as follows:
Members 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. 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

730Panel Reports, para. 7.720.

and technical information, relate d processing technology or intended
end-uses of products.
369. The first two sentences of Article 2.2 establish certain obligations with which WTO Members
must comply when preparing, adopting, and applyi ng technical regulations. In accordance with the
first sentence, they must ensure that such prepara tion, adoption, and application is not done "with a
view to or with the effect of creating unnecessary obstacles to international trade"; and, in accordance
with the second sentence, they mu st ensure that thei r technical regulations are "not … more
trade-restrictive than necessary to fulfil a le gitimate objective, taking account of the risks
non-fulfilment would create". The words "[f]or this purpose" linking the first and second sentences
suggest that the second sentence informs the scope and meaning of the obligation contained in the
first sentence.731
370. We begin with the meaning of the different elements set out in the text of Article 2.2. First, a
"legitimate objective" refers to an aim or target that is lawful, justifiable, or proper.732 Article 2.2 lists
specific examples of such "legitimate objectives", namely: national security requirements; the
prevention of deceptive practices; and the protection of human health or safety, animal or plant life or
health, or the environment. The use of the words " inter alia " in Article 2.2 introducing that list,
however, signifies that the list of legitimate objectives is not a closed one. In addition, the objectives
expressly listed provide a reference poi nt for other objectives that may be considered to be legitimate
in the sense of Article 2.2. 733 The sixth and seventh recitals of the preamble of the TBT Agreement
refer to several objectives, which to a large extent overlap with the objectives listed in Article 2.2. 734
As the Appellate Body has also noted, objectives recognized in the provisions of other covered
agreements may provide guidance for, or may inform, the analysis of what might be considered to be
a legitimate objective under Article 2.2.735
371. A panel adjudicating a claim under Article 2.2 may face conflicting arguments by the parties
as to the nature of the "objective" pursued by a responding party through its technical regulation. In
identifying the objective pursued by a Member, a panel should take into account that Member's
articulation of what objective(s) it pursues through its measure. However, a panel is not bound by a

731Appellate Body Report, US – Tuna II (Mexico), para. 318.
732Appellate Body Report, US – Tuna II (Mexico) , para. 313 (referring to Shorter Oxford English
Dictionary, 6th edn, W.R. Trumble, A. Stevenson (eds) (Oxford University Press, 2007), Vol. 1, p. 1577; and
Vol. 2, p. 1970).
733Appellate Body Report, US – Tuna II (Mexico), para. 313.
734Appellate Body Report, US – Tuna II (Mexico), para. 313.
735Appellate Body Report, US – Tuna II (Mexico), para. 313.

Member's characterizations of such objective(s).
736 Indeed, in order to make an objective and
independent assessment of the objective that a Member seeks to achieve, the panel must take account
of all the evidence put before it in this regard, incl uding "the texts of statutes, legislative history, and
other evidence regarding the structure and operation" of the technical regulation at issue.737
372. With respect to the determination of the "legitimacy" of the objective, we note first that a
panel's finding that the objective is among those liste d in Article 2.2 will end the inquiry into its
legitimacy. If, however, the objective does not fall among those specifically listed, a panel must make
a determination of legitimacy. It may be guided by considerations that we have set out above,
including whether the identified objective is reflected in other provisions of the covered agreements.
373. We turn next to the phrase "fulfil a leg itimate objective" in Article 2.2 of the TBT Agreement.
The Appellate Body in US – Tuna II (Mexico) found that, while, read in isolation, the word "fulfil"
could be understood to signify the complete achievement of something, as used in Article 2.2 this
term is concerned with the degree of contribution that the technical regulation makes towards the
achievement of the legitimate objective.738 The Appellate Body found re levant contextual support for
this reading in the sixth rec ital of the preamble of the TBT Agreement, which provides that, subject to
certain qualifications739, a Member shall not be prevented from taking measures necessary to achieve
its legitimate objectives "at the levels it considers appropriate". 740 The degree or level of contribution
of a technical regulation to its objective is not an abstract concept, but rather something that is
revealed through the measure itself. In preparing, adopting, and applying a measure in order to pursue
a legitimate objective, a WTO Member articulates, ei ther implicitly or explicitly, the level at which it
pursues that objective. 741 Thus, a panel adjudicating a claim under Article 2.2 must seek to
ascertain—from the design, structure, and operation of the technical regulation, as well as from

736Appellate Body Report, US – Tuna II (Mexico), para. 314 (referring to Appellate Body Report, US –
Gambling, para. 304).
737Appellate Body Report, US – Tuna II (Mexico), para. 314.
738Appellate Body Report, US – Tuna II (Mexico), para. 315.
739The sixth recital reads:
Recognizing that 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 levels it co nsiders appropriate, subject to the
requirement that they are not applied in a manner which would constitute a
means of arbitrary or unjustifiable discrimination between countries where
the same conditions prevail or a disguised restriction on international trade,
and are otherwise in accordance with the provisions of this Agreement[.]
740Appellate Body Report, US – Tuna II (Mexico), para. 316.
741Appellate Body Report, US – Tuna II (Mexico), para. 316.

evidence relating to its application—to what degree, if at all 742, the challenged technical regulation, as
written and applied, actually contributes to the achie vement of the legitimate objective pursued by the
Member.743
374. The notion of "necessity" is reflected in both th e first and second sentences of Article 2.2,
through the reference in the first sentence to " unnecessary obstacles to international trade", and in the
second sentence to "not … more trade-restrictive than necessary". As the Appellate Body observed in
US – Tuna II (Mexico) , the assessment of "necessity", in the context of Article 2.2, involves a
"relational analysis"744 of the following factors: the trade-rest rictiveness of the technical regulation;
the degree of contribution that it makes to the ach ievement of a legitimate objective; and the risks
non-fulfilment would create. In a particular case, a panel's determination of what is considered
"necessary" will be based on a consideration of all these factors.745
375. By its terms, Article 2.2 requires an assessment of the necessity of the trade-restrictiveness of
the measure at issue. In this regard, the Appellate Body in US – Tuna II (Mexico) defined
"trade-restrictive" to mean "having a limiting effect on trade".746 Moreover, it found that the reference
in Article 2.2 to "unnecessary obstacles" implies that "some" trade-restrictiveness is allowed and,
further, that what is actually prohibited are those restrictions on international trade that "exceed what
is necessary to achieve the degree of contribution that a technical regulation makes to the achievement
of a legitimate objective".747
376. The Appellate Body considered that the use of the comparative "more … than" in the second
sentence of Article 2.2 suggests that the existence of an "unnecessary obstacle[] to international trade"

742This may involve an assessment of whether the measure at issue is capable of achieving the
legitimate objective. (Appellate Body Report, US – Tuna II (Mexico), footnote 640 to para. 317)
743The Appellate Body explained that, as is the case when determining the contribution of a measure to
the achievement of a particular objec tive in the context of Article XX of the GATT 1994, "a panel must assess
the contribution to the legitimate objective actually achieved by the measure at issue." (Appellate Body Report,
US – Tuna II (Mexico) , para. 317 (referring to Appellate Body Report, China – Publications and Audiovisual
Products, para. 252))
744Appellate Body Report, US – Tuna II (Mexico), para. 318.
745The Appellate Body noted that, similarly, in the context of Article XX of the GATT 1994 and
Article XIV of the GATS, "necessity" is determined on the basis of "weighing and balancing" a number of
factors. (Appellate Body Report, US – Tuna II (Mexico), footnote 643 to para. 318 (referring to Appellate Body
Report, Brazil – Retreaded Tyres, para. 178; and Appellate Body Report, US – Gambling, paras. 306-308)) The
Appellate Body has also stated that the word "necessary" refers to a range of degrees of necessity, depending on
the context in which it is used. At "one end of this continuum lies 'necessary' understood as 'indispensable'; at
the other end, is 'necessary' taken to mean as 'making a contribution to'." (Appellate Body Report, US – Tuna II
(Mexico), footnote 642 to para. 318 (quoting Appellate Body Report, Korea –Various Measures on Beef ,
para. 161))
746Appellate Body Report, US – Tuna II (Mexico), para. 319.
747Appellate Body Report, US – Tuna II (Mexico), para. 319.

in the first sentence may be established on the basis of a comparative analysis of the above-mentioned
factors. In most cases
748, this will involve a comparison of the tr ade-restrictiveness of, and the degree
of achievement of the objective by, the measure at issue, with that of possible alternative measures 749
that may be reasonably available and that are less trade restrictive than the challenged measure, taking
account of the risks non-fulfilment would create.750
377. With respect to the requirement under Article 2. 2 to consider "the risks non-fulfilment would
create", the Appellate Body explained that this suggests that the comparison of the challenged
measure with a possible alternative measure should be made "in the light of the nature of the risks at
issue and the gravity of the consequences that would arise from non-fulfilment of the legitimate
objective", which suggests a "further element of weighing and balancing" in the analysis under
Article 2.2.751
378. In summary, the Appellate Body explained the el ements of an analysis under Article 2.2 of
the TBT Agreement as follows:
[A]n assessment of whether a technical regulation is "more
trade-restrictive than necessary" with in the meaning of Article 2.2 of
the TBT Agreement involves an evaluation of a number of factors.
A panel should begin by consideri ng factors that include: (i) the
degree of contribution made by the measure to the legitimate
objective at issue; (ii) the trade -restrictiveness of the measure; and
(iii) the nature of the risks at issue and the gravity of consequences
that would arise from non-fulfilment of the objective(s) pursued by
the Member through the measure. In most cases, a comparison of the
challenged measure and possible alternative measures should be
undertaken. In particular, it may be relevant for the purpose of this
comparison to consider whether the proposed alternative is less trade
restrictive, whether it would make an equivalent contribution to the
relevant legitimate objective, taking account of the risks

748The Appellate Body observed that there are "at l east two instances" when su ch a comparison might
not be required, namely, when the measure is not trade re strictive at all, or when a trade-restrictive measure
makes no contribution to the achievement of the relevant legitimate objective. (Appellate Body Report, US –
Tuna II (Mexico), footnote 647 to para. 322)
749The Appellate Body explained that the comparison w ith reasonably available alternative measures is
a "conceptual tool" to be used for the purpose of as certaining whether a challenged measure is more trade
restrictive than necessary. (Appellate Body Report, US – Tuna II (Mexico), para. 320)
750The Appellate Body drew an analogy with the analysis of "necessity" in the context of Article XX of
the GATT 1994 and Article XIV of the GATS, in which a measure found to be inconsistent with a relevant
obligation is to be compared with reasonably availabl e less trade-restrictive altern ative measures. (Appellate
Body Report, US – Tuna II (Mexico) , footnote 645 to para. 320 (referring to Appellate Body Report, Korea –
751Appellate Body Report, US – Tuna II (Mexico), para. 321.

non-fulfilment would create, and whether it is reasonably
available.752 (footnote omitted)
379. Finally, we recall the burden of proof under Artic le 2.2. In order to demonstrate that a
technical regulation is inconsistent with Article 2.2, the complainant must make a prima facie case by
presenting evidence and arguments sufficient to estab lish that the challenged measure is more trade
restrictive than necessary to achieve the contribut ion it makes to the legiti mate objective, taking
account of the risks non-fulfilment would create. A complainant may, and in most cases will, also
seek to identify a possible alternativ e measure that is less trade restrictive, makes an equivalent
contribution to the relevant objectiv e, and is reasonably available. It is then for the respondent to
rebut the complainant's prima facie case by presenting evidence and arguments showing that the
challenged measure is not more trade restrictive th an necessary to achieve the contribution it makes
toward the objective pursued, for example, by demonstrating that the alternative measure identified by
the complainant is not, in fact, "reasonably available", is not less trade restrictive, or does not make an
equivalent contribution to the achievement of the relevant legitimate objective.
753
380. With these interpretations in mind, we turn now to the specific arguments on appeal.
2. Did the Panel Err in Finding that the COOL Measure Is Trade Restrictive?
381. The United States appeals the Panel's finding that the COOL measure is "trade-restrictive",
within the meaning of Article 2.2. 754 The United States submits that , "[f]or the reasons" provided in
its appeal of the Panel's analysis under Article 2.1 of the TBT Agreement , the Panel also erred in
finding that the COOL measure is trade restri ctive for purposes of its Article 2.2 analysis. 755 I n
response to questioning at the oral hearing, the Un ited States clarified that its argument on appeal is
simply that, because the Panel relied upon a finding that it had made in the course of its analysis under
Article 2.1 to conclude that the COOL measure is trade restrictive for purposes of Article 2.2, the
latter finding must be reversed once that Article 2.1 finding has been reversed. 756 The United States'
appeal is therefore dependent on the success of its appeal under Article 2.1. As we have, however,

752Appellate Body Report, US – Tuna II (Mexico), para. 322.
753Appellate Body Report, US – Tuna II (Mexico), para. 323.
755United States' appellant's submission, footnote 187 to para. 124 (quoting Panel Reports, para. 7.574).
756Although the Panel expressed the view that "a technical regulation's non-conformity with Article 2.1
is not per se an issue for that technical regulation's conf ormity with Article 2.2 in general or the
'trade-restrictive' element in particular" (Panel Reports, para. 7.573), it nevertheless relied upon findings that it
had made in its Article 2.1 analysis to find that the COOL measure is trade restrictive within the meaning of
Article 2.2. The United States challenges, in particular , the Panel's reliance upon its finding that "the COOL
measure negatively affects imported livestock's conditions of competition in the US market in relation to like
domestic livestock by imposing higher segregation costs on imported livestock." ( Ibid., para. 7.574) We have
rejected the United States' claims of error on appeal related to this finding at paragraph 292 of these Reports.

upheld the Panel's finding that the COOL m easure is inconsistent with Article 2.1
757, we need not
further consider this ground of the United States' appeal.
3. Did the Panel Err in Its Identification of the Objective Pursued?
382. We begin by recalling the divergent positions taken by the parties as to the objective pursued
by the United States through the COOL measure. Before the Panel, both Canada and Mexico asserted
that, based on "the text as well as the design, arch itecture, and structure of the COOL measure", the
objective of the COOL measure is trade protectionism. 758 The United States maintained that the
objective of the COOL measure is to "provide consumer information about origin".759
383. The Panel addressed the question of "what is th e objective" in two separate places in its
Reports. It did so, first, under the second step 760 of its analysis of the claims (when it considered
whether the objective pursued by the United States is legitimate) at paragraphs 7.594-7.620, and again
under the third step 761 of its analysis (whether the COOL me asure is more trade restrictive than
necessary to fulfil its objective) at paragraphs 7.678-7.691.
384. When it addressed the issue of the objective pursu ed by the COOL measure for the first time,
the Panel considered it "inapposite" to address the comp lainants' arguments that trade protectionism is
the objective of the COOL measure, and explaine d that it would defer its consideration of these
arguments to the third step of its analysis. 762 Instead, the Panel decide d "to accept the objective as
identified by the United States" 763, which it sought to determine based on the United States'
submissions during the Panel proceedings, as well as on the notification of the COOL measure
provided by the United States to the TBT Committee. The Panel observed that the United States'
formulation of the objective had "varied somewhat" throughout its written submissions 764, but that
"the main element" consistently highlighted by the United States had been "to provide consumer
information on origin".765 Thus, the Panel stated that it would "proceed on the understanding that this
is the objective pursued by the United States through the COOL measure". 766 The Panel further

757Supra, para. 350.
759Panel Reports, paras.7.581 and 7.587.
760See Panel Reports, para. 7.558 (second bullet point).
761See Panel Reports, para. 7.558 (third bullet point).
762Panel Reports, para. 7.610.
763Panel Reports, para. 7.615.
764Panel Reports, para. 7.617.
765Panel Reports, para. 7.617.
766Panel Reports, para. 7.617.

elaborated that "the objective pursued by the Un ited States through the COOL measure is to provide
as much clear and accurate origin information as possible to consumers."767
385. The second time the Panel considered the COOL m easure's objective was in the context of its
assessment of whether the COOL measure "fulfils" its objective under the third step of its three-part
test.
768 At that juncture, the Panel specifically a ddressed the complainants' argument that the text,
design, architecture, and structure of the COOL measure, as well as statements made during the
legislative process for the COOL statute, demons trated that the COOL measure was designed to
protect the United States' domestic industry. 769 Having considered the relevant evidence and
arguments of the parties in this regard, the Pane l concluded that these additional factors did "not
affect" its prior finding that "the objective of the COOL measure is to provi de consumer information
on origin".770
386. In this appeal, the participants raise a number of objections with respect to the approach taken
by the Panel in identifying the "objective" pursued . Before addressing these arguments, we wish to
express our own concerns with the manner in which the Panel referred to the objective of the COOL
measure throughout the course of its analysis.
387. First, we observe that the Panel's formulati on of the objective pursued by the United States
varied over the course of its analysis. For instance, at times the Panel identified the objective as being
"to provide consumer information on origin" 771; at other times, the Panel referred to the objective as

767Panel Reports, para. 7.620.
768Panel Reports, paras. 7.678-7.691.
769Panel Reports, para. 7.678.
770Panel Reports, para. 7.691.
771Panel Reports, paras. 7.617, 7.671, and 7.685.

being "to provide as much clear and accurate origin information as possible to consumers".
772
Through these differing formulations of the objective, the Panel introduced a level of uncertainty in its
reasoning.773 It is of course self-evident that panels should seek to avoid using different language to
denote the same concept. This is especially so in the context of an analysis under Article 2.2 of the
TBT Agreement, given that the relevant objective is the benchmark against which a panel must assess
the degree of contribution made by a challenge d technical regulation, as well as by proposed
alternative measures. For these reasons, the importa nce of a panel identifying with sufficient clarity
and consistency the objective or objectives pursu ed by a Member through a technical regulation
cannot be overemphasized.
388. In these disputes, it may be that the reason for th e difference in the formulations used by the
Panel lies in the fact that the Panel understood the mo re general formulation (that is, the provision of
consumer information on origin) to reflect the obj ective pursued, and the more detailed formulation
(that is, the provision of as much clear and accurate origin information as possible to consumers) to
represent the level of fulfilment of that objective that the United States desired to achieve. Such a
view is arguably implicit in the following statement by the Panel:
[T]he United States aims to achieve its stated objective by providing
as much clear and accurate origin information as possible.
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 the

772Panel Reports, para. 7.620. See also para. 7.715. The Panel also referred several times to the
additional objective of preventing consum er confusion. For example, at pa ragraph 7.671 of its Reports, the
Panel stated:
Specifically with respect to meat products, the United States describes its
objective in more detail as follows: (i) consumer information—the
COOL measure purports "to provide consumers with as much clear and
accurate information as possible about th e country or countr ies of origin of
meat products that they buy at the retail level", particularly "information on
the countries, where the animal from wh ich the meat was derived was born,
raised, and slaughtered"; and (ii) prevention of consumer confusion—the
COOL measure purports to prevent confusion relating to a USDA grade
label and the previous FSIS "Product of the U.S.A." labelling system, which
allowed this label if the meat products received minimal processes in the
United States.
The Panel further paraphrased the second of these objectiv es as follows: "[T]he United States aims to prevent
meat derived from animals of non-US origin from carrying a US-origin label under any circumstances." ( Ibid.,
para. 7.713)
773Such uncertainty was also reflected in the divergent formulations expressed by the participants at the
oral hearing when asked what they understood the objective identified by the Panel to be.

identified objective does not contribute in a meaningful way to
fulfilling the objective.774 (original italics; underlining added)
389. We note that the United States also points to this statement as setting out the Panel's
articulation of "the level at which the United Stat es considers it appropriate to fulfill the objective". 775
In its appeal, the United States contends that it was a ppropriate for the Panel to include this step in its
analysis776, but that the Panel erred in the way in which it identified the level of fulfilment desired by
the United States.777
390. However, as we have explained above, in pr eparing, adopting, and applying a measure in
order to pursue a legitimate objective, a Member articul ates, either implicitly or explicitly, the level at
which it seeks to pursue that particular objective. 778 Neither Article 2.2 in particular, nor the
TBT Agreement in general, requires that, in its examina tion of the objective pursued, a panel must
discern or identify, in the abstract, the level at which a responding Member wishes or aims to achieve
that objective.779 Rather, what a panel is required to do, under Article 2.2, is to assess the degree to
which a Member's technical regulation, as adopted, written, and applied, contributes to the legitimate
objective pursued by that Member.780
391. Having identified what we consider the Panel's understanding of the objective pursued
through the COOL measure to be—that is, the provision of consumer information on origin—we
proceed to discuss the participants' arguments on appeal.

774Panel Reports, para. 7.715. Read together, paragraphs 7.619 and 7.620 of the Panel Reports also
suggest that the Panel may have been using such an approach.
776The United States contends that Article 2.2 and the sixth recital of the preamble of the
TBT Agreement make clear "that a Member is entitled to take m easures 'at the level it co nsiders appropriate,' in
pursuance of a legitimate objective under the Agreement". (United States' appellant's submission, para. 124
(quoting Panel Report, US – Tuna II (Mexico) , para. 7.460)) For the United St ates, this "level", sometimes
referred to as the "level of protection" , is more accurately termed the "'level of fulfillment' (of the objective)",
and this is how "the Panel refers to it". (United Stat es' appellant's submission, para. 124 (referring to Panel
Reports, para. 7.715))
777As discussed further below, the United States contends that the Panel wrongly understood the United
States' "level of fulf ilment" as being "to completely fulfill its objective of providing consumer information by
providing 'clear and accurate' consumer information in every conceivable s cenario". (United States' appellant's
submission, para. 132 (original emphasis); see subsection VI.C.3(c) of these Reports) According to the United
States, in so finding, the Panel acted inconsistently with Article 11 of the DSU because it mischaracterized the
United States' position by relying on partial quotes from the United States' submissions. The United States
further alleges that the Panel erred in failing to consider all relevant information in its determination of the
United States' chosen level of fulfilment. (United States' appellant's submission, paras. 136-144)
778See supra, para. 373.
779We have noted above that the sixth recital of the preamble of the TBT Agreement provides that a
Member shall not be prevented from taking measures necessary to achieve a legitimate objective "at the levels it
considers appropriate". (See supra, para. 373) This does not, however, require a separate assessment of a
desired level of fulfilment.
780Appellate Body Report, US – Tuna II (Mexico), para. 316.

(a) Canada's and Mexico's Other Appeals of the Panel's Approach to
Identifying the Objective Pursued
392. Canada and Mexico both consider the Panel's re liance on the United States' articulation of the
objective alone to be an erroneous basis on which to identify the objective pursued through the COOL
measure for the purposes of an Article 2.2 analysis. Canada submits that the Panel erred in focusing
its analysis on a general policy objective that th e COOL measure might pursue, as stated by the
United States, rather than on the actual objective pursued by the measure. In so doing, the Panel also
erred in analyzing evidence relating to the design, arch itecture, structure, and legislative history of the
COOL measure only "as a secondary matter [and] as an alternative to the 'identified objective'".
781
While Mexico generally agrees that the identification of the objective of a technical regulation is the
prerogative of the Member establishing the measure, a nd that there is a presumption of good faith in
favour of that Member's declared objective—for instance, through its notification of the measure to
the TBT Committee—it submits that the Panel should have verified the objective identified by the
United States to ensure that it was congruent with the design, structure, and architecture of the COOL
measure, as well as its legislative history and surrounding circumstances.782
393. For its part, the United States considers that the Panel took the United States' declared
objective only as "a starting point" 783 for its analysis and did in fact verify the identified objective on
the basis of an analysis of the text, design, architecture, and structure of the COOL measure.784
394. We explained above that the Panel addressed the question of "what is the objective" twice.
The Panel appears to have first determined "the Un ited States' objective" in the abstract, and then
turned to consider the specific objective pursued by the COOL measure itself. The Panel also seems
to have accorded considerably more deference to the United States' articulation of its objective in its
initial consideration of the issue than in its subseque nt consideration. In both instances, however, the
Panel reached the same result: that the objectiv e that the United States pursues through the COOL
measure is the provision of consumer information on origin.
395. We have already set out the proper approach to be followed by a panel in determining the
objective a Member seeks to achieve by means of a te chnical regulation. That analysis calls for an
independent and objective assessment, based on an examin ation of the text of the measure, its design,
architecture, structure, legislative history, as well as its operation. While a panel may take as a

781Canada's other appellant's submission, para. 29.
782Mexico's other appellant's submission, para. 35.

starting point the responding Member's characterization of the objective it pursues through the
measure, a panel is not bound by such characterizati on. This is so especially where the objective of a
measure is contested between the parties, and comp eting arguments have been raised on the basis of
the text of the measure, its design, architecture, st ructure, legislative history, and evidence relating to
its operation. Indeed, the United States itself accepts that the responding Member's declared objective
is only a starting point in the panel's analysis of the objective pursued by a measure. Having said this,
we note that, while the Panel, when it considered the objective for the first time, stopped once it had
determined the declared objective of the United St ates, it did consider the evidence relating to the
COOL measure's text, design, architecture, struct ure, operation, and legislative history, when it
considered the objective for the second time.785
396. We are somewhat puzzled by the Panel's segment ation of its analysis of the objective pursued
by the COOL measure into two parts. Such seg mentation strikes us as unnecessary. Moreover, we
have concerns that, at least when it addressed the que stion of the objective for the first time, the Panel
apparently considered itself bound to accept the objective as identified by the United States. Because,
however, the Panel ultimately evaluated all rele vant features relating to the COOL measure's
objective, including evidence and arguments presente d by the parties relating to the measure's text,
design, architecture, structure, and legislative hi story, as well as its operation, we do not agree with
Canada and Mexico that the Panel erred in its application of Article 2.2 of the TBT Agreement by
determining the objective of the COOL measure in the "abstract", and solely on the basis of the
United States' declared objective.
(b) Canada's and Mexico's Claims under Article 11 of the DSU with
respect to the Panel's Identification of the Objective Pursued
(i) Introduction
397. Canada and Mexico each submits that the Pa nel failed to comply with its duties under
Article 11 of the DSU when it assessed the evidence rela ting to the design, structure, architecture, and
legislative history of the COOL measure. In th eir view, a proper assessment of that evidence would
have yielded a conclusion that the true objective of the COOL measure is trade protectionism, that is,
the protection of the United States' domestic producers of cattle and hogs.

785During questioning at the oral h earing, Mexico and Canada both accept ed that the Panel in fact did
take into account these elements in its consideration of the objective pursued by the United States through the
COOL measure.

398. As already explained, the Panel unnecessarily segme nted its analysis of the objective of the
COOL measure into two parts. To some extent, the complainants', and, in particular, Mexico's claims
of error under Article 11 of the DSU relate to the fi rst time that the Panel addressed the issue of the
objective pursued by the United States , and consist of allegations that, because it committed legal
error in identifying the objective "based solely on the descriptions, formulations and elaborations
provided by the United States"
786, the Panel also ignored or failed to take account of evidence with
respect to the design, architecture, and structure of the COOL measure, as well as its legislative
history and surrounding circumstances.
399. As discussed above, however, the Panel did not identify the objective based solely on the
submissions of the United States. Rather, the Panel undertook a bifurcated analysis of the objective of
the COOL measure. Although it declined to take acc ount of evidence relating to the text, design, and
structure of the COOL measure, as well as to its le gislative history, when it considered the objective
for the first time, the Panel explained that it woul d do so at a subsequent stage of its analysis. 787 The
Panel did, indeed, take such evidence into acc ount when it considered the objective for the second
time.788 For this reason, we found above that the Panel did not commit legal error in applying
Article 2.2 of the TBT Agreement. For the same reason, the Panel ca nnot be said to have refused to
take any account of evidence relating to the text, design, and structure of the COOL measure, as well
as its legislative history. It also follows that the merits of the claims raised under Article 11 of the
DSU must be evaluated through an examination of both of the Panel's analyses of the objective
pursued by the United States through the COOL measure. With these considerations in mind, we turn
to the relevant claims of error raised by each other appellant under Article 11 of the DSU, beginning
with Mexico.
(ii) Mexico's Other Appeal under Article 11 of the DSU
400. The bulk of Mexico's argumentation in support of its Article 11 claim is tied to and based on
its claim that the Panel committed legal error in ba sing its finding as to the objective of the COOL

786Mexico's other appellant's submission, para. 32. (original emphasis)
787Panel Reports, para. 7.610.
788We recall that the Panel addressed this issue for th e second time at the outs et of its analysis of
whether the COOL measure is more trade restrictive than necessary to fulfil its objective. (Panel Reports,
paras. 7.678-7.691)

measure exclusively on the United States ' identification of that objective. 789 Since we have already
found that the Panel did not err in this respect, this part of Mexico's appeal must fail. In this vein, we
recall that, as the Appellate Body has previously observed, a claim that a panel failed to comply with
its duties under Article 11 of the DSU must stand on its own, and should not be made merely as a
"subsidiary argument" in support of a claim that the panel erred in its application of a WTO
provision.790
401. In addition to those arguments in support of its Article 11 claim that are dependent upon its
claim of error in the application of Article 2.2 of the TBT Agreement, Mexico contends that, "[h]ad the
Panel taken into account the relevant evidence, it would have been able to identify the genuine
objective of the COOL measure" 791, that is, trade protectionism. Mexico further requests us to
complete the legal analysis and to find that the objective of the COOL measure is the protection of the
US domestic cattle industry. 792 Mexico does not, however, identify any specific error that the Panel
made, the second time that it considered the objectiv e of the COOL measure, in its assessment of the
evidence relating to the text, design, architecture, and structure of the COOL measure, as well as its
legislative history. Nor does Mexico allege that, or explain why, the Panel's findings with respect to
the objective of the COOL measure lack a factua l basis in the record. For these reasons, the
remainder of Mexico's arguments under Artic le 11 of the DSU—which are very brief 793—must be
understood either as mere disagreement with the way in which the Panel weighed the evidence, or as a
request for us to conduct a de novo assessment of the facts. Neither type of argument can suffice to
make out a claim that the Panel failed to comply with its duty, under Article 11 of the DSU, to
conduct an objective assessment of the facts.
402. For these reasons, we do not consider that Mexico has demonstrated that the Panel failed to
comply with its duties under Article 11 of the DS U in its assessment of the evidence relating to the

789Thus, Mexico contends that, " because the legal errors led to the exclusion of relevant facts, the
approach is factually erroneous". (Mexico's other appellant's submission, para. 33 (emphasis added)) Mexico
further argues that, "[a]s a co nsequence of this legal error [failing to take into account when assessing the
objective of the measure the design, ar chitecture, and structure of a technical regulation as well as its legislative
history and surrounding circumstances], the Panel did not take into account the facts presented by Mexico
regarding the protectionist character of the COOL measure", and, "[i]n this sense", failed to make an objective
assessment of the matter before it and thereby acted inconsistently with Article 11 of the DSU". ( Ibid, para. 40
(footnote omitted))
790Appellate Body Report, EC – Fasteners (China) , para. 442. See also Appellate Body Report, US –
Steel Safeguards, para. 498; and Appellate Body Report, Chile – Price Band System (Article 21.5 – Argentina),
para. 238.
791Mexico's other appellant's submission, para. 42.
792Mexico's other appellant's submission, para. 44.
793Mexico's other appellant's submission, paras. 42 and 43.

design, structure, architecture, and legislative histor y of the COOL measure. We therefore proceed to
the arguments made by Canada under this provision.
(iii) Canada's Other Appeal under Article 11 of the DSU
403. In evaluating this part of Canada's other appeal , we are mindful that our inquiry is limited to
determining whether Canada has demonstrated th at the Panel failed to assess objectively the evidence
presented to it regarding the objective of the COOL measure. As the Appellate Body has previously
noted, Article 11 of the DSU requires a panel to "c onsider all the evidence presented to it, assess its
credibility, determine its weight, and ensure that its factual findings have a proper basis in that
evidence".
794 Within these parameters, "it is generally w ithin the discretion of the panel to decide
which evidence it chooses to utilize in making findings" 795, and panels "are not required to accord to
factual evidence of the parties the same meaning and weight as do the parties".796
404. In alleging that the Panel failed to make an objective assessment of the facts, Canada
identifies four discrete groups of evidence. We deal with each of these in turn . Before doing so, we
briefly recall how the Panel dealt with the rele vant evidence and arguments in determining the
objective of the COOL measure.
405. The Panel began by examining the text of th e COOL measure, which it viewed as confirming
"that the objective is to provide consumer information on origin". 797 The Panel then turned to the
COOL measure's design and structure. The Panel set out the complainants' arguments regarding the
scope of the commodities covered by, and excluded from, the requirements of the COOL measure.
The Panel noted that Canada and Mexico asserted that products that face little or no competition from
imports are not subject to the COOL measure 798, and also highlighted that the COOL measure
excludes covered commodities that are an ingred ient in a processed food item or that undergo
processing. Moreover, they also pointed out that certain entities th at sell meat are excluded from the
measure's coverage, such as food service establishm ents and entities selling perishable agricultural
commodities below a certain annual value. 799 The Panel also explained that, according to the
complainants, these exemptions and exclusions are evidence that the objective of the COOL measure

794Appellate Body Report, Brazil – Retreaded Tyres , para. 185 (referring to Appellate Body Report,
EC – Hormones, paras. 132 and 133).
797Panel Reports, para. 7.680.
798Panel Reports, para. 7.682.
799Panel Reports, para. 7.683.

is trade protectionism because, if the objective of the COOL measure were really to provide origin
information, "it would have to apply on a more widespread basis".800
406. The Panel dealt collectively with these argu ments relating to the scope of the covered
commodities, as well as to the exemptions and exclusions from the COOL measure's labelling
requirements. In rejecting them, the Panel explained that:
… it is not atypical for any kind of regulation to have exceptions in
terms of the products and entities that are subject to it. Some …
exceptions might be justifiable for practical reasons and simply
facilitate the implementation of the measure at issue without
necessarily involving protectionist inte nt. We also consider that the
scope of the COOL measure is broad enough to cover a significant
range of food products and entities handling these products.
801
407. The Panel concluded, based on the text, design, and structure of the COOL measure, that the
COOL measure's objective is to provide consumer information on origin.802
408. Finally, the Panel considered evidence of vari ous statements made by legislators during the
legislative process and observed that, "while the sen timent in some of them finds expression in the
COOL measure, the sentiment in others does not." 803 On balance, therefore, the Panel did "not find
this evidence of assistance" in its inquiry into the objective of the C OOL measure, adding that "it is
not inconceivable that parliaments and governments pu rsue more than one objective through a certain
measure."804 For this reason, the Panel concluded that th e statements at issue "[did] not affect" its
"conclusion that the objective of the COOL measure is to provide consumer information on origin".805
409. On appeal, Canada refers, first, to evidence th at it presented to the Panel to demonstrate that
the COOL measure "includes and excludes produ cts in a way that makes no sense" from the
perspective of providing information on origin but does make sense from the perspective of protecting
the domestic industry.806 As it did before the Panel, Canada argues that the COOL measure cannot be
intended to clear up confusion caused by USDA grade labelling, because the COOL measure applies
to many products that are not USDA graded—whe n such products are subject to competition from
imports. Conversely, products th at face little or no competition from imports in the US market are

800Panel Reports, para. 7.683.
801Panel Reports, para. 7.684.
802Panel Reports, para. 7.685.
803Panel Reports, para. 7.691.
804Panel Reports, para. 7.691.
805Panel Reports, para. 7.691.
806Canada's other appellant's submission, para. 34.

excluded from the COOL regime, even if they are USDA graded.
807 Canada argues that the Panel
mentioned some, but not all, of the evidence that Canada had submitted in th is regard, and provided
only a brief conclusion as to why the exceptions from coverage under the COOL measure are
justifiable. Canada emphasizes that both prohibitive and permissive elements are relevant to an
evaluation of the measure as a whole.808
410. We observe that, while it may not have done so in as detailed a manner as Canada might have
liked, the Panel did grapple with, and reject, most of Canada's arguments regarding the scope of
coverage of the COOL measure and its relevance to the identification of its objective. The Panel
explicitly referred to Canada's ar gument that products produced in the United States that face little
competition from imports are excluded from the measur e, and to the evidence adduced in support of
that argument, namely, the percentage of the ma rket share occupied by the domestic industry for
certain products not covered under the COOL measure. 809 It is true that the Panel did not specifically
reference Canada's additional argument relating to the products cove red by the COOL measure—that,
if the United States' objective were really to avoid the confusion engendered by USDA grade
labelling, then the COOL measure should have applie d to all products that have such USDA labelling
and not to any products that are not USDA graded. Yet, this alone does not establish that the Panel
breached its duties under Article 11 of the DSU. A pa nel is not obliged to discuss in its report every
argument made, or each piece of evidence adduced, by a party. 810 Moreover, in this case, the Panel
repeatedly emphasized that the objective of the COOL measure is to provide consumers with
information on the origin of the meat they purchase. Although it also acknowledged the objective of
preventing consumer confusion, the Panel appears to have considered this to be an additional, and
secondary, objective of the COOL measure. Canada asserts that the fact that the COOL measure
applies to some products that do not have USDA grad e labelling, and does not apply to others that do,
calls into question whether the measure really aims to prevent consumer confusion. Even if this were
true, however, Canada has not explained why this would necessarily also vitiate the Panel's finding
that the objective of the COOL measure is to provide consumers with information on origin.

807Canada's other appellant's submission, para. 35.
808Canada's other appellant's submission, para. 35 (referring to Appellate Body Report, EC – Asbestos,
para. 64).
809We note that the Panel provided details of Canada 's arguments in a footnot e: "Canada argues that
the products that face little or no import competition, in clude almonds (with a market share of 99.5%), walnuts
(with a market share of 99.1 %), pistachios (with a market share of 99%), and turkey (with a market share of
99.9%)". (Panel Reports, footnote 897 to para. 7.682) It also referred to the specific paragraphs in the
submissions of Canada and Mexico where these figures, and supporting arguments, were presented.

411. In addition, the Panel did acknowledge limitati ons on the scope of coverage of the COOL
measure. Moreover, it provided reasoning as to why it was not persuaded that the exclusion of certain
products from the COOL measure necessarily means th at the COOL measure was intended to protect
domestic industry, including that such exclusions may reflect practical reasons and simply facilitate
implementation of the COOL measure. 811 Canada does not take issue with this finding per se, but
rather repeats arguments that it made before the Panel that the evidence it submitted reveals
protectionist intent. Canada appears to request us to weigh this evidence differently on appeal.
412. A second argument raised by Canada relates to the Panel's treatment of an argument by
Canada that the COOL measure applies "special ru les" to imported livestock that it does not apply to
other products. Before the Pane l, Canada submitted that "the COOL regime excludes from coverage
almost all products that undergo significant change after they pass a WTO Member's border" and that
"the only exception is meat from livestock imported into the United States." 812 As we understand it,
Canada highlighted that, while substantially transf ormed perishable agricultural products are removed
from the scope of the COOL measure, meat is not so excluded, even though it has also been
substantially transformed from its original stat e—livestock. This, argued Canada, shows that
livestock have been "singled out" for different trea tment and, therefore, that the objective of the
COOL measure is protectionist. As additional support, Canada argued that the definition of a
"processed food item" applies differently for meat and livestock than for other products, such as
vegetables. These arguments were contained in pa rt of one paragraph of Canada's second written
submission to the Panel.813
413. On appeal, Canada reiterates that this singli ng out of livestock demonstrates the objective of
protecting livestock producers in the United States and that the Panel erred since it did not "clearly
mention" this in its analysis, "much less make an objective assessment of the fact and its relevance to
the determination of the COOL measure's objective".814
414. We consider, however, that the Panel's statement that "[t]he complainants further submit that
the true objective of the COOL measure is trade prot ectionism as demonstrated by the fact that the
COOL measure excludes from its scope covered co mmodities that are an ingredient in a processed

811Panel Reports, para. 7.684.
812Canada's second written submission to the Panel, para. 57(a).
813Canada's second written submission to the Panel, para. 57(a).
814Canada's other appellant's submission, para. 37.

food item or that undergo processing"
815 may be understood as referring to, inter alia, this argument
by Canada. Indeed, Canada itself recognizes this. 816 To the extent that th e Panel's decision to deal
with several arguments together may have resulte d in the Panel not clearly mentioning each one
separately, this alone does not establish that the Panel breached Article 11 of the DSU. As we have
already noted, the fact that a panel does not explic itly reflect all of a party's arguments, or accord to
specific evidence the weight that one party consider s it should, does not, in and of itself, constitute
error. The Appellate Body has also stated that a panel has the discretion "to address only those
arguments it deems necessary to resolve a particular claim".
817
415. Third, Canada contends that the Panel failed to consider Canada's arguments and evidence
demonstrating the COOL measure's inability to provi de useful information. Canada refers to
arguments provided in its second written submission to the Panel regarding alleged deficiencies in the
labels under the COOL measure in disclosing info rmation about origin, especially in cases where
mixed origin labels are used. 818 While acknowledging that the Panel considered this evidence
elsewhere in its analysis819, Canada considers that it was also relevant for determining the objective of
the COOL measure. Such evidence reveals the protectionist intent of the COOL measure because, "if
the objective had been truly to provide informatio n, the measure would have been designed to do
that."820 Therefore, asserts Canada, the Panel should al so have taken this evidence into account as
part of that inquiry.
416. As we see it, however, a panel has a degree of discretion to assess and employ the evidence
before it in the context in which the panel finds it most probative and useful. 821 The Panel clearly
took account of evidence relating to the ability of th e different COOL labels to convey meaningful
information. It is unclear to us why, as Canada's arguments imply, the Panel was also bound to treat
that evidence as not only relevant to, but highly probative of, the objective of that measure.

815Panel Reports, para. 7.683 (referring to 2009 Final Ru le (AMS), section 65.220). That provision, in
conjunction with section 65.135(b), excludes from th e COOL measure labelling requirements those covered
commodities that have undergone specific processing that results in a change in their character.
816Canada notes that the Panel "advert[ed]" to that argument in its analysis. (Canada's other appellant's
818Canada's other appellant's submission, para. 38 (re ferring to Canada's second written submission to
the Panel, para. 57(c)).
819Canada's other appellant's submission, para. 38 (referring to Panel Reports, para. 7.718).
820Canada's other appellant's submission, para. 38.
821The Appellate Body has said that:
... nothing in the DSU limits the faculty of a panel freely to use arguments
submitted by any of the parties—or to develop its own legal reasoning—to
support its own findings and conclusions on the matter under its
consideration.
(Appellate Body Report, EC – Hormones, para. 156)

417. Finally, Canada refers to the Panel's treatment of evidence regarding the legislative process
leading to the adoption of the COOL measure. Cana da highlights the evidence that it adduced to this
effect, including the fact that the COOL measure form ed part of the 2002 Farm Bill, rather than being
placed within a legislative package relating to consumer information. 822 Canada also refers to
statements by key legislators, including Senator Johnson (allegedly a "key" architect of the COOL
measure823), and Congressman Peterson (regarded by Canada as "pivotal" to the passage of the COOL
measure).824 Finally, Canada also points to evidence that it was "overwhelmingly" 825 US producers,
rather than consumer groups, who intervened to support the COOL measure.
418. Canada observes that "the Panel correctly found that it was appropriate to consider evidence
of legislators", and acknowledges that the Panel summarized some of the evidence put forward by
Canada (and Mexico) on that point. 826 Canada faults the Panel, however, for failing to review all of
the evidence on this point, and for fa iling to evaluate it. Instead, the Panel simply stated that, "while
the sentiment in some of [the statements by legislators] finds expression in the COOL measure, the
sentiment in others does not", and then concluded that "[o]n balance, [it did not] find this evidence of
assistance".
827 Yet, the Panel did not consider the probativ e value of the statements that, in Canada's
view, reveal the true objective of the COOL meas ure, and did not explain which statements "found
expression" in the COOL measure and which did not. For Canada, such failure constitutes an error
under Article 11 of the DSU.
419. We point out first that the Panel referred to evidence from a wide range of sources, including
some of those specifically referred to by Canada on appeal, such as the statement by Congressman
Peterson.828 The Panel also noted evidence adduced by Mexico 829, and by the United States. 830 I t
appears, therefore, that the Panel did consider th e evidence relied upon by the parties. As we have

822Canada's other appellant's submission, para. 39.
823Canada's other appellant's submission, para. 40 (re ferring to Canada's second written submission to
the Panel, para. 60; and 107th Congressional Record–Senate, Statement by Senator Tim Johnson (daily ed.
14 December 2001) S13270 (Panel Exhibit US-61), at S13271).
824Canada's other appellant's submission, para. 40 (ref erring to Panel Reports, para. 7.688; Canada's
first written submission to the Panel, para. 174; an d Country-of-Origin Meat Labeling Act, Hearing on
HR 1144 before the Subcommittee on Livestock and Horticulture of the Committee on Agriculture, House of
Representatives, 106th Congress, 2nd Session, 26 September 2000 (Panel Exhibit CDA-10)).
825Canada's other appellant's submission, para. 41 (re ferring to Canada's second written submission to
the Panel, para. 62).
826Canada's other appellant's submission, para. 42 (referring to Panel Reports, para. 7.686).
827Panel Reports, para. 7.691.
828As Canada itself notes, the Panel referred specifi cally to the following statement by Congressman
Collin Peterson: "I am perfectly willing to put barriers at the borders so I just want to clear that up". (Panel
Reports, para. 7.688 (quoting Panel Exhibit CDA-10, supra, footnote 824, at p. 77 of the Subcommittee Report)
829Panel Reports, para. 7.689.
830Panel Reports, para. 7.690.

already stated, the mere fact that the Panel did not refer explicitly to each and every statement or piece
of evidence submitted by Canada (or accord to them the weight that Canada considers they deserve)
does not mean that it erred or failed to comply with its duties under Article 11 of the DSU.
Furthermore, although Canada does not consider th e evidence to have been probative, Canada does
acknowledge that the Panel also referred to tw o statements by members of Congress, which the
United States had introduced as evid ence of a non-protectionist purpose
831, and that the Panel record
did contain one letter from consumer groups on the record, expressing support for origin labelling.832
420. It also seems to us that Canada's arguments fail to recognize that the Panel appears not to have
considered evidence of legislative intent to be pa rticularly probative of a measure's objective, in
general. Before assessing the arguments of the pa rties—which were based pr imarily on statements of
a number of persons and constituents involved in or related to the passage of the COOL measure—the
Panel referred to earlier findings of the Appellate Body which, in its view, suggested that the
subjective intent of legislators was not relevant to an inquiry into the objective of a measure 833, but
which recognized that it was possible to have recour se to the purpose or objectives of the legislature
"to the extent that they are given objective expression in the statute itself".834 Having "examined all of
the statements" submitted by the parties in these di sputes, the Panel concluded that it did not find
statements by individual legislators to be of assistance in its inquiry. 835 While Canada suggests that
the Panel was required to explain further its finding, we do not consider this to have been necessary.
The Panel explicitly and properly recognized the caution with which evidence of this nature should be
treated. Moreover, the Panel was clearly of the view that the protective intent alleged by Canada did
not clearly or consistently find "objective expression" in the COOL measure, a view that it was
entitled to reach, in the exercise of its discretion, based on its appreciation of the evidence before it.
(iv) Overall Disposition of Canada's and Mexico's Claims under
Article 11 of the DSU with respect to the Panel's
Identification of the Objective Pursued
421. Overall, the arguments that Canada puts forwar d in support of its appeal under Article 11 of
the DSU consist mainly of the identification of four groups of evidence that it put before the Panel,
coupled with an assertion that "the Panel did not reach the appropriate conclusion based on that

831Canada's other appellant's submission, para. 42 (referring to Panel Reports, para. 7.690, in turn
referring to Panel Exhibits US-13 and US-14).
832Canada's other appellant's submission, para. 41 (referring to Panel Exhibit US-61).
833Panel Reports, para. 7.686 (referring to Appellate Body Report, Japan – Alcoholic Beverages II ,
p. 27, DSR1996:I, 97, at 119; and Appellate Body Report, Chile – Alcoholic Beverages, para. 62).
835Panel Reports, para. 7.691.

evidence."836 Canada does not explain, specifically, how the Panel failed to comply with its duty to
assess objectively the facts under Article 11 of the DS U. Nor does Canada make clear whether it is
arguing that the Panel erred in its treatment of each of these four groups of evidence, or only in its
collective assessment of all four groups of evid ence, taken together. Moreover, Canada explicitly
recognizes that the Panel did take some account of each such group of evidence.
422. It seems to us that, in arguing that the Panel did not reach the appropriate conclusion based on
the evidence, Canada in effect seeks to have us conduct our own assessment of the facts, and to
ascribe a different weight to the ev idence than did the Panel. Yet, we are not called upon, on appeal,
to re-weigh factual evidence, or to disturb the Pa nel's exercise of its discretion merely because we
might have arrived at a different conclusion. We al so consider that the lack of importance that the
Panel attached to the evidence of statements made by legislators reflects not only its appreciation of
the facts, but also its recognition that, as a matter of law, care should be exercised in relying upon this
type of evidence in order to determine the objectiv e pursued by a measure. Furthermore, apart from
asserting that the Panel should have made a different finding, Canada does not contend that either the
finding actually made by the Panel in rejecting its ar guments regarding the protectionist intent of the
COOL measure837, or the Panel's finding as to the objectiv e of the COOL measure, lacked a proper
factual underpinning. It follows that we do not cons ider that Canada has demonstrated that the Panel
failed to satisfy its duty to assess objectively the fact s with respect to its analysis of the objective
pursued by the United States through the COOL measure.
423. We recall that we have dismissed the arguments ra ised by Mexico in support of its Article 11
claim on appeal, either because these arguments are based on its claim that the Panel committed legal
error in basing its finding as to the objective of the COOL measure exclusively on the United States'
identification of that objective, which we have rejected 838, or because they amount to mere
disagreement with the way in which the Panel weighed the evidence or to a request for us to conduct a
de novo assessment of the facts.839
424. Accordingly, we reject these grounds of appeal and find that Canada and Mexico have not
established that the Panel acted inconsistently w ith its obligations under Article 11 of the DSU in
assessing the evidence regarding the design, architectur e, structure, and legislative history of the
COOL measure in its analysis of the objective pursued by the United States through that measure.

836Canada's other appellant's submission, para. 33.
837The Panel found that "the scope of the COOL measure is broad enough to cover a significant range
of food products and entities handling these products". (Panel Reports, para. 7.684)
838See supra, para. 396.
839See supra, paras. 401 and 402.

(c) The United States' Appeal of the Panel's Finding concerning the
COOL Measure's "Level of Fulfilment" of Its Objective
425. The United States alleges that the Panel committed two errors in its analysis of the level at
which the United States considers it appropriate to fulfil its objective.
840 Specifically, in concluding
that the United States "aimed to provide ' as much clear and accurate origin information
as possible'"841, the Panel: (i) acted inconsistently with Article 11 of the DSU because it wilfully
distorted and misrepresented the United States' pos ition as to the level at which the United States
considers it appropriate to fulfil that objective; an d (ii) failed to consider all relevant information
regarding the level at which the United States sought to achieve its objective.842
426. We note that these two allegations made by the United States relate to paragraphs 7.590-7.621
of the Panel Reports, that is, to the Panel's first analysis of the objective pursued by the
United States.843 The United States characterizes the Panel's finding that "the objective pursued by
the United States through the COOL measure is to provide as much clear and accurate origin
information as possible to consumers" 844 as the Panel's "determination of [the United States'] chosen
level of fulfilment"845 of its objective. The United States claims that, in so finding, the Panel erred in
its application of Article 2.2 of the TBT Agreement, and also failed to make an objective assessment of
the facts as required under Article 11 of the DSU. Both of these allegations are, however, misplaced,
because they assume that, in id entifying the objective, the Panel was also required to identify the
desired "level of fulfilment". We have alread y explained in our analysis above why it was not
necessary or appropriate for the Panel, in identif ying the objective (that is, to provide consumer
information on origin), to further identify the le vel at which the United States desired to fulfil its
objective of providing consumer information on origin (that is, to provide as much clear and accurate
origin information as possible to consumers). 846 As we noted, the fulfilment of an objective is a
matter of degree, and what is relevant for the inqui ry under Article 2.2 is the degree of contribution to
the objective that a measure actually achieves.

added by the United States)
843United States' appellant's submission, para. 136 (referring to Panel Reports, paras. 7.590-7.621).
added by the United States)
845United States' appellant's submission, para. 136 (referring to Panel Reports, paras. 7.590-7.620
and 7.715).
846See supra, paras. 373 and 390.

427. The United States further argues that the Panel e rred and acted inconsistently with Article 11
of the DSU by relying on partial quotes that omitted key elements of the United States' description of
the desired level of fulfilment of its objective. In particular, the United States points to the complete
versions of excerpts from its Panel submissions that, in its view, demonstrate that it intended to strike
a balance between providing informa tion to consumers, on the one hand, and minimizing the costs to
market participants of implementing the measure, on the other hand. 847 The United States contends
that, by "selectively editing" these statements, how ever, the Panel misrepresented the United States'
objective as being "to provide 'as much clear and accurate origin information as possible' without
regard to … cost ".848 Thus, the Panel disregarded evidence th at the COOL measure reflects a balance
between the provision of information and the costs in curred, and wilfully distorted the United States'
position.
428. We disagree that the Panel erred in its identif ication of the objective pursued in this case
because it failed to take into account the fact that the COOL measure was implemented with a view to
minimizing the costs to market participants. First, as Canada points out, the Panel rejected a similar
attempt to introduce a consideration of costs into the formulation of the objective during the stage of
interim review on the ground that the United States had not presented arguments during the Panel
proceedings.849 Moreover, and even if the United States had raised its argument in a timely manner,
we fail to see how the balancing of cost considerations or the ex tent to which the United States
otherwise sought to achieve its objective (with "as much clear and accurate … information as
possible") are properly considered as part of the relevant objective. Indeed, the Panel itself
considered the issue of costs only when it came to assess whether the C OOL measure fulfilled its
objective.850

847United States' appellant's submission, paras. 136, 139, and 140.
848United States' appellant's submission, para. 142. (original emphasis)
849The Panel stated:
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". The Panel was not presented with the
argument from the United States that the reduction of compliance costs for
market participants also formed pa rt of the objective pursued by the
United States through the COOL meas ure. 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. Reducing
compliance costs therefore cannot form part of the objective itself.
(Panel Reports, para. 6.113 (footnotes omitted; original emphasis))
850See Panel Reports, para. 7.711.

429. For all of these reasons, we reject the United States' claims that the Panel erred in its
determination of the United States' "level of fulfilment" of its objective.
(d) Canada's Claim that the Panel Failed to Define the Objective of the
COOL Measure at a "Sufficiently Detailed Level"
430. Finally, Canada argues that, should we disagr ee with its arguments under Article 11 of the
DSU with respect to the Panel's identification of the objective pursued through the COOL measure,
then we should find that the Panel erred in failing to define that objective at a "sufficiently detailed
level".
851 Canada asserts that the Panel erred in not identifying the pur pose for which origin
information is provided to consumers. 852 Canada argues that, unlike a measure aimed at protecting
human life or health, which can be used for onl y legitimate purposes, the provision of "consumer
information" can be used for "illegitimate" purposes, such as to further racial discrimination or favour
domestic producers over foreign competition.853 Therefore, "[b]y vaguely framing the objective of the
COOL measure without a description of its underlying rationale, the Panel puts itself in a position of
having to test the legitimacy of an objective that can cover both legitimate and illegitimate
purposes."854
431. We disagree with Canada that the Panel faile d to identify the purpose for which the COOL
measure seeks to provide information. The Panel di d so, at least in part, by specifying the type of
information to be provided (on "origin" as defi ned under the COOL measure), and the persons to
whom that information is to be provided (consum ers). In any event, we are not persuaded by
Canada's argument that, because a variety of pur poses, both legitimate and illegitimate, could in
theory be served by a measure with the objective of providing consumer information on origin, this is
not an objective that is defined at a "sufficiently detailed level". In our view, while framed as a matter
relating to the precision with which the Panel identif ied the objective, Canada's arguments relate more
to the Panel's analysis of the legitimacy of the objec tive, an issue we turn to in the next section. We
therefore reject this ground of appeal.
(e) Summary of Conclusions
432. We have found above that, although the Panel unnecessarily conducted two analyses of the
objective pursued by the United States through the COOL measure, it did not err under Article 2.2 of
the TBT Agreement. We so found because the Panel's finding that the objective of the COOL measure

851Canada's other appellant's submission, p. 19, subheading III.(A).2(b).
852Canada's other appellant's submission, para. 44.
853Canada's other appellant's submission, paras. 45 and 46.
854Canada's other appellant's submission, para. 46.

is to provide to consumers info rmation on origin was, ultimately, based on a global assessment of the
United States' declared objective together with ev idence relating to the text, design, structure, and
legislative history of the COOL measure. We ha ve rejected arguments by Canada and by Mexico
that, in its treatment of the evidence relating to th e COOL measure's design, structure, and legislative
history, the Panel failed to make an objective assessment of the matter, as required under Article 11 of
the DSU. We have also rejected the United Stat es' argument that the Panel erred in applying
Article 2.2 of the TBT Agreement and acted inconsistently with its obligations under Article 11 of the
DSU in its characterization of the United States' chosen "level of fulfilment". Finally, we have
rejected Canada's argument that the Panel erre d by failing to define the objective of the COOL
measure at a "sufficiently detailed level".
433. On the basis of the above, we find that the Panel did not err, in paragraphs 7.617, 7.620,
and 7.685 of the Panel Reports, in identifying the objective pursued by the United States through the
COOL measure as being to provide consumer information on origin.855
4. Did the Panel Err in Finding that the Objective of the COOL Measure Is
"Legitimate"?
434. Canada also challenges the Panel's finding that "providing consumer information on origin is
a legitimate objective within the meaning of Article 2.2" of the TBT Agreement.856 Canada raises this
ground of appeal in the event that we reject its cl aim that the objective pursued by the United States
through the COOL measure is trade protectionism and that the Panel erred in finding otherwise. 857 As
we have affirmed the Panel's finding regarding th e objective pursued by the United States through the
COOL measure, we turn to this part of Canada's appeal.
435. Canada asserts that the Panel: (i) failed to ar ticulate a test for determining what constitutes a
legitimate objective 858; (ii) wrongly concluded that any objective that has a "genuine link" to a
"public policy" or "social norm" is legitimate 859; and (iii) erred in the two reasons that it gave for
finding the objective of the COOL measure to be legitimate. 860 According to Canada, the correct
"test" for determining whether an objective not explic itly listed in Article 2.2 is "legitimate" entails

855We recall in this respect that the COOL measure de fines the "origin" of beef and pork as a function
of the country or countries in which the livestock fr om which the meat is derived were born, raised, and
slaughtered.
856Panel Reports, para. 7.651. Mexico does not raise a separate ground of appeal in this regard.
857Both Mexico and Canada submit that, if we accept that the "true" objective of the measure is to
protect domestic industry, then it would automatically follow that such an objective is not "legitimate".
(Mexico's other appellant's submission, para. 45; Canada's other appellant's submission, para. 60)
858Canada's other appellant's submission, paras. 48 and 50.
859Canada's other appellant's submission, para. 50.
860Canada's other appellant's submission, para. 63.

three elements. First, a panel should determine whethe r an objective is "directly related" to one of the
objectives explicitly listed in Article 2.2.
861 Second, if it is not, then the panel should determine, in
accordance with the principle of ejusdem generis862, "if the measure is of the same type as the listed
objectives".863 In applying this principle, Canada conte nds that there are "significant elements of
commonality" in the explicitly listed objectives that can helpfully inform whether a particular
objective is legitimate. 864 In Canada's view, the objectives explicitly listed in the "General
Exceptions" provisions of Article XX of the GAT T 1994 and Article XIV of the GATS are of the
same "type" as those listed in Article 2.2 of the TBT Agreement, and the fact that such objectives are
"prioritized" in the covered agreements is one way to determine that they are "legitimate" for purposes
of Article 2.2. 865 Third, Canada submits that other un listed objectives may also be shown to be
"legitimate" with "clear and compelling evidence", and provided that they are identified with an
appropriately high level of specificity. 866 Canada stresses that the objective of providing consumers
with information "is not an objective privileged in any of the covered agreements, nor has the United
States provided clear and convincing evidence that i ndicates why that objective is legitimate in this
case".867 Moreover, argues Canada, the Panel erred in finding the objective pursued through the
COOL measure to be legitimate on the basis only of the existence of other WTO Members' labelling
measures that "purport" to provide consumer in formation on the origin of food products, and a
reference to the "protection of consumers" as one of the legitimate objectives in the Disciplines on
Domestic Regulation in the Accountancy Sector 868 (the " Accountancy Disciplines "), adopted in
accordance with Article VI:4 of the GATS.869
436. The United States rejects Canada's "test" for determining the "legitimacy" of objectives on the
ground that it lacks any basis in the text of Article 2.2. 870 First, according to the United States,
nothing in Article 2.2 "ranks" or "prioritizes" va rious objectives or provides for an "ever-escalating
presumption against the legitimacy of an objective depe nding on how closely related it is to the list in
Article 2.2".871 Second, Canada's reliance on the principle of ejusdem generis in creating its "test" to

861Canada's other appellant's submission, para. 53.
862Canada's other appellant's submission, para. 52 and footnote 100 thereto.
863Canada's other appellant's submission, para. 53.
864Canada's other appellant's submission, para. 52.
865Canada's other appellant's submission, para. 58.
866Canada's other appellant's submission, para. 59 (quoting New Zealand's oral statement at the first
Panel meeting).
867Canada's other appellant's submission, para. 62.
868S/L/64, adopted by the Council for Trade in Services on 14 December 1998.
869Canada's other appellant's submission, para. 63.

interpret Article 2.2 is mistaken. 872 Third, Canada's test is based on the false assumption that
Article 2.2 "prioritizes" the listed objectives over the unlisted ones, such that the explicitly listed
objectives are more "important" than the unlisted ones. 873 Fourth, even under Canada's approach, the
legitimacy of providing consumer information as an objective finds support in the enumerated
objectives themselves. Specifically, the United Stat es considers the objective of the COOL measure
to be closely connected to the prevention of deceptive practices, which is explicitly listed in
Article 2.2.874
437. We recall that the Panel began its analysis of this issue by noting that the burden of proving
that the relevant objective is not legitimate w ithin the meaning of Article 2.2 rested on the
complainants.875 Turning to the meaning of "legitimate", the Panel referred to the dictionary
definitions of this word, to the analysis of the panel in EC – Sardines, and to the objectives that are
explicitly listed in Article 2.2. According to the Pa nel, these demonstrated that "the legitimacy of a
given objective must be found in the ' genuine nature ' of the objective, which is 'justifiable' and
'supported by relevant public policies or other social norms' ."876 The Panel underlined that Article 2.2
"provides a non-exhaustive, open list of legitimat e objectives", "without any modifying language",
which "indicates that a wide range of objectives c ould potentially fall within the scope of legitimate
objectives under Article 2.2". 877 The Panel saw no explicit requirement, in the text of Article 2.2 or
elsewhere in the TBT Agreement, "that a policy objective pursued by a technical regulation must be
specifically linked in nature to those objectives explicitly listed in Article 2.2".878 Turning to Canada's
argument that Article 2.2 must be in terpreted and applied according to the ejusdem generis principle,
the Panel stated that it did not find that principle to be "helpful for determining whether the objective
pursued by the United States is legitimate". 879 The Panel nevertheless added that, even assuming that
the ejusdem generis principle were relevant, this would not assi st Canada because all of the examples
of legitimate objectives listed in Article 2.2 "are expressed at a high level of generality" 880, and thus
would not clearly indicate any particular limitations on the class of "legitimate objectives" covered by
that provision.

875Panel Reports, para. 7.629.
876Panel Reports, para. 7.632. (original emphasis)
877Panel Reports, para. 7.634.
878Panel Reports, para. 7.634.
879Panel Reports, para. 7.636.
880Panel Reports, para. 7.636.

438. The Panel noted that, while Canada and Mexico did not contest that, at a general level, the
provision of consumer informati on on country of origin can constitute a legitimate objective under
Article 2.2, they emphasized that the legitim acy of the specific objectives pursued by the
United States must be determined according to the factual circumstances of these disputes.
881 T h e
Panel observed that nearly 70 other WTO Members maintain some form of mandatory country of
origin labelling, and that many apply such requireme nts at the retail level. The Panel found that this
constituted evidence that "consumer in formation on country of origin is considered by a considerable
proportion of the WTO Membership to be a le gitimate objective under the TBT Agreement." 882 The
Panel found further support for its view in the fact th at the "protection of consumers" is listed as an
example of a legitimate objective in the Accountancy Disciplines developed in accordance with
Article VI:4 of the GATS. 883 This suggested to the Panel that "objectives relating to consumer
information or consumer protection can in prin ciple constitute a legitimate objective under the WTO
covered agreements".884
439. The Panel next referred to the complainants ' argument that the United States' objective
"should not be found legitimate unless the United Stat es can prove that it is important for consumers
to be provided with that information or why consumers need that information". 885 It also noted the
United States' arguments that the origin informa tion in question helps consumers make informed
choices and prevents consumer confusion, and th at there is strong consumer demand for such
information.886 The Panel expressed doubt as to the probativ e value of the United States' evidence of
consumer demand for such information, which co nsisted of comments made during the legislative
process. At the same time, the Panel did not cons ider that the absence of independent evidence of
consumer desire for the particular kind of info rmation on origin provided under the COOL measure
demonstrated that the objective of providing it was not legitimate. 887 The Panel then expressed the
view that:
[c]learly, 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

881Panel Reports, paras. 7.633 and 7.641.
882Panel Reports, para. 7.638.
883Panel Reports, paras. 7.639 and 7.640.
884Panel Reports, para. 7.640.
885Panel Reports, para. 7.641.
886Panel Reports, paras. 7.642 and 7.645.
887Panel Reports, para. 7.647.

products produced by or originating in particular countries for a
variety of reasons.888
440. The Panel further acknowledged that WTO Members enjoy certain "policy space" in pursuing
their regulatory objectives, and may decide to a dopt regulations even absent specific demand for
them, provided that this is not done in order to shape consumer expectations through regulatory
intervention.889
441. The Panel was persuaded, "based on the evid ence before [it] regarding US consumer
preferences as well as the practice in a considerab le proportion of WTO Members, that consumers
generally are interested in having informati on on the origin of the products they purchase." 890 The
Panel further set out its view that "whether an objective is legitimate cannot be determined in a
vacuum, but must be assessed in the context of the world in which we live. Social norms must be
accorded due weight in considering whether a par ticular objective pursued by a government can be
considered legitimate."891 On that basis, the Panel conclude d that "providing consumer information
on origin is a legitimate objective within the meaning of Article 2.2."892
442. Returning to Canada's appeal, we first observe that Canada does not challenge the Panel's
articulation of the burden of proof with respect to the issue of whether an objective is legitimate
within the meaning of Article 2.2. Furthermore, we agree with the Panel that it is for the complainant
raising an Article 2.2 claim to establish that th e relevant objective falls outside the scope of the
legitimate objectives covered by that provision. We al so take note that there appears to be agreement
among the participants that the relevant issue is whether the provision of consumer information on

888Panel Reports, para. 7.648.
889Panel Reports, para. 7.649. See also paras. 7.643 and 7.644.
890Panel Reports, para. 7.650. The Panel further observed that "many WTO Members have responded
to that interest by putting measures in place to require the provision of such information, albeit with different
definitions of 'origin'". (Ibid. (emphasis added))
891Panel Reports, para. 7.650. (footnote omitted) The Panel derived support for this statement from the
Appellate Body's finding in EC – Hormones that:
[i]t 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 world where people live and
work and die.
(Appellate Body Report, EC – Hormones, para. 187)
892Panel Reports, para. 7.651.

origin
893—an objective not explicitly listed in Artic le 2.2—can be considered "legitimate". 894
Although the United States has to some extent linked the provision of consumer information on origin
with the objective of "preventing deceptive prac tices"—which is listed in Article 2.2—its claim
appears to be that these objectives are "closely connected", and not that they are the same thing.895
443. As we see it, the thrust of Canada's appeal is directed at the Panel's alleged failure to articulate
a proper test for determining whether an objective that is not explicitly listed in Article 2.2 is
"legitimate" within the meaning of that provision. More specifically, Canada considers that the Panel
erred in not adopting the test proposed by Canada in this regard, which relies upon the ejusdem
generis principle to limit the class of "legitimate" objec tives to those objectives th at are of the same
type or kind as the ones explicitly listed in that provision.
444. As we have explained above, and draw ing upon the Appellate Body report in US – Tuna II
(Mexico), in determining whether an unlisted objective qualifies as legitimate, a panel may usefully
have regard to those objectives that are expressly listed in Article 2.2, because these may provide an
illustration and reference point for other objectives that may be considered "legitimate".
896 Thus, an
objective that is linked or related to a specific liste d objective may be more likely to be found to be
legitimate. Yet, like the Panel, we do not see, and Canada does not elaborate, the alleged "significant
elements of commonality of the explicitly listed objectives" that would illuminate the relevant type of
objective and thus serve to delineate the class of legitimate objectives that fall within Article 2.2. 897

893As discussed above, Canada also argues that, b ecause the provision of consumer information can
seek to achieve both legitimate and illegitimate purposes, this objective is too broadly cast to assess its
legitimacy under Article 2.2. For the reasons already discussed supra, at paragraph 431, however, we do not
consider that the Panel failed to identify the objective pursued through the COOL measure with sufficient
precision.
894The United States did not assert that it seeks to pr ovide consumers with information on the origin of
the meat they purchase through th e COOL measure in furtherance of one of the listed objectives under
Article 2.2, such as the protection of human health and safety, or the environment. (See Panel Reports,
para. 7. 637)
895United States' appellant's submission, para. 57. In its responses to Panel Questions, the United States
explained that it never asserted that the COOL measure was enacted in "direct response" to deceptive practices.
However, the United States did note that its objectives—that is, providing consumer information and preventing
consumer confusion—are related to preventing deceptive practices "in th at they help ensure that consumers
receive accurate and non-misleading info rmation about the products that they buy". (United States' response to
Panel Question 56(b))
896Appellate Body Report, US – Tuna II (Mexico), para. 313.
897As the Appellate Body noted in US – Large Civil Aircraft (2 nd complaint), the principle of Latin
canon of construction, "ejusdem generis", provides that, when a general word or phrase follows a list of specific
persons or things, the general word or phrase will be interpreted to include only persons or things of the same
type as those listed. (Appellate Body Report, US – Large Civil Aircraft (2 nd complaint) , footnote 1290 to
para. 615 (referring to Black's Law Dictionary, 7th edn (West Group, 1999), p. 535)) Canada does not explain
what is the common feature across the ra nge of specifically listed objectives of the protection of health, safety,
environment, national security requir ements, and the prevention of deceptiv e practices that would provide an
indication of the type of objectives that might be considered legitimate.

Indeed, it is difficult to discern such commonality amongst the disparate listed objectives that are,
moreover, "expressed at a high level of generality". 898 In addition, it seems to us that any relevant
"commonality" among explicitly listed objectives would have to relate to the nature and content of
those objectives themselves, rather than, as Canada seems to suggest, to the fact that each objective in
Article 2.2 is also listed in excep tions provisions in othe r covered agreements. For these reasons, we
do not consider the Panel to have erred in failing to rely upon the ejusdem generis principle to identify
the class of "legitimate objectives" under Article 2.2 of the TBT Agreement.
445. The Appellate Body also explained, in US – Tuna II (Mexico), that objectives listed in the
recitals of the preamble of the TBT Agreement and provisions of other c overed agreements may guide
or usefully inform a panel's determination of wh ich other objectives can be considered "legitimate"
for purposes of Article 2.2. 899 We observe, in this regard, that the provision of information to
consumers on origin bears some relation to the objective of prevention of deceptive practices reflected
in both Article 2.2 itself and Article XX(d) of the GATT 1994, insofar as consumers could be
deceived as to the origin of products if labelling is inaccurate or misleading. In our view, support for
the legitimate nature of the objective of providing information to consumers on origin is also found
elsewhere in the covered agreements, in particular in Article IX of the GATT 1994. This provision,
entitled "Marks of Origin", expressly recognizes the right of WTO Members to require that imported
products carry a mark of origin. Although the appl icability of this provision to the circumstances of
these disputes has not been explored by the partic ipants, and it is in any event not at issue 900,
Article IX does indicate that requiring origin la belling for imported goods is, at least in some
circumstances and for some definitions of "origi n", considered under WTO law to be a permissible
means of regulating trade in goods.
446. While Canada has accepted, at a general level, that the provision of consumer information on
origin can constitute a legitimate objective 901, it appears to consider that the Panel erred in finding the
objective of providing consumers with information on origin as defined under the COOL measure
(that is, based on where the livestock from which m eat is derived were born, raised, and slaughtered)
to be legitimate. In this rega rd, we understand Canada to assert that the Panel's reasoning does not

898Panel Reports, para. 7.636.
899Appellate Body Report, US – Tuna II (Mexico), para. 313.
900We note that, while both Canada and Mexico included claims under Article IX of the GATT 1994 in
their requests for establishment of a panel (WT/DS/384/8 and WT/DS/386/7 and Corr. 1), neither pursued these
claims in its submissions to the Panel.
901Panel Reports, para. 7.633.

show that many Members require the provision of that type of consumer information on origin.
902 We
further understand Canada to assert that, even if ma ny Members do require the provision of consumer
information on origin, generally, this would not suffi ce to show that the specific objective pursued by
the United States is legitimate.
447. We observe in this regard that Canada's arguments seem to imply that, in assessing
legitimacy, a distinction should be drawn between th e provision of consumer information on origin,
generally903, and the provision of c onsumer information on origin b ased on the definition of "origin"
under the COOL measure. Yet, Canada has not explained why it is not legitimate to define the origin
of meat according to the countries in which the livestock from which it is derived were born, raised,
and slaughtered. Indeed, in a separate section of its Reports, the Panel noted that the United States'
definition of origin for purposes of the COOL meas ure is different from that employed for customs
purposes.904 The Panel added that there was "no basi s" for it to find that the United States is
prohibited from adopting for labelling purposes an origin definition—based on the places where
animals used to produce meat were born, raised, a nd slaughtered—which is different from that used
for customs purposes. 905 Canada does not contest this statemen t by the Panel or argue, for example,
that it is not legitimate for the United States to defi ne "origin" differently for purposes of the labelling
of meat for retail sale than it does for customs purposes. It is therefore unclear on what basis or to
what extent, in the context of its arguments rela ting to legitimacy, Canada challenges the precise way
in which the COOL measure defines "origin". We note, for example, that Canada's position appears
to imply that it would accept the legitimacy of provi ding consumers with information on origin when
such labelling is based on origin as defined by the principle of substantial transformation—that is,
according to the country in which the last producti on step (slaughter) took place. Yet, Canada does
not elaborate its implicit view that providi ng consumers with information on origin is not a legitimate
objective when origin is defined based on all of the countries in which relevant production steps took
place. Rather, as it did before the Panel, Canada simply links its approach to legitimacy to its

902Canada argues, for instance, that in examining the COOL regime of other WTO Members, the Panel
"did not examine them to consider whether they are analogous to the C OOL measure, much less examine the
purposes for which that information was provided in those cases". (Canada's other appellant's submission,
para. 64)
903Panel Reports, paras. 7.623, 7.633, and 7.641.
904As the Panel noted, for customs purposes, the United States relies on the rules of substantial
transformation for determining the origin of products imported into the United States. (Panel Reports,
para. 7.674)
905Panel Reports, para. 7.675.

arguments on the need to know the purpose for which information on origin is provided to consumers
in order to determine whether the objective is legitimate.906
448. Furthermore, although Canada appears to cons ider that the Panel wrongly assumed that a
widely held social norm is always legitimate, we do not see that the Panel made any such assumption.
Indeed, as explained below, we find the Panel's stat ements regarding "social norms" to be somewhat
opaque and, ultimately, of no consequence for its c onclusion on legitimacy. In its arguments, Canada
is also critical of the Panel's reference to the or igin labelling practices of other WTO Members. We
recall that the Panel took account of evidence that wa s put before it by the United States to show that
many WTO Members maintain some form of mandator y origin labelling scheme. To the extent that
Canada is arguing that, when there are differences among the "origin" information that different
Members require be provided to consumers, the proba tive value of such evidence may be limited, we
agree. Indeed, the Panel itself seems to have recogni zed this since, when it referred to evidence that a
"considerable proportion of the WTO Membership" 907 provides consumers with information on
origin, the Panel explicitly acknowledged that such sc hemes use different definitions of "origin" than
the one set out in the COOL measure. 908 In any event, Canada does not raise a claim under Article 11
of the DSU in this respect.
449. We are nevertheless troubled by certain aspects of the Panel's analysis of the legitimacy of the
United States' objective. First, although the Panel recognized, at the outset of its analysis, that the
burden of proving that an objective is not legitimate lay with the complainants, its reasoning at times
suggests that it, instead, placed on the United St ates the burden of proving that its objective was
legitimate. Thus, for example, the Panel referred to the complainants' position that "the United States'
stated objectives in this dispute should not be fo und legitimate unless the United States can prove that
it is important for consumers to be provided with that informati on or why consumers need that

906In its other appellant's submission, Canada contends that its proposed approach to a determination of
legitimacy "unlike the appr oach of the Panel, would also ensure that a measure providing information to
consumers in order to discriminate on the basis of race or to advance protectionist interests could not be
'legitimate'". (Canada's other appellant's submission, para. 51) See also the Panel's summary of Canada's
arguments with respect to legitimacy as set out in paragraph 7.633 of the Panel Reports.
907Panel Reports, para. 7.638.
908The Panel considered the mandatory labelling requirements maintained by the complainants and
third parties in these disputes and found that they purported to provide consumer information on origin of food
products. (Panel Reports, para. 7.638) Moreover, in its conclusion, the Panel found that:
… based on the evidence before us regarding US consumer preferences as
well as the practice in a considerable proportion of WTO Members, …
consumers generally are interested in having information on the origin of
the products they purchase. We al so observe that many WTO Members
have responded to that interest by putting measures in place to require the
provision of such information, albeit with different definitions of "origin".

information"
909, and then proceeded to examine whether th e United States had done so. Furthermore,
in the paragraph summarizing its conclusions with respect to the legitimacy of the objective, the Panel
stated: "We are persuaded, based on the eviden ce before us …, that consumers generally are
interested in having information on the origin of the products they purchase." 910 I n t h e s a m e
paragraph, the Panel also observed that "whether an objective is legitimate cannot be determined in a
vacuum, but must be assessed in the context of the world in which we live".911
450. Second, it is not clear upon what basis the Panel reached its finding "that consumers generally
are interested in having information on the origin of the products they purchase" 912, given that the
Panel itself cast doubt on the probative value of the evidence that the Un ited States adduced to
demonstrate such demand. 913 Canada does not, however, challe nge this finding under Article 11 of
the DSU.
451. Third, we are uncertain as to the basi s on which the Panel had recourse to the Accountancy
Disciplines developed under the GATS, and to the objective of "the protection of consumers" set out
in those Disciplines.914 That being said, however, we do not agree with Canada that it was improper
for the Panel to link the objective of consumer protection with the objective of providing consumers
with information on origin. We have already e xplained that we view the objective of providing
consumers with information on origin as related to the objective of preventing deceptive practices,
which is in turn linked to the objective of consumer protection. Thus, like the Panel, we consider that
providing accurate and reliable information ma y protect consumers from being misled or
misinformed.915
452. Fourth, we have some difficulties understa nding how the Panel viewed the relationship
between "the practice in a considerable proporti on of WTO Members" and "social norms", and the

909Panel Reports, para. 7.641.
910Panel Reports, para. 7.650.
911Panel Reports, para. 7.650.
912Panel Reports, para. 7.650.
913Panel Reports, para. 7.647.
914None of the participants cited these Disciplines in support of their positions on the legitimacy of the
United States' objective. The Panel might, for example, have considered these Disciplines to be a subsequent
agreement between the parties, within the meaning of Article 31(3)(a) of the Vienna Convention. Even if this
had been the case, however, it would have been helpful for the Panel to have explained why it considered that
such an agreement, made in connection with the GATS, wa s also relevant to the interpretation or application of
term "legitimate" in Article 2.2 of the TBT Agreement.
915We also recall, in this respect, that the Panel on several occasions rec ognized that the COOL
measure has the additional objective of eliminating the consumer confusion that existed prior to the COOL
measure as a result of the US DA grade labels and the voluntary FSIS la bels. (See, for example, Panel Reports,
paras. 7.671 and 7.713)

role that these considerations played in its an alysis. Ultimately, however, while these ambiguities
may detract from the overall clarity of the Panel's analysis, they do not taint its conclusion.
453. Based on all of the above, we see no reason to di sturb the Panel's finding with respect to the
legitimacy of the objective pursued by the Unite d States through the COOL measure, namely, to
provide consumers with information on the countries in which the livestock from which the meat they
purchase is produced were born, raised, and slaught ered. The Panel's analysis reveals that the
arguments and evidence submitted by the complainants failed to persuade the Panel that providing
consumers with information on origin, as defined under the COOL measure, is not a legitimate
objective. On appeal, Canada has not shown that the Panel erred in rejecting its arguments and
evidence in this regard. We therefore di smiss this ground of Canada's appeal and find that the Panel
did not err, in paragraph 7.651 of the Panel Reports , in finding the provision of consumer information
on origin is a legitimate objective within the meaning of Article 2.2 of the TBT Agreement.
5. Did the Panel Err in Its Analysis of Whether the COOL Measure Is More
Trade Restrictive than Necessary to Fulfil a Legitimate Objective, Taking
Account of the Risks Non-Fulfilment Would Create?
454. Having found that the Panel did not err in findi ng that the objective of the COOL measure is
"legitimate", we turn now to address the United States ' arguments on appeal relating to the third step
of the Panel's analysis of the claims under Article 2.2 of the TBT Agreement, that is, to the Panel's
assessment of whether the COOL measure is "mor e trade-restrictive than necessary to fulfil" a
legitimate objective.916
455. The United States appeals the legal framework a dopted by the Panel to determine whether a
measure is "more trade-restrictive than necessary to fulfil a legitimat e objective", including its failure
to require the complaining parties to meet thei r burden of proving that the measure is "more
trade-restrictive than necessary" based on the availability of a significantly less trade-restrictive
alternative measure. With respect to the legal fr amework, the United States submits that the Panel
erroneously employed a two-stage test that involved an initial inquiry into whether the measure fulfils
the objective, and only if so, a separate and subse quent examination of whether the measure is more
trade restrictive than necessary based on the existence of a reasonably available less trade-restrictive
alternative measure. According to the United States, such a two-stage analysis is not required under
Article 2.2. Rather, as with the "parallel provision" in Article 5.6 of the SPS Agreement, Article 2.2
of the TBT Agreement calls for a "single analysis, containing three elements that are to be judged

916See Panel Reports, para. 7.558 (third bullet point).

cumulatively".
917 The three elements include an assessment of whether (i) there is a reasonably
available alternative measure (ii) that fulfils the Member's legitimate objective at the level that the
Member considers appropriate and (iii) is significantly less trade restrictive.918
456. The United States explains that the Panel's impr oper use of the two-stage test led it to find
that the United States acted inconsistently with Article 2.2 simply because the COOL measure does
not contribute to the objective—or fulfil the objective—" enough".919 Yet, the United States
emphasizes, a measure cannot be found to be inconsistent with Article 2.2 " solely because it does not
meet some minimum threshold of contribution to its objective".920 The United States emphasizes that,
while a panel's determinations of the objective and of the level at which a Member seeks to fulfil that
objective are important for an Article 2.2 analysis, th ey are not an end in themselves. Rather, these
determinations are relevant in order to assess whether the complaining party has met its burden of
showing that the same level of fulfilment could be achieved by a significantly less trade-restrictive
alternative measure.
457. In addition to the allegedly erroneous legal framework adopted by the Panel, the United States
appeals what it characterizes as a finding by the Pa nel that the COOL measure does not fulfil its
objective at the level the United States considers appropriate. 921 The United States argues that the
Panel failed properly to take into account that the COOL measure "completely" fulfils its objective for
meat that carries Label A. 922 Moreover, the United States asserts that, notwithstanding its various
criticisms of the information that Labels B and C provide, even the Panel acknowledged that those
labels made some contribution to the objective of providing consumers with information on the origin
of meat.923
458. Both Canada and Mexico reject the United St ates' argument that the Panel adopted an
erroneous legal approach to its analysis under the th ird stage of its test. Although neither Canada nor

918The United States quotes, in this regard, the Appellate Body's statement, in Australia – Salmon, that
an inconsistency with Article 5.6 of the SPS Agreement will be demonstrated when "there is an SPS measure
which: (1) is reasonably available taking into acco unt technical and economic feasibility; (2) achieves the
Member's appropriate level of sanitary or phytosanitary protection; and (3) is significantly less restrictive to
trade than the SPS measure contested. " (United States' appellant's subm ission, para. 156 and footnote 241
thereto (quoting Appellate Body Report, Australia – Salmon, para. 194))
919United States' appellant's submission, para. 167. (original emphasis)
920United States' appellant's submission, para. 167. (original emphasis) The United States further
submits that whether a measure makes a "material contribution" to its objective, in the sense that the Appellate
Body used the term in Brazil – Retreaded Tyres , is not the correct test for purposes of Article 2.2. ( Ibid.
(referring to Appellate Body Report, Brazil – Retreaded Tyres, para. 151))
921United States' appellant's submission, paras. 171-177 (referring to Panel Reports, para. 7.719).

Mexico specifies the precise threshold that must be me t for a technical regulation to be considered to
"fulfil" its objective, both suggest that this threshold is fairly high. 924 Moreover, Canada and Mexico
disagree with the United States that the Panel erre d in its assessment of the level of fulfilment
achieved by the COOL measure, and submit that th e Panel correctly found that the COOL measure
does not fulfil its objective because it fails to convey meaningful information. For this reason, they
consider that it was appropriate for the Panel to ha ve stopped its analysis after having determined that
the COOL measure does not fulfil its objective. If, however, the Appellate Body disagrees that there
is a separate step for assessing whether a challenge d measure fulfils its objective, then Canada and
Mexico agree that the level of fulfilment found by the Panel is relevant for assessing the COOL
measure against proposed alternatives.
459. Turning to the Panel's treatment of this issue, we recall that the Panel first articulated the
approach it would take in determining the COOL measure's consistency with Article 2.2 in the
introduction to its assessment of the complainants' claims under that provision. There, the Panel
stated that, if it determined that the objective of the COOL measure is "legitimate" under the second
step of its Article 2.2 analysis, then its inquiry under the third, and final, step would proceed as
follows. First, it would determine whether the t echnical regulation fulfils the identified objective. 925
If that question were answered in the affirmative, th e Panel stated that it would then consider whether
the technical regulation is more trade restrictive th an necessary to fulfil the objective. This would
entail an analysis of the availability of less trade-restrictive alternative measures that can equally fulfil
the objective, taking into account the risks that non-fulfilment would create. 926 When it came to
applying this framework later in its analysis, however, the Panel never reached the stage of comparing
the COOL measure against less trade-restrictive a lternative measures because it found that the COOL

924In this regard, Canada notes that, while the ordinary meaning of the word "fulfil" used in Article 2.2,
as well as its French and Spanish equivalents (" réaliser" and " alcanzar", respectively), sugg est that a measure
must achieve its objective at 100%, when read in its context, and, in the light of the relevant object and purpose,
the word "fulfil" requires a showing of something less than complete fulfilment. (Canada's appellee's
submission, paras. 92-94) Mexico argues that the standard "to fulfil" is close in its degree to the standard
"necessary", so the term "to fulfil" in the context of Article 2.2 of the TBT Agreement requires that a technical
regulation be located significantly closer to the pole of 100% fulfilment of the legitimate objective. (Mexico's
appellee's submission, paras. 177 and 178 (referring to Appellate Body Report, Korea – Various Measures on
925Panel Reports, para. 7.556. In this regard, the Panel noted the parties' agreement that such an inquiry
was the "starting point" and "an analytical step" that is required in order to examine whether that technical
regulation is more trade restrictive than necessary. ( Ibid., footnote 743 to para. 7.556) The Panel further noted
the United States' argument that it is appropriate to anal yze whether the measure in qu estion fulfils a legitimate
objective first because an analysis 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 objective. The Panel also noted th at, according to the United St ates, "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. (Ibid.)
926Panel Reports, paras. 7.556 and 7.557. See also para. 7.558 (third bullet point).

measure "does not fulfil the identified objective with in the meaning of Article 2.2 because it fails to
convey meaningful origin information to consumers".
927
460. This part of the United States' appeal compri ses both a challenge to the Panel's interpretation
of Article 2.2 and a challenge to the Panel's applicat ion of that interpretation to the COOL measure.
In particular, the United States seeks reversal of the Panel's ultimate finding under Article 2.2 based
on its view that Article 2.2 does not require a separate assessment of whether a technical regulation
"fulfils" a legitimate objective, and does require a complainant to prove that there is a less
trade-restrictive alternative measure available. The United States adds, in this regard, that, in finding
that the COOL measure does not fulfil its objectiv e, the Panel ignored its own findings about the
extent of the contribution that the COOL measure makes to achieving its objective.
461. Many of the issues relating to the proper appro ach to be adopted and applied in determining
whether a measure "fulfils" its objective were dealt with by the Appellate Body in US – Tuna II
(Mexico). There, the Appellate Body clarified that an analysis under Article 2.2 involves an
assessment of a number of factors, and that one such factor is whether a technical regulation "fulfils"
an objective. The Appellate Body explained that this factor is concerned with the degree of
contribution that the technical regulation makes to wards the achievement of the legitimate objective,
and that a panel must seek to ascertain to what degree, or if at all
928, the challenged technical
regulation, as written and applied, actually contri butes to the legitimate objective pursued by the
Member. The degree of achievement of a particular objective may be discerned from the design,
structure, and operation of the technical regul ation, as well as from evidence relating to the
application of the measure. The Appellate Body di d not find or imply that, in order for a measure to
comply with Article 2.2, it must meet some minimum threshold of fulfilment. Rather, the
contribution that the challenged measure makes to the achievement of its objective must be
determined objectively, and then evaluated along with the other factors mentioned in Article 2.2, that
is: (i) the trade-restrictiveness of the measure; and ( ii) the nature of the risks at issue and the gravity
of the consequences that would arise from non-fulfilm ent of the objective(s) pursued by the Member
through the measure. In most cases, a comparison of the challenged measure and possible alternative

927Panel Reports, para. 7.719.
928This may involve an assessment of whether the measure at issue is capable of achieving the
legitimate objective.

measures will then also need to be undertaken. 929 Through such an analysis, a panel will be able to
judge the "necessity" of the trade-restrictiveness of the measure at issue, that is, to discern whether the
technical regulation at issue restricts internati onal trade beyond what is necessary to achieve the
degree of contribution that it makes to the achievement of a legitimate objective.
462. In these disputes, the Panel attempted to articulat e a standard of "fulfilment" at the beginning
of its analysis. After referring to a number of dic tionary definitions of the word "fulfil", the Panel
found that "to meet the requirement in Article 2.2 of the TBT Agreement, the COOL measure must
carry out and perform the objective of providing origin information to consumers." 930 The Panel also
considered it "useful to recall" the Appellate Body's clarification in the context of Article XX(b) of
the GATT 1994 that "a contribution exists when there is a genuine relationship of ends and means
between the objective pursued and the measure at issue."931
463. When it came to actually applying a standard of "fulfilment" to the COOL measure, the Panel
noted that, as the parties agreed, information on the or igin of products must be clear and accurate for
it to be able to convey meaningful information to consumers. Therefore, "[u]nder 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." 932 The Panel then referred to the argument of the
complainants that the COOL measure did not fulfil its objective because the labels under that measure
provide consumers with "inaccurate or misleading information".933
464. In the course of its analysis, the Panel confin ed itself largely to addressing the complainants'
arguments as regards Labels B and C.934 The Panel agreed with the complainants that the information
provided through these labels was not accurate and was confusing. The Panel concluded, with respect
to Labels B and C that:
… in light of the origin definition as determined by the United States
for meat products, the description of origin for Label B and Label C
is confusing in terms of the meaning of multiple country names listed
in these labels. Moreover, the po ssibility of interchangeably using

929Appellate Body Report, US – Tuna II (Mexico) , para. 322. The Appellate Body identified "at least
two instances where a comparison of the challenged measure and possible alternative measures may not be
required", namely, when the measure is not trade restrictive at all, or wh en a trade-restrictive measure makes
no contribution to the achievement of the relevant legitimate objective. (Appellate Body Report, US – Tuna II
(Mexico), footnote 647 to para. 322)
930Panel Reports, para. 7.692. (emphasis added)
(emphasis added by the Panel)
932Panel Reports, para. 7.695.
933Panel Reports, para. 7.696.
934Panel Reports, paras. 7.697-7.705.

Label B and Label C for all categories of meat based on commingling
does not contribute in a meaningful way to providing consumers with
accurate information on origin of meat products.
935
465. In the next paragraph, the Panel found that th e 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".936
466. Despite this overall finding, a number of findi ngs and observations made by the Panel in the
course of its analysis belie this conclusi on and suggest that the COOL measure does contribute to the
objective of providing information to consumers on the countries in which the livestock from which
meat is derived were born, raised, and slaughtered. With respect to Label A, the Panel found that the
COOL measure "appears to fulfil the objective b ecause the measure prohibits [meat derived from
animals of non-US origin] from carrying a Label A". 937 Even with respect to Labels B and C, the
Panel found that these labels provide at least some origin information, namely, "information on meat
with regard to the possible … origin as defined by the measure". 938 Moreover, the Panel found that,
on the whole, the COOL measure provides more information to consumers than was available to them
prior to its enactment. 939 The Panel also noted that the "labels required to be affixed to meat
products … provide additional country of origin info rmation that was not available prior to the COOL
measure" and that this "may have reduced cons umer confusion that existed under the pre-COOL
measure and USDA grade labelling system".940
467. While recognizing these contributions, the Panel' s concluding statements and ultimate finding
suggest that the Panel considered that, in order for the COOL measure to fulfil its objective, either all
of the labels had to provide 100% accurate and clear information, or that the COOL measure had to
meet or surpass some minimum threshold. Whiche ver test it employed, the Panel was clearly of the
view that the COOL measure did not meet that standard. For instance, the Panel found that the COOL

935Panel Reports, para. 7.718.
936Panel Reports, para. 7.719.
937Panel Reports, para. 7.713. The finding of the Panel in its entirety is as follows:
In essence, the specific objective purs ued by the United States through the
COOL measure as explained above, namely the prevention of confusion
caused by the previous COOL 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 circumstances. To that
extent, the COOL measure appears to fulfil the objec tive because the
measure prohibits such meat from ca rrying a Label A even though the same
meat may still carry a USDA grade label.
938Panel Reports, para. 7.707.
939According to the Panel, the COOL measure provides " more information than under the previous
labelling regime". (Panel Reports, para. 7.715 (original emphasis))
940Panel Reports, para. 7.717.

measure "falls short" 941 of its objective, and that merely "providing more information than under the
previous labelling regime or fulfilling only a limited aspect of the identified objective does not
contribute in a meaningful way to fulfilling the objective".942
468. We have stated above that a panel's assessment of whether a measure fulfils its objective is
concerned primarily with the actual contribution made by the measure towards achieving its objective.
Thus, a panel's assessment should focus on ascertain ing the degree of contribution achieved by the
measure, rather than on answering the questions of whether the measure fulfils the objective
completely or satisfies some minimum level of fulfilment of that objective. 943 Because the Panel
seems to have considered it necessary for the COOL measure to have fulfilled the objective
completely, or satisfied some minimum level of fulfilme nt to be consistent with Article 2.2, it erred in
its interpretation of Article 2.2. Moreover, because the Panel ignored its own findings, which
demonstrate that the labels under the COOL m easure did contribute towards the objective of
providing consumer informa tion on origin, it also erred in its an alysis under Article 2.2. For these
reasons, we find that the Panel erred, in paragraph 7.719 of the Panel Reports, in finding 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", and we reverse the Panel's ultimate
finding, in paragraph 7.720 of the Panel Reports , that, for this reason, the COOL measure is
inconsistent with Article 2.2 of the TBT Agreement.944
469. We note that the United States further argues that the Panel erred by relieving the
complaining parties of their burden to prove that the measure is "more trade-restrictive than
necessary" based on the availability of less trade-restrictive alternativ e measures. We have reversed
the Panel's finding, that the COOL measure is inc onsistent with Article 2.2 because it does not fulfil
its objective, on the basis that the Panel's own findi ngs indicate that the COOL measure did contribute
to its objective. It follows therefore that, as the Appellate Body explained in US – Tuna II (Mexico),
the Panel in this case was required also to evaluate th e other factors referred to in Article 2.2, and to
undertake a comparison with the alternative meas ures proposed by Mexico and by Canada. The
Appellate Body has found, and the participants do not contest, that the burden of proof with respect to
such alternative measures is on the complainants. 945 Accordingly, we agree with the United States
that, by finding the COOL measure to be inconsistent with Article 2.2 of the TBT Agreement without

941Panel Reports, para. 7.716.
942Panel Reports, para. 7.715. (original emphasis)
943See supra, para. 373.
944See also Canada Panel Report, para. 8.3(c); and Mexico Panel Report, para. 8.3(c).
945Appellate Body Report, US – Tuna II (Mexico), para. 323.

examining the proposed alternative measures, the Pane l erred by relieving Mexico and Canada of this
part of their burden of proof.
6. Completion of the Legal Analysis – Is the COOL Measure More Trade
Restrictive than Necessary to Fulfil the Legitimate Objective, Bearing in
Mind the Risks that Non-Fulfilment Would Create?
470. We have reversed the Panel's finding that the CO OL measure is inconsistent with Article 2.2
of the TBT Agreement because it does not fulfil the objective of providing consum er information on
origin.946 Therefore, the condition that triggers Canada 's and Mexico's requests for completion of the
legal analysis under this provision has been met. 947 Accordingly, we proceed to consider whether we
can rule on the complainants' claims that the COOL measure is inconsistent with Article 2.2 because
it is more trade restrictive than necessary to fulfil a legitimate objective. To the extent possible, we
shall seek to complete the legal analysis in order to foster resolution of these disputes. However, we
can do so only to the extent that "the factual findings of the panel and the undisputed facts in the panel
record provide … a sufficient basis" for our analysis. 948 With these considerations in mind, we turn to
address the complainants' request for completion of the analysis under Article 2.2 of the
TBT Agreement.
471. As we have already noted above, in US – Tuna II (Mexico), the Appellate Body explained that
an assessment of whether a technical regulation is "more trade-restrictive th an necessary" within the
meaning of Article 2.2 involves an evaluation of a number of factors, including: (i) the degree of
contribution made by the measure to the legitimate obj ective at issue; (ii) the trade-restrictiveness of
the measure; and (iii) the nature of the risks at issue as well as the gravity of the consequences that
would arise from non-fulfilment of the objective pursued by the Member through the measure.
949 The
Appellate Body further stated that, "[i]n most cases, a comparison of the challenged measure and
possible alternative measures should be undertaken."
950 In making this comparison, it will be relevant
to consider whether the proposed alternative is le ss trade restrictive; whether it would make an
equivalent contribution to the relevant legitimat e objective, taking account of the risks non-fulfilment

946Panel Reports, para. 7.720. See also Canada Pane l Report, para. 8.3(c); and Mexico Panel Report,
para. 8.3(c).
947Canada's other appellant's submission, para. 69; Mexico's other appellant's submission, para. 47.
949Appellate Body Report, US – Tuna II (Mexico), para. 322.
950Appellate Body Report, US – Tuna II (Mexico) , para. 322. As noted above, the Appellate Body
identified two instances where a compar ison of the challenged measure with possible alternative measures may
not be required, namely, when the measure is not trade re strictive at all, or when a trade-restrictive measure
makes no contribution to the achievement of the relevant legitimate objective. (Appellate Body Report, US –
Tuna II (Mexico), footnote 647 to para. 322)

would create; and whether it is reasonably available. 951 For the reasons that led us to reverse the
Panel's finding under Article 2.2, we consider the pre sent case to be one that calls for an examination
of the factors identified above for both the COOL measure and the alternatives proposed by the
complainants in order to determine whether the COOL measure is more trade restrictive than
"necessary" to fulfil its objective.
472. We start by examining the COOL measure. We recall that we have affirmed the Panel's
findings on the objective pursued by the United States through the COOL measure and its
legitimacy.952
473. With respect to the degree of contribution ma de by the COOL measure to its objective, we
have already referred to a number of Panel fi ndings suggesting that the COOL measure does
contribute, at least to some degree, to providing consumers with informati on on origin. The Panel
found, for example: that the labels required to be affixed to meat produc ts "provide additional
country of origin information that was not available prior to the COOL measure" 953; that the labelling
requirements under the COOL measure "may have reduced consumer confusion that existed under the
pre-COOL measure and USDA grade labelling system" 954; that Label A ensures "meaningful
information for consumers"955; that, to the extent the United States aims to prevent meat derived from
animals of non-US origin from carrying a US-ori gin label under any circumstances, "the COOL
measure appears to fulfil the objective because the measure prohibits such meat from carrying a
Label A"956; and that, even with respect to Labels B and C, the COOL measure contributes to
providing information with regard to the possible countries in which the livestock from which meat is
derived were born, raised, and slaughtered.957
474. On appeal, the participants disagree as to the implications of the Panel's findings for assessing
the contribution made by Label A to the objectiv e of the COOL measure, both in terms of the
proportion of meat sold in the United States that ca rries this label, and in terms of the clarity and

951Appellate Body Report, US – Tuna II (Mexico), para. 322.
952See subsections VI.C.3 and VI.C.4 of these Reports.
953Panel Reports, para. 7.717.
954Panel Reports, para. 7.717.
955Panel Reports, para. 7.718. We also note Canada's and Mexico's acce ptance during the oral hearing
that Labels B and C convey some information, namely, th e fact that at least one stage of production took place
in the United States.
956Panel Reports, para. 7.713.
957Panel Reports, para. 7.707.

accuracy of the information that Label A conveys.
958 We recall the Panel's finding that Label A
ensures "meaningful information for consumers". 959 We also recall that the COOL measure does not
apply to all beef and pork sold within the Unite d States. Indeed, the COOL measure's labelling
requirements do not apply to all entities that sell pork and beef 960, or to all beef and pork products. 961
The Panel found, in this regard, that, "as a result of these exceptions, a considerable proportion of beef
and pork is exempted from the COOL measure." 962 Although the Panel did not identify the precise
percentage of beef and pork sold in the Unite d States that is subject to the COOL labelling
requirements, according to the United States and Mexi co, 55% of beef sold in the United States is
subject to the COOL requirements. 963 With respect to the subset of beef and pork subject to the

958The United States asserts that the Panel found that Label A "completely" fulfils this objective, and
points to the Panel's finding that the COOL measure pr ovides clear and accurate consumer information for at
least 71% of the meat sold in the United States. (United States' appellant's submission, para. 172 (referring to
Panel Reports, paras. 7.713, 7.718, and footnote 941 to para. 7.715)) Canada argues that the Panel never found
that Label A provides consumers with information that is "clear and accurate" and, moreover, that the
United States ignores that the Panel's finding with resp ect to Label A applies only to beef, and not to pork.
(Canada's appellee's submission, para. 120) Mexico argues that the United States' figure of 71% is exaggerated
and that, in fact, only 39% (71% of 55%) of all meat sold in the Unite d States carries Label A. (Mexico's
appellee's submission, para. 58)
959Panel Reports, para. 7.718.
960As explained supra, at paragraphs 242 and 334, only entities selling in excess of $230,000 worth of
fruit and vegetables per year are subj ect to the COOL measure, and "[f]ood service establishments", such as
restaurants, cafeterias, and enterprises providing read y-to-eat foods are expressl y exempted from the COOL
requirements.
961As explained supra, at paragraphs 242 and 334, covered co mmodities that are an "ingredient in a
processed food item" are excluded from the scope of the COOL measure and, for beef and pork, this exclusion
encompasses processing such as cooking, curing, smoking, and restructuring.
962Panel Reports, para. 7.417.
963Before the Panel, the United States stated that ap proximately 65% of beef purchased in retail stores
is for home use, and, of this beef, approximately 85% is either muscle cuts or grou nd beef not s ubject to the
processed foods exemption. Therefore, on the United States' own figures, slightly more than half of the beef
consumed in the United States is covered by the COOL m easure (85% of 65% is 55.25%). The United States
also noted that the percentage is similar for pork products, but likely a bit lower, since a larger percentage of
pork products is processed. (United States' response to Panel Question 92, para. 15 (referring to Panel Exhibit
US-148, p. 9)) The United States confirmed these statistics at the oral hearing. Mexico also referred to the 55%
figure in its appellee's submission when rejecting the Unite d States' assertion that at least 71% of the meat sold
in the United States carries Label A. Mexico contended that, "[a]ccording to uncontes ted facts, meat products
carrying Label A constitute less than 39% (71% of 55%) of the meat products sold in the United States."
(Mexico's appellee's submission, para. 58) See also supra, footnote 958 .

COOL measure, the Panel referred to evidence that 90 % of this meat would be eligible for Label A 964
and that the "vast majority" of it in fact carries an A Label.965
475. At the same time, as already discussed, the Panel also identified multiple examples of ways in
which the labelling scheme prescribed by the COOL measure provides unclear, imperfect, or
inaccurate information to consumers, in particular with respect to Labels B and C. The Panel found,
for instance, that "the description of origin on La bel B and Label C does not, in fact, deliver origin
information as defined under the measure or as the consumer might understand it." 966 The Panel
noted that "confusion is also likely in a case wh ere 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." 967 It also
observed that "[i]t is far from clear … that differe ntiation of origin based on the order of country
names will indeed communicate accu rate origin information."968 Further, the Panel found that, due to
the commingling flexibilities, not even a "perfect c onsumer who is fully informed of the meaning of
different categories of labels under the COOL measure" could ever "be assured that the label precisely
reflects the origin of meat as defined under the COOL measure". 969 In addition, since commingling
can take place at multiple stages of the meat produ ction process, including at the retail level, this
"further diffuses the content and impact of origin labels as defined by the measure". 970 Finally, in
observing that the labelling under the COOL measure provides information with regard to the possible
origin(s) of meat, the Panel added that the inform ation would not necessarily convey the "actual, or
for that matter accurate, origin as defined by the measure".971

964The Panel also referred, in this regard, to evidence submitted by the complainants to the effect that
several major US meat processors had 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 the US would qualify for the
Category A label." (Panel Reports, para. 7.370 (quoting Panel Exhibit CDA-38))
965The Panel stated that it was uncontested among the parties that "the use of Label A affects the vast
majority of meat labelled under the COOL requirements." (Panel Reports, para. 7.370 (referring to
United States' response to Panel Question 91) (emphasi s added)) The Panel noted that, according to Canada,
data collected during the first quarter of 2010 show that Label A was affixed to 78.6% of muscle cuts of beef
supplied in major supermarkets, and that according to the United States, as of July 2009, Label A was affixed
to 71% of muscle cuts of beef. ( Ibid., footnote 941 to para. 7.715 (referring to Panel Exhibits CDA-211 and
US-145)) Canada and Mexico did not contest that the use of Label A affects the vast majority of meat labelled
under the COOL requirements . (Ibid., para. 7.370) However, as already mentioned, Mexico notes that, out of
all meat sold in the United States , less than 39% carries a Label A (71% of 55%). (Mexico's appellee's
submission, para. 58) See supra, footnotes 958 and 963.
966Panel Reports, para. 7.699.
967Panel Reports, para. 7.700.
968Panel Reports, para. 7.701.
969Panel Reports, para. 7.702.
970Panel Reports, para. 7.704.
971Panel Reports, para. 7.707.

476. Overall, the findings of the Panel and undisputed facts on the record indicate that the labelling
requirements under the COOL measure make some contribution to the objective of that measure.
Under the COOL measure, more meat will bear labe ls indicating some form of origin than was
previously the case, despite the fact that not all b eef and pork sold within the United States is required
to carry a country of origin label.
972 Where that meat carries Label A, the label is capable of
conveying to consumers that the livestock from which it is derived were born, raised, and slaughtered
in the United States, and some of the risk of confusion that existed unde r the previous labelling
regime is avoided.973 With respect to meat bearing Labels B and C, however, any contribution made
is much more limited because the information ma y be confusing and inaccurate. We observe that
—even though they appear to be at odd s with the Panel's ultimate conclusion 974—the Panel's own
findings indicate that the COOL measure does make some contribution to its objective, notably where
Label A is used. Nevertheless, these Panel findings do not enable us to ascertain the degree of
contribution made by the COOL measure to such an objective.
477. As for the trade-restrictiveness of the COOL me asure, we recall the Panel's finding that the
COOL measure is "'trade-restrictiv e' within the meaning of Article 2.2 by affecting the competitive
conditions of imported livestock". 975 The Panel found that the scope of the term "trade-restrictive" is
broad976 and "does not require the demonstration of an y actual trade effects, as the focus is on the
competitive opportunities available to imported products". 977 In its analysis under Article 2.1 of the
TBT Agreement, the Panel observed that "the United States does not contest the complainants'
description of the situation preceding the COOL measu re [in which] conditions of competition were
the same for imported and domestic products". 978 It then found that "by imposing higher segregation
costs on imported livestock" the COOL measure ne gatively affects the conditions of competition of
imported livestock vis-à-vis like domestic livestock in the US market. 979 In our view, although the
Panel declined to make a finding "on the level of trade-restrictiveness" of the COOL measure 980, its

972As already noted, according to the United States and Mexico, the COOL requirements apply to
approximately 55% of beef sold in the United States. (See supra, para. 474 and footnote 963 thereto)
974We recall that the Panel found that "the COOL measure does not fulfil the identified objective within
the meaning of Article 2.2 because it fails to convey meaningf ul origin information to consumers." (Panel
975Panel Reports, para. 7.575.
976The Panel noted that the ordinary meaning of the te rm "restrictive" is "[i]mplying, conveying, or
expressing restriction or limitation" and "[h]aving the nature or effect of a restriction; imposing a restriction".
(Panel Reports, para. 7.567 (quoting Shorter Oxford English Dictionary , 6th edn, A. Stevenson (ed.) (Oxford
University Press, 2007), Vol. 2, p. 2553))
977Panel Reports, para. 7.572.
978Panel Reports, para. 7.387.
979Panel Reports, para. 7.574.
980Panel Reports, para. 7.575.

findings suggest it considered the measure to have a considerable degree of trade-restrictiveness
insofar as it has a limiting effect on the competitiv e opportunities for imported livestock as compared
to the situation prior to the enactment of the COOL measure. 981 This was confirmed by the Panel's
analysis of the actual trade effects of the COOL measure.982
478. The Panel did not make findings regarding th e risks that non-fulfilment of the objective
pursued by the United States through the COOL measur e would create. The Panel did, however, cast
doubt on the probative value of evidence presented by the United States in order to show that
consumers want information on the countries of birth, raising, and slaughter of livestock from which
meat is derived.983 The Panel also took note of US consumers' unwillingness to "bear all the costs of
country of origin labelling of beef and pork". 984 That most US consumers are not prepared to pay to
receive information on origin as defined in the COOL measure with respect to the meat products they
purchase suggests that obtaining such information is not a high priority for such consumers. This in
turn seems to indicate that the consequences th at may arise from non-fulfilment of the objective
would not be particularly grave.
479. Overall, in our view, the Panel's factual findi ngs suggest that the COOL measure makes some
contribution to the objective of providing consumer s with information on origin; that it has a
considerable degree of trade-restrictiveness; and that the consequences that may arise from
non-fulfilment of the objective would not be particular ly grave. We stress, however, that we lack
clear and precise Panel findings with regard to thes e factors, and, in particular, findings that would
enable us to identify the degree of contribution made by the COOL measure to the United States'

981The Panel found, for instance, that "there is di rect evidence of major slaughterhouses applying a
considerable COOL discount of USD 40-60 per head for imported livestock". (Panel Reports, para. 7.356) It
noted that "some plants and companies are simply refu sing to process any imported livestock any more". ( Ibid.,
para. 7.375) Moreover, the Panel found that, as a result of the COOL measure, "fewer US processing plants are
accepting imported livestock than before." ( Ibid., para. 7.376) As a result of the reduction of available
processing plants, certain suppliers "had to transport im ported livestock longer distances than before the COOL
measure"; several US plants process imported livesto ck only "at specific, lim ited times", which creates
"congestion" that, in turn, increases "waiting time" an d creates "delays"; and these have "increased the
transportation costs of certain suppliers of imported livestock". (Ibid., para. 7.377) The Panel further found that
"[c]ontractual terms for suppliers of imported livestock have also changed", becoming less favourable, and that
certain suppliers have suffered "significant financial disadvantages resulting from the COOL measure". ( Ibid.,
paras. 7.378 and 7.379) In addition, the Panel referred to undisputed evidence that imported cattle have been
excluded from private premium pr ogrammes, such as the Certified Angus Beef programme, which are
"particularly profitable for operators in the supply chain, including livestock suppliers". (Ibid., para. 7.380)
982The Panel found that "the Sumner Econometric Study makes a prima facie case that the COOL
measure negatively and significantly affected the import sh ares and price basis of Canadian livestock." (Panel
Reports, para. 7.542) The Panel also found that "[t]his significant and negative impact of the COOL measure"
was not refuted by the USDA Econometric Study. (Ibid., para. 7.546)
983Panel Reports, para. 7.647.

objective. Against this preliminary assessment of the COOL measure, we proceed to examine the
alternative measures proposed by Canada and by Me xico in order to see whether we are able to
complete our assessment of whether the COOL meas ure is "more trade-restrictive than necessary to
fulfil a legitimate objective".
480. As they did in their submissions to the Panel, Canada and Mexico point to four alternative
measures, which, in their view, are reasonably availabl e to the United States, are less trade restrictive,
and fulfil the objective of providing consumers with in formation on origin at an equal or greater level
than the COOL measure. These alternatives are: (i) a voluntary country of origin labelling
requirement; (ii) a mandatory country of orig in labelling requirement based on the criterion of
substantial transformation; (iii) a voluntary count ry of origin labelling regime combined with a
mandatory country of origin labelling requirement based on substantial transformation; and (iv) a
trace-back regime.
985
481. We note that the Panel made no factual findings with regard to these four proposed labelling
schemes because, having found that the COOL measure does not fulfil its objective, it did "not
consider it necessary to proceed with the next st ep of the analysis, namely whether the COOL
measure is 'more trade-restrictiv e than necessary' based on the availa bility of less trade-restrictive
alternative measures".
986 Therefore, to the extent that our analysis of the proposed alternative
measures entails consideration of f actual elements, we will be able to complete the analysis only if
there are sufficient undisputed facts on the record, or factual findings made by the Panel elsewhere in
its analysis, that are relevant to our evaluation of: (i) whether these alternative measures are less trade
restrictive than the COOL measure; (ii) whether they would make an equivalent contribution to the
relevant objective, taking account of the risks non-fulf ilment would create; and (iii) whether they are
reasonably available to the United States. 987 We note, at this juncture, that we are faced with a
challenging exercise since, in its Article 2.2 analys is, the Panel made no findings with respect to any
of the four proposed alternative measures, and made only limited findings with respect to the COOL
measure itself, in particular with respect to its degree of contribution to the United States' objective.

985Canada's other appellant's submission, paras. 77 -90; Mexico's other appellant's submission,
paras. 61-68.
986Panel Reports, para. 7.719.
987Appellate Body Report, US – Tuna II (Mexico), para. 322.

482. With regard to voluntary labelling988, Canada submits that such a scheme could contribute to
the fulfilment of the objective of the COOL measure, while being "significantly less trade-restrictive",
because segregation costs would be borne only by those livestock producers catering to interested
consumers, and it would not impose a differential burden on the use of Canadian livestock.989 Mexico
adds that a voluntary labelling regime could maintain the same strict labelling criteria on origin as the
COOL measure—namely, where the livestock were born, raised, and slaughtered—while allowing
market forces to fill consumer demand for this information to the extent such a demand exists. 990 The
United States responds that a system based on volunt ary labelling would not fulfil its objective at the
level it considers appropriate, and stresses that it did try a voluntary labelling system before adopting
the COOL measure, but that such voluntary scheme "d id not result in country of origin information
routinely being provided to consumers".991
483. We observe that the trade-restrictiveness of th is proposed alternative labelling regime would
likely be a function of who would bear the costs a ssociated with the labelling, that is, whether the
costs would be incurred by producers or passed on to consumers. Its trade-restrictiveness would also
depend on the extent to which such labels would be used. We observe, however, that there are no
uncontested facts on the record, and the Panel ma de no findings, with regard to how a voluntary
labelling requirement would operate in the market at issue in terms of trade-restrictiveness. At the
same time, the contribution of a voluntary labelling requirement to the objective of providing
consumers with information on where livestock we re born, raised, and slaughtered would be a
function of the accuracy with which labels reflect origin as the count ry or countries in which different
production steps took place, the scope of the products covered by such a voluntary labelling scheme,
and the extent to which labels would be used. We note that, in its analysis under Article 2.1 of the
TBT Agreement, the Panel referred to evidence suggesting that US consumers are not generally
willing to pay for information on origin
992, and that, prior to the introduction of the COOL measure,

988Voluntary country of origin labelling is a business-driven system contingent upon consumers'
willingness to pay for the information on where livestock were born, raised , and slaughtered. This system
allows "market forces to recognize and fill the consum er need for additional information". (Mexico's first
written submission to the Panel, para. 316) Accordi ngly, if US consumers "were to express a demand for
country-of-origin information", US industry could "use these voluntary programs to provide it". (Canada's first
written submission to the Panel, para. 196)
989Canada's other appellant's submission, para. 78.
990Mexico's other appellant's submission, para. 62.
991United States' appellee's submission, footnote 139 to para. 68 (referring to United States' second
written submission to the Panel, para. 161).
992When referring to voluntary labelling programmes maintained by the United States, the Panel found,
for instance, that animal pr oduction and raising labels, which relate to the place in which production steps took
place, "affect a smaller proportion of beef marketed in the United States" than USDA grade labels, which relate
to the quality of meat. (Panel Reports, para. 7.406)

there was a lack of widespread participa tion in voluntary origin labelling programmes.
993 Overall,
these findings do not enable us to determine to what extent a voluntary labelling scheme would
contribute to the objective of providing consumers with information on where livestock were born,
raised, and slaughtered, or how such a contribution would compare to the degree of contribution made
by the COOL measure itself. We are faced with limited elaboration by the parties of their arguments,
and we are unable to identify Panel findings or sufficient undisputed facts on the record that would
enable us to complete the legal analysis.
484. Regarding the second alternative measure proposed by the complainants—namely, mandatory
labelling of origin of beef and pork based on the criterion of substantial transformation
994—Canada
submits that such a system would provide " accurate and easy to understand information" 995, while
avoiding the trade-restrictiveness of the COOL me asure, "as it does not impose differential costs on
the importation of livestock".996 According to Mexico, this option would eliminate the discrimination
and trade restrictions affecting imports of Mexican feeder cattle, and would also be consistent with the
origin rules applied to imported meat products unde r the COOL measure (Label D), thereby avoiding
confusion.997 The United States argues that a system that defines origin on the basis of substantial
transformation—that is, slaughter—would not fulfil the US objective at the level it considers
appropriate because it would not provide information about the countries where the animals were born
and raised.998
485. We note that a mandatory labelling system according to which the country of origin is the one
in which substantial transformation—that is , slaughter—took place would not entail costs of
segregation of livestock for purposes of country of orig in labelling. In practice, there would be no

993Panel Reports, paras. 7.354 and 7.355. The Panel found that "[t]he 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." (Ibid., para. 7.354) The Panel also noted the USDA Chief Economist's explanation
on "the lack of consumer interest in voluntary country of origin labelling". ( Ibid., para. 7.355 (referring to
Mandatory Country of Origin Labeling, Heari ng before the Committee on Agriculture, House of
Representatives, 108th Congress, 26 June 2003 (Panel Exhibit MEX-51)))
994The substantial transformation system "considers th at where processing in a second country changes
the nature of a product, the country of origin is that of the second country". (Canada's first written submission to
the Panel, para. 201; see also Mexico's first written submission to the Panel, para. 317) We note that a
substantial transformation principle confers origin exclusively based on the country in which the relevant
processing took place, and that this ru le of origin is used by the United States for customs purposes. (Panel
Reports, paras. 7.674 and 7.734)
995Canada's other appellant's submission, para. 81.
996Canada's other appellant's submission, para. 82.
997Mexico's other appellant's submission, para. 63.
998United States' appellee's submission, footnote 142 to para. 68.

"restriction or limitation"999 imposed on imported livestock since all meat products derived from cattle
and hogs slaughtered in the United States would bear a "Product of the US" label. We also note that,
under such a labelling scheme consumers would be provided with information on where livestock
were slaughtered, but they would not be provided with any information as to where the livestock were
born and raised. We recall the Panel's finding that the COOL measure's objective is to provide
"consumer information on origin" 1000, and that 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". 1001 In this
respect, we note that, in the context of Article 2.4 of the TBT Agreement , the Panel found that
CODEX STAN 1-1985 1002, which is based on the principle of substantial transformation, "does not
have the function or capacity of accomplishing th e objective of providing information to consumers
about the countries in which an animal was born, raised and slaughtered" 1003 and hence is " ineffective
and inappropriate for the fulfilment of the specific objective as defined by the United States".1004
486. To the extent that these Panel findings are rele vant for an analysis under Article 2.2 of the
TBT Agreement, they suggest that a mandatory labelling regime based on substantial transformation
would, at best, contribute only partially to the objective of providing information to consumers on
where livestock from which meat is derived were bor n, raised, and slaughtered. In any event, as
stated above, there are insufficient Panel findings to enable us to ascertain the degree of contribution
made by the COOL measure to the United States' objective. Moreover, without knowing whether a
mandatory labelling system based on subs tantial transformation would require all beef and pork sold
in the United States to be labelled, we are unabl e to compare the degree of the COOL measure's
contribution with that of this alternative measure proposed by the complainants.

999Panel Reports, para. 7.567 (quoting the definition of "restrictive", Shorter Oxford English
Dictionary, 6th edn, A. Stevenson (ed.) (Oxford University Press, 2007), Vol. 2, p. 2553).
1000Panel Reports, para. 7.685.
1001Panel Reports, para. 7.673. We also recall the Panel's findings that "[t]here is no basis … to find
that the United States is prohibited from adopting for labelling purposes an origin definition which is different
from that for customs purposes." (Ibid., para. 7.675)
1002General Standard for the Labelling of Prepackag ed Foods, as amended. (See Panel Reports,
para. 7.722)
1003Panel Reports, para. 7.734.
1004Panel Reports, para. 7.735. (original emphasis) We also note that, in response to the complainants'
argument that even if US consumers might be interested in the "origin" of their meat, this does not necessarily
mean that they are interested in origin defined as the places in which every stage of production of the relevant
livestock took place, the United States referred during the oral hearing to Panel Exhibit US-115. This exhibit is
a letter to the USDA from a consumer explicitly expressing a preference for a definiti on of origin that states
where livestock were born, raised, and slaughtered.

487. Regarding the third alternative measure suggested by the complainants—namely a
combination of the two schemes already discussed
1005—Canada submits that this option would be less
trade restrictive than the COOL measure because it "would not require segregation for the portion of
the market that did not require voluntary labels". 1006 In addition, both Canada and Mexico argue that
a combined system would ensure that all consumers are provided with information on the origin of the
meat that they purchase on the sa me basis as they currently are fo r imported meat products (Label D),
and would permit additional information to be conveyed to those who are interested. 1007 T h e
United States rejects this alterna tive because, in its view, such a scheme would ultimately depend on
the choice of the retailer, and not the consumer, as to whether meat will be labelled with additional
information about where livestock were born and rai sed, and, without a recordkeeping infrastructure
similar to that under the COOL measure in place, ma ny retailers would not have the ability to provide
this information even if they desired to do so.1008
488. We observe that this combined alternative measure would not require segregation of livestock
for the portion of the market that does not volunta rily choose to provide consumer information on
where livestock were born and raised. More over, no segregation costs would result from the
compulsory labelling part of the measure based on s ubstantial transformation. However, for the same
reasons already discussed under the two previous alternatives, it is unclear whether a voluntary
labelling scheme combined with a mandatory labelling requirement based on substantial
transformation would make a contribution to the obj ective of providing consumers with information
on where livestock were born, raised, and slaughtered, at least equivalent to the contribution made by
the COOL measure. Again, we are faced with limi ted elaboration by the parties of their arguments
and we are unable to identify Panel findings or sufficient undisputed facts on the record that would
enable us to complete the legal analysis.
489. Lastly, with respect to the fourth su ggested alternative measure—namely, a trace-back
system
1009—Canada argues that such a regime could provide detailed information for each piece of

1005This alternative is a combination of a mandatory labelling system based on the criterion of
substantial transformation and a voluntary country of or igin labelling regime. (See Canada's other appellant's
1006Canada's other appellant's submission, para. 86.
1007Canada's other appellant's submission, para. 87; Mexico's other appellant's submission, para. 64.
1008United States' appellee's submission, footnote 147 to para. 68 (referring to United States' answer to
Panel Question 37, paras. 69 and 70; and United States' second written submission to the Panel, para. 144).
1009A trace-back system requires "that a retailer be able to trace a piece of meat back to the original
animal". (Mexico's second written submission to the Panel, para. 78 (referring to Panel Exhibit MEX-88, p. 7);
see also Canada's opening statement at the second meeti ng of the Panel, para. 70) The information provided
under this system can indicate "the precise location of each processing step (farm, feedlot, processing facility)
by state/province, municipality, etc.". (Canada's other appellant's submission, para. 88)

meat. Although Canada acknowledges that a trace-b ack system could also increase costs because of
the additional tracking throughout the supply chain, it stresses that "any additional cost would be
distributed equally to all market participants." 1010 Mexico submits that this alternative is "technically
and economically feasible in the United States" 1011 and that, since it would impose the same
requirements on both domestic and imported animals, the economic incentive to discriminate against
Mexican cattle would likely be eliminated. Me xico noted during the oral hearing that the
United States already imposes a trace-back system for sanitary and phytosanitary reasons, pursuant to
which all Mexican cattle are identified with ear tags and can be traced back to the farm. The United
States replies that a trace-back system is not a reasonably available alternative because it is more trade
restrictive than the COOL measure, since it woul d increase the costs on entities throughout the supply
chain, including on Canadian and Mexican livestock producers.1012
490. All of the participants appear to accept th at a trace-back system would entail additional
costs.1013 They also appear to accept that a trace-back system could require the provision of consumer
information on the country(ies) where livestock were born, raised, and slaughtered, or of even more
detailed information, such as the specific location of individual production steps within a country.
However, the participants hold opposing views as to the trade-restrictiv eness of such a system. In the
absence of specific information and argumentation re garding the relationship between costs, prices,
and demand in the US market for livestock and meat, it is not clear to what extent an increase in costs
would be trade restrictive, or would affect livestock from all sources equally. With regard to Mexico's
argument that the United States already imposes a trace-back system on all Mexican cattle for sanitary
and phytosanitary purposes, the Panel made no find ings, and there are no undisputed facts on the
record regarding how this trace-back scheme for Me xican cattle operates, or whether it would already
satisfy the requirements of a trace-back regime imposed for labelling purposes. Therefore, we are not
in a position to reach a conclusion as to how the tr ade-restrictiveness of a trace-back system would
compare to the status quo.
491. Overall, due to the absence of relevant fact ual findings by the Panel, and of sufficient
undisputed facts on the record, we are unable to comp lete the legal analysis under Article 2.2 of the

1010Canada's other appellant's submission, para. 90.
1011Mexico's other appellant's submission, para. 67 (referring to Panel Exhibit MEX-88, p. 7).
1012United States' appellee's submission, footnote 150 to para. 68. In the United States' view,
"a traceability system is significantly costly to im plement and would increase overall compliance costs."
(United States' answer to Panel Question 146, para. 103)
1013We note, however, that the mere fact that an a lternative measure would entail some additional cost
does not, alone, mean that such a measure is not reasonably available to a Member. (See Appellate Body Report,
China – Publications and Audiovisual Products, para. 327 (referring to Appellate Body Report, US – Gambling,
para. 308; and Appellate Body Report, Korea – Various Measures on Beef, para. 181))

TBT Agreement and determine whether the COOL measure is more trade restrictive than necessary to
fulfil its legitimate objective.
VII. Article III:4 of the GATT 1994
492. Canada and Mexico each raises a conditional appeal
1014 with respect to Article III:4 of the
GATT 1994. Both appeals are conditional upon our reve rsal of the Panel's fi nding of inconsistency
under Article 2.1 of the TBT Agreement. In that event, Mexico appeals the Panel's exercise of judicial
economy and requests us to complete the legal analysis and find the COOL measure to be inconsistent
with Article III:4. In its other appellant's submi ssion, Canada appeals the Panel's exercise of judicial
economy with respect to its claims regarding bot h the COOL measure and the Vilsack letter under
Article III:4 of the GATT 1994, and requests us to complete the legal analysis and find these
measures to be inconsistent with the United States ' obligations under that provision. At the oral
hearing, however, Canada clarified that, in the light of the United States' asserted withdrawal of the
Vilsack letter1015, Canada was no longer seeking a discrete finding with respect to that measure.1016
493. Having upheld the Panel's finding that the COOL measure is inconsistent with Article 2.1 of
the TBT Agreement, the condition upon which Canada's and Mexico's appeals under Article III:4 are
made is not satisfied, and we therefore need not ma ke any findings in respect of Article III:4 with
regard to the COOL measure. It is also unnecessary for us to make any finding with regard to the
Vilsack letter.
VIII. Article XXIII:1(b) of the GATT 1994
494. Canada and Mexico also each conditionally app eals the Panel's exercise of judicial economy
with respect to whether the COOL measure nullifi es and impairs benefits within the meaning of
Article XXIII:1(b) of the GATT 1994. Canada further raises a conditional appeal with respect to the
Vilsack letter. That is, should we reverse the Pane l's finding of inconsistency under Article 2.1 of the
TBT Agreement, and not find the COOL measure to be inconsistent with Article III:4 of the
GATT 1994, then Canada requests us to complete th e legal analysis under Article XXIII:1(b) and to
find that both the COOL measure and the Vilsack letter nullify and impair benefits accruing to

1014In its other appellant's submission, Canada's appeal with respect to Article III:4 did not appear to be
made on a conditional basis. However, at the oral hearing, Canada stated that this ground of its appeal is indeed
conditional upon our reversal of the Panel's finding under Article 2.1 of the TBT Agreement.
1015In its appellee's submission, the United States a sserts that the Vilsack letter was withdrawn on
5 April 2012. (United States' appellee's submission, para. 90 and footnote 193 thereto (referring to a USDA
letter to industry representatives, available at: <http://www.ams.usda.gov/AMSv1.0/cool>)).
1016Canada did, however, request us to take the Vils ack letter into account insofar as it relates to our
analysis of the COOL measure under Article III:4 of the GATT 1994.

Canada under successive multilateral trade negotiations. Should those same conditions be satisfied,
then Mexico requests us to complete the legal an alysis under Article XXIII:1(b) and to find that the
COOL measure nullifies and impairs benefits accruing to Mexico from the tariff concessions made by
the United States in its tariff bindings.
495. Having upheld the Panel's finding that the COOL measure is inconsistent with Article 2.1 of
the TBT Agreement , the first condition upon which Cana da's and Mexico's appeals under
Article XXIII:1(b) of the GATT 1994 are made is not met, and we therefore need not make any
findings in respect of Article XXIII:1(b) with regard to the COOL measure. It is also unnecessary for
us to make any finding with regard to the Vilsack letter.1017

1017As noted above, the United States stated in its appellee's submission that the Vilsack letter has been
withdrawn. At the oral hearing, Canada stated that it was no longer seeking a specific finding under
Article XXIII:1(b) of the GATT 1994 with regard to the Vilsack letter, although it encouraged us to take that
measure into account insofar as it relates to our analys is of the COOL measure under Article XXIII:1(b) of the
GATT 1994.

 Page CDA-219

IX. Findings and Conclusions
496. In the appeal of the Panel Report, (Complaint by Canada) (WT/DS384/R) (t he "Canada Panel Report"), for the
reasons set out in this Report, the Appellate Body:
(a) with respect to the Panel's findings under Article 2.1 of the TBT Agreement:
(i) finds that the Panel did not err, in paragraph 7.295 of the Canada Panel
Report, in stating that the COOL measure treats imported livestock
differently than domestic livestock;
(ii) finds that the Panel did not err, in pa ragraphs 7.372, 7.381, and 7.420 of the
Canada Panel Report, in finding th at the COOL measure modifies the
conditions of competition in the US market to the detriment of imported
livestock by creating an incentive in favour of processing exclusively
domestic livestock and a disincentive against handling imported livestock;
(iii) finds that the Panel did not act inconsistently with its obligation under
Article 11 of the DSU to make an objective assessment of the facts in its
findings with respect to segregation, commingling, and the price differential
between imported and domestic livestock in the US market; and
(iv) upholds, albeit for different reasons, the Panel's ultimate finding, in
paragraphs 7.548 and 8.3(b) of the Ca nada Panel Report, that the COOL
measure, particularly in regard to the muscle cut meat labels, is inconsistent
with Article 2.1 of the TBT Agreement because it accords less favourable
treatment to imported livestock than to like domestic livestock;
(b) with respect to the Panel's findings under Article 2.2 of the TBT Agreement:
(i) makes no finding with respect to the United States' claim that the Panel erred
in finding that the COOL measure is "trade-restrictive" within the
meaning of Article 2.2, because that claim of error is dependent upon the
Appellate Body's reversal of the Pa nel's finding under Article 2.1 of the
TBT Agreement;

Page CDA-220

(ii) finds that the Panel did not err, in pa ragraphs 7.617 and 7.685 of the Canada
Panel Report, in finding that the objective pursued by the United States
through the COOL measure is the pr ovision of consumer information on
origin1018;
(iii) finds that, in identifying the objective pursued by the United States through
the COOL measure, the Panel did not act inconsistently with its obligation
under Article 11 of the DSU to make an objective assessment of the facts,
and did not fail to characterize the objective of the COOL measure in
sufficient detail;
(iv) finds that the Panel did not err, in paragraph 7.651 of the Canada Panel
Report, in finding that the provision of consumer information on origin is a
legitimate objective within the meaning of Article 2.2 of the TBT Agreement;
(v) finds that the Panel erred in the interp retation and application of Article 2.2
of the TBT Agreement in its analysis of whether the COOL measure is "more
trade-restrictive than necessary to fulfil a legitimate objective", and,
consequently, finds that the Panel erre d, in paragraph 7.719 of the Canada
Panel Report, in finding 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"; and, therefore,
(vi) reverses the Panel's ultimate finding, in paragraphs 7.720 and 8.3(c) of the
Canada Panel Report, that the COOL measu re is inconsistent with Article 2.2
of the TBT Agreement; and
(vii) finds that, in the light of the lack of sufficient undisputed facts on the Panel
record or factual findings by the Panel, the Appellate Body is unable to
complete the legal analysis under Article 2.2 of the TBT Agreement and
properly assess whether the COOL measure is more trade restrictive than
necessary to fulfil its legitimate objective; and

1018We recall in this respect that the COOL measure de fines the "origin" of meat as a function of the
country or countries in which the livestock from which the meat is derived were born, raised, and slaughtered.

 Page MEX-219

IX. Findings and Conclusions
496. In the appeal of the Panel Report, (Complaint by Mexico) (WT/DS386/R) (the "Mexico Panel Report"), for the
reasons set out in this Report, the Appellate Body:
(a) with respect to the Panel's findings under Article 2.1 of the TBT Agreement:
(i) finds that the Panel did not err, in paragraph 7.295 of the Mexico Panel
Report, in stating that the COOL measure treats imported livestock
differently than domestic livestock;
(ii) finds that the Panel did not err, in pa ragraphs 7.372, 7.381, and 7.420 of the
Mexico Panel Report, in finding th at the COOL measure modifies the
conditions of competition in the US market to the detriment of imported
livestock by creating an incentive in favour of processing exclusively
domestic livestock and a disincentive against handling imported livestock;
(iii) finds that the Panel did not act inconsistently with its obligation under
Article 11 of the DSU to make an objective assessment of the facts in its
findings with respect to segregation, commingling, and the price differential
between imported and domestic livestock in the US market; and
(iv) upholds, albeit for different reasons, the Panel's ultimate finding, in
paragraphs 7.548 and 8.3(b) of the Mexico Panel Report, that the COOL
measure, in particular in regard to th e muscle cut meat labels, is inconsistent
with Article 2.1 of the TBT Agreement because it accords less favourable
treatment to imported livestock than to like domestic livestock;
(b) with respect to the Panel's findings under Article 2.2 of the TBT Agreement:
(i) makes no finding with respect to the United States' claim that the Panel erred
in finding that the COOL measure is "trade-restrictive" within the
meaning of Article 2.2, because that claim of error is dependent upon the
Appellate Body's reversal of the Pa nel's finding under Article 2.1 of the
TBT Agreement;

Page MEX-220

(ii) finds that the Panel did not err, in pa ragraphs 7.617 and 7.685 of the Mexico
Panel Report, in finding that the objective pursued by the United States
through the COOL measure is the pr ovision of consumer information on
origin1018;
(iii) finds that, in identifying the objective pursued by the United States through
the COOL measure, the Panel did not act inconsistently with its obligation
under Article 11 of the DSU to make an objective assessment of the facts;
(iv) finds that the Panel erred in the interp retation and application of Article 2.2
of the TBT Agreement in its analysis of whether the COOL measure is "more
trade-restrictive than necessary to fulfil a legitimate objective", and,
consequently, finds that the Panel erre d, in paragraph 7.719 of the Mexico
Panel Report, in finding 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"; and, therefore,
(v) reverses the Panel's ultimate finding, in paragraphs 7.720 and 8.3(c) of the
Mexico Panel Report, that the COOL measu re is inconsistent with Article 2.2
of the TBT Agreement; and
(vi) finds that, in the light of the lack of sufficient undisputed facts on the Panel
record or factual findings by the Panel, the Appellate Body is unable to
complete the legal analysis under Article 2.2 of the TBT Agreement and
properly assess whether the COOL measure is more trade restrictive than
necessary to fulfil its legitimate objective; and
(c) with respect to Mexico's conditional a ppeals under Articles III:4 and XXIII:1(b) of
the GATT 1994, finds that the conditions upon which these appeals are premised are
not satisfied, and, consequently, makes no finding with respect to Mexico's claims
that the COOL measure is inconsistent w ith Article III:4 of the GATT 1994, or that
the application of the COOL measure nullifies or impairs benefits accruing to Mexico
within the meaning of Article XXIII:1(b) of the GATT 1994.

1018We recall in this respect that the COOL measure de fines the "origin" of meat as a function of the
country or countries in which the livestock from which the meat is derived were born, raised, and slaughtered.

ANNEX I

28 March 2012

(12-1654)
 Original: English

Notification of an Appeal by the United States
under Article 16.4 and Article 17 of the Understanding on Rules
and Procedures Governing the Settlement of Disputes (DSU),
and under Rule 20(1) of the Working Procedures for Appellate Review

 The following notification, dated 23 March 201 2, from the Delegation of the United States, is
being circulated to Members.

 Pursuant to Article 16 of the Understanding on Rules and Procedures Governing the
Settlement of Disputes ("DSU") and Rule 20 of the Working Procedures for Appellate Review , the
United States hereby notifies its decision to appeal to the Appellate Body certain issues of law
covered in the Reports of the Panel in (WT/DS384/R and WT/DS386/R) ("Panel Repor ts") and certain legal interpretations
developed by the Panel.

1. The United States seeks review by the Appellate Body of the Panel's findings and conclusion
that U.S. country of origin labeling requirements
1 are inconsistent with Article 2.1 of the Agreement
on Technical Barriers to Trade (the "TBT Agreement"). 2 This conclusion is in error and is based on
erroneous findings on issues of law and legal interpretations including:
(a) the Panel's finding that the U.S. COOL requirements treat imported livestock
differently than domestic livestock.3

1The U.S. COOL requirements consist of the releva nt sections of the Agricultural Marketing Act of
1946 (7 U.S.C.  1638-1638c) ("the COOL statute") and regulations promulgated by the United States
Department of Agriculture's Agricultural Marketing Se rvice on January 15, 2009, entitled "Mandatory Country
of Origin Labeling of Beef, Pork, Lamb, Chicken, Goat Meat, Wild and Farm-Raised Fish and Shellfish,
Perishable Agricultural Comm odities, Peanuts, Pecans, Ginseng, and Macadamia Nuts, which are codified at
7 C.F.R. Parts 60 and 65 ("2009 Final Rule"). See Panel Reports, para. 7.61.
2See, e.g., Panel Reports, paras.7.420, 7.548, 8.3(b).
3See, e.g., Panel Reports, paras.7.295-7.296.

(b) the Panel's finding that the U.S. COOL requirements accord less favorable treatment
to imported livestock than that accorded to domestic livestock by modifying the
conditions of competition to the detriment of imported products.
4

2. The United States also requests the Appellate Body to find that the Panel acted inconsistently
with Article 11 of the DSU by failing to make an objective assessment of the facts related to these
issues, specifically that segregation of livestock is "necessitated" by the COOL requirements, that
commingling is not occurring on a widespread basis, and that the COOL requirements resulted in a
"price differential" between domestic and imported livestock, 5 and by using these faulty factual
findings to support its conclusions with regard to different treatment and less favorable treatment.
3. The United States also seeks review of the Pa nel's findings and conclusion that the COOL
requirements are inconsistent with Article 2.2 of the TBT Agreement.6 This conclusion is in error and
is based on erroneous findings on issues of law and legal interpretations including:
(a) with regard to section VII.D.3(b) of th e Panel Reports, the Panel's finding that the
COOL measure is "trade restrictive" for purposes of Article 2.2.7

(b) with regard to section VII.D.3(c) of the Panel Reports, the Panel's failure to consider
all relevant information regarding the U. S. chosen level of fulfillment of the
legitimate objective.8

(c) with regard to sections VII.D.3(d)-(e) of the Panel Reports: (1) the Panel's legal
framework for determining whether a measure is "more trade-restrictive than
necessary to fulfil a legitimate objective";
9 (2) the Panel's finding that the COOL
requirements do not fulfill the legitimate objective at the level the United States
considers appropriate;
10 and (3) the Panel's failure to require the complaining parties
to meet their burden to prove that the measure is "more trade-restrictive than
necessary" based on the availability of a signi ficantly less trade-restrictive alternative
measure that also fulfills the objective at the level the United States considers
appropriate.11

4. The United States also requests the Appellate Body to find that the Panel acted inconsistently
with Article 11 of the DSU by failing to make an objective assessment of the facts related to these
issues, specifically the Panel's findings regarding the level at which the United States considers it
appropriate to fulfill its objective.
12
The United States is providing a copy of this letter directly to Canada, Mexico and to the third
parties.

4See, e.g., Panel Reports, paras. 7.420, 7.548
5See, e.g., Panel Reports, paras. 7.316, 7.327, 7.336, 7.352-353, 7.356, 7.364, 7.366-368, 7.379. 7.487,
and 7.542.
6See, e.g., Panel Reports, para. 8.3(c).
7See, e.g., Panel Reports, paras. 7.565-7.575.
8See, e.g., Panel Reports, paras. 7.590-7.620.
9See Panel Reports, paras. 7.652, 7.666-7.670, 7.692-7.720.
10See, e.g., Panel Reports, paras. 7.692-7.720.
11See Panel Reports, para. 7.719.
12See, e.g., Panel Reports, paras. 7.619-7.620, 7.715.

ANNEX II

2 April 2012

 (12-1706)
 Original: English

Notification of an Other Appeal by Canada
under Article 16.4 and Article 17 of the Understanding on Rules
and Procedures Governing the Settlement of Disputes (DSU),
and under Rule 23(1) of the Working Procedures for Appellate Review

 The following notification, dated 28 March 2012, from the Delegation of Canada, is being
circulated to Members.

 Pursuant to Article 16 of the Understanding on Rules and Procedures Governing the
Settlement of Disputes (DSU) and Rule 23 of the Working Procedures for Appellate Review , Canada
hereby notifies its decision to appeal to the Appellate Body certain issues of law covered in the Report
of the Panel in
(WT/DS384/R) (Panel Report) and certain legal interpretations developed by the Panel.

1. Canada seeks review by the Appellate Body of the Panel's legal conclusions that:

(a) Article 2.2 of the Agreement on Techni cal Barriers to Trade requires identifying a
potential objective of a challenged measure rather than the actual objective of that
measure; and

(b) the objective of the COOL measure
1 is legitimate within the meaning of Article 2.2 of
the Agreement on Technical Barriers to Trade.

2. Canada also appeals the Panel's failure, in cont ravention of Article 11 of the DSU, to make an
objective assessment of the facts demonstrating that the objective of the COOL measure is
protectionism. In the alternative, if the objective of the COOL measure is not protectionism, the Panel
erred by failing to define the objective at a sufficiently detailed level.

1The COOL measure includes the COOL Statute and th e Final Rule, as set out in the Panel Report,
paras. 7.21, 7.34, and 7.63.

3. If the Appellate Body does not uphold the Panel's finding that the COOL measure fails to
fulfil a legitimate objective, then Canada seeks a fi nding by the Appellate Body that there are less
trade-restrictive alternative measures that fulfil th at objective, and that therefore the COOL measure
violates Article 2.2 of the Agreement on Technical Barriers to Trade.

4. Canada further seeks review by the Appellate Body of the Panel's exercise in judicial
economy on Canada's GATT Article III:4 claim regarding the COOL measure and the Vilsack letter
2.

5. Finally, Canada seeks conditional review by th e Appellate Body of the Panel's failure to find
that the COOL measure and the Vilsack letter cons titute an instance of non-violation nullification or
impairment under GATT Article XXIII:1(b). That re quest for review is conditional on the Appellate
Body not finding a violation of either Article 2.1 of the TBT Agreement or Article III:4 of the GATT.

2Defined in the Table of Abbreviations of the Panel as "Letter to 'Industry Representative' from the
United States Secretary of Agriculture, Thomas J. Vilsack, of 20 February 2009".

ANNEX III

2 April 2012

 (12-1707)
 Original: English

Notification of an Other Appeal by Mexico
under Article 16.4 and Article 17 of the Understanding on Rules
and Procedures Governing the Settlement of Disputes (DSU),
and under Rule 23(1) of the Working Procedures for Appellate Review

 The following notification, dated 28 March 2012, from the Delegation of Mexico, is being
circulated to Members.

Certain Country of Origin Labelling (COOL) Requirements (WT/DS386) ("Panel Report").

2. Pursuant to Rule 23(2)(c)(ii) of the Working Procedures for Appellate Review , this Notice of
Other Appeal includes an indicative list of the para graphs of the Panel Report containing the alleged
errors, without prejudice to Mexico's ability to refe r to other paragraphs of the Panel Report in the
context of this appeal.

I. Conditional Appeal of the Panel's Decision to Exercise Judicial Economy with Respect
to Mexico's Claims under Article III:4 of the GATT 1994

3. This appeal is conditional in the event that the Appellate Body overturns the Panel's finding
that the COOL measure is inconsistent with Article 2.1 of the TBT Agreement.

4. If this condition is triggered, Mexico appeals the Panel's decision to exercise judicial
economy in respect of Mexico's claim under Article III:4 of the GATT 1994.
1

5. The Panel erred in its decision to exercise judi cial economy with respect to Mexico's claims
under Article III:4 of the GATT 1994, considering the par ticular circumstances of this case, where, if

1Panel Report, 7.807, 8.4(a).

the Panel's finding on inconsistency of Article 2.1 of the TBT Agreement is overturned, the Panel's
legal basis for exercising judicial economy will no longer exist and Mexico will be left with no
positive solution to its discrimination claims under Article III:4 of the GATT 1994.

6. As a result of the foregoing error, Mexico requ ests the Appellate Body to modify the Panel's
legal conclusions and findings in paragraph 8.4 (a) and paragraph 7.807 of the Panel Report, complete
the analysis of Mexico's claims under Article III:4 of the GATT 1994, and find that the COOL
Measure is inconsistent with Article III:4 of the GATT 1994.

II. Conditional Appeal of the Panel's Finding Regarding the Identification of the Objective
Pursued by the COOL Measure and the Examination of Its Legitimacy

7. This appeal is conditional in the event that the Appellate Body overturns the Panel's finding
that the COOL measure is inconsistent with Article 2.2.

8. If this condition is triggered, Mexico appeals the Panel's finding that the objective of the
COOL measure is to "provide as much clear and accurate information as possible to consumers"
2 and
that " providing consumer information on origin is a legitimate objective within the meaning of
Article 2.2".3

9. The Panel applied an incorrect legal analysis to determine the objective and, by doing so, it
incorrectly identified that objective. Having erred in identifying the objective, the Panel incorrectly
found that the objective was legitimate.

10. Moreover, because the legal errors led to the exclus ion of relevant facts, the approach is also
factually erroneous. In this sense, the Panel faile d to make an objective assessment of the matter
before it and thereby acted inconsistently with Article 11 of the DSU.

11. As a result of the foregoing errors, Mexico requ ests the Appellate Body to modify the Panel's
legal conclusions and findings in paragraphs 7.620, 7.651, inter alia, of the Panel Report, apply the
correct analysis to identify the objective and exam ine its legitimacy, and find that the objective is
inconsistent with Article 2.2 of the TBT Agreement.

III. Conditional Appeal of the Panel's Decision to Exercise Judicial Economy in Respect of
the Existence of an Alternative Measure That is Less Trade Restrictive and That Fulfils
the Legitimate Objective Taking Into Account the Risks Non-Fulfilment Would Create

12. This appeal is conditional in the event that the Appellate Body overturns the Panel's finding
that the COOL measure is inconsistent with Article 2.2 of the TBT Agreement.

13. If this condition is triggered, Mexico appeals the Panel's decision to exercise judicial
economy in respect of "whether the COOL measure is 'more trade-restrictive than necessary' based on
the availability of less trade-restrictive alterna tive measure that can equally fulfil the identified
objective".
4

14. The Panel erred in its decision to exercise judici al economy in respect to Mexico's claims that
the COOL measure is more trade restrictive than necessary. In particular, there are alternative
measures that are less trade restrictive and that fulfil the legitimate objective taking into account the

2Panel Report, 7.620.
3Panel Report, 7.651.
4Panel Report, 7.719.

risks non-fulfilment would create and, considering the particular circumstances of this case, if the
Panel's finding on inconsistency of Article 2.2 of the TBT is overturned, the Panel's legal basis for
exercising judicial economy will no longer exist and Mexico will be left with no positive solution to
its claims under Article 2.2 of the TBT Agreement.

15. As a result of the foregoing error, Mexico requests that the Appellate Body modify the Panel's
legal conclusions and findings in the second sen tence of paragraph 7.719 of the Panel Report,
complete the analysis and find that the COOL m easure is inconsistent with Article 2.2 of the
TBT Agreement.

IV. Conditional Appeal of the Panel's Decision to Exercise Judicial Economy with
Respect to Mexico's Claim of Non-Viol ation Nullification or Impairment under
Article XXIII:1(b) of the GATT 1994.

16. This appeal is conditional in the event that th e Appellate Body overturns the Panel's findings
that the COOL measure is inconsistent with Artic le 2.1 of the TBT Agreement and does not complete
the analysis and find that the measure is inconsistent with Article III:4 of the GATT 1994.

17. If this condition is triggered, Mexico appeals the Panel's decision to exercise judicial
economy with respect to Mexico's claim of non-violation nullification or impairment under
Article XXIII:1(b) of the GATT 1994.
5

18. The Panel erred in its decision to exercise judici al economy with respect to Mexico's claim of
non-violation nullification or impairment under Article XXIII:1(b) of the GATT 1994, considering the
particular circumstances of this case, where, if the Panel's finding on inconsis tency of Article 2.1 is
overturned and there is not a finding that the m easure is inconsistent with Article III:4 of the
GATT 1994, the Panel's legal basis for exercising ju dicial economy will no longer exist and Mexico
will be left with no positive solution to its clai m of non-violation nullifica tion or impairment under
Article XXIII:1(b) of the GATT 1994.

19. As a result of the foregoing error, Mexico requ ests the Appellate Body to modify the Panel's
legal conclusions and findings in pa ragraph 8.5 and paragraph 7.907, inter alia, of the Panel Report,
complete the analysis of Mexico's claim, and find that the COOL measure nullifies or impairs benefits
accruing to Mexico under the GATT 1994 within the meaning of Article XXIII:1(b) of the
GATT 1994.

5Panel Report, 7.907, 8.5.

ANNEX IV

AB-2012-3

Procedural Ruling

1. On 5 April 2012, we received a joint comm unication from the participants in the above
appellate proceedings. In that letter, Canada and the United States request that we allow observation
by the public of the oral hearing. Mexico indi cates that it does not object to allowing such public
observation of the hearing, but requests that we reflect in our report that its position in these
proceedings is without prejudice to its systemic views on the matter.1
2. Specifically, Canada and the United States join tly request that all WTO Members and the
public be allowed to observe the statements and an swers to questions of the participants and third
participants that agree to make their statements and answers public. The participants observe that
nothing in the Understanding on Rules and Procedures Governing the Settlement of Disputes (the
"DSU") or the Working Procedures for Appellate Review (the " Working Procedures") precludes the
Appellate Body from authorizing public observation of the oral hearing. The participants also rely on
the rulings by the Appellate Body in eight previous proceedings authorizing public observation of the
oral hearing.2
3. The participants recall that Article 18.2 of the DSU affirms the right of WTO Members to
disclose statements of their positions to the public, and that this includes statements and answers to
questions during an Appellate Body hearing. Thus, they maintain, when the parties to a dispute so
request, it is appropriate to have such statements and answers made public at the time that they are
uttered. The participants further observe that public observation has operated smoothly in previous
appellate proceedings, and that the rights of those th ird participants that have not wanted their oral
statements to be subject to public observation have been fully protected.
4. The participants add that the request is made on the understanding that any information that
was designated as confidential in the documents file d in the Panel proceedings would be adequately
protected in the course of the hearing. They propose that public observation be permitted via
simultaneous closed-circuit television broadcasting, with the option for the transmission to be turned
off should the participants find it necessary to discuss issues that involve confidential information, as

1Mexico pointed to a similar statement made by the Panel in paragraph 2.5 of its Reports.
2These proceedings are: United States – Continued Suspension of Obligations in the EC – Hormones
Dispute (WT/DS320/AB/R) and Canada – Continued Suspension of Obligations in the EC – Hormones Dispute
(WT/DS321/AB/R); European Communities – Regime for the Importation, Sale and Distribution of Bananas –
Second Recourse to Article 21.5 of the DSU by Ecuador (WT/DS27/AB/RW2/ECU) and 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); United States – Continued Existence and Application of
Zeroing Methodology (WT/DS350/AB/R); United States – Laws, Regulations and Methodology for Calculating
Dumping Margins ("Zeroing") – Recourse to Article 21.5 of the DSU by the European Communities
(WT/DS294/AB/RW); United States – Measures Relating to Zeroing and Sunset Reviews – Recourse to
Article 21.5 of the DSU by Japan (WT/DS322/AB/RW); Australia – Measures Affecting the Importation of
Apples from New Zealand (WT/DS367/AB/R); European Communities and Certain Member States – Measures
Affecting Trade in Large Civil Aircraft (WT/DS316/AB/R); and United States – Measures Affecting Trade in
Large Civil Aircraft (Second Complaint) (WT/DS353/AB/R).

well as for those third participants that do not wish to have their oral statements subject to public
observation.
5. On the day that we received the communication from the participants, we invited the third
participants to comment in writing on the request by noon on 12 April 2012. By that deadline, we
received responses from Brazil, China, Colombia, and the European Union. Brazil and Colombia
indicated that they do not object to allowing public observation of the hearing, but requested that the
Appellate Body reflect in its report that their accep tance of an open hearing in these proceedings is
without prejudice to their systemic views on the matter. China indicated that it had no comments on
the request to allow public observation of the hearing, but that it reserved the right to make an oral
statement in closed session. The European Union indicated that it had no objection to the request by
Canada and the United States for public observation of the oral hearing, or to the specific logistical
arrangements proposed, and expressed its intent to make its submissions during the public hearing.3
6. We recall that requests to allow public observati on of the oral hearing have been made, and
have been authorized, in eight previous appeals. 4 In its rulings, the Appellate Body has held that it
has the power to authorize such requests by the pa rticipants, provided that this does not affect the
confidentiality in the relationship between the third pa rticipants and the Appellate Body, or impair the
integrity of the appellate process. We concur with the reasons previously expressed by the Appellate
Body, and its interpretation of Article 17.10 of the DS U, in this regard, and consider that it applies
equally in circumstances such as those prevailing in these appellate proceedings.
7. In this appeal, Canada and the United States ha ve suggested that the Appellate Body allow
observation by the public of the oral hearing by means of simultaneous closed-circuit television
broadcasting. They have further suggested that pr ovision be made for transmission to be turned off
should the participants find it necessary to discuss issu es that involve information that was designated
as confidential by any participant in the documents filed with the Panel, as well as for the oral
statements and responses to questions by those third participants who have indicated that they do not
wish to have such statements and responses subject to public observation. We agree that such
modalities would operate to protect confidential informa tion in the context of a hearing that is open to
public observation, and would not have an adverse impact on the integrity of the adjudicative function
performed by the Appellate Body. We also cons ider that during public observation in previous
appeals, the rights of those third participants that did not wish to have their oral statements made
subject to public observation have been fully protected.
8. For these reasons, the Appellate Body Division in these appellate proceedings authorizes the
public observation of the oral hearing on the terms set out below. Accordingly, pursuant to
Rule 16(1) of the Working Procedures, we adopt the following additional procedures for the purpose
of this appeal:

3We also received a number of responses after the deadline of noon on 12 April 2012. Australia and
New Zealand stated that they have no objection to the re quest for public observation of the oral hearing, or to
the logistical arrangements proposed, and added that any oral statement that they may make will be made in the
open session. Guatemala stated that, although it does not oppose the request for public observation of the oral
hearing in these proceedings, this is without prejudi ce to Guatemala's position on this matter within the
framework of the DSU review, and does not prejudge Guatemala's position in future cases. India recalled that it
has consistently taken the view that the DSU does not permit open hearings. India stipulated that, should the
Appellate Body agree to the request from the United States and Canada, it would make its oral statement, if any,
in the session closed to public, and further requested the Appellate Body to reflect in its report India's systemic
concerns on this issue. It was not compulsory for the third participants to submit comments on the joint
communication from the participants. Yet, for those that chose to do so, we recall the importance of the timely
filing of documents in appeals.
4See supra, footnote 2.

(a) The oral hearing will be open to public observation by means of simultaneous
closed-circuit television broadcast, shown in a separate room to which duly registered
delegates of WTO Members and members of the general public will have access.
(b) Oral statements and responses to questions by the third participants that have
indicated their wish to maintain the conf identiality of their submissions, as well as
—at the request of any participant—an y discussion of information that the
participants designated as confidential in documents submitted to the Panel, will not
be subject to public observation.
(c) Any request by a third participant wishing to maintain the confidentiality of its oral
statements and responses to questions s hould be received by the Appellate Body
Secretariat no later than 17:00 p.m. Geneva time on Wednesday, 25 April 2012.
(d) An appropriate number of seats will be reserved for delegates of WTO Members in
the room where the closed-circuit television broadcast will be shown. WTO
delegates wishing to observe the oral hearing are requested to register in advance with
the Appellate Body Secretariat.
(e) Notice of the oral hearing will be provided to the general public on the WTO website.
Members of the general public wishing to ob serve the oral hearing will be required to
register in advance with the Appellate Body Secretariat, in accordance with the
instructions set out in the WTO website notice.

Geneva, 16 April 2012