Document: WT/DS384/R WT/DS386/R Page B-1 ANNEX B EXECUTIVE SUMMARIES OF THE SECOND WRITTEN SUBMISSIONS OF THE PARTIES Contents Page Annex B-1 Executive summary of the second written submission of Canada B-2 Annex B-2 Executive summary of the second written submission of Mexico B-10
Document codes: WT/DS384/R; WT/DS386/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

ANNEX B

EXECUTIVE SUMMARIES OF THE SECOND WRITTEN SUBMISSIONS
OF THE PARTIES

Contents Page
Annex B-1 Executive summary of the second written submission of Canada B-2
Annex B-2 Executive summary of the second written submission of Mexico B-10
Annex B-3 Executive summary of the second written submission of the United States B-24

ANNEX B-1

EXECUTIVE SUMMARY OF THE SECOND WRITTEN SUBMISSION
OF CANADA

I. INTRODUCTION
1. The United States has challenged few of Canada's legal arguments or evidence in this case.
Where the United States has, it has done so in a curs ory way. That is particularly the case regarding
Canada's claims of discrimination under GATT Ar ticle III:4 and TBT Article 2.1, where the United
States has made only bare assertions to counter th e wealth of Canadian and Mexican evidence of
discrimination.
2. Canada therefore takes this opportunity to revi ew its key claims and arguments and, to the
extent that it has not yet done so, to address arguments and evidence put forward by the United States.
II. TBT ARTICLE 2.1/GATT ARTICLE III:4
A. I
NTRODUCTION
3. TBT Article 2.1 and GATT Article III:4 prohibit the United States from according less
favourable treatment to Canadian-born livestock by changing the conditions of competition to the
detriment of that livestock in the US market. The inconsistency of the COOL measure with these
obligations is at the heart of the dispute: discr imination against Canadian-born livestock, which was
the fundamental reason for Canada to bring this case.
B. US LEGAL ARGUMENTS TO JUSTIFY A VIOLATION OF TBT ARTICLE 2.1 ARE WITHOUT MERIT.
4. In its defence, the United States tries to argue that since it endeavoured to consult with
industry in developing the COOL measure and, afte r doing so, made certain accommodations in the
measure to address industry concerns, there is no viol ation of Article 2.1 of the TBT Agreement. It
also suggests that all technical regulations result in costs and benefits that are not always spread
evenly among market actors. Even if these points are valid, TBT Article 2.1 still requires that
technical regulations do not accord less favourable treatment to imported products.
5. In the context of its argument that all regulations cause costs and benefits that are not always
evenly spread, the United States explicitly refers to the OECD Checklist for Regulatory Decision
Making. This document does not support the assertion of the United States that the COOL measure is
consistent with its national treatment obligati on: it only provides guidelines for OECD members to
consider when developing regulations; there is no reference in the Checklist to trade effects or
discrimination on imports; and in any case the Unite d States has not claimed that it followed the
Checklist. There is nothing in TBT Article 2.1 or GATT Article III:4 that justifies a measure that
would otherwise violate those provisions because a certain approach was taken to regulatory decision-
making.
6. The United States argues that the national treat ment obligation under TBT Article 2.1 does
not apply to products not explicitly covered by a technical regulation, contending that "less favourable
treatment" accorded to Canadian-born cattle and hogs would not be "in respect of" the COOL measure
because the measure applies only to beef and pork. That argument is flawed. First, the COOL
measure applies to livestock and thus is "in respect of" livestock because it requires tracking, which in
practical terms requires segregation of both livestock and the resulting meat. Second, TBT Article 2.1
requires that WTO Members shall ensure national tr eatment is accorded to imported products. The

words "in respect of" refer to the technical regulations, not the products that are the subject of the
discrimination claim. If the United States' interpretation were accepted, a WTO Member would be
free under TBT Article 2.1 (but not GATT Article III:4) to discriminate against imported products
that are the contents, inputs or ingredients of a final product as long as the technical regulation did not
discriminate against the final product on the basis of origin.
7. The United States argues that the words "in respect of" in TBT Article 2.1 require a WTO
Member to ensure that no less favourable treatment of like products only when the treatment can be
directly attributed to a Member. A WTO Member cannot divorce itself from the response by industry
to its technical regulation. The actions of priv ate actors can be attributed to the WTO Member,
particularly where a measure creates incentives for those actors to act in such a manner that has
adverse effects on the conditions of competition. Having imposed the COOL measure, the US
government is more than sufficiently involved in the industry's response to be held responsible for the
resulting violation of TBT Article 2.1.
C. M
EASURES OF OTHER WTO MEMBERS ARE NOT AT ISSUE IN THIS DISPUTE , AND IN ANY
EVENT DO NOT ASSIST THE UNITED STATES IN JUSTIFYING THE COOL MEASURE.
8. The United States has referred to a number of WTO Members that maintain country-of-origin
labelling measures. Those measures ar e not relevant to this dispute fo r a number of reasons: they are
not at issue in this dispute; they do not make th e COOL measure any less inconsistent with the WTO
Agreement; and Canada does not contend that coun try-of-origin labelling generally violates the WTO
Agreement.
9. In any case, those other measures are not similar to the COOL measure in a number of
significant ways: none of them explicitly deals with meat obtained from livestock slaughtered within
the territory of the WTO Member; many of the measures recognize substantial transformation as
conferring origin; most of the measures cited re fer to labelling of pre-packaged foods; many do not
have the objective of providing information to co nsumers; and some of the measures relate to
voluntary labelling. Even if those measures were similar to the COOL measure, these can only be
legally relevant if they collectively represent a "c oncordant, common and consistent" sequence of acts
or pronouncements implying the agreement of the WTO Members regarding an interpretation of the
WTO Agreements, which they do not.
D. L
IMITED PRE -EXISTING SEGREGATION AND CERT AIN FLEXIBILITIES IN THE COOL MEASURE
DO NOT PREVENT THE COOL MEASURE FROM CAUSING DISCRIMINATORY TREATMENT TO
CANADIAN LIVESTOCK.
10. The United States has asserted that the US indus try has not changed its practices because of
the COOL measure due to pre-existing segregation prac tices; and that there is flexibility in the design
and architecture of the COOL measure. That is not correct.
11. The limited segregation prior to the COOL m easure was not for origin, but principally for
premium programs concerning meat quality. The voluntary pre-existing segregation under those
programs to meet the limited demand for such pro ducts did not have the effect of lowering the
widespread segregation costs of the COOL measure. To participate in such programs, the vast
majority of which apply only to beef (not pork), US slaughter houses absorbed the costs of operation,
including the costs of segregation, in order to obtai n the price premium associated with meat products
labelled as meeting a particular program's criteria. Similarly, the voluntary USDA carcass grading
program identifies the quality of beef produced from a particular animal and does not require plants to
segregate their slaughter animals. There is no grade labelling for pork.

12. There was very limited pre-COOL segregation for export, again principally for beef: total
beef exports account for just 6.4% of US production, and of that well over half goes to countries that
do not limit imports based on the origin of livestock. Where origin is an issue, it is based on a number
of factors that vary by destination, and importa ntly, the cuts from those animals which are not
exported under the Export Verification (EV) Program move seamlessly into the US domestic supply
chain. The EV programs are voluntary, with slaughter houses participating when the premium
derived from the export sale is greater than the cost to comply with the EV program.
13. US industry was also engaged in segregation by origin for the domestic market on a limited
basis whenever it decided to participate in any voluntary country-of-origin labelling programs.
Again, slaughter houses were willing to absorb the co sts of segregation but only to the extent that the
premium available for these origin-label products exceeded those costs.
14. Finally, the US position that the COOL measur e does not require segregation or did not force
US industry to alter its pre-existing segregation pr actices is directly contrary to the extensive
unchallenged evidence that the COOL measure cause d slaughter houses to terminate or limit their
acceptance of Canadian-born livestock.
15. The United States asserts that there is some flexibility in the Final Rule that allows
implementation of the COOL measure at lower cost th an if the COOL measure had been less flexible.
Any such flexibility is without legal significance. There is no flexibility in the requirement that all
beef and pork, being "covered commodities" subj ect to the COOL measure, must be labelled by
covered retailers. Any flexibility in the COOL measure does not apply to Label "A".
E. F
LAWS IN THE US CRITIQUE OF CANADA'S ECONOMETRIC ANALYSIS AND ECONOMIC DATA
16. Contrary to the assertion of the United States, Dr. Sumner's analysis and the Informa Report
took into account pre-existing costs of segregatio n, whether for health and safety reasons or
otherwise. Dr. Sumner's statistical analysis shows that the COOL measure caused specific reductions
in the Canadian price of fed cattle compared to US fed cattle and reductio ns in US imports of
Canadian fed and feeder cattle, slaughter hogs and feeder pigs relative to the use of domestic animals.
17. The United States has offered monthly trade data to challenge Dr. Sumner's economic
analysis. The United States bases its statistical analysis on monthly data, despite the ready availability
of weekly data from the US Animal and Plant He alth and Inspection Service (US-APHIS) for cattle
imports as used by Dr. Sumner. By only using monthly observations rather than the weekly data from
the US-APHIS, the United States reduces the size of the available data set and reduces the precision
with which the effects of the COOL measure may be measured. In contrast, by using additional
weekly observations, Dr. Sumner improves the ability to test hypotheses and measure effects with
precision. There is no bias in the weekly data. As a result, Dr. Sumner's analysis based on these data
is superior.
18. Contrary to what the United States asserts, changes in export numbers do not change the
fundamental point that the COOL measure continues to impose differential discriminatory burdens on
imports of Canadian-born livestock. The chart pr epared by the United States in answer to Panel
Question 50 is consistent with the weekly data av ailable from the US APHIS which Canada uses, and
as a result does not serve to disprove any of Canada's economic data or econometric analysis.
III. THE COOL MEASURE VIOLATES TBT ARTICLE 2.2.
19. As Canada indicated in its response to Pa nel Questions, the proper interpretation of a
technical regulation's compliance with this Article requires a five-step test:

 Determine if the technical regulation restrict s international trade. If it does not, the
measure cannot violate Article 2.2.
 Identify the objective of the technical regulation.
 Determine if it the objective of the technical regulation is legitimate. If it is not, the
technical regulation violates Article 2.2.
 Determine if the technical regulation, alone or in connection with other measures, fulfils
the legitimate objective. If it does not do that, the technical regulation violates
Article 2.2.
 Assess other alternative measures that would fulfil the legitimate objective in a less trade-
restrictive way, "taking into account the risk s non-fulfilment would create". If there are
such alternative measures, the technical regulation violates Article 2.2.
20. Applying the elements of that test shows that the COOL measure violates TBT Article 2.2 in
each of steps 3, 4, and 5 of the test.
A. THE COOL MEASURE RESTRICTS INTERNATIONAL TRADE.
21. If a technical regulation imposes any restriction on international trade, it meets the first
element of the test. There is abundant unchallenge d evidence that the COOL measure has restricted
international trade by reducing the ability of Cana dian-born livestock to be exported to the United
States.
B. THE OBJECTIVE OF THE COOL MEASURE IS PROTECTIONISM.
22. The Panel should determine the objective of a me asure. This determination should focus on
the "design, the architecture and the structure" of that measure, not the text of the measure. That
focus should be supplemented as necessary with addi tional information to determine the objective of
the measure, including its legislative history. If th e objective of a measure is one that is explicitly
listed in TBT Article 2.2, then it is not necessary to provide more precision in defining the objective.
If the measure's objective is not specifically listed in TBT Article 2.2, then it is necessary to define the
objective with an appropriate level of specificity, which in this instance needs to be high, because
"consumer information" as an objective can be for both legitimate and illegitimate purposes.
23. The design, architecture and the structure of the COOL measure show that the measure's
objective is not to provide consumer information but rather to provide protection to US producers of
cattle and hogs. That is evident in the special rules and reporting requirements applied to imported
livestock that do not apply to other covered commodi ties; the selection of covered commodities itself;
and the very limited information provided by the COOL measure.
24. The protectionist objective of the COOL meas ure is confirmed by other evidence showing
that the intent of the makers of the measure was to economically help US farmers and ranchers: its
introduction in the 2002 Farm Bill (not with a pack age of other consumer information measures);
statements made by the principal architect of th e COOL provisions in the Farm Bill in connection
with its introduction in the US Senate; and the in terventions reflecting producer interests in its
support.
25. The United States has highlighted a letter su bmitted during the legislative process by a
number of consumer groups. But that letter, which itself discloses protectionist interests as part of its
motivation, is the only one included in the Congr essional Record from consumer groups. All the

other letters come from producer groups. The th ree other pieces of secondary evidence presented by
the United States deal mostly with country-of-ori gin labelling generally; wrongly suggest the COOL
measure will assist in enhancing food safety; focus on issues not addressed in the COOL measure; and
focus on protectionist purposes.
26. Although the United States has conceded that th e COOL measure was not enacted in direct
response to deceptive practices, it has more recently asserted that the objective of the COOL measure
is related to deceptive practices because of consum er confusion. The design, architecture, and
structure of the COOL measure do not support a findi ng that the objective is to counter consumer
confusion, much less deception. Nor does legislativ e history or related context reveal an objective to
counter confusion. Further, even if there wa s evidence of consumers being deceived by the USDA
grading stamp, the appropriate solution would have been to refine the USDA grading program to
address that confusion. The United States cannot use confusion caused by its own voluntary
programs to justify the COOL measure.
C. T
HE OBJECTIVE OF THE COOL MEASURE IS NOT LEGITIMATE WITHIN THE MEANING OF TBT
ARTICLE 2.2.
27. Since the alleged objective of the COOL measure is not specifically listed, the United States
must prove that the COOL objective is legitimate. This requires clear and compelling evidence of
legitimacy, including evidence of a wider intent to implement a particular policy goal.
28. The general term of "inter alia" followed by specific terms means that the general term is
limited to the type of items listed in the specific te rms (a principle often referred to by the Latin term
ejusdem generis). The list of specific legitimate obj ectives in Article 2.2 are all important objectives
recognized elsewhere in exceptions in the covere d agreements: national security requirements;
protection of human health or safety, animal or pl ant life or health; protection of the environment; and
the prevention of deceptive practices. It would theref ore be reasonable to conclude that the type of
items listed in the specific terms covers objectiv es set out as general exceptions or other similar
situations in the covered agreements. Even if th e Panel finds that the objective of the COOL measure
is not to provide protection to US livestock producers but to "provide information to consumers", this
is not an objective of the type listed in TBT Article 2.2. "Consumer information" is a broad term. It
is therefore particularly important to define the objective with more precision for the analysis under
TBT Article 2.2. Any specific definition of th e objective is either not legitimate (providing
information to consumers is to encourage them to favour US domestic producers of livestock over
foreign competitors), or not an objective addr essed by the COOL measure (health and safety,
environment).
D. I
F THE OBJECTIVE OF THE COOL MEASURE IS LEGITIMATE , IT DOES NOT FULFIL THAT
OBJECTIVE.
29. Even if the Panel rejects Canada's positi on and determines that providing "consumer
information" is a legitimate objective, the COOL m easure does not fulfil its objective. In order to
fulfil that objective, the COOL measure must provide clear and accurate information to consumers. If
not, the consumers are given misinformation. Most consumers do not understand the subtle
differences between Label "A", "B", and "C" meat. Even if a consumer did understand the intricate
difference between Label "A", "B", and "C", b ecause of the way the COOL measure operates, it
provides virtually no useful information.
30. In order to fulfil the objective of providing cons umers with information, the information must
provide consumers with information that is desired by them, or at least information on which they are
willing to act. The COOL measure provides info rmation that US consumers generally are not
interested in knowing and it is therefore not meaningf ul. The vast majority of consumers express no

interest in country-of-origin labelling, even at a ge neral level, much less in the kind of information
required to be provided by the COOL measure.
E. O
THER ALTERNATIVE MEASURES WOULD FULF IL ANY LEGITIMATE OBJECTIVE OF THE COOL
MEASURE IN A LESS TRADE -RESTRICTIVE WAY , "TAKING ACCOUNT OF THE RISKS NON -
FULFILMENT WOULD CREATE".
31. TBT Article 2.2 requires an assessment of another less trade-restrictive alternative measure
against the challenged technical regulation. An assessment of the risks non-fulfilment would create
requires a consideration of both the type of risk and the importance of legitimate objective. A
challenged technical regulation, the objective of whic h is very important, is easier to justify than a
technical regulation that addresses a less important objective. Technical regulations that discriminate
against imports cannot be justified when the objective could be fulfilled in other, less trade-restrictive
ways. That is particularly the case when the risks creat ed by the failure to fulfil the objective are low.
It is also important here where the COOL measure requires distinctions with discriminatory effects
that are not based on neutral technical criteria but based on origin.
32. The United States has suggested that the test fo r an alternative measure is rather whether it
meets a WTO Member's objective "at the level [it] deems appropriate while also being significantly
less restrictive to trade". The suggestion that the level is that "deemed appropriate" by a WTO
Member is misplaced because it relies on text found in SPS Article 5.6 that is not in TBT Article 2.2,
and text in the preamble to the TBT Agreement that can only be useful as an aid to interpretation, and
in any case, applies only to a closed list of objectiv es. The argument that alternative measures must
be "significantly" less trade-restrictive lacks merit because that language is not found in the text of the
Agreement, and the 1993 letter submitted by the United States in support demonstrates that an attempt
by the United States to include that test for a cl osed list of objectives was rejected by other WTO
Members.
33. Even if the test is to meet an objective at a level that a WTO Member considers appropriate,
the determination of that level has to involve an objective assessment of what level of protection the
challenged technical regulation actually provides. Because the COOL measure provides information
that is neither accurate nor meaningful, the "level " of protection established by the United States for
providing information to consumers is also very lo w. Consequently, non-fulfilment of that objective
would pose few risks.
34. A legitimate objective that the COOL measure fu lfils would have to bear some relation to
informing consumers where the livestock used to produce the meat they are purchasing was born,
raised, and slaughtered. The COOL measure fails to fulfil any reasonably defined legitimate objective
because it does not cover purchases at places such as restaurants, specialty stores that do not sell fruits
and vegetables, and smaller grocery stores; it allo ws commingling; and it allows transformed meat
(i.e., processed meats), but not livestock, to escape fro m the coverage of the COOL measure. Canada
is not suggesting that if those limitations were re moved, the COOL measure would be consistent with
the WTO Agreement. Many of these limitations mitigate (but do not eliminate) the loss of
competitive position (contrary to TBT Article 2.1 and GATT Article III:4) that would have been
suffered by Canadian cattle and hogs in the US ma rket if the COOL measure did not have those
limitations. But those limitations are also indicia that the United States does not consider the risk of
non-fulfilment of the objective of providing informa tion to consumers to be very high since it is
willing to accept non-fulfilment of that allegedly legitimate objective in a number of significant ways.
35. Voluntary labelling is a less trade-restrictive a lternative that already exists and could be
expanded or modified as required. Voluntar y labelling provides interested consumers with
information about where livestock is born, raised, and slaughtered. It can apply to all points of sale
(so could include restaurants, small grocery stores, etc.) The segregation costs and other burdens

associated with providing that information would apply only to the livestock and resulting meat that is
produced to satisfy that specialized market. Othe r livestock and resulting meat would remain free to
be traded without facing the costs and burdens of a mandatory country-of-origin labelling measure.
36. Applying substantial transformation would also be significantly less trade- restrictive as there
would be no need to track an animal and its meat throughout the supply chain. Mandatory labelling
based on substantial transformation would provide c onsumers who want to know "where their meat
comes from" with that information. They woul d get that: labelling of meat based on the state it
arrives at the border, with transformation within th e country serving to change the origin to the last
place of transformation. As with voluntary labellin g, it could also provide greater information to
consumers by including additio nal points of sale. It would be less trade-restrictive as it would be
much simpler to label meat, removing costly segregation costs on imported livestock.
IV. THE VILSACK LETTER
37. Canada disagrees with the United States' characterization of the Vilsack Letter as being non-
binding and its suggestion that the letter was of a routine nature.
38. The Vilsack Letter is extraord inary because of its timing and circumstances, the position of
the person who signed the letter, the public nature of the letter, the directions given to US industry,
and the fact that the Secretary's directions were backed up by an explicit threat (to reopen the Final
Rule if the directions contained in the letter were not complied with by the US industry).
39. The Vilsack Letter was not a routine letter. There were multiple instances in which the new
Administration reviewed pending regulations that we re issued in the final days of the previous
Administration. None of these resulted in a letter like that from Secretary Vilsack.
40. The Vilsack Letter expressed concern about "t he regulation's treatment of product from
multiple countries" and in that regard urged point –of–production labelling of muscle cuts, rather than
the use of the labels and corresponding designations provided for in the Final Rule. Secretary
Vilsack's concern was able to be readily addressed by US industry shifting to the use of only livestock
that were born, raised and slaughtered in the United States and by selling only meat derived from such
livestock. This is what has happened in practice. Thereby the US industry avoids practices that
potentially conflict with the directions of the Vilsac k Letter. The shift by the US industry away from
livestock born in Canada was demonstrated by Ca nada through witness statements and confirmed by
economic and econometric analyses. This shift demonstrates compliance with the directions of
Secretary Vilsack.
41. Regardless of the legal status of the Vilsack Letter in US law, the Panel should characterize
the directions in the Vilsack Letter as "mandatory", within the meaning of the TBT Agreement. In
this respect the Panel should take into account th e threat in the letter to reopen the Final Rule
following a review of compliance by US industry with the directions contained in the letter as well the
reference in the letter to the "intent of Congress" . These factors lead to the conclusion that the
directions in the Letter are mandatory.
V. ARTICLE X:3(A) OF GATT 1994
42. Canada's claim under GATT Article X:3(a) concerns the unreasonable administration by the
United States Government, through the Vilsack Letter, of the Final Rule and the underlying statutory
COOL provisions.

43. The Vilsack letter is being complied with through a shift by US industry away from
Canadian-born livestock and is thus a form of enfo rcing the Final Rule and the underlying statutory
COOL provisions.
44. The Vilsack Letter is an unreasonable manner of administering and enforcing the Final Rule
and the underlying COOL legislation because the Letter addresses the implementation of the Final
Rule, and at the same time adds further rules, while invoking the intent of Congress and threatening to
reopen the provisions of the Final Rule. This am ounts to regulation-making by the government of the
United States through a public letter addressed to US industry. Its is an unreasonable manner of
administering the Final Rule and the underlying COOL legislation, in contravention of GATT
Article X:3(a).
VI. GATT ARTICLE XXIII:1(B)
45. In relation to Canada's claim under GATT Article XXIII:1(b), Canada clarified that its claim
is based on the tariff concessions granted by the United States in its MFN tariff schedule that was
negotiated in the Uruguay Round.
46. The current MFN rate of the United States for cattle , other than cattle for dairy or breeding, is
US $ 0.01 per kilogram, in accordance with the bound rate of duty of US $ 0. 01 per kilogram in the
US MFN tariff. As to hogs, the same MFN tari ff schedule of the United States ensures duty-free
imports of hogs into the United States; this pr e-dates the WTO Agreement (and even the Canada-
United States Free Trade Agreement, of 1988, and the NAFTA, of 1992).
VII. CONCLUSION
47. Canada respectfully requests that the Panel fi nd that the COOL measure of the United States
is inconsistent with its obligati ons under the TBT Agreement, in pa rticular Articles 2.1 and 2.2; and
with its obligations under the GATT 1994, in particul ar Articles III:4, X:3(a) and XXIII:1(b); and that
the Panel recommend that the United States bring th e COOL measure into conformity with these
obligations, subject to the provision of Ar ticle 26.1 of the DSU in respect of GATT
Article XXIII:1(b).

ANNEX B-2

EXECUTIVE SUMMARY OF THE SECOND WRITTEN SUBMISSION
OF MEXICO

I. INTRODUCTION
1. This dispute concerns a particularly egregious type of country of origin labelling measure as it
applies to specific facts and circumstances. Mexico's case is not a broad challenge to country of origin
labelling. Mexico's case highlights that country of origin labelling measures are subject to the
application of the disciplines in the WTO Agreemen ts and are permissible only when they are in
compliance with those disciplines.
2. In its first written submission, Mexico establis hed a prima facie case with respect to each of
the elements of its claims in respect of the C OOL measure and the United States has failed to rebut
that case.
3. The design, structure and application of the COOL measure, in respect of muscle cuts of beef
and ground beef, unjustifiably discriminates against and restrict imports of Mexican cattle into the
United States. Prior to the COOL measure, Mexican cattle were processed throughout the
United States at various packing plants without the need for segregation by origin. The COOL
measure changed this. Mexican cattle are now segr egated from US cattle and processed at a limited
number of packing plants, during a limited number of days and subject to additional conditions such
as advance notification. Not only has this redu ced the packing plants and processing opportunities
available to Mexican cattle, it has reduced the feed lots and backgrounders th at are willing to take
Mexican cattle. This adverse change in the conditions of competition is a direct result of the COOL
measure. It is clear from the case presented by Mexico that the purpose and effect of COOL measure
is to protect the US cattle industry against competition with Mexican like products – live cattle.
4. On the basis of the argument and evidence pr esented by Mexico, it requests that the Panel
find that the COOL measure is inconsistent with Articles III:4, X:3 and XXIII:1(b) of the GATT 1994
and Articles 2.1, 2.2, 2.4 and 12 of the TBT Ag reement and make such recommendations that are
necessary for the United States to bring itself into conformity with these provisions.
II. THE MEASURE AT ISSUE
A. T
HE COOL MEASURE IS DISTINGUISHABLE FROM OT HER COUNTRY OF ORIGIN LABELLING
MEASURES
5. Mexico recognizes that country of origin labelling is used by WTO Members. However, most
of those measures differ from the COOL measure in their design and structure and are applied in
different circumstances.
6. The most common form of country of origin labelling measures relate to imported products
that are to be consumed in the importing WTO Member in the form in which they are imported. This
type of labelling measure is often mandatory and is applied at the border.
7. Another form of country of origin labelling me asures relates to products manufactured within
the territory of a WTO Member from domestic and/or imported inputs. This type of measure can be
mandatory or voluntary, it can employ different ty pes of rules and conditions for application and it
can employ different forms of compliance mechanisms (e.g., certification and audit, trace back).

8. The COOL measure falls within this second form of measures. However, it occupies a very
specific sub-category of such measures. The features that distinguish the COOL measure are: (i) it is
mandatory; (ii) it applies very strict rules and cond itions for application, related to place of birth,
developing and processing of the input used to produce the final food product; (iii) it employs a
certification and audit compliance mechanism; and (iv) it implicitly discriminates in the treatment
between domestic and imported cattle.
B. COOL
 IS A SINGLE MEASURE
9. The COOL measure, like most measures created by WTO Members, is made up of various
instruments. It comprises the statutory provisions, the regulations, and the administrative guidance
including the Vilsack letter. Each instrument is dependent upon others and it is the collection of the
instruments as a whole that creates the measure that is being challenged by Mexico. Therefore,
Mexico requests that the Panel rule on these instruments as a whole. It is in this context that Mexico
refers to the instruments as the "COOL measure".
C. THE COMPONENTS OF THE SINGLE MEASURE
1. The statute
10. The Statute comprises the Agricultural Marketi ng Act of 1946, as amended by the Farm Bill
2002 and Farm Bill 2008. It is in the Statute where the country of origin labelling requirements were
created, and specifically, where the rules for labe lling muscle cuts of meat and ground products were
created.
2. The regulations
11. The regulations comprise the AMS Interim Fina l Rule, the FSIS Interim Final Rule, the AMS
Final Rule and the FSIS Final Rule. These regulati ons implemented the statutory COOL provisions.
Without the statutory provisions the regulations would not have been issued, but without the
regulations, the statutory provisions could not be implemented and put into force.
3. The Vilsack letter and the administrative guidance
12. The Vilsack letter is part of the COOL measu re and is subject to the TBT Agreement and
GATT Article III. Even if viewed in isolation, th e Vilsack letter is a "requirement" and a "technical
regulation".
13. At the very least, the Vilsack letter confirms the strict interpretation of the COOL measure
that has been applied by the USDA — i.e., that it is not possible for the US industry to use multiple
country of origin labels in order to avoid the seg regation and other costs asso ciated with using the A
label.
14. In addition to the Vilsack letter, the guidance received by the industry from the USDA further
confirms the strict interpretation of the rules adopted by the US authorities.
D. THE COOL PROVISIONS FOR MEAT PRODUCTS : LABELLING CATEGORIES BASED ON THE
ORIGIN OF THE CATTLE
15. The COOL measure has created a new system for labelling muscle cuts of meat and ground
meat, through labelling categories based on the place where the animal from which the meat is
derived was born and raised, and not on the place wh ere the meat was produced from that animal. In
this way, it ignores the substantial transformation processes that occur in the United States.

16. The COOL measure creates a labelling system wi th four labelling categories for muscle cuts
of meat and one labelling category for ground beef. These categories do not apply to any other edible
parts of the same animal and they do not apply to butcher shops and specialty meat stores, or to food
service establishments.
17. In relation with Category "B", it does not make sense that the meat derived from a Mexican
animal will never be able to obtain a "Product of the United States" labelling when it: (i) was born in
Mexico and has the same genetic features of the ca ttle born in the United States, (ii) was sent to the
United States at a very early period in its life to be fed in the same grasslands on which cattle born in
the United States are fed, (iii) was sent thereafter to a feedlot to be fed with the same grains with
which cattle born in the United States are fed, (iv) obtained more than 70% of its weight in the
United States, and (v) was slaughtered and processed into meat in the same facilities as the cattle born
in the United States, and further (vi) its meat w as classified with the same quality grading as meat
derived from an animal born in the United States
18. Furthermore, the end consumer might think that parts of the cuts come from Mexico and parts
of the cuts come from the United States. This creat es confusion between what is truly a "Product of
Mexico" and what is considered by the COOL measure as a "Product of the United States and
Mexico".
19. Importantly, the "B" label can be used in several other instances, so the end consumer might
never be able to know whether a product labelle d as "Product of the United States and Mexico"
derived from a cattle born in Mexico and transported at a very early stage, raised, slaughtered and
processed into meat in the United States.
E. T
HE SUPPOSED EFFORTS TO BALANCE COMPETING INTERESTS
1. The reduction of the costs of compliance
20. Although the United States attempted to reduce the burdens on US dom estic retailers and
producers, it is not true that it tried to reduce the burden for foreign producers or industry participants
using foreign cattle.
21. The first way in which the United States trie d to reduce compliance for its own market
participants was through an express prohibition of the creation of any mandatory identification system
to verify the country of origin of the covered commodities, and from requiring additional records
other than those maintained in the course of th e normal business. This prohibition does not reduce the
impact of the COOL measure for Mexican cow calf producers; rather, it was designed to protect US
cow calf producers.
22. The COOL measure also excludes retailers such as butcher shops and specialty meat shops
from its application. This minimizes the impact of the measure on US domestic interests but keeps
untouched the protectionist objective and effect of the measure because the principal distribution
channels remain covered.
23. Finally, the US "compromise" excludes so many products from the scope of the COOL
measure, that it has created a complex matrix of rules which would confound the most diligent
consumer. This further clarifies that protecti onism – not consumer information – was the true
objective of the law.

2. The "flexibilities" regarding commingling
24. The United States argues that the flexibilities in the labelling rules minimize the impact on
foreign cattle. This is simply incorrect. There is no flexibility regarding label "A" beef which cannot
be used for beef produced from Mexican cattle notwith standing that such cattle have the same genetic
features as US cattle, were raised in the United St ates and were processed in the United States into
beef.
25. Also, to the extent there is any practical fl exibility to commingle US and Mexican cattle and
use label B, the USDA's strict interpretation of the provisions has effectively discouraged this
commingling. Furthermore, the flexibility to ch oose between label "B" or "C" does not facilitate the
use of foreign cattle.
26. These flexibilities serve mainly to protect labe l "A", but do not provide any meaningful
benefits to foreign cattle.
F. THE OBJECTIVES OF THE COOL MEASURE
1. Determining the objectives
27. Mexico presented detailed argument and evid ence that the true purpose of the COOL
measure, by virtue of its design, structure and a pplication, is to protect domestic producers in the
United States by altering the operation of the US beef industry in favour of the US feeder cattle. Its
protectionist purpose and objective is reflected in, inter alia , its scope being limited to certain
commodities, the targeting of the principal downs tream products (i.e., muscle cuts of beef) and
distribution network (i.e., large diversified retailers ), the exclusion of small retailers and the US
processed food industry, and the departure from the established comprehensive system that was in
place for regulating consumer information. The United States has not rebutted this evidence.
28. In determining the objectives of the COOL measu re it is necessary for the Panel to examine
the measure at a high degree of detail. If the objectives were self-defining and beyond scrutiny by a
Panel, it would be difficult if not impossible fo r developing country Members such as Mexico to
challenge such measures.
2. Protectionist intent and effect
29. It is Mexico's view that the evidence demonstr ates that the intent of the COOL measure is
overwhelmingly protectionist. The protectionist inte nt of the COOL measure is reflected in the
circumstances in which the measure was introdu ced, its design and structure and in secondary
corroborating evidence in the form of statements of US legislators and officials and of members of the
US cattle industry.
(a) Circumstances in which the measure was introduced
30. It is clear that consumers supported the id ea of country of origin labelling for fruits,
vegetables and meat in general, although that idea was firstly introduced and supported not by
consumers, but by producers.
31. To the extent some US consumers stated they wanted information on the country in which the
cattle used to produce beef products were born and raised, the proportion of those consumers to the
entire population of US beef consumers was very sm all, and unwilling to pay higher prices for any
country of origin information.

32. The interests of the US cattle producers were the motivating factor in the design of the special
COOL provisions for beef. In other words, the motivation was protectionism.
(b) Design and structure of the measure
33. The design and structure of the COOL measure denotes its protectionist intent. By virtue of
the design and structure of the COOL measure, the only label that provides relatively precise
information is the A label. The intent of the Un ited States was to draw a distinction between beef
produced exclusively from US cattle and beef produced from imported cattle or commingled imported
and domestic cattle.
34. Evidence of the protectionist intent of the C OOL measure is the fact that the design and
structure of the COOL measure favours the use of th e label A and that US authorities are interpreting
and applying the measure strictly so that US b eef producers maximize the use of the label A and
production of A label beef and minimize the use of the multiple country of origin label and therefore
the production of beef from imported cattle.
35. Also, all the efforts to reduce burdens and cost s were designed to help the cow-calf operators,
processors and suppliers in the United States, not to reduce the cost of compliance of foreign
producers.
36. Finally, the compliance mechanism implemented in the COOL measure is designed so that
the lowest cost alternative for compliance is to exclude all non-U.S. animals from the processing
stream or segregate those animals in the processing st ream. If there were trace back to the originating
farm, there would likely be no incentive to exclud e imported Mexican cattle or shift the cost of
compliance solely to Mexican animals.
(c) Corroborating statements of legislators, regulators and industry
37. The legislative history of the COOL measure during the discussion of the 2002 Farm Bill
clearly reflects the protectionist intent of the COOL measure.
38. Also, the protectionist intent of the COOL m easure is reflected in public statements of R-
CALF, the main proponents and supporters of the COOL measure. Country of origin labelling was
seen by R-CALF, other producer groups and their supporters as a means to protect the US cattle
industry from foreign competition.
(d) Protectionist effect
39. The protectionist intent of the COOL measure is reflected in the adverse effects of the COOL
measure. If the effects of the COOL measure were simply a reflection of consumer choice, there
would be very little adverse effect in the market because such a small proportion of consumers care
about the country of origin of the beef they are purchasing. Instead, the actual adverse effects of the
COOL measure on Mexican cattle are market-wide. This manifestly reflects protectionism and not
consumer choice.
3. The consumer information objective: two principal objectives
40. Assuming arguendo that the Panel accepts that the COOL measure is not merely
protectionist, it is Mexico's view that the COOL m easure could be viewed as a labelling measure that,
at a very general level, is inte nded to provide information to cons umers on where the cattle that were
processed into beef in the United States were born, raised and slaughtered. However, it is not

sufficient for the Panel to define the objectives of the COOL measure at this general level. It must go
further to determine the true objectives of the measure.
41. Although the A, B, and C labels purport to provide various combinations of origin
information, the two underlying and primary objectives of the COOL measure are: (i) to provide
information on label A, namely beef produced from ca ttle that are born, raised and slaughtered in the
United States; and (ii) to ensure that most of the beef sold at retail in US stores is label A beef. This
second objective goes beyond simply informing consumer s of the origin of the inputs used to produce
the beef they purchase and promotes the production of beef from cattle born, raised and slaughtered in
the United States.
42. The first objective is apparent when the design, structure and circumstances of application of
the COOL measure are analyzed agai nst the stated objective of the measure. It is not clear that the
average consumer is aware of what the B and C labels actually mean. It is impossible for US
consumers to accurately determine the origin of b eef identified with the label "B". The only label
giving accurate information is label "A".
43. With respect to the second objective, the Statute re quires that to use label A (i.e., "product of
the United States"), the beef must be produced fro m cattle that are exclusively born, raised and
slaughtered in the United States. Moreover, in th e Final Rule there is no practical flexibility in
labelling when label A beef is produced. Finally, th e Final Rule does not allow the use of "or" or
"and/or" when connecting a string of two or more countries of origin on a declaration of origin,
further restricting flexibility. These aspects prom ote the use of the label A and beef production
meeting that label and make it harder to use alternative labels.
44. To the extent that the Final Rule provides any flexibility for US producers to commingle
production and use the B and/or C labels, USDA has interpreted the Statute and applied the Final Rule
strictly to discourage US producers from commingling imported and domestic cattle and beef and
therefore label most of their beef production as label A. This strict interpretation and application is
confirmed by the Vilsack letter.
4. Shaping consumer expectations
45. The strict standard for the use of the label "A" was developed with the intent of ensuring that
the beef sold at retail in US stores is label A beef , thereby affecting both the consumers of the cattle
(i.e. backgrounders, feedlot operators and processors) and the end consumers of beef.
46. The Panel in EC – Sardines stated that "the danger is that Members, by shaping consumer
expectations through regulatory intervention in th e market, would be able to justify thereafter the
legitimacy of that very same regulatory interventi on on the basis of governmentally created consumer
expectations." In this dispute, through the COOL me asure, the United States is trying to shape
consumer expectations and percep tions through regulatory interventi on, and to justify the legitimacy
of this intervention on the basis of a governmentally created consumer perception and expectation.
III. FACTUAL INFORMATION
A. T
HE COOL MEASURE CONTINUES TO UPSET THE BA LANCE OF COMPETITIVE OPPORTUNITIES
TO THE DETRIMENT OF MEXICAN CATTLE
47. The COOL measure continues to upset the balance of competitive opportunities to the
detriment of Mexican cattle compared to lik e US cattle. Mexico summarizes these as follows: (i) the
reduction in the number of plants that slaughter a nd process fed cattle that were born in Mexico and
raised in the United States; (ii) the reduction of the number of days per week that such cattle are

slaughtered or processed; (iii) the reduction in the number of backgrounders and feedlots taking
Mexican cattle; and (iv) the imposition of additional requirements in the form of advance notice prior
to accepting Mexican cattle for slaughter and processing.
48. These factors that evidence the upsetting of the balance of competitive opportunities continue.
Over the summer, this continued to be reflected in a price discount being applied to Mexican cattle.
For example, Mexico is submitting evidence of tran sactions in July and August in which different
processors applied downward adjustments of $40 per head and $25 per head to Mexican cattle.
B. T
HE OTHER FACTORS IDENTIFIED BY THE US DO NOT EXPLAIN THE LOSS OF COMPETITIVE
OPPORTUNITIES
49. Mexico acknowledges that the North American market for cattle is affected by factors outside
of the COOL measure and that those factors affect both the price of cattle and the volume of trade
flows within North America. Nonetheless, the available recent documentation shows that the US
processors are still imposing COOL-based downward ad justments to the prices they pay for Mexican
born cattle, and the Mexican industry will continue to have to bear the burden of that differential
during times of both rising and declining prices.
50. Independent of those factors, the COOL m easure is upsetting the balance of competitive
opportunities against Mexican cattle in favour of like US cattle. Mexican cattle have been denied
competitive opportunities that existed prior to th e COOL measure and, irrespective of North
American market conditions, would be better off if those competitive opportunities were restored
through the elimination of the COOL measure.
IV. LEGAL ARGUMENT
A. G
ENERALLY
51. Mexico has presented a prima facie case with respect to all of the elements of its claims. None
of the arguments raised by the United States rebut the case that Mexico has presented.
B. MEXICO'S DE FACTO DISCRIMINATION CLAIMS UNDER ARTICLE III:2 OF THE GATT 1994
AND ARTICLE 2.1 OF THE TBT AGREEMENT
1. The burden of proof in a de facto claim
52. Contrary to what the EU suggests, there is no basis for increasing the evidentiary threshold
for de facto discrimination claims. De facto discrimination claims go back to the GATT 1947 and
nowhere has such a high evidentiary threshold been applied to such claims. The normal burden of
proof applies. Mexico must establish a prima facie case with respect to each element of its de facto
discrimination claims. Mexico has met this burden.
2. The timeframe for examining de facto discrimination claims
53. The EU also argues that "the immediate regulatory shock" of a regulation does not, in itself,
necessarily demonstrate less favourable treatment. Th ere is no legal basis for this argument. Whether
or not a challenged measure de facto discriminates in a manner that violates a provision of a WTO
agreement must be assessed by a Panel on the b asis of the facts existing at the time of the
establishment of the Panel.
54. Mexico's de facto discrimination claims are grounded in the fact that the economically
rational way for US processors to comply with the COOL measure is to either stop processing

Mexican cattle or to segregate the processing of th ose cattle in a way that restricts the access to
Mexican cattle. This fact will not change over time.
3. Like products
55. In the view of the United States, the like prod uct analysis should focus on beef. Mexico
disagrees. The COOL measure explicitly applies to both beef and cattle. This is evident from the text
of the Statute and the Final Rule which links the re levant label for beef to the country in which the
cattle were born, raised and slaughtered. Moreover, Mexico's challenge of the COOL measure relates
to its effect on imported inputs (i.e., Mexican cattle ). The relevant like product is therefore domestic
cattle. Mexican and US cattle are clearly like.
56. In regards to Mexico's de facto discrimination claim under Article 2.1 of the TBT Agreement,
the United States argument regarding the term "in respect of" is misplaced. That term simply clarifies
that the non-discrimination obligation in Article 2.1 applies only to technical regulations. It does not
prevent Mexico from challenging the de facto discrimination created between like imported and
domestic inputs.
4. Private actions and market forces
57. The United States argues that any action by priv ate actors not compelled by the measure at
issue does not result in a violation of the non-discrimination provisions. In this sense, the Appellate
Body stated in Korea – Various Measures on Beef that "[w]hat is addressed by Article III:4 is merely
the governmental intervention that affects the conditions under which like goods, domestic and
imported, compete in the market within a Member's territory".
58. It is the COOL measure that is imposing the le gal necessity of making the choice of either not
accepting Mexican cattle or restricting their access. The reduced access Mexican cattle have to the
US market is a direct consequence of the COOL measure. To the extent some element of private
choice is involved, it does not relieve the United States of responsibility for the resulting
establishment of competitive conditions less favour able for imported Mexican cattle than like US
cattle.
5. Costs inherent to regulating
59. The United States argues that to the extent th at the COOL measure imposes costs, they are
merely costs inherent to regulating. In its vi ew, compliance costs may and often do vary among
market participants based on their pre-existing ma keup and market participants may respond to new
costs in different ways.
60. While the United States' observations about th e distribution of costs of regulation among
market participants may be correct in certain circum stances, they are inapplicable to the facts of this
dispute. This dispute is not about the distributio n of costs among individual market participants; it is
about the discriminatory and trade restrictive eff ects of the COOL measure on imported cattle. It is
about the disproportionate or possibly even complete allocation of costs to one market participant (the
Mexican cattle producers and other participants ca rrying Mexican cattle) over others based solely on
the origin of the cattle they provide.
61. While regulations can distribute costs throughout the market in a variable manner, they
cannot discriminate on the basis of origin as does the COOL measure.

6. Less favourable treatment
(a) Mexico is not arguing that market participants are being "forced" to discontinue the purchase
of Mexican cattle
62. The United States argues that Mexico's arguments regarding less favourable treatment are
flawed because "they presuppose that market particip ants will all choose to comply, and in fact, are
forced to comply with the regulations by discont inuing the purchase of Canadian and Mexican
livestock".
63. This characterization of Mexico's arguments is incorrect. Mexico is arguing that the COOL
measure is imposing the necessity of making a c hoice and in the light of the normal economic
conditions in the market that choice is to either stop carrying Mexican cattle or to segregate Mexican
cattle in a way that restricts trade in those cattle. By law, relevant US market participants must
comply with the COOL measure. The design and structure of the measure is such that when
complying with the measure the market participan ts will discontinue or restrict the purchase of
Mexican cattle.
(b) Differential effect on different market participants
64. The EU argues that the effects arising from di fferent volumes of trade do not, in themselves,
necessarily demonstrate less favourable treatment. Th e EU misconstrues Mexico's arguments. Mexico
is not arguing that the COOL measure is imposing the same total cost on imported and like domestic
cattle but a higher per unit cost on imported cattle. Ra ther, the COOL measure is structured so that
the most commercially rational means of compliance is to stop carrying Mexican cattle or to segregate
Mexican cattle in a way that restri cts trade in those cattle. Mexico's de facto discrimination claims
have nothing to do with per unit costs.
(c) Sufficient remaining US capacity to process all Mexico's cattle exports
65. Whether or not the remaining US slaughterhou ses have enough capacity to process all of the
Mexican cattle exports is immaterial. What matters is that access to the US market for Mexican cattle
is being limited to certain slaughterhouses on cer tain days and under certain circumstances. This
reduces the competitive opportunities for the sale of Mexican cattle compared to like US cattle.
(d) Segregation
66. The United States argues that the provisions of the COOL measure do not require segregation
and that the flexibility provided by the measures reduces the likelihood that livestock will need to be
segregated.
67. The United States misplaced the point made by Mexico. Mexico is arguing that the COOL
measure is structured so that the most commercially rational means of compliance is to stop carrying
Mexican cattle or to segregate Mexican cattle in a wa y that restricts trade in those cattle. Also, the
flexibility provided by the measures does not reduce the likelihood that livestock will need to be
segregated. Given the restrictive conditions applicab le to the application of the multiple origin label
to label A beef the use of the multiple label is sever ely restricted and is therefore of little practical use
to avoid segregation.
68. Mexico has presented prima facie evidence that segregation was an understood consequence
of the COOL measure and that it is in fact occurring.

(e) Small market shares
69. The United States argues that Canada and Me xico both appear to acknowledge that any
decision by US packers to change their production pr actices results in large part from their relatively
small market shares.
70. In assessing whether the COOL measure de facto discriminates against Mexican cattle, the
Panel must assess the facts and circumstances rela ted to the trade in Mexican cattle that would
normally exist in the absence of the measure a nd then examine how the facts change when the
measure is applied. Mexico's share of the US market may be one of the facts that is taken into account
in this analysis, however, the fact Mexico h as a small market share does not mean that any de facto
discrimination against Mexican imports resulting from the COOL measure is to be ignored. To do so
would fundamentally prejudice developing country Members who generally account for only a small
portion of the trade with any given developing country Member.
(f) Other factors affecting the reduction in the demand for Mexican cattle
71. The United States argues that Canada and Mexi co have failed to consider the numerous
external factors that explain any reduction in the demand for and price of their livestock.
72. Mexico acknowledges that there are many economic factors that could affect the demand for
cattle in the North American market. However, the detrimental effects Mexico is challenging relate to
the upsetting of the balance of competitive oppor tunities between Mexican cattle and like US cattle.
These effects include the reduction in the numbe r of slaughterhouses accepting Mexican cattle, the
reduction in the number of days Mexican cattle ar e being accepted, the additional conditions required
for Mexican cattle, and the conse quent reduction in the number of market participants carrying
Mexican cattle or segregating Mexican cattle. None of these important facts can be attributed to the
external factors highlighted by the United States. Those factors affect the North American market as a
whole and do not discriminate against Mexican cattle. The factors at issue in this dispute are a direct
consequence of the COOL measure and discriminate against Mexican cattle.
7. The COOL measure is inconsistent with Article III:4 of the GATT 1994 and Article 2.1
of the TBT Agreement
73. In the context of Mexico's challenge, the funda mental thrust of the COOL measure is the
protection of US domestic cattle to the detrim ent of like Mexican cattle. In other words, pure
protectionism. This is reflected in the upsetti ng of the balance of competitive opportunities to the
disadvantage of Mexican cattle.
C. TBT A
GREEMENT
1. The COOL measure is a technical regulation
74. Mexico has demonstrated that the COOL Measu re is a technical regulation. The only point
upon which Mexico and the United States disagree is wh ether the Vilsack letter, viewed in isolation,
constitutes a technical regulation. In Mexico's vi ew the Vilsack letter is a "requirement" and a
"technical regulation". However, even if it is not a "requirement" or "technical regulation" when
viewed in isolation, it clearly is when viewed as part of the COOL measure as a whole, which is
unquestionably a "requirement" and "technical regulation".

2. The COOL measure is inconsistent with Article 2.2 of the TBT Agreement
(a) Preamble to the TBT Agreement
75. The United States argues that Article 2.2 provid es deference to WTO Members in the pursuit
of their policy objectives and must be read in conjunc tion with the sixth recital in the preamble of the
TBT Agreement.
76. The United States ignores an important caveat in th is recital—i.e., "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 c onditions prevail or a disguised restriction on
international trade". It is crucial that this language in the preamble is given meaning. Otherwise, WTO
Members could define the objectives of their technical regulations so narrowly and with such high
levels of protection that no other alternative measure could fulfil those objectives. This would insulate
such measures from challenge under the TBT Agreement.
77. In Mexico's view the COOL measure is "app lied in a manner which […]constitute[s] a means
of arbitrary or unjustifiable discrimination between countries where the same conditions prevail" and
it is a "disguised restriction on international trade".
78. The objective of the measure is protectionist and, in the light of the failure of the measure to
fulfil its stated objective of consumer information and the reduction of cons umer confusion, it is
clearly arbitrary. Also, the COOL measure is being taken under the guise of a "consumer information"
measure that is clearly aimed not at consumers but at protecting US domestic industry so it is a
disguised restriction on international trade.
(b) The objectives of the COOL measure
79. It is essential to the proper interpretation and ap plication of Article 2.2 that the Panel first
objectively determines the objective of the COOL measure to the necessary level of specificity.
(c) The objectives are not legitimate
80. The COOL measure is applied in a manner which constitutes a means of arbitrary or
unjustifiable discrimination between countries where th e same conditions prevail and it is a disguised
restriction on international trade. Its objectiv es are overwhelmingly protectionist. Such objectives
cannot be "legitimate" within the meaning of Article 2.2. They go against the object and purpose of
the WTO Agreements. If there ever was a measur e whose true objective was not legitimate, the
COOL is such a measure. A finding that the objectives of the COOL measure are legitimate would
render this element of Article 2.2 inutile.
(d) If the objectives are found to be legitimate, the COOL measure does not fulfil those
objectives
81. If the Panel finds that the objectives of the C OOL measure are legitimate, it is Mexico's
position that the COOL measure does not fulfil tho se objectives. There are substantial gaps in the
retail coverage of the measure and the information provided further confuses rather than clarifies the
origin of the beef that is being purchased.

(e) If the COOL measure fulfils those objectives, it is more trade-restrictive than necessary taking
account of the risks non-fulfilment would create
82. Mexico proposed two alternative measures: (i) voluntary country of origin labelling that uses
the same strict transformation rule and other require ments currently utilized in the COOL measure; or
(ii) mandatory country of origin labelling that uses the transformation rule applied by US Customs to
imported products.
83. The United States has not sufficiently explai ned how these two alternative measures do not
fulfil the objectives of the COOL measure. Moreover, it fails to address an important element of this
final step in the application of Article 2.2, name ly "taking into account the risks non-fulfilment would
create". Mexico addresses this element in its firs t written submission. The value of the information
provided by the COOL measure "to the consumer" is minimal and to the extent it has value to US
consumers it is to a very limited sub-set of t hose consumers. In such circumstances, a voluntary
measure or a measure that employs the substantia l transformation test applied by US Customs is
sufficient to meet the objectives of the COOL measure.
84. There is also a third alternative measure that , depending on how it is implemented, may be
less trade restrictive in the sense that it may e liminate the discrimination currently facing Mexican
cattle imports. That alternative is a country of origin labelling measure that employs the strict
requirements of the COOL measure but that also employs a trace back compliance mechanism.
D. T
HE COOL MEASURE IS INCONSISTENT WITH ARTICLE 2.4 OF THE TBT AGREEMENT
1. CODEX STAN 1-1985 is a relevant international standard
85. The United States suggested that Mexico ha d failed to establish that CODEX STAN 1-1985
was "adopted by a body whose membership is open to the relevant bodies of at least all Members and
is based on consensus." EC  Sardines involved another standard of the CODEX Alimentarius,
which the Appellate Body affirmed was a relevant standard. In EC – Sardines, the EU argued that the
complainant had the burden of proving that the standa rd at issue had been adopted by consensus. The
Appellate Body expressly disagreed.
86. The United States has already conceded that CODEX STAN 1-1985 is "relevant".
87. The United States questions whether the CODEX standard is actually equivalent to the
"substantial transformation" standard, noting that the word "processing" in CODEX STAN 1-1985 is
undefined. However, the complete relevant term in the CODEX standard is "When a food undergoes
processing in a second country which changes its nature ,". The "change in nature" standard is closely
similar, if not identical, to substantial transformation, which under US law is a change that results in a
different name, character or use.
88. In any event, it cannot be seriously questioned that the conversion of a live animal into cuts of
beef meets both standards, however they are inte rpreted. The end of temporal existence is a
fundamental change of condition in and of it self. The death of the animal followed by
dismemberment and slicing into cuts of meat is certainly "processing … which changes [the] nature"
of the cattle" within the meaning of the standard.
2. The CODEX standard would be both effective and appropriate
89. The United States argues that CODEX STAN 1-1985 would not be effective or appropriate
because the substantial transformation test would prov ide misleading information in some situations.

The example offered by the United States is a situat ion in which cattle would be in US territory only
one day prior to slaughter.
90. Mexico has previously explained, and the Unite d States has not disputed, that Mexican cattle
are brought to the United States at a young age, gain 70% of their weight in the United States, and are
fed on the grasslands and in the same feedlots as US born cattle. Accordingly, the US example is
wholly inapplicable to Mexico.
91. In any event, Mexico observes that: (i) CODEX Stan-1985 was adopted twenty five years ago
and reflects a multilateral consensus on how origin should be identified on prepackaged food products
to as to avoid misleading consumers; (ii) as a factual matter the processing of live animals into cuts of
beef is an extremely extensive form of processing, and relying on the substantial
transformation/processing test cannot fairly be characterized as misleading. (iii) the United States, in
effect, applied the CODEX standard to meat proce ssed within its territory for many years, without
considering it misleading.
92. The United States seems to be arguing that CODEX STAN 1-1985 is ineffective and
inappropriate because it is different than the C OOL measure. That approach would turn the
obligations of the TBT Agreement on their head and render Article 2.4 meaningless. CODEX STAN
1-1985 deals specifically with the purported object ive of the COOL measure as claimed by the
United States – to inform consumers of the origin of food products. The COOL measure is not based
on CODEX STAN 1-1985, but rather conflicts with it.
E. T
HE COOL MEASURE IS INCONSISTENT WITH ARTICLES 12.1 AND 12.3 OF THE
TBT AGREEMENT
93. The United States argues that developing country Members were given ample opportunity to
participate in the development of the measure. Wh ile it is true that the United States gave some
opportunity to Mexico to comment on the developmen t of the 2009 Final Rule, it is not true that the
United States gave Mexico the opportunity to partic ipate in the development of the 2002 Farm Bill.
The only opportunity that Mexico had to provide comments was when the COOL provisions were
already established and only needed to be implemented.
94. At that point, there was little flexibility in the me asure, and thus, contrary to Article 12 of the
TBT Agreement, the United States did not take in to account the special development, financial and
trade needs of Mexico as a developing country in th e formulation of the 2002 Farm Bill, and thus, in
the formulation of the country of origin provisions and the rules for labelling meat products.
95. Also, Mexico summarizes the type of evidence that the US would have to present in order to
show that it "took into account" Mexico's special needs: (i) evidence that the United States has
"looked at attentively", "reflected on", or "weighed the merits of" the special development, financial
and trade needs of Mexico and evidence that, in undertaking these steps, th e United States has made
certain that the COOL measure does not creat e unnecessary obstacles to exports from Mexico; (ii)
public comments during the preparation process of the COOL Measure made Congress and the USDA
cognizant of the possible negative effects on Mexican exports. Neither Congress nor the USDA
responded to these comments; (iii) the Regulatory Flexibility Act requires US agencies to consider the
impact of their regulatory proposals on small entities, analyze effective alternatives that minimize the
impact, and make their analyses available for public comment; and (iv) evidence that the "special
needs" referred to in Article 12.3 have been taken into account would require a showing that
consideration was given to how the measure may imp act developing countries, that steps were taken
to minimize the impact of the measure on developi ng countries, and that less onerous alternatives
were considered.

96. There is no evidence that the United States took any of these actions.
F. GATT
 ARTICLE X:3(A)
97. The administration of the COOL measure has been characterized by shifts in interpretation
and guidance by USDA on its implementation of the statutory and regulatory provisions, as reflected
in USDA's guidelines, non-public pressure by the US government of individual companies, and the
Vilsack letter. The final interpretation by USDA was both partial (favouring US producers of cow-
calves) and unreasonable.
98. The USDA privately contacted major US. Processo rs to tell them not to use mixed origin
labels. USDA later issued the Vilsack letter to put more pressure on the industry, by stating that
processors and retailers should "voluntarily" adopt ad ditional burdens if they used a multiple country
of origin label (B or C); this made obvious that USDA preferred that labels B and C not be used at all.
The continuing changes in USDA policy – first indicati ng that mixed origin labels were permissible,
then discouraging them – significantly contributed to the disruptions experienced by the Mexican
industry. It is also evidence of unreasonable, ar bitrary administration of the law, as USDA's change
in position was made in reaction to pressure motivated by protectionism.
99. Plainly, the COOL measure has not been admini stered in a uniform, im partial and reasonable
manner, contrary to the obligation of GATT Article X.3(a).
G. N
ON-VIOLATION NULLIFICATION OR IMPAIRMENT UNDER GATT ARTICLE XXIII:1(B)
100. Mexico has demonstrated with su fficient evidence that the benefits provided to its imports of
livestock to the US under the relevant tariff concessions have been nullified or impaired.
101. The US bound tariff is 1 cent per kilogram, whic h is about $1.36 to $1.81 for a 300 to 400
pound animal. Based on this WTO tariff binding, Me xico could legitimately expect that its cattle
would have a competitive disadvantage of $1.36 to $1.81 per animal compared to like US products.
The actual price discount created by the COOL measure has been up to $60 for the same 300-400
pound animal. The competitive disadvantage or level of protection reflected in this price discount
vastly exceeds Mexico's legitimate expectation of $1.36 to $1.81 per animal. Thus, the COOL
measure nullifies or impairs benefits accruing to Mexico under the WTO tariff bindings of the
United States.
102. The United States argues that Mexico could have reasonably anticipated that the United States
would enact the COOL measure's origin labellin g requirements for meat products. None of the
legislative proposals submitted by the United States included the born/raised/slaughtered origin rule
for meat products. Those proposals involved genera l requirements for origin labelling, unrelated to
Mexico's claims in this proceeding.
V. CONCLUSIONS
103. On the basis of the foregoing, Mexico requests th at the Panel find that the COOL measure is
inconsistent with Articles III:4, X:3 and XXIII:1(b) of the GATT 1994 and Articles 2.1, 2.2, 2.4
and 12 of the TBT Agreement and make such recommendations that are necessary for the
United States to bring itself into conformity with these provisions.

ANNEX B-3

EXECUTIVE SUMMARY OF THE
SECOND WRITTEN SUBMISSION OF THE UNITED STATES

I. INTRODUCTION
1. Canada and Mexico's core claims in this di spute are predicated on three basic factual and
legal fallacies: first, that the US COOL measures were a response to protectionist demands rather than
consumers' desire for information about wher e their food comes from; second, that the US measures
discriminate against imports because some US processors allegedly chose to modify their handling of
imported livestock; and third, that the measu res adversely affected imports. Consumers
overwhelmingly demanded the COOL measures, these measures do not discriminate against imports,
and – given current trade volumes and import prices – it cannot be the case that the measures have
resulted in significant additional costs on imports.
2. In their oral statements, Canada and Mexico have introduced a fourth fallacy: that accepting
their arguments would not require the conclusion that most – and perhaps all – mandatory country of
origin labelling regimes maintained by WTO Members are inconsistent with the WTO agreements. In
fact, notwithstanding the fact that both complaining pa rties maintain labelling laws of their own, were
Canada and Mexico's arguments accepted, it is difficu lt to conceive of a mandatory country of origin
labelling system that would be found WTO-consistent.
3. In particular, Canada and Mexi co would have the Panel believe that the US COOL measures
are "more trade restrictive than necessary" because they require retailers to provide too much
information about the meat that they sell – but at th e same time that they do not fulfil their legitimate
objective because the amount of information that they provide is not enough. Putting aside that many
of the flexibilities and exceptions contained in th e measures were added at the request of the
complaining parties, accepting their arguments woul d put all WTO Members with country of origin
labelling laws in an impossible position.
4. The Panel should reject Canada and Mexico's attempts to turn the question of whether a
Member's measures comply with TBT Article 2.2 into a re-evaluation of every choice the Member
made in the process of developing a complex regulatory regime. Designing a technical regulation
necessitates difficult choices, especially when balanc ing the views of numerous interested parties,
such as US consumers and trading partners. The Pa nel need not – and should not – stand in the shoes
of the regulator and attempt to re-calibrate the ba lance that was struck. Rather, all the Panel need
determine is whether the US measures, as designed, fulfil their legitimate objectives at the level the
United States considers appropriate without restricting trade more than is necessary.
5. Likewise, the labelling systems that Canada a nd Mexico put forward as "reasonably available
alternatives" to the US regime – if accepted as such – would call into question the WTO-consistency
of the origin labelling requirements maintained by nearly half of the WTO membership. Were the
Panel to accept voluntary labelling as a reasonably ava ilable alternative, and ergo one that fulfils the
consumer information objective at the same level as a mandatory regime, it would raise doubts about
the systems of over 70 WTO Members who maintain mandatory origin labelling requirements.
Similarly, finding that labelling based on substa ntial transformation is a reasonably available
alternative would suggest that the labelling requirements of many of these same Members who do not
base their origin designations on substantial transf ormation principles, may likewise be inconsistent
with TBT Article 2.2.

II. THE PANEL SHOULD ANALYZE THE DIFFERENT US INSTRUMENTS
SEPARATELY FROM EACH OTHER
6. Given the differences between the instruments that Canada and Mexico challenge in this
dispute, and the fact that some have been supersed ed, are not acts attributable to the United States, or
do not create binding legal obligations, the Panel s hould reject Canada and Mexico's attempt to
characterize the instruments at issue as a single "COOL measure". By glossing over these substantive
differences – differences which, among other things, have implications for how the obligations at
issue apply – Canada and Mexico avoid making their case with regard to each instrument that is the
subject of the dispute. Further, the previous WTO reports that Canada cites in support of the
proposition that the Panel should consider the instruments as a single measure are inapposite.
7. Unlike the 2009 Final Rule and COOL statute, the Vilsack Letter is not mandatory and has no
legal status. The fact that the Vilsack Letter is not mandatory and not a technical regulation is
confirmed by the text of the letter itself, which clearly identifies the suggestions as "voluntary" in four
separate instances, as well as the industry's decision not to follow the Vilsack Letter. Canada and
Mexico ignore the text of the letter and are unable to adduce any evidence to show that industry is
following the Vilsack Letter's suggestions.
8. Due to significant differences between the C OOL statute and the 2009 Final Rule, these
instruments should be examined as separate measur es. The COOL statute establishes the framework
for US COOL requirements, but requires separat e implementing regulations to provide necessary
details before any requirements could take effect. For example, for muscle cuts of meat, the 2009
Final Rule provides necessary details about what is included on each label and specifies when there is
flexibility between the different labels. The 2009 Final Rule also defines many key terms and
establishes the final record keeping requirements. These details ar e relevant to Canada and Mexico's
legal and factual arguments, and thus, these two inst ruments should not be examined together. It is
also worth noting that Canada and Mexico have never explained how the COOL statute breaches US
WTO obligations, separate and apart from the 2009 Final Rule; thus, they have failed to make a prima
facie case with regard to this measure.
9. The Interim Final Rule no longer exists under US law and has been replaced by a 2009 Final
Rule that contains substantively different provisions. Further, the Interim Final Rule did not exist at
the time when the Panel was established. With re gard to the FSIS Interim Rule and FSIS Final Rule,
Mexico has failed to make a prima facie case with regard to either instrument. The FSIS Final Rule is
a distinct legal instrument from the 2009 Final Ru le and COOL statute, yet Mexico has not even
attempted to explain how this instrument is incons istent with US WTO obligations. Further, the FSIS
Interim Rule no longer exists. And contrary to new assertions advanced by Canada, an alleged
statement in a meeting that was held between Repr esentative Collin Peterson and the US industry and
USDA clarification documents are not a "measures". Representative Peterson's statements are not an
"act or omission" of the United States and the USDA clarification documents have no status under US
law. Moreover, neither Canada nor Mexico identif ied either as measures in their consultations or
panel requests; thus, they are not within the Panel's terms of reference.
III. NONE OF THE COOL MEASURES BREACH TBT ARTICLE 2.1 OR GATT
ARTICLE III:4
10. Canada and Mexico have failed to demonstrate that any of the COOL measures breach TBT
Article 2.1 or GATT Article III:4. These provisions obligate Members to ensure that its measures do
not accord imported products "less favourable treatment" than like products of national origin.
11. Based on past WTO reports, Canada and Mexico's arguments that the COOL measures breach
TBT Article 2.1 or GATT Article III:4 must fail. The COOL measures do not treat domestic and

imported like products differently. Rather, they require retailers to la bel all covered meat
commodities at the retail level, regardless of whethe r they are derived from imported animals or not,
and the exact same record keeping requirements apply to imported livestock as domestic livestock. In
addition, to the extent that Canadian and Mexican livestock have experienced any detrimental effects,
these effects are not attributable to the origin of the livestock and are not attributable to the COOL
measures. Any detrimental effects can be attributed to external factors, such as Canada and Mexico's
limited market share, the economic downturn, and th e independent decisions of private market actors
on how to respond to the COOL measures.
12. In arguing to the contrary, Canada and Mexico misapply both the Korea – Various Measures
on Beef and Dominican Republic – Import and Sale of Cigarettes reports. The measures in Korea –
Various Measures on Beef required separate distribution chan nels based on origin, whereas the
measures here do not. Unlike in Korea – Various Measures on Beef , the COOL measures do not
restrict a processor's ability to process or a retailer' s ability to sell all types of products together (for
example, by commingling) as long as adequate record s are maintained and accurate labels affixed to
the product. Thus, the most that Canada and Mexico can allege is that US processors have somehow
responded to the COOL measures by processing differe nt types of meat in different distribution
channels; however, even if this were factually accurate, it does not establish a breach. The
complaining parties also mis-characterize the Appellate Body's findings and the facts in Dominican
Republic – Import and Sale of Cigarettes , arguing that it is "not analogous because there is no dispute
here over a single origin-neutral measure imposed eq ually on companies, some of which happen to be
foreign and have a lower market share". Contrary to this assertion, the COOL measures apply equally
to all companies, requiring slaughter houses to mainta in adequate records and all retailers to label
their products regardless of the origin of the pr oduct. Both domestic and foreign livestock must be
tracked in some way to ensure that the resulting product is correctly labelled.
13. Contrary to Canada and Mexico's arguments, the COOL statute and 2009 Final Rule do not
require segregation. By allowing for a single label to be used for meat derived from livestock with
different origins, the commingling flexibility obviat es the need for a slaughter house to segregate the
livestock that it is processing. In addition, a slaughter house may comply with the COOL
requirements and process muscle cuts without segre gating by processing only livestock of foreign or
domestic origin, or process domestic and mixed or igin livestock on separate days, and on each given
day label the resulting meat as appropriate.
14. Canada and Mexico's claims that the US indus try is not utilizing the commingling flexibility
is directly refuted by their own evidence and ot her evidence obtained by the United States. For
example, the Can Fax updates indicate that some US slaughter houses are commingling and that at
least 14 US slaughter houses are accepting Canadian and Mexican animals. Similarly, the letter from
the American Meat Institute indicates that approxi mately 5 per cent of animals are being commingled
and photographs taken around the country indicate that commingling is occurring as do industry
affidavits and other information collected by USDA. As this indicates, US slaughter houses have not
found it cost prohibitive to use the commingling flexibility or to continue producing Category B meat.
15. Canada and Mexico also drama tically overstate the costs associated with segregation for
slaughter houses and others who choose to segregate in response to the 2009 Final Rule. They ignore
all of the pre-existing segregation programs that exist in the United States, including (1) USDA's
grade labelling program; (2) private premium label programs; (3) export market requirements for at
least 22 countries; (4) animal production and raising label programs. US processors and others in the
supply chain have long segregated for these purposes a nd thus have developed synergies that can be
applied to any segregation done in response to the C OOL measures. If the cost of segregation was as
high as Canada and Mexico assert, and segregation w as truly the only way that US slaughter houses
could comply with the COOL measures, then there is no reason that US feed lots and slaughter houses
would ever continue to accept Canadian and Mexi can livestock. Yet, the export numbers tell a

different story. Over the first eight months of 2010, Canadian cattle exports are up 7.5 per cent and
Mexican cattle exports are up 29 per cent over last year's levels.
16. These export numbers contradict the picture of economic distress that Canada and Mexico
have attempted to paint during this dispute. Canada and Mexico ha ve presented "evidence" that some
US feedlots and slaughter houses have limited thei r purchase of Canadian and Mexican livestock, but
the most this evidence can prove is that some processors have made the independent decision to
modify their business practices after the COOL measures were enacted in a way that is detrimental to
some Canadian and Mexican livestock. None of these decisions were required by the COOL
measures, and indeed, as the United States explained, there are numerous options for these entities to
comply with COOL without changing their sourcing patterns.
17. Not only is Canada and Mexico's evidence of little relevance from a legal standpoint, but
much of it is inaccurate. Mexico's claim that the number of feed lots accepting their feeder cattle has
declined from 24 to 3 is directly contradicted by evidence on the ground: not all of the 24 facilities
that Mexico identifies accepted their cattle in the first instance and more than 3 are accepting their
cattle now. Similarly, Canada's claim that none of the 12 slaughter houses are accepting Canadian
origin livestock without limitations is not substa ntiated by any evidence that Canada has submitted
and is actually refuted by Exhibit CDA-41.
18. Canada and Mexico attempt to downplay the in crease in their exports during 2010 in various
ways. For example, Canada argues that although exports have risen significantly in 2010, their
market share has decreased. However, as Canada indicates "looking at market share alone is
deceptive" because it captures larger tr ends in the US market that have nothing to do with Canadian
imports. Regardless, if one were to believe that market share were a reliable indicator, Canada and
Mexico's share of the US market remains at levels consistent with their hist orical averages. Second,
Canada points out that although its exports of cattle have increased in 2010, its hog exports have not
rebounded, but Canadian hog exports are declining for reasons that have nothing to do with the COOL
measures; namely Canada's rapidly declining hog in ventories fully explain the decline in Canada's
exports.
19. Canada and Mexico also both attempt to mini mize the export data by focusing on price data,
but Canadian and Mexican livestock prices are at hi gh levels. The price paid for Canadian slaughter
cattle is up 15.3 per cent while the price being paid for Canadian feeder cattle is up 18.9 percent.
These price increases are higher than the increase in the prices for US feeder and slaughter cattle,
indicating that Canadian animals are not being discounted due to the COOL measures. The price paid
for Mexican feeder cattle and Canadian hogs have also risen significantly, directly contradicting
claims by Mexico that the COOL measures have resulted in discounting.
20. To the extent that there has been any negative impact on Canadian and Mexican cattle exports
in recent years, it is not due to the COOL measures. While the COOL measures were being
implemented, the world was in the throes of a gl obal economic recession. As a result, it would have
been a major surprise had Canadian and Mexican livestock exports and prices not declined.
Consistent with these expectations, a USDA analys is that examined the decline in Canadian and
Mexican exports in 2008 and 2009 concluded that the economic recession is more likely the cause of
the temporary decline than the 2009 Final Rule.
IV. NONE OF THE COOL MEASURES BREACH TBT ARTICLE 2.2
21.
Canada and Mexico have faile d to demonstrate that the COOL statute or 2009 Final Rule
breach TBT Article 2.2. This provision prohib its technical regulations from being "more trade
restrictive than necessary to fulfil a legitimate objective, taking account of the risks non-fulfilment
would create". Article 2.2 does not prohibit all techni cal regulations that create obstacles to trade,

rather only those that create " unnecessary obstacles". The text of Article 2.2, interpreted in light of
the relevant context provided by the preamble to the TBT Agreement, permits WTO Members to
adopt measures to achieve legitimate objectives at th e levels they consider appropriate. Thus, WTO
Members who adopt measures to achieve the sa me or similar objectives need not design these
measures in the exact same way. They are permitte d to design their measures in the way that best
suits their objectives as long as they are not more trade restrictive than necessary.
22. Past Appellate Body reports that have interp reted SPS Article 5.6 provide useful insights for
the interpretation of TBT Article 2.2 based on th e textual similarities between the provisions, the
similarities between the TBT and SPS Agreements th emselves, and a letter from the Director-General
of the GATT to the Chief US Negotiator confirmi ng that TBT Article 2.2 should be interpreted
similarly to SPS Article 5.6. Thus, to prove that any of the COOL measures are inconsistent with
TBT Article 2.2, Canada and Mexico must first show that the COOL measures restrict trade. If the
complaining parties make this showing, then the Panel may examine whether the measures in question
are "more trade restrictive than necessary" in the sense that: (1) th ere is another measure that is
reasonably available to the government, taking into account economic and technical feasibility; (2)
that measure fulfils the legitimate objective at th e level that the United States has determined is
appropriate; and (3) is significantly less trade restrictive.
23. In conducting the "more trade restrictive than n ecessary" analysis, it would not be appropriate
to apply the same interpretive approach panels a nd the Appellate Body have undertaken in connection
with the word "necessary" as it appears in GATT Articl e XX. The term "necessary" there is used in a
different context than in TBT Article 2.2. Furthe r, there is no textual basis to apply the panel and
Appellate Body's interpretive approach to GATT Article XX to Article 2.2 of the TBT Agreement.
24. Providing consumer information about orig in and preventing consumer confusion are
legitimate objectives under TBT Article 2.2. Neither complaining party has directly challenged the
US assertion that providing consumer information about origin and preventing consumer confusion
are legitimate objectives and many of the third parties have acknowledged that they are. The
legitimacy of these objectives is supported by th eir connection to the prevention of deceptive
practices, which also relates to ensuring that cons umers in the territory of the WTO Member are not
misled or mistaken about the products they buy, whether about the product's origin or some other
product characteristic. Other WTO Members have also recognized the connection between country of
origin labelling and the prevention of deceptive prac tices as evidenced by their TBT notifications,
including Colombia, the EU, and Korea. Finally, the strong consumer support for country of origin
labelling in the United States and internationally a nd the fact that many WTO Members have notified
their country of origin labelling requirements to the TBT Committee, identifying their objective as
consumer information, supports the legitimacy of these objectives.
25. US consumers and consumer organizations wide ly support country of origin information on
the food products they buy at the re tail level. Nearly all the leadin g US consumer organizations have
expressed support for country of origin labelling fo r consumer information purposes and to prevent
consumer confusion. For example, the Consumers Federation of America (CFA) indicated that it "has
long supported a mandatory country of origin la belling (COOL) program as a means of providing
consumers with important information about the s ource of their food". In a joint letter with the
National Consumers League and Public Citizen, tw o other leading US cons umer organizations, CFA
wrote that "[w]ithout country-of-origin labelling, these consumers are unable to make an informed
choice between US and imported products. In fact , under the Agriculture Department's grade stamp
system, they could be misled into thinking some imported meat is produced in this country."
Similarly, the Consumers Union wrote that "it is clear that consumers desire to know where there food
is coming from". Individual US consumers have also expressed strong support for country of origin
labelling in order to provide consumer information and prevent consumer confusion.

26. The support of pro-consumer organizations fo r country of origin labelling for consumer
information purposes is not confined to the United States. In 2008, the Trans Atlantic Consumer
Dialogue ("TACD"), a forum of 27 US consumer or ganizations, 49 EU consum er organizations, and
3 observer organizations from Canada and Austra lia, adopted a resolution on country of origin
labelling stating that "consumers have repeated ly and overwhelmingly expressed their support for
country of origin labelling of food products both in the United States and in European countries".
Numerous domestic and international polls also indicate strong consumer support for mandatory
country of origin labelling.
27. Providing consumer information about orig in and preventing consumer confusion are
indisputably the objectives of the COOL measures. To determine the objective of the US measures,
the Panel should start with their text and may consid er their design, architecture, and structure. The
2009 Final Rule states: "the intent of the law and this rule is to provide consumers with additional
information on which to base their purchasing decisions ". The design, architecture, and structure of
the COOL measures reinforce the f act that these are their objectives, with both the statute and 2009
Final Rule structured around the requi rement that retailers provide c ountry of origin information to
consumers on the covered commodities they buy at th e retail level. At the same time, the measures
prevent consumer confusion by requi ring retailers to list more than one country when an animal was
not exclusively born, raised, and slaughtered in the United States.
28. To the extent that the Panel considers the legi slative history relevant, it confirms that the
objective of COOL measures is consumer informati on and the prevention of consumer confusion.
The conference reports accompanying the statute clearly indicate that it was enacted with the
objective of providing consumers with information about origin and the floor statements of the
legislators involved with the enactment of the stat ute indicate that the objective of the measure was
consumer information and the prev ention of consumer c onfusion. As one example, Representative
John Thune stated: "Why is this important? For sev eral reasons. First, consumers have the right to
know the origin of the meat that they buy in the groc ery store. Second, ranchers deserve to have their
product clearly identified. Third, current law cr eates a false impression about the origin of USDA
grade meat... "
29. The numerous changes made to the implemen ting regulations to reduce the costs of
compliance for foreign and domestic producers also demonstrate that the US objective was not
protectionism. After all, it would not have made these changes to help reduce compliance costs if its
objective were to protect the domestic industry. Cert ain changes to the Interi m Final Rule – such as
the clarification in the 2009 Final Rule that Category B labels cannot be used on Category A meat that
is not commingled – are not evidence of protectionism either. To the contrary, these changes were
made at the request of US consumer organizations, such as Food & Water Watch and others.
30. To the extent that US consumers, the domestic industry, or Members of Congress expressed a
desire to enact the COOL measures to help US farmers through the enactment of the COOL measures,
their advocacy was premised on a desire to help US farmers differentiate their products from their
competitors, not as a form of protectionism. For example, one US consumer wrote: "American
farmers and ranchers produce a superior product and th ey deserve the right to receive credit for their
efforts. Label it and let the market decide." Similar points were echoed by the US producers groups
and Members of Congress, all of whom noted a d esire to increase competition by providing this
information with the hope that the US products woul d fare well in a competitive market. Thus, it is
incorrect to construe the support of the US domestic industry or the support of those that indicated
they wanted to help the domestic industry as a pr otectionist motive. Rather, country of origin
labelling was intended to help these producers res pond to consumer demand and differentiate their
products in a competitive market place, a legitimate motive.

31. The COOL statute and 2009 Final Rule fulfil th e legitimate objectives of providing consumer
information and preventing consumer confusion at the level that the United States considers
appropriate. They have provided millions of consumers with information that was not previously
available to them. With regard to meat, these measures ensure that consumers are provided with
information about all of the countries in which an an imal that was slaughtered in the United States
was born and raised.
32. Of course, the United States could have designed the measures to provide even more
information to consumers than they currently do . The United States could have required point of
production labelling for meat products, could have omitted any flexibility between the use of different
labels, and could have omitted certa in exemptions. If the United States had designed its measures in
this way, consumers would have even more informa tion. However, the United States did not do this.
Rather, it responded to the concerns raised by in terested parties – including Canada and Mexico –
during the regulatory process and sought to design its measures so that they achieved their objectives
at a reduced cost of compliance.
33. These efforts by the United States do not demons trate that the COOL measures do not fulfil
their objectives. As a result of the 2009 Final Rule, most of the meat derived from animals born,
raised, and slaughtered in the United States is a ccurately and appropriately being labelled as US
origin, consistent with the requests of US cons umers. The 2009 Final Rule also ensures that
consumers who purchase Category B or C meat are info rmed of all of the countries in which at least
one processing step occurred. Consumers who purch ase Category D meat are also informed of that
meat's country of origin. Although the commingli ng provisions may reduce the level of detail
provided in certain circumstances, consumers will never be mislead by commingled meat because
meat will never be labelled as US origin unless it was in fact derived from an animal born, raised, and
slaughtered in the United States. Additionally, the COOL measures help resolve the confusion related
to USDA grade labelling and FSIS's "Product of the USA" program by adopting a standard definition
of US origin meat that comports with consumer e xpectations and by adding an origin label to meat
products so that the USDA grade label does not mislead the consumer into believing that the meat is
derived from a US origin animal when that is not the case.
34. Canada and Mexico's arguments, if accepted, would mean that no Member could adopt a
labelling system and achieve its legitimate object ive without covering every possible scenario in
which a consumer buys food, and would make it extremely difficult to adopt commonsense
flexibilities to help reduce compliance costs without jeopardizing the measure itself. At the same
time, it would make it challenging to design a measure that is not more trade restrictive than necessary
because a Member would always be required to co ver every commodity and every scenario even if
that particular Member did not believe that it was co st effective or desirable to do so. Additionally,
the Member would not be able to adopt flexibiliti es even when it believ es those flexibilities would
reduce the overall burden without fear that those effo rts would then be used against them in the WTO
dispute settlement context as evidence of how the Memb er did not fulfil its objective. In this sense,
Canada and Mexico's arguments illustrate the importance of ensuring that WTO Members are allowed
to weigh costs and benefits in the design of their technical regulations. Members must be able to
make their own decisions on how to weigh competi ng interests and should not be discouraged from
taking into account the views of interested parties or adopting flexibilities to meet the needs of those
parties. Such an approach is entirely consistent with the TBT Agreement.
35. Thus, the Panel should reject Canada and Mexico 's attempt to turn the question of whether a
particular Member's labelling measure fulfils its objective into a question of whether that Member
could have conceivably designed its measure in a different, and perh aps better way. Deciding how to
design a technical regulation often necessitates diffi cult choices, especially when balancing the views
of numerous interested parties, and it is quite possible that some parties might choose to make
different choices than the United States did in this instance. Some Members might have chosen to err

more on the side of consumer in formation while others might have decided to err on the side of
reduced costs. Regardless, the Panel need not deci de whether it would have been appropriate for the
United States to lean more in one direction or the other as it attempted to weigh the views of
interested parties such as Canada, Mexico, and US c onsumers. Rather all the Panel must decide in
this part of its analysis is whether the US measures fulfil the US objectives at the level the
United States considers appropriate. And as the United States explained, the COOL statute and 2009
Final Rule do just that.
36. Canada and Mexico's arguments about the scope of the COOL statute and 2009 Final Rule
also would implicate the labelling systems of many other WTO Members. Canada and Mexico argue
that the COOL measures are both protectionist and fail to fulfil their objective because of the scope of
the products covered and the exemptions that ar e included. Yet many other Members' labelling
systems include similar characteristics. For exam ple, Australia's mandatory labelling requirements
apply to pork and fish but not to beef, chicken, or lamb. Australia's requirements also apply at the
retail level, but exempt food sold in restaurants. The labelling requirements of Brazil, Colombia,
Canada, and the EU, and Korea, among others, share similar characteristics with regard to scope and
exemptions.
37. Canada and Mexico have failed to present a ny reasonably available alternatives to the US
COOL measures. A voluntary country of origin labelling system is a not a reasonably available
alternative because it would not achieve the US legitimate objectives at the level that the
United States considers appropriate. In particul ar, a voluntary labelling system would not provide
consistent and reliable country of origin information to consumers about the covered commodities that
they buy at the retail level. This is clear from the fact that the United States proposed a voluntary
labelling system, but this system was not followed by US retailers. Most consumer organizations
oppose voluntary labelling because they do not believe that it is effective in providing consumers with
information. Accepting that voluntary labelling is a reasonably available alternative to mandatory
labelling would raise doubts about mandatory labelling systems applied at the retail level by over 70
WTO Members.
38. A system based on substantial transformation is also not a reasonably available alternative; it
would fail to achieve the US legitimate objectives for at least three reasons. First, it would not
provide any information about the multiple countri es where an animal spent its life when it was not
born, raised, and slaughtered in more than a si ngle country, information that US consumers and
consumer organizations indicated was important to them. Second, it would perpetuate confusion
about the origin of animals that were only in th e United States for a short period of time before being
slaughtered. Third, it would require a definition of origin that is at odds with the views of US
consumers and consumer organizations. Indeed, a recent Consumers Union poll confirms the fact that
consumers do not support a definiti on of origin based on substantia l transformation and would find
such a definition misleading. When asked how th ey would expect beef derived from a cow born and
partially raised in Mexico before being sent to the United States to be fattened for two months and
slaughtered to be labelled, 72 per cent of cons umers picked a definition other than substantial
transformation. Given the lack of consumer support fo r such a definition of origin, it is clearly not a
reasonably available alternative.
39. Finally, Canada and Mexico's arguments that a country of origin labelling system must be
based on substantial transformation is inconsistent with the country of origin labelling requirements
adopted by many WTO Members, and thus, would call into question the WTO-consistency of these
systems. Examples of labelling requirements that do not solely define origin using substantial
transformation principles include: (1) Australia's ma ndatory country of origin labelling requirements
for all packaged foods and unpackaged fresh or pr ocessed fruit, vegetables, seafood and pork sold at
retail; (2) Canada's voluntary "Product of Canada" labelling requirements; (3 ) Colombia's labelling
requirements for honey; (4) the EU's labelling requi rements for beef sold at retail; (5) Japan's

labelling requirements for fresh food sold at retail; and (6) Korea's labelling requirements for beef,
pork, chicken, rice, and kim chi.
V. NONE OF THE COOL MEASURES BREACH TBT ARTICLE 2.4
40. Mexico has failed to meet its burden to show that any of the COOL measures breach TBT
Article 2.4. To meet its burden, Mexico mu st first demonstrate that CODEX-STAN 1-1985 is a
relevant international standard for the particular la belling requirements at issue in this dispute, which
requires the standard in question to be an internat ional standard and to bear upon or relate to the
particular requirements at issue. Mexico has fa iled to meet its burden with regard to CODEX-STAN
1-1985 because it has not shown that it bears upon or relates to the labelling requirements for a
significant number of products at issue in this dispute; namely, the COOL requirements as they apply
to meat that is not pre-packaged. A significant por tion of meat sold in stores covered by the COOL
measures is not pre-packaged, which raises serious questions about whether CODEX-STAN 1-1985 is
a relevant standard. Mexico appears to admit as mu ch, conceding that "the standard does not apply to
meat that is not prepackaged".
41. Mexico has also failed to demonstrate that th e CODEX standard is not an ineffective or
inappropriate means of achieving the US legitim ate objectives. In this case, CODEX-STAN 1-1985
is both ineffective and inappropriate because it is based on substantial transformation. Thus, it does
not fulfil the legitimate objectives of the United States for the reasons discussed in the preceding
section.
VI. NONE OF THE COOL MEASURES BREACH TBT ARTICLE 12.3
42. Mexico has failed to meet its burden to dem onstrate that any of the COOL measures breach
TBT Article 12.3. The text of Article 12.3 requir es the developed country Member to take account of
a developing country Members' needs with a view to avoiding unnecessary obs tacles to trade, not to
accept every recommendation presented by the developing country Member. Examined in the context
of other provisions of the TBT Agreement, such as the most favoured nation provisions, Article 12.3
does not require the developed country Member to treat the developing country Member more
favourably than other similarly situated parties. Similar provisions in other agreements, such as SPS
Article 10.1, may also provide relevant contex t and disputes concerning this provision may be
instructive. In EC – Approval and Marketing of Biotech Products , the panel found that the EC had
not breached SPS Article 10.1 despite its failure to produce evidence suggesting it had taken
Argentina's needs as a developing country Memb er into account during the preparation and
application of its measure.
43. Mexico has also failed to meet its burden to establish a violation of Article 12.3 of the
TBT Agreement. Mexico has not adduced any evid ence to demonstrate that the United States did not
take its needs into account, but rather implies that the burden is on the United States to show that it
did. While the United States does not bear this burden as the responding party, the United States has
repeatedly demonstrated the steps it took to take Mexico's concerns into account. For example: (1)
USDA provided Mexico with multiple opportunities to comment on development of the COOL
implementing regulations and took Me xico's concerns into consideration; (2) USDA held a briefing
on the Interim Final Rule for embassy officials, including those from Mexico, who were provided the
opportunity to share their views; (3) AMS individua lly met with officials from the Mexican Embassy
to discuss the COOL rule making and took their views into account; and (4) the United States
discussed the COOL rule making at meetings of the United States - Mexico Consultative Committee
on Agriculture (CCA).
44. The United States also modified the COOL measures to address Mexico's concerns by
significantly reducing the record keeping burden and introducing significant flexibility (such as

commingling) into the 2009 Final Rule that has helped mitigate any potential impact on exports from
Mexico. Although the United States did not adopt every single suggestion put forward by Mexico,
TBT Article 12.3 does not require it to do so. Rath er, a developed country developing a regulation is
expected to balance developing country considerati ons against the views of other interested parties,
such as consumers and retailers. In this instance, the United States weighed the views of all interested
parties as it designed the 2009 Final Rule in a way that would provide consumer information without
imposing an undue burden on foreign and domestic producers. Thus, even if Mexico had put forth
information to show that the United States did not ta ke account of its views, the information that the
United States has put forth is sufficient to rebut it.
VII. NONE OF THE COOL MEASURES BREACH GATT ARTICLE X:3
45. Canada and Mexico have failed to demonstrate that any of the COOL measures breach GATT
Article X:3. Both parties continue to focus on acti ons that are not the "administration" of the COOL
measures. The meaning of the term "administer" is to "put into practical effect" or to "apply" the
measures referred to in paragraph 1 of Article X:3. Contrary to Mexico's suggestion, the meaning of
the word "administration" does not include all of the "steps, actions, or events that are taken or occur
in relation to the making of an administrative deci sion". The Appellate Body explicitly rejected this
interpretation, clarifying that "under Article X:3(a), it is the application of a legal instrument of the
kind described in Article X:1 that is required to be uniform, but not the processes leading to
administrative decisions, or the tools that might be used in the exercise of administration". Thus,
Canada and Mexico's focus on the Vilsack Letter and the development of the 2009 Final Rule is
legally inapposite. Neither action "puts into practical effect" or "applies" any of the COOL measures.
46. Canada and Mexico's arguments also lack any evidentiary support for the proposition that the
US administration has been non-uniform or unreasonable. The complaining parties have not
produced any evidence to suggest that the COOL measures were not applied equally to all entities
subject to their requirements or that the issuance of the Vilsack Letter or the development of the 2009
Final Rule were unreasonable. Th e Vilsack Letter was issued in ac cordance with a directive from the
Obama Administration to review pending regulations while the development of the 2009 Final Rule
proceeded in accordance with the normal US rule making process. While the implementing
regulations evolved, this is commonplace in a transparent system and many changes were made in
response to comments received by Canada and Mexico to reduce the 2009 Final Rule's burden.