Document: WT/DS384/R WT/DS386/R Page A-1 ANNEX A EXECUTIVE SUMMARIES OF THE FIRST WRITTEN SUBMISSIONS OF THE PARTIES Contents Page Annex A-1 Executive summary of the fi rst written submission of Canada A-2 Annex A-2 Executive summary of the fi rst written submission of Mexico A-9 Annex A-3 Executive summary of the first wr itten submission of the United States A-22
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 A

EXECUTIVE SUMMARIES OF THE FIRST WRITTEN SUBMISSIONS
OF THE PARTIES

Contents Page
Annex A-1 Executive summary of the fi rst written submission of Canada A-2
Annex A-2 Executive summary of the fi rst written submission of Mexico A-9
Annex A-3 Executive summary of the first wr itten submission of the United States A-22

ANNEX A-1

EXECUTIVE SUMMARY OF THE FIRST WRITTEN SUBMISSION
OF CANADA

I. INTRODUCTION
1. This dispute concerns the establishment by th e United States of country-of-origin labelling
requirements (the "COOL measure"). The COOL measure has many negative effects on Canadian
cattle and hogs:
 It disrupts long-established practices regardi ng the importation of Canadian cattle and
hogs to the United States and the subsequent production of beef and pork derived from
them.
 It imposes additional and unnecessary costs and burdens on US feeding operations,
slaughter houses and retailers that use Canadian animals or sell meat derived from them.
 It reduces demand for Canadian animals or meat derived from them in the US market by
discouraging US feeding operations and slaughter houses from buying Canadian animals
and US retailers from selling beef and pork derived from such animals.
2. The end result of the COOL measure has been a significant decline in exports of Canadian
cattle and hogs to the United States and a reduction in the prices being offered by US purchasers for
certain Canadian livestock .
II. BACKGROUND TO THE DISPUTE
A. T
HE COOL MEASURE
3. The COOL measure includes:
 the 2008 Farm Bill, enacted on June 18, 2008;
 the Interim Final Rule, published on 1 August 2008;
 the Final Rule, published on 15 January 2009; and
 the "Vilsack Letter" of US Secretary of Agriculture Tom Vilsack, issued on
20 February 2009.
4. The 2008 Farm Bill requires certain US retailers to identify the country of origin of muscle
cuts of beef (including veal), lamb, chicken, goat, and pork; ground beef, ground lamb, ground
chicken, ground goat, and ground pork; wild and farm-raised fish and shellfish; perishable agricultural
commodities (fresh and frozen fruits and vegetables); peanuts; pecans; ginseng; and macadamia nuts.
5. The COOL measure applies only to retail establishments that sell more than US $230,000
worth of perishable agricultural commodities during a calendar year. Butcher shops and food service
establishments are exempt from the COOL measure.

6. The country of origin of meat must be identified through the use of one of five labels:
 Label A – "Product of the United States" – used only for muscle cuts derived from
animals, born, raised, and slaughtered in the United States.
 Label B – "Product of United States and Country X" – used for muscle cuts from animals
born in country X, but raised and slaughtered in the United States.
 Label C – "Product of Country X and the United States" – used for muscle cuts derived
from animals born and raised in Country X and imported for immediate slaughter in the
United States.
 Label D – "Product of Country X" – used for imported muscle cuts.
 Label E – "Product of Country X, Country Y, Country Z" – used for ground meat; the
label must list all countries of origin of the meat contained in the ground meat or that may
reasonably be contained in it.
7. The main responsibility for maintaining accurate records on the country of origin of the
covered commodities falls on retailers. However, the responsibility for maintaining accurate records
flows through the entire production chain from produ cers to feeding operations to slaughter houses
and, ultimately, to retailers. Any supplier of a covered commodity who is responsible for making a
country-of-origin declaration must possess records to substantiate the country-of-origin claim.
8. The Interim Rule provided the initial regulator y basis for the implementation of the COOL
legislation.
9. On the basis of the language of the Interim Fi nal Rule, and to avoid the costs of segregation
that multiple labels would impose, several major US slaughter houses indicated their intent to use
Label B for the bulk of their products - even t hose derived from exclusively US-origin cattle and
hogs (and so entitled to Label A). In response, th e USDA issued a series of clarification documents
that provided direction on various aspects of the In terim Final Rule, including a statement that it was
not permissible to label meat derived from US-ori gin livestock with a mixed-origin label if solely
US-origin meat was produced during the production da y. There was also a meeting between select
members of the US slaughter industry and US congr essional leaders where such leaders threatened to
modify the COOL legislation to remove any flex ibility allowing the commingling of animals during
slaughter, if US industry did not abandon its plans to use primarily Label B. The combination of the
clarification documents and the meeting had a prof ound effect on the US slaughter industry. Major
US slaughter houses indicated that they would ch ange their procurement practices, so that the
majority of their meat would carry Label A.
10. On 15 January 2009, the USDA published the Final Rule, which allowed for greater
flexibility in the use of B or C Labels. However, the Final Rule removed the flexibility of labelling
products from only US-origin animals as Label B, unless there is commingling with non-US-origin
animals during a single production day.
11. On 20 February 2009, USDA Secretary Tom Vils ack issued an open letter ("Vilsack Letter")
to industry outlining his concerns about the flexib ility still contained in the Final Rule. He asked
industry to adopt labelling practices that are even mo re stringent than the requirements found in the
Final Rule, including asking industry to "voluntar ily" adopt labelling by prod uction point (i.e., Born
in Country X, Raised in Country Y and Slaughtered in Country Z). The Letter stated that failure to
comply with the "voluntary" suggestions could result in modifications to the Final Rule.

B. C
ANADA-UNITED STATES CATTLE AND HOG MARKETS: INTEGRATED INDUSTRIES
12. The Canadian and US cattle and hog markets ar e highly integrated, with producers, feeding
operations and slaughter houses located on both sides of the Canada-United States border.
13. The United States is Canada's largest export mark et for cattle and hogs. In 2007, prior to the
COOL measure, Canadian cattle exports totalled approximately 1. 4 million head and Canadian hog
exports totalled approximately 10 million head. In 2009, the first full year after the COOL measure
went into effect, exports of cattle declined to a pproximately 1.1 million head and exports of hogs
declined to approximately 6.4 million head, reductions of 23% and 36% respectively.
14. Canadian cattle and hog exports to the United States are a major percentage of Canadian
production (30% in 2007). The United States is esse ntially Canada's only export market for cattle and
hogs for non-breeding purposes, due to its proximity and the practical limitations on the transportation
of live animals to other countries.
15. In contrast, US feeding operations and slaught er houses in most regions are able to quite
easily find domestic substitutes for Canadian imports when the costs of using Canadian animals are
higher than the costs of using US animals. Because of the size of the US market, Canadian exports of
cattle and hogs are a small percentage of US sl aughter - a percentage that has dropped since the
introduction of the COOL measure:
 for cattle 4.2% of US slaughter in 2007, dropping to 3.1% in 2009;
 for hogs 9.2% of US slaughter in 2007, dropping to 5.5% in 2009.
C. EFFECTS OF THE COOL MEASURE
16. The COOL measure has caused significant differen tial effects on Canadian cattle and hogs as
compared to US cattle and hogs. It imposes significantly greater costs and burdens on the use of
Canadian rather than on US cattle and hogs in the production of beef and pork, mainly in the form of
requirements for product segregation. Therefore, the COOL measure creates a significant incentive to
use exclusively US-origin animals.
17. As a result of the COOL measure, there has been decreased demand from US feeding
operations and slaughter houses for Canadian cattle and hogs. That decreased demand has led to a
significant reduction in both quantity of US imports of Canadian cattle and hogs and a reduction in the
prices being offered by US purchasers for certain Canadian livestock.
III. LEGAL ARGUMENTS
18. The COOL measure is inconsistent with the following WTO obligations of the United States:
 TBT Agreement Articles 2.1 and 2.2; and
 GATT 1994 Articles III:4, X:3(a), and XXIII:1(b).

1. TBT Agreement
(a) The COOL measure is a technical regulation
19. A measure is a technical regulation under the TBT Agreement if: it applies to an identifiable
product or group of products; it lays down a produc t characteristic; and compliance with the product
characteristics laid down in the measure is mandatory. The COOL measure is a technical regulation
because it applies to specific commodities; lays down product characteristics by requiring labels that
contain a means of identification of the products based on their origin; and is mandatory.
(b) The COOL measure violates Article 2.1 of the TBT Agreement
20. There is a violation of Article 2.1 if a technical regulation applies to "like" products and the
technical regulation treats imported products less fa vourably than like domestic products. A measure
provides less favourable treatment to an imported product if it modifies the conditions of competition
in the relevant market to the detriment of imported products.
21. Imported and domestic cattle and hogs are lik e products for the purposes of Article 2.1
because the only basis of distinction between imported and domestic cattle and hogs is their origin.
22. The COOL measure accords less favourable treat ment to Canadian cattle and hogs than their
US counterparts because it imposes substantial additio nal costs and burdens on use of Canadian cattle
and hogs. In particular:
 The COOL measure imposes segregation costs and burdens on feeding operations,
slaughter houses and retailers that use Canadi an-origin cattle and hogs or meat derived
from them.
 Such costs and burdens have resulted in ma ny US feeding operations and slaughter
houses no longer accepting Canadian cattle and hogs . As a result, those animals that are
exported must be transported over greater dist ances, at increased costs, to those US
feeding operations and slaughter houses that are still accepting Canadian animals.
 In order to accommodate the need to segreg ate Canadian cattle and hogs from US cattle
and hogs, US slaughter houses that are still accepting Canadian cattle and hogs have
restricted the days of the week and often th e times of the day when Canadian animals will
be accepted at their facilities. Such restrict ed days and times have caused border delays,
increased transport costs and created other logistical problems for Canadian producers.
 The COOL measure has forced US feeding operations and slaughter houses to modify
their contracting practices to the detriment of Canadian cattle and hogs.
 The COOL measure has created administrativ e and political uncertainty for the use of
Canadian cattle and hogs. The USDA and Congress have provided contradictory and
confusing direction as to the implementation of the COOL measure. This has created
uncertainty for US feeding operations and slaughter houses that use Canadian cattle and
hogs – uncertainty that does not exist for feed ing operations and slaughter houses that use
only US cattle and hogs.
23. As the COOL measure imposes substantial a dditional costs and burdens in the use of
Canadian cattle and hogs as compared to the use of US animals in the United States, there is
decreased demand for Canadian cattle and hogs. Th e decrease in demand has resulted in a significant

decline in imports of Canadian animals and a reduc tion in the prices being offered by US purchasers
for certain Canadian livestock, as confirmed by econometric analyses and the U.S Congressional
Research Service.
24. The COOL measure has therefore modified the c onditions of competition in the US market to
the detriment of Canadian livestock, contrary to Article 2.1.
(c) The COOL measure violates Article 2.2 of the TBT Agreement
25. A technical regulation violates Article 2.2 if:
 Its objective is not a legitimate one;
 It fails to fulfil the legitimate objective; or
 The technical regulation is more trade rest rictive than necessary to fulfil the legitimate
objective. An important consideration in this element of the test is whether a reasonably
available and less trade-restrictive alterna tive measure exists that would fulfil the
legitimate objective.
26. The true objective of the COOL measure is trade protectionism, which is shown by the
selection of the commodities covered by the COOL measure as well by statements of US lawmakers
and industry groups during the development a nd enactment of the COOL measure. Trade
protectionism can never be a justifiable or legitimate objective under Article 2.2 of the
TBT Agreement. Therefore the COOL measure violates Article 2.2.
27. The COOL measure does not fulfil its purported objective of providing consumers with
accurate country-of-origin information because it actually provides inaccurate or misleading
information about the country-of-origin of the meat consumers are purchasing.
28. The COOL measure is more trade-restrictiv e than necessary to achieve the US purported
objective. There are less trade-restrictive alterna tives reasonably available to the United States that
can meet the US objective of providing consumer information. These include voluntary country-of-
origin labelling and labelling based on substantial transformation.
29. Voluntary labelling is an appropriate alterna tive as there is limited consumer demand in the
United States for country-of-origin information and there is no compelling justification, such as health
or safety, which would warrant mandating its provi sion. Voluntary country-of-origin labelling would
make country-of-origin information available to consumers who consid er such information
sufficiently important to their purchasing decisions that they are willing to pay for it. It would also be
less trade-restrictive than the COOL measure by removing or reducing the differential costs and
burdens on the use of Canadian cattle and hogs.
30. Labelling based on substantial transformation, wh ich would determine the country of origin
on the basis of whether processing in a second country changes the nature of a product, is also an
appropriate alternative. It would provide clear and relevant country-of-origin information to
consumers, while being less confusing and easier to understand than the COOL measure. It would
also be simple, and both technically and economica lly feasible, to use this approach for retail
labelling. Finally, it would not impose differentia l costs on the use of imported cattle and hogs as
there would be no costs associated with segregating animals during production.

2. GATT 1994
(a) The COOL measure violates Article III:4 of the GATT 1994
31. Three elements must be satisfied for a measur e to violate Article III:4: (1) the imported and
domestic products must be "like"; (2) the measure must constitute a law, regulation or requirement
affecting the internal sale, offering for sale, purchase, transportation, distribution or use; and (3) the
measure must accord less favourable treatment to the imported product by modifying the conditions
of competition in the relevant market to the detriment of imported products.
32. Imported and domestic cattle and hogs are lik e products for the purposes of Article III:4
because the only basis of distinction between imported and domestic cattle and hogs is their origin.
33. The COOL measure is a law, regulation or requirement that affects the internal sale, offering
for sale, purchase, distribution and use of importe d cattle and hogs, as well as beef and pork derived
from imported cattle and hogs. The COOL measu re affects the competitive opportunities for
Canadian cattle and hogs by imposing greater costs and burdens on US industry when using Canadian
cattle and hogs. This has resulted in a significan t decrease in demand for Canadian cattle and hogs,
therefore affecting the sale, purchase and use of Canadian animals.
34. The COOL measure modifies the conditions of co mpetition in the US market to the detriment
of imported Canadian products. Therefore, it is inconsistent with Article III:4 of the GATT 1994
because it accords to imported products treatment less favourable than the treatment it accords to
"like" domestic products.
(b) The COOL measure violates Article X:3(a) of the GATT 1994
35. Article X:3(a) requires a WTO Member to administer laws, regulations, and administrative
rulings of general application affecting the sale, di stribution, processing or other use of imports in a
uniform, impartial and reasonable manner.
36. The COOL measure is a law, regulation and administrative ruling of general application
affecting the sale, distribution, processing or other use of imports.
37. The United States prescribed requirements throug h the Vilsack Letter that are not found in
laws and regulations of the United States. It enfo rced that prescription by a threat of regulatory
amendments. This constitutes an unreasonable ad ministration of the COOL legislation and the Final
Rule. The United States has therefore violated its obligation under Article X:3(a) of the GATT 1994
to administer its laws, regulations and administra tive rulings of general application in a reasonable
manner.
(c) The COOL measure has nullified or impaired Cana da's benefits as a r esult of the application
of the COOL measure
38. A complaining party must establish three elem ents for a claim under Article XXIII:1(b): 1)
the application of a measure by a WTO member; 2) a benefit accruing under the relevant agreement;
and 3) the nullification or impairment of the benefit as the result of the application of the measure.
39. The United States has applied the COOL measure th us satisfying the first element. Canada is
entitled to expect market access to the United States for its cattle and hogs that is related to the tariff
concessions that would apply, on a MFN basis, between the United States and Canada under the WTO
Agreement, thereby satisfying the second element.

Canada reasonably expected that its access to the US market for live cattle and hogs would be
virtually unrestricted, given the low MFN rates. The extent of the restrictions on market access due to
the COOL measure could not reasonably have been e xpected. By requiring US retailers to label beef
and pork in a manner that is fundamentally at odds with the normal practice applied in other areas of
US customs law – i.e., substantial transformation – the United States has nullified or impaired the
benefits that Canada negotiated at the time off the conclusion of the Uruguay Round and is entitled to
under Article XXIII:1(b) of the GATT 1994.

ANNEX A-2

EXECUTIVE SUMMARY OF THE FIRST WRITTEN SUBMISSION
OF MEXICO

I. INTRODUCTION
1. This dispute concerns a mandatory country of origin labelling measure (hereinafter the COOL
measure) that is applied in a manner and in circ umstances such that it unjustifiably discriminates
against and restricts imports of Mexican cattle into the United States.
2. Historically, Mexico has been an important s upplier of cattle to the United States and the
largest importer of US beef. Mexico and the United States have established an integrated market on
this sector.
3. The COOL measure has modified the conditions of competition to the disadvantage of
Mexican cattle compared to like US cattle. It has also reduced the export opportunities available to,
increased the handling cost of, and reduced the price of Mexican cattle. The COOL measure has
resulted in adverse effects to the Mexican cattle industry.
4. The COOL measure is a mandatory internal country of origin labelling measure that, by virtue
of its design, structure and application, unjustifia bly discriminates against and restricts imports of
Mexican cattle into the United States. Its purpose and effect is to protect the US cattle industry and
other domestic industries that produce covered co mmodities against competition with like imported
products and it has achieved that purpose and effect in the case of cattle from Mexico.
5. The COOL measure violates the provisions of GATT Article III:4 and X:3 and Articles 2.1,
2.2, 2.4 and 12 of the TBT Agreement, and cannot be justified under other WTO provisions. It also
nullifies or impairs benefits accruing to Mexico under the GATT 1994 within the meaning of
Article XXIII:1(b) of the GATT 1994.
II. LEGAL BACKGROUND
A. THE MEASURE AT ISSUE
6. The measure at issue in this dispute  the COOL measure  comprises the following legal
instruments: (i) the Agricultural Marketing Act of 1946, as amended by the Farm, Security and Rural
Investment Act of 2002 (hereinafter Farm Bill 2002) and the Food, Conservation and Energy Act of
2008 (hereinafter Farm Bill 2008); (ii) the Interim Final Rule on Mandatory Country of Origin
Labelling of Beef, Pork, Lamb, Chicken, Goat Meat , Perishable Agricultural Commodities, Peanuts,
Pecans, Gingseng, and Macadamia Nuts; (iii) the Interim Final Rule on Mandatory Country of Origin
Labelling of Muscle Cuts of Beef (including Veal), Lamb, Chicken, Goat and Pork, Ground Beef,
Ground Lamb, Ground Chicken, Ground Goat, and Ground Pork, and its affirmation; (iv) the Final
Rule on Mandatory Country of Origin Labelling of Beef, Pork, Lamb, Chicken, Goat Meat, Perishable
Agricultural Commodities, Peanuts, Pecans, Gingseng and Macadamia Nuts; (v) the Letter from the
United States Secretary of Agriculture, Thom as J. Vilsack, to Industry Representatives; (vi) any
modifications, amendments, administrative guidance, directives or policy announcements issued in
relations to items i through v above.

B. T
HE STATUTORY COOL PROVISIONS
7. The Farm Bill 2002 amended the Agricultura l Marketing Act of 1946, adding Subtitle
D-Country of Origin Labelling . The Farm Bill 2008 modified some of the statutory country of origin
labelling provisions that were first introduced by the Farm Bill 2002.
1. The contents of the statutory COOL provisions
8. The main requirement of the statutory COOL provisions is that retailers must notify
consumers of the country of origin of the covered commodities.
9. In order for an entity to be considered a "retailer" for purposes of COOL, it must sell
perishable agricultural commodities (i.e. fruits and ve getables, including cherries in brine) at a level
above a $230,000 per year threshold. Entities that make sales below the threshold or do not sell any
fruits and vegetables are not covered by COOL provisions.
10. The commodities covered by COOL requirements in the statutory provisions are: (i) muscle
cuts of beef, lamb and pork, (ii) ground beef, ground lamb and ground pork; (iii) farm raised fish; (iv)
wild fish; (v) a perishable agricultural commodity; (vi) peanuts; (vii) meat produced from goats; (viii)
chicken, in whole or in part; (ix) ginseng; (x) pecans; and (xi) macadamia nuts.
11. The statutory provisions exclude from the scope of the COOL requirements those covered
commodities used as an ingredient in a further processed food item, and those prepared in a food
service establishment.
12. In relation to muscle cuts of beef, the statutory provisions include four labelling rules: (i) US
Country of Origin
1; (ii) Multiple Countries Of Origin 2; (iii) Imported for Immediate Slaughter 3; and
Foreign Country of Origin4
13. Regarding ground meat, according to the stat utory COOL provisions, it must be labelled
indicating a list of all countries of origin of su ch ground meat, or a list of all reasonably possible
countries of origin of such ground meat.
14. Audit Verification System: The statutory COOL provisions give the US Department of
Agriculture (USDA) authority to conduct audits of any person that prepares, stores, handles, or
distributes a covered commodity for retail sale.
15. The statutory COOL provisions include specific provisions for audit verification system for
suppliers and retailers, informational obligations for suppliers, and its enforcement procedures.

1 In order for a muscle cut to be labelled as havi ng a US country of origin, it has to derive from (i) an
animal exclusively born, raised and slaughtered in the United States; (ii) an animal present in the United States
on or before 15 July 2008, or (iii) an animal born and raised in Alaska and Hawaii and transported to the
United States through Canada within 60 days.
2 Meat derived from an animal that was not exclusively born, raised and slaughtered in the
United States, or that was either born, raised or slaugh tered in the United States and not imported for immediate
slaughter, must be labelled indicating all of the countrie s in which the animal may have been born, raised, or
slaughtered.
3 Meat products derived from animals imported for immediate slaughter must be labelled indicating
both the country from which the animal was imported, and the United States.
4 Meat products with a foreign country of origin must be labelled indicating the country of origin of the
meat.

C. THE REGULATIONS
16. On 1 August 2008, the Agricultural Marketing Service (AMS) of the USDA published the
interim final rule for covered commodities other than fish and shellfish. On 15 January 2009 the AMS
published the final rule for the mandatory country of origin labelling for all covered commodities,
which came into effect on 16 March 2009.
1. The contents of the regulations implementing the statutory COOL provisions
17. The US origin for meat was defined in the regulations as the meat derived from animals
exclusively born, raised and slaughtered in the United States.
18. The regulations further developed the stat utory rule for Multiple Countries of Origin . Muscle
cuts with multiple countries of origin "may" be la belled indicating first the United States, and second,
the country or countries of foreign origin. Also , if the muscle cut covered commodities derived from
animals born in a foreign country, and raised and sl aughtered in the United States are commingled in
a single production day with animals born raised and slaughtered in the United States, the origin
"may" be designated as Product of the United States, Country X, and (as applicable) Country Y.
19. The regulations further developed the statutor y rule for Imported for Immediate Slaughter.
Muscle cuts derived from animals that we re imported for immediate slaughter " shall" be labelled
indicating first the country of foreign origin, and second, the United States. Also, if the muscle cut
covered commodities derived from animals imported into the United States for immediate slaughter
are commingled in a single production day with animals born in a foreign country, and raised and
slaughtered in the United States, the origin ma y be designated as Product of the United States,
Country X, and (as applicable) Country Y.
20. Regarding Foreign Country Of Origin, the regulations provide that the normal customs border
labelling requirements continue to apply to muscle cuts of foreign origin.
21. Also, the regulations further developed the stat utory rule for ground products, specifying that
the labelling of ground meat, must list all countries of origin contained in it, or all countries that may
be reasonably contained in it. Regarding the term "reasonable", when a raw material from a specific
origin is not in a processor's inventory for more than 60 days, that country cannot be included on the
label as a possible country of origin.
22. Recordkeeping Requirements: Regarding the authority given to the USDA by the statutory
provisions for the audit verification system and enforcement, the regulations include a section
describing the recordkeeping requirements.
D. T
HE VILSACK LETTER AND COMMENTS
23. On 20 February 2009, Thomas Vilsack, Secretary of Agriculture of the United States, issued a
news release announcing that he ha d sent a letter inviting stakeholders to follow additional voluntary
labelling practices. Mr. Vilsack's letter was address ed to industry representatives, and it suggested
that, after the effective date of the final rule, th e industry voluntarily follow the practices contained in
his letter. The practices consist of:
 Multiple countries of origin: Including information about the production steps that
occurred in each country.

 Processed foods: Labelling the products that are subject to curing, smoking, broiling,
grilling, or steaming.
 Inventory Allowance for Ground Meat : Reducing from 60 to 10 days the time a raw
material must be in a processor's inventory in order to be included in the notice of country
of origin.
24. Mr. Vilsack's letter included a warning, stati ng that based on industry compliance with his
suggestions, the USDA would consider whether or not it is necessary to modify the regulations.
III. FACTUAL BACKGROUND: THE IMPACT OF COOL ON IMPORTS OF MEXICAN
CATTLE
A. O
VERVIEW
25. The cattle and beef industries of Mexico a nd the United States have been historically
integrated and interrelated. Mexico produces and e xports feeder cattle to the United States where it is
raised in grasslands and feedlots and subsequently slaughtered. The industry of feeder cattle for export
has become of such importance for Mexico, th at from 2003 to 2007, the years prior to COOL
implementation, Mexico exported an average of ove r 1,200,000 head of cattle per year, with a value
of over USD$500 million dollars per year.
B. THE PRODUCTION PROCESS OF BEEF DERIVED FROM LIVESTOCK BORN IN MEXICO
26. The Mexican industry dedicated to the production of feeder cattle for export is composed by a
large number of independent cow-calf operators. Th e core business of the cow-calf operators is to
generate the birth of calves and then raise them un til they are weaned and ready to be sent to the
grasslands. Therefore, the usual commercial practice is to sell calves at a weight ranging between 300
and 400 pounds.
27. There are different ways through which Mexican cattle for export are sold to the US market.
Depending on a cow-calf operator's capacity, it can either sell calves directly to the buyer in the
United States, or sell calves to a broker who will complete the transaction with the buyer in the
United States. The sale of the calves from the broker or cow-calf operator to their clients in the US
usually takes the form of a direct transaction between them.
28. The selling price of Mexican calves for export is usually determined in advance by the buyer
and the seller before the cattle crosses the Mexico-U S border. The selling price is negotiated between
the buyer and the seller taking into account several factors, which include the market demand for
calves, the quality of the calves determined by the USDA grading system, the reference prices used in
the livestock auctions in the United States, the costs for transporting the calves, the future prices and
the costs of feeding. Because the feeder cattle are a commodity product, Mexican sellers must
maintain a competitive price in order to retain thei r clients in the Unites States. A small increase in
the cost of the cattle can result in lost clients.
29. In general, the calves from the Mexican exportin g states, mostly locat ed in the Northern
region of Mexico, have the same genetic features as the calves from the South-western regions of the
United States. There are no qualitative differences be tween the Mexican calves for export and calves
that are born in the United States.

30. Once the cattle are exported to the United States, they are shipped throughout US territory.
The cattle are sent to grasslands where they are rai sed and fed with grass. They remain grazing on the
grasslands until they reach a weight ranging between 600 to 700 pounds.
31. Once the cattle reach 600 to 700 pounds, they are sent to feedlots where it receives intensive
feeding based on grains. They remain confined in the feedlots until it reaches a weight between 1,100
to 1,200 pounds.
32. When the animals reach 1,200 pounds, they are considered as fed cattle ready for slaughter,
and thus, the animals are sent to the slaughterho uses. The chilled carcass is broken down in to pieces
of meat that are placed in boxes. The boxed meat is then transported to distribution centres, and
subsequently to retail markets.
C. CHANGES IN THE BEEF PRODUCTION PROCE SS AFTER THE IMPLEMENTATION OF THE COOL
PROVISIONS
33. The implementation of the COOL provisions disrupted the well integrated cattle-beef market
between Mexico and the United States. Before CO OL, beef labelled as "Product of the US" could
refer to beef derived from an animal that was bor n in Mexico but slaughtered in the United States.
This allowed Mexican-born cattle and US-born ca ttle to be fed, slaughtered, processed, boxed and
sent to the retail market together without having to segregate them in each of those steps.
34. After the COOL measure, meat derived from cattle born in Mexico and raised and slaughtered
in the United States must be labelled as "Product of US and Mexico. This makes it impossible for the
meat derived from cattle born in Mexico to be sla ughtered and processed in US plants together with
cattle born and raised in the United States. Implem entation of the COOL measure necessarily requires
segregation through the cattle-to-beef chain.
35. The US beef processors must now incur additio nal costs to segregate cattle throughout the
production process of beef and keep evidentiary reco rds of such segregation. To limit those costs,
each of the four major US beef processors has deci ded to slaughter and process Mexican cattle at only
one of their plants. Also, in the case of one pr ocessor, its facilities may process Mexican born cattle
only limited days per week and with a 14-day advance notice.
36. In the feedlots and grasslands cattle has to be segregated as well. Also, considering that the
few processing facilities that accept Mexican-born ca ttle are located near the US–Mexico border, it
has become economically unviable for grasslands a nd feedlots other than those located near the
border to acquire Mexican calves. Thus, some ba ckgrounders and feedlot operators who formerly
purchased Mexican-born cattle have simply decided to suspend those purchases, in order to avoid the
costs of compliance with the COOL measure and al so to adjust to the new policies of the US
processors.
37. In addition, the need to segregate has caused a price decrease of Mexican feeder cattle relative
to comparable US cattle, which ranges between US $40 and US $60 dollars per head.
38. For an industry that has historically operat ed using domestic and imported cattle without
distinction, the enactment of the COOL measure signifies a drastic modification of its operations,
which in turn has resulted in significant losses in the volume and value of the Mexican exports of
cattle to the United States.

IV. THE PROTECTIONIST OBJECTIVE OF COOL
39. The true purpose of the COOL measure by virtue of its design, structure and application is to
protect domestic producers in the United States by altering the operation of the US beef industry in
favour of US feeder cattle. A measure that creates a new system, independent from an existing one,
and provides information on the country of origin of inputs of a product manufactured in the
United States but only for some products that are purchased in certain retail stores and that excludes
such information for inputs into certain processed products cannot be characterized as being designed
and structured to achieve a legitimate consumer information objective.
40. The protective effect of the COOL measure is confirmed by its legislative history and the
actions of the Ranchers-Cattleme n Action Legal Fund, United Stockgrowers of America (R-CALF),
the main proponents and supporters of the COOL measure. Country of origin labelling was seen by R-
CALF and its supporters as a means to protect the US cattle industry from foreign competition.
V. LEGAL ARGUMENT
41. The measure at issue in this dispute is inconsis tent with the obligations of the United States
under the following provisions: (i) Articles III and X of the GATT 1994, and (ii) Articles 2 and 12 of
the TBT Agreement. (iii) It also nullifies or impairs benefits that accrue to Mexico under the GATT
1994 within the meaning of GATT Article XXIII:1(b).
A. ARTICLE
 III OF THE GATT 1994
42. The COOL measure accords Mexican feeder cattle treatment less favourable than that
accorded to US feeder cattle in a manner that is inconsistent with Article III:4 of the GATT 1994.
43. In Korea – Various Measures on Beef, the Appellate Body explained that a Member's
measure is deemed to breach Article III:4 if three elements are met: (i) imported and domestic
products at issue are "like products"; (ii) the measure at issue is a law, regulation or requirement
affecting their internal sale, offering for sale, purchase, transportation, distribution, or use; (ii)the
imported products are accorded "less favourable" treatment than that accorded to like domestic
products. The three elements are met by the COOL measure.
1. Like products
44. Mexico's claims relate to the treatment accord ed to Mexican exports of live feeder cattle
produced by Mexican cow-calf operators. Live feed er cattle born in Mexico, and raised in the
United States, and live feeder cattle born, raised and slaughtered in the United States are "like
products", considering the criteria established in the findings and recommendations from the WTO
DSB on this specific issue:
 The physical properties of Mexican feeder cattle are equivalent to US feeder cattle.
Feeder cattle, whether from Mexico or the Un ited States, meet the same standards and
industry requirements.
 Regarding end-uses, the feeder cattle, whethe r from Mexico or the United States are used
principally to produce beef. Prior to the COOL measure, Mexican and US cattle were
employed without distinction in the production and processing of beef.
 As to the perceptions and beha viour of consumers, the consumers of feeder cattle are the
US backgrounders, feedlots and the packing plants in which the cattle are processed.

Prior to the COOL measure, such backgrounde rs, feedlots and packing plants perceived
and treated Mexican and US feeder cattle identically.
 Finally, both Mexican and US cattle are classified under subheading 0102.90 of the
Harmonized System (live bovine animals – other).
45. Accordingly, by all relevant criteria, Mexican and US feeder cattle are like products.
2. Laws, regulations and requirements affecting their internal sale, offering for sale,
purchase, transportation, distribution or use
46. The COOL measure comprises a series of laws and regulations that set out the country of
origin labelling requirement. These laws, regulations and requirements "affect the internal sale,
offering for sale, purchase, transportation, distribution or use" of feeder cattle.
47. The COOL measure applies to a specified group of "covered commodities", among which is
beef. The COOL measure imposes a requirement on reta ilers to notify their customers of the country
of origin of beef. The measure also imposes recordkeeping and verification requirements to
substantiate the origin claims that apply to all pers ons engaged, either directly or indirectly, in the
supply of beef to retailers including stockbreeder s, backgrounders, feedlot operators and meat
processors and packers. While the COOL measur e does not directly regulate feeder cattle, it affects
the internal sale, offering for sale, purchase, transpor tation, distribution or use of feeder cattle because
it regulates retail beef, which is derived from those cattle.
48. The COOL measure therefore pertains to the category of laws, regulations and requirements
that affect the internal sale, offering for sale, purchase, transportation, distribution or use of Mexican
feeder cattle within the meaning of Article III:4. Th us, the national treatment obligation in that article
applies.
3. Less favourable treatment
49. The COOL measure requires that beef sold at the retail level be labelled with information
indicating the place where the cattle are born, raised and slaughtered and im pose record keeping and
verification requirements to support the labels. The COOL measure by itself does not de jure
distinguish between domestic and impo rted like products nor do the measures de jure distinguish
between like Mexican and US feeder cattle. However, GATT Article III:4 applies to both de jure and
de facto inconsistency. The focus is whether the meas ure modifies the conditions of competition, and
the COOL measure gives US feeder cattle a compe titive advantage over like Mexican feeder cattle in
the US feeder cattle market.
50. The COOL measure has caused US packing pl ants to cease commingling fed cattle born in
Mexico and raised in the United States with fed ca ttle born and raised in the United States and instead
segregate by: (i) reducing the number of plants that slaught er and process fed cattle that was born in
Mexico and raised in the United States. (ii) reducing the number of days per week that such cattle are
slaughtered and processed; (iii) reducing the overall number of such cattle that are slaughtered and
processed; and (iv) requiring advance notice prior to accepting such cattle.
51. The COOL measure has also caused US packing pl ants to reduce the price paid for fed cattle
that was born in Mexico and raised in the United States, by means of applying an additional discount
to the purchase price. The discount ranges between US$ 40 and US$ 60 dollars per head.

52. These actions have had the following direct adverse upstream effects: (i) some backgrounders
and feedlots have simply stopped buying feeder calves born in Mexico; (ii) the only backgrounders
and feedlots that are willing to receive feeder calves that were born in Mexico are those that are close
to the packing plants that are still receiving finished cattle that were born in Mexico; (iii) finished
cattle that were born in Mexico and raised in th e United States are segregated from finished cattle
born in the United States for shipping and transpor tation to packing plants and, in some cases, at
backgrounding and feedlot facilities. (iv) the discount applied by packing plants against the purchase
price of finished cattle that were born in Mexico and raised in the United States has been ultimately
passed on to the Mexican cow-calf operators that produce the Mexican feeder calves.
53. In addition, the uncertainty created by Secr etary Vilsack's letter has had the effect of
encouraging the US packing plants, backgrounders a nd feedlots to make the actions described above
even stricter.
54. Similar actions have not been taken in respect of the stockbreeding, backgrounding, feeding
and transport of like US born cattle.
55. These actions have modified the conditions of co mpetition in the US market to the detriment
of Mexican feeder cattle. In this way, the C OOL measure gives US feeder cattle a competitive
advantage over like Mexican feeder cattle in the US feeder cattle market and thereby violate the
national treatment obligation in Article III:4.
B. A
GREEMENT ON TECHNICAL BARRIERS TO TRADE
56. The COOL measure is a technical regulation within the meaning of Annex 1.1 of the
TBT Agreement that is inconsistent with Articles 2.1, 2.2, 2.4, 12.1 and 12.3 of the Agreement.
1. The COOL measure is a "technical regulation" for purposes of the TBT Agreement
57. The obligations in Articles 2.1, 2.2 and 2. 4 of the TBT Agreement apply to technical
regulations, as defined by Annex 1.1 of the TBT Ag reement. The COOL measure falls within the
scope of the TBT Agreement, because it constitutes a "technical regulation" pursuant to the definition
contained in Annex 1.1, for the following reasons:
 The COOL measure is contained in a set of published legal instruments that are
undoubtedly "documents" within the meani ng of Annex 1.1 of the TBT Agreement.
These documents meet the three criteria to be considered a "technical regulation": (i) they
apply to an identifiable product or group of products; (ii) they lay down one or more
characteristics of the product; (iii) compliance with those product characteristics is
mandatory.
 The COOL provisions expressly state that the country of origin labelling requirements
apply to a specific group of "covered commodities". Muscle cuts of beef and ground beef
are included among those covered commodities. Secretary Vilsack's letter and its press
release apply to the same group of "cove red commodities". Thus, the COOL measure
expressly applies to an identifiable group of products.
 Regarding the second criterion, the definition of "technical regulation" expressly includes
"marking or labelling requirements". The Appellate Body in EC – Asbestos clarified that
a "labelling requirement" is a product characteristic. The COOL measure imposes on
retailers the obligation of informing consumer s of the country of origin of the covered
commodities. It further describes the method for identifying the country of origin of the

covered commodities, namely, by means of a label, stamp, mark, placard, or other visible
sign. In the case of some covered commodities, such as muscle cuts of beef, the COOL
measure lays down rules for determining wh en this product can be labelled as having a
US origin, multiple countries of origin or foreign countries of origin. These features
contained in the COOL measure leave no doubt that they fulfil the second criterion of
laying down product characteristics consisting of marking or labelling requirements.
 Finally, the COOL measure imposes a manda tory obligation on retailers to inform
consumers about the country of origin of th e covered commodities. It is clear from the
statutory COOL provisions that the United States imposes a mandatory scheme. With
respect to the letter of Secretary Vilsack and its press release, they also have a mandatory
nature, evident from the threat implied therei n, that additional modifications will depend
on the industry's compliance, threat that is seriously taken by the industry.
58. In conclusion, the COOL measure falls with in the scope of the TBT Agreement, for it
constitutes a "technical regulation" pursuant to the definition contained in Annex 1.1 of the
TBT Agreement.
2. The COOL measure is inconsistent with Article 2.1 of the TBT Agreement
59. As already explained when analyzing Article III of The GATT 1994, the COOL measure
accords Mexican feeder cattle treatment less favourab le than that accorded to US feeder cattle,
contrary to Article 2.1 of the TBT Agreement.
60. There is a close resemblance between the term s used in Article 2.1 of the TBT Agreement
with those of Article III:4 of the GATT 1994. Accordi ngly, the essential elements of an inconsistency
with Article 2.1 are: (i) that the measure at issue is a "technical regulation"; (ii) that the imported and
domestic products at issue are "like products " within the meaning of that provision; and (iii) that the
imported products are accorded "less favourable" treatment than that accorded to like domestic
products.
61. As already explained, the COOL measure indeed is a "technical regulation", the products at
issue are "like products", and the COOL measure accords products importe d from Mexico, treatment
less favourable than that accorded to like produc ts of national origin. For these reasons, the COOL
measure is inconsistent with Article 2.1 of the TBT Agreement.
3. The COOL measure is inconsistent with Article 2.2 of the TBT Agreement
62. The COOL measure is inconsistent with Article 2.2 of the TBT Agreement because it was
prepared, adopted and applied with a view to, and with the effect of, creating unnecessary obstacles to
international trade, and is more trade restrictive than necessary to fulfil a legitimate objective taking
account of the risks non-fulfilment would create.
63. Two issues must be addressed under this prov ision, specifically, whether the technical
regulation: (i) fulfils or is capable of fulfilling a legitimate objective; (ii) is not more trade-restrictive
than necessary to fulfil such objective taking account of the risks non-fulfilment would create.
64. The COOL measure does not fulfil a legitimate objective nor is it capable of fulfilling such an
objective as described hereinafter. If the Panel disag rees with that assertion, Mexico submits that the
measure is certainly more trade restrictive than n ecessary to fulfil that objective, taking account of the
risks non-fulfilment would create. Therefore, th e COOL measure constitutes an unnecessary obstacle
to international trade.

(a) The COOL measure does not fulfil a legitimate objective
65. In the case at issue, the obj ective of the COOL measure is not legitimate for the following
reasons:
66. As explained above, the COOL measure does not pursue a legitimate objective since the real
objective of the measure is to protect domestic producers in the United States by altering the operation
of the US beef industry in favour of US feeder cattle to the disadvantage of like Mexican feeder cattle.
The objective of the measure is clearly protectionist.
67. However, if this Panel finds that the objective of the COOL measure is the provision of
consumer information, Mexico is of the view that while in certain circumstances providing consumer
information can be a legitimate objective within th e meaning of the provision, it is not a legitimate
objective in all circumstances. Whether the objective is leg itimate will depend on the specific type of
information being provided to consumers and whether the provision of that information is "justifiable"
in the light of all relevant circumstances relating to that information.
68. In the case of the COOL measure, both the character and the intrinsic value of the information
given to consumers are inherently protectionist.
69. Regarding the character of the information, it is that US origin beef is produced from cattle
that are "born, raised, slaughtered and processed" in the United States. Such detailed and specific
information has only one purpose which is inherently protectionist.
70. As to the value of the information, the COOL measure provides a type of information whose
value to the consumer is, as well, solely prot ectionist. By enacting the COOL measure, the
United States is trying to shape consumer percepti on through regulatory intervention, and justify the
legitimacy of this intervention on the basis of a gove rnmentally created consumer perception. In such
circumstances, it cannot be said that the provisi on of consumer information conforming to this
regulatory intervention is a "legitimate objective".
71. Furthermore, if the Panel finds that, in the circumstances of this dispute, the provision of
consumer information is a legitimate objective, Mexico submits that the COOL measure does not
fulfil that consumer information objective because of the substantial gaps in its coverage and because
of the ambiguity and uncertainty that it creates.
72. Regarding the gaps in the coverage, the COOL measure is limited to certain commodities,
only governs certain retailers, and certain pro cessed food items are excluded from the coverage. A
measure that provides information on the country of origin of inputs in a product manufactured in the
United States but only for some products that are purchased in certain retail stores and that excludes
such information for inputs into certain processed products cannot reasonably be characterized as
intended to "fulfil" a consumer information objective.
73. Regarding the ambiguity and uncertainty created by the COOL measure, first, the
United States has long had a comprehensive system in place for regulating the information provided
to consumers on packaging of meat products; sec ond, the labelling "Product of USA and Mexico"
under the COOL, in itself, is confusing because cons umers will not know that the entire process of
meat production took place in the United States while only the birth and minimal raising of the animal
occurred in Mexico. A measure that creates new rules for determining the origin of beef for labelling
purposes that differ from pre-existent criteria, and imposes such confusing labels cannot fulfil a
legitimate consumer information objective.

(b) Even if the COOL measure was considered to fulfil a legitimate objective, the measure is
more trade-restrictive than necessary to fulfil that objective, taking account of the risks non-
fulfilment would create.
74. In the event that the Panel concludes that th e COOL measure fulfils a legitimate objective,
Mexico submits that the COOL measure is more trade restrictive than necessary to fulfil that
objective, taking account of the risks non-fulfilment would create.
75. The USDA has found that the value of the inform ation provided and its contribution to the
needs of a US consumer is minimal and restricted to a limited sub-set of US consumers. Thus, the
importance of the objective of providing consumer information is low. Likewise, the possibility of
adverse consequences arising should the objective not be carried out is low and to the extent that those
consequences arise they will be restricted to a limited sub-set of US consumers.
76. It is clear that the COOL measure is more trade-restrictive than necessary to fulfil a legitimate
objective, taking into account the risks that non-fulf ilment would create. The measure is highly trade
restrictive as evidenced by its adverse effect on imports of Mexican feeder cattle.
77. Finally, there are at least other alternative me asures that are reasonably available that provide
the equivalent contribution to the ob jective. The first alternative is a voluntary country of origin
labelling requirement. A second alternative is to m odify the labelling criteria to conform to the pre-
existing criteria (change of tariff classification and processing, both including the rule of substantial
transformation or a change in nature).
78. In this way, the US measure is inconsistent with Article 2.2 of the TBT Agreement.
4. The COOL measure is inconsistent with Article 2.4 of the TBT Agreement
79. The COOL measure is not based on an existing relevant international standard, contrary to the
obligation contained in Article 2.4 of the TBT Agreement.
80. The COOL measure is inconsistent with Article 2.4 of the TBT Agreement because: (i) a
relevant international standard exists; (ii) the United States failed to base its regulation on that
international standard; and (iii) the relevant international sta ndard is not an ineffective or
inappropriate means for the fulfilment of the legitimate objectives pursued.
81. CODEX-STAN 1-1985 is the "General Standard for the Labelling of Prepackaged Foods." It
is a standard because it falls within the definitio n of "standard" contained in Annex 1.2 of the
TBT Agreement. It is relevant because it contai ns rules for the labelling of pre-packaged foods,
including rules regarding the country of origin fo r labelling such foods, and muscle cuts of beef and
ground beef are within its the scope. It is interna tional because it was approved by an international
body.
82. According to the CODEX-STAN 1-1985, if labelling with a country of origin is considered
necessary, meat that is derived from cattle that are born in Mexico and subsequently raised and
slaughtered in the United States should be labelle d as having a US country of origin. In direct
contradiction to this international standard, the COOL measure confers the United States country of
origin only to muscle cuts of beef and ground beef that derive from cattle that are exclusively born,
raised, and slaughtered in the United States. Thus, the United States failed to base its regulation on the
relevant international standard,

83. Finally, in the event that the Panel conclud es that the COOL measure pursues a legitimate
objective, Mexico submits that the rule in C ODEX-STAN 1-1985 is an effective and appropriate
means for the fulfilment of a legitimate objective.
84. The United States has stated that the objective of COOL measure is to inform consumers and
give them accurate information pertaining to the country of origin, for the purposes of making
purchasing decisions. CODEX-STAN 1-1985 is an effective means for achieving the pursued
objective because it seeks to protect consumers from deceptive practices, and information on the
country of origin is conveyed through a label. It is an appropriate means for informing consumers of
the country of origin of the covered commoditie s because the rules regarding country of origin
contained therein are specially designed, and thus suitable, for achieving the purpose of informing
consumers about the country of origin of prepackaged foods.
85. In this way, the US measure is inconsistent with Article 2.4 of the TBT Agreement.
5. The COOL measure is inconsistent with Articles 12.1 and 12.3 of the TBT Agreement
86. The COOL measure is contrary to the obliga tions of the United States under articles 12.1 and
12.3 of the TBT Agreement of providing special and differential treatment to developing countries.
87. The obligation set forth in Article 12. 3 can be divided into two elements: (i) the obligation of
the United States to take into account the special deve lopment, financial and trade needs of Mexico as
a developing country in the preparation and application of technical regulations; and (ii) the obligation
of the United States to ensure that the COOL measure does not create unnecessary obstacles to
exports from Mexico as a developing country.
88. Neither of those two actions was carried out by the United States.
89. First, during the preparation process of the COOL measure, both the US Congress and the
USDA were made aware that the COOL measure would harm imports of Mexican feeder cattle. There
is no doubt that the United States was cognizant of the possible negative effects on Mexican exports
of feeder cattle. The US Congress and the USDA, however, did not address those comments and
consequently made no effort to take into account the special develo pment and financial trade needs of
Mexico in its capacity of developing country.
90. Last, the COOL measure has the effect of creating unnecessary obstacles to trade, and thus
the United States failed to comply with its obligati on of ensuring that the technical regulations do not
create unnecessary obstacles to exports from Mexico as a developing country Member.
C. A
RTICLE X:3(A) OF THE GATT 1994
91. The COOL measure is inconsistent with Article X:3(a) of the GATT 1994, because the
administration of the COOL measure has been anything but predictable and reasonable. The
administration of the details of the measure change d over the course of the interim final rule and the
final rule and the associated guidelines issued by USDA over this period. These uncertainties
continued with Vilsack's letter. Administration of a law or regulation in such a manner cannot amount
to uniform (i.e., predictable) and reasonable administration.

D. NON-VIOLATION NULLIFICATION OR IMPAIRMENT: ARTICLE XXIII:1(B) OF THE GATT 1994
92. The COOL measure also nullifies or impairs benefits accruing to Mexico based on tariff
concessions made by the US in respect of live ca ttle at the end of successive multilateral rounds of
trade negotiations, in a manner that is inconsistent with Article XXIII:1(b) of the GATT 1994.
93. The Article provides that a Member may have recourse to WTO dispute settlement if it
considers that any benefit accruing to it directly or indirectly under the GATT 1994 is being nullified
or impaired as the result of the application by another Member of any measure, whether or not it
conflicts with the provisions of the GATT 1994.
94. In the case at issue, first, the United Stat es enacted and implemented the COOL measure
through a series measures including statutory provisions, regulations and other implementing
guidance, directives of policy annou ncements issued in relation to those measures. Thus, a measure
was applied.
95. Second, Mexico is entitled under Article XXIII:I(b) of the GATT 1994 to expect market
access to the United States for its feeder cattle that is related to the tariff concessions that would
apply, on a Most-Favoured-Nation (MFN) basis, between Mexico and the United States under the
WTO Agreement. Mexico does not view these ta riff concessions as creating a guarantee of trade
volumes, but rather as creating trade expectations as to the competitive relationship between Mexican
and US feeder cattle. Thus, there are benefits accruing to Mexico under the GATT 1994.
96. Last, given the low MFN rates of the United States in respect of feeder cattle, Mexico
reasonably expected that its access to the US market for feeder cattle would be virtually unrestricted.
The COOL measure drastically restricts this access in a manner that could not have been anticipated
at the time of the conclusion of the Uruguay Round. It therefore nullifies and impairs the benefits
under the GATT 1994 that Mexico negotiated during the Round.
VI. CONCLUSIONS
97. On the basis of the foregoing, Mexico respect fully requests that the Panel find that US
measures are inconsistent with Articles III:4 and X:3 of the GATT 1994 and Articles 2.1, 2.2, 2.4
and 12 of the TBT Agreement. Mexico also requests that Panel find the US measure also nullifies or
impairs benefits accruing to Mexico under the GA TT 1994 within the meaning of Article XXIII:1(b)
of the GATT 1994.

ANNEX A-3

EXECUTIVE SUMMARY OF THE
FIRST WRITTEN SUBMISSION OF THE UNITED STATES

I. INTRODUCTION
1. The US country of origin labelling measures are the product of a decade long legislative and
regulatory process, driven by the desire to provide consumers with additiona l information about the
origin of meat and other food products they buy at the retail level. Quite simply, consumers in the
United States want better information about where their food comes from.
2. Previous US labelling requirements did not require meat labelling at the retail level and did
nothing to alleviate consumer confusion about or igin, which for some products was compounded by
the grade labelling program administered by the US Department of Agriculture ("USDA"). The
labelling provisions included in the 2002 Farm Bill, amended in 2008, and the 2009 implementing
regulations, were the results of hard work to r econcile the views of US consumer advocacy groups,
who strongly supported stricter labelling requirements, and industry interests, who sought to minimize
compliance costs. The legislative and regulator y record demonstrates the lengths to which the
United States went to balance these interests, and th e efforts made to address concerns of interested
parties, including Canada and Mexico, while en suring that US consumers would receive better
information about the products they buy.
3. The United States is not alone in seeking to pr ovide consumers with information on country
of origin. Motivated by the objective of providi ng consumer information, numerous WTO Members,
including Canada and Mexico, have enacted mandatory country of origin labelling regimes, applying
to a vast cross-section of products.
4. Despite the widespread acceptance of country of origin labelling requirements by WTO
Members and US efforts to carefully design the COOL measures, Canada and Mexico allege that they
are inconsistent with US oblig ations under the TBT Agreemen t, the GATT 1994, and nullify and
impair their benefits under the GATT. Fundament ally, Canada and Mexico's objections amount to
nothing more than an attempt to re-weigh the comple x balance of interests that led to the measures,
and in the process prevent the United States from provi ding its consumers with information that is
routinely available to consumers in other WTO Members.
5. They seek to do so not because the measures are discriminatory on their face, nor because
they result in de facto discrimination vis-à-vis Canadian or Mexican meat, but because some US
slaughterhouses have allegedly modified certain policies in processing Canadian and Mexican
livestock. On this basis alone, they seek to upe nd the entire US statutory and regulatory framework,
notwithstanding that nothing in the measures requir es slaughterhouses to take the actions that some
allegedly did. Canada and Mexico ignore the fact that slaughterhouses segregated livestock before the
labelling requirements took effect, and that the measures were designed to provide market participants
with as much flexibility as possible to minimize burdens on suppliers.
6. Nor in fact have those slaughterhouses' actions had an appreciable impact on trade – indeed,
cattle exports to the United States are sharply up in 2010. Only by ignoring basic market factors
unrelated to the COOL measures – the global econo mic recession, high feed costs, animal disease
issues, declining inventories, and a restructuri ng of the North American hog industry – can Canada
and Mexico attempt to imply some commercial imp act on their livestock attributable to the COOL
measures. Indeed, it is telling that, in advanci ng a (remarkably underdeveloped) claim that their

benefits have been nullified and im paired, neither complainant can even identify how they have been
harmed. The failure of the complaining parties to put forward a colourable argument in this regard
illustrates the weak foundations upon which their arguments rest. The COOL measures do not provide
less favourable treatment to Canadian and Mexican li vestock. They fulfil the legitimate objective of
providing consumer information wit hout substantially restricting trade, are administered fairly, and
were developed and applied in a ma nner that took into account a wide range of interests. Throughout
the process, the United States carefully weighed co mpeting objectives – the desire to provide better
consumer information and the desire to limit the imp act on market participants – and incorporated the
views of interested parties in an attempt to stri ke the correct balance. The COOL measures reflect
these objectives and are not inconsistent with the WTO Agreements.
II. LEGAL ARGUMENT
7. Canada and Mexico describe the measures at issue as a single "COOL measure," but as they
define this term, their complaint rests on several substantively distinct measures: Section 10816 of
the 2002 Farm Bill, as amended by Section 11002 of the 2008 Farm Bill, the 2008 Interim Final Rule,
the 2009 Final Rule, and a February 20, 2009 letter from Secretary Vilsack. Mexico also
characterizes the FSIS Final Rule as an additional element of the "COOL measure".
8. In so doing, Canada and Mexico obscure the f act that the 2008 Interim Final Rule is not in
effect. In addition, the Vilsack Letter (even if c onsidered a US measure) is not subject to the TBT
disciplines that complainants claim the United Stat es has breached because it is not "mandatory".
Finally, Canada and Mexico overlook important substantive differences between each of the elements
of the "COOL measure," which has important impli cations for their respective legal claims. For
example, Canada and Mexico's arguments do not address how the statute, apart from the 2009 Final
Rule, is inconsistent with US ob ligations, nor does Mexico explain how the FSIS Rule is inconsistent
with US obligations.
9. By treating these measures as a single "COOL measure," Canada and Mexico attempt to
sweep into the Panel's analysis a document not subject to the relevant commitments, to obtain findings
on a measure no longer in effect, and to avoid ma king their case with respect to other measures.
Rather than evaluating them collectively, the Panel should assess each document on its own merits,
consistent with the approach used in previous disputes.
III. THE COOL MEASURES ARE NOT INCONSISTENT WITH THE
TBT AGREEMENT
10. Canada and Mexico discuss the Vilsack Letter at length in arguing that the "COOL measure"
is inconsistent with US obligations under the TBT Agreement. However, the Vilsack Letter does not
meet the definition of a "technical regulation" – by its terms, compliance with it is not mandatory. In
describing its suggestions, the Vilsack Letter states that the Secretary is simply recommending that the
industry "voluntarily adopt ... practices to ensure that cons umers are adequately informed about the
source of food products". The Vilsack Letter also does not include any mechanism to ensure that
companies follow its suggestions. While Canada an d Mexico attempt to characterize the Secretary's
comment that he "will carefully consider whether modifications to the rule will be necessary to
achieve the intent of Congress" as evidence of th e Letter's so-called "mandatory nature," this
statement merely reflects the fact that USDA (like any other regulator) has the ability to revisit its rule
making. Finally, Canada and Mexico offer no evid ence demonstrating that industry is following the
letter's suggestions.
11. The COOL measures are not inconsistent with TBT Article 2.1. To demonstrate that a
measure is inconsistent with this obligation, the complaining party must demonstrate that: (1) the

measure is a technical regulation; (2) the imported and domestic products at issue are "like" products;
(3) the imported products receive less favourable tr eatment than the "like" domestic products; and (4)
such treatment is in respect of the technical regulation.
12. As discussed above, the Vilsack Letter is not a technical regulation. With regard to the 2002
COOL Statute, as amended, 2009 Final Rule, a nd FSIS Rule, the requirements contained therein
provide for labelling of beef and pork with country of origin information at the retail level regardless
of whether the product is imported or produced dom estically. Further, Canada and Mexico do not
even address the fact the COOL measures apply to meat, not livestock.
13. Even if it were appropriate to evaluate a meas ure for consistency with Article 2.1 based on
evidence regarding a product not regulated by that measure, Canada and Mexico have failed to show
that the COOL measures provide less favourable treat ment to livestock. These measures require meat
to be labelled with origin info rmation regardless of where the livestock from which the meat was
derived was born, raised, or slaughtered.
14. Rather than asserting that the COOL measures by their terms accord different treatment to
their beef and pork, Canada and Mexico claim th at the measures have modified the conditions of
competition to the detriment of their livestock. Ce ntral to their argument is the assertion that the
measures require US processors to segregate their pr oduction lines. Further, the complainants allege
that US processors have avoided segregation costs by refusing foreign livestock. These arguments do
not withstand scrutiny.
15. In law and in fact, the COOL measures do not require US processors to segregate. Feeding
operations and slaughter houses can meet the law's re quirements in any way they choose. In fact, the
2009 Final Rule indicated that there are multiple ways a processing facility could comply with the
law, which may or may not include segregation.
16. Not only does nothing in these measures require segregation, but the flexibility they provide
reduces the likelihood that livestock will need to be se gregated to comply with the law. For example,
the 2009 Final Rule contains significant flexibility that allows processors to commingle muscle cuts
of meat from various different sources and affix the sa me label to all of the meat that is processed.
Retailers can use a Category B or C label when vari ous combinations of Category A, B, and C meat
are commingled during a single production day.
17. Even if a US processor did not take advantage of these flexibilities and chose to segregate or
only accept one type of livestock, nothing in th ese measures would require them to favour US
livestock. A processor could easily dedicate its proce ssing line to Canadian or Mexican instead of US
livestock and still efficiently comply with the COOL measures.
18. In conclusion, a slaughter house has a number of options available to it to comply with the
COOL measures without segregating. The slaught er house may: (1) process cattle of exclusively
domestic origin; (2) process cattle of exclusivel y foreign origin; (3) process domestic cattle and
imported cattle during the same production day when producing muscle cuts; or (4) process cattle and
meat of varying origins when producing ground meat.
19. While none of the COOL measures require segrega tion, Canada and Mexico argue that this
practice is widespread and has had a detrimental im pact on their products. Canada and Mexico also
allege that several slaughter houses have been rejecting their livestock entirely.
20. As a threshold matter, it is not clear that what Canada and Mexico assert is accurate. In
addition, the evidence they cite show that four of the five largest cattle packers and four of the five

largest swine packers are continuing to accept fore ign cattle at some of their processing plants.
Together, these plants have more than enough ca pacity to process all of Canada's and Mexico's
exports. Canada's evidence also indicates that ma ny producers are taking advantage of the law's
flexibilities to continue processing domestic and foreign livestock without segregating.
21. Canada and Mexico also ignore the fact that certain US processors segregated their processing
lines before the 2009 Final Rule was implemented. This pre-existing segregation undermines
Canada's and Mexico's argument that the COOL measures have generated high costs of compliance
for processors that handle their livestock by requiri ng them to segregate processing lines. It also
demonstrates that individual market actors have re asons for segregating products that have nothing to
do with the COOL measures.
22. In addition to incorrectly asserting that the COOL measures require segregation, Canada and
Mexico argue that these measures "create incentives" for US industry to segregate, citing to the
Appellate Body report in Korea – Various Measures on Beef to argue that this is sufficient to prove
the measures afford less favourable treatment. However, Korea – Various Measures on Beef provides
no support for this position. The measure at issue th ere created a dual retail system for domestic and
foreign beef – thus, the measure itself imposed on retailers "the legal necessity of making a choice"
between domestic and foreign products. By contrast, the complainants argue that the US law leads to
a commercial necessity to segregate products. Indeed, the fact that some companies are not
segregating demonstrates that it is not commercially necessary, and certainly not legally necessary.
Processors can, and have been, accep ting both types of meat, both in a segregated and non-segregated
fashion.
23. Even if Canada and Mexico could prove th at some producers began to segregate after
adoption of the COOL measures, this does not establish less favourable treatment because this
decision would have resulted from circumstances unr elated to these measures. Canada and Mexico
both appear to acknowledge that any decision by US packers to change their production practices
results in large part from the complaining parties' relatively small market shares.
24. Finally, the trade data does not support the c onclusion that Canadian and Mexican livestock
have been adversely impacted by the COOL meas ures. Canadian and Mexican cattle exports were
close to their 10-year averages in 2009 and are expect ed to increase in 2010. Prices of Canadian and
Mexican cattle are also expected to increase. Simi larly, Canadian hog prices have been rising since
late 2009. Although Canadian hog exports are still at low levels, this results from the significant
restructuring of the industry, which has outweighed the positive momentum from other factors.
25. To the extent that economic conditions for Ca nadian and Mexican livestock were positive in
2008 and 2009, this results from factors unrelated to COOL. Canadian and Mexican cattle export
volumes and prices have been influenced by the recession, feed costs, transportation costs, currency
fluctuations, weather conditions, and animal diseases. The recent Canadian hog market conditions are
consistent with the significant industry restructur ing, the recession, falling inventories, high feed
costs, currency fluctuations, and H1N1. A USDA an alysis demonstrates that factors other than the
2009 Final Rule were responsible for the decline in Canadian exports of cattle and hogs to the
United States in 2008 and 2009. In particular, USDA 's analysis shows that the economic recession is
more likely the cause of the temporary decline in imports than the 2009 Final Rule.
26. The studies cited by Canada and Mexico to de monstrate that market conditions in 2008 and
2009 would have been more favourable but for the im plementation of the 2009 Final Rule are flawed.
The Informa Report suffers from four key limitations: (1) non-transparent methodologies; (2) a failure
to account for previously occurring segregation; (3) a failure to account for impact of flexibilities in
2009 Final Rule; and (4) implausible conclusions give n market trends. The two models developed by

Professor Daniel Sumner are also flawed. Exhibit CDA-78 relies on the unsubstantiated and flawed
results produced by the Informa Report. Likewise, Exhibit CDA-79 fails to account for key factors
that drove North American livestock markets during this turbulent period, erroneously relies on the
use of dummy variables to explain complex chang es in U.S.-Canadian price differentials and US
livestock imports, and makes other methodological errors.
27. Canada and Mexico's arguments about the COOL measures also ignore a fundamental reality
of regulation: namely, that any time a governme nt passes a new law or adopts a new technical
regulation, it may impose significant compliance costs on industry or even impose a greater cost on
some market participants versus others. This does not mean that the measure "modifies conditions of
competition" so as to afford less favourable treatment. Rather, to the extent they exist, the "costs"
identified by Canada and Mexico are at most simply transition and compliance costs – costs that
typically arise whenever governments implement a new regulation.
28. Canada and Mexico additionally cite to alle ged administrative and political "uncertainty"
surrounding the adoption and implementation of the COOL measures. Incongruously, these
objections appear to be directed at a the transp arent nature of the US regulatory process, which
provided multiple opportunities for stakeholder input, and changes that were made to take the input
into account in developing the 2009 Final Rule. Ind eed, Canada and Mexico point to nothing in the
process that disadvantaged imported products over domestic products.
29. Finally, while the COOL Statute and 2009 Fina l Rule contain labelling requirements that
"relate to" the labelling of beef and pork, they are not "in respect of" the labelling of livestock.
Accordingly, the Panel need not conduct an inquiry into whether the COOL measures have resulted in
less favourable treatment to Canadian and Mexican livestock because these measures do not apply in
respect of these products.
30. The COOL measures are not inconsistent with Article 2.2 of the TBT Agreement. The
United States adopted these measures to achieve the legitimate objective of providing consumer
information, information that, among other things, helps prevent consumer confusion related to the
use of USDA grade labels. Further, the COOL m easures were carefully constructed and modified
during the legislative and regulatory processes to ensure that they were not more trade restrictive than
necessary to achieve their objective.
31. To determine the objective of the COOL measures, the Panel should begin with their text and
should consider their "design, architecture, and revealing structure". The 2009 Final Rule's text
makes clear that its objective is to provide consumers with information about the food that they buy at
the retail level. A number of aspects of the measure s' design and structure confirm this purpose. For
meat, Congress determined that retailers should provide consumers with information about the
country in which the animal from which the meat is derived was slaughtered and about where that
animal was born and raised if that animal was sl aughtered in the United States. Congress determined
that this was necessary to reduce the likelihood that consumers would be confused about the origin of
the meat in instances where the anim al was slaughtered in the United St ates. In the absence of this
requirement, meat from livestock that spent its entire life outside of the United States and was only
present in the United States for a short time before sl aughter could still be labelled as a US product.
Reading the label, a consumer could reasonably assu me that the meat they purchased came from a
cow that had spent most of its life within the United States. At the same time, this product would also
carry a USDA grade label, which would further rein force the erroneous impression that the meat was
derived from a "US" animal. The objective of the COOL measures is also ev ident in other elements
of their design, such as record keeping requireme nts and fines to ensure the consumer receives
accurate origin information.

32. The coverage of commodities under the COOL measures does not support the conclusion that
their objective is not consumer information. Th e COOL measures cover products that make up more
than 90 per cent of the meat products consumed by Americans and require that all fruits and
vegetables sold at the retail level be labelled. The fact that a measure does not cover every
conceivable product within a sector for which the pur suit of the same objective would be legitimate is
not evidence that the measure is protectionist any more than the fact that a Member had adopted
labelling requirements for one sector but not another. Indeed, the fact that the COOL measures
encompass much more than beef and pork argues against a finding that their intent is protectionism
for the livestock sector.
33. Canada and Mexico argue that COOL's protectioni st intent is evidenced by the fact that the
covered commodities are more likely to face import co mpetition than those not covered. However, in
making this argument, Canada and Mexico overlook the obvious – that if a measure's objective is to
provide consumers with informati on about where the food they buy comes from, that information is
the most valuable precisely when consumers have the option of choosing among a mix of domestic
and imported options. If there was no import compe tition for a particular product, there is less
imperative to require an origin label because it is less likely to provide any additional information to
the consumer or help clear up consumer confusion.
34. Putting this aside, the data that Canada and Me xico cite are misleading. With regard to
omitted commodities, Canada appears to cite only th e import statistics that support its theory while
ignoring those that do not. And even within covere d commodities, no pattern is discernable. Some
covered commodities face significant competition while other commodities do not.
35. Congress' decisions to only apply the require ments to retailers who sell fresh fruits and
vegetables in excess of $230,000 and to exempt certa in processed foods were also not irrational or
motivated by protectionism. Rather, these decisions were made to help reduce compliance costs for
both foreign and domestic producers.
36. Finally, Mexico's argument that the COOL m easures were adopted for a protectionist purpose
because the United States already had other c onsumer information measures in place does not
withstand scrutiny. First, these requirements did not ensure that consumers had accurate information
about certain food products at the retail level, including meat. S econd, there is nothing inherently
protectionist about adopting more than one measure to achieve the same objective. Third, the existing
FSIS label pre-approval program by which packers and processors could apply for approval to use a
"Product of the U.S.A." label was a voluntary program that did not ensure that consumers received
adequate information about the majority of the agricultural products they buy.
37. Canada and Mexico also base their allegations of a "protectionist" intent for the COOL
measures on a handful of statements of individua l groups and legislators. In relying on these
statements, Mexico and Canada vastly oversimplif y the domestic policy debate surrounding COOL in
the United States and ignore the large assortment of interested parties that participated in the multi-
year legislative and regulatory process, while attempti ng to divine the intent of the measures at issue
from an arbitrary selection of participants rather than the text itself.
38. First, the US meat industry opposed the inclusion of beef and pork as covered commodities
under the statute. Thus, to the extent that Canada and Mexico suggest that the coverage of the statute
reflects the protectionist desires of US industry as a whole, they are simply incorrect. Second, the
principal sponsors of the legislation repeatedly re ferred to the desire for consumer information as the
objective of the legislation. Third, Canada and Mexico ignore the hundreds of comments received
during the rule making process by numerous cons umers and consumer groups in unanimous support
of the measures.

39. Article 2.2 interpreted in the context of the TBT Agreement preamble leaves each Member to
decide on which legitimate objectives it wishes to pu rsue and the level at which it seeks to pursue
them. TBT Article 2.2 contains a non-exhaustive list of legitimate objectives, as confirmed by the use
of the term " inter alia ". The text reflects that objectives other than those expressly listed in
Article 2.2 may be "legitimate.". Further, one of the specifically enumerat ed legitimate objectives is
"the prevention of deceptive practices," which is closely related to consumer information.
40. Neither Canada nor Mexico assert that consum er information cannot constitute a legitimate
objective. Canada does not deny that providing co nsumer information is a legitimate objective and
Mexico's arguments do not withstand scrutiny. To the extent that Mexico suggests that consumer
information is never a legitimate objective when the information supplied pertains to origin, it would
appear to call into question all mandatory country of origin labelling systems maintained by Members,
including its own programs. Further, to the exte nt Mexico is asserting that the information required
by the COOL measures can be distinguished from th at required under other origin labelling programs,
it offers no meaningful basis on which to draw such a distinction.
41. The adoption of the COOL measures has also "fulfilled" the US objective by providing
millions of US consumers with information about the origin of the products they buy at the retail level
when this information was not previously ava ilable. Although the COOL measures do not cover
every conceivable scenario in which a consumer buys food, this does not mean that they do not fulfil
their objective. After all, Article 2.2 does not require that a Member pursue an objective to the
maximum possible degree without regard to costs or other considerations. In fact, when designing the
COOL measures, Congress and USDA had to balance competing interests. On one hand, they sought
to design measures that provided as much informatio n to consumers as possible regarding origin. On
the other hand, they wanted to ensure that the cost of compliance with these measures would not place
too large a burden on foreign or domestic producers or retailers. As a result, Congress and USDA
provided a range of flexibilities and exceptions to reduce compliance costs without jeopardizing the
larger objective.
42. While Canada and Mexico assert that the meat labels prescribed by the COOL measures are
"confusing" and cannot be viewed as fulfilling a cons umer information objective, they have provided
no evidence demonstrating that the current labe lling scheme has caused or will cause any consumer
confusion. To the contrary, COOL's labelling of meat reflects the facts about these products' origin
much more accurately than the labels previously available to consumers.
43. Article 2.2 of the TBT Agreement provides that technical regulations shall not be "more
trade-restrictive than necessary" to fulfil a legiti mate objective. Based on the ordinary meaning of
Article 2.2, and its relevant context, in order fo r a WTO Member to show that another government's
technical regulation is more trade restrictive th an necessary for purposes of the second sentence of
TBT Article 2.2, the complaining member must show that, first, there is another measure that is
reasonably available to the government. Second, th at measure must fulfil the government's legitimate
objectives. Finally, the measure must be significantly less restrictive to trade.
44. Both Canada and Mexico suggest that the Unite d States adopt a voluntary labelling program.
A voluntary labelling program fails to fulfil the obj ective of providing consumers with country of
origin information on a wide range of products sold at the retail level. I ndeed, before implementing
mandatory country of origin labelling requirement s for meat, the United States tried this option
without success. The primary problem with voluntary labelling is that many businesses will not
voluntarily make the choice to label their products with origin information when given the option.
45. Canada and Mexico also suggest that the Un ited States adopt a meat labelling system based
on substantial transformation. This alternative would not fulfil the US objective because it would not

provide consumers with information about wher e the various processing steps took place. The
United States has determined that this must be a ke y part of any labelling regime due to the consumer
confusion related to products that have been impor ted for immediate slaughter. Indeed, consumers do
not expect meat derived from an animal that spen t its entire life in a foreign country before coming
into the United States for a very short period of time be fore it is slaughtered to be labelled US origin.
Similarly, for animals that spend significant peri ods of their lives in both the United States and a
foreign country, a US origin label does not provide complete information. As a result, consumers
would have incomplete and misleading information, and significantly less information than under the
system provided for by the COOL measures.
46. The COOL measures are not inconsistent with TB T Article 2.4. Mexico argues that they are
inconsistent with this provision because they ar e not based on CODEX-STAN 1-1985. To constitute
an international standard, the standard must be a dopted by a body whose membership is open to the
relevant bodies of all Members and is based on consensus. It is possible that CODEX-STAN 1-1985
may qualify as such, but Mexico bears the burden of demonstrating that this is the case.
47. Even assuming arguendo that CODEX-STAN 1-1985 is a "rel evant international standard"
and that the United States did not base the COOL measures on it, Mexico's claim fails because,
insofar as this standard addresses the provision of co untry of origin information of a product based on
a substantial transformation rule, it would fail to fulfil the legitimate objective pursued by the
United States of providing consumer information a nd thus would be an ine ffective and inappropriate
means of fulfilling the objective of the COOL measures.
48. To the extent that CODEX-STAN 1-1985 addresses providing country of origin information
based on a substantial transformation rule for all products, it would not provide meaningful
information to consumers about the origin of the produc ts at issue in this dispute. With respect to
meat, a substantial transformation rule would mean that meat from a cow born and raised in Canada
or Mexico would be labelled as a product of the United States simply b ecause it was transported
across the border for a single day to be slaughtered. This renders the rule "ineffective" because it does
not have the function of accomplishing the legiti mate objective pursued. Nor is a substantial
transformation rule "appropriate," as the type of information provided is in some cases misleading.
49. The COOL measures are not inconsistent with Articles 12.1 and 12.3 of the TBT agreement.
Mexico does not argue that the United States has independently breached Article 12.1; rather its
argument appears to rest on the premise that the United States has acted inconsistently with TBT
Article 12.3, and as a result, also acted inconsistently with Article 12.1.
50. To establish a violation of Article 12.3, the comp laining party must demonstrate that: (1) it is
a developing country; (2) the other Member did not ta ke account of its special development, financial
or trade needs during the preparation and applicat ion of a technical regulation; and (3) that the
Member did not take account of these needs with a view to ensuring that the technical regulation does
not create unnecessary obstacles to export.
51. Mexico has failed to meets its burden to prove any of these elements. Even assuming
arguendo that Mexico is a developing country, Mexico has not demonstrated that the United States
did not take account of one or more special needs of Mexico in the preparation and application of the
COOL measures. To the contrary, the United States offered Mexico numerous opportunities to
formally comment on the development of the regulat ions and held meetings with Mexico to discuss
the rule making. In addition, changes to the COOL measures are consistent with suggestions provided
by Mexico during the regulatory process on ways to minimize their impact on trade and to facilitate
compliance with the labelling requirements contained therein.

52. Moreover, Mexico's argument that the United States has violated Article 12.3 because the
COOL measures have created an unnecessary obstacle to trade applies the wrong legal standard. TBT
Article 12.3 requires that Members take account of the needs of developing country Members in the
"preparation and application" of a measure, " with a view " to ensuring that these measures do not
create unnecessary obstacles to trade. This means th at Members must consider the special needs of
developing countries when developing their technical regulations with the goal of ensuring that their
technical regulations do not constitute unnecessary obstacles to trade, which the United States has
done. Article 12.3 does not actually prohibit the creation of unnecessary obstacles to trade. That
obligation is set out in Article 2.2 of the TBT Agreement, and as demonstrated, the COOL Statute and
Final Rule are not inconsistent with that obligation.
IV. THE COOL MEASURES ARE NOT INCONSISTENT WITH GATT 1994
53. The COOL measures are not inconsistent with GATT Article III:4. To demonstrate that a
Member has acted inconsistently with Article III:4, a complaining party must establish three elements:
(1) the imported and domestic products are "like pr oducts"; (2) the measure in question is a "law,
regulation, or requirement" that affects the "interna l sale, offering for sale, purchase, transportation,
distribution, or use" of the imported products; a nd (3) the imported products are accorded "less
favourable" treatment than "like" domestic products. Canada and Mexico's arguments fail to satisfy
these elements.
54. Canada and Mexico have not demonstrated that Canadian and Mexican livestock are like
products with US livestock under GATT Article III:4. Further, the complaining parties have not even
made a case with regard to beef or pork.
55. Secretary Vilsack's Letter to industry representatives is not a "law, regulation, or requirement"
affecting the internal sale, offering for sale, purch ase, distribution and use of imported livestock or
beef and pork within the meaning of GATT Article III:4, nor do Canada and Mexico explain why they
consider the Vilsack Letter to qualify as such. The le tter is plainly not a "law" or "regulation". Nor is
it a "requirement". The industry is not "legally b ound" to carry out the Vilsack Letter's suggestions,
which by their terms are voluntary. In addition, the Vilsack Letter does not include suggestions that
companies may "voluntarily accept in order to obtain an advantage from the government". Canada
and Mexico claim that the industry would benefit by "not being subjected to possibly stricter and
more extensive regulation in the future". Howeve r, the letter does not contain a commitment not to
regulate, nor does the Secretary have legal authorit y to prevent Congress (or a future Secretary) from
modifying the labelling requirements or requiring additional regulations.
56. Canada and Mexico have also fa iled to demonstrate that the statute and 2009 Final Rule treat
their livestock less favourably than US livestock. The United States will not repeat its arguments on
this point that were already made in the context of TBT Article 2.1.
57. The COOL measures are not inconsistent with Ar ticle X:3(a) of GATT 1994. Canada's entire
Article X claim rests on its allegation that the Vilsack Letter constitutes an unreasonable
administration of the COOL laws because the lette r allegedly "threatened" US companies and persons
who did not go beyond the terms of the statute and 2009 Final Rule and "voluntarily" take certain
actions. Mexico makes a similar argument that the administration of the COOL measures is non-
uniform and unreasonable because the Vilsack Letter le d to uncertainties regarding the administration
of the measures.
58. The Vilsack Letter does not fall within the scope of Article X:3(a). Article X:3(a) applies to
the manner in which WTO Members "administer" their laws, regulations, decisions and rulings
referred to in paragraph 1. The Appellate Body has interpreted the term "administer" to mean "putting

into practical effect" or "applying" those measures enumerated in paragraph 1 of Article X. The
Vilsack Letter does not "apply" to the COOL measures or put them into "practical effect".
59. Mexico alleges that the administration of th e COOL measures has b een non-uniform because
of changes to the rule over time. Even assuming arguendo that the Vilsack Letter falls within the
scope of Article X:3(a), Mexico has not provided evidence to demonstrate that the statute or 2009
Final Rule has been administered in a way that a ffected persons similarly situated in a non-uniform
manner. At all times the United States has mainta ined a single set of regulations implementing the
COOL Statute, and these regulations have been administered in a uniform fashion.
60. Canada and Mexico have also failed to establish that the COOL measures are being
administered in an unreasonable fashion. Indeed, Canada and Me xico have not presented evidence
establishing behaviour by USDA in administering th e COOL measures that has been unreasonable in
any sense. First, because the Vilsack Letter does not administer the COOL measures, the
complainants are wrong to argue that the Vilsack Le tter is an "unreasonable" administration of those
measures. Second, Mexico has adduced no evidence to suggest that any decisions made regarding the
implementing regulations as they evolved through the process were "irrational" or "absurd".
V. THE COOL MEASURES DO NOT NULLIFY OR IMPAIR THE BENEFITS
ACCRUING TO CANADA AND MEXICO UNDER THE WTO AGREEMENTS
61. Article XXIII:1(b) establishes three elements th at a complaining party must demonstrate in
order to make out a cognizable claim under Article XXIII:1(b): (1) application of a measure by a
WTO Member; (2) a benefit accruing under the GATT 1994; and (3) nullification or impairment of
the benefit as a result of the application of the measure.
62. Canada and Mexico bear the burden of proof of demonstrating that their benefits are being
nullified or impaired and must "provid[e] a detail ed justification" for their non-violation claims.
Canada and Mexico also bear the burden of pr oving that the US measures could not have been
reasonably anticipated at the time the relevant tariff concessions were negotiated and that the
challenged measures have directly upset the compe titive relationship between domestic and imported
products which existed as a consequence of the re levant tariff concessions. Canada and Mexico's
cursory treatment of these elements fails to establis h even a prima facie case that the COOL measures
have nullified or impaired any legitimate expectations that they fairly held.
63. First, neither Canada nor Mexico explains how a tariff benefit accruing to them directly or
indirectly under the GATT 1994 is being nullified or im paired when their trade is not, in fact, relying
on a tariff concession under the GATT 1994: each concede that it is a tariff concession under the
NAFTA that provides them with market access. Se cond, Canada and Mexico assert, without support,
that they are entitled to expect market access to the United States for their live cattle (and, for Canada,
live hogs) that are related to the tariff concessions "that would apply, on an MFN basis ... under the
WTO Agreement". Even assuming arguendo that this claim can proceed, neither Canada nor Mexico
specifically identify which tariff concession incorpor ated into the GATT 1994 allegedly gives rise to
the benefits that they claim have been nullified or impaired.
64. Second, Canada and Mexico ha ve not demonstrated that th ey could not have reasonably
anticipated the COOL measures at the time the tari ff concessions were negotiated. Indeed, many US
goods have been required to be labe lled with origin information at the retail level since 1930, decades
before the conclusion of the Uruguay Round or the NAFTA. In addition, the US Congress has long
contemplated various pieces of legislation that w ould require additional labelling requirements for
meat. Finally, many other WTO Members have re quired country of origin labelling for various
products (including meat) for many years. Accord ingly, Canada and Mexico should have reasonably

anticipated that the United States would maintain some kind of origin labelling on meat products
when the tariff rates were negotiated.
65. Canada and Mexico have also failed to demonstrate that th e benefits provided to their
imported livestock under the relevant tariff concessions have been nullified or impaired by proving "a
clear correlation" that the COOL measures have up set the competitive relationship between domestic
and imported livestock in the United States to the detriment of imports. Other than submitting flawed
and unverifiable economic models , Canada and Mexico have provided no evidence in their
submissions to prove that COOL measures have negatively impacted imported livestock as a whole
greater than domestic livestock or that such eff ects are clearly correlated to the COOL measures
themselves rather than attributable to independent market forces.
VI. CONCLUSION
66. For the foregoing reasons, the United States respec tfully requests that the Panel reject the
claims made by Canada and Mexico in their entirety.