UNITED STATES – CERTAIN COUNTRY OF ORIGIN LABELLING (COOL) REQUIREMENTS RECOURSE TO ARTICLE 21.5 OF THE DSU BY CANADA AND MEXICO AB-2014-10
Document: Reports of the Appellate Body Note: The Appellate Body is issuing these Reports in th e form of a single document constituting two separate Appellate Body Reports: WT/DS384/AB/RW; and WT/DS386/AB/RW. The cover page, preliminary pages, sections 1 through 5, and the annexes are common to both Reports. The page header throughout the document bears the two document symbols WT/DS384/AB/RW and WT/DS386/AB/RW, with the following exceptions: section 6 on pages CDA-169 to CDA-172, which bears the document symbol for and contains the Appellate Body's conclusions and recommendation in the Appellate Body Report WT/DS384/AB/RW; and section 6 on pages MEX-173 to MEX-176, which bears the document sy mbol for and contains the Appellate Body's conclusions and recommendation in the Appellate Body Report WT/DS386/AB/RW.
Date: 18 May 2015
Document codes: WT/DS384/AB/RW; WT/DS386/AB/RW; WT/DS384/AB/RW; WT/DS386/AB/RW.; WT/DS384/AB/RW; WT/DS386/AB/RW
Complainant: Canada
Respondent: U.S.
Third parties: Argentina, Australia, Brazil, China, Colombia, EU, Guatemala, India, Japan, South Korea, Mexico, New Zealand, Peru, Taiwan
Dispute stage: Implementation & Compliance
Agreements cited: Art. 2.1, 2.2, 2.4  Technical Barriers to Trade (TBT)Art. 2, 5, 7  Sanitary and Phytosanitary Measures (SPS)Art. IX:2, IX, X:3(a)  GATT 1994Art. 2(b), 2(c), 2(e), 2(j)  Rules of Origin

UNITED STATES – CERTAIN COUNTRY OF
ORIGIN LABELLING (COOL) REQUIREMENTS
RECOURSE TO ARTICLE 21.5 OF THE DSU BY CANADA AND MEXICO
AB-2014-10
Reports of the Appellate Body
Note:

The Appellate Body is issuing these Reports in th e form of a single document constituting two
separate Appellate Body Reports: ; and The cover page,
preliminary pages, sections 1 through 5, and the annexes are common to both Reports. The page
header throughout the document bears the two document symbols and
, with the following exceptions: section 6 on pages CDA-169 to CDA-172, which
bears the document symbol for and contains the Appellate Body's conclusions and
recommendation in the Appellate Body Report ; and section 6 on pages
MEX-173 to MEX-176, which bears the document sy mbol for and contains the Appellate Body's
conclusions and recommendation in the Appellate Body Report
 •

ABBREVIATIONS USED IN THESE REPORTS
Abbreviation Description
2002 Farm Bill Farm Security and Rural Investment Act of 2002, Public Law No. 107-171,
Section 10816, 116 Stat. 134 (Panel Exhibit CDA-4)
2008 Farm Bill Food, Conservation, and Energy Act of 2008, Public Law No. 110-234,
Section 11002, 122 Stat. 923 (Panel Exhibit CDA-5)
2009 Final Rule (AMS) Final Rule on Mandatory Country of Origin Labeling of Beef, Pork, Lamb,
Chicken, Goat Meat, Wild and Farm-Raised Fish and Shellfish, Perishable
Agricultural Commodities, Peanuts, Pecans, Ginseng, and Macadamia Nuts,
United States Federal Register, Vol. 74, No. 10 (15 January 2009),
pp. 2658-2707 (Panel Exhibits CDA-2 and MEX-12)
2013 Final Rule Final Rule on Mandatory Country of Origin Labeling of Beef, Pork, Lamb,
Chicken, Goat Meat, Wild and Farm-Raised Fish and Shellfish, Perishable
Agricultural Commodities, Peanuts, Pecans, Ginseng, and Macadamia Nuts,
United States Federal Register, Vol. 78, No. 101 (24 May 2013),
pp. 31367-31385 (Panel Exhibits CDA-1 and MEX-3)
amended COOL measure COOL statute together with the 2009 Final Rule (AMS), as amended by the
2013 Final Rule
AMS Agricultural Marketing Service of the USDA
BCI business confidential information
COOL country of origin labelling
COOL statute Agricultural Marketing Act of 1946, 60 Stat. 1087, United States Code, Title 7,
Section 1621 et seq., as amended by the 2002 Farm Bill and the 2008 Farm
Bill (Panel Exhibit CDA-3)
DSB Dispute Settlement Body
DSU Understanding on Rules and Procedures Governing the Settlement of Disputes
GATS General Agreement on Trade in Services
GATT 1994 General Agreement on Tariffs and Trade 1994
original COOL measure COOL statute together with the 2009 Final Rule (AMS)
original panel panel in the original proceedings in US – COOL
original panel reports Panel Reports, United States – Certain Country of Origin Labelling (COOL)
Requirements, WT/DS384/R / WT/DS386/R
PACA Perishable Agricultural Commodities Act of 1930, United States Code of
Federal Regulations, Title 7, Section 499 (Panel Exhibits CDA-10 and MEX-7)
Panel Reports Panel Reports, United States – Certain Country of Origin Labelling (COOL)
Requirements – Recourse to Article 21.5 of the DSU by Canada and Mexico,
WT/DS384/RW and Add.1 / WT/DS386/RW and Add.1
SPS Agreement Agreement on the Application of Sanitary and Phytosanitary Measures
TBT Agreement Agreement on Technical Barriers to Trade
USDA United States Department of Agriculture
Working Procedures Working Procedures for Appellate Review, WT/AB/WP/6, 16 August 2010
WTO World Trade Organization
WTO Agreement Marrakesh Agreement Establishing the World Trade Organization
WT/DS384/AB/RW • WT/DS386/AB/RW

PANEL EXHIBITS CITED IN THESE REPORTS
Exhibit No. Short Title
(if any)
Description
CDA-1
MEX-3
2013 Final Rule Final Rule on Mandatory Country of Origin Labeling of Beef, Pork,
Lamb, Chicken, Goat Meat, Wild and Farm-Raised Fish and Shellfish,
Perishable Agricultural Commodities, Peanuts, Pecans, Ginseng, and
Macadamia Nuts, United States Federal Register, Vol. 78, No. 101
(24 May 2013), pp. 31367-31385
CDA-2
MEX-12
2009 Final Rule
(AMS)
Final Rule on Mandatory Country of Origin Labeling of Beef, Pork,
Lamb, Chicken, Goat Meat, Wild and Farm-Raised Fish and Shellfish,
Perishable Agricultural Commodities, Peanuts, Pecans, Ginseng, and
Macadamia Nuts, United States Federal Register, Vol. 74, No. 10
(15 January 2009), pp. 2658-2707
CDA-3 COOL statute Agricultural Marketing Act of 1946, 60 Stat. 1087, United States Code,
Title 7, Section 1621 et seq., as amended by the 2002 Farm Bill and
the 2008 Farm Bill
CDA-4 2002 Farm Bill Farm Security and Rural Investment Act of 2002, Public Law
No. 107-171, Section 10816, 116 Stat. 134
CDA-5 2008 Farm Bill Food, Conservation, and Energy Act of 2008, Public Law No. 110-234,
Section 11002, 122 Stat. 923
CDA-10
MEX-7
PACA Perishable Agricultural Commodities Act of 1930, United States Code of
Federal Regulations, Title 7, Section 499
CDA-17 United States District Court for the District of Colombia, American Meat
Institute v. United States Department of Agriculture, Case
No. 13-cv-1033, Declaration of Brad McDowell in Support of Plaintiffs'
Motion for a Preliminary Injunction (25 July 2013)
CDA-83
MEX-35
MEX-62
 M.R. Taylor and G.T. Tonsor, "Revealed Demand for Country of Origin
Labeling of Meat in the United States" (2013) 38(2) Journal of
Agricultural and Resource Economics, pp. 235-247
CDA-121 American Meat Institute (AMI) Fact Sheet, "Questions and Answers
about Ground Beef, Hamburger and Patties" (June 2011)
CDA-154 Department of Agricultural Economics, Kansas State University
entitled, "Food Values Applied to Livestock Products" (7 February 2014)
US-48 Results of a telephone survey conducted by the National Research
Center, "Country of Origin Labeling Poll, Final Report" (4 October 2010)
CASES CITED IN THESE REPORTS
Short Title Full Case Title and Citation
Argentina – Hides and
Leather
Panel Report, Argentina – Measures Affecting the Export of Bovine Hides and
Import of Finished Leather, WT/DS155/R and Corr.1, adopted 16 February
2001, DSR 2001:V, p. 1779
Argentina – Textiles and
Apparel
Appellate Body Report, Argentina – Measures Affecting Imports of Footwear,
Textiles, Apparel and Other Items, WT/DS56/AB/R and Corr.1, adopted
22 April 1998, DSR 1998:III, p. 1003
Australia – Salmon Appellate Body Report, Australia – Measures Affecting Importation of Salmon,
WT/DS18/AB/R, adopted 6 November 1998, DSR 1998:VIII, p. 3327
Brazil – Retreaded Tyres Appellate Body Report, Brazil – Measures Affecting Imports of Retreaded
Tyres, WT/DS332/AB/R, adopted 17 December 2007, DSR 2007:IV, p. 1527
Canada – Aircraft Appellate Body Report, Canada – Measures Affecting the Export of Civilian
Aircraft, WT/DS70/AB/R, adopted 20 August 1999, DSR 1999:III, p. 1377
WT/DS384/AB/RW • WT/DS386/AB/RW

Short Title Full Case Title and Citation
Canada – Aircraft
(Article 21.5 – Brazil)
Appellate Body Report, Canada – Measures Affecting the Export of Civilian
Aircraft – Recourse by Brazil to Article 21.5 of the DSU, WT/DS70/AB/RW,
adopted 4 August 2000, DSR 2000:IX, p. 4299
Canada – Periodicals Appellate Body Report, Canada – Certain Measures Concerning Periodicals,
WT/DS31/AB/R, adopted 30 July 1997, DSR 1997:I, p. 449
Chile – Price Band System Appellate Body Report, Chile – Price Band System and Safeguard Measures
Relating to Certain Agricultural Products, WT/DS207/AB/R, adopted 23 October
2002, DSR 2002:VIII, p. 3045 (Corr.1, DSR 2006:XII, p. 5473)
Chile – Price Band System
(Article 21.5 – Argentina)
Appellate Body Report, Chile – Price Band System and Safeguard Measures
Relating to Certain Agricultural Products – Recourse to Article 21.5 of the DSU
by Argentina, WT/DS207/AB/RW, adopted 22 May 2007, DSR 2007:II, p. 513
China – Auto Parts Appellate Body Reports, China – Measures Affecting Imports of Automobile
Parts, WT/DS339/AB/R / WT/DS340/AB/R / WT/DS342/AB/R, adopted
12 January 2009, DSR 2009:I, p. 3
China – Publications and
Audiovisual Products
Appellate Body Report, China – Measures Affecting Trading Rights and
Distribution Services for Certain Publications and Audiovisual Entertainment
Products, WT/DS363/AB/R, adopted 19 January 2010, DSR 2010:I, p. 3
China – Rare Earths Appellate Body Reports, China – Measures Related to the Exportation of Rare
Earths, Tungsten, and Molybdenum, WT/DS431/AB/R / WT/DS432/AB/R /
WT/DS433/AB/R, adopted 29 August 2014
Colombia – Ports of Entry Panel Report, Colombia – Indicative Prices and Restrictions on Ports of Entry,
WT/DS366/R and Corr.1, adopted 20 May 2009, DSR 2009:VI, p. 2535
Dominican Republic – Import
and Sale of Cigarettes
Appellate Body Report, Dominican Republic – Measures Affecting the
Importation and Internal Sale of Cigarettes, WT/DS302/AB/R, adopted 19 May
2005, DSR 2005:XV, p. 7367
EC – Approval and Marketing
of Biotech Products
Panel Reports, European Communities – Measures Affecting the Approval and
Marketing of Biotech Products, WT/DS291/R, Add.1 to Add.9 and Corr.1 /
WT/DS292/R, Add.1 to Add.9 and Corr.1 / WT/DS293/R, Add.1 to Add.9 and
Corr.1, adopted 21 November 2006, DSR 2006:III, p. 847
EC – Asbestos Appellate Body Report, European Communities – Measures Affecting Asbestos
and Asbestos-Containing Products, WT/DS135/AB/R, adopted 5 April 2001,
DSR 2001:VII, p. 3243
EC – Bananas III Appellate Body Report, European Communities – Regime for the Importation,
Sale and Distribution of Bananas, WT/DS27/AB/R, adopted 25 September
1997, DSR 1997:II, p. 591
EC – Bed Linen
(Article 21.5 – India)
Appellate Body Report, European Communities – Anti-Dumping Duties on
Imports of Cotton-Type Bed Linen from India – Recourse to Article 21.5 of the
DSU by India, WT/DS141/AB/RW, adopted 24 April 2003, DSR 2003:III,
p. 965
EC – Export Subsidies on
Sugar
Appellate Body Report, European Communities – Export Subsidies on Sugar,
WT/DS265/AB/R, WT/DS266/AB/R, WT/DS283/AB/R, adopted 19 May 2005,
DSR 2005:XIII, p. 6365
EC – Fasteners (China) Appellate Body Report, European Communities – Definitive Anti-Dumping
Measures on Certain Iron or Steel Fasteners from China, WT/DS397/AB/R,
adopted 28 July 2011, DSR 2011:VII, p. 3995
EC – Hormones Appellate Body Report, EC Measures Concerning Meat and Meat Products
(Hormones), WT/DS26/AB/R, WT/DS48/AB/R, adopted 13 February 1998,
DSR 1998:I, p. 135
EC – Poultry Appellate Body Report, European Communities – Measures Affecting the
Importation of Certain Poultry Products, WT/DS69/AB/R, adopted 23 July
1998, DSR 1998:V, p. 2031
EC – Sardines Appellate Body Report, European Communities – Trade Description of
Sardines, WT/DS231/AB/R, adopted 23 October 2002, DSR 2002:VIII, p. 3359
EC – Sardines Panel Report, European Communities – Trade Description of Sardines,
WT/DS231/R and Corr.1, adopted 23 October 2002, as modified by
Appellate Body Report WT/DS231/AB/R, DSR 2002:VIII, p. 3451
WT/DS384/AB/RW • WT/DS386/AB/RW

Short Title Full Case Title and Citation
EC – Seal Products Appellate Body Reports, European Communities – Measures Prohibiting the
Importation and Marketing of Seal Products, WT/DS400/AB/R /
WT/DS401/AB/R, adopted 18 June 2014
EC – Seal Products Panel Reports, European Communities – Measures Prohibiting the Importation
and Marketing of Seal Products, WT/DS400/R and Add.1 / WT/DS401/R and
Add.1, adopted 18 June 2014, as modified by Appellate Body Reports
WT/DS400/AB/R / WT/DS401/AB/R
EC – Selected Customs
Matters
Appellate Body Report, European Communities – Selected Customs Matters,
WT/DS315/AB/R, adopted 11 December 2006, DSR 2006:IX, p. 3791
EC – Tube or Pipe Fittings Appellate Body Report, European Communities – Anti-Dumping Duties on
Malleable Cast Iron Tube or Pipe Fittings from Brazil, WT/DS219/AB/R,
adopted 18 August 2003, DSR 2003:VI, p. 2613
EC and certain member
States – Large Civil Aircraft
Appellate Body Report, European Communities and Certain Member States
– Measures Affecting Trade in Large Civil Aircraft, WT/DS316/AB/R, adopted
1 June 2011, DSR 2011:I, p. 7
Japan – Agricultural
Products II
Appellate Body Report, Japan – Measures Affecting Agricultural Products,
WT/DS76/AB/R, adopted 19 March 1999, DSR 1999:I, p. 277
Japan – Alcoholic
Beverages II
Appellate Body Report, Japan – Taxes on Alcoholic Beverages, WT/DS8/AB/R,
WT/DS10/AB/R, WT/DS11/AB/R, adopted 1 November 1996, DSR 1996:I,
p. 97
Japan – Apples Appellate Body Report, Japan – Measures Affecting the Importation of Apples,
WT/DS245/AB/R, adopted 10 December 2003, DSR 2003:IX, p. 4391
Japan – Apples Panel Report, Japan – Measures Affecting the Importation of Apples,
WT/DS245/R, adopted 10 December 2003, upheld by Appellate Body Report
WT/DS245/AB/R, DSR 2003:IX, p. 4481
Japan – DRAMs (Korea) Appellate Body Report, Japan – Countervailing Duties on Dynamic Random
Access Memories from Korea, WT/DS336/AB/R and Corr.1, adopted
17 December 2007, DSR 2007:VII, p. 2703
Korea – Alcoholic Beverages Appellate Body Report, Korea – Taxes on Alcoholic Beverages, WT/DS75/AB/R,
WT/DS84/AB/R, adopted 17 February 1999, DSR 1999:I, p. 3
Korea – Dairy Appellate Body Report, Korea – Definitive Safeguard Measure on Imports of
Certain Dairy Products, WT/DS98/AB/R, adopted 12 January 2000,
DSR 2000:I, p. 3
Korea – Various Measures on
Beef
Appellate Body Report, Korea – Measures Affecting Imports of Fresh, Chilled
and Frozen Beef, WT/DS161/AB/R, WT/DS169/AB/R, adopted 10 January
2001, DSR 2001:I, p. 5
Philippines – Distilled Spirits Appellate Body Reports, Philippines – Taxes on Distilled Spirits,
WT/DS396/AB/R / WT/DS403/AB/R, adopted 20 January 2012, DSR
2012:VIII, p. 4163
Thailand – Cigarettes
(Philippines)
Appellate Body Report, Thailand – Customs and Fiscal Measures on Cigarettes
from the Philippines, WT/DS371/AB/R, adopted 15 July 2011, DSR 2011:IV,
p. 2203
US – Carbon Steel Appellate Body Report, United States – Countervailing Duties on Certain
Corrosion-Resistant Carbon Steel Flat Products from Germany,
WT/DS213/AB/R and Corr.1, adopted 19 December 2002, DSR 2002:IX,
p. 3779
US – Clove Cigarettes Appellate Body Report, United States – Measures Affecting the Production and
Sale of Clove Cigarettes, WT/DS406/AB/R, adopted 24 April 2012, DSR 2012:
XI, p. 5751
US – Clove Cigarettes Panel Report, United States – Measures Affecting the Production and Sale of
Clove Cigarettes, WT/DS406/R, adopted 24 April 2012, as modified by
Appellate Body Report WT/DS406/AB/R, DSR 2012: XI, p. 5865
US – Continued Suspension Appellate Body Report, United States – Continued Suspension of Obligations in
the EC – Hormones Dispute, WT/DS320/AB/R, adopted 14 November 2008,
DSR 2008:X, p. 3507
WT/DS384/AB/RW • WT/DS386/AB/RW

Short Title Full Case Title and Citation
US – Continued Suspension Panel Report, United States – Continued Suspension of Obligations in the EC –
Hormones Dispute, WT/DS320/R and Add.1 to Add.7, adopted 14 November
2008, as modified by Appellate Body Report WT/DS320/AB/R, DSR 2008:XI,
p. 3891
US – COOL Appellate Body Reports, United States – Certain Country of Origin Labelling
(COOL) Requirements, WT/DS384/AB/R / WT/DS386/AB/R, adopted 23 July
2012, DSR 2012:V, p. 2449
US – COOL Panel Reports, United States – Certain Country of Origin Labelling (COOL)
Requirements, WT/DS384/R / WT/DS386/R, adopted 23 July 2012, as modified
by Appellate Body Reports WT/DS384/AB/R / WT/DS386/AB/R, DSR 2012:VI,
p. 2745
US – COOL
(Article 21.3(c))
Award of the Arbitrator, United States – Certain Country of Origin Labelling
(COOL) Requirements – Arbitration under Article 21.3(c) of the DSU,
WT/DS384/24, WT/DS386/23, 4 December 2012, DSR 2012:XIII, p. 7173
US – COOL
(Article 21.5 – Canada and
Mexico)
Panel Reports, United States – Certain Country of Origin Labelling (COOL)
Requirements – Recourse to Article 21.5 of the DSU by Canada and Mexico,
WT/DS384/RW and Add.1 / WT/DS386/RW and Add.1, circulated to WTO
Members 20 October 2014
US – FSC Appellate Body Report, United States – Tax Treatment for "Foreign Sales
Corporations", WT/DS108/AB/R, adopted 20 March 2000, DSR 2000:III,
p. 1619
US – Gambling Appellate Body Report, United States – Measures Affecting the Cross-Border
Supply of Gambling and Betting Services, WT/DS285/AB/R, adopted 20 April
2005, DSR 2005:XII, p. 5663 (Corr.1, DSR 2006:XII, p. 5475)
US – Gasoline Appellate Body Report, United States – Standards for Reformulated and
Conventional Gasoline, WT/DS2/AB/R, adopted 20 May 1996, DSR 1996:I, p. 3
US – Lamb Appellate Body Report, United States – Safeguard Measures on Imports of
Fresh, Chilled or Frozen Lamb Meat from New Zealand and Australia,
WT/DS177/AB/R, WT/DS178/AB/R, adopted 16 May 2001, DSR 2001:IX,
p. 4051
US – Large Civil Aircraft
(2nd complaint)
Appellate Body Report, United States – Measures Affecting Trade in Large Civil
Aircraft (Second Complaint), WT/DS353/AB/R, adopted 23 March 2012, DSR
2012:I, p. 7
US – Oil Country Tubular
Goods Sunset Reviews
Appellate Body Report, United States – Sunset Reviews of Anti-Dumping
Measures on Oil Country Tubular Goods from Argentina, WT/DS268/AB/R,
adopted 17 December 2004, DSR 2004:VII, p. 3257
US – Section 211
Appropriations Act
Appellate Body Report, United States – Section 211 Omnibus Appropriations
Act of 1998, WT/DS176/AB/R, adopted 1 February 2002, DSR 2002:II, p. 589
US – Shrimp Appellate Body Report, United States – Import Prohibition of Certain Shrimp
and Shrimp Products, WT/DS58/AB/R, adopted 6 November 1998,
DSR 1998:VII, p. 2755
US – Softwood Lumber VI
(Article 21.5 – Canada)
Appellate Body Report, United States – Investigation of the International Trade
Commission in Softwood Lumber from Canada – Recourse to Article 21.5 of
the DSU by Canada, WT/DS277/AB/RW, adopted 9 May 2006, and Corr.1,
DSR 2006:XI, p. 4865
US – Tuna II (Mexico) Appellate Body Report, United States – Measures Concerning the Importation,
Marketing and Sale of Tuna and Tuna Products, WT/DS381/AB/R, adopted
13 June 2012, DSR 2012:IV, p. 1837
US – Upland Cotton
(Article 21.5 – Brazil)
Appellate Body Report, United States – Subsidies on Upland Cotton – Recourse
to Article 21.5 of the DSU by Brazil, WT/DS267/AB/RW, adopted 20 June
2008, DSR 2008:III, p. 809
US – Wheat Gluten Appellate Body Report, United States – Definitive Safeguard Measures on
Imports of Wheat Gluten from the European Communities, WT/DS166/AB/R,
adopted 19 January 2001, DSR 2001:II, p. 717
US – Wool Shirts and
Blouses
Appellate Body Report, United States – Measure Affecting Imports of Woven
Wool Shirts and Blouses from India, WT/DS33/AB/R, adopted 23 May 1997,
and Corr.1, DSR 1997:I, p. 323
WT/DS384/AB/RW • WT/DS386/AB/RW

treatment to imported livestock than to like domestic livestock. 7 Moreover, the Appellate Body
reversed the panel's finding that the original COOL measure was inconsistent with Article 2.2 of
the TBT Agreement. The Appellate Body found that the panel properly identified the legitimate
objective of the original COOL measure as being "to provide consumer information on origin".
8
However, it concluded that the panel had erred in its interpretation and application of Article 2.2 in
finding the original COOL measure to be inconsistent with Article 2.2 of the TBT Agreement.
Accordingly, the Appellate Body reversed the panel's finding that "the COOL measure does not
fulfil the identified objective within the meaning of Article 2.2 because it fails to convey meaningful
origin information to consumers."
9 Given the lack of sufficient undisputed facts on the panel record
or factual findings by the original panel, the Appellate Body was unable to complete the legal
analysis to determine whether the original COOL measure was more trade restrictive than
necessary to fulfil a legitimate objective.
10
1.3. The Appellate Body made no findings with respect to the complainants' conditional claims
under Articles III:4 and XXIII:1(b) of the General Agreement on Tariffs and Trade 1994
(GATT 1994), because the conditions on which those appeals were based, namely, the reversal of
the original panel's findings under Article 2.1 of the TBT Agreement, were not satisfied.11
1.4. The Appellate Body recommended that the DSB request the United States to bring its
measures into conformity with its obligations under the GATT 1994 and the TBT Agreement. 12
On 23 July 2012, the DSB adopted the original pa nel and Appellate Body reports. At the meeting
of the DSB held on 31 August 2012, the United States signalled its intention to comply with the
recommendations and rulings of the DSB, and stated that it would need a reasonable period of
time in which to do so. The reasonable period of time for implementation was determined through
arbitration pursuant to Article 21.3(c) of the DSU to be ten months, expiring on 23 May 2013.
13
1.5. Following the original proceedings, the Agricultural Marketing Service (AMS) of the
US Department of Agriculture (USDA) issued a final rule, effective 23 May 2013, to make changes
to the labelling provisions for muscle-cut covered commodities and certain other modifications. The
Article 21.5 Panel found that this rule is the only regulatory change identified by the parties in the
compliance proceedings as the "measure taken to comply" by the United States with the DSB's
recommendations and rulings in the original disputes.
14
1.6. On 24 May 2013, the United States informed the DSB that, by virtue of a final rule issued by
the USDA making certain changes to the COOL re quirements, the United States had complied with
the DSB's recommendations and rulings in these disputes. 15 Canada and Mexico, however,
considered that the "amended COOL measure" 16 did not bring the United States into compliance
with the recommendations and rulings of the DSB. 17 Accordingly, on 19 August 2013, Canada and
Mexico requested the establishment of a panel pursuant to Articles 6 and 21.5 of the DSU,
Article 14 of the TBT Agreement, and Article XXIII of the GATT 1994. 18 The Panel was established
by the DSB on 25 September 2013.19

7 Appellate Body Report (DS384), US – COOL, para. 496(a); Appellate Body Report (DS386),
US – COOL, para. 496(a).
8 Appellate Body Reports , US – COOL, para. 433.
9 Appellate Body Report (DS384), US – COOL, para. 496(b)(iv) and (v); Appellate Body Report (DS386),
US – COOL, para. 496(b)(iv) and (v) .
10 Appellate Body Report (DS384), US – COOL, para. 496(b); Appellate Body Report (DS386),
US – COOL, para. 496(b).
11 Appellate Body Report (DS384), US – COOL, para. 496(c); Appellate Body Report (DS386),
US – COOL, para. 496(c).
12 Appellate Body Report (DS384), US – COOL, para. 497; Appellate Body Report (DS386), US – COOL,
para. 497.
13 Award of the Arbitrator, US – COOL (Article 21.3(c)), para. 123.
14 Panel Reports, para. 7.8.
15 WT/DSB/M/332, p. 22.
16 In the present Reports, we refer to the COOL statute together with the 2009 Final Rule (AMS) and the
2013 Final Rule, and any modifications or amendments thereto, as the "amended COOL measure" (see infra,
para. 1.7).
17 WT/DSB/M/332, p. 22.
18 WT/DS384/26 (Canada); WT/DS386/25 (Mexico).
19 Panel Reports, para. 1.4.
WT/DS384/AB/RW • WT/DS386/AB/RW

1.7. In their panel requests, Canada and Mexico identified the amended COOL measure,
comprising the following instruments, as the subject of their claims:
a. the COOL statute – Agricultural Marketing Act of 1946 20, as amended by the Farm
Security and Rural Investment Act of 2002 21 (2002 Farm Bill) and the Food,
Conservation, and Energy Act of 200822 (2008 Farm Bill);
b. the 2009 Final Rule (AMS) – Final Rule on Mandatory Country of Origin Labeling of Beef,
Pork, Lamb, Chicken, Goat Meat, Wild and Farm-Raised Fish and Shellfish, Perishable
Agricultural Commodities, Peanuts, Pecans, Ginseng, and Macadamia Nuts23;
c. the 2013 Final Rule – Final Rule on Mandatory Country of Origin Labeling of Beef, Pork,
Lamb, Chicken, Goat Meat, Wild and Farm-Raised Fish and Shellfish, Perishable
Agricultural Commodities, Peanuts, Pecans, Ginseng, and Macadamia Nuts
24; and
d. any modifications or amendments to the in struments listed in a. through c. above,
including any further implementing guidance, directives, policy announcements, or any
other document issued in relation to these instruments.
1.8. Canada and Mexico requested the Article 21.5 Panel to find that the United States has failed
to comply with the recommendations and rulings adopted by the DSB on 23 July 2012 on the basis
that the amended COOL measure violates Arti cles 2.1 and 2.2 of the TBT Agreement and
Article III:4 of the GATT 1994. Furthermore, Canada and Mexico requested the Panel to find that
the amended COOL measure nullifies or impairs benefits accruing to Canada and Mexico within the
meaning of Article XXIII:1(b) of the GATT 1994.
1.9. The Panel Reports were circulated to Members of the World Trade Organization (WTO) on
20 October 2014. In its Reports, the Panel made procedural rulings regarding: (i) additional
procedures for the protection of business confidenti al information (BCI); (ii) procedures for an oral
hearing open to public observation; and (iii) enhanced third party rights.
25
1.10. With regard to Canada's and Mexico's claims under the TBT Agreement, the Panel
concluded26 that:
a. the amended COOL measure is a "technical regulation" within the meaning of Annex 1.1
to the TBT Agreement;
b. the amended COOL measure violates Article 2.1 because it accords Canadian and
Mexican livestock treatment less favourable than that accorded to like domestic
livestock, in particular, because the amended COOL measure increases the original COOL
measure's detrimental impact on the competitive opportunities of Canadian and Mexican
livestock, and this detrimental impact does not stem exclusively from legitimate
regulatory distinctions; and
c. Canada and Mexico had not made a prima facie case that the amended COOL measure is
more trade restrictive than necessary within the meaning of Article 2.2 of the
TBT Agreement.

20 60 Stat. 1087, United States Code, Title 7, Section 1621 et seq., as amended (Panel Exhibit CDA-3).
21 Public Law No. 107-171, Section 10816, 116 Stat. 134 (Panel Exhibit CDA-4).
22 Public Law No. 110-234, Section 11002, 122 Stat. 923 (Panel Exhibit CDA-5).
23 United States Federal Register, Vol. 74, No. 10 (15 January 2009), pp. 2658-2707 (Panel Exhibits
CDA-2 and MEX-12).
24 United States Federal Register, Vol. 78, No. 101 (24 May 2013), pp. 31367-31385 (Panel Exhibits
CDA-1 and MEX-3).
25 Panel Reports, paras. 1.10, 1.11, 1.15, and 1.16.
WT/DS384/AB/RW • WT/DS386/AB/RW

1.11. Furthermore, regarding Canada's and Mexico's claims under the GATT 1994, the Panel
concluded that the amended COOL measure violates Article III:4 because it has a detrimental
impact on the competitive opportunities of imported livestock and, thus, accords less favourable
treatment than that accorded to like domestic live stock, within the meaning of Article III:4 of the
GATT 1994.
27
1.12. Finally, in the light of these findings of vi olation, the Panel exercised judicial economy with
regard to the non-violation claims under Article XXIII:1(b) of the GATT 1994 raised by Canada and
Mexico.28
1.13. On 28 November 2014, the United States notified the DSB, pursuant to Articles 16.4 and 17
of the DSU, of its intention to appeal certain issues of law covered in the Panel Reports and certain
legal interpretations developed by the Panel, and filed a Notice of Appeal
29 pursuant to Rule 20 of
the Working Procedures for Appellate Review 30 (Working Procedures). The notification was
circulated and the Notice of Appeal filed in advance of a special meeting of the DSB scheduled for
the same day to consider these Panel Reports. At the request of Canada and Mexico, the special
meeting of the DSB proceeded as scheduled to co nsider these Panel Reports, notwithstanding the
filing of a Notice of Appeal by the United States earlier in the day. This meeting was subsequently
suspended in order to facilitate informal consultations about a joint request to the Appellate Body
by Canada, Mexico, and the United States to modify the time-periods for filing written submissions
in this appeal.
1.14. Such a request was filed later on the same day with the Appellate Body. The participants
jointly submitted that "exceptional circumstances" present in these disputes meant that strict
adherence to the regular deadlines for filing submissions would result in "manifest unfairness"
within the meaning of Rule 16(2) of the Workin g Procedures. In particular, the participants
submitted that the time-period set out in Rule 21 would not afford the United States as appellant
sufficient time to present its arguments, and that this would impede the development of
arguments in subsequent submissions, thereby im peding the orderly conduct of the appeal. In
support of their request, the participants pointed to resource constraints due to concurrent work
on other pending proceedings, as well as the constraints imposed by the contemporaneous holiday
period, the multiple, complex issues at stake in these disputes, and the present workload of the
Appellate Body.
1.15. On the same day, the Presiding Member of the Appellate Body Division hearing this appeal
invited the third parties to comment on the joint request of the participants. In order to ensure
orderly procedure in the conduct of the appeal in accordance with Rule 16(1) of the Working
Procedures, the Division suspended the deadlines for the filing of any Notice of Other Appeal, and
of written submissions, until the issuance of a ru ling on the joint request for the extension of the
deadlines for filing submissions.
1.16. Brazil, the European Union, India, and Japan submitted written comments. All of them
considered it to be within the discretion of the Appellate Body to modify deadlines for filing written
submissions. No third participant expressed objections to the extension of deadlines as requested
by the participants. Brazil expressed no view as to whether the request met the conditions set out
in Rule 16(2) of the Working Procedures, wherea s the European Union and Japan submitted that
the factors present in this case could give rise to "exceptional circumstances", without such factors
necessarily setting a precedent for Rule 16(2) or being categorically accepted as constituting
"exceptional circumstances" in future cases. Indi a submitted that resource constraints, especially
when experienced by developing countries, could constitute "exceptional circumstances" for
modifying time-periods, and that what is considered to constitute "exceptional circumstances" in
this case could be relevant factors in future a ppeals. Japan expected that, if the request of the
participants was granted, the time-period for fili ng third participants' submissions would also be
extended.

29 WT/DS384/29, WT/DS386/28 (attached as Annex 1 to these Reports).
30 WT/AB/WP/6, 16 August 2010.
WT/DS384/AB/RW • WT/DS386/AB/RW

1.17. On 2 December 2014, the Division issued a Procedural Ruling extending the time-periods for
filing written submissions in this appeal. These time-periods are set out in the Procedural Ruling,
which is attached as Annex 4 to these Reports.
31 In accordance with these time-periods, the
United States filed an appellant's submission on 5 December 2014.32
1.18. On 11 December 2014, the Division received a letter from Australia requesting that the
deadline for filing third participants' submissions be further extended. Australia noted that,
although the time-period between the filing of the appellees' submissions and the filing of the third
participants' submissions set out in the Procedural Ruling of 2 December 2014 was in line with the
standard time-periods set out in the Working Procedures, in this particular case this three-day
period ran over a weekend, providing the thir d participants with only one working day to
incorporate reactions to the appellees' submissions into their third participants' submissions.
Australia further explained that the challenges it faced in preparing its submission were
exacerbated by the decreased staffing capacity during the peak summer holiday period in
Australia.
1.19. On 12 December 2014, the Division invited the participants and the other third participants
to comment on Australia's request. Brazil, Colombia, and New Zealand supported Australia's
request that the deadline for filing third particip ants' submissions be extended. Canada and the
United States expressed no objection to an extension of the deadline. Mexico submitted that it had
no objection if the timetable for the subsequent stages of the appellate proceedings was not
affected and if the extension was granted to all third participants. Japan stated that it had no
specific comment on Australia's request.
1.20. On the same day, in keeping with the time-periods set out in the Procedural Ruling of
2 December 2014, Canada and Mexico each notified the DSB, pursuant to Articles 16.4 and 17 of
the DSU, of its intention to appeal certain issues of law covered in the respective Panel Report and
certain legal interpretations developed by the Panel, and each filed a Notice of Other Appeal
33 and
an other appellant's submission pursuant to Rule 23 of the Working Procedures.
1.21. On 17 December 2014, the Division issued a Procedural Ruling further extending the
deadline for filing third participants' submissions in this appeal to 15 January 2015. The Procedural
Ruling is attached as Annex 5 to these Reports.
1.22. On 18 December 2014, the Division received a joint communication from the participants.
In that communication, Canada and the United States requested that the Appellate Body allow
observation by the public at the oral hearing of the participants' answers to questions as well as
statements of those third participants who agree to public observation in this appeal. This request
was made on the understanding that any information that was designated as confidential in the
documents filed by any party in the Panel proceedings would be adequately protected in the
course of the oral hearing before the Appellate Body. For its part, Mexico did not object to allowing
observation by the public of the oral hearing, but maintained that its position in these proceedings
was without prejudice to its systemic views on the matter.
1.23. On 19 December 2014, the Division invited the third participants to comment on the request
of Canada and the United States by 6 January 2015. By that deadline, only Japan had responded,
indicating that it had no objection to the request.
34 On 7 January 2015, the Division issued a
Procedural Ruling allowing public observation of the oral hearing and adopting additional
procedures for the conduct of the hearing. The Procedural Ruling is attached as Annex 6 to these
Reports.

31 In this Ruling, the date for filing Notice(s) of Other Appeal and other appellants' submissions was set
for 12 December 2014, the date for filing appellee's submissions for 9 January 2015, and the date for filing
third participants' submissions for 12 January 2015.
32 Pursuant to Rule 21 of the Working Procedures.
33 WT/DS384/30 (Canada) (attached as Annex 2 to these Reports); WT/DS386/29 (Mexico) (attached as
Annex 3 to these Reports).
34 In addition, Brazil and Australia responded in the afternoon of 6 January 2015 that they had no
objection to this request.
WT/DS384/AB/RW • WT/DS386/AB/RW

1.24. In accordance with the time-periods set out in the Procedural Ruling of 2 December 2014,
Canada, Mexico, and the United States each fi led an appellee's submission on 9 January 2015. 35
In keeping with the time-period set out in the Procedural Ruling of 17 December 2014, Australia,
Brazil, China, Colombia, the European Union, Japan, and New Zealand each filed a third
participant's submission on 15 January 2015.
36 Guatemala37 and Korea38 each notified its intention
to appear at the oral hearing as a third participant, and India notified that it would not be
appearing at the oral hearing.
1.25. The oral hearing in this appeal was held on 16 and 17 February 2015. Public observation
took place via simultaneous closed-circuit television broadcast to a separate room. Transmission
was turned off during statements made by those third participants that had indicated their wish to
maintain the confidentiality of their submissions. The participants and third participants made oral
statements and responded to questions posed by the Members of the Appellate Body Division
hearing the appeal.
1.26. By letter dated 26 January 2015
39, the Chair of the Appellate Body notified the Chair of the
DSB that the Appellate Body would not be able to circulate its Reports within the 60-day period
pursuant to Article 17.5 of the DSU, or within th e 90-day period pursuant to the same provision.
The Chair of the Appellate Body explained that th is was due to a number of factors, including the
current workload of the Appellate Body, the number and complexity of the issues raised in this
appeal, and the demands that this placed on the WTO Secretariat's translation services, as well as
the extensions of the time-periods for filing wr itten submissions granted at the request of the
participants and third participants, the intervening year-end closure of the WTO Secretariat, and
the scheduling difficulties arising from overlap in the composition of Divisions hearing appeals
concurrently pending before the Appellate Body. The Chair of the Appellate Body explained that
the date of circulation of the Reports in this appeal would be communicated to the participants and
third participants shortly after the oral hearing.
1.27. By letter dated 20 February 2015, Canada, Mexico, and the United States requested to meet
with the Appellate Body to discuss the date by wh ich the Appellate Body intended to circulate its
Reports. The participants stated that they would consider any reports circulated within the
timeframe communicated to them during this meeting to have been circulated in accordance with
Article 17.5 of the DSU. By letter dated 2 March 20 15, the Division informed the participants that
the Appellate Body Reports in this appeal would be circulated no later than 18 May 2015, and
explained that the Appellate Body remained intere sted in exploring with the WTO Membership the
issues addressed in the Communication from th e Appellate Body of 30 May 2013 entitled,
The Workload of the Appellate Body.
40
2 ARGUMENTS OF THE PARTICIPANTS AND THIRD PARTICIPANTS
2.1 Claims of error by the United States – Appellant
2.1.1 Article 2.1 of the TBT Agreement
2.1. The United States requests the Appellate Body to reverse the Panel's conclusion that the
amended COOL measure is inconsistent with Articl e 2.1 of the TBT Agreement. In particular, the
United States requests the Appellate Body to fi nd that the Panel erred in concluding that the
detrimental impact of the amended COOL meas ure on imported livestock does not stem
exclusively from legitimate regulatory distinctions. According to the United States, this conclusion
of the Panel is based on three intermediate findings that are in error, namely: (i) that the
amended COOL measure "entails an increased reco rdkeeping burden"; (ii) that Labels B and C
have a "potential for label inaccuracy"; and (iii) that the amended COOL measure "continues to
exempt a large proportion of muscle cuts" from its scope.
41

35 Pursuant to Rules 16, 22, and 23(4) of the Working Procedures.
36 Pursuant to Rules 16 and 24(1) of the Working Procedures.
37 On 15 January 2015, pursuant to Rule 24(2) of the Working Procedures.
38 On 11 February 2015, pursuant to Rule 24(4) of the Working Procedures.
39 Contained in document WT/DS384/31, WT/DS386/30.
40 See Appellate Body Annual Report for 2013, Annex 1.
WT/DS384/AB/RW • WT/DS386/AB/RW

2.1.1.1 The increased recordkeeping burden entailed by the amended COOL measure
2.2. The United States appeals the Panel's conclusion that the detrimental impact of the amended
COOL measure does not stem exclusively from legi timate regulatory distinctions, and alleges that
the Panel erred in finding that this measure, as compared to the original COOL measure, entails an
increased recordkeeping burden on upstream producers of livestock. The United States advances
three claims of error in this regard.
2.3. First, the United States claims that the Panel erred in considering that its finding concerning
the increased recordkeeping burden entailed by the amended COOL measure constitutes an
independent basis for concluding that the detrimental impact of this measure does not stem
exclusively from legitimate regulatory distinctions . The United States submits that, to the extent
that the recordkeeping burden entailed by the am ended COOL measure is at all relevant to the
analysis of the legitimacy of regulatory distinctions under Article 2.1, it is relevant only to the
question of whether there is a "disconnect" be tween, on the one hand, the amount of origin
information collected by producers and processors of livestock and, on the other hand, the amount
of origin information provided to consumers through mandatory labels. The information collected
must be so disproportionate to the information provided that the collection of the information
cannot be explained in the first place. In order to make such a finding, the Panel would have
needed to examine what information is collected vis-à-vis what is provided by the labels that are
actually used in the marketplace. The United States submits that the Panel failed to undertake this
inquiry and, therefore, the Panel's reliance on any increase in the recordkeeping burden entailed
by the amended COOL measure as a basis for its ultimate conclusion under Article 2.1 is in error.
2.4. Second, the United States asserts that the Panel erred in its analysis of the impact of
point-of-production labelling, and the impact of the elimination of the country order flexibility, on
the recordkeeping burden entailed by the amended COOL measure. The United States clarifies that
it does not dispute that the elimination of the commingling flexibility that had been available under
the original COOL measure increased segregation for those companies that had actually been
commingling. However, the United States disputes that the introduction of point-of-production
labelling and the elimination of the country order flexibility had a similar impact on segregation
and recordkeeping.
2.5. As regards the Panel's finding that point-of-production labelling increases the recordkeeping
burden in practice for US-slaughtered livestock, the United States claims that this finding is in
error because it is not based on an examination of the actual trade in livestock between the three
parties to the disputes but, instead, on "incorrect" hypothetical transactions.
42 More specifically,
contrary to the various scenarios posited by the Panel, there is no evidence of trade in live animals
between Canada and Mexico that would result in the "multiple origin" labels on which the Panel
based its findings.43 The lack of such evidence is explained by the fact that it is highly improbable,
if not inconceivable, that the prices for energy, feed, and livestock would ever align such that it
would be profitable to export animals between Canada and Mexico even once, much less twice,
before exporting to the United States, as th e Panel's hypothetical scenarios envision. The
United States submits that it is, thus, clear that the Panel's finding that point-of-production
labelling increases the recordkeeping burden in practice for US-slaughtered livestock has no basis
and, therefore, reliance on such a finding to support a conclusion on detrimental impact
constitutes legal error. The United States emphasizes that the scenarios that reflect actual
livestock trade between the parties proves the opposite of what the Panel found, namely, that
point-of-production labels do not increase the recordkeeping burden. Noting that in Canada –
Periodicals the Appellate Body reversed the panel's "like product" analysis in the light of its
reliance on an incorrect hypothetical, the United States submits that, in the present disputes, the
Panel's analysis is similarly flawed due to its reliance on incorrect hypotheticals.
44
2.6. Third, the United States claims that the Panel erred in finding that the removal of the country
order flexibility increases the recordkeeping burden on producers and processors of livestock, and
that this supports a conclusion that the detrimental impact of the amended COOL measure does
not stem exclusively from legitimate regulatory distinctions. According to the United States, the

42 United States' appellant's submission, para. 117.
43 United States' appellant's submission, para. 119.
44 United States' appellant's submission, para. 123 (referring to Appellate Body Report, Canada –
Periodicals, pp. 20-23, DSR 1997:I, pp. 465-468).
WT/DS384/AB/RW • WT/DS386/AB/RW

removal of the country order flexibility creates more distinct labels, but does not alter the
recordkeeping burden entailed by the amended COOL measure because, under the original COOL
measure, different categories of muscle cuts already had different records. The United States
explains that, under the original COOL meas ure, the country order flexibility allowed
non-commingled Category B and C muscle cuts to have labels that could look the same in practice,
i.e. Labels B and C could both read "Product of Canada, U.S." By contrast, those same muscle cuts
are labelled differently under the amended COOL measure – i.e. Category B muscle cuts are
labelled "Born in Canada, Raised and Slaughtered in the U.S.," while Category C muscle cuts are
now labelled "Born and Raised in Canada, Slaughtered in the U.S." According to the United States,
the fact that there are now two labels – where before there was one – does not mean that the
recordkeeping burden has increased under the amended COOL measure, since the records
required under the original COOL measure for Category B muscle cuts must have been able to
substantiate that they were produced from an animal that was born in Canada and raised and
slaughtered in the United States. Similarly, the records required for Category C muscle cuts must
have been able to substantiate that they were produced from an animal that was born in Canada,
raised in Canada, and exported to the United States for immediate slaughter. Thus, while the
removal of the country order flexibility increases the distinct number of labels on non-commingled
muscle cuts, it does not increase the recordk eeping burden. The United States submits that,
because the Panel made no findings that the elimination of the country order flexibility changed
the records required to substantiate Category B and C origin claims, the Panel erred in finding that
the removal of this flexibility increases recordkeeping, and that this finding supports a conclusion
that the detrimental impact of the amended COOL measure on imported livestock does not stem
exclusively from legitimate regulatory distinctions.
2.1.1.2 The accuracy of labels prescribed by the amended COOL measure
2.7. The United States requests the Appellate Body to find that the Panel erred in finding that
Labels B and C under the amended COOL measure convey potentially inaccurate information, and
in finding that this supports the Panel's ultimate conclusion that the detrimental impact of that
measure does not stem exclusively from legitima te regulatory distinctions. The United States
advances two grounds for its claim.
2.8. First, the United States claims that the Panel's finding that Labels B and C are potentially
inaccurate is in error because it is based on incorrect hypothetical transactions that do not reflect
actual trade in livestock among the three parties to the disputes. The United States explains that
the Panel's analysis of label accuracy turns on how information relating to where an animal was
"raised" is communicated on Labels B and C in a number of livestock trade scenarios. According to
the United States, some of these scenarios reflect actual trade in livestock among the three parties
to the disputes, and others are purely hypothetical. As regards Label B, the Panel found that this
label is potentially inaccurate in two scenarios: (i) where an animal had a "single foreign origin",
e.g. born in either Canada or Mexico and then exported to the United States for further raising and
slaughter; and (ii) where an animal had "multiple foreign origins", e.g. born in Mexico, exported to
Canada for further raising, then exported to the United States for further raising and slaughter. As
regards Label C, the Panel found that, although this label is accurate in practice, it is potentially
inaccurate when affixed to muscle cuts produced from animals that have been the subject of at
least one, and maybe two, transactions between Mexico and Canada, prior to being exported to
the United States for immediate slaughter.
45
2.9. The United States submits that, in determining whether Labels B and C are potentially
inaccurate, the Panel treated each of the scenarios above as being equally persuasive, without
regard for the improbability of the various scenarios. As regards Label B, the Panel treated the
scenario where an animal was born in Canada and exported to the United States for further raising
and slaughter – a scenario that the United States admits occurs – on equal terms with the scenario
where an animal was born in Canada, exported to Mexico for raising, and then exported to the
United States for further raising and slaughter – a scenario that the United States alleges does not
occur. The United States claims that the Panel erred in this regard.
2.10. The United States further contends that, because the claim before the Panel was one of
de facto discrimination under Article 2.1 of the TB T Agreement, the Panel was precluded from
relying on hypothetical transactions that do not reflect actual trade in livestock among the three

45 United States' appellant's submission, para. 152.
WT/DS384/AB/RW • WT/DS386/AB/RW

parties to the disputes. The United States submits in this regard that, in a de facto case, a panel
must base its finding of detrimental impact on the effect of the measure in the marketplace –
"(i.e., the 'facts')".46 Yet, the Panel drew its conclusion concerning the accuracy of labels under the
amended COOL measure on the basis of hypothetical scenarios that have no basis in the factual
circumstances of the US market. The United States, thus, submits that, as was the case in Canada
– Periodicals , the Panel's reliance on such hypotheticals lacks "proper reasoning based on
inadequate factual analysis" and, as such, constitutes legal error.47
2.11. Second, the United States claims that th e Panel erred in considering that its finding that
Labels B and C are potentially inaccurate supports its ultimate conclusion under Article 2.1 of the
TBT Agreement. The United States submits, in this regard, that the Panel failed to make a
determination of whether the labels prescribed by the amended COOL measure are even handed in
their design and application, "including" whether a "disconnect" exists between, on the one hand,
the origin information required to be kept by pr oducers and processors of livestock and, on the
other hand, the origin information that is ultimately conveyed to consumers through the labels.
The United States explains that, pursuant to the DSB's recommendations and rulings in the
original disputes, the question of whether the de trimental impact on imported livestock reflects
discrimination hinges on a determination of whether the relevant regulatory distinctions – i.e. the
three categories of muscle cuts derived from US-slaughtered livestock and their corresponding
labels – are designed and applied in an even-han ded manner. The United States submits that the
Panel erred by failing to make this determination.
2.12. The United States asserts that the Panel's criticism of Labels B and C is based on its finding
that, by permitting only the United States to be listed as the country in which an animal was
raised, these labels could be considered "inaccurate" in circumstances where an animal was, in
fact, raised in multiple countries.
48 The United States notes that the Panel appears to criticize the
COOL requirements because they do not requir e the labels prescribed by the amended COOL
measure to provide as much detail as the Panel considered optimal, and asserts that it is not the
prerogative of panels to determine the level at which Members should seek to fulfil their legitimate
objectives. The United States adds that the Panel's finding that Labels B and C are potentially
inaccurate because they permit the omission of information regarding the countries in which an
animal was raised cannot provide a basis for a fi nding that the COOL requirements are not even-
handed.
49 In this regard, the inclusion of information with respect to all of the countries in which
an animal was raised would not provide additional origin information because it is understood that
an animal born in a country other than the United States will have been raised at least a portion of
its life in that other country. The United States argues that the Panel failed to provide a reason as
to why consumers would understand this differently.
2.13. The United States asserts that the "central criticism" of the Appellate Body with regard to
the original COOL measure was that the origin information provided by Labels B and C was "far
less detailed and accurate than the information required to be tracked and transmitted by …
producers and processors" of livestock that the tracking and transmission of such information
"[could not] be explained by the need to convey ... [origin] information" on meat products to
consumers.
50 The United States contends that the compliance Panel adopted a different analytical
framework from that of the Appellate Body in th e original disputes, because the Panel failed to
address the question of whether there is a "disconnect" between the information required to be
collected by producers and processors of livestoc k, and the information ultimately conveyed to
consumers by the labels prescribed by the amended COOL measure. In this regard, although the
Panel criticized the amended COOL measure on the basis of the omission of countries of raising
where an animal was raised in multiple countries, the Panel did not make a finding that the
amended COOL measure requires that producers an d processors of livestock track and transmit
any information that is not provided by the labels. As such, the Panel erred, as a matter of law, by
finding that the informational "disconnect" that the Appellate Body found to exist under the
original COOL measure continues to exist under the amended COOL measure.

46 United States' appellant's submission, para. 158.
47 United States' appellant's submission, para. 159 (quoting Appellate Body Report, Canada – Periodicals
p. 22, DSR 1997:I, p. 467).
49 United States' appellant's submission, para. 169.
50 United States' appellant's submission, para. 172 (quoting Appellate Body Reports, US – COOL,
para. 349).
WT/DS384/AB/RW • WT/DS386/AB/RW

2.1.1.3 The exemptions under the amended COOL measure
2.14. The United States requests the Appellate Bo dy to find that the Panel erred in finding that
the scope of the exemptions under the amended C OOL measure constitutes a basis for concluding
that the detrimental impact of that measure does not stem exclusively from legitimate regulatory
distinctions. The three exemptions at issue preclu de the application of the COOL requirements to
muscle-cut commodities that are: (i) used as an ingredient in a "processed food item";
(ii) prepared or served at a "food service establis hment"; or (iii) sold by entities not meeting the
definition of the term "retailer".
51 The United States advances three main arguments in support of
this claim of error.
2.15. First, the United States claims that the Panel erred in finding that the exemptions are
relevant to the analysis of whether the detrim ental impact of the amended COOL measure stems
exclusively from legitimate regulatory distinctions. According to the United States, only regulatory
distinctions that account for the detrimental impact on imported products can answer the question
of whether such detrimental impact reflects discrimination. The United States points out that the
original panel had found that the exemptions under the original COOL measure were not a source
of detrimental impact on imported livestock. Thus, the compliance Panel should not have found the
exemptions relevant to its analysis of whethe r the detrimental impact of the amended COOL
measure stems exclusively from legitimate regulatory distinctions. For the United States, the
Panel's "legal framework" is in error, because regulatory distinctions that are not relevant fall
outside the scope of the analysis under Article 2.1 of the TBT Agreement.
52
2.16. Second, the United States claims that, aside from the fact that the exemptions are not
relevant to the Panel's analysis, the Panel erred in determining that they demonstrate that the
detrimental impact of the amended COOL measure reflects discrimination prohibited by Article 2.1.
In particular, because the Panel failed to take into account the three considerations elaborated on
below, the Panel erred in finding that the exemptions support a conclusion that the detrimental
impact of the amended COOL measure reflects discrimination.
2.17. The United States submits that the Panel failed to take account of the fact that the
exemptions apply equally to meat derived from imported and domestic livestock, and are thus
"perfectly even handed".53 The United States asserts that it is uncontested that neither the design,
nor the operation, of the exemptions disadvantage Canadian and Mexican livestock exports. In this
regard, these exemptions are "wholly different" from the exemptions under the measures at issue
in US – Clove Cigarettes and EC – Seal Products .
54 The United States explains that, in US – Clove
Cigarettes, the Appellate Body found that the exemption of menthol cigarettes from the ban on
flavoured cigarettes was not even handed because producers of menthol cigarettes – mainly US
producers – could take advantage of the exemption notwithstanding the fact that menthol
cigarettes presented a risk similar to that presented by the banned products.55 Similarly, the panel
in EC – Seal Products found that the indigenous community exemption was not even handed in the
light of the fact that, while seal products from Greenland could benefit from that exemption, seal
products from Canada could not, even though the hunts from which these seal products were
derived "greatly approximated one another".
56 According to the United States, the same dynamic
does not arise in the case of the exemptions under the amended COOL measure. By failing to take
this into account, the Panel erred in finding that these exemptions support a conclusion that the
detrimental impact of the amended COOL measure reflects discrimination.
2.18. The United States further submits that, in its assessment of the exemptions, the Panel failed
to take into account the "legitimate desire of Members to adjust the scope of their technical
regulations" for cost considerations. 57 As the Panel explicitly recognized, "it is not atypical for any
kind of regulation to have exceptions in terms of the products and entities that are subject to it"
and that "[s]ome of such exceptions might be just ifiable for practical reasons and simply facilitate

51 United States' appellant's submission, para. 184 (referring to Panel Reports, paras. 7.28-7.30).
52 United States' appellant's submission, para. 201.
53 United States' appellant's submission, para. 207.
54 United States' appellant's submission, para. 208.
55 United States' appellant's submission, para. 208 (referring to Appellate Body Report, US – Clove
Cigarettes, para. 225).
56 United States' appellant's submission, para. 208 (referring to Panel Reports, EC – Seal Products,
para. 7.317).
57 United States' appellant's submission, para. 187.
WT/DS384/AB/RW • WT/DS386/AB/RW

the implementation of the measure at issue without necessarily involving protectionist intent." 58
Moreover, in its analysis under Article 2.2 of the TBT Agreement, the Panel recognized that "there
may be a variety of possible reasons unrelated to risks for exempting or treating differently certain
product categories under a Member's technical regulation, such as regulatory or compliance
costs."
59 The United States asserts that, consistent with these acknowledgements, the exemptions
under the amended COOL measure constitute "important mechanisms that policy makers use to
control costs of measures in pursuit of legitimate government objectives".
60
2.19. The United States explains that, while its intent is to provide consumers with accurate and
meaningful information on the origin of the meat that they purchase, it does not intend to do so
"at any cost".61 Accordingly, even if such information was, and remains, desired by consumers, the
United States, ultimately, set a slightly lower level of fulfilment by including exemptions in the
amended COOL measure, as is the prerogative of any regulator. Further, the cost savings provided
by the exemptions under the amended COOL measur e are real. In this regard, it is uncontested
that removing these exemptions would increase recordkeeping, verification, and segregation costs
in the United States. The United States highligh ts that it is not the only Member seeking to
balance, on the one hand, the provision of information to consumers concerning the products that
they purchase and, on the other hand, the co sts of providing such information. Thus, the
exemptions under the amended COOL measure reflec t sound public policy, rather than arbitrary
discrimination.
2.20. The United States further argues that, in its assessment of the exemptions, the Panel failed
to take into account that, in the light of the e nhanced accuracy of the labels prescribed by the
amended COOL measure, the recordkeeping burden entailed by that measure can now be
explained by the need to provide origin informatio n to consumers. According to the United States,
the scope of the exemptions under the original COOL measure further corroborated the problem
under that measure that adequate information was not provided on Labels B and C to justify the
recordkeeping required of producers and processors of livestock. However, under the amended
COOL measure, this underlying problem has now been corrected so that more detailed and
accurate information is provided to consumers on the labels. The United States further contends
that, although the exemptions have not been e liminated, this alone cannot be determinative of
whether the detrimental impact of the amende d COOL measure on imported livestock stems
exclusively from legitimate regulatory distinctions . In the United States' view, the Panel erred by
failing to examine whether, in the light of the more detailed and accurate information provided on
labels to consumers, the recordkeeping burden im posed on producers and processors of livestock
can now be explained by the need to provide origin information to consumers, notwithstanding the
continued existence of the exemptions.
2.21. In addition to the enhanced accuracy of the labels prescribed by the amended COOL
measure, the United States also considers it important to highlight that the coverage of the
amended COOL measure is hardly limited. These two factors – the origin information provided to
consumers (in terms of detail and accuracy) and the sheer breadth of what is sold by the tens of
thousands of retailers covered by the amended COOL measure – provide a sound basis for the
recordkeeping required of producers and processors of livestock in order to substantiate where an
animal was born, raised, and slaughtered. The United States submits that the exemptions,
therefore, do not support a finding that the de trimental impact of the amended COOL measure
reflects discrimination.
2.22. The United States also challenges the Pane l's assessment of the exemptions on the ground
that the Panel failed to undertake an evaluati on of the operation of the exemptions in the
US market. The United States asserts that the Panel drew a conclusion that distinct distribution
channels for the sale of meat products to exempt entities do not exist simply by repeating a
statement of the original panel that "the ultimate disposition of a meat product is often not known
at any particular stage of the production chain"
62, and a statement by the Appellate Body that

58 United States' appellant's submission, para. 210 (quoting Panel Reports, para. 7.275, in turn quoting
Original Panel Reports, US – COOL, para. 7.684).
60 United States' appellant's submission, para. 211. (fn omitted)
61 United States' appellant's submission, para. 212. (emphasis omitted)
62 United States' appellant's submission, para. 233 (quoting Panel Reports, para. 7.272, in turn quoting
Original Panel Reports, US – COOL, para. 7.417, in turn quoting United States' response to original panel
question No. 93, para. 16).
WT/DS384/AB/RW • WT/DS386/AB/RW

"information regarding the origin of all livestock will have to be identified, tracked, and transmitted
through the chain of production by upstream prod ucers … even though 'a considerable proportion'
of the beef and pork derived from that livest ock will ultimately be exempt from the COOL
requirements and therefore carry no COOL label at all." 63 The United States points out that, in
making this statement, the Appellate Body cited the statement of the original panel that "the
ultimate disposition of a meat product is often not known at any particular stage of the production
chain." This statement, in turn, is a quotation from an answer provided by the United States to a
question from the original panel. The United St ates explains that the question was not whether
distinct distribution channels exist for sales to exempt establishments but, instead, how operators
in the distribution chain distinguish exempt an d non-exempt meat. The United States contends
that its answer spoke to that specific question, indicating that the United States was "not aware of
any evidence" that operators "systematically separate[]" animals or meat products, and that this
was due to the fact that "the ultimate disposition of a meat product is often not known at any
particular stage of the production chain." Furtherm ore, this statement related to the situation at
the time of the original proceedings.
64 The United States submits that, although its answer to the
original panel's question may be understood, in isolation, as supporting a view that mixed
distribution channels exist, it does not, on its face, support a conclusion that distinct distribution
channels do not exist for sales to exempt establishments.
2.23. The United States contends that whether information regarding the origin of all livestock will
have to be identified, tracked, and transmitte d through the chain of production by upstream
producers is critical to the weight that the Panel could have placed on the exemptions for the
purpose of its analysis of whether the detrimenta l impact of the amended COOL measure reflects
discrimination. The Panel should have considered whether the statement that it relied on is
currently supported by the operation of the US market, or whether information regarding the
origin of less than all livestock is being identified, tracked, and transmitted by producers and
processors of livestock. Noting that the Pa nel did not undertake such an analysis, the
United States submits that the Panel erred because it had no basis to conclude that all US
slaughterhouses, wholesalers, and exempt retailers take on recordkeeping costs that they are not
obligated to assume.
2.24. The United States asserts that record evidence suggests that distinct distribution channels
for sales to exempt establishments do, in fact, exist. In the proposed, interim, and final rules, the
USDA explained that channels of distribution to exempt establishments would not be subject to the
COOL requirements, and that firms were enga ged in distribution through such channels.
65
Moreover, in the 2013 Final Rule, one commenter argued that imported products would derive an
advantage from the revised labelling requirements, as imported products would be sold through
foodservice channels, like restaurants, where they would not have to be labelled. 66 Further, in
examining estimated implementation costs of the 2013 Final Rule, the USDA excluded muscle cuts
of beef from its estimate, noting that these typically are marketed through hotel, restaurant, or
institutional channels, such that they would be covered by the exemptions of the amended COOL
measure.67 In addition, the USDA noted in the 2009 Final Rule (AMS) that most manufacturers of
covered commodities will likely print country of or igin and, if applicable, method of production
information on retail packages supplied to retailers.68
2.25. Finally, the United States highlights that Canada, itself, presented evidence from a packer
that, once cattle are slaughtered and the meat is processed, packers ship it in boxes to
distributors, food service establishments, and retailers. 69 In each of these examples, the ultimate
disposition of the meat is known at the slaughterhouse/packer or wholesaler stage of distribution.

63 United States' appellant's submission, para. 233 (quoting Panel Reports, para. 7.272, in turn quoting
Appellate Body Reports, US – COOL, para. 344 (emphasis original), in turn quoting Original Panel Reports,
US – COOL, para. 7.417).
64 United States' appellant's submission, para. 242 (quoting United States' response to original panel
question No. 93, para. 16).
65 United States' appellant's submission, para. 240 (referring to 2009 Final Rule (AMS), p. 2696).
66 United States' appellant's submission, para. 240 (referring to 2013 Final Rule, p. 31374).
67 United States' appellant's submission, para. 240 (referring to 2013 Final Rule, p. 31380).
68 United States' appellant's submission, para. 240 (referring to 2009 Final Rule (AMS), p. 2695).
69 United States' appellant's submission, para. 240 (referring to United States District Court for the
District of Colombia, American Meat Institute v. United States Department of Agriculture, Case
No. 13-cv-1033, Declaration of Brad McDowell in Support of Plaintiffs' Motion for a Preliminary Injunction
WT/DS384/AB/RW • WT/DS386/AB/RW

Thus, there was evidence before the Panel that the ultimate disposition of a meat product is known
at any particular stage of distribution. The question the Panel should then have asked is how often
the ultimate disposition of meat products woul d not be known. Yet, the Panel simply did not
examine this question. The United States notes that , although it is not aware of the extent of use
of distinct distribution channels by US economic operators, neither Canada nor Mexico presented
any evidence that slaughterhouses, wholesalers, and exempt establishments are not making use
of the exemptions to establish lower-cost channe ls of distribution. The limited evidence on the
record relating to this issue suggests that dist inct distribution channels for sales to exempt
establishments do exist. Thus, submits the United States, the Panel's conclusion is unsupportable.
2.1.2 Article 2.2 of the TBT Agreement
2.26. Conditional on Canada or Mexico appealing the Panel's findings on Article 2.2 of the
TBT Agreement, the United States requests the Appellate Body to reverse certain aspects of the
Panel's interpretation of Article 2.2. In particular, the phrase "taking account of the risks
non-fulfilment would create" should not be interpreted to mean that providing less origin
information for a significantly wider range of products might achieve an equivalent degree of
contribution as the amended COOL measure.
70 Rather, the United States argues that the phrase
"taking account of the risks non-fulfilment would create" is properly understood as a reflection that
an individual Member takes into account such risk s when setting its desired level of fulfilment of a
legitimate objective.
2.27. In the United States' view, it is within a Member's discretion to determine what legitimate
objectives it seeks to pursue, and to what degree it wishes to pursue those objectives. 71 In that
regard, the United States points to the sixth preambular recital of the TBT Agreement, which
states that it is a Member's right to pursue legitimate objectives "at the levels it considers
appropriate".
72 A technical regulation can only be found to be "more trade restrictive than
necessary" under Article 2.2 where an alternative, less trade-restrictive measure that makes an
equivalent contribution to the objective is reasonably available to the Member. An approach that
leads to a finding of inconsistency with Article 2. 2 on the basis of proposed alternative measures
that provide less origin information would not be compatible with the fundamental premise that it
is up to the Member adopting the technical regulation to decide the level at which it provides
consumer information on origin, regardless of whether "the risks non-fulfilment would create" are
high or low.
2.28. According to the United States, the Panel's interpretation of the phrase "taking account of
the risks non-fulfilment would create" would appear to enable a panel to judge whether a trade-off
between less origin information and wider product coverage could produce an equivalent
contribution to the achievement of the objective of the amended COOL measure. In the
United States' view, such an analysis would go beyond considering a challenged measure's
contribution to a legitimate objective, and require an analysis of a Member's domestic interests,
expectations, risks, and concerns. The value to assign to various objectives and the levels at which
Members desire to fulfil particular objectives are very sensitive questions, and Members' views on
these questions will vary, based on domestic conditions, societal preferences, cultural
considerations, and other factors. The United States further contends that the objectives at issue
include those relating to human health and safety, and that, under the Panels' approach, WTO
panels would substitute their judgement for that of Members with respect to what value to assign
to human health and safety and the risks created by not fulfilling the protection of human health
and safety at the desired level. For the United States, any judgement based on the Panel's
interpretation would ultimately be subjective, lacking any objective basis for determining whether
a measure is more trade restrictive than necessary.

70 United States' appellant's submission, para. 249 (referring to Panel Reports, para. 7.488).
71 United States' appellant's submission, para. 260.
72 United States' appellant's submission, fn 306 to para. 260 (quoting Appellate Body Reports, US –
COOL, para. 373, in turn quoting Appellate Body Report, US – Tuna II (Mexico), para. 316).
WT/DS384/AB/RW • WT/DS386/AB/RW

2.1.3 Articles III:4 and IX of the GATT 1994
2.29. The United States requests the Appellate Body to find that the Panel erred in concluding
that the amended COOL measure is inconsistent with Article III:4 of the GATT 1994, in particular,
by failing to take into account Article IX of th e GATT 1994 as relevant context. According to the
United States, the context of Article IX informs the interpretation and application of Article III:4,
and the Panel erred in finding that less favourable treatment could be demonstrated based on
detrimental impact without a further inquiry into the context provided by Article IX of the
GATT 1994.
2.30. The United States refers to the Appellate Body's statement in EC – Seal Products that,
"under the TBT Agreement, the balance betwee n the desire to avoid creating unnecessary
obstacles to international trade under the fifth recital, and the recognition of Members' right to
regulate under the sixth recital, is not, in principle, different from the balance set out in the
GATT 1994, where obligations such as national trea tment in Article III are qualified by the general
exceptions provision of Article XX"
73, and submits that this statement is based on considerations of
the context afforded to Article III:4 by Article XX. In the same vein, the United States asserts that,
in the present disputes, the Panel should have co nsidered the context provided by Article IX in
interpreting Article III:4 of the GATT 1994.
2.31. In particular, the United States contends that Articles IX:2 and IX:4 of the GATT 1994
recognize that laws and regulations concerning consumer information on origin may cause
difficulties and inconvenience to exporting Member s, and increase the cost of imported products.
Consequently, Article III:4, when read in the context of Article IX, provides regulatory space for
Members to provide consumers with information as to the origin of products in the sense that
"reasons for any difficulties and inconveniences caused by the measures" should be taken into
account.
74 This requires consideration of whether difficulties and inconveniences could "be
reduced, with due regard to the necessity of protecting consumers, and what the reasons would be
for any increased cost for imported products caused by the measures, in particular whether the
measures unreasonably increase the cost of imported products."
75
2.32. The United States highlights the Panel's statement that "there may be a variety of possible
reasons unrelated to risks for exempting or treating differently certain product categories under a
Member's technical regulation, such as regulatory or compliance costs"
76, and submits that the
Panel erred in failing to consider, in its Article III:4 analysis, the role of possible reasons, such as
regulatory or compliance costs, for the structur e of the amended COOL measure and its impact on
imported livestock.
2.33. The United States contends that the need to take into account the context provided by
Article IX in interpreting Article III:4 of the GATT 1994 is particularly relevant in these disputes, in
the light of the original panel's finding that it is a legitimate objective of the United States to
provide consumers with information on the country of origin of meat at the level of fulfilment that
the United States considers appropriate. For the United States, the compliance Panel's finding that
providing such information at the chosen level of fulfilment results in detrimental impact on the
conditions of competition for imported livestock creates a "paradox".
77 On the one hand, the
United States would be entitled to adopt a measure in order to provide this information to
consumers. On the other hand, that measure could never be consistent with Article III:4, since it
would have a detrimental impact on imported livestock.
2.34. Finally, the United States asserts that the Panel's approach would render Article IX inutile
because, if a finding of detrimental impact alone were sufficient to establish discrimination in the
context of marks of origin, then the provisions of Article IX would not be relevant, since a
complainant could invoke the non-discrimination provisions of the GATT 1994 and there would be
no utility for a complainant to invoke Article IX.

73 United States' appellant's submission, para. 277 (quoting Appellate Body Reports, EC – Seal Products,
para. 5.127, in turn referring to Appellate Body Report, US – Clove Cigarettes, para. 96).
74 United States' appellant's submission, para. 284.
75 United States' appellant's submission, para. 284.
77 United States' appellant's submission, para. 288.
WT/DS384/AB/RW • WT/DS386/AB/RW

2.1.4 Article XX of the GATT 1994
2.35. The United States requests the Appellate Body to find that the Panel erred by not
addressing, at the interim review stage, the avai lability of Article XX of the GATT 1994 as an
exception with respect to the amended COOL measure. 78 In addition, the United States requests
the Appellate Body to complete the legal analysis and find which of the Article XX exceptions would
be available "so as to maintain the balance between a Member's right to regulate and the desire to
avoid unnecessary obstacles to trade" 79, and to find that the amended COOL measure qualifies as
"necessary" within the meaning that has been give n t o t h a t t e r m a s u s e d i n A r t i c l e X X o f t h e
GATT 1994.
2.36. The United States notes that, in its anal ysis of Article III:4 of the GATT 1994, the Panel
relied on the Appellate Body reports in EC – Seal Products . The United States submits that,
because those reports were circulated only after the conclusion of the period in which the parties
in the COOL disputes could submit evidence an d arguments, the present Article 21.5 proceedings
presented an extraordinary situation. In particular, the United States refers to the statement of the
Appellate Body in EC – Seal Products that, "under the TBT Agreement, the balance between the
desire to avoid creating unnecessary obstacles to international trade … and the recognition of
Members' right to regulate … is not, in principle, different from the balance set out in the
GATT 1994, where obligations such as national trea tment in Article III are qualified by the general
exceptions provision of Article XX."
80 The United States asserts that this statement came too late
for the parties in the present Article 21.5 proceedings to submit evidence or argumentation with
respect to Article XX of the GATT 1994.
2.37. The United States recalls that, at the interim review stage, it requested the Panel to address
the relationship between Article 2.1 of the TB T Agreement and Article III:4 of the GATT 1994, and
to address the availability of an Article XX exception with respect to the amended COOL measure.
The United States takes issue with the Panel's response to this request that, having found the
amended COOL measure to be in violation of both Article 2.1 of the TBT Agreement and
Article III:4 of the GATT 1994, the Panel was not face d with the situation hypothetically suggested
by the United States. For the United States, the Panel failed to appreciate the concern being
expressed, which was not of a hypothetical nature, but flowing logically from the Panel's findings in
the interim report. The Panel contemplated that the amended COOL measure could be brought into
compliance with Article 2.1 of the TBT Agreement. The United States asserts that, if that were the
case, there would presumably still be detrimental impact on imported livestock, but that
detrimental impact would stem exclusively from legitimate regulatory distinctions.
2.38. The United States further contends that, under the Panels' approach, a measure consistent
with Article 2.1 of the TBT Agreement would none theless be in breach of Article III:4 of the
GATT 1994 if any detrimental impact remained, unless the measure qualified for an exception
under Article XX of the GATT 1994. Therefore, the Panel was required to address the availability of
Article XX as an exception with respect to the amended COOL measure in order to facilitate the
resolution of the COOL disputes. If the balanc e under Article 2.1 of the TBT Agreement is in
principle no different from the balance under Ar ticle III:4 and Article XX of the GATT 1994, then
the Panel should have been able to explain how that would apply in the context of the COOL
disputes. For the United States, the Panel's approach raises the question as to whether the balance
is upset where the objective of the measure at issue is not one that is specified in Article XX of the
GATT 1994. The United States further contends that this would undermine the ability of Members
to regulate, and to pursue a wide range of objectives, including providing consumer information,
preventing deceptive practices. If the amended C OOL measure could be consistent with Article 2.1
of the TBT Agreement, while at the same ti me violating Article III:4 of the GATT 1994, the
United States' right to regulate under the two agreements would be out of balance, and this would
not conform to the Appellate Body's statement in EC – Seal Products.

78 United States' appellant's submission, para. 301.
79 United States' appellant's submission, para. 301.
80 United States' appellant's submission, para. 277 (quoting Appellate Body Reports, EC – Seal Products,
para. 5.127, in turn referring to Appellate Body Report, US – Clove Cigarettes, para. 96). See also ibid.,
para. 291.
WT/DS384/AB/RW • WT/DS386/AB/RW

2.1.5 Article XXIII:1(b) of the GATT 1994
2.39. In the event that Canada or Mexico appeals the Panel's decision to exercise judicial
economy with respect to Canada's and Mexico's non-violation claims under Article XXIII:1(b) of
the GATT 1994, the United States requests the Appellate Body to find that these claims were not
within the Panel's terms of reference. The United States argues that the Panel erred in concluding
that "reviewing the 'consistency' of a measure taken to comply under Article 21.5 of the DSU
extends to non-violation claims under Article XXIII:1(b) of the GATT 1994 and Article 26.1 of the
DSU"
81, and submits that the Panel's conclusion "is not based on the text of Article 21.5 of the
DSU itself, but rather … over-ride[s] that text based on 'systemic considerations' and what the
Panel[] perceived to be the 'objective' of Article 21.5 of the DSU."82
2.40. The United States contends that Article 21.5 of the DSU, read in its context, demonstrates
that "consistency with a covered agreement of measures taken to comply" under Article 21.5 does
not encompass review of a measure taken to comply in order to determine if the measure results
in non-violation nullification or impairment. According to the United States, "Article 19.1 of the
DSU explicitly contrasts 'inconsistency' with 'not involving a violation'."
83 While the
recommendation under Article 19.1 is that the Member concerned bring the measure into
conformity with the infringed agreement, this recommendation is not permitted under Article 26,
which provides that, when there is a finding of non-violation, there is no obligation to withdraw the
measure but, rather, to make a mutually satisfactory adjustment. Footnote 10 to Article 19.1 also
addresses and recognizes this difference between "consistency" and "non-violation".
2.41. Moreover, the United States submits that, given the "exceptional" status of non-violation
claims, such claims cannot be raised for the first time in compliance proceedings under Article 21.5
of the DSU.
84 The United States also alleges that the Panel's reliance on its view of the objective of
Article 21.5 appears to have resulted in the Panel finding that the perceived objective justifies
ignoring the text of the provision. Further, the United States maintains that the Panel erred
in invoking "efficiency" as a basis for disregarding the agreed text of the covered agreements.85
2.2 Arguments of Canada – Appellee
2.2.1 Article 2.1 of the TBT Agreement
2.42. Canada requests the Appellate Body to reject the United States' claim that the Panel erred
in concluding that the detrimental impact of the amended COOL measure on imported livestock
does not stem exclusively from legitimate regulatory distinctions. According to Canada, the
United States' claims and arguments under Article 2.1 of the TBT Agreement suggest that the
Panel should have adopted and applied a legal fram ework that is at odds with the framework that
the Appellate Body articulated and applied in the original disputes.
2.2.1.1 The increased recordkeeping burden entailed by the amended COOL measure
2.43. Canada requests the Appellate Body to reject the United States' claim that the Panel erred
by considering that its finding that the amended COOL measure entails an increased recordkeeping
burden on upstream producers of livestock constitutes an independent basis for concluding that
the detrimental impact of that measure does not stem exclusively from legitimate regulatory
distinctions. In Canada's view, the United States seeks to create the erroneous impression that the
Panel found that the increased recordkeeping burden entailed by the amended COOL measure
ipso facto demonstrates that the detrimental impact of that measure does not stem exclusively
from legitimate regulatory distinctions. Canada asserts, however, that this is not borne out by the
analysis that the Panel conducted.
2.44. Canada contends that, at the outset of its analysis, the Panel stated that it would address
the information that must be maintained by producers and processors of livestock – i.e. the
recordkeeping burden – before turning to addr ess the information ultimately conveyed to

82 United States' appellant's submission, para. 308.
83 United States' appellant's submission, para. 316.
84 United States' appellant's submission, para. 320.
85 United States' appellant's submission, para. 322.
WT/DS384/AB/RW • WT/DS386/AB/RW

consumers, in the light of the exemptions from th e COOL requirements, as well as the accuracy of
labels prescribed by the amended COOL measure. According to Canada, the Panel followed this
analytical framework. First, the Panel recalled its finding that the amended COOL measure has
augmented the information that producers and processors of livestock are required to transmit and
maintain. The Panel then observed that the amen ded COOL measure retains essentially the same
exemptions as under the original COOL measur e, and noted features of the amended COOL
measure that impact on the accuracy of the information conveyed to consumers through the labels
affixed to muscle cuts of meat. These factors – the upstream recordkeeping burden, label
accuracy, and the exemptions from coverage – were then collectively assessed with a view to
determining whether the informational "disconnect" identified by the Appellate Body in the original
disputes had been rectified by the amended COOL measure. Canada submits that the Panel's
assessment of the increased recordkeeping burd en entailed by the amended COOL measure was
methodical, and that the Panel correctly put the issue of recordkeeping within the analytical
framework articulated by the Appellate Body in the original disputes.
2.45. Canada further requests the Appellate Body to reject the United States' claim that the
Panel's finding that the amended COOL measure entails an increased recordkeeping burden is in
error because the Panel erred in its analysis of the impact of point-of-production labelling and the
elimination of the country order flexibility on recordkeeping. For Canada, the United States' claim
improperly challenges factual findings made by the Panel and should not be considered by the
Appellate Body in the absence of an explicit claim under Article 11 of the DSU.
2.46. With respect to the United States' claim that the Panel erred in finding that the amended
COOL measure entails an increased recordkeeping burden because its analysis of the impact of
point-of-production labelling on recordkeeping was based on incorrect hypothetical transactions
that do not reflect actual trade in livestock among the three parties to the disputes, Canada
alleges that the United States misrepresents the Panel's analysis. Canada recalls that, in assessing
whether point-of-production labelling increases the number of distinct labels in scenarios involving
Category B and C muscle cuts of multiple foreign origins, the Panel expressly noted that the 2009
Final Rule (AMS), itself, addressed scenarios invo lving non-commingled Category B muscle cuts of
multiple foreign origins. In addition, the 2013 Final Rule also provides explicit guidance as to the
point-of-production labelling requirements that apply to livestock born and/or raised in multiple
foreign countries. Canada, thus, submits that the United States criticizes the Panel for elaborating
on the labelling rules that would apply in scenarios that the United States has, itself, articulated
and codified in its domestic law.
2.47. Canada notes further that, after assessing the effect of point-of-production labelling in
various scenarios, the Panel then examined the impact of the elimination of the commingling and
country order flexibilities on segregation. The Panel then concluded that point-of-production
labelling, together with the elimination of these flexibilities, increased the need for segregation in
the US market – a point confirmed by extens ive evidence that was put before the Panel.
86
Moreover, Canada points out that the Panel did not consider that segregation – or increased
segregation for that matter – would constitute a violation of Article 2.1 of the TBT Agreement.
Instead, the Panel considered that it had to assess whether segregation modifies the conditions of
competition to the disadvantage of the imported product. Before doing so, the Panel examined the
impact of the amended COOL measure on reco rdkeeping, and emphasized that the greater
diversity of labels resulting from the elimination of the commingling and country order flexibilities
creates a multiplicity of scenarios for which distinct and commensurate substantiating records are
now required. It is thus clear that, contrary to the assertions of the United States, the Panel's
conclusion that the amended COOL measure entails an increased recordkeeping burden in practice
is based on much more than purely hypothetical livestock transactions. Noting that the
Appellate Body was critical of the panel in Canada – Periodicals for basing its "like" product
findings "on a single hypothetical example"
87, Canada submits that the Panel in these disputes
cannot be similarly faulted and, as such, the Un ited States' reliance on the Appellate Body's
reasoning in Canada – Periodicals is "inapt".88

86 Canada's appellee's submission, para. 53 (referring to Panel Reports, para. 7.135 and to Panel
exhibits cited in fns 324 and 325 thereto).
87 Canada's appellee's submission, para. 55 (quoting Appellate Body Report, Canada – Periodicals,
p. 21, DSR 1997:I, p. 467).
88 Canada's appellee's submission, para. 55.
WT/DS384/AB/RW • WT/DS386/AB/RW

2.48. Canada also requests the Appellate Body to reject the United States' contention that the
Panel erred in finding that the removal of the country order flexibility increases the recordkeeping
burden for US-slaughtered livestock, and that th is supports a conclusion that the detrimental
impact of the amended COOL measure does not stem exclusively from legitimate regulatory
distinctions. According to Canada, uncontested facts that the Panel referred to reveal the
inaccuracy of the United States' assertion that the elimination of the country order flexibility does
not alter the recordkeeping burden that existed un der the original COOL measure. In this regard,
the Panel observed that the recordkeeping and verification requirements that apply under both the
original and amended COOL measures mandate that suppliers and retailers make available to
USDA representatives records that verify an origin claim and, therefore, that the "origin claim" is a
key determinant of the records and information required under the amended COOL measure. In
addition, the Panel observed that the USDA's commentary accompanying the 2009 Final Rule
(AMS) indicates that costs would be incurred by producers "to record, maintain, and transfer
country of origin … information to substantiate required claims made at retail", and that records
were required to be sufficient to substantiate country of origin claims.
89 For Canada, this reveals
the inaccuracy of the United States' position. Ca nada adds that, in the original proceedings, the
United States asserted that the country order flexibility had been included under the original COOL
measure to reduce compliance costs. Noting that compliance costs arise from the burden of the
recordkeeping and verification requirements and the consequent need for segregation, Canada
submits that the United States' position in the original proceedings confirms that the elimination of
the country order flexibility increases the record keeping burden on producers and processors of
livestock.
2.49. In relation to the United States' assertion that the elimination of the county order flexibility
does not alter the recordkeeping burden because different categories of muscle cuts already had
different records under the original COOL measure, Canada explains that, under the original COOL
measure, where non-commingled Category B muscle cuts from Canada bore Label C as a result of
the country order flexibility, the origin claim was "Product of Canada and the United States".
Because the livestock used to produce these muscle cuts did not satisfy the definition of
Category C, audited retailers could not demonstrat e that such muscle cuts derived from livestock
imported from Canada for immediate slaughter. Nor could audited retailers be expected to
demonstrate that such muscle cuts were in fact Category B muscle cuts – i.e. that they were
derived from livestock raised in the United States. Thus, all that was required to verify a Label C
origin claim was proof that the animal from which the muscle cut was derived was born outside of
the United States – in the country that appear ed on the label. Canada asserts that, for the
Appellate Body to accept the United States' posi tion that the elimination of the country order
flexibility does not alter the recordkeeping burd en entailed by the amended COOL measure, the
Appellate Body would need to be persuaded that, where Category B muscle cuts bore Label C
under the original COOL measure, the records regarding any raising occurring in the United States
were required to be maintained notwithstanding that such records were unnecessary to verify the
origin claim.
2.2.1.2 The accuracy of labels prescribed by the amended COOL measure
2.50. Canada requests the Appellate Body to reject the United States' contentions that the Panel
erred in finding that Labels B and C under the amended COOL measure convey potentially
inaccurate information, and that this finding does not support the Panel's ultimate conclusion that
the detrimental impact of that measure does not stem exclusively from legitimate regulatory
distinctions. For Canada, the Panel's finding that Labels B and C convey potentially inaccurate
information is a factual finding and, to the extent that the United States argues that this finding
does not have a proper basis in the evidence examined by the Panel, the United States' arguments
are outside the scope of this appeal in the absence of an explicit claim under Article 11 of the DSU.
2.51. In any event, as regards the United States' argument that the Panel erred by basing its
finding that Labels B and C are potentially inaccurate on incorrect hypothetical scenarios, Canada
considers that the United States mischaracterizes the Panel's analysis. According to Canada, the
Panel correctly found that, on average, "Canadian feeder cattle spend between 45 and 68% … of
their raising period outside the United States" and, on this basis, correctly determined that the
country of raising flexibility allows labels "to designate the United States as the sole place of

89 Canada's appellee's submission, para. 41 (quoting Panel Reports, para. 7.145, in turn quoting 2009
Final Rule (AMS), p. 2698).
WT/DS384/AB/RW • WT/DS386/AB/RW

raising to an animal that spent as little as 15 days in the United States". 90 It was on this basis that
the Panel found that Label B entails a potential for conveying inaccurate information in respect of
its identification of where the animal was "raised". Canada submits that, accordingly, the
United States' claim that the Panel based its analysis of label accuracy under the amended COOL
measure on hypothetical livestock transactions has no foundation.
2.52. Canada further considers as being without merit the United States' claim that the Panel was
precluded from examining hypothetical scenarios because the claim before it was one of de facto
discrimination under Article 2.1 of the TBT Agreement. In this regard, Canada recalls that, in
determining whether the detrimental impact caused by a challenged technical regulation reflects
discrimination, panels are required to assess, among other things, the design, architecture, and
revealing structure of the technical regulation at issue.
91 In short, the analysis is not strictly
confined to factual matters concerning actual trade in the relevant market.
2.53. Canada also observes that the Panel found that Labels B and C represent the greatest
incremental improvement in origin information ac hieved by the 2013 Final Rule, but rejected the
contention of the United States that Label B is entirely accurate. In addition, the Panel noted that,
although Label C "may allow – and possibly require – omission of actual countries of raising,
resulting in label inaccuracy", that label "does not appear likely to convey misleading information
about the country where animals imported for i mmediate slaughter are raised, given that these
appear to be most commonly born and raised in the country of export".
92 Hence, in Canada's view,
the Panel's identification of the informational shortcomings of the labels prescribed by the
amended COOL measure was thus largely, but not entirely, focused on Label B.
2.54. Turning to the United States' argument that the omission of countries of raising on Label B
is not inaccurate because it is understood that an animal born in another country – i.e. outside the
United States – will have been raised for at least a portion of its life in that other country, Canada
responds that it is doubtful that a reasonable consumer would consider that an animal can be
accurately described as having been raised in the United States if it has spent considerable time,
and in many cases the majority of its raising period, in a foreign country. Therefore, it was
appropriate for the Panel to take account of the fact that "the amended COOL measure allows
labels to read 'raised in the United States' … on meat from Category B feeder cattle that spend a
substantial portion of their lives either in Canada or Mexico."
93
2.55. Canada further requests the Appellate Body to reject the United States' challenge of the
Panel's finding that Labels B and C are potentially inaccurate on the ground that the Panel erred by
not making a determination of whether the labels prescribed by the amended COOL measure are
even handed in their design and application, including whether a disconnect exists between, on the
one hand, the origin information required to be kept under the amended COOL measure and, on
the other hand, the origin information that is ultimately conveyed to consumers through the labels.
Canada contends that the Panel was correct in considering the upstream recordkeeping burden,
label accuracy, and the exemptions from coverage in its assessment of whether the detrimental
impact of the amended COOL measure stems exclus ively from legitimate regulatory distinctions.
For Canada, "[t]he interaction of these three factors within the 'overall architecture' of the
amended COOL measure"
94 supports the Panel's ultimate conclusion that "the detrimental impact
caused by the amended COOL measure does not stem exclusively from legitimate regulatory
distinctions"95, and this was a sufficient basis for finding a violation of Article 2.1 of the
TBT Agreement.

90 Canada's appellee's submission, para. 101 (quoting Panel Reports, paras. 7.242 and 7.244,
respectively).
91 Canada's appellee's submission, para. 106 (referring to Appellate Body Reports, US – COOL,
para. 271, in turn referring to Appellate Body Report, US – Clove Cigarettes, para. 182).
94 Canada's appellee's submission, para. 108.
WT/DS384/AB/RW • WT/DS386/AB/RW

2.2.1.3 The exemptions under the amended COOL measure
2.56. Canada requests the Appellate Body to reject the United States' claims concerning the
Panel's assessment of the exemptions under the amended COOL measure in its analysis of
whether the detrimental impact of that measure on imported livestock stems exclusively from
legitimate regulatory distinctions.
2.57. Canada first requests the Appellate Body to reject the United States' argument that the
Panel erred in finding that the exemptions under the amended COOL measure are relevant to the
assessment of whether the detrimental impact of that measure on imported livestock stems
exclusively from legitimate regulatory distinctions. Canada notes that, consistent with the
approach adopted by the Appellate Body in the original disputes, the Panel identified the relevant
regulatory distinctions drawn by the amended COOL measure as the distinctions between the three
production steps, as well as the mandatory labels to be affixed to muscle cuts of beef and pork.
Noting the United States' argument that the exemptions are irrelevant because they are not
distinctions that account for the detrimental impact on imported livestock, Canada responds that
the Panel's attribution of relevance to the exemptions is consistent with the Appellate Body's
approach in the original disputes. Moreover, the Panel's approach is consistent with the general
legal framework that the Appellate Body has prescribed for assessing whether the relevant
regulatory distinctions drawn by a technical regulation are designed and applied in an even-handed
manner. Canada explains that this legal framework requires panels to scrutinize carefully the
particular circumstances of the case – that is, the design, architecture, revealing structure,
operation, and application of the technical regulation at issue – rather than simply the relevant
regulatory distinctions. In Canada's view, the Unit ed States requests the Appellate Body to ignore
the exemptions and to consider the legitimacy of the regulatory distinctions drawn by the
amended COOL measure in the abstract, divorced from the overall architecture of that measure.
2.58. Canada notes that, in support of its positi on, the United States repeatedly cites a statement
made by the Appellate Body in US – Tuna II (Mexico) that "[it] only need[ed] to examine the
distinction that account[ed] for the detrimental impact on Mexican tuna products as compared to
US tuna products and tuna products originating in other countries."
96 I n C a n a d a ' s v i e w , t h i s
statement should be read as guidance that a determination should be focused on whether the
detrimental impact caused by the relevant regulatory distinctions reflects arbitrary or unjustifiable
discrimination. In the light of the clear guidance that the Appellate Body has provided to panels, as
well as the analysis conducted by the Appellate Body in the original disputes, the statement relied
on by the United States cannot credibly be interpreted as a prohibition on the consideration of
elements of a challenged technical regulation – or the particular circumstances of the case – that
do not directly account for the detrimental impact on imported products but, nevertheless,
demonstrate the arbitrary or unjustifiable character of such impact.
2.59. As regards the United States' argument that the Panel failed to take account of the fact that
the exemptions apply equally to meat derived from imported and domestic livestock and are thus
even handed, Canada responds that the United States' argument reveals a fundamental
misunderstanding of the analysis under Article 2.1 of the TBT Agreement. The Panel took the
exemptions into account as part of its assessment of the "overall architecture" of the amended
COOL measure. In this regard, the Panel, like the Appellate Body in the original disputes,
determined that the exemptions under the amended COOL measure demonstrate that the
recordkeeping burden giving rise to the detrimental impact cannot be explained by the need to
convey to consumers information regarding the countries where livestock were born, raised, and
slaughtered. Canada highlights that this ultimately led the Panel to conclude that the detrimental
impact of the amended COOL measure on import ed livestock does not stem exclusively from
legitimate regulatory distinctions.
2.60. Canada further contends that the United States' reliance on differences between, on the one
hand, the exemptions under the measures at issue in US – Clove Cigarettes and EC – Seal
Products and, on the other hand, the exemptions under the amended COOL measure should be
rejected, because the Appellate Body has not indicated that exemptions must exhibit certain
characteristics to be relevant to an analysis und er Article 2.1. Instead, the Appellate Body has

96 Canada's appellee's submission, para. 62 (quoting Appellate Body Report, US – Tuna II (Mexico),
para. 286 (emphasis original)).
WT/DS384/AB/RW • WT/DS386/AB/RW

been clear that panels are required to base their determination of de facto discrimination "on the
totality of facts and circumstances" before them.97
2.61. Canada also requests the Appellate Body to reject the United States' contention that the
Panel erred in its assessment of the exemptions by failing to take into account the legitimate
desire of Members to adjust the scope of their technical regulations in order to take account of
cost considerations. Canada submits that the Panel correctly found that, while such considerations
"are not per se prohibited", they do not constitute a "supervening justification for discriminatory
measures".
98 In addition, Canada contends that the cost savings achieved by exempt US entities
do not detract from the fact that the amende d COOL measure arbitrarily and unjustifiably
discriminates against Canadian livestock. Thus, for Canada, the position of the United States that
the cost savings achieved by the exemptions nullify the discriminatory effects of the amended
COOL measure is "untenable".
99
2.62. Canada further requests the Appellate Body to reject the United States' claim that the Panel
erred in its assessment of the exemptions becaus e it failed to examine whether the nature and
scope of these exemptions establish a "disconnect" between the origin information collected by
producers and processors of livestock and the origin information conveyed to consumers on labels
that is so disproportionate as to support the conclusion that the detrimental impact of the
amended COOL measure reflects discrimination. For Canada, the Panel was thorough in its
assessment of the contribution made by the exemptions to the informational "disconnect"
identified by the Appellate Body in the original di sputes. In this regard, the Panel determined that,
because of the exemptions under the amended C OOL measure, of total US beef consumption,
between 16.3% and 24.5% are muscle cuts carrying Labels A-D, and between 16.6% and 17.8%
are ground meat carrying Label E.
100 Moreover, Canada submits that the increased recordkeeping
burden entailed by the amended COOL measure, and the fact that the greatest incremental
improvement in origin information achieved by the 2013 Final Rule is for Labels B and C in a
market dominated by Label A, reveal how marg inal the contribution of the amended COOL
measure is to the rectification of the informational "disconnect" identified by the Appellate Body in
the original disputes. Canada, thus, submits that the United States' characterization of the Panel's
treatment of the exemptions in its analysis of the legitimacy of regulatory distinctions under
Article 2.1 does not withstand scrutiny.
2.63. In addition, Canada requests the Appellate Body to reject the United States' claim that the
Panel's conclusions concerning the exemptions are legally erroneous because the Panel failed to
undertake an evaluation of the operation of these exemptions in the US market, and pointed to no
evidence in support of its findings. Canada submits that the United States' challenge to the Panel's
conclusion essentially concerns the merits of the adopted findings of the original panel and the
Appellate Body in the original disputes to the effect that the ultimate disposition of a meat product
is often not known at any particular stage of distribution. These findings, contends Canada, are
factual findings and, to the extent that the United States seeks to challenge them, this challenge is
outside of the scope of this appeal in the absence of an explicit claim under Article 11 of the DSU.
2.64. In any event, Canada asserts that the United States has not questioned the continued
accuracy of the findings of the original panel and the Appellate Body in the original disputes.
Canada points out that it relied on those findings in making its prima facie case under Article 2.1 of
the TBT Agreement, and the Panel correctly relied on those findings in its assessment of the
exemptions.
101 Canada highlights that the Appellate Body has considered that "doubts could arise
about the objective nature of an Article 21.5 panel' s assessment if, on a specific issue, that panel
were to deviate from the reasoning in the original panel report in the absence of any change in the
underlying evidence in the record."
102 Thus, having not been presented with any evidence that
would affect the findings of the original panel concerning the operation of the exemptions in the

97 Canada's appellee's submission, para. 70 (quoting Appellate Body Report, US – Clove Cigarettes,
para. 206).
99 Canada's appellee's submission, para. 76.
100 Canada's appellee's submission, para. 79 (referring to Panel Reports, para. 7.258).
101 Canada's appellee's submission, para. 34 (referring to Canada's first written submission to the Panel,
102 Canada's appellee's submission, para. 87 (quoting Appellate Body Report, US – Upland Cotton
(Article 21.5 – Brazil), para. 386, in turn quoting Appellate Body Report, US – Softwood Lumber VI
(Article 21.5 – Canada), para. 103).
WT/DS384/AB/RW • WT/DS386/AB/RW

US market, the compliance Panel was correct in not deviating from the reasoning of the original
panel on this issue.
2.65. Canada submits further that the United St ates' criticism of Canada for failing to present
evidence that distinct distribution channels do not exist for the sale of meat to entities that are
exempt, and not exempt, from the COOL requirem ents is inconsistent with basic principles
concerning the allocation of the burden of proof in WTO dispute settlement proceedings. A party
asserting a fact must provide proof thereof. Thus, Canada did not have a burden to discharge with
respect to an adopted finding made by the original panel that the United States did not take issue
with before the compliance Panel. Instead, had the United States claimed before the compliance
Panel that distinct distribution channels currently exist for the sale of meat to entities that are
exempt, and not exempt, from the COOL requirem ents, the United States would have borne the
burden of proving this.
2.66. Finally, although Canada considers that the arguments brought by the United States raise
factual issues that are outside the scope of appellate review, Canada contends that, in any event,
evidence on the record does not support the United States' contention that distinct distribution
channels exist for the sale of meat products to exempt US entities. In this regard, Canada relies
on, inter alia, several statements of the USDA in its analyses of the impact that the original and
amended COOL measures would entail in the pork, beef, hog, and cattle markets in the
United States.
2.2.2 Article 2.2 of the TBT Agreement
2.67. Canada requests the Appellate Body to reject the United States' conditional appeal with
respect to certain aspects of the Panel's interpretation of Article 2.2 of the TBT Agreement. Canada
submits that this appeal reflects a mistaken understanding of that provision. Canada argues that,
contrary to the United States' understanding , the phrase "taking account of the risks
non-fulfilment would create" is not merely descriptive or hortatory
103; rather, it is an integral part
of the obligation under Article 2.2, and means that the trade-restrictiveness of a technical
regulation has to be calibrated to the gravity of the consequences that may arise if its objective is
not fulfilled.
2.68. Canada contends that the GATT 1994 is directed to the substantial reduction of barriers to
trade, and that the TBT Agreement contributes to the objectives of the GATT 1994 through the
same means. Technical regulations are a class of measures that may be used to pursue objectives
whose importance varies. Technical regulations may seriously hinder international trade and the
risks at issue may not always justify such restrictions. Canada submits that the phrase "taking
account of the risks non-fulfilment would create" reflects those considerations and, in that regard,
it differs significantly from Article 5.6 of th e Agreement on the Application of Sanitary and
Phytosanitary Measures (SPS Agreement), since the SPS Agreement is directed at very important
objectives with grave consequences.
2.69. In Canada's view, the recognition in the sixth preambular recital of the TBT Agreement that
a Member may take measures necessary to fulfil certain objectives "at the levels it considers
appropriate" is qualified by the clause that such measures must be "otherwise in accordance with
the provisions of [the TBT] Agreement". Thus, "taking account of the risks non-fulfilment would
create" under Article 2.2 requires the weighing and balancing of relevant factors in a "relational"
analysis to determine whether the trade-restrictiveness of the measure is calibrated to the risks.
2.70. In Canada's view, an assessment of "the risks non-fulfilment would create" is not a political
or regulatory matter for the Member concerne d, but is, rather, a legal requirement under
Article 2.2 of the TBT Agreement. It is thus for a panel to assess on the basis of reason, which is
neither purely subjective nor purely objective, contrary to the arguments of the United States.

103 Canada's appellee's submission, para. 123.
WT/DS384/AB/RW • WT/DS386/AB/RW

2.2.3 Articles III:4 and IX of the GATT 1994
2.71. Canada requests the Appellate Body to uphold the Panel's finding in respect of Article III:4
of the GATT 1994 and to reject the approach of re lying on Article IX in the interpretation of
Article III:4 of the GATT 1994, as suggested by the United States.104 For Canada, it was correct for
the Panel not to address Article IX, because the United States had made no defensive claim under
that provision, nor had it presented evidence in that regard. Canada explains that the
Appellate Body in US – Gambling made it clear that a responding Member cannot expect a panel to
formulate a defence or rebuttal argument for it and then rule on it.
105
2.72. Canada disagrees with the United States' argument that the approach taken by the Panel in
these disputes would render Article IX "inutile".106 Canada alleges that the United States has failed
to explain why that would be so, and refers to oral arguments before the panel and the
Appellate Body in the original proceedings in which it had explained why, in its view, Article IX of
the GATT 1994 is not relevant to the facts of this case.
2.73. Canada maintains that, even if the Appellate Body were to be of the view that reliance by
the United States on Article IX does not amount to an affirmative defence, then there would still be
strong reasons, based on considerations of due process, not to entertain the United States'
argument based on Article IX. In this regard, Canada refers to the Appellate Body reports in EC –
Seal Products, and submits that the Appellate Body refrai ned from completing the legal analysis in
view of the novel character of an issue that the panel had not examined, and on which the panel
made no findings.
107 In Canada's view, similar considerations of due process apply to the reliance
by the United States on Article IX of the GATT 1994 at this stage in the present dispute, in the
light of a "complete absence" of legal arguments in this regard before the compliance Panel. 108 In
any event, Canada maintains that the legal test for Article III:4 of the GATT 1994 is well
established and should not be modified as suggested by the United States.
2.2.4 Article XX of the GATT 1994
2.74. Canada requests the Appellate Body to uphold the Panel's finding in respect of Article III:4
of the GATT 1994 and to reject the United States' request to find that the Panel erred in not
addressing the availability of Article XX of th e GATT 1994 as an exception for the amended COOL
measure and to complete the legal analysis and determine which of the Article XX exceptions
would be available. For Canada, the United States' request resembles a request for an "advisory
opinion".
109
2.75. Canada highlights that, while both in the original proceedings and in the Article 21.5
proceedings it had claimed that the measures at issue were inconsistent with Article III:4, the
United States chose not to raise a defence under Article XX. For Canada, the present request of
the United States is an attempt to advance such a defence at the final stage of the disputes,
contrary to the principles of due process and previous jurisprudence of the Appellate Body.
2.76. Canada disagrees with the United States' argument that it could not have predicted the
Appellate Body's ruling in EC – Seal Products . First, the Appellate Body reports in EC – Seal
Products simply upheld the finding of the panel on this point. Canada also highlights that the issue
of the applicability of the legitimate regulatory distinctions criterion to the test under Article III:4
of the GATT 1994 was a key issue throughout the EC – Seal Products disputes, and that the
United States as a third participant in those disputes was aware of this.
110 Moreover, Canada
explains that the Appellate Body report in US – Tuna II (Mexico) already clarified that the scope
and content of the national treatment obligations of the TBT Agreement and of the GATT 1994 are

104 Canada's appellee's submission, para. 150.
105 Canada's appellee's submission, para. 143 (referring to Appellate Body Report, US – Gambling,
para. 282).
106 Canada's appellee's submission, para. 142 (quoting United States' appellant's submission,
para. 289).
107 Canada's appellee's submission, para. 144 (referring to Appellate Body Reports, EC – Seal Products,
para. 5.69).
108 Canada's appellee's submission, para. 144.
109 Canada's appellee's submission, para. 145.
110 Canada's appellee's submission, para. 146 (referring to United States' third participant's submission
in EC – Seal Products, paras. 4-26).
WT/DS384/AB/RW • WT/DS386/AB/RW

not the same. Therefore, the United States could well have foreseen the possibility that
consideration of legitimate regulatory distinctions relevant under Article 2.1 of the TBT Agreement
would not be relevant in respect of Article III:4 of the GATT 1994. Canada further argues that the
United States could have structured its defence in the present disputes so as to accommodate the
possibility of the panel's and Appellate Body's findings in EC – Seal Products by raising a defence
under Article XX of the GATT 1994 in the alternative, should its "novel interpretation" of
Article III:4 not be accepted.
111
2.77. Finally, Canada highlights that, while under Article XX of the GATT 1994 a measure must be
provisionally justified under one of the subparagraphs of that provision, the United States has not
identified any subparagraph, let alone provisionally justified the amended COOL measure under a
subparagraph. Furthermore, even at the interim review stage, the United States limited itself to
asserting that "there must be an Article XX ex ception that would be available for COOL", and
requesting the Panel to "address the availability of Article XX as an exception for Article III:4 with
respect to COOL" in general terms.
112 According to Canada, the Panel was correct in denying this
request because it would have required examination of an issue for which neither the
United States, nor the complainants, had provided specific evidence or arguments.
2.2.5 Article XXIII:1(b) of the GATT 1994
2.78. Canada requests the Appellate Body to reject the United States' appeal of the Panel's
interpretation of Article 21.5 of the DSU. With respect to the United States' claim that Canada's
non-violation claim fell outside the Panel's terms of reference, Canada maintains that the
United States portrays the Panel as "having taken liberties with the text" of Article 21.5 of the
DSU.
113 For Canada, the Panel conducted a careful analysis of the text of Article 21.5 in its context
and in the light of its object and purpose, and co rrectly concluded that its jurisdiction included
Canada's non-violation claim. The Panel correctly considered the objective of Article 21.5 as being
the promotion of prompt compliance with the recommendations and rulings of the DSB, the
avoidance of requiring new proceedings, and the efficient use of the original panelists. 114 For
Canada, these are valid considerations going to the object and purpose of Article 21.5 in the
broader context of the WTO dispute settlement sy stem, and the Panel was entitled to point out
that the interpretation of Article 21.5 espoused by the United States would, as its consequence,
require the complainants in the Article 21.5 pr oceedings to request the establishment of an
entirely new panel in respect of a non-violation claim. For these reasons, Canada disagrees with
the United States' contention that the Panel used institutional considerations to override the text of
Article 21.5 of the DSU.
2.3 Arguments of Mexico – Appellee
2.3.1 Article 2.1 of the TBT Agreement
2.79. Mexico requests the Appellate Body to reject the United States' claim that the Panel erred in
concluding that the detrimental impact of the am ended COOL measure on imported livestock does
not stem exclusively from legitimate regulatory distinctions. According to Mexico, the Panel
correctly found that the relevant regulatory di stinctions under the amended COOL measure are
essentially the same as those under the original COOL measure. The Panel then correctly applied
the same legal framework that the Appellate Body applied in the original disputes in determining
whether these distinctions are "legitimate" for the purposes of Article 2.1 of the TBT Agreement.
2.3.1.1 The increased recordkeeping burden entailed by the amended COOL measure
2.80. Mexico requests the Appellate Body to reject the United States' claim that the Panel erred in
considering that its finding that the amended COOL measure entails an increased recordkeeping
burden constitutes an independent basis for concluding that the detrimental impact of that
measure does not stem exclusively from legitimate regulatory distinctions. According to Mexico,

111 Canada's appellee's submission, para. 147.
112 Canada's appellee's submission, para. 148 (referring to United States' appellant's submission,
113 Canada's appellee's submission, para. 152 (referring to United States' appellant's submission,
paras. 308-311).
114 Canada's appellee's submission, para. 153 (referring to Panel Reports, para. 7.661).
WT/DS384/AB/RW • WT/DS386/AB/RW

the United States' arguments are without merit because they are based on a misunderstanding of
the legal analysis that the Panel conducted under Ar ticle 2.1 of the TBT Agreement. In this regard,
the Panel considered the increased recordkeeping burden entailed by the amended COOL measure
as a relevant factor in the design, architecture, revealing structure, operation, and application of
the technical regulation at issue, which the Panel carefully scrutinized for the purpose of
determining whether the relevant regulatory distinctions under the amended COOL measure are
designed and applied in an even-handed manner. The framework applied by the Panel, in this
respect, is the same framework applied by th e Appellate Body in the original proceedings.
115
Moreover, contends Mexico, the Panel's application of this framework demonstrates that the Panel
carefully considered the proportionality of the burden of recordkeeping and verification
requirements imposed on producers and processors of livestock, in relation to the origin
information that is actually provided to consumers of meat products in the US market.
2.81. In addition, Mexico contends that, contrary to the United States' assertions, the Panel's
analysis of the legitimacy of regulatory distinctions drawn by the amended COOL measure involved
a comparison of the burden of recordkeeping and the provision of information through labels. In
this regard, the Panel determined that the amen ded COOL measure is designed and applied in a
manner that: (i) increases the origin information communicated to consumers through mandatory
retail labels of muscle cuts of meat sold in retail establishments; (ii) necessarily increases the
recordkeeping burden on upstream producers and processors of livestock in order to do so; and
(iii) maintains the same proportion of information that is not communicated at all to consumers
due to the exemptions from coverage. Accordingly, Mexico submits that the United States'
argument that the Panel used its finding that the amended COOL measure entails an increased
recordkeeping burden as an independent basis for its conclusion under Article 2.1 of the
TBT Agreement is without merit.
2.82. Mexico further requests the Appellate Body to reject the United States' claim that the
Panel's finding that the amended COOL measure entails an increased recordkeeping burden is in
error because the Panel erred in its analysis of the impact of the point-of-production labelling
requirement and the elimination of the country orde r flexibility on recordkeeping. For Mexico, the
United States' claim improperly challenges factual findings made by the Panel and should not be
considered by the Appellate Body in the absence of an explicit claim under Article 11 of the DSU.
2.83. In any event, as regards the Panel's analys is of the impact of point-of-production labelling
on recordkeeping, Mexico requests the Appellate Body to reject the United States' contention that
the Panel's analysis is in error because it is based on incorrect hypothetical scenarios that do not
reflect actual trade in livestock among the three parties to the disputes. According to Mexico, the
United States' arguments are premised on a fundamental mischaracterization of the Panel's
reasoning. Mexico recalls, in this regard, that, in its analysis of the impact of point-of-production
labelling on recordkeeping, the Panel recognized that point-of-production labelling does not
increase the number of labels for Category A, B, and C muscle cuts of a single foreign origin.
However, the Panel found that point-of-production labelling increases the number of distinct labels
in respect of: Category B muscle cuts of different foreign origins; Category B muscle cuts of
different, multiple foreign origins; and Category C muscle cuts of animals born in a foreign
country, raised in that and another foreign country, and imported into the United States for
immediate slaughter (where only the country of im mediate import can be shown as the country of
raising on the label). Mexico contends that, although the United States seeks to create the
impression that none of these scenarios is in any way realistic, the United States overlooks that
the Panel included in its discussion of Category B and C muscle cuts of "multiple foreign origins"
scenarios in which muscle cuts from different animals – some born in Mexico, some born in
Canada, and both slaughtered in the United St ates – would be packaged together. The Panel
correctly concluded that, under the original COOL measure, those muscle cuts could be packaged
with a single label while, under the amended COOL measure, they may not. Mexico highlights that
the United States has not explained why this scena rio is unrealistic. Moreover, the Panel correctly
noted that the 2009 Final Rule (AMS), itself, addressed scenarios involving non-commingled
Category B muscle cuts of multiple foreign origins, and that the 2013 Final Rule provides explicit
guidance as to the point-of-production labelling requirements that apply to livestock born and/or
raised in multiple foreign countries. Mexico submits that the fact that the USDA considered these

115 Mexico's appellee's submission, para. 26 (referring to Panel Reports, paras. 7.194-7.195).
WT/DS384/AB/RW • WT/DS386/AB/RW

very scenarios as warranting specific attention undermines the credibility of the United States'
criticism of the Panel's analysis.116
2.84. Mexico further requests the Appellate Body to reject the United States' contention that the
Panel erred in finding that the removal of the country order flexibility increases the recordkeeping
burden for US-slaughtered livestock and in considering that this finding supports its ultimate
conclusion under Article 2.1 of the TBT Agreement. Mexico points out that, contrary to the
United States' assertion, the Panel made no finding that "the removal of the country order
flexibility supported a conclusion that the detrimental impact does not stem exclusively from
legitimate regulatory distinctions through increased recordkeeping."
117 Instead, the Panel found
that the greater diversity of labels resulting from the elimination of both the commingling and
country order flexibilities "creates a multiplicity of scenarios for which distinct and commensurate
substantiating records are now required"
118, and that the "increase in the number of distinct labels
and in segregation logically entails a higher recordkeeping burden." 119 In addition, in the light of
the nature of the "origin claims" that must be substantiated through the records that are created
and maintained by meat processors, packers, and retailers, the Panel found that the amended
COOL measure necessarily leads to a higher re cordkeeping burden and higher costs for these
industry participants. Mexico highlights, further, that the Panel took into account the USDA's own
admission that greater costs would be incurred by industry participants as a result of the
elimination of the flexibilities previously available under the original COOL measure.
2.3.1.2 The accuracy of labels prescribed by the amended COOL measure
2.85. Mexico requests the Appellate Body to reject the United States' contention that the Panel
erred in finding that Labels B and C under the amended COOL measure are potentially inaccurate
because the Panel based this finding on incorrect hypothetical scenarios that are not reflective of
actual trade in livestock between the three parties to the disputes. Mexico submits that, contrary
to the United States' assertions, the Panel's concerns regarding potential label inaccuracy under
the amended COOL measure focused on Category B feeder cattle that spend a substantial portion
of their lives either in Canada or Mexico, and that the United States itself admits that this scenario
occurs. Moreover, the Panel's finding of a potential for label inaccuracy in relation to Label B is not
based on incorrect hypothetical livestock trade scenarios, as the United States alleges but, rather,
on a carefully reasoned and objective assessment of the implications of the design and application
of the labelling rules prescribed by the amende d COOL measure for muscle cuts of beef. In
undertaking this assessment, the Panel clearly and consistently indicated where "certain so-called
'hypothetical scenarios' would be unlikely to occur wi th material frequency in actual practice", and
discounted them accordingly.
120 The Panel's finding is not based on these infrequent scenarios but,
rather, on specific scenarios in which the amended COOL measure, in its application, would permit
labels indicating only "raised in the United States" for "livestock that commonly spend between
approximately one third and one half of their lives elsewhere".
121 This was not an unlikely
"hypothetical scenario" but, rather, a reasoned finding of a reality based on the average age at
which Category B feeder cattle are imported into the United States from Mexico and Canada.
2.86. As regards Label C, Mexico observes that the Panel recognized that the potential
inaccuracies that it observed with respect to the omission of countries of raising on that label were
less likely to occur in practice. It is, thus, clear from the Panel's reasoning that its concerns
regarding a potential for label inaccuracy under the amended COOL measure were focused on
Label B, in respect of which the Panel found that, "in its application, the amended COOL measure
permits labels indicating 'raised in the United States' alone for livestock that commonly spend
between approximately one third and on e half of their lives elsewhere."
122 By contrast, the Panel
expressed very limited concerns about the potential inaccuracies arising in respect of Label C,

116 Mexico's appellee's submission, para. 35.
117 Mexico's appellee's submission, para. 39 (quoting United States' appellant's submission, paras. 21
and 129).
120 Mexico's appellee's submission, para. 46 (referring to Panel Reports, para. 7.238).
122 Mexico's appellee's submission, para. 47 (quoting Panel Reports, para. 7.244 (emphasis original)).
WT/DS384/AB/RW • WT/DS386/AB/RW

precisely because scenarios giving rise to such inaccuracies "appear to be unlikely in the
United States' actual trade of livestock."123
2.87. Mexico considers further that the United St ates' reliance on the Appellate Body report in
Canada – Periodicals is also incorrect, as the Panel did not undertake an inadequate factual
analysis but, rather, undertook a careful, detailed, and thorough factual analysis to arrive logically
at its conclusion. Accordingly, the United States' argument that the Panel erred in basing its
finding that the amended COOL measure entails a potential for label inaccuracy on incorrect
hypothetical scenarios is premised on a mischaracterization of the Panel's reasoning and findings,
and should, therefore, be rejected.
2.3.1.3 The exemptions under the amended COOL measure
2.88. Mexico requests the Appellate Body to reject the United States' claims concerning the
Panel's assessment of the exemptions under the amended COOL measure in its analysis of
whether the detrimental impact of that measure on imported livestock stems exclusively from
legitimate regulatory distinctions.
2.89. Mexico considers as being without merit the United States' argument that the Panel erred in
finding that the exemptions under the amended COOL measure are relevant to the analysis of
whether the detrimental impact of that measure on imported livestock stems exclusively from
legitimate regulatory distinctions. According to Mexico, the Panel correctly found that the
exemptions are relevant to the analysis becaus e they are essential elements of the design,
architecture, revealing structure, operation, and application of the amended COOL measure.
Mexico asserts further that, contrary to what the United States suggests, an examination of
whether the detrimental impact of a technical regulation stems exclusively from legitimate
regulatory distinctions should not be undertaken in a vacuum. Instead, such an examination must
take into account the operation and application of the relevant regulatory distinctions within the
context of the design, overall architecture, and revealing structure of the technical regulation at
issue. For Mexico, the United States' approach wo uld insulate from examination the elements of a
regulatory regime that evidence a lack of even-handedness in the design, operation, and
application of the elements that cause the detrimental impact.
2.90. Mexico agrees that, in assessing whether the detrimental impact of a technical regulation on
imported products stems exclusively from legiti mate regulatory distinctions, a panel needs to
examine only the regulatory distinctions drawn by that technical regulation that account for such
detrimental impact. Contrary to the interpretation proposed by the United States, however, the
Appellate Body's statements in US – Tuna II (Mexico) and EC – Seal Products do not restrict or
narrow the manner in which the legitimacy of the relevant regulatory distinctions should be
examined for the purposes of Article 2.1 of the TBT Agreement. Such an examination must take
into account the operation and application of the relevant regulatory distinction – i.e. how it
functions in practice – within the context of the design, overall architecture, and revealing
structure of the technical regulation as it operates and is applied in the real world. Mexico
emphasizes that the Appellate Body confirmed as mu ch in the original disputes when it explained
that, "[i]n assessing even-handedness, a panel must 'carefully scrutinize … the design,
architecture, revealing structure, operation and application of the technical regulation at issue'."
124
2.91. Mexico also requests the Appellate Body to reject the United States' contention that the
Panel erred in its assessment of the exemptions by failing to take account of the fact that the
exemptions apply equally to meat derived from imported and domestic livestock and are, thus,
even handed. Mexico asserts that the Appellate Body has established that the regulatory
distinctions that account for the detrimental impact on imported products must be assessed for the
purpose of determining whether they are design ed and applied in an even-handed manner. By
contrast, it is not necessary to determine also whether other aspects of the measure – i.e. aspects
that do not account for the detrimental impact on imported products – are designed or applied in
an even-handed manner. Mexico contends that th e even-handedness of the exemptions under the
amended COOL measure was not at issue before the compliance Panel because they are not
regulatory distinctions that account for the detrimental impact on imported livestock. Accordingly,

123 Mexico's appellee's submission, para. 47 (quoting Panel Reports, para. 7.252 (fn omitted)).
124 Mexico's appellee's submission, para. 57 (quoting Appellate Body Reports, US – COOL, para. 271, in
turn referring to Appellate Body Report, US – Clove Cigarettes, para. 182).
WT/DS384/AB/RW • WT/DS386/AB/RW

the question of whether the exemptions under the amended COOL measure are designed or
applied in an even-handed manner is entirely irrelevant to the pertinent legal issue, i.e. whether
the relevant regulatory distinctions that account for the detrimental impact on imported livestock
are designed or applied in an even-handed manner . In Mexico's view, the United States fails to
recognize that the exemptions are relevant as part of the overall analysis of how the relevant
regulatory distinctions are designed and applied within the context of the amended COOL measure.
2.92. Responding to the United States' characterization of the exemptions as "even handed",
Mexico submits that the fact that certain US entities may enjoy cost savings as a result of the
exemptions has no bearing on the fact that the exemptions, as a central element of the overall
design and architecture of the amended COOL measure, contribute to the informational
"disconnect" created by the amended COOL measure between the origin information tracked and
transmitted by producers of livestock and the or igin information conveyed to consumers through
the mandatory labels.
125
2.93. With regard to the United States' argument that the Panel failed to take into account cost
considerations in its assessment of the exempt ions under the amended COOL measure, Mexico
responds that any cost savings achieved by these exemptions cannot excuse, justify,
counterbalance, or otherwise legitimize the discrim inatory effects of that measure. Thus, the cost
savings entailed by the exemptions under the amended COOL measure do not alter the reality that
these exemptions remove a significant proportion of beef products from the scope of the
requirements of the amended COOL measure altogether, thereby preventing the origin information
that is required to be collected by producers of livestock from being conveyed to consumers.
Mexico highlights that it was for this reason that the Panel considered the exemptions as evidence
that the recordkeeping burden giving rise to th e detrimental impact on imported livestock cannot
be explained by the need to convey to consumers information regarding the countries where
livestock were born, raised, and slaughtered. Mexico submits that the cost savings for US entities
excluded from the COOL requirements achieved by the exemptions do not affect this conclusion.
Mexico highlights further that the United States' arguments ignore the Appellate Body's clear
pronouncement that, although "[n]othing in Article 2.1 prevents a Member from seeking to
minimize the potential costs arising from technical regulations", this is qualified by the requirement
that "the technical regulation at issue does not overtly or covertly discriminate against imports."
126
In Mexico's view, the amended COOL measure fails to comply with this requirement.
2.94. Mexico further requests the Appellate Body to reject the United States' claim that the Panel
erred in its assessment of the exemptions because the Panel failed to examine whether the nature
and scope of these exemptions establish a "disco nnect" between the origin information collected
by producers and processors of livestock and th e origin information conveyed to consumers on
labels that is so disproportionate as to support the conclusion that the detrimental impact of the
amended COOL measure reflects discrimination. For Mexico, the United States' arguments lack
merit because, "even if" more detailed and accurate origin information is now provided to
consumers of meat sold in retail establishments, there is still no origin information at all provided
to consumers with respect to the majority of beef products consumed in the United States.
127
Thus, there continues to be a significant "disco nnect" between, on the one hand, the information
collected by producers and processors of livestock and, on the other hand, the information
ultimately conveyed to consumers of meat products in the US market.
2.95. Mexico also addresses the United States' claim that the Panel's conclusions concerning the
exemptions are legally erroneous because the Panel failed to undertake an evaluation of the
operation of the exemptions in the US market, and, in particular, the United States' allegation that
the Panel erred by not making a finding that the existence of the exemptions provides an incentive
to establish distribution channels to avoid cost related to the COOL requirements.128 Mexico alleges
that the United States is attempting to shift its own burden of proof to the complainants or the
Panel. Noting the United States' argument that the Panel committed legal error because it did not
evaluate evidence and make sufficient findings in relation to the US market, Mexico points out that
the United States did not present any arguments or evidence to the compliance Panel that called

125 Mexico's appellee's submission, para. 69 (referring to Panel Reports, para. 7.272).
126 Mexico's appellee's submission, para. 71 (quoting Appellate Body Report, US – Clove Cigarettes,
fn 431 to para. 221).
127 Mexico's appellee's submission, para. 76.
128 Mexico's appellee's submission, para. 77 (quoting United States' appellant's submission, para. 246).
WT/DS384/AB/RW • WT/DS386/AB/RW

into question the findings of the panel and the Appellate Body in the original disputes concerning
the effect of the exemptions from the COOL requir ements. Mexico highlights that it did not bear a
burden to refute an argument that the United States did not raise.
2.96. In any event, Mexico considers that th e evidence on the record does not support the
United States' arguments. In this regard, the Panel made findings, based on undisputed evidence,
that Mexican cattle entering the United States have an average age of six to seven months, and
that the "slaughter age" of cattle is approximately 22 months.
129 According to Mexico, the
United States does not attempt to explain how the first US purchaser of Mexican cattle entering
the United States could know, 15 to 16 months prio r to the slaughter of the animal by unrelated
companies, whether the animal's meat would be dest ined for sale in entities that are exempt, or
not exempt, from the COOL requirements.
2.3.2 Article 2.2 of the TBT Agreement
2.97. Mexico requests the Appellate Body to reject the United States' appeal of the Panel's
findings relating to the clause "the risks non-fulfilment would create" in Article 2.2 of the
TBT Agreement. Mexico submits that the Panel's interpretation of this clause is correct. In Mexico's
view, "taking account of the risks non-fulfilment would create" requires, as part of the weighing
and balancing process, an assessment of whether there is proportionality between the trade-
restrictiveness of technical regulations and the risks non-fulfilment would create.
2.98. Mexico contends that the Appellate Body's reference to an "equivalent contribution" in US –
Tuna II (Mexico) is qualified by reference to the phrase "taking account of the risks non-fulfilment
would create" in Article 2.2.
130 In this regard, Mexico draws a distinction with the unqualified use
of the term "equivalent contribution" in Article XX of the GATT 1994 and Article XIV of the General
Agreement on Trade in Services (GATS). On that ba sis, the degree of contribution exhibited by a
proposed alternative measure need not be the same as the challenged measure. Instead, its
degree of contribution may be lesser where this is justified in the light of the risks non-fulfilment
would create.
2.99. Contrary to the interpretation advanced by the United States, Mexico presents a series of
reasons suggesting that the meaning of "taking a ccount of the risks non-fulfilment would create"
should not be equated with the meaning of "at the levels it considers appropriate" in the sixth
preambular recital of the TBT Agreement. First, Ar ticle 2.2 is not expressly qualified by the clause
"at the levels it considers appropriate". Second, the elements listed in the final sentence of
Article 2.2 are not consistent with an approach that equates "taking account of the risks
non-fulfilment would create" with "at the levels it considers appropriate". Third, the phrase "taking
account of the risks non-fulfilment would create" is unique to the necessity test in Article 2.2, and
thus the inclusion of this clause must mean something other than the level of protection
considered appropriate by a Member. Fourth, the clause "at the levels it considers appropriate" in
the sixth preambular recital of the TBT Agreement is subject to the relevant measures being
"otherwise in accordance with the provision of [the TBT] Agreement", which suggests that it is
subject to the disciplines of Article 2.2, incl uding the phrase "taking account of the risks
non-fulfilment would create".
2.100. Mexico further contends that the Panel's interpretation does not inappropriately interfere
with Members' right to regulate. Rather, Mexico considers that a Member's "policy space" is limited
by its obligations under the Marrakesh Agreement Establishing the World Trade Organization (WTO
Agreement) and the rights of other WTO Members.
131

130 Mexico's appellee's submission, para. 99 (referring to Appellate Body Report, US – Tuna II (Mexico),
(referring to Appellate Body Reports, US – COOL, para. 471, in turn referring to Appellate Body Report, US –
Tuna II (Mexico), para. 322).
131 Mexico's appellee's submission, para. 112 (quoting Original Panel Reports, US – COOL, para. 7.549;
and referring to Panel Reports, para. 7.485).
WT/DS384/AB/RW • WT/DS386/AB/RW

2.3.3 Articles III:4 and IX of the GATT 1994
2.101. Mexico requests the Appellate Body to upho ld the Panel's finding in respect of Article III:4
of the GATT 1994 and to reject the United States' appeal of that finding. Mexico understands that
the United States' argument relating to Article IX of the GATT 1994 is that this provision is part of
the context in which Article III:4 should be interpreted, and not that compliance with Article IX is a
defence to a violation of Article III:4. If, however, the United States was raising Article IX as a
defence, Mexico submits that this would be prec luded by Article 17.6 of the DSU, which limits
appeals to issues of law covered in the panel report, because the United States did not raise a
defence based on Article IX before the Panel.
2.102. Mexico disagrees with the United States that Article IX should be considered context
relevant to the interpretation of Article III:4. Mexico maintains that, while Article III:4 applies to
internal measures, Article IX applies to imports at the border. Because of this difference in the
coverage of the two provisions, Article IX is not relevant context for the interpretation of
Article III:4. In particular, with regard to the amended COOL measure, Mexico contends that
Labels A, B, and C are internal measures applying to beef processed from imported cattle within
the United States, and are therefore not "marks of origin" in the sense of Article IX. Label D,
however, could fall within the scope of Article IX because it relates to imported meat. Mexico
explains that it has not asserted that Label D aspects of the amended COOL measure are
inconsistent with the covered agreements, and further explains that it is not challenging
origin-marking requirements in general, but rather aspects of the amended COOL measure that
discourage the use of imported Mexican cattle to produce US beef products.
2.103. Furthermore, Mexico emphasizes that Arti cle IX is not an exception to Article III:4, but
that both provisions apply cumulatively and that Members must comply with both of them
simultaneously. In addition, Mexico submits that the United States suggested that, because of
Article IX of the GATT 1994, the analysis of wh ether the amended COOL measure denies national
treatment to imported livestock should be different under Article III:4 of the GATT 1994 and under
Article 2.1 of the TBT Agreement, and that this im plied that Article IX was not relevant context for
the interpretation of Article 2.1. However, in the original proceedings, the Appellate Body found
Article IX of the GATT 1994 to be relevant cont ext for the TBT Agreement, in finding that the
objective of the original COOL measure was le gitimate within the meaning of Article 2.2.
132
Because, at the same time, the Appellate Body did not find that its interpretation of Article 2.1
should be influenced by Article IX, Mexico submits that the United States' argument relating to
Article IX is inconsistent with the Appellate Body's analytical approach in the original proceedings.
2.3.4 Article XX of the GATT 1994
2.104. Mexico requests the Appellate Body to up hold the Panel's finding that the amended COOL
measure is inconsistent with Article III:4 of the GATT 1994 and to reject the United States' request
to find that the Panel erred in not addressing the availability of Article XX of the GATT 1994 as an
exception with respect to the am ended COOL measure. Mexico highlights that it is the Member
invoking Article XX that bears the burden to demonstrate that the measure at issue is justified
under that provision, and that the United States has not done so in these disputes. Mexico adds
that it is inappropriate for the United States to raise a defence under Article XX of the GATT 1994
on appeal when it did not raise an Article XX defence before the Panel, nor did it invoke Article XX
as a defence in its Notice of Appeal.
2.105. In response to the United States' reference to extraordinary circumstances in the present
disputes, Mexico submits that there is no change in the circumstances that could support the
United States' request that the Appellate Body address Article XX. Mexico disagrees with the
United States that the findings of the Appellate Body in EC – Seal Products were unforeseeable.
Mexico explains that the United States has presented Article XX defences to challenges under
Article III:4 in prior disputes, and submits that it must, therefore, be assumed that the
United States made a considered decision not to raise Article XX, even in the alternative, before
the Panel in the present case.
133 Moreover, Mexico submits that the findings of the Appellate Body
in EC – Seal Products are in line with the Appellate Body report in US – Clove Cigarettes , where

132 Mexico's appellee's submission, para. 129 (referring to Appellate Body Reports, US – COOL,
para. 445).
133 Mexico's appellee's submission, para. 133 (referring to the US – Shrimp and US – Gasoline disputes).
WT/DS384/AB/RW • WT/DS386/AB/RW

the Appellate Body observed that the "balance se t out in the preamble of the TBT Agreement … is
not, in principle, different from the balance set out in the GATT 1994, where obligations such as
national treatment in Article III are qualified by the general exceptions provision of Article XX".
134
2.106. Finally, Mexico points out that the fact that the United States has not specified which of the
subparagraphs of Article XX of the GATT 1994 it would wish to rely on as a defence makes it
impossible to follow the specific sequence of analys is prescribed by the Appellate Body with regard
to Article XX, i.e. first assessing whether the relevant subparagraph would provide provisional
justification to the measure, and then whether the same measure would meet the requirements of
the chapeau of Article XX of the GATT 1994. Mexico emphasizes that this omission affects Mexico's
due process right to rebut that defence.
2.3.5 Article XXIII:1(b) of the GATT 1994
2.107. Mexico submits that the Panel correct ly found that its non-violation claim under
Article XXIII:1(b) of the GATT 1994 was within its terms of reference. In Mexico's view, a
"measure taken to comply" that results in the non-violation nullification or impairment of a benefit
that accrues to a party under the GATT 1994 is no less inconsistent with the GATT 1994 than a
measure that results in the violation of one or more provisions. The mere existence of
Article XXIII:1(b) indicates that the application of a measure does not need to result in the
violation of a provision in order to be considered inconsistent with the GATT 1994, if it otherwise
nullifies or impairs a benefit accruing to a Member under that agreement.
2.108. Mexico further contends that the factual findings made by the Panel provide a sufficient
basis for the Appellate Body to complete the legal analysis and find that the amended COOL
measure nullifies or impairs benefits accruing to Mexico within the meaning of Article XXIII:1(b) of
the GATT 1994. In this respect, Mexico contends that it was uncontested that the amended COOL
measure is being applied by the United States; that the United States' WTO tariff concessions for
cattle are within the meaning of the term "benefit accruing" in the sense of Article XXIII:1(b) of
the GATT 1994 and Article 26.1 of the DSU; and that there was no compelling evidence to confirm
that the amended COOL measure could have been reasonably anticipated before its adoption.
135
2.4 Claims of error by Canada – Other appellant
2.4.1 Article 2.1 of the TBT Agreement
2.109. Canada does not take issue with the Panel's conclusion that the amended COOL measure is
inconsistent with Article 2.1 of the TBT Agreement; however, Canada requests the Appellate Body
to modify certain aspects of the Panel's analysis under Article 2.1. In particular, Canada alleges
that the Panel erred in its analysis by failing to assess appropriately the relevance of Labels D
and E, as well as the prohibition of a trace-back system, for the determination of whether the
detrimental impact of the amended COOL measure stems exclusively from legitimate regulatory
distinctions.
2.4.1.1 The Panel's analysis of Label D
2.110. Canada requests the Appellate Body to reverse the Panel's finding that the COOL
requirements applicable to Label D do not demonstrate that the detrimental impact of the
amended COOL measure reflects discrimination prohibited by Article 2.1 of the TBT Agreement.
2.111. Canada contends that the labelling requirements for Label D, together with the
informational shortcomings identified by the Panel with respect to Labels B and C, contribute to a
labelling regime in which the only information that can be relied on as invariably accurate is the
information conveyed on Label A – i.e. information in respect of livestock that were born, raised,
and slaughtered in the United States. Thus, the purported intention of the United States "to ensure
[that] label information accurately reflects the origin of muscle cut covered commodities" is belied
by the fact that a perfect consumer, who is fully in formed of the meaning of different categories of

134 Mexico's appellee's submission, para. 134 (quoting Appellate Body Report, US – Clove Cigarettes,
para. 96).
135 Mexico's appellee's submission, para. 144 (referring to Panel Reports, paras. 7.675, 7.690,
and 7.712).
WT/DS384/AB/RW • WT/DS386/AB/RW

labels under the amended COOL measure, can only be assured of receiving complete and accurate
information when purchasing Category A muscle cuts. 136 This discrepancy, according to Canada,
exposes the arbitrary and unjustifiable character of the discrimination against Canadian livestock.
Accordingly, the Panel erred by dismissing the relevance of Label D for its analysis of whether the
detrimental impact of the amended COOL measure re flects discrimination prohibited by Article 2.1
of the TBT Agreement.
2.112. Canada observes that the Panel dismissed the relevance of Label D on the following
grounds: (i) that the complainants had not provided evidence of Category D animals that were not
born and raised in the same foreign country in which they were slaughtered; (ii) that there existed
only a small portion of Category D muscle cuts in the US market; and (iii) that there was no claim
that Label D creates any detrimental impact on imported livestock.
137
2.113. With respect to the Panel's dismissal of the relevance of Label D on the ground that the
m a r k e t s h a r e o f C a t e g o r y D m u s c l e c u t s i n t h e U S m a r k e t i s s m a l l , C a n a d a r e c a l l s t h a t i t h a d
explained to the Panel that Canada imports tens of thousands, and sometimes hundreds of
thousands, of cattle annually and that, when feed is cheaper in Canada than in the United States,
economic incentives exist to import US animals th at can then be used to produce muscle cuts that
are then available for export to the United States. The statistics submitted to the Panel
demonstrate that Canada exports between 500,000-860,000 pounds of beef, and 630,000-
710,000 pounds of pork, to the United States on an annual basis. Although there is no tracing of
the specific meat produced from imported animals in Canada, it is "virtually certain" that some of
the meat that is exported to the United States is produced from animals that were born and/or
raised in the United States.
138 In addition, under appropriate market conditions, "both the flow of
U.S. livestock to Canada and Canadian meat to the U.S. would increase".139
2.114. Canada further contends that the Panel improperly faulted Canada for failing to provide
evidence of Category D animals that were not born and raised in the country in which they were
slaughtered. As the Panel observed, Canada does not track the life histories of animals. However,
in the light of the export volumes of meat from Canada to the United States, and the "sometimes
significant imports of livestock", it is "reasonable" to infer that at least some Category D meat
from Canada is obtained from animals not born and raised in Canada. 140 In any event, Canada
submits that, by requiring positive evidence of Ca tegory D animals that were not born and raised
in the country in which they were slaughtered, the Panel placed undue importance on "actual trade
effects" for the purposes of its analysis under Article 2.1, "despite having previously acknowledged
that 'there is no need to verify actual trade effects to dispose of claims under [TBT] Article 2.1'".141
2.115. Canada also takes issue with the Panel's ex clusion of Label D from its analysis of whether
the detrimental impact of the amended COOL measure reflects discrimination prohibited by
Article 2.1 of the TBT Agreement on the ground that Canada had not challenged Label D as
causing a detrimental impact on Canadian livestock. According to Canada, whether an aspect of a
challenged technical regulation is responsible for the detrimental impact on imported products is
not determinative of its relevance to the analysis of the legitimacy of regulatory distinctions under
Article 2.1. Instead, the "key determinant" is whether an element of the challenged technical
regulation is probative of the existence of arbitrary or unjustifiable discrimination or an absence of
even-handedness.
142
2.4.1.2 The Panel's analysis of Label E
2.116. Canada requests the Appellate Body to find that the Panel committed legal errors and
acted inconsistently with Article 11 of the DSU in concluding that Label E does not support the
conclusion that the detrimental impact of the amended COOL measure reflects discrimination
prohibited by Article 2.1 of the TBT Agreement. Canada notes that, on the one hand, the amended
COOL measure imposes stringent recordkeeping and verification requirements on upstream

136 Canada's other appellant's submission, para. 159 (quoting 2013 Final Rule, p. 31372).
137 Canada's other appellant's submission, para. 158.
138 Canada's other appellant's submission, para. 160.
139 Canada's other appellant's submission, para. 160.
140 Canada's other appellant's submission, para. 161.
141 Canada's other appellant's submission, para. 162 (quoting Panel Reports, para. 7.183).
142 Canada's other appellant's submission, para. 162.
WT/DS384/AB/RW • WT/DS386/AB/RW

producers of livestock used to produce domestic be ef trimmings, while, on the other hand, Label E
conveys inaccurate origin information. Canada submits that the operation of the COOL
requirements as they relate to Label E, therefore, demonstrate that the amended COOL measure is
inconsistent with Article 2.1 of the TBT Agreement.
2.117. First, Canada submits that the Panel erred by relying on the different forms of processing
undergone by muscle cuts and ground meat as support for the proposition that Label E should be
excluded from the analysis of whether the de trimental impact of the amended COOL measure
reflects discrimination. Canada explains that, although the processing of meat differs depending on
whether the final product is a muscle cut or ground meat, the processing of both products involves
the input of livestock and results in the production of meat products. The Panel failed to explain
why the different forms of processing undergone by muscle cuts and ground meat supports its
conclusion with respect to Label E. Canada adds that the Panel's approach with respect to Label E
is inconsistent with the Panel's correct approach to the exemptions under the amended COOL
measure. In particular, in assessing whether the detrimental impact of the amended COOL
measure stems exclusively from legitimate regulatory distinctions, the Panel took into account the
exemption of muscle cuts of meat that are ingr edients in processed food items from the COOL
requirements. For Canada, it was therefore "unreasonable" for the Panel to rely on the different
forms of processing undergone by muscle cuts and ground meat as a reason to exclude Label E
from its analysis under Article 2.1.
143
2.118. Second, Canada contends that the Panel erred by relying on the diverse origins of
"trimmings" involved in the processing of ground meat as a justification for its exclusion of Label E
from its analysis under Article 2.1. Canada explains that ground beef, like muscle cuts of beef, is
produced in the United States from inputs of muscle cuts of diverse origins. Canada submits that
the fact that, in recent years, producers in the United States have apparently sourced trimmings
from a slightly larger number of countries than is the case with respect to livestock used to
produce muscle cuts is not a factor that supports the Panel's exclusion of Label E from its analysis
under Article 2.1.
2.119. Third, Canada submits that the Panel's conclusion that the complainants did not submit
arguments in this compliance dispute as to the upstream burdens relating to ground meat "reveals
that [the Panel] disregarded evidence and argu ments submitted by Canada on precisely this
point."
144 Canada submits that the Panel, thus, acted inconsistently with its mandate under
Article 11 of the DSU.
2.4.1.3 The prohibition of a trace-back system
2.120. Canada requests the Appellate Body to find that the Panel erred in its assessment of the
relevance of the prohibition of a trace-back system under the amended COOL measure for the
analysis of whether the detrimental impact of th e amended COOL measure reflects discrimination
prohibited by Article 2.1 of the TBT Agreement.
2.121. Canada recalls that it had explained to the Panel that the mandatory identification of
animals is an integral component of a mandatory trace-back system, and that the amended COOL
measure effectively prohibits such a system. Fo r Canada, this element of the amended COOL
measure is a component of the "design" and "architecture" of that measure, which affects its
"operation". Canada submits that the trace-back pr ohibition should therefore have been "carefully
scrutinize[d]" by the Panel in accordance with th e guidance provided by the Appellate Body under
Article 2.1.
145
2.122. Canada submits that the Panel erred in dismissing Canada's arguments concerning the
relevance of the trace-back prohibition for the anal ysis under Article 2.1 on the basis of an alleged
failure of Canada to "provide specific arguments or evidence … as to the nature of the prohibited

143 Canada's other appellant's submission, para. 166.
144 Canada's other appellant's submission, para. 168 (referring to Panel Reports, para. 7.280; and
American Meat Institute (AMI) Fact Sheet, "Questions and Answers about Ground Beef, Hamburger and
Patties" (June 2011) (Panel Exhibit CDA-121); Canada's first written submission to the Panel, fn 93; second
written submission to the Panel, paras. 41-42; and comments on responses to Panel questions, para. 2).
145 Canada's other appellant's submission, para. 175 (referring to Appellate Body Reports, US – COOL,
para. 271, in turn referring to Appellate Body Report, US – Clove Cigarettes, para. 182).
WT/DS384/AB/RW • WT/DS386/AB/RW

trace-back measure." 146 I n t h i s r e g a r d , C a n a d a a s s e r t s t h a t i t i s c l e a r f r o m t h e t e x t o f t h e
amended COOL measure that no particular trace-back measure is prohibited. Rather, "the
prohibition applies to a key component – mandatory identification – of any trace-back measure,
thereby precluding the implementation of the origin labelling requirements through such a
measure."
147
2.123. Canada further submits that the Panel erred in dismissing Canada's argument on the
grounds that it was "limited to whether the trace-back prohibition necessitates the same (or
similar) audit and verification system of the amen ded COOL measure" and that it "reverts focus to
the claimed deficiencies of the amended COOL measure's labelling rules". 148 As Canada noted
before the Panel, the COOL statute requires that persons subject to audits provide the Secretary of
Agriculture with verification of the origin of covered commodities and that origin information be
maintained by persons supplying covered commodities to retailers. A trace-back system and the
amended COOL measure's system of recordkeeping and verification could both meet that origin
verification requirement. However, the trace-ba ck prohibition constitutes an explicit choice
between these two systems in favour of the recordkeeping and verification system that
discriminates against Canadian livestock. Canada contends that this choice between the two
systems is relevant to the analysis under Article 2.1 because it strongly influences the "design"
and "operation" of the amended COOL measure and reflects discrimination. Moreover, Canada
asserts that the existence of an alternative meas ure that would not cause discrimination – i.e. a
trace-back system – is evidence of arbitrary and unjustifiable discrimination, particularly where the
non-discriminatory alternative measure is prohibited.
2.4.2 Article 2.2 of the TBT Agreement
2.4.2.1 Introduction
2.124. Canada requests the Appellate Body to reverse the Panel's conclusion that Canada failed to
make a prima facie case that the amended COOL measure is more trade restrictive than
necessary, "taking account of the risks non-fulfilment would create".
149 Canada alleges that the
Panel made a series of errors in respect of the interpretation and application of Article 2.2 of the
T B T A g r e e m e n t , a n d i n f a i l i n g t o m a k e a n o b j ective assessment of the matter before it, that
warrant the reversal of the Panel's conclusion in this regard. First, Canada submits that the Panel
erred in its analysis of the degree of contribu tion made by the amended COOL measure to its
objective in two ways, namely: (i) by making a legal error in excluding Labels D and E from its
analysis; and (ii) by failing to make an objective assessment of the matter at issue pursuant to
Article 11 of the DSU. Second, Canada argues that the Panel erred in its articulation of the legal
test under Article 2.2 of the TBT Agreement, both in general terms, as well as specifically in
respect of the phrase "taking account of the risks non-fulfilment would create". Third, Canada
claims that the Panel erred in concluding that it could not assess the gravity of the consequences
of non-fulfilment of the amended COOL measure to its objective. Fourth, Canada claims that the
Panel erred by failing correctly to "tak[e] account of the risks non-fulfilment would create" in its
analysis of Canada's claims, including in respect of its first and second proposed alternative
measures.
2.125. With regard to the Panel's analysis of "the risks non-fulfilment would create", Canada
advances two alternative positions. First, Canada considers that the Panel erred in finding that
Canada failed to make a prima facie case that the first and second proposed alternative measures
would contribute to a degree equivalent to that of the amended COOL measure. Second, in the
alternative, Canada argues that the Panel failed to conclude that the significantly lower degree of
trade-restrictiveness of the first and second proposed alternative measures counterbalances the
difference in their degrees of contribution vis-à-vis the amended COOL measure. Canada requests
the Appellate Body to complete the legal analysis of its claims under Article 2.2 of the
TBT Agreement in respect of its first and second proposed alternative measures.

146 Canada's other appellant's submission, para. 176 (quoting Panel Reports, para. 7.281).
147 Canada's other appellant's submission, para. 176. (emphasis original)
148 Canada's other appellant's submission, para. 177 (quoting Panel Reports, para. 7.281).
149 Canada's other appellant's submission, para. 23.
WT/DS384/AB/RW • WT/DS386/AB/RW

2.126. Separately, Canada requests the Appellate Body to find that the Panel erred in the burden
of proof that it applied in respect of Canada's third and fourth proposed alternative measures.
Canada does not request the Appellate Body to complete the legal analysis in respect of these
proposed alternative measures.
2.4.2.2 The legal test under Article 2.2 of the TBT Agreement
2.127. Canada claims that the Panel erred in articulating the legal test under Article 2.2 of the
TBT Agreement, both generally as well as specifically in respect of the phrase "taking account of
the risks non-fulfilment would create".
2.128. In respect of the Panel's articulation of the legal test generally, Canada claims that the
Panel failed to indicate that the amended COOL measure's degree of contribution to a legitimate
objective, its trade-restrictiveness, and the natu re of the risks at issue and the gravity of the
consequences that would arise from non-fulfilment of its objective, would be assessed in relation
to each other. Consequently, the Panel failed to describe how these factors are to be weighed and
balanced against each other. In addition, Canada asserts that the Panel did not clarify the
relationship between the "relational" and the "comparative" analyses, in particular, it did not clarify
that the latter does not necessarily prevail over the former. In this regard, Canada explains that an
assessment under Article 2.2 must begin with a "relational" analysis. This includes an analysis of
the trade-restrictiveness of the challenged measur e, its degree of contribution to a legitimate
objective, and the risks non-fulfilment of that objective would create. These factors must be
assessed individually, in addition to being weighed and balanced against one another. In
conducting this "relational" analysis, a panel may then engage in a "comparative" analysis,
whereby a comparison is conducted with an alternative measure proposed by a complainant to see
whether it is less trade restrictive, makes an equivalent contribution to the challenged measure's
legitimate objective, and is reasonably available to the respondent Member. Canada contends that
this kind of "comparative" analysis is a "conceptual tool" that assists in determining whether a
measure is more trade restrictive than necessary.
150 While the Appellate Body has noted it is not
always required151, it should not overtake the "relational" analysis when such an analysis is carried
out. In this regard, Canada draws a distinction with footnote 3 to Article 5.6 of the
SPS Agreement, which specifically provides that a violation exists if there is a valid alternative
measure that is significantly less trade restrictive.
2.129. In respect of the interpretation of the phrase "taking account of the risks non-fulfilment
would create", Canada advances two claims of error in arguing that the Panel adopted an "overly
narrow[]" approach.
152 First, Canada claims that the Panel wrongly found the importance of the
values or interests underlying the legitimate objective to be irrelevant in "taking account of the
risks non-fulfilment would create". In Canada's view, there is a direct correlation between the
relative importance of the values or interests be ing protected and the gravity of the consequences
of not fulfilling the measure's objective. In particular, the more important the values or interests at
stake, the higher the gravity of the consequences of non-fulfilment. In the present case, the fact
that no harm would be caused to consumers by not receiving the origin information at issue is
relevant to assessing the gravity of the consequences of the non-fulfilment of the amended COOL
measure's objective.
2.130. Second, Canada contends that the Pane l wrongly dismissed the design, structure, and
architecture of the amended COOL measure as elem ents that may shed light on the gravity of the
consequences of not fulfilling its objective. In Canada's view, the design, structure, and
architecture of a measure may contain elements that put the risks into perspective, and may even
provide an indication of how the Member taking the measure perceives those risks. In the present
case, Canada contends that certain elements of the amended COOL measure, such as the
exclusion of a considerable proportion of beef and pork from the coverage of the measure and
allowing that less accurate information be provided on ground meat (Label E) demonstrate that
the United States itself does not consider the consequences of non-fulfilment to be grave.

150 Canada's other appellant's submission, para. 37 (quoting Appellate Body Report, US – Tuna II
(Mexico), para. 320).
151 Canada's other appellant's submission, para. 50 (referring to Appellate Body Report, US – Tuna II
(Mexico), fn 647 to para. 322).
152 Canada's other appellant's submission, para. 92.
WT/DS384/AB/RW • WT/DS386/AB/RW

2.131. In Canada's view, these legal errors of the Panel led to the Panel erroneously concluding
that it could not assess the gravity of the consequences of non-fulfilment. Had the Panel applied
the correct legal test, it would have found the consequences of non-fulfilment to be not particularly
grave. For Canada, this is because the objective of providing origin information does not reflect a
value of particularly high importance but, rath er, serves no further purpose beyond satisfying
parochial interests of certain consumers. Moreover , the design, structure, and architecture of the
amended COOL measure shows that, for the United States itself, the fact that consumers may not
receive meaningful information on origin does not constitute a grave consequence, because the
covered products represent only a small fraction of all beef and pork sold in the United States, and
a significant portion is inaccurately labelled (i.e. ground meat). In addition, Canada submits that
the Panel failed to take into account that there was no market failure regarding the provision of
country of origin information, and that thus the market would provide origin information if a
sufficient number of consumers highly valued such information. The Panel's error, in that regard,
was compounded by its mischaracterization of the panel's and Appellate Body's findings in respect
of consumer demand in the original proceedings. Thus, Canada argues that its arguments and
evidence demonstrate that the consequence arising from the non-fulfilment of the amended COOL
measure's objective would not be particularly grave, which suggests that the Panel erred in
concluding that it could not assess the gravity of the consequences of non-fulfilment.
2.4.2.3 The degree of contribution made by the amended COOL measure to its objective
2.132. Canada requests the Appellate Body to find that the Panel's exclusion of Labels D and E in
its assessment of the amended COOL measure's degr ee of contribution to its objective constitutes
a legal error. Canada further claims that, in spite of its statement that it would exclude Labels D
and E from the assessment of the contribution of the amended COOL measure, the Panel
nonetheless referred to a range of percentages of beef consumed in the United States that
includes beef bearing either Label D or E. In doing so, Canada submits that the Panel acted
inconsistently with Article 11 of the DSU.
2.133. Canada argues that Labels D and E are "core features" of the impugned measure.
153
Therefore, Labels D and E should have been taken into account in the assessment of the
measure's degree of contribution and as part of the Panel's overall "relational" analysis to
determine the "necessity" of the measure under Article 2.2 of the TBT Agreement.
2.134. Canada contends that the Panel's concern that including Labels D and E in its assessment
of the amended COOL measure's degree of contri bution to its objective "could prejudice" the
"comparative" analysis under Article 2.2 is unfounded.
154 This is because, in Canada's view, the
conclusions yielded from the "relational" analysis on the relevant aspects of the amended COOL
measure are not to be individually compared to those of proposed alternatives. Rather, the
subsequent "comparative" analysis involves a comparison between the amended COOL measure
and proposed alternatives. Further, the inclusion of Labels D and E in the "relational" analysis
would not prejudice the "comparative" analysis because they are constant under both the
impugned measure and the proposed alternatives.
2.135. In respect of its claim under Article 11 of the DSU, Canada contends that the Panel
included meat bearing Labels D and E in its assessment of the proportion of muscle cuts that bear
labels under the amended COOL measure, despite having determined that those labels were to be
excluded.
155 In Canada's view, in assessing the contribution of the amended COOL measure to its
objective, the Panel should have had regard to the evidence before it that demonstrated that only
between 16.3% and 24.5% of beef consumed in the United States are muscle cuts bearing
Labels A-D, while also recognizing that Label D conveys incomplete information. 156 According to
Canada, the Panel's failure in this respect exaggerated the extent of the amended COOL measure's
degree of contribution to its objective. The Panel should have taken into account in its analysis the
incomplete character of the information provided by Label D and the likely inaccurate nature of the
information conveyed by Label E. Had the Pane l taken these elements of the amended COOL
measure into account, and properly characterized the degree of contribution of the amended COOL
measure to its objective, it could not have concluded that it makes a "considerable but necessarily

153 Canada's other appellant's submission, para. 82.
154 Canada's other appellant's submission, para. 83 (quoting Panel Reports, para. 7.345).
155 Canada's other appellant's submission, para. 86.
156 Canada's other appellant's submission, para. 87 (referring to Panel Reports, para. 7.258).
WT/DS384/AB/RW • WT/DS386/AB/RW

partial contribution".157 Rather, Canada argues that "limited" would have been a more appropriate
characterization of the amended COOL measure's degree of contribution, particularly since
meaningful consumer information was provided on between less than one fifth and one quarter of
beef and pork consumed in the United States.
158
2.4.2.4 The first and second proposed alternative measures
2.136. As a result of its failure to find that not fulfilling the amended COOL measure's objective
would not be grave, Canada claims that the Panel failed correctly to "tak[e] account of the risks
non-fulfilment would create" in its analysis of Canada's first and second proposed alternatives. 159
In particular, Canada argues that the Panel should have found that, in "taking account of the risks
non-fulfilment would create", the first and second proposed alternative measures would make a
contribution to the amended COOL measure's objective that is at least equivalent to that made by
the amended COOL measure itself. While those alternatives provide less origin information or less
accurate origin information, they cover a significantly wider range of products. Canada's claim, in
this regard, rests on the assertion that an al ternative measure need not necessarily achieve
precisely the same contribution or degree of fulfilment of the measure's objective in order to
establish a violation of Article 2.2 of the TBT Agr eement. In that regard, Canada argues that less
grave consequences arising from non-fulfilment should make it easier to accept an alternative
measure's degree of contribution as "equivalent".
2.137. In Canada's view, it is unclear what th e Panel meant when it stated that it could not
determine the "specific implications" of the risks of non-fulfilment for the interplay between less
information and more extensive product coverage under the first proposed alternative measure, or
less accurate information and more extensive coverage under the second proposed alternative
measure.
160 However, to the extent that the reference to distinct "implications" means that the
Panel considered that the risks would not be the same under the amended COOL measure and
each of the proposed alternatives, Canada acknowledges that the gravity of the consequences may
vary depending on the extent to which a measure fulfils its objective. 161 However, this would have
no impact in the case at hand, because the consequences of non-fulfilment of the amended COOL
measure's objective are not particularly grave regardless of the degree of contribution.
Furthermore, Canada contends that the Panel erred in considering "the nature of the information
being conveyed and the method of conveyance" in its assessment of gravity, since these elements
relate to the degree of contribution of the measure to its objective, and not to the risks non-
fulfilment would create.
162 In any event, the fact that the Panel found it "difficult to establish the
exact implications" 163 for providing consumers less information or less accurate information on
labels was not a justification for the Panel to "shirk its responsibility" to reach a finding.164
2.138. In the alternative, Canada argues that, ev en if the first and second proposed alternative
measures do not contribute to the amended COOL measure's objective to an equivalent degree,
the significantly lower degree of trade-restrictiveness of these alternatives should nonetheless
counterbalance the difference in their respective degrees of contribution. In this regard, had the
Panel conducted a proper "relational" analysis, it would have concluded that the high degree of
trade-restrictiveness of the amended COOL measure is out of all proportion to its very limited
contribution to its objective and the benign nature of the risks and the "non-gravity" of the
consequences arising from non-fulfilment.
165 On this basis, Canada argues that the Panel ought to
have found that the amended COOL measure is more trade restrictive than necessary under
Article 2.2 of the TBT Agreement, even in the ab sence of a "comparative" analysis with proposed
alternatives.

157 Canada's other appellant's submission, para. 88 (quoting Panel Reports, para. 7.356).
158 Canada's other appellant's submission, para. 89.
159 Canada's other appellant's submission, para. 116.
160 Canada's other appellant's submission, paras. 119 and 123 (quoting Panel Reports, paras. 7.488
and 7.501).
161 Canada's other appellant's submission, para. 119.
162 Canada's other appellant's submission, para. 120 (quoting Panel Reports, paras. 7.489).
163 Canada's other appellant's submission, para. 120 (quoting Panel Reports, paras. 7.489).
164 Canada's other appellant's submission, para. 120.
165 Canada's other appellant's submission, para. 128.
WT/DS384/AB/RW • WT/DS386/AB/RW

2.139. In any event, Canada argues that, even taking into account a "comparative" analysis with
proposed alternatives exhibiting a degree of cont ribution that is less than equivalent, the Panel
should have found an acceptable trade-off betw een the limited degree of contribution of the
amended COOL measure and the significantly lower degree of trade-restrictiveness of the first and
second proposed alternatives. Thus, even if the A ppellate Body were to conclude that the first and
second proposed alternatives do not make an equivalent degree of contribution to the amended
COOL measure's objective, Canada nonetheless requests the Appellate Body to reverse the Panel's
c o n c l u s i o n t h a t C a n a d a f a i l e d t o m a k e a prima facie case that the amended COOL measure
violates Article 2.2 of the TBT Agreement, and to complete the legal analysis.
2.4.2.5 The third and fourth proposed alternative measures
2.140. Canada requests the Appellate Body to find that the Panel erred in setting an overly high
burden of proof in respect of the third and fourth proposed alternatives.
166 Canada requests the
Appellate Body to reverse the Panel's finding that, for the purpose of making a prima facie case
that an alternative measure is reasonably available, a complainant bears the burden of providing a
cost estimate of the alternative measure or evidence substantiating the likely magnitude of the
costs that would be associated with the alternative measure.167 However, Canada does not request
the Appellate Body to complete the legal analysis.168
2.141. Canada argues that the appropriate level of precision for describing alternatives can be
elucidated by reference to their twofold purpose. First, the trade-restrictiveness of the proposed
alternative and any "conceptual limitations" in its ability to make an equivalent contribution to the
stated objective need to be identified in order to facilitate a comparison with the challenged
measure under Article 2.2 of the TBT Agreement.
169 Second, the capacity of a Member to
implement the alternative measure, in financial and technical terms, needs to be described in
order to demonstrate its reasonable availability. This might include a showing that the burden of
the alternative on the industry concerned does not jeopardize its economic viability, nor its ability
or willingness to comply. In Canada's view, unless there are "real doubts" as to the capacity of the
Member and its industry to implement the alternative, its identification does not require a detailed
description.
170
2.142. Canada claims that the Panel erred in imposing an unreasonably high burden by requiring
a description of the third and fourth proposed alternatives with an unnecessarily high level of
precision, namely, of "how" they would "be implemented in the United States", and requiring an
"actual, concrete proposal".
171 Although the Panel appears to have set out a standard that
considered whether the alternative is "merely theoretical in nature" 172, a review of the Panel's
approach demonstrates that it sought information and evidence disproportionate to such an
inquiry, and which would involve "massive research and extensive and expensive expert reports of
a sort never previously required in WTO litigation when reviewing possible alternative
measures".
173 Canada contends that it provided sufficient descriptions of the third and fourth
proposed alternatives to fulfil the dual purpose of identifying such alternatives, and thus to
facilitate a comparison under Article 2.2 and to make a prima facie case that they are reasonably
available.
2.143. Canada claims that the Panel erroneously interpreted the Appellate Body's findings in
China – Publications and Audiovisual Products a s s u p p o r t f o r i t s f i n d i n g s o n t h e n a t u r e o f t h e
burden of proof that fell on the complainants. Whereas the Panel referred to these findings for the
proposition that the magnitude of the associate costs was to be provided by the complainants, the
Appellate Body in China – Publications and Audiovisual Products found that China, the respondent

166 Canada's other appellant's submission, para. 132.
167 Canada's other appellant's submission, para. 154 (referring to Panel Reports, paras. 7.556
and 7.603).
168 Canada's other appellant's submission, para. 132.
169 Canada's other appellant's submission, para. 134 (quoting Appellate Body Reports, EC – Seal
Products, para. 5.267).
170 Canada's other appellant's submission, para. 139.
171 Canada's other appellant's submission, para. 141 (quoting Panel Reports, paras. 7.553, 7.586,
and 7.602).
172 Canada's other appellant's submission, para. 142 (quoting Panel Reports, para. 7.506, in turn
quoting Appellate Body Reports, Brazil – Retreaded Tyres, para. 156; and US – Gambling, para. 308).
173 Canada's other appellant's submission, para. 143.
WT/DS384/AB/RW • WT/DS386/AB/RW

in that case, bore the burden to substantiate the likely nature or magnitude of associate costs. 174
Although the Appellate Body's findings in that case related to Article XX(a) of the GATT 1994,
Canada submits that a complainant's burden under Article 2.2 of the TBT Agreement should not be
comparatively heavier. Thus, Canada submits that its description of the third and fourth proposed
alternative measures was sufficient to enable the Panel to compare the amended COOL measure
with these alternative measures regarding their trade-restrictiveness and degrees of contribution.
2.4.3 Article XXIII:1(b) of the GATT 1994
2.144. Canada requests the Appellate Body to reverse the Panel's decision to exercise judicial
economy in respect of Canada's non-violation claim under Article XXIII:1(b) of the GATT 1994, and
to complete the legal analysis on the basis of th e legal interpretations and facts established by the
Panel, unless the Appellate Body upholds the Panel's finding of violation under either Article 2.1 of
the TBT Agreement or Article III:4 of the GATT 1994. In the event that the Appellate Body
reverses the Panel's decision to exercise judicial economy, Canada requests the Appellate Body to
complete the legal analysis in respect of its non-violation claim by applying the legal
interpretations of the Panel to the facts as found by the Panel.
2.5 Claims of error by Mexico – Other appellant
2.5.1 Article 2.1 of the TBT Agreement
2.145. Mexico, like Canada, does not take issue with the Panel's conclusion that the amended
COOL measure is inconsistent with Article 2.1 of the TBT Agreement. However, Mexico appeals
certain findings made by the Panel in its analysis of whether the detrimental impact of that
measure stems exclusively from legitimate regulatory distinctions. In particular, Mexico claims that
the Panel erred by failing to assess correctly the relevance of Label E for its analysis of whether
the detrimental impact of the amended COOL measure stems exclusively from legitimate
regulatory distinctions.
2.5.1.1 The Panel's analysis of Label E
2.146. Mexico requests the Appellate Body to find that the Panel erred in finding that the COOL
requirements applicable to Label E do not support the conclusion that the amended COOL measure
is inconsistent with Article 2.1 of the TBT Agreement.
2.147. Mexico notes that the Panel observed that Label E had not been shown to demonstrate
that the amended COOL measure is inconsistent wi th Article 2.1 of the TBT Agreement, and that
Label E "does not constitute a relevant regulatory distinction of the amended COOL measure for
the purposes of Article 2.1."
175 For these reasons, the Panel refused to attribute relevance to
Label E for the purposes of its analysis under Article 2.1. Mexico submits that the Panel's approach
with respect to Label E is entirely inconsistent with the Panel's acknowledgement that the analysis
under Article 2.1 must take into account "the 'overall architecture' of the measure, and
encompass[es] aspects of the measure that [are] no t themselves 'relevant regulatory distinctions'
or independent sources of detrimental impact."
176 Indeed, it was on this basis that the Panel
correctly determined that the exemptions under the amended COOL measure were relevant factors
to be considered in its analysis under Article 2.1, despite the fact that they did not constitute a
relevant regulatory distinction, and were not found to give rise to any detrimental impact on
imported products. Mexico submits that the ra tionale for including the exemptions under the
amended COOL measure in the analysis under Article 2.1 also applies to the COOL requirements in
respect of Label E. More specifically, as a cent ral component of the amended COOL measure that
applies to a substantial proportion of covered beef products, the requirements applicable to Label E
are relevant to the question of whether the de trimental impact of the amended COOL measure
reflects discrimination prohibited by Article 2.1.

174 Canada's other appellant's submission, paras. 144-146 (referring to Panel Reports, para. 7.599; and
Appellate Body Report, China – Publications and Audiovisual Products, paras. 327-328).
175 Mexico's other appellant's submission, para. 186 (quoting Panel Reports, para. 7.207).
176 Mexico's other appellant's submission, para. 187 (quoting Panel Reports, para. 7.202 (fns omitted)).
WT/DS384/AB/RW • WT/DS386/AB/RW

2.148. Mexico asserts that the Panel attempted to validate its exclusion of Label E from its
assessment of the even-handedness of the amen ded COOL measure on the basis that "the
production of ground meat entails the processing of 'trimmings' of diverse origin that are ground
into a final product, and the ground meat la belling rules were adapted to the purchasing,
inventory, and production practices of US beef grinders." 177 According to Mexico, the Panel's
reasoning is untenable, as different muscle cuts of beef themselves undergo distinct processing
methods; yet, the Panel included labelling rules applicable to muscle cuts in its analysis under
Article 2.1 of the TBT Agreement. Likewise, proces sed beef products and beef products served in
food service establishments that are exempt from the COOL requirements undergo distinct
processing methods; yet, the Panel included these exemptions in its analysis under Article 2.1.
Mexico submits, accordingly, that the production process for ground meat does not constitute a
legitimate justification for excluding Label E from the analysis under Article 2.1.
2.149. Mexico further contends that the Panel incorrectly interpreted the Appellate Body's findings
in the original disputes as implying that the Appellate Body had specifically excluded Label E from
its analysis under Article 2.1 of the TBT Agreement. The passage of the Appellate Body reports
relied on by the Panel describes the discriminatory effect of the original COOL measure as arising
"because the prescribed labels do not expressly identify specific production steps and, in particular
for Labels B and C, contain confusing or inaccurate origin information, or because the meat or
meat products are exempt from the labelling requirements altogether."
178 This finding, submits
Mexico, cannot properly be interpreted as an explicit determination that requirements relating to
Label E are irrelevant for the assessment of whether the amended COOL measure is designed and
applied in an even-handed manner.
2.5.2 Article 2.2 of the TBT Agreement
2.5.2.1 Introduction
2.150. Mexico requests the Appellate Body to reverse Panel's findings and conclusions under
Article 2.2 of the TBT Agreement, complete the le gal analysis under Article 2.2 and find that the
amended COOL measure is more trade restrictive than necessary and has the effect of creating
unnecessary obstacles to international trade in violation of Article 2.2 of the TBT Agreement.
2.151. Mexico advances a number of claims of error in requesting the Appellate Body to reverse
the Panel's conclusion that Mexico failed to make a prima facie case that the amended COOL
measure is more trade restrictive than necessary, "taking account of the risks non-fulfilment would
create". First, Mexico claims that the Panel erred by replacing the weighing and balancing of
relevant factors in the "relational" analysis with an "exceptional circumstances" test.
179 Second,
Mexico claims that the Panel erred by failing to include the design and operation of Label E when
ascertaining the degree of contribution of the amended COOL measure to its objective as part of
the "relational" analysis. Third, Mexico claims that the Panel erred in its assessment of "the risks
non-fulfilment would create". In this regard, Mexico submits that the Panel erred in ascertaining
the gravity of the consequences that would arise from non-fulfilment of the objective by strictly
limiting itself to an assessment of consumer interest in country of origin information and consumer
willingness to pay for such information, to the exclusion of other relevant considerations including
the relative importance of the interests or values furthered by the amended COOL measure, as
well as its design, structure, and architecture. Mexico also claims, in this regard, that the Panel
erred under Article 11 of the DSU by failing to make an objective assessment of the evidence
before it in respect of consumer demand for or igin information and the design, structure, and
architecture of the amended COOL measure.
2.152. In Mexico's view, these multiple errors of th e Panel in respect of its "relational" analysis of
the amended COOL measure led to subsequent errors in its "comparative" analysis of Mexico's first
and second proposed alternative measures, namely, in failing to find that these alternatives make
an equivalent degree of contribution to the amended COOL measure's objective.

177 Mexico's other appellant's submission, para. 191 (quoting Panel Reports, para. 7.280 (fns omitted)).
178 Mexico's other appellant's submission, para. 193 (quoting Appellate Body Reports, US – COOL,
para. 349).
179 Mexico's other appellant's submission, para. 39 (referring to Panel Reports, para. 7.298).
WT/DS384/AB/RW • WT/DS386/AB/RW

2.153. Separately, Mexico requests the Appellate Body to find that the Panel erred in the burden
of proof that it applied in respect of its third and fourth proposed alternative measures.
2.5.2.2 The legal test under Article 2.2 of the TBT Agreement
2.154. Mexico claims that the Panel made a number of errors in its legal interpretation in respect
of the "relational" analysis and then took an incorrect approach to determining whether the
amended COOL measure is more trade restrictive than necessary.
2.155. In particular, Mexico claims that the Panel erred in narrowing the "relational" analysis step
of the necessity test under Article 2.2 of the TB T Agreement to an "exceptional circumstances"
test.180 Mexico points to the Appellate Body's findings in US – Tuna II (Mexico) and in the original
proceedings in these disputes that an assessment of "necessity" under Article 2.2 must begin with
a "relational" analysis, involving a weighing and balancing of the trade-restrictiveness of the
challenged measure, its degree of contribution to its objective, and the risks non-fulfilment would
create.181 In Mexico's view, the step of reaching a co nclusion under the "relational" analysis is a
requisite component of the assessment under Article 2.2. This is because the subsequent
"comparative" analysis is not directed at the "necessity" of the measure's trade-restrictiveness but,
rather, functions to confirm the conclusion from the initial "relational" analysis that the measure is
necessary by comparing it to proposed altern atives. Mexico draws on the Appellate Body's
identification in US – Tuna II (Mexico) of certain circumstances under which a "comparative"
analysis may not be required to support its understanding that it is possible to yield a conclusion
on the necessity of the measure solely under the "relational" analysis.
182 In that regard, while it
considers the examples identified by the Appellate Body to be "extreme", Mexico notes that the
use of the qualifier "at least" suggests that thes e were not exclusive or exhaustive examples, and
that there is "a range of more realistic possibilities" where a "comparative" analysis would be
unnecessary on the basis of a definitive finding under the "relational" analysis.
183 Thus, Mexico
submits that the Panel erred in finding that a "comparative" analysis would only be redundant
under Article 2.2 in "exceptional" circumstances.184 In response to questioning at the oral hearing,
Mexico stated that it had modified its position slightly. In particular, Mexico stated that it considers
in most cases that a "comparative" analysis with alternative measures would be required under
Article 2.2 of the TBT Agreement, but that a provisional conclusion should be drawn first under the
"relational" analysis.
2.156. Mexico also claims that the Panel erred in failing to find, based on record evidence before
it, that the gravity of the consequences that would arise from non-fulfilment of the amended COOL
measure's objective is very low. In particular, Mexico claims that the Panel limited its consideration
to evidence on consumer interest in and willingness to pay for origin information, and excluded
from its consideration the relative importance of the values or interests furthered by the measure,
and its design, structure, and architecture. Mexico further claims that the Panel failed to make an
objective assessment of certain evidence relating to consumer demand that it did consider, in
violation of Article 11 of the DSU. Mexico requests the Appellate Body to reverse the Panel's
findings, reassess the evidence on consumer demand, and find the gravity of the consequence of
non-fulfilment to be very low, taking into account the very low relative importance of the objective
and the very low consumer demand for origin information. Further, notwithstanding these errors of
the Panel, Mexico notes that the Panel found there to be "some risk" associated with the
non-fulfilment of the objective, and that the Panel ought to have taken this finding into account in
the weighing and balancing process with other relevant factors in both the "relational" and
"comparative" analyses.
185
2.157. Mexico contends, first, that the Panel committed a legal error in limiting itself to
considering the criterion of consumer demand in its consideration of "the risks non-fulfilment
would create" to the exclusion of other relevant factors. While the Appellate Body considered
consumer demand when assessing "the risks non-fulfilment would create" in the original

180 Mexico's other appellant's submission, para. 39.
181 Mexico's other appellant's submission, para. 40 (referring to Appellate Body Reports, US – Tuna II
182 Mexico's other appellant's submission, paras. 41-44 (referring to Appellate Body Report, US –
Tuna II (Mexico), para. 322 and fn 647 thereto).
183 Mexico's other appellant's submission, para. 43.
184 Mexico's other appellant's submission, para. 45 (quoting Panel Reports, para. 7.298).
185 Mexico's other appellant's submission, para. 64 (quoting Panel Reports, para. 7.417).
WT/DS384/AB/RW • WT/DS386/AB/RW

proceedings, the Appellate Body was constrained in its examination by the limited factual findings
made by the original panel, and did not state th at these findings necessarily reflected the most
relevant or appropriate criteria for the purposes of the assessment. 186 According to Mexico, the
Panel in the present proceedings failed to explain why only consumer demand ought to be
determinative of "the risks non-fulfilment would create", to the exclusion of any and all other
relevant criteria.
2.158. Mexico argues that the relative importance of the values furthered by the measure should
have been considered because, where those values are relatively important (e.g. protection of
human health), the gravity of the consequences are correspondingly significant (e.g. injury,
death), whereas relatively unimportant values will have correspondingly insignificant
consequences. Mexico considers it noteworthy and relevant to the "necessity" test under
Article 2.2 of the TBT Agreement that the relati ve importance of the values furthered by the
measure is considered at the beginning of a "necessity" analysis under Article XX of the GATT 1994
and under Article XIV of the GATS. Mexico contends that the relative importance of the values
furthered by a measure can be ascertained under Article 2.2 of the TBT Agreement comparatively
vis-à-vis other values that may be more, or less, important. Accordingly, compared to public
health and the protection of the environment, and in the light of the low actual demand or general
indifference towards origin information, the mere provision of such information is not important.
Accordingly, the gravity of the consequences of not fulfilling the objective of providing consumer
information in this case is very low.
2.159. In respect of the design, structure, and arch itecture of the measure, Mexico argues that, if
the gravity of the consequences arising from non-fulfilment were significant, then there would not
be large exemptions and less-detailed information for certain products. Thus, the very existence of
these features in the measure constitutes demonstrative evidence that the gravity of the
consequences of non-fulfilment is insignificant or trivial. Mexico argues that the Panel's rejection of
this evidence constitutes a legal error. Mexico further alleges that the Panel's failure to consider
this evidence constitutes an inconsistency with Article 11 of the DSU.
2.160. Regarding the allegation that the Panel erred by not making a finding on the gravity of the
consequences of non-fulfilment, Mexico contends that an objective assessment of the evidence on
the record relating to consumer demand demonstrates that the gravity of the consequences of
non-fulfilment is low. In particular, Mexico alleges that the Panel failed to make an objective
assessment under Article 11 of the DSU in several ways. First, Mexico claims that the Panel
erroneously required evidence on consumer demand to be based on contexts exactly equivalent to,
or consistent with, the specific kinds of information provided by the measure.
187 For example, the
Panel rejected a study about food values in relation to beef, chicken, and milk because the
definition of origin was different to that under the amended COOL measure, without explaining
why this difference made the study conceptually incompatible. As another example, the Panel
rejected the evidence adduced in the KSU Revealed Demand study
188 on the basis that there might
be reasons other than low consumer demand for origin information to explain the steady, relative
demand exhibited by the study in respect of covered and exempted products under the original
COOL measure. In Mexico's view, this represen ted the dismissal of evidence on the basis of
speculative reasons as to why it might not be relevant, which is inconsistent with Article 11 of
the DSU.
2.161. Second, Mexico claims that certain evidence of the United States was treated to a different
standard, and was considered probative notwithstanding that this meant the Panel needed to
accept certain assumptions to be true. In particular, Mexico contends that the Panel rejected its
evidence on the basis that it was not directly responsive to consumer demand, whereas the Panel
accepted a telephone opinion poll adduced by the United States as relevant evidence, even though
the poll in question did not test consumer demand for origin information for beef products at all.

186 Mexico's other appellant's submission, para. 69 (referring to Appellate Body Reports, US – COOL,
para. 478).
187 Mexico's other appellant's submission, para. 96 (quoting Panel Reports, para. 7.393, in turn referring
to Panel Exhibit CDA-154, consisting of a Working Paper reporting on a study undertaken by associates of the
Department of Agricultural Economics, Kansas State University entitled, "Food Values Applied to Livestock
Products" (7 February 2014)).
188 M.R. Taylor and G.T. Tonsor, "Revealed Demand for Country of Origin Labeling of Meat in the
United States" (2013) 38(2) Journal of Agricultural and Resource Economics, pp. 235-247 (Panel Exhibits
CDA-83, MEX-35, and MEX-62).
WT/DS384/AB/RW • WT/DS386/AB/RW

Third, Mexico claims that the Panel failed to draw the correct inferences from certain evidence. In
particular, Mexico contends that the Panel inferred from evidence suggesting consumer willingness
to pay approximately the same amount for "Product of North America" information that consumers
are indeed willing to pay something for origin information. In Mexico's view, the Panel ought to
have inferred that consumers have no greater willingness to pay for country-specific origin
information than for much broader, non-country-specific origin information. Fourth, Mexico
contends that the Panel erred in focusing on the conclusion in a USDA assessment that the
expected benefits of providing origin information are difficult to quantify, rather than focusing on
the conclusion that the economic benefits would be small. Taken together or singly, Mexico argues
that these failures rise to the level of a breach of Article 11 of the DSU. Mexico submits that an
objective assessment of the evidence demonstrates that consumer demand for origin information
is very low.
2.162. In Mexico's view, and in the light of the foregoing, the Panel's failure to undertake a
rigorous and complete "relational" analysis as a first step under Article 2.2 of the TBT Agreement
and to render a conclusion as to the "necessity" of the trade-restrictiveness of the amended COOL
measure amounts to a legal error. Mexico submits that, when weighed and balanced in a holistic
way under the "relational" analysis, the "very considerable" trade-restrictiveness is clearly
unnecessary in the light of its "profoundly disproportional relationship" to the very low gravity of
the consequences that would arise from the non-fulfilment of its objective, as well as its degree of
contribution to its objective.
189
2.5.2.3 The degree of contribution made by the amended COOL measure to its objective
2.163. Mexico claims that the Panel erred in failing to include Label E in its assessment of the
amended COOL measure's degree of contribution to its objective. Although Mexico does not claim
that Label E is inconsistent with any provisions of the covered agreements, it asserts that Label E
is nonetheless an "integral component" of the me asure because it is applied to beef products
consumed in the United States for the purpose of providing consumer information on origin. 190
Label E should thus have been part of the asse ssment of the degree of fulfilment by the amended
COOL measure to its objective.
2.164. More specifically, Mexico submits three grounds in contending that the Panel erred in
failing to include Label E in its assessment. First, Mexico contends that the Panel's concern to
ensure alignment between the aspects encompassed by the assessment of the degree of
contribution of the amended COOL measure and th e alternatives it proposed is unfounded. In
Mexico's view, the "relational" analysis and "comparative" analysis are different types of analyses
that are not compared. Further, the inclusion of Label E in the "relational" analysis would not
prejudice the "comparative" analysis because it is constant under both the amended COOL
measure and the proposed alternatives. Second, Mexico argues that the "relational" analysis must
be conducted taking into account all relevant factors related to the challenged measure, and Label
E is clearly one of these factors because the very existence of Label E suggests that the amended
COOL measure includes ground beef in its objective to provide consumer information on origin.
Third, Mexico submits that, after deciding that La bel E should be excluded from the "relational"
analysis, the Panel nonetheless referred to perc entages that included Label E as part of its
determination that the amended COOL measure makes a "considerable" contribution to its
objective.
191 In Mexico's view, an assessment that actually excludes Label E from its assessment
leaves a degree of contribution of less than one quarter, which is not "considerable". Further,
Mexico contends that, to the extent that Label E actually is included in the contribution
assessment, the Panel found that Label E rules do not provide sufficient information to fulfil the
amended COOL measure's objective. Accordingly, Label E ought not to be credited as contributing
to the fulfilment of the measure's objective.
2.5.2.4 The first and second proposed alternative measures
2.165. Mexico claims that it was wrongly deprived of a full "comparative" analysis for its first and
second proposed alternative measures under the second step of the "necessity" test under
Article 2.2 of the TBT Agreement. In particular, Mexico argues that the Panel's ability to undertake

189 Mexico's other appellant's submission, para. 110.
190 Mexico's other appellant's submission, para. 53.
191 Mexico's other appellant's submission, para. 59 (referring to Panel Reports, para. 7.356).
WT/DS384/AB/RW • WT/DS386/AB/RW

a "comparative" analysis was compromised by its earlier error of failing to ascertain the gravity of
the consequences arising from non-fulfilment. Mexico considers that the Panel ought to have found
such gravity to be very low, and should have completed the "comparative" analysis on that basis.
2.166. In Mexico's view, the determination of whether a proposed alternative makes an
"equivalent" degree of contribution to the challenged measure is qualified by a consideration of
"the risks non-fulfilment would create". In this regard, Mexico cites the Appellate Body's statement
in the original proceedings that "it will be relevant to consider whether the proposed alternative …
would make an equivalent contribution to the relevant legitimate objective, taking account of the
risks non-fulfilment would create".
192 Thus, to the extent its proposed alternatives make a
"somewhat lesser" contribution to the measure's objective, Mexico argues that they should
nonetheless be treated as making an "equivalent" contribution where the risks of non-fulfilment of
the measure's objective are insignificant so as no t to outweigh the alternative's lower degree of
trade-restrictiveness.
193
2.167. Accordingly, Mexico argues that the first proposed alternative makes at least an equivalent
contribution to the measure's objective vis-à-vis the challenged measure. The first alternative
preserves information on where the animal was slaughtered, and extends it to food service
establishments and retailers that are otherwis e exempt under the measure. The additional
information on where the animal was born and raised may be provided under this alternative on a
voluntary basis, such that consumers that place va lue on such information can seek it out and pay
a premium for it. Thus, the extent to which the voluntary component of the alternative contributes
to the amended COOL measure's objective is contingent on the degree of consumer demand for
such information, which is in turn reflective of the risks non-fulfilment would create.
194 Mexico
further argues that its first proposed alternativ e is less trade restrictive than the amended COOL
measure because the use of the substantial tran sformation rule would eliminate the need for
segregation. Mexico also argues that its first proposed alternative is reasonably available because
the amended COOL measure currently employs a simi lar approach to origin labelling for imported
muscle cuts of beef, and because the more specific location information related to production steps
would be voluntary.
2.168. In respect of the second proposed alternative measure, Mexico argues that, while the use
of the ground beef labelling rule (Label E) for Labels A-C might provide less accurate information,
the removal of exemptions would lead to a broader scope of application. In Mexico's view, the very
existence of Label E in the challenged measure for a substantial portion of beef suggests that the
level of accuracy it affords is satisfactory, particularly in the absence of any legitimate justification
for applying a higher standard of accuracy to muscle cuts of beef. Thus, the use of Label E for
muscle cuts of beef currently covered by Labels A-C, coupled with a broader scope of application,
should be treated as providing an equivalent de gree of contribution as the challenged measure,
particularly in the light of the very low risk of non-fulfilment manifested through a lack of
consumer demand for more accurate origin information. Mexico further argues that its second
proposed alternative is less trade restrictive than the challenged measure because it would include
the same 60-day inventory allowance, which would reduce the degree to which processors would
be required to segregate beef products. Mexico also argues that its second proposed alternative is
reasonably available because the amended COOL measure currently employs a similar approach to
origin labelling for ground beef, noting that there is no legitimate basis on which to distinguish
ground beef and other beef products.
2.5.2.5 The third and fourth proposed alternative measures
2.169. Mexico requests the Appellate Body to reverse the Panel's finding that precise and
complete cost estimates are a pre-requisite to th e "adequate identification" of an alternative in
order to make a prima facie case that it is reasonably available.
195

192 Mexico's other appellant's submission, para. 119 (quoting Appellate Body Reports, US – COOL,
para. 471).
193 Mexico's other appellant's submission, para. 124.
194 Mexico's other appellant's submission, paras. 134-136.
195 Mexico's other appellant's submission, paras. 174 and 184.
WT/DS384/AB/RW • WT/DS386/AB/RW

2.170. Mexico argues that the Panel effectively imposed a new and unjustifiable requirement on
the complainants to explain exactly how a proposed alternative measure would be implemented by
the respondent. Further, Mexico argues that there is no authority for the Panel's determination
that precise and complete cost estimates are a prer equisite to the "adequate identification" of an
alternative. Rather, Mexico submits that the Appellate Body has referred to evidence and
arguments on costs in respect of what a respondent might raise in rebuttal, as opposed to
evidence that a complainant would need to raise in identifying the alternative in the first
instance.
196 Thus, by requiring the complainants to provide precise explanations and complete cost
estimates with respect to the implementation of the proposed alternatives, Mexico contends that
the Panel applied an impossible standard of proof, which effectively relieved the United States of
its burden to adduce evidence and arguments in rebuttal.
2.171. In Mexico's view, the only Member in a position to comment meaningfully on the specific
issues of implementation and the associated costs, including any significant obstacles or
difficulties, is the respondent Member itself. For Mexico, this should be reflected in the standard of
proof for establishing a prima facie case. Mexico contends that, by requiring precise explanations
and complete cost estimates with respect to the implementation of proposed alternative measures
in the foreign jurisdiction of the responding Member for the purposes of "adequate identification",
the Panel required a standard of proof that was impossible for the complainants to satisfy. As a
consequence, the Panel effectively relieved the United States of its burden to adduce evidence and
arguments in rebuttal. It should not be sufficient for the United States merely to argue that the
complainants failed to meet their burden because they did not set out an "actual, concrete
proposal" or exact explanations regarding the implementation of the alternative measures.
197 For
Mexico, the United States was obligated to demonstrate specific obstacles, costs, or difficulties
facing the implementation of each proposed altern ative measure. Thus, in the absence of any real
doubt regarding the capacity of the respondent Member to implement the alternatives, Mexico
considers that it would not be reasonable or a ppropriate to require the implementation or costs
associated with the alternatives to be described with the precision demanded by the Panel.
Accordingly, the Panel's interpretation of the appropriate standard of proof – which called upon the
complainants to adduce evidence and arguments demonstrating specific obstacles, cost issues, or
other difficulties relating to the practicality of the alternatives – was an error with serious systemic
implications.
2.5.3 Article XXIII:1(b) of the GATT 1994
2.172. Should the Appellate Body conclude that the Panel erred in finding that the amended COOL
measure is inconsistent with Article 2.1 of th e TBT Agreement and Articl e III:4 of the GATT 1994,
and further determine that the amended COOL meas ure is not inconsistent with these provisions,
Mexico appeals the Panel's decision to exercise judicial economy with respect to Mexico's
non-violation claim under Article XXIII:1(b) of th e GATT 1994, and requests the Appellate Body to
complete the legal analysis and find that th e amended COOL measure is inconsistent with
Article XXIII:1(b).
198 Mexico submits that the Panel erred in exercising judicial economy,
particularly because the Panel's findings under Article 2.1 of the TBT Agreement and Article III:4 of
the GATT 1994 could be reversed by the Appellate Body on appeal.
2.6 Arguments of the United States – Appellee
2.6.1 Article 2.1 of the TBT Agreement
2.173. The United States requests the Appellate Body to reject the claims of Canada and Mexico
that the Panel erred in its treatment of Labels D and E, as well as the prohibition of a trace-back
system under the amended COOL measure, for the purposes of the Panel's assessment of whether
the detrimental impact of the amended COOL measure reflects discrimination prohibited by
Article 2.1 of the TBT Agreement. The United St ates submits that the Panel's conclusions under
Article 2.1 with respect to these elements of the amended COOL measure are correct. According to

196 Mexico's other appellant's submission, paras. 177-178 (referring to Panel Reports, para. 7.555;
Appellate Body Reports, EC – Seal Products, paras. 7.276-7.277; Brazil – Retreaded Tyres, para. 156; and US
– Gambling, para. 308).
197 Mexico's other appellant's submission, paras. 175 and 180 (quoting Panel Reports, para. 7.586, in
turn quoting United States' comments on Canada's response to Panel question No. 74).
198 Mexico's other appellant's submission, para. 199.
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the United States, Labels D and E, the statutory prohibition of a trace-back system, and the three
exemptions to the COOL requirements are irrelevant to the analysis under Article 2.1 because they
are not responsible for the detrimental impact on imported livestock. As such, these "regulatory
distinctions" cannot answer the question posed by the second step of the analysis under Article 2.1
of the TBT Agreement, namely, whether the detrimental impact on imported products reflects
discrimination.
2.6.1.1 The Panel's analysis of Label D
2.174. The United States requests the Appellate Body to reject Canada's claim that the Panel
erred in finding that Label D does not support a finding that the amended COOL measure is
inconsistent with Article 2.1 of the TBT Agreement.
2.175. In relation to Canada's assertion that Label D exposes the "arbitrary character" of the
amended COOL measure, the United States responds that Canada misunderstands the analysis to
be conducted under Article 2.1 of the TBT Agreement.
199 The United States explains that, because
the question posed in the second step of the analysis under Article 2.1 is whether the detrimental
impact on like imported products reflects discrimination, only those regulatory distinctions that
account for such detrimental impact can answer that question. The United States highlights that
Canada has neither argued, nor proved, that there is a detrimental impact on Category D muscle
cuts produced in Canada and exported to the United States.
2.176. In addition, Canada has failed to prove that Label D contributes to any "origin-based
discrepancy" between the accuracy of Label A as compared to the accuracy of the other labels
prescribed by the amended COOL measure.
200 Nor has Canada proven that Label D is otherwise
"arbitrary". In this regard, the United States asserts that Canada has not provided any evidence of
Category D animals that were not born and raised in the country in which they were slaughtered to
substantiate its assertion that Label D is inaccurate in cases where an animal was not born and/or
raised in the foreign country in which it was slaughtered. Thus, for the United States, the Panel
was correct in determining that there is no reason to conclude that Category D muscle cuts,
bearing the label "Product of Country X", will not be from animals "that are entirely a product of
that country".
201
2.177. With respect to Canada's challenge of th e Panel's reliance on the small market share of
Category D muscle cuts in the US market as a basis for concluding that Label D does not support a
conclusion that the detrimental impact of the amended COOL measure reflects discrimination, the
United States responds that Canada has not provided a reason as to why the Panel's reliance on
this factor was "misplaced".
202 In the United States' view, whether, and to what extent, a label is
used is a relevant factor in the inquiry under Article 2.1 in these disputes. The United States
highlights, in this regard, that the original panel concluded that muscle cuts bearing Label D
constitute somewhere between 0% and 0.3% of the US market.
2.178. The United States also disagrees with Canada's argument that the Panel erred by faulting
Canada for failing to provide evidence of Category D animals that were not born and raised in the
country in which they were slaughtered. According to the United States, while Canada apparently
considers Label D to be relevant to the analysis because it allegedly "demonstrates the
dissonance" between, on the one hand, the United States' objective of ensuring that label
information accurately reflects the origin of muscle cuts and, on the other hand, the amended
COOL measure's operation "in practice", Canada is unable to prove that Category D animals were
not born and raised in the same foreign country in which they were slaughtered.
203

199 United States' appellee's submission, para. 252 (quoting Canada's other appellant's submission,
para. 159).
200 United States' appellee's submission, para. 253 (quoting Canada's other appellant's submission,
para. 159).
201 United States' appellee's submission, para. 253 (quoting Panel Reports, para. 7.279). (emphasis
added by the United States)
202 United States' appellee's submission, para. 254 (quoting Canada's other appellant's submission,
para. 160).
203 United States' appellee's submission, para. 256 (quoting Canada's other appellant's submission,
para. 163).
WT/DS384/AB/RW • WT/DS386/AB/RW

2.179. Finally, with respect to Canada's conten tion that a "dissonance" exists between the
objective of the amended COOL measure and what that measure actually achieves, the
United States responds that this contention reveals a misunderstanding of the analyses under
Article 2.1 and Article 2.2 of the TBT Agreement. Th e United States asserts that it is not the case
that an importing Member must "fulfil" its objectiv e to satisfy the requiremen ts of Article 2.2. Nor
is there any basis for the proposition that a regulatory distinction is not "even handed", for the
purposes of Article 2.1, merely because it does not "fulfil" the measure's objective in "every way
possible".
204
2.6.1.2 The Panel's analysis of Label E
2.180. The United States requests the Appellate Body to reject the claims of Canada and Mexico
that the Panel erred in finding that the labelling requirements for Category E ground meat do not
support a conclusion that the detrimental impact of the amended COOL measure reflects
discrimination prohibited by Article 2.1 of the TBT Agreement.
2.181. First, the United States submits that the claims of Canada and Mexico concerning Label E
are premised on the proposition that a regulato ry distinction that does not account for the
detrimental impact on imported products is relevant to the assessment of whether such
detrimental impact stems exclusively from legitimate regulatory distinctions. This premise, in the
United States' view, is incorrect. The United States explains that, once it is established that a
regulatory distinction does not account for the detrimental impact on imported products, the
inquiry under Article 2.1 should end with respect to that particular regulatory distinction. In the
light of the findings of the original panel, Label E, unquestionably, does not account for the
detrimental impact on imported livestock. Noting Mexico's argument that the Panel's approach to
Label E, on the one hand, and its approach to the exemptions under the amended COOL measure,
on the other hand, are inconsistent because both elements do not account for the detrimental
impact on imported livestock, the United States agrees with Mexico that, in this regard, the Panel's
analysis is inconsistent and is, therefore, in error. The United States clarifies that this incoherence,
however, proves only that the exemptions are not relevant to the analysis under Article 2.1, and
that the Panel erred in relying on them as a ba sis for finding that the amended COOL measure is
inconsistent with Article 2.1.
2.182. Second, the United States contends that Canada and Mexico incorrectly criticize the Panel
for relying on the fact that ground meat is produced from different suppliers, and through different
means of processing, as a basis for excluding Label E from its analysis under Article 2.1. In
particular, Mexico appears to argue that the mere fact that the labelling requirements for Category
E meat are different from those applicable to other categories of meat provides a basis for
concluding that the amended COOL measure is incons istent with Article 2.1. In the United States'
view, Article 2.1 of the TBT Agreement does not require the United States to apply the same
labelling rules to different products. As the United States explained to the Panel, the USDA created
separate labelling rules for ground meat based on the unique attributes regarding the production
of ground meat, which differs substantially from the production of muscle cuts.
2.6.1.3 The prohibition of a trace-back system
2.183. The United States requests the Appellate Body to reject Canada's argument that the Panel
erred in its treatment of the prohibition of a tr ace-back system under the amended COOL measure
in its assessment of whether the detrimental impact of that measure reflects discrimination
prohibited by Article 2.1 of the TBT Agreement.
2.184. The United States submits that Canada's argument that the trace-back prohibition is
relevant to the analysis under Article 2.1 is incorrect because the trace-back prohibition does not
account for the detrimental impact on imported livestock and, therefore, it is not relevant for the
determination of whether such detrimental impact stems exclusively from legitimate regulatory
distinctions. Canada's argument appears to be that the trace-back prohibition supports a finding of
discrimination because the prohibition represents a "choice" between a trace-back system, on the
one hand, and the recordkeeping and verification requirements of the amended COOL measure, on

204 United States' appellee's submission, para. 257.
WT/DS384/AB/RW • WT/DS386/AB/RW

the other hand.205 The United States explains, however, that the fact that the United States could
have chosen an alternative that, in Canada's view, does not result in a detrimental impact on
imported livestock does not mean that the amended COOL measure is discriminatory. The
United States submits that, in this regard, Canada misunderstands the analysis under Article 2.1 of
the TBT Agreement for determining whether the detr imental impact of a technical regulation on
imported products reflects discrimination.
2.6.2 Article 2.2 of the TBT Agreement
2.6.2.1 Introduction
2.185. The United States submits that the Panel was correct in rejecting the complainants' claim
that the amended COOL measure is "more trade restrictive than necessary" under Article 2.2 of
the TBT Agreement because Canada and Mexico failed to make a prima facie case that any of their
four proposed alternative measures are less trade restrictive and reasonably available alternatives
that make an equivalent contribution to the amended COOL measure's objective.
2.186. In the United States' view, Canada's and Mexico's claims and arguments on appeal are
based on a significant misunderstanding of the me aning of Article 2.2 of the TBT Agreement, the
Panel's analysis of their claims, and their own burden of proof, in addition to other errors. In
particular, the United States submits that a comparison between a challenged measure and an
alternative measure is central to the analysis of whether the challenged measure is "more trade
restrictive than necessary" under Article 2.2. The United States contends that complainants must
make out a prima facie case that there exists an alternative measure that is reasonably available,
less trade-restrictive, and makes an equivalent degree of contribution to the challenged measure
in order to discharge their burden of proof under Article 2.2. In the United States' view, the Panel
correctly found that Canada and Mexico failed to make out a prima facie case for any of the four
alternatives that they proposed, thus warranting the finding of no inconsistency with Article 2.2.
2.6.2.2 The legal test under Article 2.2 of the TBT Agreement
2.187. In response to Canada's and Mexico's claims that the Panel erred in its interpretation of
Article 2.2 of the TBT Agreement in relation to the role and nature of the "relational" and
"comparative" analyses, the United States argues that their approach has no basis in the text of
Article 2.2 and its attendant case law, and repres ents an attempt of the complainants to relieve
themselves of their proper burden of proof. The Un ited States considers that a comparison of the
challenged measure with a proposed alternative is ce ntral to the analysis under Article 2.2. In this
regard, the United States relies on the language of Article 2.2 – namely, "more … than" – and the
Appellate Body's findings in US – COOL and US – Tuna II (Mexico) .
206 The United States explains
that circumstances may arise that negate the need for a comparison with an alternative, namely,
where Article 2.2 is found not to apply because there is no trade-restrictiveness, or where the
measure is found not to contribute to a legitimate objective in the first instance. However, the
possibility for such circumstances does not require the bifurcation of the "necessity" analysis under
Article 2.2, and, further, no such circumstance s are present in the case at hand. Rather, the
assessment of the measure itself provides the basi s, in terms of intermediate findings, that are
required in order for a panel to engage in a comparison of the challenged measure and the
proposed alternative measures.
2.188. Thus, according to the United States, since the text of, and case law referring to,
Article 2.2 calls for a "comparative" analysis, and since no circumstances are present to render a
comparison inutile, the Appellate Body's finding in the original proceedings that an examination of
proposed alternatives is a requisite part of the analysis under Article 2.2 should continue to
apply.
207 Moreover, the United States alleges that Mexico misunderstands the key question posed
by Article 2.2 as being whether a WTO panel, in weighing and balancing all of the relevant factors,

205 United States' appellee's submission, para. 272 (quoting Canada's other appellant's submission,
para. 177).
206 United States' appellee's submission, para. 59 (quoting Appellate Body Reports, US – COOL,
para. 376; and US – Tuna II (Mexico), para. 320), and paras. 55-56 (referring to Panel Reports,
paras. 7.292-7.303, in turn quoting Appellate Body Reports, US – COOL, para. 469).
207 United States' appellee's submission, paras. 62-64 (referring to Appellate Body Reports, US – COOL,
para. 469).
WT/DS384/AB/RW • WT/DS386/AB/RW

would choose a different public policy goal and means to accomplish that goal than what the
importing Member has decided.208
2.189. In respect of Canada's and Mexico's specific claims of error regarding the Panel's
interpretation of the phrase "taking account of the risks non-fulfilment would create" in Article 2.2
of the TBT Agreement, the United States argues that this phrase is properly understood as a
reflection that an individual Member takes into account such risks when setting its level of
fulfilment.
209 In the United States' view, there is nothin g in the text of Article 2.2 that indicates
that the intent underlying this phrase is to restrict a Member's ability to regulate in the public
interest. Accordingly, it would be incorrect to interpret this phrase so as to facilitate a finding of
inconsistency under Article 2.2 on the basis of an alternative measure that makes a lesser
contribution to the objective of a challenged measure than the challenged measure itself.
2.190. In respect of Canada's and Mexico's claims that the Panel erred in failing to assess the
relative importance of the values furthered by the measure when "taking account of the risks
non-fulfilment would create", the United States contends that there is no correlation between the
"importance" of an objective and "the risks non-fulfilment would create".
210 In the United States'
view, it is significant that the elements listed as relevant considerations for "taking account of the
risks non-fulfilment would create" do not include the "relative importance" of the measure's
objective, whereas Canada and Mexico seem to treat it as the "paramount consideration".
211
Furthermore, panels are not in a position to judge the relative importance of various objectives
pursued by different Members. Members have not provided guidance to assist panels in any such
exercise, which would rely on the subjective judgement of panels, which would in turn be
detrimental to the WTO systemically, and to the WTO dispute settlement system more
specifically.
212
2.191. In respect of Canada's and Mexico's arguments that the Panel erred in omitting the design,
structure, and architecture of the amended COOL from its assessment of "the risks non-fulfilment
would create", the United States argues that this is another version of their "relative importance"
argument. In the United States' view, it is wrong to suggest that the United States does not
consider the amended COOL measure's objective to be important. Rather, the measure itself
demonstrates that it covers an extremely large amount of food, and the consequences of not
providing origin information in respect of that food are significant. The reasons for exemptions or
different kinds of information on certain labels are not reflective of a lack of importance placed by
a Member on a measure's objective but, rather, reflect that Members accommodate certain cost
considerations in designing their measures.
2.192. The United States further argues that the additional factors advocated by Canada to be
considered when "taking account of the risks non-fulfilment would create" are not relevant to the
analysis. First, the Panel did not err by refraining from taking into account that the life or health of
consumers would not be endangered if they did not receive origin information, since Article 2.2
does not distinguish between "important" and "unimportant" objectives, as Canada presumes.
Second, the Panel did not err in not taking into account the "market failure" perspective, because
there are many situations where consumer demand for a labelling regime could be conceivably low
– such as health warnings on tobacco products – but that would not mean that the government
mandating the requirement would consider the risks non-fulfilment would create to be low.
2.193. In respect of Canada's and Mexico's claims regarding the Panel's conclusions on the gravity
of the consequences arising from non-fulfilment of the measure's objective, the United States
notes first that Canada's claim relates to the factors that Canada would prefer to be taken into
account when assessing "the risks non-fulfilment would create". Thus, the United States considers
that Canada's claim is unfounded for the same reasons that the relative importance of the
measure's objective, the design, structure, and ar chitecture of the measure, the absence of harm
to consumers, and the "market failure" perspective are not relevant in "taking account of the risks
non-fulfilment would create". In respect of Mexico's claim in this regard, the United States submits
that it rests on Mexico's erroneous "two-step" approach to assessing measures under Article 2.2 of

208 United States' appellee's submission, para. 66.
209 United States' appellee's submission, para. 84.
210 United States' appellee's submission, para. 107.
211 United States' appellee's submission, para. 108.
212 United States' appellee's submission, paras. 109-112.
WT/DS384/AB/RW • WT/DS386/AB/RW

the TBT Agreement, and is based on the misunderstanding that an alternative measure that makes
a lesser contribution to the measure's objective can ground an inconsistency with Article 2.2.
2.194. In respect of Mexico's claims of error under Article 11 of the DSU regarding the Panel's
treatment of evidence concerning consumer demand, the United States advances a number of
arguments. First, with regard to Mexico's allega tion that the Panel erred intis consideration of
Exhibit CDA-154 ("Food Values Applied to Livestock Products"), the United States submits that that
piece of evidence was submitted to the Panel record for the DS384 Panel hearing the dispute
between the United States and Canada, and not for the DS386 Panel hearing the dispute between
the United States and Mexico. Second, the United States submits that, contrary to Mexico's
arguments, the Panel did indeed address the releva nce and shortcomings of each of the pieces of
evidence raised by Mexico, but merely disagreed with Mexico as to their relevance. For instance, in
respect of Exhibit CDA-154, the Panel assessed the evidence by presenting its conclusion, noting
the representativeness of the sample of the study, analysing the questions posed in the study, and
pointing out aspects of the design of the study. With regard to the KSU Revealed Demand study,
the Panel stated its conclusion, and examined the inference that could be drawn from it. In respect
of the telephone opinion poll
213, the Panel identified shortcomings in the poll, and concluded that,
in view of the shortcomings, it could not be a ssumed that 47% of consumers would actually be
interested in having a meat label with country of origin information, but, rather, drew the
inference that there is some consumer interest in country of origin information in general. In
respect of evidence on consumer willingness to pay for a "Product of North America" label vis-à-vis
a country of origin label, the Panel was correct on drawing inferences from the evidence submitted
by Mexico. Regarding the evidence on the USDA's findings of small economic benefits of receiving
country of origin information, the Panel noted that the benefits accruing to consumers could be a
determinant of consumer demand, while also noting that a Member's interest in pursuing a
legitimate objective might also be relevant for a scertaining the gravity of the consequences of not
fulfilling an objective, which in turn affected th e weight it attributed to that evidence. In the
United States' view, Mexico's claims under Article 11 of the DSU go to the inferences drawn and
the weight accorded by the Panel, which is insufficient to ground a claim under Article 11.
2.6.2.3 The degree of contribution made by the amended COOL measure to its objective
2.195. According to the United States, the claims of Canada and Mexico that the Panel erred by
limiting its assessment of the degree of contribution of the amended COOL measure to Labels A-C
are premised on the misunderstanding that Article 2.2 of the TBT Agreement requires two separate
analyses. Rather, Article 2.2 comprises one analysis requiring the demonstration that an
alternative measure exists that is less trade restrictive, makes an equivalent contribution to the
relevant objective, and is reasonably available. Thus, the Panel correctly sought to ensure that the
same scopes were used for the measure and the proposed alternatives to enable a proper
comparison. For the United States, the Panel could only make an appropriate comparison by either
excluding Labels D and E from, or including them in, its analysis of both the measure and the
alternatives. In this regard, it is immaterial whether the degree of contribution is "considerable",
as found by the Panel, or "limited", as suggested by Canada.
214 Rather, the key question is
whether a proposed alternative makes an equivalent degree of contribution, such that a Member's
chosen level of contribution is fulfilled. Since Canada and Mexico did not make arguments in
respect of the contribution made by Labels D and E when discussing their alternatives, it was
entirely proper for the Panel to exclude those labels from its assessment of the degree of
contribution.
2.196. In respect of Canada's and Mexico's arguments regarding the Panel's inconsistent reliance
on figures on the quantum of coverage under the amended COOL measure, the United States
argues that they misread the Panel Reports. The United States contends that the Panel explained
that its use of the figures 33.3% to 42.3% coverage of beef products related to "an indicative
approximation of the extent to which the exem ptions prevent any contribution to the COOL
objective".
215 For the United States, the Panel provided further context for its use of these figures
by stating that it was "unable to determine the proportion of exempted products within

213 Results of a telephone survey conducted by the National Research Center, "Country of Origin
Labeling Poll, Final Report" (4 October 2010) (Panel Exhibit US-48).
214 United States' appellee's submission, para. 81.
215 United States' appellee's submission, para. 79 (quoting Panel Reports, fn 786 to para. 7.347).
WT/DS384/AB/RW • WT/DS386/AB/RW

Categories A-C specifically".216 The United States contends that the Panel relied on these figures at
no further stage in its analysis but, rather, that its focus was on the contribution made by
Labels A-C, evinced through the finding that "the amended COOL measure contributes to the
objective of providing consumer information on origin to a significant degree for products carrying
Labels A-C."
217 The following sentence – "At the same time, the amended COOL measure does not
make any contribution for products exempted from its coverage that would otherwise carry such
labels." – demonstrates that the Panel made its findings of the "considerable but … partial
contribution" to its objective based on the contribu tion made by Labels A-C, as qualified by the
exemptions.
218
2.6.2.4 The first and second proposed alternative measures
2.197. The United States requests the Appellate Body to reject Canada's and Mexico's appeals of
the Panel's findings that the complainants have not made a prima facie case that their first and
second proposed alternative measures would make at least an equivalent contribution to the
objective of providing origin information to consumers as the amended COOL measure. For the
United States, Article 2.2 involves a straightforward analysis of whether a complainant has
demonstrated the existence of an alternative me asure that is less trade restrictive, makes an
equivalent contribution to the relevant objective, and is reasonably available. This analysis is
reflective of the balance struck by Article 2.2 of the TBT Agreement between, on the one hand, the
right of Members to pursue legitimate objectives at the levels they consider appropriate and, on
the other hand, the requirement to choose less trade-restrictive alternatives when pursuing such
objectives at such levels.
2.198. The United States submits that Canada's and Mexico's conception of Article 2.2 strikes an
entirely different balance that distinguishes between "important" and "unimportant" objectives.
219
Under this conception, alternative measures that make a lesser degree of contribution than the
challenged measure to its objective can ground a violation of Article 2.2 where the given objective
is less important. The United States submits that this is the central weakness of Canada's and
Mexico's claims in respect of the first and second proposed alternative measures, since, under this
approach, the United States would be prohibited from providing point-of-production information. In
the United States' view, both the first and second proposed alternative measures provide a lesser
degree of consumer information on origin, or less accurate information, than the amended COOL
measure. Thus, such measures cannot be considered to contribute to the amended COOL
measure's objective to an "equivalent" degree. In that regard, the United States cites the
Appellate Body's reversal of the panel's finding in US – Tuna II (Mexico) that the challenged
measure in that dispute was inconsistent with Article 2.2 in the light of the fact that the proposed
alternative "would contribute to both the consumer information objective and the dolphin
protection objective to a lesser degree than the [challenged] measure".
220
2.199. In the United States' view, Canada's and Mexico's claims in respect of the first and second
proposed alternative measures are premised on a flawed interpretation of the phrase "taking
account of the risks non-fulfilment would create". For the United States, a panel will never be in a
position to undertake the complex balancing of whether adjusting one variable or another in the
alternative measure would adequately "compensate" for providing a lesser contribution to the
objective than the challenged measure in the context of a particular Member.
221 Further, no reason
is provided to explain why expanding the scope of product coverage under the alternatives would
"compensate" for the lesser degree of information, or less accurate information. In any case, the
United States argues that there are insufficient undisputed facts on the record and factual findings
of the Panel for the Appellate Body to complete the legal analysis.

216 United States' appellee's submission, para. 79 (quoting Panel Reports, fn 786 to para. 7.347).
217 United States' appellee's submission, para. 80 (quoting Panel Reports, para. 7.356). (emphasis
added by the United States)
219 United States' appellee's submission, para. 151.
220 United States' appellee's submission, para. 171 (quoting Appellate Body Report, US – Tuna II
(Mexico), para. 330). (emphasis added by the United States)
221 United States' appellee's submission, para. 176.
WT/DS384/AB/RW • WT/DS386/AB/RW

2.6.2.5 The third and fourth proposed alternative measures
2.200. In response to Canada's and Mexico's claims that the Panel erred in applying an overly
high burden of proof in respect of their thir d and fourth proposed alternative measures, the
United States submits that the Panel correctly concluded that the complainants' description of the
third and fourth proposed alternatives was insufficient. In the United States' view, it is well
established that precisely how much and precisely what kind of evidence will be required for a
complainant to satisfy its burden "will necessarily vary from measure to measure, provision to
provision, and case to case".
222 In the present case, the complainants made "exceedingly complex"
proposals requiring changes at all levels of production and retail of meat in the United States, but
provided only "limited explanations" and sometimes "vague" and "incomplete" descriptions.
223 In
the United States' view, Canada's and Mexico's argument that the evidentiary burden applied by
the Panel would require substantial research and expense is simply a reflection of the complexity
of their proposals. Further, while the complainants insist that they provided sufficient information
to describe the proposed alternatives, they failed to provide reasons as to why the information was
sufficient or how they made their prima facie case.
2.201. In response to the complainants' argume nts regarding the allocation of the burden of
proof, the United States argues that the compla inants carried the burden of proving all three
elements of the analysis under Article 2.2 of th e TBT Agreement, namely, that the alternative is
less trade restrictive, makes an equivalent contribution, and is reasonably available. While the
burden might be on the respondent to provide su fficient evidence to support an assertion that a
proposed alternative is not reasonably available, this does not relieve complainants of their burden
of proving that the alternative is reasonably available in the first instance. Further, in respect of
the complainants' reliance on jurisprudence rela ting to Article XX of the GATT 1994 and to
Article XIV of the GATS, the United States argues that the nature of Article 2.2 of the
TBT Agreement is "entirely different" and its burden of proof is accordingly "entirely different".
224
2.202. The United States also notes that neither Canada nor Mexico appeals the Panel's finding
that they failed to make a prima facie case that either the third or fourth proposed alternative
measures is less trade restrictive than the amended COOL measure, makes an equivalent
contribution to the objective, or is reasonably available. Similarly, neither Canada nor Mexico
appeals the Panel's finding in that regard, namely, that neither the third nor fourth proposed
alternative measure proves an inconsistency with Article 2.2 of the TBT Agreement. Thus, the
United States argues that, even if the Appellate B o d y w e r e t o f i n d i n f a v o u r o f C a n a d a ' s a n d
Mexico's appeals in respect of the third and fourth proposed alternative measures, the Panel's
ultimate finding that they did not prove an inconsistency with Article 2.2 would stand.
2.6.3 Article XXIII:1(b) of the GATT 1994
2.203. The United States requests the Appellate Body to reject Canada's and Mexico's appeals of
the Panel's exercise of judicial economy with respect to their non-violation claims under
Article XXIII:1(b) of the GATT 1994 and to reject th eir requests that the Appellate Body complete
the legal analysis. In this respect, the United States refers to the arguments presented in its
appellant's submission that the terms of reference of proceedings under Article 21.5 of the DSU do
not include non-violation claims.

222 United States' appellee's submission, para. 222 (quoting Appellate Body Report, Chile – Price Band
System (Article 21.5 – Argentina), para. 134, in turn quoting Appellate Body Report, US – Wool Shirts and
Blouses, p. 14, DSR 1997:I, p. 335).
223 United States' appellee's submission, para. 222 (quoting Panel Reports, paras. 7.556 and 7.602).
224 United States' appellee's submission, para. 237.
WT/DS384/AB/RW • WT/DS386/AB/RW

2.7 Arguments of the third participants
2.7.1 Australia
2.204. Australia disagrees with Canada's argument that "the existence of an alternative measure
that would not cause discrimination (i.e. trace-ba ck) is evidence of arbitrary and unjustifiable
discrimination, especially where the non-discriminatory alternative measures are prohibited."
225 In
Australia's view, this argument is not supported by longstanding Appellate Body jurisprudence with
respect to determining arbitrary and unjustifiable discrimination in the context of both the chapeau
of Article XX of the GATT 1994 and the TBT Agr eement. Australia notes that, in considering
whether the relevant regulatory distinctions are designed and applied in an even-handed manner
in the context of Article 2.1 of the TBT Agreem ent, the Appellate Body has "focused on the
relationship between the regulatory distinction at issue and the objective of the relevant
measure".
226 However, Australia contends that the Appellate Body has in no case undertaken an
examination of alternative measures in the context of an analysis of arbitrary or unjustifiable
discrimination for the purposes of Article 2.1 of th e TBT Agreement, nor should it do so in this
case.
2.205. With regard to Article 2.2 of the TBT Agreement, Australia highlights that the
TBT Agreement seeks to maintain the balance betw een the objective of avoiding the creation of
unnecessary obstacles to international trade and the right of a Member to regulate in order to
pursue certain legitimate objectives. Furthermore, Australia refers to the statement by the panel in
EC – Sardines that "Article 2.2 and [the preamble to th e TBT Agreement] affirm that it is up to
Members to decide which policy objectives they wish to pursue and the levels at which they wish
to pursue them."
227
2.206. With respect to the participants' arguments concerning the relationship between the
"relational" analysis of various factors of the challenged measure and the "comparative" analysis
focusing on proposed alternative measures, Australia submits that the legal framework for the
analysis of whether a measure is "more trade restrictive than necessary" under Article 2.2 was
clearly articulated by the Appellate Body in US – Tuna II (Mexico) and in the original proceedings
in US – COOL . Australia considers that these reports provide instructive guidance regarding the
overall framework for the necessity analysis under Article 2.2.
2.207. Finally, Australia addresses Canada's and Mexico's allegations that the Panel erred in not
considering the relative importance of the values and interests being protected by the amended
COOL measure as against other measures. Austra lia cautions against adopting an "analytical
discourse around the relative importance of the values and interests underlying a measure"
228,
because this may lead to a reassessment of the objective of the measure and its legitimacy and
result in the development of a "hierarchy" of legitimate objectives. 229 Rather, in Australia's view,
"the nature of the risks and the gravity of the consequences of non-fulfilment of the legitimate
objective must be determined by reference to th e legitimate objective of the challenged measure
itself … and not by comparison with the values and interests underlying other legitimate objectives
not at issue in that dispute."
230 In this vein, Australia highlights that, in assessing "the risks
non-fulfilment would create" in the original proceedings, the Appellate Body considered arguments
and evidence presented by the participants but di d not refer to the "relative" importance of the
legitimate objective of the challenged measure as compared with other legitimate objectives.

225 Australia's third participant's submission, para. 7 (quoting Canada's other appellant's submission,
para. 177 (fn omitted)).
226 Australia's third participant's submission, para. 9 (referring to Appellate Body Reports, US – Clove
227 Australia's third participant's submission, para. 13 (quoting Panel Report, EC – Sardines,
228 Australia's third participant's submission, para. 24 (referring to United States' appellant's submission,
paras. 249-271). (emphasis original)
229 Australia's third participant's submission, para. 30.
230 Australia's third participant's submission, para. 26. (fn omitted)
WT/DS384/AB/RW • WT/DS386/AB/RW

2.7.2 Brazil
2.208. Brazil submits that, in assessing whether a measure modifies the conditions of competition
between imported and domestic like products in violation of Article 2.1 of the TBT Agreement, no
single characteristic or effect of the measure can, in itself, be determinative. Rather, and especially
in the case of a technical regulation that does not de jure discriminate against imports, the design,
structure, and expected operation of a measure, as a whole, should be carefully scrutinized.
Moreover, Brazil contends that the assessment of whether a challenged measure has detrimental
impact on imported products "must be informed by all relevant aspects of the market, which may
include the particular characteristics of the industry at issue, the relative market share in a given
industry, consumer preferences and historical trade patterns".
231
2.209. With regard to Article 2.2 of the TBT Ag reement, Brazil contends that the legitimate
objective pursued by a technical regulation is a factor that permeates the analysis and informs the
obligation set out in Article 2.2. Accordingly, it is important that the legitimate objective pursued
by a Member is correctly defined, and that the me asure's actual contribution to the fulfilment of
the stated objective, and the manner and extent of the measure's contribution to the legitimate
objective, is assessed. In this assessment, no sing le characteristic or effect of the measure can be
determinative of the measure's inconsistency with Article 2.2. Rather, this analysis involves an
evaluation of a number of factors, including the degree of contribution made by the measure to
the legitimate objective pursued, and the nature of the risks and the gravity of consequences that
would arise from non-fulfilment of the measure. In addition, in most cases, this "relational"
analysis should be followed by a "comparative" analysis between the measure at issue and
possible alternative measures.
232
2.210. With regard to "the risks non-fulfilment would create" in the sense of Article 2.2 of the
TBT Agreement, Brazil contends that these risks inform the degree of contribution of an alternative
measure and the burden of proof in relation to potential less trade-restrictive alternative
measures. In particular, Brazil contends that the complainant bears the burden of identifying a
possible less trade-restrictive alternative measure, and of explaining how the alternative would be
implemented. In Brazil's view, the risks of non-fu lfilment need to be taken into account in the
allocation of the burden of proof in the sense th at, when non-fulfilment of the measure's objective
would entail grave consequences, the alternative measure should be described in detail. Similarly,
with regard to the degree of contribution, when non-fulfilment of the measure's objective would
entail grave consequences, the alternative measure would need to present an "invariably
equivalent degree of contribution" to the legitimate objective being pursued.
233
2.7.3 China
2.211. China takes issue with the United States' argument relating to the Panel's analysis under
Article 2.1 of the TBT Agreement that, because the exemptions to the amended COOL measure are
even handed and apply to domestic and imported livestock equally, the amended COOL measure
does not disadvantage Canadian or Mexican livestock. First, China argues that the exemptions
per se are not measures alleged to be inconsistent with Article 2.1, and, thus, even if they are
even handed and apply to domestic and imported products equally, it does not mean that the
amended COOL measure itself is even handed, or that its detrimental effect stems only from
legitimate regulatory distinctions. Second, the exemptions per se are not relevant regulatory
distinctions, and, therefore, ev en if they are even handed and apply to domestic and import
livestock equally, it does not mean that all detrimental impact of the amended COOL measure
stems only from legitimate regulatory distinctions. Third, China contends that the exemptions are
part of the overall architecture of the amended COOL measure, and, in particular, they are part of
the reason why origin information that is collected and maintained by upstream producers and
processors is not conveyed to consumers for the majority of the meat products consumed in the
United States. Fourth, China disagrees with the United States that there is an analogy between the
exemptions at issue in US – Clove Cigarettes and EC – Seal Products , on the one hand, and the
exemptions to the amended COOL measure, on the other hand. While the former "were central to

231 Brazil's third participant's submission, para. 7 (referring to Appellate Body Reports, US – COOL,
para. 269).
232 Brazil's third participant's submission, para. 12 (referring to Appellate Body Report, US – Tuna II
(Mexico), para. 322).
233 Brazil's third participant's submission, para. 14.
WT/DS384/AB/RW • WT/DS386/AB/RW

the relevant regulatory distinctions in those di sputes", the latter "are not relevant regulatory
distinctions".234 Accordingly, the findings relating to the exemptions in US – Clove Cigarettes and
EC – Seal Products have no relevance for the exemptions of the amended COOL measure in the
present disputes. Fifth, China takes issue with the United States' argument that the exemptions
contributed to the reduction of costs of the amended COOL measure. In China's view, the
exemptions' contribution to the reduction in costs is irrelevant to the determination of whether the
detrimental impact of the amended COOL meas ure stems only from legitimate regulatory
distinctions. Otherwise, the national treatmen t obligation of Article 2.1 could easily be
circumvented by granting some kind of exemption reducing cost.
2.212. Regarding Article 2.2 of the TBT Agreemen t, China disagrees with Canada's and Mexico's
contention that the Panel erred in failing to consider the relative importance of the values or
interests furthered by the amended COOL measure in assessing "the risks non-fulfilment would
create". First, China submits that there is no "clear-cut hierarchy among the numerous values
stipulated in Article 2.2 of the [TBT Agreement]".
235 Second, China considers that determining the
"relative importance" of an objective involves subjective judgement and submits that Members are
free to decide which policy objectives and at which levels they wish to pursue. Third, there is no
clear correspondence between the objectives pursued and trade-restrictiveness, and, thus, a
measure could be found to be inconsistent with Article 2.2 of the TBT Agreement when it exceeds
the necessary level to "fulfil" the objective, even if it pursues an "important" objective.
2.213. With regard to the burden of proof for id entifying alternative measures under Article 2.2 of
the TBT Agreement, China disagrees with Canada and Mexico that the Panel "set[] the bar overly
high" for the complainants to establish a prima facie case of violation under Article 2.2 with
respect to the third and fourth proposed alternative measures.
236 In China's view, in order to
establish a prima facie case, the complainant must provide evidence to prove that an alternative is
not merely a theory but is reasonably available. Ch ina adds that "lowering the bar" of establishing
a prima facie case would blur the difference between the "necessity" tests in Article 2.2 of the
TBT Agreement and Article XX of the GATT 1994.237
2.214. With respect to the Panel's findings under Article III:4 of the GATT 1994, China disagrees
with the United States' argument that the Panel erred in failing to consider Article IX of the
GATT 1994 as context of Article III:4. For China, Ar ticle IX does not constitute an exemption from
Article III because nothing in Article IX indicates the right of a Member to depart from the
obligations set out in Article III. Rather, Article IX establishes additional obligations for Members in
relation to marks of origin. In the alternative, China submits that, even if Article IX allowed
derogation from the obligation under Article III:4, the United States failed to demonstrate that
Article IX is applicable in this case and that the requirements set out in this provision are satisfied.
2.215. Finally, China also disagrees with the United States' contention that the Panel erred in not
addressing the availability of Article XX [of the GATT 1994] as an exception for Article III:4 of the
GATT 1994 with respect to the amended COOL measure. China submits that the United States
failed to advance the defence under Article XX or identify any subparagraph thereof as relevant
before the Panel and, thus, did not meet its burden of proof in this respect. Moreover, China states
that Article XX can always be invoked by a Member if it considers that the exceptions set out
therein are applicable, and, thus, it is not the ca se that the United States could have access to
Article XX only after the publication of the Appellate Body reports in EC – Seal Products.
2.7.4 Colombia
2.216. Colombia submits that the Panel erred in its interpretation of Article 2.2 of the
TBT Agreement because it failed to establish a clear legal test, and because it erred in applying the
phrase "taking account of the risks non-fulfilment would create" in that provision to the amended
COOL measure. First, with regard to the legal test under Article 2.2, Colombia maintains that the
Panel identified six factors as relevant to the an alysis, however, the Panel failed to consider the
relationships between these different factors. For Colombia, this resulted in an incorrect weighing
and balancing of the risks at issue in the present case. Colombia therefore supports Canada's claim

234 China's third participant's submission, para. 18 (quoting Mexico's appellee's submission, para. 67).
235 China's third participant's submission, para. 23.
236 China's third participant's submission, para. 27.
237 China's third participant's submission, para. 32.
WT/DS384/AB/RW • WT/DS386/AB/RW

that the Panel should have clarified how it intended to address the relevant factors of the analysis
under Article 2.2.
2.217. Second, Colombia asserts that the Panel erred in limiting its assessment of "the risks
non-fulfilment would create" to only two criteria, namely, consumer interest in country of origin
information, and willingness of consumers to pay for this information. For Colombia, the Panel
failed to explain why only these criteria are relevant for assessing "the risks non-fulfilment would
create", to the exclusion of any other criteria. In particular, Colombia argues that the Panel should
have considered the design, structure, and arch itecture of the amended COOL measure as an
element that may shed light on the gravity of the consequences of not fulfilling the measure's
objective. In particular, Colombia submits that it is evident from the design of the amended COOL
measure that the United States, itself, does not consider the consequences of non-fulfilment of the
amended COOL measure to be grave, because th e Label E requirements of the amended COOL
measure, itself, allow for providing inaccurate information.
2.218. Furthermore, Colombia disagrees with the United States' argument that the Panel erred by
not addressing the availability of an Article XX exception with respect to Article III:4 of the
GATT 1994. Colombia notes that the United States did not invoke Article XX, and merely proposed
a "hypothetical situation" for the Panel's consideration.
238 It was, therefore, correct of the Panel
not to address the availability of an exception under Article XX, given the fact that the
United States had not provided specific evidence or arguments in this regard. For Colombia, a
panel should not make findings "based on hypothetical situations".
239
2.219. In addition, Colombia addresses the issue of the availability of the general exceptions of
Article XX of the GATT 1994 to justify violations of provisions of covered agreements other than
the GATT 1994. In this regard, Colombia refers to the Appellate Body reports in China – Rare
Earths, and emphasizes the requirement of an objectiv e link between the provision that is alleged
to be violated and the provision of the GATT 1994.240
2.220. Moreover, Colombia addresses the relationship between Article III:4 of the GATT 1994 and
Article 2.1 of the TBT Agreement, and notes th at the national treatment obligations under
Article 2.1 and Article III:4 use the same terms, namely, "like products" and "treatment no less
favourable". Colombia agrees with the Appellate Body in EC – Seal Products that, "in interpreting
Article 2.1 of the TBT Agreement, a panel should focus on the text of Article 2.1, read in the
context of the TBT Agreement, including its preamble, and also consider other contextual
elements, such as Article III:4 of the GATT 1994."
241
2.221. Finally, with regard to Canada's and Mexico's non-violation claims under Article XXIII:1(b)
of the GATT 1994, Colombia addresses the criteria fo r exercising judicial economy in this regard.
While Colombia does not wish to comment on Canada's and Mexico's requests that the
Appellate Body reverse the Panel's decision to exercise judicial economy, Colombia considers that
the Appellate Body might "shed some light" on the application of Article XXIII:1(b) of the
GATT 1994.
242
2.7.5 European Union
2.222. With respect to Article 2.1 of the TBT Agreement, the European Union notes that the
participants do not challenge the Panel's findings on the detrimental impact of the amended COOL
measure. Rather, the United States invokes the im propriety of relying on increased recordkeeping
only as an aspect of the analysis of legitimate regulatory distinctions. However, for the European
Union, the question of whether or not an increase in recordkeeping is relevant to the Article 2.1
analysis is more properly an issue of detrimental impact. In this regard, the European Union
maintains that the amended COOL measure's detrimental impact on imports should be assessed
on its own terms, and not by comparing it to th at of the original COOL measure. Thus, the key

238 Colombia's third participant's submission, para. 23.
239 Colombia's third participant's submission, para. 23.
240 Colombia's third participant's submission, paras. 25-27 (referring to Appellate Body Reports, China –
Rare Earths, para. 5.74).
241 Colombia's third participant's submission, para. 35 (quoting Appellate Body Reports, EC – Seal
Products, para. 5.122, in turn referring to Appellate Body Report, US – Clove Cigarettes, para. 100).
242 Colombia's third participant's submission, para. 45.
WT/DS384/AB/RW • WT/DS386/AB/RW

question is not whether the recordkeeping burden or segregation under the amended COOL
measure has increased as compared to the original COOL measure, but whether, as such, the
amended COOL measure has a detrimental impact on imports.
2.223. The European Union further submits that compliance with the recommendations of a panel
may be achieved by adopting measures that are simultaneously more trade restrictive and more
even handed. However, the European Union disagrees with the United States' argument that the
inquiry into whether a measure's detrimental impact stems exclusively from a legitimate
regulatory distinction should be limited to those elements of a measure that, in themselves, cause
detrimental impact on imports. Rather, all aspects of a measure that speak to its design and
architecture are relevant. Therefore, it would have been correct for the Panel to consider
arguments relating to the three exemptions from coverage, as well as arguments relating to
Labels D and E and the prohibition of trace-back. For the European Union, these are all aspects of
the amended COOL measure's design, architecture, revealing structure, operation and application
to be taken into account in the assessment of even-handedness, even if these aspects of the
measure are not relevant regulatory distinctions that impact imports detrimentally.
2.224. Furthermore, the European Union agrees with Canada that even hypothetical or rare
categories of transactions could be considered as an aspect of the design and architecture of a
measure that shows a lack of even-handedness. For the European Union, it would be relevant for
the analysis of even-handedness if certain relevant scenarios were treated more, or less,
favourably for reasons that have nothing to do with a measure's purported aim or other legitimate
objective, even if those scenarios do not (or do not yet) frequently occur in practice. At the same
time, the variety of features of a measure may no t all be explained by one overriding objective.
Thus, mitigating adverse effects on a conflicting objective, or the pursuit of another objective
implicated by the measure, could legitimately explain "looser regulatory approaches in some
markets or market segments".
243
2.225. Turning to Article 2.2 of the TBT Agr eement, the European Union first addresses the
structure and sequence of the analysis under that provision. In particular, the European Union
submits that the analysis of whether a measure is more trade restrictive than necessary involves a
"relational" and a "comparative" analysis, which are closely interlinked. For the European Union, it
makes little sense to ask how much a measure contributes to some objective without being aware
of alternatives that could contribute more, or less. The European Union therefore supports the
Appellate Body's finding that a "comparative" analysis is required "in most cases", and submits
that quantifying the difference, if any, be tween "most cases" and "all but exceptional
circumstances" seems to be a "fruitless task".
244
2.226. With regard to the contribution of the measure at issue to the legitimate objective, the
European Union agrees with Canada's and Mexico's argument that, just because Labels D and E
are neither challenged per se, nor addressed by any of the proposed alternative measures, this
does not mean that they should be a priori excluded from the "relational" analysis. Nonetheless,
the European Union expresses doubt whether including the contribution of Labels D and E would
have changed the outcome of the analysis under Article 2.2, because a Member may legitimately
impose stricter regulatory requirements for some market segments, as long as doing so does not
reveal incoherence or protectionism.
2.227. With respect to the phrase "taking account of the risks non-fulfilment would create", the
European Union agrees with the United States that there is no "hierarchy of values" in WTO law
245,
and that it is for a Member to decide which regulatory objective it wishes to pursue and at which
level. The European Union disagrees with Canada and Mexico that the Panel's "necessity" analysis
was flawed by the Panel's failure to reach definite conclusions on the gravity of consequences of
non-fulfilment. For the European Union, this reading would be merely another way of saying that
the TBT Agreement is based on a hierarchy, or a "relative importance", of regulatory objectives. In
addition, the European Union submits that, while the Panel was correct in considering consumer
interest and willingness to pay among the issues to be taken into account, these criteria should not
necessarily have been the only ones to be considered.

243 European Union's third participant's submission, para. 24.
244 European Union's third participant's submission, paras. 47-48.
245 European Union's third participant's submission, para. 58 (referring to United States' appellant's
submission, para. 260).
WT/DS384/AB/RW • WT/DS386/AB/RW

2.228. With respect to the proposed alternative measures, the European Union submits that they
should, in principle, make a contribution that is equivalent to that of the challenged measure. The
European Union agrees with the Panel that, in some circumstances, an alternative measure may
be found to make an equivalent contribution "by covering a broader range of transactions in a less
demanding way".
246 The burden to demonstrate that such a proposed alternative measure makes
an equivalent contribution rests on the complainant. In this regard, the European Union submits
that Canada and Mexico did not meet that burden with respect to the first and second proposed
alternatives.
2.229. However, the European Union agrees with Canada's and Mexico's argument that
"'identifying' a reasonably available alternative measure, which by necessity means identifying a
hypothetical scenario, cannot require a complainant to describe in detail a fully worked out
measure ready to be put in place by a regulator."
247 Therefore, the European Union disagrees with
the Panel that the complainant should have to sh ow "comparability between the circumstances of
the respondent and a third country … whose measur es are put forward as an example", because it
is for the respondent to rebut a prima facie case of inconsistency. 248 I n t h e s a m e v e i n , t h e
European Union considers that the Panel erred in requiring Canada and Mexico to demonstrate
how and at what cost the proposed alternative measures would be implemented in the
United States. The European Union questions the Panel's reliance on the Appellate Body's
approach in China – Publications and Audiovisual Products , because that case concerned not the
burden of persuasion to be met by a complainant seeking to identify alternative measures as part
of a prima facie claim, but that of a respondent demonstrating that the proposed alternative
measure is not reasonably available.
249 While the European Union does not take a position on
whether Canada and Mexico discharged their burden of proof with respect to the third and fourth
proposed alternatives measures, the European Union nevertheless considers the Panel's approach
to the allocation of the burden of proof under Article 2.2 of the TBT Agreement to be "excessively
strict towards complainants".250
2.230. Turning to the relationship between Ar ticle III:4 of the GATT 1994 and Article 2.1 of the
TBT Agreement, the European Union expresses a co ncern about a possible "hollowing out" of the
TBT Agreement.251 The concern is that a measure causing detrimental impact on imports might
de facto violate Article III:4 of the GATT 1994, while being consistent with Article 2.1 of the
TBT Agreement, if it even-handedly pursues a legitimate objective. This may give complainants an
incentive to pursue national treatment claims under Article III:4 alone, which would be at odds
with the TBT Agreement's role as a lex specialis. The European Union recalls that these concerns
were addressed by the Appellate Body in EC – Seal Products . While the European Union does not
question those findings, it considers the Panel's approach to Article III:4 in the present case
questionable, because it fails to take account of the need for a harmonious and contextual
interpretation of national treatment obligations across the covered agreements. The European
Union considers that this was a central element of the Appellate Body's findings relating to
Article III:4 in EC – Seal Products. In particular, the Panel erred in concluding that, simply because
a finding of a detrimental impact on imports has been made under Article 2.1 of the
TBT Agreement, there is automatically a violatio n of Article III:4 of the GATT 1994. Rather, in
European Union's view, the specific and more imme diate context of Article III:4 should have been
taken into account.
2.231. In particular, the European Union agrees with the United States that Article IX of the
GATT 1994, as the most specific provision on ma rking imported products, and the Agreement on
Rules of Origin may provide such contextual guidan ce. Thus, were the Appellate Body to find that
the amended COOL measure follows the principles laid down by Article IX, that may put the
Panel's finding of less-favourable treatment under Article III:4 into question. While the European
Union does not take a position on whether the Appellate Body should complete the legal analysis in
this way, it nonetheless considers that the question merits discussion. The European Union adds
that another way of interpreting Article III:4 in the context of Article IX would be by focusing on

246 European Union's third participant's submission, para. 64.
247 European Union's third participant's submission, para. 69. (emphasis original)
248 European Union's third participant's submission, para. 69 (referring to Panel Reports, para. 7.548).
249 European Union's third participant's submission, para. 70 (referring to Appellate Body Report, China
– Publications and Audiovisual Products, para. 327, as well as the preceding discussion in paras. 318-326).
250 European Union's third participant's submission, para. 71.
251 European Union's third participant's submission, para. 77.
WT/DS384/AB/RW • WT/DS386/AB/RW

whether the detrimental impact is " attributable to the measure at issue". 252 The European Union
explains that, under this approach, as long as a Member has complied with Article IX of the
GATT 1994, the remaining detrimental impact "should no longer be attributed to the measure" but,
rather, to "subsequent market developments, such as the lack of investment by private actors in
innovative processing techniques or distribution channels".
253
2.232. With regard to the United States' argument regarding the availability of an Article XX of
the GATT 1994 exception for the amended COOL measure, the European Union notes that the
United States did not put forward a defence of Article XX, and failed to identify any specific
subparagraph of Article XX that would be applicable in the present case. The European Union notes
that panels are not required to apply Article XX on their own motion whenever a violation of some
provision is invoked. Moreover, the European Union considers it unclear whether any subparagraph
of Article XX applies in the present case. If it were to speculate, the European Union would
consider that Article XX(d) "might seem to offer some support to the amended COOL measure". 254
However, the European Union observes that, in order to justify the amended COOL measure under
Article XX(d), the United States would had had to identify another domestic measure separate to
the amended COOL measure. In addition, th e amended COOL measure would have to be
necessary to secure compliance with that other domestic measure. In any event, to the extent that
the balance between the obligations contained in the TBT Agreement and the obligations of the
GATT 1994 can be preserved by interpreting the GATT 1994 in a way that respects legitimate
regulatory objectives as much as the TBT Agreem ent does, the Appellate Body should adopt such
an approach.
2.233. Finally, with respect to Canada's and Me xico's non-violation claims, the European Union
submits that the proposition that "a non-violation claim can never be made in compliance
proceedings" would be incorrect.
255 By way of illustration, the European Union refers to a situation
where original proceedings would consist of a single non-violation claim and there would be a
recommendation by the DSB that the Member concerned make a mutually satisfactory adjustment
under Article 26.1(b) of the DSU. If, in such ca se, a Member would recast the original measure
instead of offering compensation, it would be questionable whether this would be a "mutually
satisfactory adjustment". Consequently, there wo uld be a "disagreement" as to the consistency
with a covered agreement (Article 26.1 of the DSU) of a measure taken to comply.
256 In the case
of a successful non-violation complaint, the recommendation made under Article 26.1(b) of the
DSU is "the necessary foundation for the subsequent 'disagreement as to … consistency' within the
meaning of Article 21.5". 257 The European Union notes that, to the contrary, in the absence of a
successful non-violation claim in the original proceedings, a non-violation claim cannot be raised in
compliance proceedings.
2.7.6 Japan
2.234. With respect to Article 2.1 of the TBT Agreement, Japan submits that providing general
information on origin to consumers can be a legitimate objective pursued by a technical regulation.
However, Japan urges that, in fulfilling this legiti mate objective, a government should not demand
more information than necessary to satisfy the objective. In Japan's view, the regulatory
distinctions drawn by a technical regulation im posing detailed COOL requirements "may not be
'legitimate' in the first place where the government intervention does not respond to consumer
demand and the more detailed information can be voluntarily provided by suppliers to consumers
in the market."
258 In the absence of consumer demand, the detrimental impact of such regulatory
distinctions would have no "'rational connection to the objective' pursued by the measure and …
would constitute arbitrary or unjustifiable discrimination contrary to Article 2.1 of the
TBT Agreement."
259 Japan also notes that the assessment of the "legitimacy" of the regulatory
distinction under Article 2.1 should be conducted together with the analysis of the "disconnect"

252 European Union's third participant's submission, para. 83. (emphasis original)
253 European Union's third participant's submission, para. 83.
254 European Union's third participant's submission, para. 89.
255 European Union's third participant's submission, para. 96. (emphasis original)
256 European Union's third participant's submission, para. 96.
257 European Union's third participant's submission, para. 101.
258 Japan's third participant's submission, para. 9.
259 Japan's third participant's submission, para. 10.
WT/DS384/AB/RW • WT/DS386/AB/RW

between the information required from upstream producers and the information conveyed to
consumers through the labels prescribed under the amended COOL measure.260
2.235. Furthermore, Japan takes issue with the United States' argument that the Panel erred in
analysing hypothetical scenarios when examining whether the detrimental impact of the amended
COOL measure stems exclusively from legitimate regulatory distinctions. In Japan's view,
hypothetical situations would seem relevant to the examination of the design, architecture,
revealing structure, operation, or application of the measure because such situations may arise in
the future, and therefore should not necessar ily be excluded from the assessment of the
measure's even-handedness. However, Japan cautions that potential situations or hypothetical
scenarios are relevant only to the extent that they relate to how the regulatory distinctions operate
and are applied in the particular market at issue.
2.236. Turning to the relationship between th e relevant regulatory distinctions and the
exemptions to the amended COOL measure, Japa n submits that, although the exemptions are
relevant to the analysis of "treatment no less favourable", they are not, on their own, dispositive
as to whether the relevant regulatory distinct ion under the amended COOL measure lacks "even-
handedness" in its design and application. Japan explains that, by excluding "a considerable
portion"
261 of meat products from the COOL requirements, the exemptions effectively create an
additional product category of "unknown" or "unidentified" origin262, which precludes products from
being classified under Categories A-D. Thus, "t he difference in labelling conditions under the
amended COOL measure does not appear to be cali brated to the regulatory distinctions drawn by
that measure." 263 For these reasons, Japan concludes that the exemptions are sufficiently
connected to the relevant regulatory distinctions.
2.237. Japan disagrees with the Panel's conclu sions regarding the source of the detrimental
impact. According the Japan, it is not the regulatory distinctions, but the recordkeeping and
verification requirements imposed by the amen ded COOL measure that cause the detrimental
impact on imports. Thus, Japan argues that th e relationship between the exemptions and the
scope of the recordkeeping and verifications requirements, and how the former affect the latter in
the particular market, are relevant factors to be carefully scrutinized in these proceedings. In
addition, with respect to the United States' argu ment that the exemptions are justifiable as a
"legitimate policy choice to reduce regulatory costs", Japan maintains that such justification must
be scrutinized in the light of, inter alia, the measure's objective of providing origin information to
consumers.
264
2.238. With respect to the relationship between Article 2.1 of the TBT Agreement and Article III:4
and XX of the GATT 1994, Japan notes that the scope of legitimate objectives under the
TBT Agreement is broader than that under Article XX of the GATT 1994. First, the analysis of what
can be considered as a legitimate objective may be informed by the objectives listed in Article 2.2
and the sixth and seventh recitals of the preamble of the TBT Agreement, as well as the objectives
recognized in the provisions of other covered agreements. Second, Japan argues that, in analysing
the relationship between Article 2.1 of the TBT Agreement and Article III:4 of the GATT 1994, each
agreement needs to be considered as a whole. To the extent that there is potential for an
imbalance between the obligations set out in these ag reements, this should be a relevant factor to
be taken into account in the analysis of the relationship between the two agreements. Third, Japan
recognizes that, although arguments in favour of a more flexible interpretation of Article III:4 of
the GATT 1994 exist, this approach does not appear to be in line with the case law developed by
the Appellate Body.
265 Japan recalls that the Appellate Body has been reluctant to accept
considerations based on the objectives of the measure to determine whether there is "less
favourable treatment". Furthermore, Japan is of the view that such a more flexible approach to the
interpretation of Article III:4 might raise the question as to whether this would render Article XX of
the GATT 1994 meaningless.

260 Japan's third participant's submission, para. 11.
261 Japan's third participant's submission, para. 17 (quoting Appellate Body Reports, US – COOL,
262 Japan's third participant's submission, para. 17.
263 Japan's third participant's submission, para. 17.
264 Japan's third participant's submission, paras. 24-25 (referring to United States' appellant's
submission, paras. 210-215; and Appellate Body Reports, US – COOL, paras. 271 and 340).
265 Japan's third participant's submission, para. 32 (referring to Appellate Body Report, Korea – Various
Measures on Beef, para. 137).
WT/DS384/AB/RW • WT/DS386/AB/RW

2.239. Turning to the relationship between Arti cle III:4 and Article IX of the GATT 1994, Japan
recognizes that Article IX may provide context for the interpretation of Article III:4 in relation to
marks of origin measures. However, Japan expresses a concern that such interpretation could lead
to a conclusion that Article IX "reduces the normative scope" of Article III:4 and provides
"a carve-out" for violations of Article III:4.
266 In addition, Article III:4 and Article IX "provide
different and distinct disciplines, and … regulate Members' conduct in a cumulative manner". 267
Therefore, Japan does not consider that labelling requirements on the origin of products are
excluded from the scope of Article III:4 of the GATT 1994.
2.240. With respect to Article 2.2 of the TBT Agreement, Japan disagrees with Canada's and
Mexico's argument that the "comparative" analysis inherently assumes that the challenged
measure's trade-restrictiveness is "necessary" in order to fulfil the legitimate objective. In this
respect, Japan recalls that the inquiry under Article 2.2 is a holistic exercise involving both a
"relational" analysis and a "comparative" analysis. Furthermore, according to the Appellate Body in
the original proceedings in US – COOL , the "comparative" analysis is part of an overall weighing
and balancing exercise and should be undertaken in most cases, unless the inconsistency of a
technical regulation with Article 2.2 can be unequivocally established without such analysis.
268
2.241. Japan agrees with the Panel's finding that "the relative importance of interests or values
protected by a measure is not a separate factor of the Article 2.2 legal test."269 It can be examined
in the assessment of the nature of the risks at issue and the gravity of the consequences that
would arise from non-fulfilment of the legitimate objective. With respect to the alternative
measures, Japan agrees with Canada that they are hypothetical in nature and should not be
required to be identified with unnecessary precisio n. Finally, Japan adds that, under Article 2.2,
the complainant's burden to establish a prima facie case includes identification of a possible
reasonably available alternative measure, while the respondent should rebut the complainant's
prima facie case by presenting evidence and arguments to demonstrate that the proposed
alternative is "merely theoretical in nature", impossible to undertake, or that it would impose an
"undue burden" on the Member, such as prohibitive costs or substantial technical difficulties.
270
2.7.7 Korea
2.242. At the oral hearing, Korea commented on two issues. First, Korea addressed the meaning
of "compliance" under Article 21 of the DSU. Se cond, Korea addressed the relationship between
Article 2.1 of the TBT Agreement and Article III:4 of the GATT 1994. With regard to the first issue,
Korea is of the view that "compliance" encompasse s more than the withdrawal or modification of
the measure at issue. Thus, while addressing concerns articulated by a panel or the Appellate Body
is an important element in the implementation of DSB recommendations and rulings, the genuine
meaning of compliance is to bring the measure at issue into conformity in good faith with the
obligations under the agreement at issue. Accordin gly, in the present disputes, the issue before
the Appellate Body is not only whether the United States has addressed the concerns identified by
the Appellate Body in the original proceedin gs, but whether the amended COOL measure has
removed discrimination against imported livestock, which does not stem exclusively from
legitimate regulatory distinctions. Second, Korea highlighted the systemic importance of clarifying
the relationship between Article 2.1 of the TB T Agreement and Article III:4 of the GATT 1994.
Korea explained that a detrimental impact that stems from legitimate regulatory distinctions may
be found to be consistent with Article 2.1 of the TBT Agreement, while violating Article III:4 of the
GATT 1994, if Article XX of the GATT 1994 does not provide an exception. For Korea, this may lead
to confusion and cause implementation problems.

266 Japan's third participant's submission, para. 38.
267 Japan's third participant's submission, para. 39. (fn omitted)
268 Japan's third participant's submission, para. 43 (referring to Appellate Body Reports, US – COOL,
para. 374).
269 Japan's third participant's submission, para. 44 (quoting Panel Reports, para. 7.379, and referring to
para. 7.311).
270 Japan's third participant's submission, para. 47 (quoting Panel Reports, para. 7.555, in turn quoting
Appellate Body Report, Brazil – Retreaded Tyres, para. 156, in turn quoting Appellate Body Report, US –
Gambling, para. 308).
WT/DS384/AB/RW • WT/DS386/AB/RW

2.7.8 New Zealand
2.243. With regard to the Panel's analysis of Article 2.1 of the TBT Agreement, New Zealand
submits that the Panel was correct in considerin g elements of the amended COOL measure that
are not, themselves, relevant regulatory distinctions or independent sources of detrimental impact
in its analysis of the "overall architecture" of the measure. While individual elements of the
measure, when viewed in isolation, may appear to be consistent with Article 2.1, the combined
effect may nevertheless be inconsistent if the nature or number of distinctions is such that the
technical regulation, as a whole, accords less-favourable treatment to imported products.
2.244. With respect to Article 2.2 of the TBT Agreement, New Zealand offers comments on three
issues. First, regarding the interpretation of the phrase "taking account of the risks non-fulfilment
would create", New Zealand does not consider that the relative importance of the legitimate
objective of the measure constitutes a separate factor in the analysis. Rather, this element is part
of the analysis of the nature of the risks and gr avity of the consequences of non-fulfilment. For
New Zealand, consideration of the nature of the ri sks and of the gravity of the consequences will
necessarily, although indirectly, include consideration of the "importance" of the objective.
2.245. Second, with respect to the complainant's burden of proof to present a prima facie case for
an alternative measure, New Zealand recalls that the Appellate Body in US – Tuna II (Mexico)
referred to at least two instances where a complainant may be absolved from this burden:
(i) when the challenged measure is not trade restrictive at all; or (ii) when a challenged measure
makes no contribution to the achievement of the relevant legitimate objective.
271 New Zealand
considers that, if neither of the instances identified by the Appellate Body is applicable, then the
burden rests on the complainant to establish a prima facie case that an alternative measure that
meets the requirements of Article 2.2 exists.
2.246. Finally, with respect to the degree of contribution to the objective that an alternative
measure is required to achieve, New Zealand points out that "[a]n alternative measure may make
a greater contribution, or only a generally equivalent contribution to the legitimate objective".272 In
only "very rare cases" may a proposed alternative measure that makes a lesser contribution
demonstrate that the challenged measure is more trade restrictive than necessary.273 New Zealand
cautions against adopting an interpretative approach "that would routinely favour alternative
measures that make a lesser contribution to the achievement of the legitimate objective".
274
3 ISSUES RAISED IN THIS APPEAL
3.1. With respect to the Panel's findings that the amended COOL measure is inconsistent with
Article 2.1 of the TBT Agreement, the following issues are raised by the participants:
a. whether the Panel erred in concluding that the detrimental impact of the amended COOL
measure on imported livestock does not stem exclusively from legitimate regulatory
distinctions, and, in particular:
i. whether the Panel erred in finding that the amended COOL measure increases the
recordkeeping burden entailed by the origin al COOL measure, and that this supports
a conclusion that the detrimental impact of that measure on imported livestock does
not stem exclusively from legitimate regulatory distinctions (issue raised by the
United States);
ii. whether the Panel erred in finding that Labels B and C, as prescribed by the
amended COOL measure, are potentially inaccurate, and that this supports a
conclusion that the detrimental impact of that measure on imported livestock does
not stem exclusively from legitimate regulatory distinctions (issue raised by the
United States); and

271 New Zealand's third participant's submission, para. 10 (referring to Appellate Body Report, US –
Tuna II (Mexico), para. 322; and United States' appellee's submission, para. 52).
272 New Zealand's third participant's submission, para. 13.
273 New Zealand's third participant's submission, para. 13.
274 New Zealand's third participant's submission, para. 13.
WT/DS384/AB/RW • WT/DS386/AB/RW

iii. whether the Panel erred in finding that th e exemptions prescribed by the amended
COOL measure support the conclusion that the detrimental impact of that measure
on imported livestock does not stem exclusively from legitimate regulatory
distinctions (issue raised by the United States);
b. whether the Panel erred by failing to assess appropriately the relevance of Label D for
the analysis of whether the detrimental impact of the amended COOL measure on
imported livestock stems exclusively from legitimate regulatory distinctions (issue raised
by Canada);
c. whether the Panel erred by failing to assess appropriately the relevance of Label E for
the analysis of whether the detrimental impact of the amended COOL measure on
imported livestock stems exclusively from legitimate regulatory distinctions (issue raised
by Canada and Mexico); and
d. whether the Panel erred by failing to assess appropriately the relevance of the
prohibition of a trace-back system under the amended COOL measure for the analysis of
whether the detrimental impact of that measure on imported livestock stems exclusively
from legitimate regulatory distinctions (issue raised by Canada).
3.2. With respect to the Panel's findings unde r Article 2.2 of the TBT Agreement, the following
issues are raised by the participants:
a. in respect of the sequence and order of the "necessity" analysis under Article 2.2:
i. whether the Panel erred by failing to articulate correctly the relational component of
the analysis under Article 2.2 (issue raised by Canada);
ii. whether the Panel erred by failing to describe how different factors are to be weighed
and balanced against each other under the "relational" analysis (issue raised by
Canada);
iii. whether the Panel erred by failing to clarify that the "comparative" analysis does not
necessarily prevail over the "relational" analysis (issue raised by Canada); and
iv. whether the Panel erred by stating that a "comparative" analysis would only be
redundant in exceptional circumstances, and in concluding that such "exceptional
circumstances" must be demonstrated befo re any "overall" conclusions with respect
to Article 2.2 may be drawn from the "relational" analysis (issue raised by Mexico);
b. whether the Panel erred by excluding Labels D and E (issue raised by Canada), or
Label E only (issue raised by Mexico), in its analysis of the contribution of the amended
COOL measure to its objective, and, therefore, in concluding that the amended COOL
measure makes a "considerable but necessarily partial" degree of contribution to its
objective;
c. with respect to the interpretation and applic ation of the phrase "taking account of the
risks non-fulfilment would create" in Article 2.2:
i. whether the Panel erred in contemplating that an alternative measure providing less
specific or less accurate information could qualify as making an "equivalent" degree
of contribution as compared to the amended COOL measure (issue raised by the
United States);
ii. whether the Panel erred by failing to take into account the relative importance of the
values or interests furthered by the amended COOL measure (issue raised by Canada
and Mexico);
iii. whether the Panel erred by failing to take into account the design, structure, and
architecture of the amended COOL measure (raised by Canada and Mexico); and
WT/DS384/AB/RW • WT/DS386/AB/RW

iv. whether the Panel erred in concluding that it was unable to ascertain the gravity of
the consequences of non-fulfilment of the amended COOL measure's objective (issue
raised by Canada and Mexico);
d. whether the Panel erred in finding that Canada and Mexico did not make a prima facie
case that the first and second proposed alternative measures would make an
"equivalent" degree of contribution to th e amended COOL measure's objective (issue
raised by Canada and Mexico); and
e. whether the Panel erred in finding that Canada and Mexico did not make a prima facie
case that the third and fourth proposed al ternative measures are reasonably available
for purposes of their claims under Article 2.2 (issue raised by Canada and Mexico).
3.3. With respect to the Panel's finding that the amended COOL measure is inconsistent with
Article III:4 of the GATT 1994, whether the Panel erred by failing to take into account Articles IX:2
and IX:4 of the GATT 1994 as relevant context in interpreting Article III:4 of the GATT 1994 (issue
raised by the United States).
3.4. Whether the Panel erred in the way it addressed the United States' request at the interim
review stage regarding the availability of Ar ticle XX of the GATT 1994 as an exception for
Article III:4 of the GATT 1994 with respect to th e amended COOL measure (issue raised by the
United States).
3.5. In the event that the Appellate Body reve rses the Panel's findings that the amended COOL
measure is inconsistent with Article 2.1 of th e TBT Agreement and Articl e III:4 of the GATT 1994,
whether the Panel erred by exercising judicial economy with respect to Canada's and Mexico's
non-violation claims under Article XXIII:1(b) of the GATT 1994 (issue raised by Canada and
Mexico).
3.6. In the event that the condition of Canada's and Mexico's appeals under Article XXIII:1(b) of
the GATT 1994 is fulfilled, whether the Panel erred in concluding that the complainants' claims
under Article XXIII:1(b) were within the Panel's terms of reference (issue raised by the
United States).
4 BACKGROUND AND OVERVIEW OF THE MEASURE AT ISSUE
4.1. Before turning to the analysis of the issues raised in this appeal, we provide an overview of
the measure at issue in these disputes, as identified by the Panel.
4.1 Introduction
4.2. The measure at issue in the original disputes comprised the "COOL statute"
275, adopted by
the US Congress, and related implementing regulations, promulgated by the US Secretary of
Agriculture through the Agricultural Marketing Service (AMS) of the US Department of
Agriculture
276 (USDA) (2009 Final Rule (AMS)), which, in these Reports, we refer to collectively as
the "original COOL measure". Other measures considered by the original panel have either expired
or have been withdrawn and are not at issue in these compliance proceedings.277

275 The Agricultural Marketing Act of 1946 (60 Stat. 1087, United States Code, Title 7, Section 1621
et seq.) (Panel Exhibit CDA-3), as amended by the Farm Security and Rural Investment Act of 2002
(116 Stat. 134, 533-535, Public Law No. 107-171, Section 10816: "Country of Origin Labeling" (Panel Exhibit
CDA-4)) (2002 Farm Bill) and the Food, Conservation, and Energy Act of 2008, 122 Stat. 923, 1351-1354,
Public Law No. 110-234 (22 May 2008), Section 11002: "Country of Origin Labeling" (Panel Exhibit CDA-5)
(2008 Farm Bill). Through the enactment of the 2002 and 2008 Farm Bills, the COOL requirements were
inserted into the Agricultural Marketing Act of 1946 as Section 1638, and in turn codified under United States
Code, Title 7, Section 1638. (See Original Panel Reports, US – COOL, paras. 7.12-7.13 and 7.77)
276 USDA, Final Rule on Mandatory Country of Origin Labeling of Beef, Pork, Lamb, Chicken, Goat Meat,
Wild and Farm-Raised Fish and Shellfish, Perishable Agricultural Commodities, Peanuts, Pecans, Ginseng, and
Macadamia Nuts, United States Federal Register, Vol. 74, No. 10 (15 January 2009) pp. 2704-2707 (Panel
Exhibits CDA-2 and MEX-12).
277 Panel Reports, para. 7.7.
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4.3. These compliance disputes concern measures adopted by the United States to comply with
the DSB recommendations and rulings in US – COOL. As noted by the Panel, the AMS of the USDA
issued the final rule, effective 23 May 2013 278 (2013 Final Rule), in order "to make changes to the
labeling provisions for muscle cut covered commodities and certain other modifications". 279 The
COOL statute, which constituted part of the original COOL measure, remains unchanged. 280 In
these Reports, we refer to the COOL statute an d the 2009 Final Rule (AMS), as amended by the
2013 Final Rule, collectively as the "amended COOL measure". The amended COOL measure
maintains the key elements of the original COOL measure 281, in particular: (i) the wide range of
"covered commodities", including muscle cuts of beef and pork, as well as ground beef and
pork
282; (ii) the four different origin categories for muscle cuts of meat and one additional origin
category for ground meat283; (iii) rules concerning the way in which information is provided to the
consumer284; and (iv) recordkeeping and verification requirements. 285 The main changes
introduced by the amended COOL measure concern: (i) the prescription of a point-of-production
labelling requirement – i.e. a requirement that Labels A, B, and C for muscle cuts of
US-slaughtered livestock indicate where each production step (birth, raising, slaughter)
occurred286; (ii) the removal of the commingling and country order flexibilities 287; (iii) the
amendment of the multiple countries of raising flexibility 288; and (iv) the amendment of the
coverage of Label D.289
4.2 Overview of the amended COOL measure
4.4. The amended COOL measure is an internal measure of the United States, as opposed to a
customs or border measure.
290 It requires retailers in the United States to affix labels providing
country of origin information on certain products. This obligation applies irrespective of whether
the products are imported or domestically produced. The measure applies to a wide range of
commodities, including muscle cuts and ground meat of beef and pork. Although livestock are not
formally listed as "covered commodities" under the amended COOL measure, the Panel found that,
for the same reasons as set out in the original panel reports, the amended COOL measure applies
also to cattle and hogs.
291 The products at issue in these disputes are cattle and hogs used in the
production of beef and pork. 292 The definition of "origin" of meat under the original and amended
COOL measures differs from the conception of "o rigin" generally employed by the United States
and other Members for customs purposes. While, for customs purposes, the United States relies on
the rule of substantial transformation for determining the origin of products imported into the
United States
293, the original and amended COOL measures define "origin" for purposes of
Labels A, B, and C as a function of where the an imals from which the meat is derived were born,
raised, and slaughtered.294 Under the COOL measures, meat carrying Labels A, B, and C may have
one or more countries of origin, depending on where these production steps took place. Similarly,
meat carrying Label E (ground meat) may have one or more countries of origin, as the label must
list all countries of origin of the meat contained therein, or of meat that may reasonably be

278 USDA, Final Rule on Mandatory Country of Origin Labeling of Beef, Pork, Lamb, Chicken, Goat Meat,
Wild and Farm-Raised Fish and Shellfish, Perishable Agricultural Commodities, Peanuts, Pecans, Ginseng, and
Macadamia Nuts, United States Federal Register, Vol. 78, No. 101 (24 May 2013), pp. 31367-31385 (Panel
Exhibits CDA-1 and MEX-3).
279 Panel Reports, para. 7.8 (quoting 2013 Final Rule, p. 31367).
280 Panel Reports, para. 7.9.
281 Panel Reports, para. 7.55. For additional details with regard to the original COOL measure, see
Appellate Body Reports, US – COOL, paras. 237-253; and Original Panel Reports, US – COOL,
paras. 7.75-7.142.
282 Panel Reports, para. 7.25.
283 Panel Reports, para. 7.12.
284 Panel Reports, para. 7.22.
285 Panel Reports, para. 7.45.
286 Panel Reports, para. 7.18.
287 Panel Reports, paras. 7.34 and 7.37.
288 Panel Reports, paras. 7.40-7.43.
289 Panel Reports, para. 7.19.
290 Panel Reports, para. 7.635 (referring to Canada's first written submission to the Panel, para. 93; and
Mexico's first written submission to the Panel, para. 224).
291 Panel Reports, paras. 7.25-7.26 (quoting Original Panel Reports, US – COOL, para. 7.246).
293 The rule of substantial transformation confers origin exclusively to the country where the processing
of food took place, which, in the case of meat, is the country where the animal was slaughtered.
(Appellate Body Reports, US – COOL, para. 241)
294 Panel Reports, para. 7.10 (referring to Appellate Body Reports, US – COOL, paras. 240-241).
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contained therein.295 The origin of meat carrying Label D is determined based on the criterion of
substantial transformation that confers origin to the country where the animal was slaughtered.296
4.5. The amended COOL measure permits the same methods for conveying origin information as
the original COOL measure. Specifically, requisite information may be conveyed to consumers "by
means of a label, stamp, mark, placard, or othe r clear and visible sign on the covered commodity
or on the package, display, holding unit, or bin co ntaining the commodity at the final point of sale
to consumers". 297 The amended COOL measure allows the use of country abbreviations
(e.g. "U.S." and "USA" for "United States of Amer ica"), and abbreviations for the production steps
(e.g. "slghtrd" as me aning "slaughtered").298 In addition, the amended COOL measure maintains
the permission of the use of the term "harvested" in lieu of "slaughtered".299
4.6. In addition to requiring retailers to provide information on the origin of beef and pork, the
amended COOL measure maintains the requirements for upstream suppliers of meat products to
provide retailers with information on the origin of the meat supplied. The recordkeeping and
verification rules of the original COOL meas ure remain unchanged under the amended COOL
measure.
300 The US Secretary of Agriculture "may conduct an audit of any person that prepares,
stores, handles, or distributes a covered commodity for retail sale to verify compliance" with the
recordkeeping requirements.
301
4.7. The COOL statute limits the recordkeeping obligations for retailers and their suppliers to
"[r]ecords maintained in the course of the normal conduct of the business of such person,
including animal health papers, import or customs documents, or producer affidavits".
302
Moreover, it expressly prohibits the USDA from imposing "a mandatory identification [trace-back]
system to verify the country of origin of a covered commodity".303 This limitation and prohibition of
the original COOL measure remain unchanged under the amended COOL measure.304
4.3 Coverage of the amended COOL measure
4.8. The original COOL measure applied to a wide range of "covered commodities", including
muscle cuts of beef and pork, as we ll as to ground beef and pork. 305 Even though cattle and hogs
were not formally listed as "covered commodities", the original panel found that the original COOL
measure nevertheless applied not only to beef and pork, but also to cattle and hogs. 306 The 2013
Final Rule does not modify the original COOL measure in respect of its application to meat and
livestock.
307

295 Panel Reports, para. 7.20 (quoting 2009 Final Rule (AMS), Section 65.300(h)).
296 Panel Reports, para. 7.15 (referring to Original Panel Reports, US – COOL, para. 7.674; and
Appellate Body Reports, US – COOL, para. 241). We note that the amended COOL measure provides a
voluntary option for Label D to "include more specific location information related to production steps". Where
that option is exercised, origin under Label D is also a function of where the animals from which the meat is
derived were born, raised, and slaughtered. (Panel Reports, para. 7.19 (quoting 2013 Final Rule,
Section 65.300(f)(2)))
297 Panel Reports, para. 7.22 (quoting COOL statute, Section 1638a(c)(1)).
298 Panel Reports, paras. 7.23-7.24 (quoting 2013 Final Rule, p. 31369).
299 Panel Reports, fn 78 to para. 7.23 (quoting 2009 Final Rule (AMS), Section 65.250; and 2013 Final
Rule, p. 31368).
300 Panel Reports, para. 7.45. The 2009 Final Rule (AMS) required that "[a]ny person engaged in the
business of supplying a covered commodity to a retailer, whether directly or indirectly …, must maintain
records to establish and identify the immediate previous source (if applicable) and immediate subsequent
recipient of a covered commodity for a period of 1 year from the date of transaction", and must make that
information available to the buyer. (2009 Final Rule (AMS), Section 65.500(b)(3)) See also Original Panel
Reports, US – COOL, para. 7.118.
301 Panel Reports, fn 134 to para. 7.45 (quoting COOL statute, Section 1638a(d)(1)).
302 Panel Reports, para. 7.82 (quoting COOL statute, Section 1638a(d)(2)(A)).
303 Panel Reports, para. 7.82 (quoting COOL statute, Section 1638a(f)(1)).
304 Panel Reports, para. 7.45 (quoting COOL statute, Section 1638a(d)(1) and (2)(4) and
Section 1638a(f)(1)).
305 The "covered commodities", in addition to beef and pork, include lamb, chicken, goat meat, wild and
farm-raised fish and shellfish, perishable agricultural commodities, peanuts, pecans, ginseng, and macadamia
nuts. (Panel Reports, fn 82 to para. 7.25 (quoting COOL statute, Section 1638(2)(A)))
306 Panel Reports, para. 7.26 (referring to Original Panel Reports, US – COOL, para. 7.246).
307 Panel Reports, para. 7.26.
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4.9. The original COOL measure contained thr ee exemptions from coverage. They concerned:
(i) ingredients in "processed food items" 308; (ii) products served in "food service
establishments"309; and (iii) entities not meeting the definition of "retailer".310 The Panel found that
the amended COOL measure retains these exemptions and "slightly adjust[s]" the definition of
"retailer".311
4.10. The original COOL measure defined "retailer" as "any person licensed as a retailer under the
Perishable Agricultural Commodities Act of 1930 (PACA)". 312 Pursuant to the terms of the PACA,
this means that a "retailer" is an entity whose invoice costs of purchases of perishable agricultural
commodities are in excess of US $230,000 in any calendar year. 313 The 2013 Final Rule defines
"retailer" as "any person subject to be licensed as a retailer under the … PACA". 314 The Panel also
noted the USDA's explanation that the change in the definition clarifies that all retailers that meet
the PACA definition of "retailer", whether or not they actually have a PACA licence, are covered by
the amended COOL measure.315
4.4 Categories of meat
4.11. The original COOL measure established four categories of origin for muscle cuts of meat
(Categories A-D) and one additional category for ground meat (Category E). 316 These categories
remain applicable under the amended COOL measure317:
a. Category A is reserved for meat derived from livestock born, raised, and slaughtered in
the United States.
b. Two categories of origin are reserved for muscle cuts derived from livestock slaughtered
in the United States but that were born and/or raised in a different country. For each of
these categories, at least one production step will have taken place outside the
United States, and at least one production step will have taken place within the
United States. These categories are distinguished based on whether the animals were
born in a foreign country and then raised and slaughtered in the United States
(Category B), or raised outside the United States and then imported into the
United States for immediate slaughter, that is, to be slaughtered within two weeks of the
date the animals enter the United States (Category C).
318

308 A "processed food item" is defined as "a retail item derived from a covered commodity that has
undergone specific processing resulting in a change in the character of the covered commodity, or that has
been combined with at least one other covered commodity or other substantive food component". (Panel
Reports, para. 7.29 (quoting 2009 Final Rule (AMS), Section 65.220)) Such processing includes "cooking",
"curing", "smoking", and "restructuring". (Panel Reports, fn 91 to para. 7.29 (referring to 2009 Final Rule
(AMS), Section 65.220)) Any covered commodities that are "an ingredient in a processed food item" were also
excluded from the scope of the original COOL measure. (Panel Reports, para. 7.29 (quoting COOL statute,
Section 1638(2)(B)))
309 "Food service establishments" are defined by the original COOL measure as "a restaurant, cafeteria,
lunch room, food stand, saloon, tavern, bar, lounge, or other similar facility operated as an enterprise engaged
in the business of selling food to the public." The 2009 Final Rule (AMS) further provided that "[s]imilar food
service facilities include salad bars, delicatessens, and other food enterprises located within retail
establishments that provide ready-to-eat foods that are consumed either on or outside of the retailer's
premises." (Panel Reports, para. 7.30 (quoting 2009 Final Rule (AMS), Section 65.140))
310 Panel Reports, para. 7.27 (referring to Original Panel Reports, US – COOL, paras. 7.101-7.108; and
Appellate Body Reports, US – COOL, para. 334).
311 Panel Reports, para. 7.27.
312 Panel Reports, para. 7.28 (quoting 2009 Final Rule (AMS), Section 65.240, in turn referring to
Perishable Agricultural Commodities Act of 1930, United States Code of Federal Regulations, Title 7,
Section 499 (Panel Exhibits CDA-10 and MEX-7)).
313 Panel Reports, para. 7.28 (referring to Original Panel Reports, US – COOL, para. 7.101).
314 Panel Reports, para. 7.28 (quoting 2013 Final Rule, Section 65.240). (emphasis added by the Panel)
315 Panel Reports, fn 89 to para. 7.28 (quoting 2013 Final Rule, p. 31368).
316 Panel Reports, para. 7.11 (referring to COOL statute, Section 1638a(2)(A-E); and Original Panel
Reports, US – COOL, para. 7.89).
317 Panel Reports, para. 7.12 (referring to 2013 Final Rule, p. 31370).
318 See Panel Reports, para. 7.14; Appellate Body Reports, US – COOL, para. 244; and Original Panel
Reports, US – COOL, para. 7.92.
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c. Muscle cuts must be designated as having a country of origin other than the
United States (Category D) when the livestock from which the meat is derived have
been slaughtered in that country prior to export – i.e. when imported as meat.
d. For ground meat (Category E), the label must list all countries of origin of the meat
contained therein or that may reasonably be contained therein based on the 60-day
"inventory allowance" rule.319 According to this rule, when a raw material from a specific
origin has not been in a processor's inventory for more than 60 days, that country shall
no longer be included as a country of origin on the label.320
4.12. The Panel found that the 2013 Final Rule am ends the definition of Category D muscle cuts.
Under the original COOL measure, Category D ex tended to "[i]mported covered commodities for
which origin has already been established as defined by this law (e.g., born, raised, and
slaughtered or produced) and for which no production steps have occurred in the
United States".321 The amended COOL measure defines Category D meat as "[m]uscle cut covered
commodities derived from an animal that was slaughtered in another country … including muscle
cut covered commodities derived from an animal that was born and/or raised in the United States
and slaughtered in another country."322
4.5 Labelling requirements
4.13. For each of the above-mentioned catego ries of products, the original COOL measure
provided for corresponding Labels A, B, C, D, and E.
4.14. The original COOL measure provided that muscle cuts in Category A could bear a
declaration that identified the United States as the sole country of origin at retail. Label A could
read "Product of the United States" or any vari ation permitted under the original COOL measure
(e.g. "Product/Produce of the USA", using acceptable country abbreviations "U.S." or "USA" for the
"United States of America"). 323 The amended COOL measure provides that "[t]he United States
country of origin designation for muscle cut covered commodities shall include all of the production
steps (i.e. 'Born, Raised, and Slaughtered in the United States')." 324 Accordingly, under the
amended COOL measure, Label A may read "Born, Raised and Slaughtered in the United States",
or any variation thereof permitted under the amended COOL measure.325
4.15. Under the original COOL measure, Category B meat could be labelled as a product of the
United States and of the foreign country or countries in which the animal was born and raised. The
countries of origin could be listed in any order. For example, a label on Category B meat could
state "Product of the U.S. and Mexico" or "Product of Mexico and the U.S."
326 The amended COOL
measure provides that, "[i]f an animal was born and/or raised in Country X and/or (as applicable)
Country Y, and slaughtered in the United States, the resulting muscle cut covered commodities
shall be labeled to specifically identify the production steps occurring in each country".
327
Accordingly, under the amended COOL measure, Label B may read "Born and Raised in Country X,
Raised and Slaughtered in the United States" or "Born and Raised in Country X, Raised in
Country Y, Raised and Slaughtered in the United States".

319 Panel Reports, para. 7.20 (referring to 2009 Final Rule (AMS), Section 65.300(h)).
320 Panel Reports, para. 7.16 (referring to 2009 Final Rule (AMS), Section 65.300(h)).
321 Panel Reports, para. 7.15 (quoting 2009 Final Rule (AMS), Section 65.300(f)). (emphasis added by
the Panel)
322 Panel Reports, para. 7.15 (quoting 2013 Final Rule, Section 65.300(f)(2)). (emphasis added by the
Panel)
323 Panel Reports, para. 7.17 and fn 62 thereto (quoting 2009 Final Rule (AMS), Section 65.300(d)).
324 Panel Reports, para. 7.21, Table 1 (quoting 2013 Final Rule, Section 65.300(d)). (emphasis added by
the Panel)
325 Panel Reports, paras. 7.23-7.24 (quoting 2013 Final Rule, p. 31369). See also supra, para. 4.5. Such
variations are permitted for Labels A-E.
326 See Panel Reports, para. 7.17.
327 Panel Reports, para. 7.21, Table 1 (quoting 2013 Final Rule, Section 65.300(e)). (emphasis added by
the Panel)
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4.16. In the case of Label C, under the original COOL measure, when an animal was imported into
the United States for immediate slaughter, the origin of the resulting meat products derived from
that animal had to be designated as "Pro duct of Country X and the United States".
328 Label C had
to indicate all the origins of the animal, but could not list the United States first. Labels following
this rule could read, e.g. "Product of Canada and the U.S." Because the countries of origin for meat
of Category B could be listed in any order, the labels for Category B and C meat could look the
same in practice – i.e. a label stating "Product of Canada and the United States" could be
describing the origin of Category B meat from an animal born in Canada and raised and
slaughtered in the United States, or it could be describing Category C meat derived from an animal
imported from Canada for immediate slaughter.
329 Under the amended COOL measure, "[i]f an
animal was born and/or raised in Country X and/or (as applicable) Country Y, and slaughtered in
the United States, the resulting muscle cut covered commodities shall be labelled to specifically
identify the production steps occurring in each country (e.g., 'Born and Raised in Country X,
Slaughtered in the United States')." 330 Accordingly, under the amended COOL measure, Label C
may read "Born and raised in Country X, Slaughtered in the United States".
4.17. Under the original COOL measure, Label D reflected the country of origin "as declared to
U.S. Customs and Border Protection" based on the criterion of substantial transformation. 331 The
amended COOL measure maintains the requirement to indicate origin of meat "as declared to U.S.
Customs and Border Protection at the time the product entered the United States" based on the
criterion of substantial transformation.
332 In addition, the amended COOL measure provides a
voluntary option for Label D to "include more specific location information related to production
steps (i.e., born, raised, and slaughtered) prov ided records to substantiate the claims are
maintained".333 Accordingly, under the amended COOL me asure, Label D may read "Product of
Country X".
4.18. Finally, under the original COOL measure, Label E for ground meat products had to list all
countries of origin of the meat contained therein or that could reasonably have been contained
therein based on the 60-day "inventory allowance" mentioned above.
334 The amended COOL
measure maintains this requirement.
4.19. In paragraph 7.21 of its Reports, the Panel summarized the origin definitions and gave
examples of labels for each category of meat under the original and the amended COOL measures
as set out in the table below.

328 Panel Reports, para. 7.17 (referring to 2009 Final Rule (AMS), Section 65.300(e)(3)). The Panel
further noted that the 2009 Final Rule (AMS) also stipulated that the countries on Label B "may be listed in any
order", as distinct from Label C, which did not have a similar flexibility. (Panel Reports, fn 64 to para. 7.17
(quoting 2009 Final Rule (AMS), Section 65.300(e)(4) and p. 2659))
329 Panel Reports, para. 7.35 (quoting Appellate Body Reports, US – COOL, para. 245; and Original
330 Panel Reports, para. 7.21, Table 1 (quoting 2013 Final Rule, Section 65.300(e)). (emphasis added by
the Panel)
331 Panel Reports, paras. 7.17 and 7.21, Table 1 (quoting 2009 Final Rule (AMS), Section 65.300(f)).
332 Panel Reports, paras. 7.19 and 7.21, Table 1 (quoting 2013 Final Rule, Section 65.300(f)(2)).
333 Panel Reports, para. 7.19 (quoting 2013 Final Rule, Section 65.300(f)(2)). The Panel noted that the
provision for voluntarily providing such information applied to Labels B and C under the original COOL
measure. (Panel Reports, fn 70 to para. 7.19)
334 Panel Reports, para. 7.17 (referring to 2009 Final Rule (AMS), Section 65.300(h)).
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Table 1: Definitions of origin and basic labels for muscle cuts
 2009 Final Rule (AMS) 2013 Final Rule*
LABEL A

"United States country of origin means … [f]rom
animals exclusively born, raised, and slaughtered in
the United States" (65.260(a)(1))
"A covered commodity may bear a declaration that
identifies the United States as the sole country of
origin at retail only if it meets the definition of
United States country of origin as defined in
§ 65.260." (65.300(d) (emphasis added by Panel))
"The United States country of origin designation for
muscle cut covered commodities shall include all of the
production steps (i.e. 'Bor n, Raised, and Slaughtered
in the United States')." (65.300(d) (emphasis added
by Panel))
LABEL B

"For muscle cut covered commodities derived from
animals that were born in Country X or (as applicable)
Country Y, raised and slaughtered in the
United States, and were not derived from animals
imported for immediate slaughter as defined in
§ 65.180, the origin may be designated as Product of
the United States, Country X, and (as applicable)
Country Y." (65.300(e)(1) (emphasis added by Panel))
"If an animal was born and/or raised in Country X
and/or (as applicable) Country Y, and slaughtered in
the United States, the resulting muscle cut covered
commodities shall be labelled to specifically identify
the production steps occurring in each country… . "
(65.300(e) (emphasis added by Panel))
LABEL C

"If an animal was imported into the United States for
immediate slaughter as defined in § 65.180, the origin
of the resulting meat prod ucts derived from that
animal shall be designated as Product of Country X
and the United States." (65.300(e)(3) (emphasis
added by Panel))
"If an animal was born and/or raised in Country X
and/or (as applicable) Country Y, and slaughtered in
the United States, the resulting muscle cut covered
commodities shall be labeled to specifically identify the
production steps occurring in each country (e.g., 'Born
and Raised in Country X, Slaughtered in the
United States')." (65.300(e) (emphasis added by
Panel))
LABEL D

"Imported covered commodities for which origin has
already been established as defined by this law (e.g.,
born, raised, and slaughtered or produced) and for
which no production steps have occurred in the
United States, shall retain their origin, as declared to
U.S. Customs and Border Protection at the time the
product entered the United States, through retail sale."
(65.300(f) (emphasis added by Panel))
"Muscle cut covered commodities derived from an
animal that was slaughtered in another country shall
retain their origin, as declared to U.S. Customs and
Border Protection at the time the product entered the
United States, through retail sale (e.g., 'Product of
Country X')" (65.300(f)(2) (emphasis added by Panel))

*The excerpts from the 2013 Final Rule in the right-hand column replace the corresponding provisions from the
2009 Final Rule (AMS) in the left-hand column, except fo r the excerpt in the top right-hand cell, which is
additional to the excerpt in the top left-hand cell.

Notes to Table 1: Label A on the left is taken from the 2009 Final Rule (AMS), p. 2668. See also Original
Panel Reports, US – COOL, para. 7.100. Label A on the right is taken from the 2013 Final Rule, § 65.300(d).
The two Labels B on the left are taken from the 2009 Final Rule (AMS), § 65.300(e)(1) and p. 2661. The
first Label B on the right is taken from the 2013 Final Rule, p. 31368. The second Label B on the right is
taken from the 2013 Final Rule, § 65.300(e). Label C on the left is taken from the 2009 Final Rule (AMS),
§ 65.300(e)(3). Label C on the right is taken from the 2013 Final Rule, § 65.300(e) and pp. 31368-31369.
Label D on the left is taken from Original Panel Reports, US – COOL , para. 7.100. Label D on the right is
taken from the 2013 Final Rule, § 65.300(f)(2).

Product of the U.S. Born, Raised, and
Slaughtered in the
United States
Product of the
United States,
Country X
Product of the
United States,
Country X, and …
Country Y
Born and Raised in
Country X, Raised
and Slaughtered in
the United States
Born and Raised in
Country X, Raised
in Country Y,
Raised and
Slaughtered in the
United States
Product of Country X and
the United States
Born and Raised in Country X,
Slaughtered in the United States
Product of Country X Product of Country X
WT/DS384/AB/RW • WT/DS386/AB/RW

4.6 Flexibilities
4.20. The original COOL measure provided for flexibilities with respect to labelling of
"commingled" meat, the order in which countries of origin were indicated on Label B, and labelling
of muscle cuts from animals raised in the Unit ed States and another country. The amended COOL
measure has removed the commingling and country order flexibilities, and changed the multiple
countries of raising flexibility.
4.21. First, the original COOL measure included ce rtain flexibilities with respect to origin labelling
of meat "commingled" on a single production day.
335 More specifically, the original COOL measure
allowed that commingled Category A and B meat could be labelled as Category B meat, even
though a particular piece of meat could have been derived from a Category A animal.
336 Further,
when Category B and C meat was commingled on a single production day, the original COOL
measure allowed that the resulting meat was labelled as Category B meat, even though a
particular piece of meat could have been derived from a Category C animal. 337 In both cases, the
countries of origin for the commingled meat could be listed on the label in any order. 338 The
commingling flexibility has been removed by the 2013 Final Rule.339
4.22. Second, the original COOL measure contained flexibility with respect to the order in which
countries of origin were indicated on Label B, which could be listed on the label in any order.340 For
example, Label B for muscle cuts of mixed US and Canadian origin could read "Product of U.S.,
Canada" or "Product of Canada, U.S." 341 Furthermore, because the country order flexibility could
be applied cumulatively with the commingling flexibility, commingled Label A, B, and C meat could
carry the same label.
342 The amended COOL measure has eliminated the country order
flexibility.343
4.23. Finally, under the original COOL measure, for animals raised in the United States and
another country, for the purpose of indicating origin on the label, the raising in the United States
"[took] precedence" over the minimal raising in the country of birth. 344 By contrast, under the
amended COOL measure, a country of partial raising may be "omitted" from the label.345 The Panel
noted that the main difference between the two versions of this flexibility is that, under the
original COOL measure, the US raising "[took] precedence" over the raising in the country of birth,

335 "Commingled covered commodities" were defined as "covered commodities (of the same type)
presented for retail sale in a consumer package that have been prepared from raw material sources having
different origins." (See Panel Reports, fn 101 to para. 7.33 (quoting 2009 Final Rule (AMS), Section 65.125))
336 See Panel Reports, fn 97 to para. 7.32 (referring to 2009 Final Rule (AMS), Section 65.300(e)(2);
and Original Panel Reports, US – COOL, para. 7.96). The 2009 Final Rule (AMS), Section 65.300(e)(2),
provided the following with regard to the commingling of Categories A and B meat:
For muscle cut covered commodities derived from animals born, raised, and slaughtered in the
U.S. that are commingled during a production day with muscle cut covered commodities
described in § 65.300(e)(1), the origin may be designated as Product of the United States,
Country X, and (as applicable) Country Y.
337 Panel Reports, fn 98 to para. 7.32 (referring to 2009 Final Rule (AMS), Section 65.300(e)(4); and
Original Panel Reports, US – COOL, para. 7.96). The 2009 Final Rule (AMS), Section 65.300(e)(4), reads:
For muscle cut covered commodities derived from animals that are born in Country X
or Country Y, raised and slaughtered in the United States, that are commingled during a
production day with muscle cut covered commodities that are derived from animals that are
imported into the United States for immediate slaughter as defined in § 65.180, the origin may
be designated as Product of the United States, Country X, and (as applicable) Country Y.
338 See Original Panel Reports, US – COOL, para. 7.97 (referring to 2009 Final Rule (AMS),
Section 65.300(e)(4)).
339 Panel Reports, para. 7.34 (quoting 2013 Final Rule, p. 31385).
340 Panel Reports, para. 7.35 (quoting 2009 Final Rule (AMS), Section 65.300(e)(4) and pp. 2659, 2661,
and 2662).
341 Panel Reports, para. 7.35 (referring to 2009 Final Rule (AMS), p. 2661).
343 Panel Reports, para. 7.37 (referring to 2013 Final Rule, Section 65.300(e)).
344 Panel Reports, para. 7.40 (quoting 2009 Final Rule (AMS), p. 2659: "[I]f animals are raised in
another country and the United States, provided the animals are not imported for immediate slaughter as
defined in § 65.180, the raising that occurs in the United States takes precedence over the minimal raising that
occurred in the animal's country of birth."). (emphasis added)
345 Panel Reports, para. 7.38 (quoting 2013 Final Rule, Section 65.300(e): "If an animal is raised in the
United States as well as another country (or multiple countries), the raising occurring in the other country (or
countries) may be omitted from the origin designation."). (emphasis added)
WT/DS384/AB/RW • WT/DS386/AB/RW

while, under the amended COOL measure, the other country or countries of raising may be
"omitted" from the label. 346 The Panel further explained that because, under the 2009 Final
Rule (AMS), Label B did not need to show point-of-production information, a muscle cut from a
US-slaughtered animal that was born in Canada, and raised in Canada and the United States,
could have carried a "Product of United States, Canada" label. The US raising taking precedence
over the Canadian raising had no practical implication for this label, because the label had to
mention Canada in any event, given the place of birth.
347 The Panel explained that, by contrast,
under the 2013 Final Rule, for meat derived from animals raised in the country of birth and the
United States, Label B may read "Born in Country X, Raised and Slaughtered in the United States"
in lieu of "Born and Raised in Country X, Raised and Slaughtered in the United States".
348
5 ANALYSIS OF THE APPELLATE BODY
5.1 Article 2.1 of the TBT Agreement
5.1.1 Introduction
5.1. The Panel concluded that the amended COOL measure is inconsistent with Article 2.1 of the
TBT Agreement because it accords less favourable treatment to imported livestock than to like
products of US origin.
349 This conclusion was based on two central findings made by the Panel,
namely, that the amended COOL measure has incr eased the original COOL measure's detrimental
impact on competitive opportunities for imported livestock, and that such detrimental impact does
not stem exclusively from legitimate regulatory distinctions.350
5.2. On appeal, each participant challenges certain elements of the Panel's analysis and findings
under Article 2.1 of the TBT Agreement. The United States appeals the Panel's conclusion that the
amended COOL measure is inconsistent with Article 2.1 because its detrimental impact on
imported livestock does not stem exclusively from legitimate regulatory distinctions. The
United States asserts that this conclusion rests on three intermediate findings made by the Panel
that are in error, namely: (i) that the amended COOL measure entails an increased recordkeeping
burden for producers and processors of livestock; (ii) that Labels B and C convey potentially
inaccurate information; and (iii) that the amended COOL measure continues to exempt a large
proportion of muscle cuts from its scope.
351
5.3. Canada and Mexico do not appeal the Panel's conclusion that the amended COOL measure is
inconsistent with Article 2.1. They do take issu e, however, with the Panel's assessment of certain
elements of the amended COOL measure in reaching its conclusion that the detrimental impact of
that measure on imported livestock does not stem exclusively from legitimate regulatory
distinctions. Canada claims that the Panel failed to assess appropriately the relevance of Labels D
and E, as well as the amended COOL measure's prohibition of a trace-back system, for the
analysis of whether the detrimental impact of that measure on imported livestock stems
exclusively from legitimate regulatory distinctions.
352 Mexico puts forward a similar claim, but
limits its appeal to the Panel's assessment of the relevance of Label E for the purposes of its
analysis under Article 2.1.353
5.4. We begin our review of the participants' appeals under Article 2.1 by considering the claims
of the United States. Thereafter, we address those of Canada and Mexico.

346 Panel Reports, para. 7.42 (quoting 2013 Final Rule, Section 65.300(e)).
347 Panel Reports, fn 127 to para. 7.42 (quoting 2013 Final Rule, p. 31368: "the country of birth is
already required to be listed in the origin designation").
348 Panel Reports, paras. 7.41-7.42 (referring to 2013 Final Rule, p. 31368: "if animals are born and
raised in another country and subsequently further raised in the United States, only the raising that occurs in
the United States needs to be declared on the label, as it is understood that an animal born in another country
will have been raised at least a portion of its life in that other country. Because the country of birth is already
required to be listed in the origin designation, and to reduce the number of required characters on the label,
the Agency is not requiring the country of birth to be listed again as a country in which the animal was also
raised.").
349 Panel Reports, para. 7.284.
350 Panel Reports, paras. 7.176 and 7.283.
351 United States' appellant's submission, paras. 53-54.
352 Canada's other appellant's submission, para. 156.
353 Mexico's other appellant's submission, para. 185.
WT/DS384/AB/RW • WT/DS386/AB/RW

5.1.2 Claims of the United States under Article 2.1 of the TBT Agreement
5.1.2.1 Claims relating to the Panel's anal ysis of the recordkeeping burden entailed by
the amended COOL measure
5.5. The United States claims that the Panel's finding that the amended COOL measure entails an
increased recordkeeping burden does not support the Panel's conclusion that the detrimental
impact of that measure on imported livestock does not stem exclusively from legitimate regulatory
distinctions. This claim rests on two main grounds. First, the United States argues that the Panel
erred in relying on its finding that the amended COOL measure entails an increased recordkeeping
burden as an independent basis for concluding that the detrimental impact of that measure does
not stem exclusively from legitimate regulatory distinctions. Second, the United States argues that
the Panel's finding that the amended COOL measur e entails an increased recordkeeping burden is
flawed to the extent that it is based on incorrect analyses of the impact of point-of-production
labelling and the elimination of the country order flexibility on the recordkeeping burden for
producers along the livestock and meat production chain.
354
5.6. We begin our analysis with the United States' contention that the Panel erred in its analyses
of the impact of point-of-production labelling and the elimination of the country order flexibility on
recordkeeping. We then address the United States' claim that the Panel erred in relying on its
finding that the amended COOL measure entails an increased recordkeeping burden as an
independent basis for concluding that the detrim ental impact of that measure does not stem
exclusively from legitimate regulatory distinctions.
5.1.2.1.1 Whether the Panel erred in its anal ysis of the impact of point-of-production
labelling on recordkeeping
5.7. The United States claims that the Panel erred by basing its analysis of the impact of point-of-
production labelling on recordkeeping on incorrect hypothetical transactions, without regard for
actual trade in livestock among the three parties to these disputes.
355 In addressing this claim, we
begin by recalling salient aspects of the Panel's analysis and findings concerning the introduction of
point-of-production labelling by the amende d COOL measure, and the implications for
recordkeeping along the livestock and meat production chain.
5.8. We recall that, in its analysis under Articl e 2.1 of the TBT Agreement, the Panel considered
whether the amended COOL measure has increased the original COOL measure's detrimental
impact on competitive opportunities for imported livestock.
356 In undertaking this assessment, the
Panel considered, inter alia, whether compliance with the amended COOL measure involves
segregation of livestock and meat derived therefrom and, consequently, differential costs for
imported livestock.
357 Noting that the original panel had found that, "for all practical purposes, the
[original] COOL measure necessitates segregation of meat and livestock according to origin" 358 in
order to comply with the requirement of an unbroken chain of origin information, the compliance

354 United States' appellant's submission, para. 91.
355 United States' appellant's submission, para. 91.
356 Before the Panel, the United States conceded that the amended COOL measure was not intended to
"remove [the original COOL measure's] detrimental impact on imports". (Panel Reports, para. 7.63
(fn omitted)) As the Panel noted, the United States explained in response to a question from the Panel that, "to
comply with the DSB recommendations and rulings, the United States could either remove the detrimental
impact on imports or ensure that any detrimental impact stems exclusively from a legitimate regulatory
distinction. The 2013 Final Rule implements the second option – it addresses the DSB recommendations and
rulings by ensuring that any detrimental impact stems exclusively from a legitimate regulatory distinction."
(Panel Reports, fn 172 to para. 7.63 (quoting United States' response to Panel question No. 18 (emphasis
original)) At the same time, the United States disputed the claim of the complainants that the amended COOL
measure has increased the detrimental impact on imported livestock compared with the detrimental impact
entailed by the original COOL measure. (Panel Reports, para. 7.63)
357 The Panel considered three issues in its analysis of whether the amended COOL measure has
increased the detrimental impact of the original COOL measure on imported livestock: (i) whether the different
categories of muscle cut labels under the amended COOL measure accord different treatment to imported
livestock; (ii) whether the amended COOL measure involves segregation and, consequently, differential costs
for imported livestock; and (iii) whether, through the compliance costs involved, the amended COOL measure
creates any incentive to process domestic livestock, thus reducing the competitive opportunities for imported
livestock. (Panel Reports, para. 7.66)
WT/DS384/AB/RW • WT/DS386/AB/RW

Panel considered that "[t]he same conclusion co ntinues to apply to the amended COOL measure,
which has the same features that led the original panel to reach its conclusion regarding
segregation."
359 Thus, the Panel concluded that, "for all practical purposes, the amended COOL
measure necessitates segregation of meat and livestock according to origin."360
5.9. Noting that the parties disputed whether the amended COOL measure involves more
segregation than the original COOL measure, the Panel assessed, in turn, the impact of three
"potentially relevant changes" introduced by the amended COOL measure: (i) the introduction of a
mandatory point-of-production labelling requirement for Category A, Category B, and Category C
muscle cuts; (ii) the removal of the commingling and country order flexibilities that existed under
the original COOL measure; and (iii) the amended coverage of Label D.
361 As regards point-of-
production labelling, the Panel considered whether, in practice, point-of-production labelling
increases the number of distinct labels for Category A, Category B, and Category C muscle cuts,
noting that the original panel had found that more origins and labels means more segregation. 362
The Panel concluded that point-of-production labelling, in and of itself, increases the number of
labels and, accordingly, results in more segregation for: (i) Category B muscle cuts of different
foreign origins 363; (ii) Category B muscle cuts of different, multiple foreign origins 364; and
(iii) Category C muscle cuts derived from animals born in a foreign country, raised in that country
and another foreign country, and imported into the United States for immediate slaughter. 365 By
contrast, the Panel concluded that point-of-produ ction labelling, as prescribed by the amended
COOL measure, does not directly increase or decrease segregation for other Category B and C
muscle cut scenarios, and for Category A muscle cuts in general.
366
5.10. On appeal, the United States submits that the Panel's finding that the amended COOL
measure entails an increased recordkeeping burden is in error to the extent that the Panel's
analysis of the impact of point-of-production labelling was based on incorrect hypothetical
scenarios that do not reflect actual trade in livestock among the three parties to these disputes.
5.11. Noting that the Panel found that point-of-production labelling for "single foreign origin"
scenarios would lead to neither more labels, nor an increased record-keeping burden, the
United States asserts that it is "those very scenarios" that constitute the virtual entirety of the
livestock market in the United States. 367 In this regard, the United States asserts that the market
for livestock in the United States consists of: Category A animals (i.e. animals born, raised, and
slaughtered in the United States); "single foreign origin" Category B animals from either Canada or
Mexico (i.e. animals born in either Canada or Mexico, and raised and slaughtered in the
United States); and "single foreign origin" Category C animals from Canada (i.e. animals born and
raised in Canada, and exported for immediate slaughter in the United States).
368 Thus, contrary to
the scenarios posited by the Panel, there is no ev idence of trade in live animals between Canada

359 Panel Reports, para. 7.84. While the amended COOL measure does not explicitly require the
segregation of livestock according to origin, it prescribes, like the original COOL measure, "an unbroken chain
of reliable country of origin information with regard to every animal and muscle cut". (Panel Reports,
360 Panel Reports, para. 7.86.
361 Panel Reports, para. 7.88.
362 Panel Reports, para. 7.90 (referring to Original Panel Reports, US – COOL, para. 7.331).
363 The Panel explained that, "[u]nder this scenario (Scenario B2), the Category B muscle cuts in
question originate from both (i) livestock born in Country X, and raised and slaughtered in the United States,
as well as (ii) livestock born in Country Y, and raised and slaughtered in the United States. This scenario
therefore represents a combination of livestock from two different foreign countries of origin, which fall within
Category B." (Panel Reports, para. 7.97 (referring to 2009 Final Rule (AMS), Section 65.300(e)(1)) (emphasis
original))
364 The Panel identified this situation as consisting of "Category B muscle cuts from livestock (i) born in
two different foreign countries; (ii) raised in the same two foreign countries and the United States; and
(iii) slaughtered in the United States." (Panel Reports, para. 7.102 (emphasis original)) The Panel explained
further that the same would apply to "muscle cuts from US-born and -slaughtered animals raised in both the
United States and a foreign country". (Panel Reports, fn 269 to para. 7.102)
365 Panel Reports, para. 7.111. The Panel found that point-of-production labelling increases segregation
in this scenario if the 2013 Final Rule is read as requiring that only the country of immediate import is shown
as the country of raising on Label C. (Ibid.)
366 In other words, point-of-production labelling under the amended COOL measure does not directly
increase or decrease segregation for these types of muscle cuts and the originating livestock. (Panel Reports,
para. 7.113)
367 United States' appellant's submission, para. 118 (referring to Panel Reports, paras. 7.96-7.98).
368 United States' appellant's submission, para. 118.
WT/DS384/AB/RW • WT/DS386/AB/RW

and Mexico that would result in the "multiple origin" Label B and Label C scenarios on which the
Panel based its findings.369 The lack of such evidence, contends the United States, is explained by
the fact that it is highly improbable, if not in conceivable, that the prices for energy, feed, and
livestock would ever align such that it would be profitable to export animals between Canada and
Mexico even once, much less twice, before exporting to the United States, as the Panel's
hypothetical scenarios envision. 370 The United States emphasizes that the scenarios that reflect
actual livestock trade between the parties prove that point-of-production labels do not increase the
recordkeeping burden that was entailed by the original COOL measure.371 Noting that, in Canada –
Periodicals, the Appellate Body reversed the panel's "like" product analysis in the light of the
panel's reliance on an incorrect hypothetical, the United States submits that the Panel's analysis in
the current disputes is similarly flawed.
372
5.12. Canada responds that the United States cr iticizes the Panel for elaborating on the labelling
rules that would apply in scenarios that the United States has itself articulated and codified in its
domestic law.
373 In this regard, Canada points out that the Panel expressly noted that the 2009
Final Rule (AMS), itself, addressed scenarios invo lving non-commingled Category B muscle cuts of
multiple foreign origins, and the 2013 Final Rule also provides explicit guidance as to the point-of-
production labelling requirements that apply to livestock born and/or raised in multiple foreign
countries. Canada further contends that, contrary to the assertions of the United States, the
Panel's conclusion that the amended COOL measure entails an increased recordkeeping burden
was based on much more than purely hypothetical livestock transactions. Canada highlights, in
this connection, that the Panel concluded that point-of-production labelling, together with the
elimination of the commingling and country order flexibilities, increased the need for segregation
in the US market – a point confirmed by exte nsive evidence that was put before the Panel.
374
Moreover, the Panel examined the impact of th e amended COOL measure on recordkeeping, and
emphasized that the greater diversity of labels resulting from the elimination of the commingling
and country order flexibilities creates a multiplicity of scenarios for which distinct and
commensurate substantiating records are now required. Noting that the Appellate Body was critical
of the panel in Canada – Periodicals for basing its "like" product analysis on a single hypothetical
example, Canada submits that the Panel in the present disputes cannot be similarly faulted and, as
such, the United States' reliance on Canada – Periodicals is inapt.
375
5.13. For its part, Mexico responds that, although the United States seeks to create the
impression that none of the scenarios examined by the Panel are in any way realistic, the
United States overlooks that the Panel included in its discussion scenarios in which muscle cuts
from different animals – some born in Mexico, some born in Canada, and both slaughtered in the
United States – would be packaged together. Mexico asserts that the Panel correctly concluded
that, under the original COOL measure, those muscle cuts could be packaged with a single label,
while, under the amended COOL measure, they may not. Mexico highlights that the United States
has not explained why this scenario is unrealistic. In addition, Mexico, like Canada, highlights that
the United States faults the Panel for elaborating on the labelling rules that would apply in
scenarios that the United States has itself articulated and codified in its domestic law.
376
5.14. Turning to our analysis, we consider that the United States' claim raises two issues: First,
whether, and to what extent, a panel may rely on hypothetical scenarios that are not reflective of
actual patterns of trade for the purpose of determining whether a technical regulation accords less
favourable treatment to imported products than to like domestic products in violation of Article 2.1
of the TBT Agreement. Second, we must consider whether the United States is correct in asserting
that the Panel based its finding on the impact of point-of-production labelling on "incorrect
hypothetical" scenarios involving trade in live animals between Canada and Mexico.
377

369 United States' appellant's submission, para. 119.
370 United States' appellant's submission, para. 121.
371 United States' appellant's submission, para. 122.
372 United States' appellant's submission, para. 123 (referring to Appellate Body Report, Canada –
Periodicals, pp. 20-23, DSR 1997:I, pp. 465-468).
373 Canada's appellee's submission, para. 52.
374 Canada's appellee's submission, para. 53 (referring to Panel Reports, para. 7.135, and to exhibits
submitted by Canada and Mexico listed in fns 324 and 325 thereto).
375 Canada's appellee's submission, paras. 53-55.
376 Mexico's appellee's submission, para. 35.
377 United States' appellant's submission, paras. 19, 117, and 119.
WT/DS384/AB/RW • WT/DS386/AB/RW

5.15. As regards the first issue, we recall that, in US – Clove Cigarettes , the Appellate Body
considered that the context and object and purp ose of the TBT Agreement weigh in favour of
reading the "treatment no less favourable" requirement of Article 2.1 as prohibiting both de jure
and de facto discrimination against imported products while, at the same time, permitting a
detrimental impact on competitive opportunities for like imported products that stems exclusively
from legitimate regulatory distinctions. 378 Because Article 2.1 is concerned with competitive
opportunities for like imported products, we consider that the analysis under that provision is not
limited to an examination of the operation of the technical regulation at issue within the confines
of scenarios that are representative of current patterns of trade.
5.16. At the same time, we are not suggesting that a panel may ascribe undue weight to the
effect of a technical regulation in any hypothetical scenario for the purposes of its analysis under
Article 2.1. In this connection, we emphasize that Article 2.1 proscribes a detrimental impact on
competitive opportunities for like imported products that does not stem exclusively from legitimate
regulatory distinctions. Thus, a panel's analysis under Article 2.1 must be grounded in an
assessment of the technical regulation at issue in scenarios under which competitive opportunities
may arise, notwithstanding that they may not be currently reflective of actual patterns of trade.
5.17. Turning to the second issue, we do not agree with the United States that the Panel's
assessment of the impact of point-of-production labelling was based on "incorrect hypothetical"
scenarios involving the trade of live animals between Canada and Mexico. 379 As Mexico correctly
points out, the Panel included in its analysis scenarios in which muscle cuts from different animals
– some born in Mexico, some born in Canada, and both slaughtered in the United States – would
be packaged together.
380 This scenario does not involve the trade of live animals between Canada
and Mexico. The Panel found that, under the original COOL measure, such muscle cuts could be
packaged with a single label, while, under the amended COOL measure, they would need to carry
distinct labels to reflect their different countries of origin.
381 The United States has not explained
why this scenario is inconceivable or constitutes an "incorrect" hypothetical scenario. Instead, the
United States asserts that the extent to which processors have "actually taken advantage of this
particular type of commingling appears to be small ", as processors typically purchase livestock
born in either Canada or Mexico, not both.
382 For the reasons stated above, however, we do not
consider that the Panel erred under Article 2.1 by assessing the impact of point-of-production
labelling in scenarios that are not representative of actual, or the most common, situations in
which the products at issue are traded among the parties to these disputes.
5.18. In the light of the foregoing considerations, we disagree with the United States that the
Panel based its analysis of the impact of point-of-production labelling, as prescribed by the
amended COOL measure, on incorrect hypothetical scenarios. Accordingly, we find that the Panel
did not err, in paragraphs 7.87-7.113 of the Panel Reports, in its analysis of the impact of point-of-
production labelling on recordkeeping.
5.1.2.1.2 Whether the Panel erred in its analys is of the impact of the elimination of the
country order flexibility on recordkeeping
5.19. We turn now to the United States' claim that the Panel erred in finding that the elimination
of the country order flexibility increases the reco rdkeeping burden entailed by the original COOL
measure.383
5.20. We begin by recalling that, under the orig inal COOL measure, the country order flexibility
applied to Category B muscle cuts and permitted the countries of origin to be listed in any order on
Label B such that muscle cuts of, for example, "mixed US-Canadian origin" could be labelled as

378 Appellate Body Report, US – Clove Cigarettes, para. 175.
379 United States' appellant's submission, para. 119.
380 In this regard, we recall the Panel's explanation that, "[u]nder this scenario, the Category B muscle
cuts in question originate from both (i) livestock born in Country X, and raised and slaughtered in the
United States, as well as (ii) livestock born in Country Y, and raised and slaughtered in the United States. This
scenario therefore represents a combination of livestock from two different foreign countries of origin, which
fall within Category B." (Panel Reports, para. 7.97 (referring to 2009 Final Rule (AMS), Section 65.300(e)(1))
(emphasis original))
381 Panel Reports, paras. 7.97-7.99.
382 United States' appellant's submission, para. 98. (fn omitted; emphasis added)
383 United States' appellant's submission, para. 91.
WT/DS384/AB/RW • WT/DS386/AB/RW

"Product of U.S., Canada" or "Product of Canada, U.S." 384 Further, the labelling requirements
under the original COOL measure for Category C muscle cuts mandated that Label C had to
indicate all the origins of the animal from which such muscle cuts were derived, but could not list
the United States first. As the Panel acknowledged, the Appellate Body noted in the original
proceedings that, "[b]ecause the countries of origin for Category B meat [c]ould be listed in any
order [under the original COOL measure], the labels for Category B and C meat could look the
same in practice."
385 The amended COOL measure has eliminated the country order flexibility that
had been available under the original COOL measure.386
5.21. As part of its analysis of whether the amended COOL measure, as compared to the original
COOL measure, involves more segregation of livestock and resulting muscle cuts of meat, the
Panel assessed, in conjunction, the impact of the removal of the commingling and country order
flexibilities. The Panel recalled that, in the orig inal proceedings, the commingling flexibility was
found to have only partially mitigated the segregation necessitated by the original COOL
measure
387 and, in the Panel's view, the country order flexibility had a similar effect. 388 The Panel
concluded that the effect of eliminating these flexibilities – that had partially mitigated the need for
segregation under the original COOL measure – is increased segregation for US-slaughtered
livestock and muscle cuts of meat derived therefrom.
389
5.22. The United States does not dispute that th e removal of the commingling flexibility increases
the need for segregation in respect of those operators that had made use of this flexibility.
However, the United States disputes that the remo val of the country order flexibility has a similar
effect. In particular, the United States submits that, although the removal of the country order
flexibility increases the distinct number of labels for non-commingled muscle cuts, it does not
increase the recordkeeping burden that had been entailed by the original COOL measure.
5.23. The United States explains that, under the original COOL measure, the country order
flexibility allowed non-commingled Category B and Category C muscle cuts to have labels that
could look the same in practice – i.e. Label B and Label C could both read "Product of Canada,
U.S." By contrast, those same muscle cuts are labelled differently under the amended COOL
measure – i.e. Category B muscle cuts are labelled "Born in Canada, Raised and Slaughtered in the
U.S.", while Category C muscle cuts are now labelled "Born and Raised in Canada, Slaughtered in
the U.S." The United States asserts, however, that the fact that there are now two labels – where
before there was one – does not mean that the recordkeeping burden has increased under the
amended COOL measure. According to the United St ates, this is because the records required for
substantiating an origin claim under the original COOL measure in respect of Category B muscle
cuts must have been able to demonstrate that they were produced from an animal that was born
in Canada, and raised and slaughtered in the United States. Similarly, the records required for
substantiating an origin claim under the original COOL measure in respect of Category C muscle
cuts must have been able to demonstrate that they were produced from an animal that was born
in Canada, raised in Canada, and exported to the United States for immediate slaughter. Thus, the
United States asserts that, although the removal of the country order flexibility creates more
distinct labels for non-commingled muscle cuts, "it does not alter the recordkeeping burden" that
existed under the original COOL measure, because "different categories of muscle cuts already had
different records" under that measure.
390

384 Panel Reports, para. 7.35 (referring to 2009 Final Rule (AMS), p. 2661).
386 Panel Reports, para. 7.37.
387 Panel Reports, para. 7.114 (referring to Original Panel Reports, US – COOL, para. 7.327; and
Appellate Body Reports, US – COOL, para. 310).
388 Panel Reports, para. 7.114 and fn 284 thereto. The Panel based this view on the following statement
contained in the Appellate Body reports in the original proceedings:
Meat derived from animals born outside the United States but raised and slaughtered in the
United States (Category B meat) must be labelled as a product of the United States and the
foreign country in which the animal was born, and the countries of origin may be listed in any
order. For meat derived from animals imported into the United States for immediate slaughter
(Category C meat), labels must indicate all of the countries of origin of the animal, but cannot list
the United States first. Because the countries of origin for Category B meat can be listed in any
order, the labels for Categories B and C meat could look the same in practice.
(Appellate Body Reports, US – COOL, para. 245 (fns omitted))
389 Panel Reports, para. 7.127.
390 United States' appellant's submission, para. 126.
WT/DS384/AB/RW • WT/DS386/AB/RW

5.24. Canada disagrees with the United States' assertion that the removal of the country order
flexibility creates more distinct labels, but does not increase the recordkeeping burden that was
entailed by the original COOL measure. Canada ex plains that, under the original COOL measure,
where non-commingled Category B muscle cuts from Canada bore Label C as a result of the
country order flexibility, the origin claim to be substantiated was "Product of Canada and the
United States". Canada asserts that, because the livestock used to produce these muscle cuts did
not satisfy the definition of Category C meat, audited retailers could not demonstrate that such
muscle cuts derived from livestock imported from Canada for immediate slaughter. Nor could
audited retailers be expected to demonstrate that such muscle cuts were, in fact, Category B
muscle cuts – i.e. that they were derived from livestock raised in the United States. Thus, Canada
contends that all that was required to verify the origin claim – "Product of Canada and the
United States" – was proof that the animal fr om which the muscle cut was derived was born
outside of the United States, in the country that appeared on the label.
391
5.25. For its part, Mexico observes that the Panel found that the greater diversity of labels
resulting from the elimination of both the commingling and country order flexibilities "creates a
multiplicity of scenarios for which distinct and commensurate substantiating records are now
required"
392, and that "the increase in the number of distinct labels and in segregation logically
entails a higher recordkeeping burden."393 In Mexico's view, these findings reveal the inaccuracy of
the United States' claim that the removal of the country order flexibility does not contribute to the
increased recordkeeping burden entailed by the amended COOL measure.
5.26. Turning to our analysis, it seems to us that the United States' claim is premised on its
assertion that, although removing the country order flexibility creates more distinct labels, "it does
not alter the recordkeeping burden" that was entailed by the original COOL measure.
394
5.27. We recall that, in comparing the recordkeeping burdens entailed by the original and
amended COOL measures, the Panel found that, under both measures, the recordkeeping
obligations of operators along the livestock and meat production chain are explicitly tied to the
"information needed to correctly label the covered commodities".
395 The Panel further explained
how the introduction of mandatory point-of-production labelling under the amended COOL
measure for muscle cuts deriving from US-slaught ered livestock affects the recordkeeping burden
that had been entailed by the original COOL measure. In this regard, the Panel noted that, under
the original COOL measure, an "origin claim" could consist of a muscle cut being a "product of" the
country(ies) of origin involved, and that the original COOL measure stipulated that "the origin
declaration [for Category B, Category C, and all commingled muscles cuts] may include more
specific information related to production steps provided records to substantiate the claims are
maintained".
396 Noting that the amended COOL measure now mandates such specific production
step information on Labels A, B, and C, the Panel considered that this entails a corresponding
augmentation of the records kept by livestock and meat producers to substantiate the origin
claims made on these labels.
397
5.28. To us, this finding of the Panel on the implications of the introduction of mandatory point-of-
production labelling for recordkeeping calls into question the United States' assertion that the
removal of the country order flexibility creates more distinct labels, but does not increase the
recordkeeping burden that was entailed by the original COOL measure. This assertion is
necessarily premised on the proposition that the original COOL measure required that records be
maintained to substantiate specific production step information concerning the livestock from
which muscle cuts derived. Yet, as the Panel explained, the original COOL measure stipulated that
"the origin declaration [for Category B, Category C, and all commingled muscles cuts] may include

391 Canada's appellee's submission, para. 43.
394 United States' appellant's submission, para. 126.
395 Panel Reports, para. 7.144 and fn 344 thereto (referring to 2009 Final Rule (AMS), p. 2693).
396 Panel Reports, para. 7.146 (quoting 2009 Final Rule (AMS), Section 65.500(e)(4) and p. 2662).
(emphasis added by the Panel)
397 Panel Reports, para. 7.146.
WT/DS384/AB/RW • WT/DS386/AB/RW

more specific information related to production steps provided records to substantiate the claims
are maintained."398
5.29. Thus, it seems to us that, because, under the original COOL measure, the provision of
specific information on production steps could voluntarily be provided only if "records to
substantiate the claims are maintained" 399, origin claims for non-commingled Category B and
Category C muscle cuts carrying the same label as a result of the country order flexibility –
e.g. "Product of Canada, U.S." – could be su bstantiated by records demonstrating that the
livestock from which these muscle cuts derived were born outside the United States, in the country
appearing on the label.
400 By contrast, the provision of production step information for such muscle
cuts is now mandatory under the amended COOL me asure. This, in turn, entails the augmentation
of the records kept by livestock and meat producer s to substantiate the origin claims made on the
mandatory retail labels for muscle cuts deriving from US-slaughtered livestock, including
non-commingled Category B and Category C muscle cuts.401
5.30. For the reasons expressed above, we are not persuaded by the United States that removing
the country order flexibility has not altered the recordkeeping burden that was entailed by the
original COOL measure. 402 Accordingly, we find that the Panel did not err, in paragraphs 7.114-
7.127 of the Panel Reports, in its analysis of th e impact of the elimination of the country order
flexibility on recordkeeping.
5.1.2.1.3 Whether the Panel erred in rely ing on its finding that the amended COOL
measure entails an increased recordkeeping burden as an independent basis for its
conclusion under Article 2.1 of the TBT Agreement
5.31. We turn now to the United States' claim that the Panel erred in relying on its finding that
the amended COOL measure entails an increased recordkeeping burden as an independent basis
for concluding that the detrimental impact of th at measure on imported livestock does not stem
exclusively from legitimate regulatory distinctions.
403
5.32. According to the United States, the Panel "failed to put the issue of recordkeeping within the
proper analysis, which involves a comparison of the burdens of recordkeeping and the provision of
information through labels." 404 The United States submits that, to the extent that the
recordkeeping burden entailed by the amended COOL measure is at all relevant for the analysis of
whether the detrimental impact of that measure stems exclusively from legitimate regulatory
distinctions, it is relevant only for the question of whether there is a "disconnect" between, on the
one hand, the amount of origin information collected along the livestock and meat production
chain and, on the other hand, the amount of origin information provided to consumers through the
mandatory labels. The United States further asserts that, in order to conclude that the detrimental
impact of the amended COOL measure does not stem exclusively from legitimate regulatory
distinctions, the origin information collected must be so disproportionate to the information
provided to consumers on labels that the collecti on of the information cannot be explained in the
first place.
405 The United States submits, however, that the Panel failed to undertake this inquiry
and, therefore, the Panel erred in relying on any increase in the recordkeeping burden entailed by
the amended COOL measure as a basis for its ultimate conclusion under Article 2.1 of the
TBT Agreement.
406
5.33. Canada responds that the United States is seeking to create the erroneous impression that
the Panel found that the increased recordkeeping burden entailed by the amended COOL measure,
ipso facto, demonstrates that the detrimental impact of that measure does not stem exclusively
from legitimate regulatory distinctions. 407 Canada observes that, at the outset of its analysis, the

398 Panel Reports, para. 7.146 (quoting 2009 Final Rule (AMS), Section 65.500(e)(4) and p. 2662).
(italics added by the Panel; underlining added)
399 Panel Reports, para. 7.146 (quoting 2009 Final Rule (AMS), Section 65.500(e)(4) and p. 2662).
400 See also Canada's appellee's submission, para. 43.
401 Panel Reports, para. 7.146.
402 United States' appellant's submission, para. 126.
403 United States' appellant's submission, para. 91.
404 United States' appellant's submission, para. 113.
405 United States' appellant's submission, para. 115.
406 United States' appellant's submission, para. 116.
407 Canada's appellee's submission, para. 47.
WT/DS384/AB/RW • WT/DS386/AB/RW

Panel stated that it would address the informat ion that must be collected by producers and
processors of livestock before addressing the information ultimately conveyed to consumers. 408
According to Canada, the Panel followed this analytical framework. In this regard, the Panel first
recalled its finding that the amended COOL measure has augmented the information that
producers and processors of livestock are required to transmit and maintain. The Panel then
observed that the amended COOL measure retains essentially the same exemptions as under the
original COOL measure, and noted features of the amended COOL measure that impact on the
accuracy of the information conveyed to consumer s on the labels affixed to muscle cuts of meat.
Canada asserts that these factors – the upstream recordkeeping burden, label accuracy, and the
exemptions from coverage of the COOL requirements – were then collectively assessed by the
Panel with a view to determining whether the informational "disconnect" identified by the
Appellate Body in the original disputes had been rectified by the amended COOL measure.
409
5.34. Mexico contends that, contrary to the United States' assertions, the Panel's analysis
involved a comparison of the recordkeeping burd en entailed by the amended COOL measure with
the provision of information on the labels prescribed by that measure. In this regard, Mexico points
out that the Panel determined that the amende d COOL measure is designed and applied in a
manner that: (i) increases the origin information communicated to consumers on the mandatory
retail labels for muscle cuts of meat; (ii) necessarily increases the recordkeeping burden on
upstream producers and processors of livestock in order to do so; and (iii) maintains the same
proportion of information that is not communicated at all to consumers as a result of the
exemptions from coverage of the COOL requirements.
410 Accordingly, Mexico submits that the
United States' claim is without merit.
5.35. Turning to our analysis, we consider it useful first to recall the analytical framework that the
Appellate Body applied in the original disputes for the purpose of assessing whether the
detrimental impact of the original COOL measure on imported livestock stemmed exclusively from
legitimate regulatory distinctions. In conducting that assessment, the Appellate Body recalled the
original COOL measure's recordkeeping and verification requirements, and the detailed origin
information required to be identified, tracked, and transmitted by upstream producers of
livestock.
411 The Appellate Body then compared this with the information communicated to
consumers on the retail labels. In undertaking this comparison, the Appellate Body observed that,
under the original COOL measure, a large amount of information was tracked and transmitted by
upstream producers of livestock for the purpose of providing consumer information on origin, but
only a small amount of this information was communicated to consumers in an understandable
manner, if it was communicated at all.
412 The Appellate Body explained that this was because the
labels prescribed by the original COOL measure di d not expressly identify specific production steps
and, in particular for Label B and C, contained confusing or inaccurate origin information, or
because the meat or meat products were exempt from the labelling requirements altogether.
413
5.36. Accordingly, the Appellate Body considered that the recordkeeping and verification
requirements under the original COOL measure imposed a disproportionate burden on upstream
producers and processors because the level of information conveyed to consumers through the
prescribed labels was far less detailed and accurate than the information required to be tracked
and transmitted by upstream producers and processors. The Appellate Body, therefore, considered
that the recordkeeping and verification requirements imposed on these producers and processors
could not be explained by the need to convey to consumers information regarding the countries
where livestock were born, raised, and slaughtere d. Consequently, the Appellate Body considered
that the detrimental impact caused by these sa me recordkeeping and verification requirements
under the original COOL measure could also not be explained by the need to provide origin
information to consumers. Based on these findings, the Appellate Body considered that the
regulatory distinctions imposed by the original COOL measured amounted to arbitrary and
unjustifiable discrimination against imported livestock, such that they could not be said to be
applied in an even-handed manner. Accordingly, the Appellate Body concluded that the

408 Canada's appellee's submission, para. 48 (referring to Panel Reports, paras. 7.218-7.219).
409 Canada's appellee's submission, para. 49.
410 Mexico's appellee's submission, para. 29.
411 Appellate Body Reports, US – COOL, para. 342.
412 Appellate Body Reports, US – COOL, para. 347.
413 Appellate Body Reports, US – COOL, para. 349.
WT/DS384/AB/RW • WT/DS386/AB/RW

detrimental impact on imported livestock did not stem exclusively from a legitimate regulatory
distinction but, instead, reflected discrimination in violation of Article 2.1 of the TBT Agreement.414
5.37. In the current proceedings, the participants do not appear to dispute that a similar analysis
is required for the purpose of examining the consistency of the amended COOL measure with
Article 2.1. Thus, the increased recordkeeping burden entailed by the amended COOL measure –
i.e. the source of the increased detrimental impact on imported livestock – is to be compared with
the origin information conveyed to consumers on the revised labels prescribed by that measure,
with a view to determining whether the information conveyed to consumers is far less detailed and
accurate than the information required to be collected by producers and processors. The
United States contends that, instead of conducting this analysis, the Panel relied on its finding that
the amended COOL measure entails an increased recordkeeping burden as an independent basis
for its conclusion that the detrimental impact of that measure does not stem exclusively from
legitimate regulatory distinctions.
5.38. We note that, at the outset of its analys is, the Panel articulated the analytical framework
that it would employ for the purpose of dete rmining whether the detrimental impact of the
amended COOL measure stems exclusively from legiti mate regulatory distinctions. In this regard,
the Panel explained that it would take the objective of the amended COOL measure as a point of
reference and, drawing upon the Appellate Body 's guidance, it would assess the amended COOL
measure by reference to whether there is a "di sconnect" between, on the one hand, "the detailed
information required to be tracked and transmitted by [upstream] producers" and, on the other
hand, the information "conveyed to consumers through the labels prescribed under the [amended]
COOL measure".
415 In respect of the latter, the Panel explained that it would examine the
exemptions from the labelling requirements of the amended COOL measure, as well as the
accuracy of the labels prescribed by that measure.416
5.39. As we see it, the Panel articulated an analytical framework pursuant to which the
recordkeeping burden entailed by the amended COOL measure would serve as a comparator
against which to compare the origin information that is ultimately conveyed to consumers on the
mandatory labels for muscle cuts of meat. This approach, as articulated by the Panel, comports
with the approach of the Appellate Body in the original proceedings set out above.
5.40. Turning to the Panel's application of the analytical framework that it had articulated, we
note that the Panel first considered the detailed origin information that must be collected by
upstream producers and processors of livestock. In this regard, the Panel recalled its earlier
findings that had led it to conclude that the amended COOL measure entails an increased
recordkeeping burden on upstream producers and processors of US-slaughtered livestock.
417 The
Panel then examined the information ultimately co nveyed to consumers on the labels prescribed
by the amended COOL measure. In doing so, the Panel assessed, in particular, the nature and
accuracy of the information conveyed on thes e labels and the proportion of the collected
information that is exempt from being communicated to consumers.
418
5.41. As regards the nature and accuracy of th e information conveyed on the revised labels, the
Panel noted that the greatest incremental impr ovement of the amended COOL measure is for
Labels B and C, which, the Panel considered, were effectively indistinguishable under the original
COOL measure.419 The Panel further found that, "although the amended COOL measure increases
the information communicated to consumers", it "necessarily increases the associated upstream
informational (recordkeeping) requirements in order to do so."
420 Moreover, notwithstanding the
improvement in the nature and accuracy of the information conveyed on the revised labels, the
Panel considered that, at the same time, these labels introduce the potential for informational
inaccuracy in respect of where livestock were "raised". In particular, the Panel recalled its earlier
finding that the amended COOL measure allows labels to read "raised in the United States"
(without listing any other country) on meat from Category B feeder cattle that spent a substantial

414 Appellate Body Reports, US – COOL, para. 349.
416 Panel Reports, para. 7.218.
417 Panel Reports, paras. 7.220-7.221.
418 Panel Reports, para. 7.265.
419 Panel Reports, para, 7.268.
420 Panel Reports, para. 7.266.
WT/DS384/AB/RW • WT/DS386/AB/RW

portion of their lives either in Canada or Mexico. According to the Panel, this was of primary
importance to its assessment as it represents "potential inaccuracy in light of the average age of
cattle traded between the complainants and the United States".
421
5.42. As regards the proportion of origin information that is exempt from being communicated to
consumers at all, the Panel found that the amended COOL measure maintains the same proportion
of information that is not communicated to consumers as a result of the exemptions from coverage
of the COOL requirements.
422 The Panel reasoned, therefore, that, due to the increased
recordkeeping burden under the amended COOL measure, even more "information regarding the
origin of all livestock will have to be identified, tracked, and transmitted through the chain of
production by upstream producers in accordance with the recordkeeping requirements … even
though 'a considerable proportion' of the beef and pork derived from that livestock will ultimately
be exempt from the COOL requirements and therefore carry no COOL label at all."
423
5.43. In concluding its overall assessment of whether the detrimental impact of the amended
COOL measure on imported livestock stems exclusively from legitimate regulatory distinctions, the
Panel noted that, in the original disputes, the Appellate Body found "the manner in which the
[original] COOL measure [sought] to provide information to consumers on origin … to be arbitrary,
and the disproportionate burden imposed on upstream producers and processors to be
unjustifiable."
424 The Panel considered this finding of the Appellate Body to be relevant in the
context of the amended COOL measure, which, the Panel explained, "entails an increased
recordkeeping burden and a potential for label inaccuracy, and continues to exempt a large
proportion of muscle cuts" from its scope.
425 Accordingly, the Panel concluded that, under the
particular circumstances of this case, the detrimental impact of the amended COOL measure on
imported livestock does not stem exclusively from legitimate regulatory distinctions.426
5.44. Having reviewed the Panel's analysis, it seems to us that the Panel's conclusion that the
detrimental impact of the amended COOL measur e does not stem exclusively from legitimate
regulatory distinctions was based on a comparative analysis of three key determinants of the
informational "disconnect" that the Appellate Body had identified in the original disputes in relation
to the original COOL measure: (i) the informational requirements imposed on upstream producers;
(ii) the nature and accuracy of the information conveyed on the labels; and (iii) the proportion of
the collected information that is exempt from being communicated to consumers.
427 Accordingly,
we do not consider that the Panel, as the United States alleges, relied on its finding that the
amended COOL measure entails an incr eased recordkeeping burden as an independent basis for
concluding that the detrimental impact of that me asure does not stem exclusively from legitimate
regulatory distinctions.
5.45. We recall that the United States further asserts that, in order to conclude that the
detrimental impact of the amended COOL measur e does not stem exclusively from legitimate
regulatory distinctions, the origin information required to be collected under that measure must be
so disproportionate to the information provided to consumers on labels that the collection of the
information cannot be explained in the first place. 428 As we see it, this comports with the analysis
of the Appellate Body in the original disputes . Indeed, in the original disputes, of central
importance to the Appellate Body's conclusion under Article 2.1 was its finding that the level of
information conveyed to consumers through the prescribed labels under the original COOL
measure was far less detailed and accurate than the information required to be tracked and
transmitted by upstream producers and processors.
5.46. In looking at the Panel's analysis in the current proceedings, it seems to us that several of
the discrete findings made by the Panel support the conclusion that the recordkeeping burden
entailed by the amended COOL measure is dispro portionate to the information conveyed to
consumers on the revised labels under that measure. First, the Panel acknowledged that the

421 Panel Reports, para. 7.269.
422 Panel Reports, para. 7.266.
423 Panel Reports, para. 7.272 (quoting Appellate Body Reports, US – COOL, para. 344 (emphasis
original; fn omitted)).
425 Panel Reports, para. 7.282 (referring to Appellate Body Reports, US – COOL, para. 347).
426 Panel Reports, para. 7.283.
427 Panel Reports, para. 7.265.
428 United States' appellant's submission, para. 115.
WT/DS384/AB/RW • WT/DS386/AB/RW

amended COOL measure has increased the amount of information conveyed to consumers on the
mandatory labels but, importantly, that it has increased the recordkeeping burden on upstream
producers in order to do so. Second, the Panel noted that the revised labels under the amended
COOL measure introduce the potential for informational inaccuracy in respect of the identification
of where the animals were "raised". Third, in co nnection with the exemptions from the scope of
the COOL requirements, the Panel reasoned that , due to the increased recordkeeping burden
under the amended COOL measure, even more "information regarding the origin of all livestock
will have to be identified, tracked, and transmi tted through the chain of production by upstream
producers in accordance with the recordkeeping requirements … even though 'a considerable
proportion' of the beef and pork derived from that livestock will ultimately be exempt from the
COOL requirements and therefore carry no COOL label at all."
429
5.47. As we see it, the discrete findings made by the Panel outlined above support the conclusion
that the recordkeeping and verification requir ements of the amended COOL measure impose a
disproportionate burden on producers and processo rs of livestock that cannot be explained by the
need to provide consumers with information re garding where livestock were born, raised, and
slaughtered. Accordingly, the detrimental impact on imported livestock arising from these same
recordkeeping and verification requirements does not stem exclusively from legitimate regulatory
distinctions.
5.48. In the light of the above, we disagree with the United States that the Panel's finding that
the amended COOL measure entails an increased recordkeeping burden served as an "independent
basis" for the Panel's conclusion that the detrimental impact of that measure does not stem
exclusively from legitimate regulatory distinctions. Moreover, we do not consider, as the
United States alleges, that the Panel "failed to put the issue of recordkeeping within the proper
analysis, which involves a comparison of the burdens of recordkeeping and the provision of
information through labels."
430 Accordingly, we find that the Panel did not err, in
Section 7.5.4.2.4.4 of the Panel Reports, in its consideration of the increased recordkeeping
burden entailed by the amended COOL measure wi thin its analysis of whether the detrimental
impact of that measure on imported livestock stems exclusively from legitimate regulatory
distinctions.
5.1.2.2 Claims relating to the Panel's analys is of the accuracy of the labels prescribed
by the amended COOL measure
5.49. We turn now to assess the United States' claims concerning the Panel's findings on the
accuracy of the revised labels prescribed by th e amended COOL measure. The United States puts
forward two claims of error in relation to these fi ndings. First, the United States contends that the
Panel erred in finding that Labels B and C are potentially inaccurate, because this finding is based
on "incorrect hypotheticals" and does not account for the actual trade in livestock among the three
parties to these disputes. Second, the United States claims that the Panel erred in considering that
its finding that Labels B and C are potentially inaccurate supports a conclusion that the detrimental
impact of the amended COOL measure does not stem exclusively from legitimate regulatory
distinctions. The United States argues, in this regard, that the Panel failed to make a
determination of whether the labels prescribed by the amended COOL measure are designed and
applied in an even-handed manner, including of whether a "disconnect" exists between, on the one
hand, the origin information required to be colle cted by producers and processors and, on the
other hand, the origin information that is ultimately conveyed to consumers.
431
5.1.2.2.1 Whether the Panel's analysis of th e accuracy of Labels B and C was based on
incorrect hypotheticals
5.50. The United States claims that the Panel's finding that Labels B and C are potentially
inaccurate is in error because it was based on incorrect hypothetical transactions that do not
reflect actual trade in livestock among the three parties to these disputes. Noting that the Panel's
analysis of the accuracy of Labels B and C turns on how information relating to where an animal
was "raised" is communicated on these labels in various scenarios, the United States asserts that

429 Panel Reports, para. 7.272 (quoting Appellate Body Reports, US – COOL, para. 344 (emphasis
original; fn omitted)).
430 United States' appellant's submission, para. 113.
431 United States' appellant's submission, para. 131.
WT/DS384/AB/RW • WT/DS386/AB/RW

some of these scenarios reflect actual trade in livestock among the three parties to the disputes,
and others are purely hypothetical. 432 The United States submits that, in determining whether
Labels B and C are potentially inaccurate, the Pane l treated each of the scenarios it examined as
being equally persuasive, without regard for thei r improbability. Thus, as regards Label B, the
Panel treated the scenario where an animal was born in Canada and exported to the United States
for further raising and slaughter – a scenario that the United States admits occurs – on equal
terms with the scenario where an animal was born in Canada, exported to Mexico for raising, and
then exported to the United States for further raising and slaughter – a scenario that the
United States alleges does not occur.
5.51. The United States further contends that the Panel was precluded from relying on
hypothetical transactions that do not reflect actual trade in livestock because the claim before it
was one of alleged de facto discrimination under Article 2.1 of the TBT Agreement. The
United States submits, in this regard, that, in a de facto case, a panel must base its finding of
detrimental impact on the effect of the measure in the marketplace – "i.e., the 'facts'".
433 The
United States, thus, submits that, as was the case in Canada – Periodicals, the Panel's reliance on
such hypotheticals lacks "proper reasoning based on inadequate factual analysis" and, as such,
constitutes legal error.
434
5.52. Canada responds that, in arguing that th e Panel based its finding that Labels B and C are
potentially inaccurate on incorrect hypothetical scenarios, the United States mischaracterizes the
Panel's analysis. According to Canada, the Panel correctly found that, on average, "Canadian
feeder cattle spend between 45 and 68% … of their raising period outside the United States", and,
on this basis, correctly determined that the country of raising flexibility under the amended COOL
measure allows Label B "to designate the United States as the sole place of raising to an animal
that spent as little as 15 days in the United States".
435 Canada asserts that it was on this basis
that the Panel found that Label B entails a potential for conveying inaccurate information. Canada
submits that, accordingly, the United States' claim that the Panel based its analysis of label
accuracy under the amended COOL measure on incorrect hypothetical livestock transactions has
no foundation.
5.53. Canada further considers as being without merit the United States' claim that the Panel was
precluded from examining hypothetical scenarios because the claim before it was one of de facto
discrimination under Article 2.1 of the TBT Agreement. In this regard, Canada recalls that, in
determining whether the detrimental impact of a technical regulation on like imported products
reflects discrimination, panels are required to assess, inter alia , the design, architecture, and
revealing structure of the technical regulation at issue.
436 Canada submits that, in short, the
analysis under Article 2.1 is not strictly confined to factual matters concerning actual trade in the
relevant market.
5.54. Canada also observes that the Panel found that, although Label C "may allow – and possibly
require – omission of actual countries of raising, resulting in label inaccuracy", that label "does not
appear likely to convey misleading informatio n about the country where animals imported for
immediate slaughter are raised, given that these appear to be most commonly born and raised in
the country of export."
437 Hence, in Canada's view, the Panel's identification of the informational
shortcomings of the labels prescribed by the am ended COOL measure was, thus, largely, but not
entirely, focused on Label B.

432 The United States explains that, as regards Label B, the Panel found that this label is potentially
inaccurate in two scenarios: (i) where an animal had a "single foreign origin", i.e. born in either Canada or
Mexico and then exported to the United States for further raising and slaughter; and (ii) where an animal had a
"multiple foreign origin", e.g. born in Mexico, exported to Canada for further raising, then exported to the
United States for further raising and slaughter. As regards Label C, the Panel found that, although this label is
accurate in practice, it is potentially inaccurate when affixed to muscle cuts produced from animals that have
been the subject of at least one, and maybe two, transactions between Mexico and Canada, prior to being
exported to the United States for immediate slaughter. (United States' appellant's submission, para. 152)
433 United States' appellant's submission, para. 158.
434 United States' appellant's submission, para. 159 (quoting Appellate Body Report, Canada –
Periodicals p. 22, DSR 1997:I, p. 467).
436 Canada's appellee's submission, para. 106 (referring to Appellate Body Reports, US – COOL,
para. 271, in turn referring to Appellate Body Report, US – Clove Cigarettes, para. 182).
WT/DS384/AB/RW • WT/DS386/AB/RW

5.55. For its part, Mexico submits that, contrary to the United States' assertions, the Panel's
finding that Label B potentially conveys inaccurate information was not based on incorrect
hypotheticals but, rather, on a carefully reasoned and objective assessment of the implications of
the design and application of the labelling rules prescribed by the amended COOL measure. Mexico
submits that, in undertaking this assessment, the Panel clearly and consistently indicated where
certain so-called "hypothetical scenarios" would be unlikely to occur with material frequency in
actual practice, and discounted them accordingly.
438 Mexico contends that the Panel's finding with
respect to Label B was not based on these infrequent scenarios but, rather, on specific scenarios in
which the amended COOL measure, in its application, would permit labels indicating only "raised in
the United States" for "livestock that commonly spend between approximately one third and one
half of their lives elsewhere".
439 This was not an unlikely "hypothetical scenario" but, rather, a
reasoned finding based on the average age at which Category B feeder cattle are imported into the
United States from Mexico and Canada.
5.56. As regards Label C, Mexico observes that the Panel recognized that the potential
inaccuracies that it observed with respect to the omission of countries of raising on that label were
less likely to occur in practice. 440 Mexico asserts that it is, thus, clear from the Panel's reasoning
that its concerns regarding potential label inaccuracy under the amended COOL measure were
focused on Label B, in respect of which the Panel found that, "in its application, the amended
COOL measure permits labels indicating 'raised in the United States' alone for livestock that
commonly spend between approximately one third and one half of their lives elsewhere."
441
5.57. In addressing the United States' claim, we consider first the United States' argument that,
because the claim before the Panel was one of de facto discrimination under Article 2.1, the Panel
was precluded from examining the accuracy of labels under the amended COOL measure in
hypothetical scenarios "that do not reflect" actual trade in livestock between Canada, Mexico, and
the United States.442
5.58. We have considered above that, because Article 2.1 is concerned with competitive
opportunities for like imported products, the analysis under that provision is not limited to an
examination of the operation of the technical regula tion at issue within the confines of scenarios
that are representative of actual patterns of tr ade. We have emphasized, however, that a panel
may not ascribe undue weight to the effect of a technical regulation in any hypothetical scenario
for the purposes of its analysis under Article 2.1. Instead, a panel's analysis under Article 2.1 must
be grounded in an assessment of the technical regulation at issue in scenarios in which competitive
opportunities may arise, notwithstanding that they may not be currently reflective of actual
patterns of trade.
443
5.59. Accordingly, we disagree with the United States to the extent that it contends that, in
considering claims of de facto discrimination under Article 2.1, a panel's analysis is confined to
assessing the effect of a measure on actual trade.
5.60. The United States argues, in any event, that the Panel's finding that Labels B and C are
potentially inaccurate was based on incorrect hypotheticals. We note that, in considering the
accuracy of the labels prescribed by the am ended COOL measure, the Panel addressed the
complainants' contention that the amended COOL measure may convey potentially misleading or
inaccurate information to consumers as a result of the multiple countries of raising flexibility –
applicable to Label B – and the rules applicable to Label C.444
5.61. As regards the alleged inaccuracy of Label B due to the multiple countries of raising
flexibility, the Panel noted that this flexibility can be applied only in respect of the labelling of
Category B muscle cuts deriving from animals that were raised in at least two countries, including
the United States. The Panel further explained that, pursuant to this flexibility, "if animals are born

438 Mexico's appellee's submission, para. 46 (referring to Panel Reports, para. 7.238).
441 Mexico's appellee's submission, para. 47 (quoting Panel Reports, para. 7.244 (emphasis original)).
442 United States' appellant's submission, para. 158.
443 See supra, paras. 5.14-5.16.
444 Panel Reports, para. 7.232.
WT/DS384/AB/RW • WT/DS386/AB/RW

and raised in another country and subsequently further raised in the United States, only the
raising that occurs in the United States needs to be declared on the label."445
5.62. The Panel stated that it would evaluate the accuracy of Label B by considering evidence
regarding where Category B animals were actually "raised", and what must be ultimately labelled
according to the terms of the amended COOL measure. 446 After reviewing evidence concerning the
age at which feeder cattle are imported into the United States, as well as the amount of time
feeder cattle typically spend in the United States prior to slaughter, the Panel considered that the
slaughter age of cattle is approximately 22 months.
447 The Panel considered further that, relative
to this slaughter age, it was clear from the evidence that feeder cattle exported to the
United States typically spend a substantial part of their lifespan in their country of birth. In this
regard, the Panel pointed out that the parties' evidence indicated that, on average, Canadian
feeder cattle spend between 45% and 68%, while Mexican feeder cattle spend between 27% and
32%, of their raising period outside the United States. Yet, these feeder cattle, explained the
Panel, will be processed into muscle cuts that are eligible to be labelled with a Category B label
that reads "Born in Canada/Mexico, Raised and Slaughtered in the United States". Thus, the Panel
found that feeder cattle imported into the United States may spend up to 68% of their lifespan
outside the United States, yet, the resulting meat products could be labelled to indicate that the
animals from which the meat products derived were raised only in the United States.
448
5.63. In the light of the above, the Panel was no t persuaded by the United States' contention that
Label B can be regarded as "entirely accurate"449, particularly given the definition of "raised" under
the amended COOL measure. 450 The Panel further observed that the rationale for permitting
flexibility to designate the United States as the so le place of raising is that this would "reduce the
number of required characters on the label" 451, and that there is a "presumption" that the raising
of an animal must naturally occur, at least in part, in an animal's country of birth. The Panel
considered, however, that this takes no account of the substantial amount of time that traded
livestock typically spend outside the United States.452
5.64. In the light of the Panel's analysis as se t out above, we do not consider that the Panel's
finding that the amended COOL measure entails a potential for label inaccuracy was based on
hypothetical scenarios, as argued by the United States. Instead, the Panel's findings concerning
the accuracy of Label B was based on unchallenge d evidence concerning where feeder cattle are
actually "raised", and what must be ultimately indicated on Label B according to the terms of the
amended COOL measure.
5.65. As regards Label C, the Panel concluded that the design of the rules pertaining to this label
may allow, "and possibly require", the omission of actual countries of raising, "resulting in label
inaccuracy as to an animal's place of raising".
453 The Panel qualified this finding by acknowledging,
however, that, "[i]n its actual application to trad ed livestock … Label C do es not appear likely to
convey misleading information about the country where animals imported for immediate slaughter
are raised, given that these appear to be most commonly born and raised in the country of
export."454 Thus, we find persuasive Mexico's contention that the Panel did not rely on unlikely
hypothetical scenarios in determining that there is a potential for label inaccuracy under the
amended COOL measure but, instead, that the Panel "considered all of the potential scenarios" and
"discounted or disregarded those that were unlikely to occur in actual practice".
455

445 Panel Reports, para. 7.233 (quoting 2013 Final Rule, p. 31368).
446 Panel Reports, para. 7.239.
447 Panel Reports, para. 7.242.
448 Panel Reports, para. 7.242.
449 Panel Reports, para. 7.243 (quoting United States' comments on the complainants' responses to
Panel question No. 9, para. 16). (emphasis added by the Panel)
450 "Raised" is defined by way of exclusion from the extreme start and end points of an animal's life,
that is, from birth until slaughter or, in the case of Category C, entry into the United States for immediate
slaughter. Immediately after an animal is born, "the period of time" for raising commences and continues for
the remaining lifespan. (Panel Reports, para. 7.234 (quoting 2009 Final Rule (AMS), Section 65.235))
451 Panel Reports, para. 7.243 (quoting 2013 Final Rule, p. 31368).
452 Panel Reports, para. 7.243.
453 Panel Reports, para. 7.254.
454 Panel Reports, para. 7.254.
455 Mexico's appellee's submission, para. 49.
WT/DS384/AB/RW • WT/DS386/AB/RW

5.66. In the light of the foregoing considerations, we disagree with the United States that the
Panel's finding that the amended COOL measure entails a potential for label inaccuracy was based
on "incorrect hypotheticals." Accordingly, we find that the Panel did not err, in paragraph 7.269 of
the Panel Reports, in its assessment of the accu racy of Labels B and C as prescribed by the
amended COOL measure.
5.1.2.2.2 Whether the Panel erred by failing to assess the potential for label inaccuracy
under the amended COOL measure in relation to the recordkeeping burden entailed by
that measure
5.67. We turn now to the United States' claim that the Panel's finding that Labels B and C are
potentially inaccurate does not support the Panel's conclusion that the detrimental impact of that
measure on imported livestock does not stem excl usively from legitimate regulatory distinctions.
For the United States, the Panel was required to assess the potential for label inaccuracy under the
amended COOL measure in relation to the reco rdkeeping burden entailed by that measure by
determining whether a "disconnect" exists between, on the one hand, the origin information
required to be collected by producers and processors and, on the other hand, the origin
information that is ultimately conveyed to consumers on the mandatory labels.
456 The
United States submits that the Panel erred by failing to make this determination.
5.68. According to the United States, the "central criticism" of the Appellate Body with regard to
the original COOL measure was that the origin information provided by Labels B and C was "far
less detailed and accurate than the information required to be tracked and transmitted by …
producers and processors" of livestock, such that the tracking and transmission of such
information "[could not] be explained by the need to convey [origin] information" on meat
products to consumers.
457 The United States contends that the Panel adopted an analytical
framework that is different from the Appellate Body's approach in the original disputes. In this
regard, the United States submits that the Panel criticized Labels B and C because of their
potential to omit information concerning some of the countries where an animal was raised when
its raising occurred in multiple countries. However, the Panel did not make a finding that the
amended COOL measure requires that producers an d processors of livestock track and transmit
any information that is not provided by the labels. As such, the United States contends that the
Panel erred, as a matter of law, in finding that the informational "disconnect" that the
Appellate Body found to exist under the original COOL measure continues to exist under the
amended COOL measure.
458
5.69. Canada and Mexico respond that, in its assessment of whether the detrimental impact of the
amended COOL measure stems exclusively from legitimate regulatory distinctions, the Panel
correctly considered the upstream recordkeeping burden entailed by the amended COOL measure,
the potential for label inaccuracy entailed by that measure, and the exemptions from coverage of
the COOL requirements. Canada and Mexico submit that the interaction of these three factors
within the overall architecture of the amende d COOL measure supports the Panel's ultimate
conclusion that the detrimental impact caused by the amended COOL measure does not stem
exclusively from legitimate regulatory distinctio ns. Canada and Mexico submit that this was a
sufficient basis for the Panel's finding of a violation of Article 2.1 of the TBT Agreement.
459
5.70. Turning to our assessment of the United Stat es' present claim, we recall that, in connection
with a separate claim put forward by the United States on appeal, we have considered in detail
above the Panel's overall assessment of whether the detrimental impact of the amended COOL
measure stems exclusively from legitimate regulatory distinctions.
460 After examining the Panel's
analysis, we have considered that the Panel's conclusion that the detrimental impact of the
amended COOL measure does not stem exclusively from legitimate regulatory distinctions was
based on a comparative analysis of three key determinants of the informational "disconnect" that
the Appellate Body had identified in the original disputes in relation to the original COOL measure:
(i) the informational requirements imposed on upstream producers; (ii) the nature and accuracy of

456 United States' appellant's submission, para. 131.
457 United States' appellant's submission, para. 172 (quoting Appellate Body Reports, US – COOL,
para. 349).
458 United States' appellant's submission, para. 179.
459 Canada's appellee's submission, para. 108; Mexico's response to questioning at the oral hearing.
460 See supra, paras. 5.38-5.44.
WT/DS384/AB/RW • WT/DS386/AB/RW

the information conveyed on the labels; and (iii) the proportion of the collected information that is
exempt from being communicated to consumers. 461 In addition, we have considered that several
elements of the Panel's analysis, and discrete findings made by the Panel in relation to these three
determinants, support the conclusion that the reco rdkeeping and verification requirements of the
amended COOL measure impose a disproportiona te burden on producers and processors of
livestock that cannot be explained by the need to provide origin information to consumers. 462
Accordingly, we are not persuaded by the United States' contention that the Panel failed to
address the question of whether there is a "disconnect" between, on the one hand, the information
required to be collected by producers and proces sors of livestock and, on the other hand, the
information ultimately conveyed to consumers on the labels prescribed by the amended COOL
measure.
5.71. For the reasons expressed above, we find that the Panel did not err, in Section 7.5.4.2.4.4
of the Panel Reports, in its consideration of the potential for label inaccuracy under the amended
COOL measure within its analysis of whether the detrimental impact of that measure on imported
livestock stems exclusively from legitimate regulatory distinctions.
5.1.2.3 Claims relating to the exemptions prescribed by the amended COOL measure
5.72. We turn now to the United States' claim that the Panel erred in finding that the scope of the
exemptions prescribed by the amended COOL meas ure support a conclusion that the detrimental
impact of that measure on imported livestock does not stem exclusively from legitimate regulatory
distinctions.
463
5.73. We recall that the COOL statute provides for three exemptions from the COOL
requirements. In particular, it exempts: (i) en tities not meeting the definition of the term
"retailer"; (ii) covered commodities that are used as ingredients in "processed food items"; and
(iii) products served in "food service establishm ents". These exemptions were provided for under
the original COOL measure, and are maintained by the amended COOL measure.
5.74. In its overall assessment of whether the detrimental impact of the amended COOL measure
stems exclusively from legitimate regulatory distinctions, the Panel considered the exemptions
from the coverage of the COOL requirements as evidence that the recordkeeping burden giving
rise to the detrimental impact on imported livestock "cannot be explained by the need to convey to
consumers information regarding the countries where livestock were born, raised, and
slaughtered."
464
5.75. On appeal, the United States claims that the Panel erred in finding that the scope of the
exemptions under the amended COOL measure supports a conclusion that the detrimental impact
of that measure on imported livestock does no t stem exclusively from legitimate regulatory
distinctions.
465 This claim rests on three main grounds.
5.76. First, the United States claims that the Panel erred in finding that the exemptions are
relevant for the analysis, under Article 2.1 of the TBT Agreement, of whether the detrimental
impact of the amended COOL measure stems exclusively from legitimate regulatory distinctions.466
The United States submits in this connection that, because the exemptions are not relevant
regulatory distinctions drawn by the amende d COOL measure, the Panel should not have
considered them in its analysis under Article 2.1.
5.77. Second, the United States claims that, "a side from the fact that the exemptions are not
relevant", the Panel erred by failing to take into account the following considerations in its
assessment: (i) that the exemptions apply equally to meat derived from imported and domestic
livestock and are, therefore, even handed in their design and application; (ii) the "legitimate desire
of Members to adjust the scope of their technical regulations" to take account of cost
considerations; and (iii) that, in the light of the "enhanced accuracy" of the labels prescribed by

461 Panel Reports, para. 7.265.
462 See supra, paras. 5.46-5.47.
463 United States' appellant's submission, paras. 184-185.
465 United States' appellant's submission, para. 91.
466 United States' appellant's submission, para. 186.
WT/DS384/AB/RW • WT/DS386/AB/RW

the amended COOL measure, the recordkeeping burden entailed by that measure can now "be
explained by the need to provide origin information to consumers".467
5.78. Third, the United States submits that th e Panel failed to evaluate the operation of the
exemptions within the US market and, therefore, that the Panel erred in concluding that these
exemptions support a conclusion that the detr imental impact of the amended COOL measure
reflects discrimination in violation of Article 2.1 of the TBT Agreement.468
5.79. We turn now to examine these distinct cl aims of error advanced by the United States.
Before doing so, we recall briefly the Panel's ke y findings concerning the exemptions under the
amended COOL measure for the purpose of its as sessment of whether the detrimental impact of
that measure on imported livestock stems exclusively from legitimate regulatory distinctions.
5.80. We recall that, having found that the amended COOL measure increases the detrimental
impact of the original COOL measure on imported livestock, the Panel turned to consider whether
such detrimental impact stems exclusively from legitimate regulatory distinctions. In considering
this issue, the Panel first identified the relevant regulatory distinctions drawn by the amended
COOL measure as the distinctions between the three production steps, as well as the mandatory
labels to be affixed to muscle cuts of beef and pork. The Panel observed that the parties had not
disputed that these are relevant regulatory distinctions under the amended COOL measure.
469 The
Panel then proceeded to consider the relevance of other elements of the amended COOL measure
for the analysis of whether the detrimental impact of that measure stems exclusively from
legitimate regulatory distinctions.
470
5.81. As regards the relevance of the exemptions, the Panel observed that, in the original
disputes, the Appellate Body had considered relevant for its analysis under Article 2.1 "the fact
that the COOL measure exempts from its labelling requirements muscle cuts of beef and pork that
are 'ingredient[s] in a processed food item', or are sold in a 'food service establishment' or in an
establishment that is not a 'retailer'". 471 According to the Panel, the Appellate Body's attribution of
relevance to the exemptions in the original disputes was consistent with the Appellate Body's
explanation that, in assessing whether the detrimental impact of a technical regulation stems
exclusively from legitimate regulatory distinctions, a panel must "carefully scrutinize the particular
circumstances of the case, that is the design, architecture, revealing structure, operation, and
application of the technical regulation at issue".
472
5.82. The Panel, therefore, concluded that, although the exemptions from the COOL requirements
are not "relevant regulatory distinctions" as such, they should, nevertheless, be taken into account
as part of its examination of the "overall archit ecture" of the amended COOL measure, insofar as
they are relevant to the issue of whether "the detrimental impact [of that measure on imported
livestock] reflects discrimination in violation of Article 2.1".473
5.83. The Panel then examined the exemptions as part of its overall assessment of whether the
detrimental impact of the amended COOL measure stems exclusively from legitimate regulatory
distinctions. The Panel considered that the amende d COOL measure failed to address, in any way,
the Appellate Body's finding that "the [original] COOL measure exempts from its labelling

467 United States' appellant's submission, para. 187.
468 United States' appellant's submission, para. 188.
469 See Canada's second written submission to the Panel, para. 47; Mexico's first written submission to
the Panel, paras. 118-119; and United States' second written submission to the Panel, para. 19.
470 The Panel noted that the United States contended that the complainants had inappropriately
challenged "other regulatory distinctions that either have nothing to do with the detrimental impact caused by
the amended COOL measure or, in fact, are not regulatory distinctions at all". (Panel Reports, para. 7.199
(quoting United States' first written submission to the Panel, para. 81)) The United States had referred in this
regard to: (i) the exemptions and defined scope of the amended COOL measure; (ii) Label D for muscle cuts
derived from foreign-slaughtered animals; (iii) the COOL statute's prohibition of a trace-back system; and
(iv) Label E for ground meat products. We address Labels D and E and the prohibition of a trace-back system
in the context of the claims raised by Canada and Mexico in their other appeals under Article 2.1 of the
TBT Agreement in section 5.1.3 infra.
472 Panel Reports, para. 7.202 (quoting Appellate Body Reports, US – COOL, para. 271, in turn referring
to Appellate Body Report, US – Clove Cigarettes, para. 182).
WT/DS384/AB/RW • WT/DS386/AB/RW

requirements muscle cuts of beef and pork that are 'ingredient[s] in a processed food item', or are
sold in a 'food service establishment' or in an establishment that is not a 'retailer'." 474 Further, the
Panel stated that it had no evidence before it that called into question the finding of the original
panel that "the ultimate disposition of a meat product is often not known at any particular stage of
the production chain".
475 Thus, the Panel considered that, due to the increased recordkeeping
burden under the amended COOL measure, even more "information regarding the origin of all
livestock will have to be identified, tracked, and transmitted through the chain of production by
upstream producers in accordance with the re cordkeeping requirements … even though 'a
considerable proportion' of the beef and pork derive d from that livestock will ultimately be exempt
from the COOL requirements and therefore carry no COOL label at all."476
5.84. For these reasons, the Panel concluded that the exemptions under the amended COOL
measure constitute evidence that the recordkeeping burden giving rise to the detrimental impact
on imported livestock "cannot be explained by the need to convey to consumers information
regarding the countries where livestock were born, raised, and slaughtered".
477
5.85. We turn now to examine the distinct claims of error raised by the United States concerning
the Panel's analysis of the exemptions from the COOL requirements.
5.1.2.3.1 Whether the Panel erred in considering that the exemptions from the COOL
requirements were relevant for its analysis under Article 2.1
5.86. The United States claims that the Panel erred in finding that the exemptions are relevant for
the analysis of whether the detrimental impact of the amended COOL measure stems exclusively
from legitimate regulatory distinctions. 478 Relying on the Appellate Body's statement in US –
Tuna II (Mexico) that "[it] only need[ed] to examine the distinction that account[ed] for the
detrimental impact on Mexican tuna products", the United States argues that only regulatory
distinctions that account for the detrimental impact on like imported products can answer the
question of whether such detrimental impact reflects discrimination.
479 The United States points
out that the original panel had found that the exemptions under the original COOL measure were
not a source of detrimental impact on imported livestock.
480 The United States submits that,
accordingly, the compliance Panel should not have found that the exemptions under the amended
COOL measure are relevant for the analysis of whether the detrimental impact of that measure
stems exclusively from legitimate regulatory distinctions.
481
5.87. Canada responds that the Panel's attribution of relevance to the exemptions is consistent
with the Appellate Body's approach to the exem ptions under the original COOL measure and the
general legal framework that the Appellate Body has prescribed for the analysis under Article 2.1
of the TBT Agreement.
482 According to Canada, this legal framework requires panels to scrutinize
carefully the particular circumstances of the case – that is, the design, architecture, revealing
structure, operation, and application of the technical regulation at issue – rather than simply the
relevant regulatory distinctions.
5.88. In respect of the United States' reliance on the Appellate Body report in US – Tuna II
(Mexico), Canada submits that, in the light of the clear guidance that the Appellate Body has
provided to panels, as well as the analysis conducted by the Appellate Body in the original
disputes, the statement relied on by the United States cannot "credibly" be interpreted as a
prohibition on the consideration of elements of a challenged technical regulation, or the particular
circumstances of the case, that do not directly account for the detrimental impact on imported

475 Panel Reports, para. 7.272 (quoting Appellate Body Reports, US – COOL, para. 344, in turn referring
to Original Panel Reports, US – COOL, para. 417).
476 Panel Reports, para. 7.272 (quoting Appellate Body Reports, US – COOL, para. 344 (emphasis
original; fn omitted)).
478 United States' appellant's submission, para. 203.
479 Appellate Body Report, US – Tuna II (Mexico), para. 286 (emphasis original); United States'
appellant's submission, para. 195.
480 United States' appellant's submission, para. 196 (referring to Original Panel Reports, US – COOL,
paras. 7.417 and 7.419).
481 United States' appellant's submission, para. 201.
482 Canada's appellee's submission, para. 59. (fns omitted)
WT/DS384/AB/RW • WT/DS386/AB/RW

products but, nevertheless, demonstrate the ar bitrary or unjustifiable character of such
detrimental impact.483
5.89. For Mexico, the Panel correctly found that the exemptions are relevant for the analysis
under Article 2.1 because they constitute an essential element of the design, architecture,
revealing structure, operation, and application of the amended COOL measure. Mexico submits
that, contrary to the interpretation proposed by the United States, the Appellate Body's statement
in US – Tuna II (Mexico) does not restrict or narrow the ma nner in which the legitimacy of the
relevant regulatory distinctions should be examined for the purposes of Article 2.1 of the
TBT Agreement. According to Mexico, such an examination must take into account the operation
and application of the relevant regulatory distinction – i.e. how it functions in practice – within the
context of the design, overall architecture, and revealing structure of the technical regulation.
Mexico emphasizes that the Appellate Body confirmed as much in the original disputes when it
explained that, "in assessing even-handedness, a panel must carefully scrutinize the design,
architecture, revealing structure, operation and application of the technical regulation at issue."
484
5.90. Turning to our analysis, we consider that the United States' claim raises the issue of what
elements of a technical regulation are relevant for the inquiry of whether the detrimental impact of
that technical regulation on like imported products stems exclusively from legitimate regulatory
distinctions. In particular, we must consider whether elements of a technical regulation that have
not been identified as relevant regulatory distinctions can be examined for the purpose of
determining whether the detrimental impact of that measure on like imported products stems
exclusively from legitimate regulatory distinctions.
5.91. We recall that, in the original disputes, the Appellate Body explained that some technical
regulations that have a de facto detrimental impact on imported products may not be inconsistent
with Article 2.1 "when such impact stems exclusively from a legitimate regulatory distinction".
485
The Appellate Body further explained that, by contrast, where a regulatory distinction is not
designed and applied in an even-handed manner 486 – because, for example, it is designed or
applied in a manner that constitutes a means of arbitrary or unjustifiable discrimination – that
distinction cannot be considered "legitimate", and the detrimental impact on competitive
opportunities for like imported products will reflect discrimination in violation of Article 2.1. The
Appellate Body considered that, in assessing whether a regulatory distinction is designed and
applied in an "even-handed" manner, a panel must "carefully scrutinize the particular
circumstances of the case, that is, the design, ar chitecture, revealing structure, operation, and
application of the technical regulation at issue".
487
5.92. Thus, if a panel finds that a technical regulation has a de facto detrimental impact on
competitive opportunities for like imported products, the focus of the inquiry shifts to whether such
detrimental impact stems exclusively from legitimate regulatory distinctions. This inquiry probes
the legitimacy of regulatory distinctions through careful scrutiny of whether they are designed and
applied in an even-handed manner such that they may be considered "legitimate" for the purposes
of Article 2.1.
5.93. We consider, therefore, that the inquiry in to whether the detrimental impact of a technical
regulation on like imported products stems exclusively from legitimate regulatory distinctions must
focus on those regulatory distinctions that account for such detrimental impact. Further, the
legitimacy of such regulatory distinctions, for the purposes of Article 2.1, is a function of whether
they are designed and applied in an even-h anded manner. While the assessment of even-
handedness focusses on the regulatory distinction(s) causing the detrimental impact on imported
products, other elements of the technical regulation are relevant for that assessment to the extent
that they are probative of whether such detrimental impact stems exclusively from legitimate
regulatory distinctions. Indeed, as the Appellate Body explained in the original disputes, a panel, in

483 Canada's appellee's submission, para. 62.
484 Mexico's appellee's submission, para. 57 (quoting Appellate Body Reports, US – COOL, para. 271, in
turn quoting Appellate Body Report, US – Clove Cigarettes, para. 182).
485 Appellate Body Reports, US – COOL, para. 271 (referring to Appellate Body Reports, US – Clove
486 Appellate Body Reports, US – COOL, para. 271 (referring to Appellate Body Reports, US – Clove
487 Appellate Body Reports, US – COOL, para. 271 (referring to Appellate Body Report, US – Clove
Cigarettes, para. 182).
WT/DS384/AB/RW • WT/DS386/AB/RW

assessing even-handedness for the purposes of Article 2.1, must "carefully scrutinize the particular
circumstances of the case, that is, the design, ar chitecture, revealing structure, operation, and
application of the technical regulation at issue".488
5.94. Thus, the inquiry under Article 2.1 must situate the regulatory distinctions that account for
the detrimental impact on imported products within the overall design and application of the
technical regulation at issue. In this way, a determination can be made as to whether these
distinctions are designed and applied in an even-handed manner such that they may be considered
"legitimate" for the purposes of Article 2.1, or whether, instead, they lack even-handedness
because, for example, they are designed and ap plied in a manner that constitutes arbitrary or
unjustifiable discrimination in violation of Article 2.1.
5.95. We emphasize that the analysis described above is meant to assess an allegation of de facto
discrimination under Article 2.1 of the TBT Agreement. Such de facto discrimination against
imported products will not be immediately discernib le from the text of a measure, nor may it be
discernible when its operation is assessed exclusiv ely through the lens of one of its components.
Therefore, technical regulations must be assessed as composite legal instruments through careful
scrutiny of their design, architecture, revealing structure, operation, and application.
5.96. In support of its argument that the Panel erred in attributing relevance to the exemptions
for the purposes of its analysis under Article 2.1, the United States relies on the Appellate Body's
statement in US – Tuna II (Mexico) that "[it] only need[ed] to examine the distinction that
account[ed] for the detrimental impact on Mexican tuna products."
489 This statement merely
confirms that the inquiry into whether the detrimental impact of a technical regulation on imported
products stems exclusively from legitimate regulatory distinctions has, as its focus, those
regulatory distinctions that account for such detrimental impact. Thus, those regulatory
distinctions are the distinctions that must be assessed to determine whether they are designed
and applied in an "even-handed" manner, such that they may be considered "legitimate" for the
purposes of Article 2.1. However, the statement of the Appellate Body on which the United States
relies does not exclude consideration of other relevant elements that may be probative of whether
the detrimental impact on imported products stems exclusively from legitimate regulatory
distinctions. Indeed, in US – Tuna – II (Mexico) , the Appellate Body recalled that, in making a
determination of whether a measure is de facto inconsistent with Article 2.1, "a panel must
carefully scrutinize the particular circumstances of the case, that is, the design, architecture,
revealing structure, operation, and application of the technical regulation at issue, and, in
particular, whether that technical regulation is even-handed."
490
5.97. To us, the analytical framework followed by the Appellate Body in examining claims under
Article 2.1 does not support the United States' contention that a panel may examine only the
regulatory distinctions causing the detrimental impact on imported products, for the purposes of
assessing the consistency of a technical regulation with Article 2.1 of the TBT Agreement.
491 We,
therefore, disagree with the United States ' reading of the Appellate Body report in US – Tuna II
(Mexico).
5.98. For the reasons expressed above, we find that the Panel did not err, in paragraph 7.203 of
the Panel Reports, in finding that the exemptio ns prescribed by the amended COOL measure are
relevant for the analysis of whether the detrimental impact of that measure on imported livestock
stems exclusively from legitimate regulatory distinctions.

488 Appellate Body Reports, US – COOL, para. 271 (quoting Appellate Body Report, US – Clove
Cigarettes, para. 182).
489 Appellate Body Report, US – Tuna II (Mexico), para. 286 (original emphasis); United States'
appellant's submission, para. 195.
490 Appellate Body Report, US – Tuna II (Mexico), para. 225 (quoting Appellate Body Report, US – Clove
Cigarettes, para. 182).
491 United States' appellant's submission, para. 195.
WT/DS384/AB/RW • WT/DS386/AB/RW

5.1.2.3.2 Whether the Panel erred in find ing that the exemptions under the amended
COOL measure support a conclusion that th e detrimental impact of that measure on
imported livestock reflects discrimination
5.99. We turn now to the second ground of the United States' appeal of the Panel's finding that
the exemptions under the amended COOL measur e support a conclusion that the detrimental
impact of that measure on imported livestock does not stem exclusively from legitimate regulatory
distinctions. The United States claims that, "asi de from the fact that the exemptions are not
relevant" to the analysis under Article 2.1, the Panel erred by failing to take into account the
following considerations: (i) that the exemptions apply equally to meat derived from imported and
domestic livestock and are, therefore, even hand ed in their design and application; (ii) the
"legitimate desire of Members to adjust the scope of their technical regulations" to take account of
cost considerations; and (iii) that, in the light of the "enhanced accuracy" of the labels prescribed
by the amended COOL measure, the recordkeeping burden entailed by that measure can now "be
explained by the need to provide origin information to consumers".
492
5.1.2.3.2.1 Whether the Panel erred by failing to take into account that the exemptions
under the amended COOL measure apply equally to meat derived from imported and
domestic livestock
5.100. The United States claims that, in concluding that the exemptions under the amended COOL
measure support a conclusion that the detrimental impact of that measure on imported livestock
reflects discrimination, the Panel erred by failing to take into account that these exemptions apply
equally to meat derived from imported and domestic livestock and are, therefore, even handed in
their design and application.
5.101. The United States asserts that it is uncontested that neither the design, nor the operation,
of the exemptions disadvantage Canadian and Me xican livestock exports. In this regard, these
exemptions are "wholly different" from the exemptions under the measures at issue in US – Clove
Cigarettes and EC – Seal Products .
493 The United States explains that, in US – Clove Cigarettes ,
the Appellate Body found that the exemption of menthol cigarettes from the ban on flavoured
cigarettes was not even handed because producers of menthol cigarettes – mainly US producers –
could take advantage of this exemption notwithstanding the fact that menthol cigarettes presented
a risk similar to that pres ented by the banned products. 494 The United States adds that, similarly,
the panel in EC – Seal Products found that the indigenous community exemption was not even
handed in the light of the fact that, while seal products from Greenland could benefit from that
exemption, seal products from Canada could no t, even though the hunts from which these seal
products derived "greatly approximated one another". 495 According to the United States, the same
dynamic does not arise in the case of the ex emptions under the amended COOL measure. The
United States submits that, by failing to take this into account, the Panel erred in finding that the
exemptions under the amended COOL measure suppo rt a conclusion that the detrimental impact
of that measure on imported livestock reflects discrimination in violation of Article 2.1 of the
TBT Agreement.
5.102. Canada responds that the even-handednes s of the exemptions, in and of themselves, was
not at issue before the Panel. Instead, the ex emptions constitute a component of the overall
architecture of the amended COOL measure that reveals that this measure is not designed and
applied in an even-handed manner, and causes ar bitrary and unjustifiable discrimination against
imported livestock.
496
5.103. For its part, Mexico, like Canada, contends that the even-handedness of the exemptions
under the amended COOL measure was not at issue before the Panel because they are not
regulatory distinctions that account for the detrimental impact on imported livestock. Accordingly,

492 United States' appellant's submission, para. 187 (quoting Appellate Body Reports, US – COOL,
para. 349).
493 United States' appellant's submission, para. 208.
494 United States' appellant's submission, para. 208 (referring to Appellate Body Report, US – Clove
Cigarettes, para. 225).
495 United States' appellant's submission, para. 208 (referring to Panel Reports, EC – Seal Products,
para. 7.317).
496 Canada's appellee's submission, para. 68.
WT/DS384/AB/RW • WT/DS386/AB/RW

the question of whether the exemptions under the amended COOL measure are designed or
applied in an even-handed manner is entirely irrelevant to the pertinent legal issue, i.e. whether
the relevant regulatory distinctions that account for the detrimental impact on imported livestock
are designed or applied in an even-handed manner. Responding further to the United States'
characterization of the exemptions as "even handed", Mexico submits that the fact that certain
US entities may enjoy cost savings as a result of the exemptions has no bearing on the fact that
these exemptions, as a central element of the ov erall design and architecture of the amended
COOL measure, contribute to the informational "disconnect" between, on the one hand, the origin
information tracked and transmitted by producers of livestock and, on the other hand, the origin
information conveyed to consumers through the mandatory labels.
497
5.104. In our analysis above, we have considered that other elements of a measure, apart from
the regulatory distinctions causing detrimental impact, may be relevant for assessing whether
these regulatory distinctions are designed and applied in an even-handed manner and are, thus,
"legitimate" for the purposes of Article 2.1 of the TBT Agreement. In particular, we have
considered that such other elements are relevant for that assessment to the extent that they are
probative of whether the detrimental impact on like imported products stems exclusively from
legitimate regulatory distinctions.
498
5.105. It follows, in our view, that the Panel was not required to assess the even-handedness of
the exemptions under the amended COOL measure because these exemptions are not relevant
regulatory distinctions under that measure. Inst ead, the exemptions form part of the overall
architecture of the amended COOL measure that the Panel scrutinized in order to assess whether
the relevant regulatory distinctions at issue – i. e. the distinctions between the three production
steps, as well as the mandatory labels to be affixed to muscle cuts of beef and pork – are designed
and applied in an even-handed manner. Thus, wh ether the exemptions under the amended COOL
measure are, in and of themselves , designed and applied in an even-handed manner is not
relevant for the inquiry under Article 2.1. The qu estion is not whether the exemptions are even
handed in the sense that they exclude from the scope of the COOL requirements both domestic
and imported meat products. Instead, the questi on is whether the exemptions, as part of the
overall architecture of the amended COOL measure, demonstrate that the relevant regulatory
distinctions are not designed and applied in an even-handed manner.
5.106. The Panel ultimately found that the exem ptions, as an integral part of "the overall
architecture" of the amended COOL measure, were "of central importance" to its overall analysis
under Article 2.1
499 because between 57.7% and 66.7% of be ef consumed in the United States,
and between 83.5% and 84.1% of pork muscle cuts , will convey no consumer information on
origin despite imposing an upstream recordkeeping burden on producers and processors that has a
detrimental impact on competitive opportunities for imported livestock. 500 For this reason, the
exemptions prescribed by the amended COOL measure are probative of whether the detrimental
impact of that measure on imported livestock stems exclusively from legitimate regulatory
distinctions.
5.107. Finally, we consider that the United States' reliance on the exemptions prescribed by the
measures at issue in EC – Seal Products and US – Clove Cigarettes is unavailing. By contrast with
the exemptions under the amended COOL measure, the exemptions prescribed by the measures at
issue in EC – Seal Products and US – Clove Cigarettes were, in fact, the regulatory distinctions
causing detrimental impact on the imported prod ucts at issue. As such, it was necessary to
examine, for the purposes of Article 2.1, whethe r these exemptions were designed and applied in
an even-handed manner such that they could be co nsidered legitimate for the purposes of that
provision.
5.108. For the reasons expressed above, we find that the Panel did not err, in
paragraphs 7.273-7.276 of the Panel Reports, by not attributing significance to the fact that the
exemptions under the amended COOL measure apply equally to meat derived from imported and
domestic livestock.

497 Mexico's appellee's submission, para. 69 (referring to Panel Reports, para. 7.272).
498 See supra, para. 5.93.
500 Panel Reports, para. 7.273.
WT/DS384/AB/RW • WT/DS386/AB/RW

5.1.2.3.2.2 Whether the Panel erred by failing to take into account that cost
considerations provide a non-discriminato ry basis for the exemptions under the
amended COOL measure
5.109. The United States claims that, in concluding that the exemptions under the amended COOL
measure support a conclusion that the detrimental impact of that measure on imported livestock
reflects discrimination, the Panel erred by failing to take into account the "legitimate desire of
Members to adjust the scope of their technical regulations" to take account of cost
considerations.
501
5.110. According to the United States, the exemptions under the amended COOL measure
constitute "important mechanisms that policy makers use to control costs of measures in pursuit of
legitimate government objectives".
502 The United States explains that, while its intent is to provide
consumers with accurate and meaningful information on the origin of the meat that they purchase,
it does not intend to do so "at any cost". 503 Accordingly, even if such information was, and
remains, desired by consumers, the United States, ultimately, set a slightly lower level of
fulfilment by including exemptions in the amende d COOL measure, as is the prerogative of any
regulator.504 The United States further argues that th e cost savings provided by the exemptions
under the amended COOL measure are real and, in this regard, the United States asserts that it is
uncontested that removing these exemptions would increase recordkeeping, verification, and
segregation costs associated with the amended COOL measure. 505 The United States highlights
that it is not the only Member seeking to balance, on the one hand, the provision of information to
consumers with, on the other hand, the costs of providing such information. Thus, for the
United States, the exemptions under the amended COOL measure reflect sound public policy,
rather than arbitrary discrimination.
506
5.111. Canada submits that the Panel correctly found that, while cost considerations "are not
per se prohibited", they do not constitute a "supervening justification for discriminatory
measures".507 In addition, Canada contends that the cost savings achieved by exempt US entities
do not detract from the fact that the amende d COOL measure arbitrarily and unjustifiably
discriminates against Canadian livestock. Thus, for Canada, the position of the United States that
the cost savings achieved by the exemptions ju stify the discriminatory effects of the amended
COOL measure is "untenable".508
5.112. Mexico contends that any cost savings achieved by the exemptions from the COOL
requirements cannot excuse, justify, counterbalanc e, or otherwise legitimize the discriminatory
effects of the amended COOL measure. 509 These cost savings enjoyed by US entities that remain
exempt from the COOL requirements do not, in Mexico's view, alter the reality that the exemptions
remove a significant proportion of products from the scope of the requirements of the amended
COOL measure, thereby preventing the origin in formation that is collected by producers of
livestock from being conveyed to consumers. Mexico highlights that it was for this reason that the
Panel considered the exemptions as evidence that the recordkeeping burden giving rise to the
detrimental impact on imported livestock cannot be explained by the need to convey to consumers
information regarding the countries where livestock were born, raised, and slaughtered. 510 Mexico
submits that the cost savings achieved by the exemptions do not affect this conclusion.
5.113. Turning to our analysis, we recall that, in US – Clove Cigarettes , the Appellate Body
considered that "[n]othing in Article 2.1 prevents a Member from seeking to minimize the potential
costs arising from technical regulations, provided that the technical regulation at issue does not

501 United States' appellant's submission, para. 187 (quoting Appellate Body Reports, US – COOL,
para. 349).
502 United States' appellant's submission, para. 211. (fn omitted)
503 United States' appellant's submission, para. 212. (emphasis omitted)
504 United States' appellant's submission, para. 212.
505 United States' appellant's submission, para. 213.
506 United States' appellant's submission, paras. 214-215.
508 Canada's appellee's submission, para. 76.
509 Mexico's appellee's submission, para. 72.
510 Mexico's appellee's submission, para. 70.
WT/DS384/AB/RW • WT/DS386/AB/RW

overtly or covertly discriminate against imports." 511 Thus, Members may seek to minimize the
costs entailed by technical regulations insofar as such technical regulations do not discriminate
against like imported products in violation of Article 2.1.
5.114. We note that the Panel explicitly engaged with the United States' defence of the
exemptions on the basis of the cost savings that they allegedly entail. In this regard, the Panel
recalled the guidance of the Appellate Body in US – Clove Cigarettes and considered that cost
considerations do not provide "supervening justification for discriminatory measures".
512 On that
basis, the Panel did not consider that "such practical considerations justify the discriminatory
nature of the amended COOL measure or call into question the Appellate Body's concern with the
exemptions in the original dispute."513
5.115. As we see it, the Panel's analysis, as set forth above, comports with the Appellate Body's
guidance in US – Clove Cigarettes . We see no error in the Panel's finding that cost considerations
do not constitute a "supervening justification for discriminatory measures". 514 In particular, we do
not consider that the cost savings enjoyed by US entities that are exempt from the COOL
requirements mitigate the Panel's finding that, as a result of the exemptions, between 57.7% and
66.7% of beef consumed in the United States , and between 83.5% and 84.1% of pork muscle
cuts, will convey no consumer information on origin, despite imposing recordkeeping burdens
upstream that have a detrimental impact on competitive opportunities for imported livestock.515
5.116. In the light of the above, we find that the Panel did not err, in paragraph 7.275 of the
Panel Reports, in considering, with respect to the cost considerations that allegedly justify the
existence of the exemptions, that cost considerations do not constitute a supervening justification
for discriminatory measures.
5.1.2.3.2.3 Whether the Panel erred by fa iling to take into account the enhanced
accuracy of the revised labels under the amended COOL measure
5.117. The United States claims that, in determining that the exemptions constitute evidence that
the detrimental impact of the amended COOL measure on imported livestock reflects
discrimination, the Panel erred by failing to take into account that, in the light of the "enhanced
accuracy" of the labels prescribed by the am ended COOL measure, the recordkeeping burden
entailed by that measure can now be explained by the need to provide origin information to
consumers.
516
5.118. According to the United States, the scope of the exemptions under the original COOL
measure further corroborated a problem with that measure, namely, that adequate information
was not provided on Labels B and C to justify the recordkeeping required of producers and
processors of livestock.
517 The United States asserts that the amended COOL measure has
corrected this "underlying problem" so that more detailed and accurate information is provided to
consumers on the labels. 518 The United States further contends that, although the exemptions
have not been eliminated, this alone cannot be determinative of whether the detrimental impact of
the amended COOL measure on imported livestock stems exclusively from legitimate regulatory
distinctions. In this regard, the United States asserts that the scope of the exemptions "no longer
exacerbate any underlying problem since the underlying problem no longer exists".
519 In the
United States' view, the Panel erred by failing to examine whether, in the light of the more
detailed and accurate information provided on labels to consumers, the recordkeeping burden
imposed on producers of livestock can now be expl ained by the need to provide origin information
to consumers, notwithstanding the continued existence of the exemptions.

511 Panel Reports, para. 7.275 (quoting Appellate Body Report, US – Clove Cigarettes, fn 431 to
para. 221).
512 Panel Reports, para. 7.275.
513 Panel Reports, para. 7.276.
514 Panel Reports, para. 7.275.
515 Panel Reports, para. 7.273.
516 United States' appellant's submission, para. 187.
517 United States' appellant's submission, para. 218.
518 United States' appellant's submission, para. 219.
519 United States' appellant's submission, para. 220.
WT/DS384/AB/RW • WT/DS386/AB/RW

5.119. Canada responds that the increased reco rdkeeping burden entailed by the amended COOL
measure, and the fact that the greatest incremen tal improvement in origin information achieved
by the 2013 Final Rule is for Labels B and C in a market dominated by Label A, reveal how
marginal the contribution of the amended COOL measure is to the rectification of the informational
"disconnect" identified by the Appellate Body in the original disputes. Canada, thus, submits that
the United States' characterization of the Panel's assessment of the exemptions in its analysis of
the legitimacy of regulatory distinctions under Article 2.1 does not withstand scrutiny.
520
5.120. For its part, Mexico considers that the United States' arguments lack merit because, "even
if more detailed and accurate origin information is now provided to consumers" of meat sold in
retail establishments, there is still no origin information at all provided to consumers with respect
to the majority of beef products consumed in the United States. Thus, in Mexico's view, there
continues to be a significant "disconnect" between, on the one hand, the information collected by
producers and processors of livestock and, on the other hand, the information ultimately conveyed
to consumers of meat products in the US market.
521
5.121. Turning to our analysis, we do not agree with the United States that the Panel failed to
examine whether the nature and scope of the exemptions establish a "disconnect" between, on the
one hand, the amount of information collected by upstream producers and, on the other hand, the
amount of information conveyed to consumers that is so disproportionate as to support the
conclusion that the detrimental impact of the amended COOL measure reflects discrimination in
violation of Article 2.1. 522 We have found above that several discrete findings made by the Panel
support the conclusion that the recordkeeping and verification requirements of the amended COOL
measure impose a disproportionate burden on producers and processors of livestock that cannot
be explained by the need to provide origin information to consumers. 523 In particular, as regards
the exemptions from the scope of the COOL requ irements, the Panel found that, as an integral
part of the "overall architecture" of the amen ded COOL measure, these exemptions were "of
central importance" to its overall analysis under Article 2.1 524 because between 57.7% and 66.7%
of beef consumed in the United States, and be tween 83.5% and 84.1% of pork muscle cuts, will
convey no consumer information on origin despit e imposing recordkeeping burdens upstream that
detrimentally impact competitive opportunities for foreign livestock. 525 We see no error in the
Panel's approach.
5.122. Accordingly, we disagree with the United States that the Panel failed to take into account
the "enhanced accuracy" of the labels prescribed by the amended COOL measure in determining
that the exemptions support a conclusion that the detrimental impact of that measure on imported
livestock does not stem exclusively from legitimate regulatory distinctions. Thus, we find that the
Panel did not err, in paragraph 7.277 of the Pane l Reports, in considering that the exemptions
prescribed by the amended COOL measure support a conclusion that the detrimental impact of
that measure on imported livestock does not stem exclusively from legitimate regulatory
distinctions.
5.1.2.3.3 Whether the Panel erred by fa iling to evaluate the operation of the
exemptions under the amended COOL measure in the US market
5.123. We turn now to the third and final ground of the United States' appeal of the Panel's
findings concerning the exemptions under the amended COOL measure in its assessment of the
consistency of that measure with Article 2.1 of the TBT Agreement. The United States submits
that, in concluding that the exemptions under the amended COOL measure support a conclusion
that the detrimental impact of that measure reflects discrimination, the Panel erred by failing to
evaluate the operation of the exemptions in the US market.526

520 Canada's appellee's submission, para. 79.
521 Mexico's appellee's submission, para. 76.
522 United States' appellant's submission, para. 216.
523 See supra, paras. 5.46-5.47.
525 Panel Reports, para. 7.273.
526 United States' appellant's submission, para. 188.
WT/DS384/AB/RW • WT/DS386/AB/RW

5.124. The United States asserts that the Panel drew a conclusion that distinct distribution
channels for the sale of meat products to exempt entities do not exist simply by repeating a
statement of the original panel that "the ultimate disposition of a meat product is often not known
at any particular stage of the production chain"
527, and a statement by the Appellate Body that
"information regarding the origin of all livestock will have to be identified, tracked, and transmitted
through the chain of production by upstream prod ucers … even though 'a considerable proportion'
of the beef and pork derived from that livest ock will ultimately be exempt from the COOL
requirements and therefore ca rry no COOL label at all." 528 The United States contends that
whether information regarding the origin of all livestock will have to be identified, tracked, and
transmitted through the chain of production by upst ream producers is critical to the weight that
the Panel could have placed on the exemptions for the purpose of its analysis of whether the
detrimental impact of the amended COOL measure reflects discrimination. Thus, the Panel, in the
United States' view, was required to consider whether the statement that it relied on is currently
supported by the operation of the US market, or whether information regarding the origin of less
than all livestock is being identified, tracked, and transmitted by producers and processors of
livestock. The United States asserts that the Panel failed to undertake such an analysis and,
accordingly, the Panel erred because it had no ba sis to conclude that all US slaughterhouses,
wholesalers, and exempt retailers take on reco rdkeeping costs that they are not obligated to
assume.
529
5.125. The United States notes that, although it is not aware of the extent of use of distinct
distribution channels by US economic operators, neither Canada nor Mexico presented any
evidence that slaughterhouses, wholesalers, and exempt establishments are not making use of the
exemptions to establish lower cost channels of distribution. 530 In the United States' view, the
limited evidence on the record relating to this issu e suggests that distinct distribution channels for
sales to exempt establishments do exist. Thus, submits the United States, the Panel's conclusion is
unsupportable.531
5.126. Canada submits that the United States' challenge to the Panel's conclusion essentially
concerns the merits of the adopted findings of the original panel and the Appellate Body in the
original disputes to the effect that the ultimate disposition of a meat product is often not known at
any particular stage of distribution. These findings, contends Canada, are factual findings and, to
the extent that the United States seeks to challenge them, this challenge is outside of the scope of
this appeal in the absence of an expl icit claim under Article 11 of the DSU.
532 Canada points out
that it relied on the findings of the panel and the Appellate Body in the original disputes concerning
the operation of the exemptions in the US market in making its prima facie case under Article 2.1
of the TBT Agreement. According to Canada, the Panel correctly relied on those findings in its
assessment of the exemptions.
533 Canada highlights that the Appellate Body has considered that
"doubts could arise about the objective nature of an Article 21.5 panel's assessment if, on a
specific issue, that panel were to deviate from the reasoning in the original panel report in the
absence of any change in the underlying evidence in the record." 534 Thus, having not been
presented with evidence that would affect the findings of the original panel concerning the
operation of the exemptions in the US market, the compliance Panel was correct in not deviating
from the reasoning of the original panel on this issue.
5.127. Canada submits further that the United St ates' criticism of Canada for failing to present
evidence that distinct distribution channels do not exist for the sale of meat to entities that are
exempt from the COOL requirements is inconsistent with basic principles concerning the allocation

527 United States' appellant's submission, para. 233 (quoting Panel Reports, para. 7.272, in turn quoting
United States' response to original panel question No. 93, para. 16).
528 United States' appellant's submission, para. 233 (quoting Panel Reports, para. 7.272, in turn quoting
Appellate Body Reports, US – COOL, para. 344 (emphasis original; fn omitted)).
529 United States' appellant's submission, para. 233.
530 United States' appellant's submission, para. 244.
531 United States' appellant's submission, para. 246.
532 Canada's appellee's submission, paras. 33 and 36.
533 Canada's appellee's submission, para. 34 (referring to Canada's first written submission to the Panel,
534 Canada's appellee's submission, para. 87 (quoting Appellate Body Report, US – Upland Cotton
(Article 21.5 – Brazil), para. 386, in turn quoting Appellate Body Report, US – Softwood Lumber VI
(Article 21.5 – Canada), para. 103).
WT/DS384/AB/RW • WT/DS386/AB/RW

of the burden of proof in WTO dispute settlement proceedings. 535 A party asserting a fact must
provide proof thereof. Thus, Canada did not have a burden to discharge with respect to an adopted
finding made by the original panel that the United States did not take issue with before the
compliance Panel. Instead, had the United States claimed before the compliance Panel that distinct
distribution channels currently exist for the sale of meat to entities that are exempt from the COOL
requirements, the United States would have borne the burden of proving this assertion.
5.128. For Mexico, the United States is attemp ting to shift its own burden of proof to the
complainants or the Panel.
536 Noting the United States' argument that the Panel committed legal
error because it did not evaluate evidence and make sufficient findings in relation to the
US market, Mexico points out that the United States did not present any arguments or evidence to
the compliance Panel that called into question the findings of the panel and the Appellate Body in
the original disputes concerning the effect of th e exemptions in the US market. Mexico highlights
that it did not bear a burden to refute an argument that the United States did not raise.
537
5.129. Turning to our analysis of whether the Panel erred by failing to evaluate the operation of
the exemptions in the US market, we recall that the Panel, in reaching its conclusion, noted that it
had "no evidence" before it that called into question the original panel's finding that "the ultimate
disposition of a meat product is often not known at any particular stage of the production
chain."
538 The United States asserts that it was for Canada and Mexico to adduce evidence
sufficient to establish whether, and to what extent, the ultimate disposition of a meat product is
known at any particular stage of the production chain.
539 In our view, having not been presented
with evidence that would affect the findings of the original panel concerning the operation of the
exemptions in the US market, it was appropriate for the Panel to have relied on those findings.
5.130. In the light of the foregoing considerat ions, we find that the Panel did not err, in
paragraph 7.272 of the Panel Reports, by failing to evaluate the operation of the exemptions
prescribed by the amended COOL measure in the US market.
5.1.3 Claims of Canada and Mexico under Article 2.1 of the TBT Agreement
5.131. We turn now to address the claims raised by Canada and Mexico in their other appeals
with regard to the Panel's findings under Article 2.1 of the TBT Agreement. Canada and Mexico do
not appeal the Panel's conclusion that the amended COOL measure is inconsistent with Article 2.1.
However, they challenge the Panel's assessmen t of certain elements of the amended COOL
measure in its analysis of whether the detrimental impact of that measure on imported livestock
stems exclusively from legitimate regulatory distinctions.
5.132. For Canada, the Panel failed to assess appropriately the relevance of Labels D and E, as
well as the prohibition of a trace-back system under the amended COOL measure, in its analysis of
whether the detrimental impact of that measure on imported livestock stems exclusively from
legitimate regulatory distinctions.
540 In Canada's view, Labels D and E, as well as the prohibition of
a trace-back system, demonstrate that the detrim ental impact of the amended COOL measure on
imported livestock does not stem exclusively from legitimate regulatory distinctions but, instead,
reflects arbitrary and unjustifiable discrimination in violation of Article 2.1.
5.133. Mexico alleges that the Panel erred in its assessment of the relevance of Label E for the
analysis of whether the detrimental impact of the amended COOL measure stems exclusively from
legitimate regulatory distinctions. 541 In Mexico's view, the labelling rules for ground beef – to
which Label E must be affixed – provide further evidence that the amended COOL measure is not
designed and applied in an even-handed manner, and that its detrimental impact on imported
livestock reflects arbitrary discrimination.
542 Mexico does not allege that the Panel erred in its

535 Canada's appellee's submission, para. 91.
536 Mexico's appellee's submission, para. 78.
537 Mexico's appellee's submission, para. 79.
538 Panel Reports, para. 7.272 (quoting Appellate Body Reports, US – COOL, para. 344, in turn referring
to Original Panel Reports, US – COOL, para. 7.417).
539 United States' appellant's submission, fn 284 to para. 243.
540 Canada's other appellant's submission, para. 156.
541 Mexico's other appellant's submission, para. 186.
542 Mexico's other appellant's submission, para. 197.
WT/DS384/AB/RW • WT/DS386/AB/RW

assessment of the relevance of Label D or of th e prohibition of a trace-back system under the
amended COOL measure.
5.134. We begin our analysis of the claims put forward by Canada and Mexico under Article 2.1 of
the TBT Agreement with Canada's claim concerning the Panel's treatment of Label D. Next, we
consider the claims of Canada and Mexico as they relate to the Panel's treatment of Label E.
Finally, we consider Canada's claim concerning the Panel's treatment of the prohibition of a
trace-back system under the amended COOL measure.
5.1.3.1 Whether the Panel erred in its asse ssment of Label D under Article 2.1 of the
TBT Agreement
5.135. Canada submits that Label D, as a part of the amended COOL measure's design,
architecture, and revealing structure, demonstrates that the detrimental impact of that measure
on imported livestock reflects arbitrary and unjustifiable discrimination prohibited by Article 2.1 of
the TBT Agreement. Accordingly, Canada submits that the Panel failed to assess appropriately the
relevance of Label D for the analysis of whethe r the detrimental impact of the amended COOL
measure stems exclusively from legitimate regulatory distinctions.
543
5.136. At the outset, we recall that, unlike Labels A, B, and C, which apply to muscle cuts of meat
derived from US-slaughtered livestock, Label D applies to muscle cuts of meat derived from
foreign-slaughtered livestock. Thus, under the amended COOL measure, Label D is to be affixed to
muscle cuts of meat that are imported into the Un ited States. We further recall that the amended
COOL measure introduced a change to the coverage of Label D. In this regard, under the original
COOL measure, Label D applied to "[i]mported covered commodities for which origin has already
been established as defined by this law (e.g., born, raised, and slaughtered or produced) and for
which no production steps have occurred in the United States ".
544 By contrast, the 2013 Final Rule
refers to "[m]uscle cut covered commodities derived from an animal that was slaughtered in
another country … including muscle cut covered commodities derived from an animal that was
born and/or raised in the United States and slaughtered in another country".545
5.137. Under both the original and the amended COOL measures, origin, for the purposes of
Category D muscle cuts of meat, is designated according to the definition used for customs
purposes546 – i.e. based on the rules of substantial transformation. In practice, this means that
Label D indicates "Product of Country X", with "X" representing the foreign country where the
livestock from which the muscle cuts derive were slaughtered.
547 By contrast, Labels A, B, and C
indicate production step information concerning th e place(s) of birth, raising, and slaughter for
US-slaughtered livestock based on the records collected in accordance with the recordkeeping and
verification requirements under the amended COOL measure. While, in principle, Label D indicates
only the place of slaughter on muscle cuts deriving from foreign-slaughtered livestock
548, the 2013
Final Rule introduced a voluntary option to "include more specific location information related to
production steps (i.e., born, raised, and slaughtered) provided records to substantiate the claims
are maintained".
549
5.138. In its overall assessment of whether the detrimental impact of the amended COOL
measure stems exclusively from legitimate regulatory distinctions, the Panel considered the
contention of the complainants that the requirements for Label D weigh against the "even-
handedness" of the amended COOL measure. Noting that the Appellate Body had observed, in the
original disputes, that Label D, under the original COOL measure, did not convey information on
the place of an animal's birth or raising
550, the Panel observed that this has not been modified

543 Panel Reports, para. 7.279.
544 Panel Reports, para. 7.128 (quoting 2009 Final Rule (AMS), Section 65.300(f)). (emphasis added by
the Panel)
545 Panel Reports, para. 7.128 (quoting 2013 Final Rule, Section 65.300(f)(2)). (emphasis added by the
Panel)
546 Panel Reports, para. 7.15 (referring to 2009 Final Rule (AMS), Section 65.300(f); and
2013 Final Rule, Section 65.300(f)(2)).
547 Panel Reports, para. 7.15 (referring to Original Panel Reports, US – COOL, para. 7.674; and
Appellate Body Reports, US – COOL, para. 241).
548 See Panel Reports, para. 7.132 and fn 317 thereto.
549 Panel Reports, para. 7.19 (quoting 2013 Final Rule, Section 65.300(f)(2)).
550 Panel Reports, para. 7.279 (referring to Appellate Body Reports, US – COOL, para. 343).
WT/DS384/AB/RW • WT/DS386/AB/RW

under the amended COOL measure. The Panel considered, however, that the complainants had not
provided evidence of Category D animals that we re not born and raised in the country in which
they were slaughtered, and that there was "nothi ng before [it] to suggest" that muscle cuts
bearing Label D stating "Product of Country X" would not derive from animals that were born,
raised, and slaughtered in that country. On this basis, the Panel considered that, although the
omission of production step information would result in the provision of less detailed information
on Label D, this was not apt to mislead consumers of Category D muscle cuts "in the same
fashion" as would the omission of countries of raising on Labels B and C. The Panel further
considered the relatively small portion of Category D muscle cuts in the US market, and the
absence of a claim that Label D creates any detrimental impact. Ultimately, the Panel was not
convinced that Label D rules of substantial transfor mation are compelling evidence of arbitrary or
unjustifiable discrimination.
551
5.139. On appeal, Canada submits that the Pa nel's reliance on the small market share of
Category D muscle cuts in the United States was misplaced. According to Canada, statistics
submitted to the Panel demonstrate that Canada exports between 500,000 and 860,000 pounds of
beef and between 630,000 and 710,000 pounds of pork to the United States on an annual basis.552
Moreover, when feed is cheaper in Canada than in the United States, economic incentives exist to
import US animals into Canada that can then be used to produce muscle cuts that are then
available for export to the United States.
5.140. Canada further contends that the Panel improperly faulted Canada for failing to provide
evidence of Category D animals that were not born and raised in the country in which they were
slaughtered. Canada notes that, as the Panel observ ed, Canada does not track the life histories of
animals. However, in the light of the export volumes of meat from Canada to the United States,
and the "sometimes significant imports of livestock", Canada submits that it is "reasonable" to
infer that at least some Category D meat from Canada is obtained from animals not born and
raised in Canada. In any event, Canada submits th at, by requiring positive evidence of Category D
animals that were not born and raised in the country in which they were slaughtered, the Panel
placed undue importance on "actual trade effects" for the purposes of its analysis under
Article 2.1, "despite having previously acknowledged that 'there is no need to verify actual trade
effects to dispose of claims under Article 2.1'."
553
5.141. Canada also takes issue with the Panel's dismissal of its arguments concerning Label D on
the ground that Canada had not challenged Label D as causing a detrimental impact on Canadian
livestock. According to Canada, whether an aspect of a challenged technical regulation is
responsible for the detrimental impact on imported products is not determinative of its relevance
for the analysis of the legitimacy of regulatory distinctions under Article 2.1. Instead, the "key
determinant" is whether an element of the challenged technical regulation is probative of the
existence of arbitrary or unjustifiable discrimination or an absence of even-handedness.
554
5.142. The United States responds that, because the question posed in the second step of the
analysis under Article 2.1 is whether the detrimental impact on imported products reflects
discrimination, only those regulatory distinctions that account for such detrimental impact can
answer that question. The United States highlights, in this regard, that Canada has neither argued,
nor proved, that there is a detrimental impact on Category D muscle cuts produced in Canada and
exported to the United States.
555 The United States further submits that Canada has failed to
prove that Label D contributes to any "origin-ba sed discrepancy" between the accuracy of Label A
as compared to the accuracy of the other labels prescribed by the amended COOL measure.556 Nor
has Canada, in the United States' view, proven that Label D is otherwise "arbitrary".
5.143. According to the United States, while Canada apparently considers Label D to be relevant
for the analysis because it allegedly "demonstrates the dissonance" between, on the one hand, the
United States' objective of ensuring that label information accurately reflects the origin of muscle

551 Panel Reports, para. 7.279.
552 Canada's other appellant's submission, para. 160.
553 Canada's other appellant's submission, para. 162 (quoting Panel Reports, para. 7.183).
554 Canada's other appellant's submission, para. 162 (referring to Appellate Body Reports, US – COOL,
para. 272).
555 United States' appellee's submission, para. 252.
556 United States' appellee's submission, para. 253 (quoting Canada's other appellant's submission,
para. 159).
WT/DS384/AB/RW • WT/DS386/AB/RW

cuts and, on the other hand, the amended COOL measure's operation "in practice", Canada is
unable to prove that Category D animals were not born and raised in the same foreign country in
which they were slaughtered.
557 Thus, for the United States, the Panel was correct in determining
that there is no reason to conclude that Category D muscle cuts, bearing the label "Product of
Country X", will not be from animals "that are entirely a product of that country". 558 The
United States further disagrees with Canada's argument that the Panel erred by faulting Canada
for failing to provide evidence of Category D anim als that were not born and raised in the country
in which they were slaughtered.
5.144. The United States argues further that Canada's contention that a "dissonance" exists
between the objective of the amended COOL meas ure and what that measure actually achieves
reveals a misunderstanding of the analyses under Article 2.1 and Article 2.2 of the TBT Agreement.
According to the United States, there is no basis for the proposition that a regulatory distinction is
not "even handed", for the purposes of Article 2.1, merely because it does not "fulfil" the
measure's objective in "every way possible".
559
5.145. With respect to Canada's criticism of th e Panel for relying on the small market share of
Category D muscle cuts as a basis for concluding that Label D does not support a conclusion that
the detrimental impact of the amended COOL meas ure reflects discrimination, the United States
responds that Canada has not provided a reason as to why the Panel's reliance on this factor was
"misplaced".
560 In the United States' view, whether, and to what extent, a label is used is a
relevant factor in the inquiry under Article 2.1 in these disputes. The United States highlights, in
this regard, that the original panel concluded that muscle cuts bearing Label D constitute
somewhere between 0% and 0.3% of the US market.
5.146. At the outset, we note that Canada has framed its challenge to the Panel's consideration of
Label D as a failure of the Panel to assess appropriately the relevance of Label D for the analysis of
whether the detrimental impact of the amended C OOL measure stems exclusively from legitimate
regulatory distinctions or, instead, reflects arbitrary or unjustifiable discrimination in violation of
Article 2.1 of the TBT Agreement.
561 We recall, however, that the Panel considered that, "[t]o the
extent that Label D concerns the 'overall archit ecture' of the amended COOL measure, and hence
is relevant to the analysis of legitimate regulatory distinctions", it would consider Label D as it
relates to the relevant distinctions that it had identified "for other muscle cut labels".
562 Thus, the
Panel found that the requirements for Label D were, in fact, relevant for the analysis of whether
the detrimental impact of the amended COOL measure stems exclusively from legitimate
regulatory distinctions to the extent that Label D forms part of the overall architecture of that
measure. The Panel then considered the requirements for Label D in its overall analysis of whether
the detrimental impact of the amended COOL me asure on imported livestock stems exclusively
from legitimate regulatory distinctions. In conducting this analysis, the Panel stated that it was not
convinced that Label D rules of substantial transfor mation are compelling evidence of arbitrary or
unjustifiable discrimination. Canada takes issue with this statement of the Panel.
5.147. According to Canada, the Panel failed to recognize that the requirements for Label D,
together with the informational shortcomings iden tified by the Panel with respect to Labels B
and C, contribute to a labelling regime in which the only information that can be relied on as
invariably accurate is the information conveyed on Label A – i.e. origin information in respect of
livestock that were born, raised, and slaughtered exclusively in the United States.
563 Thus,
contends Canada, the purported intention of the United States "to ensure [that] label information
accurately reflects the origin of muscle cut covered commodities" is belied by the fact that a
consumer, who is fully informed of the meaning of different categories of labels under the
amended COOL measure, can only be assured of receiving complete and accurate information

557 United States' appellee's submission, para. 256 (quoting Canada's other appellant's submission,
para. 163).
558 United States' appellee's submission, para. 253 (quoting Panel Reports, para. 7.279). (emphasis
added by the United States)
559 United States' appellee's submission, para. 257.
560 United States' appellee's submission, para. 254 (quoting Canada's other appellant's submission,
para. 160).
561 Canada's other appellant's submission, paras. 156 and 163.
562 Panel Reports, para. 7.204.
563 Canada's other appellant's submission, para. 159.
WT/DS384/AB/RW • WT/DS386/AB/RW

when purchasing Category A muscle cuts. 564 This discrepancy, according to Canada, exposes the
arbitrary and unjustifiable character of the discrimination against Canadian livestock.
5.148. We recall that, in the original disputes, th e Appellate Body considered as being of central
importance to its overall analysis under Article 2.1 the lack of correspondence between, on the one
hand, the recordkeeping and verification requiremen ts of the original COOL measure and, on the
other hand, the limited consumer information conveyed through the labelling requirements of that
measure and the exemptions therefrom.
565 More specifically, the Appellate Body found that the
level of information conveyed to consumers was far less detailed and accurate than the
information required to be tracked and transmitted by upstream producers and processors of
livestock.
566 This was central to the Appellate Body's analysis under Article 2.1 because, as the
Appellate Body explained, it was those same re cordkeeping and verification requirements that
necessitated segregation and, thus, created an incentive for US producers to process exclusively
domestic livestock, and a disincentive to process imported livestock.567
5.149. To us, the accuracy of the muscle cut labe ls prescribed by the amended COOL measure is
a relevant factor to the extent that it demonstrates that the recordkeeping and verification
requirements of that measure impose a disproportionate burden on upstream producers and
processors in comparison with the level of information conveyed to consumers through the
mandatory labelling requirements. This comports with the Appellate Body's analysis in the original
disputes as outlined above. Thus, the focus of the inquiry under Article 2.1 for the purposes of
these disputes is not, in itself, the relative a ccuracy of the muscle cut labels prescribed by the
amended COOL measure. In particular, the releva nt question is not whether Label A fulfils the
objective of the amended COOL measure to a greater degree than Label D.
5.150. In examining Canada's claim as it relates to Label D, we consider it useful to juxtapose the
requirements for Labels B and C and the exemptions from the coverage of the COOL requirements
with the requirements for Label D. In our view, the informational shortcomings of Labels B and C,
as well as the exemptions from the coverage of the COOL requirements, are closely connected to
the source of the detrimental impact on imported livestock in these disputes, namely, the
recordkeeping and verification requirements for US-slaughtered livestock that create an incentive
for US producers to process exclusively domestic livestock, a disincentive to handle imported
livestock, and, consequently, a detrimental impact on such imported livestock. In particular, the
detailed information required to be tracked and transmitted by upstream producers may not be
conveyed to consumers as a result of the informational shortcomings of Labels B and C with regard
to the countries where US-slaughtered livestock were raised, and the exemptions from the
coverage of the COOL requirements. For this reason, the detrimental impact of the amended COOL
measure on imported livestock that is caused by the same recordkeeping and verification
requirements under the amended COOL measure cannot be explained by the need to provide
origin information to consumers.
5.151. By contrast, origin, for the purposes of Category D muscle cuts of meat, is based on the
rules of substantial transformation and, in practice, is a function of where the livestock from which
such muscle cuts derive were slaughtered. Accordin gly, it seems to us that the requirements for
Label D – as compared to the requirements for Labe ls B and C, as well as the exemptions – do not
have a sufficient nexus with the source of the detrimental impact on the imported products at
issue in these disputes, namely, the recordkeeping and verification requirements that apply to US-
slaughtered livestock and muscle cuts of meat deriving therefrom. Thus, because the requirements
for Label D do not have a sufficient nexus with the source of the detrimental impact on the
imported products at issue in these disputes, we are not convinced that these requirements are

564 Canada's other appellant's submission, para. 159 (quoting 2013 Final Rule, p. 31372).
565 Appellate Body Reports, US – COOL, para. 348.
566 Appellate Body Reports, US – COOL, para. 349.
567 Appellate Body Reports, US – COOL, para. 348.
WT/DS384/AB/RW • WT/DS386/AB/RW

probative of whether such detrimental impact stems exclusively from legitimate regulatory
distinctions.568
5.152. Ultimately, the Panel determined that the requirements for Label D did not support a
conclusion that the detrimental impact of th e amended COOL measure stems exclusively from
legitimate regulatory distinctions on the cumulative grounds that: (i) the omission of production
steps on Label D does not seem apt to mislead consumers regarding the origin of Category D
muscle cuts "in the same fashion" as would the omission of countries on Labels B and C; (ii) there
is a relatively small proportion of Category D muscle cuts in the US market; and (iii) no claim was
made that Label D creates any detrimental impact on imported livestock.
569
5.153. As regards the grounds on which the Panel dismissed Canada's claim concerning Label D
for the purposes of the analysis under Article 2.1, we note Canada's contention that the Panel
placed too much emphasis on actual trade patterns in requiring positive evidence of Category D
animals that were not born and raised in the co untry in which they were slaughtered, and in
expressing concern about the small market share of Label D muscle cuts in the US market. As we
have stated in connection with our disposition of the United States' appeal under Article 2.1, that
provision is concerned with competitive opportunities for like imported products rather than, more
narrowly, actual trade patterns or volumes. It is, therefore, unfortunate that the Panel seemed to
place emphasis on the latter aspect in disposing of the complainants' claims regarding the
requirements for Label D. In any event, we have found above that, because the requirements for
Label D do not have a sufficient nexus with the source of the detrimental impact on the imported
products at issue in these disputes, these requirements are not probative of whether such
detrimental impact stems exclusively from legitimate regulatory distinctions.
5.154. Turning to Canada's criticism of the Panel's reliance on the absence of a claim that Label D
creates any detrimental impact on imported livestock, we do not consider that whether an element
of a challenged technical regulation is, independently, the cause of the detrimental impact on
imported products is determinative of its relevance for the analysis of whether such detrimental
impact stems exclusively from legitimate regulatory distinctions. Instead, the relevant question is
whether that element of the challenged techni cal regulation is probative of whether the
detrimental impact of that technical regulation on imported products stems exclusively from
legitimate regulatory distinctions. As we have found above, because the requirements for Label D
do not have a sufficient nexus with the source of the detrimental impact on the imported products
at issue in these disputes, these requirements are not probative of whether such detrimental
impact stems exclusively from legitimate regulato ry distinctions. We, therefore, do not consider
that the Panel erred in stating that it was not convinced that "Label D rules of substantial
transformation" are compelling evidence that the detrimental impact of the amended COOL
measure on imported livestock reflects arbitrary or unjustifiable discrimination in violation of
Article 2.1.
570
5.155. In the light of the foregoing considerat ions, we find that the Panel did not err, in
paragraph 7.279 of the Panel Reports, in findin g that the requirements for Label D are not
compelling evidence of arbitrary or unjustifiable discrimination in violation of Article 2.1 of the
TBT Agreement.

568 We recognize that, while, in principle, Label D indicates only the place of slaughter on muscle cuts
deriving from foreign-slaughtered livestock, the 2013 Final Rule introduced a voluntary option to "include more
specific location information related to production steps (i.e., born, raised, and slaughtered) provided records
to substantiate the claims are maintained". (Panel Reports, para. 7.19 (quoting 2013 Final Rule, Section
65.300(f)(2))) Although the exercise of this voluntary option may, in a given case, result in a disconnect
between the information collected and the information provided on Label D to the extent that a Category D
animal was not born and raised in the country where it was slaughtered, we consider it important that the
provision of production step information on Label D is not mandatory in character. Thus, producers and
processors of foreign-slaughtered livestock are not required to collect information on Category D animals that
may not eventually be conveyed on Label D.
569 Panel Reports, para. 7.279.
570 Panel Reports, para. 7.279.
WT/DS384/AB/RW • WT/DS386/AB/RW

5.1.3.2 Whether the Panel e rred in its assessment of Label E under Article 2.1 of the
TBT Agreement
5.156. We turn now to address the claims of Canada and Mexico that the Panel committed legal
errors in its assessment of the relevance of Labe l E for the analysis of whether the detrimental
impact of the amended COOL measure stems exclusively from legitimate regulatory distinctions571,
as well as Canada's discrete claim under Article 11 of the DSU that the Panel disregarded certain
evidence that Canada had placed before it, and thereby acted inconsistently with its duty as
prescribed by that provision.
572
5.157. We recall that, unlike Labels A, B, C, and D, which all apply to muscle cuts of meat, Label E
applies to ground meat products. The requirements for Label E prescribed by the amended COOL
measure are the same as those that were prescribed under the original COOL measure. Thus,
under the amended COOL measure, Label E must in dicate all countries of origin of the meat
contained in the ground meat product, or that may reasonably be contained therein, based on the
60-day "inventory allowance".
573 Accordingly, when a raw material from a specific country has not
been in a processor's inventory for more than 60 days, that country shall no longer be included as
a possible country of origin on the label.574
5.158. In its overall analysis of whether the detrimental impact of the amended COOL measure
stems exclusively from legitimate regulatory distinctions, the Panel first recalled that, in the
original disputes, the complainants had not demonstrated that the labelling requirements for
ground meat caused detrimental impact on imported livestock. The Panel then noted that, in their
arguments in these compliance proceedings, the complainants referred to the large percentage of
meat under the amended COOL measure that would carry Label E, which omits point-of-production
information and contains "significant flexibility" as to which countries may be listed on the label.
The Panel considered, however, that the findings of the original panel on the ground meat labelling
rules had not been appealed in the original disputes, nor had they been reviewed in the
Appellate Body's analysis under Article 2.1. Further, the Panel considered that it was not clear that
the treatment of ground meat "is sufficiently connected to the relevant regulatory distinctions to
justify incorporation into [the Panel's] broad assessment" of the design and operation of the
amended COOL measure.
575 In this regard, the Panel noted that the USDA has explained that the
production of ground meat entails the processing of trimmings of diverse origin that are ground
into a final product, and that the ground meat labelling rules have been adapted to the purchasing,
inventory, and production practices of US beef grinders. 576 The Panel stated that the complainants
had not refuted the different forms of processing undergone by muscle cuts and ground meat, nor
had they submitted arguments as to the upstream recordkeeping burdens for ground meat.
Accordingly, in the light of the findings in the original disputes and the complainants' arguments
and claims in these compliance disputes, the Panel did not consider the requirements for Label E to
evidence that the detrimental impact of the am ended COOL measure reflects discrimination in
violation of Article 2.1.
577
5.159. Canada submits that the Panel erred by relying on the different forms of processing
undergone by muscle cuts and ground meat as support for the proposition that Label E should be
excluded from the analysis of whether the de trimental impact of the amended COOL measure
reflects discrimination. According to Canada, although the processing of meat differs depending on
whether the final product is a muscle cut or ground meat, the processing of both products involves
the input of livestock and results in the production of meat products. Canada submits that the
Panel failed to explain why the different forms of processing undergone by muscle cuts and ground
meat support its conclusion with respect to Label E. Canada adds that the Panel's approach with
respect to Label E is inconsistent with the Panel's correct approach to the exemptions under the
amended COOL measure. In particular, in assessing whether the detrimental impact of the
amended COOL measure stems exclusively from legitimate regulatory distinctions, the Panel took
into account the exemption from the COOL requirements of muscle cuts of meat that are
ingredients in processed food items. For Canada, it was, therefore, "unreasonable" for the Panel to

571 Canada's other appellant's submission, para. 165; Mexico's other appellant's submission, para. 196.
572 Canada's other appellant's submission, para. 172.
573 Panel Reports, para. 7.20.
574 Panel Reports, para. 7.493 (quoting 2009 Final Rule (AMS), Section 65.300(h)).
576 Panel Reports, para. 7.280 and fn 635 thereto.
577 Panel Reports, para. 7.280 and fn 635 thereto.
WT/DS384/AB/RW • WT/DS386/AB/RW

rely on the different forms of processing undergone by muscle cuts and ground meat as a basis for
its conclusion concerning the requirements for Label E.578
5.160. Canada further disagrees with the Panel's statement that "[t]he complainants [… did not]
submit arguments in this compliance dispute as to the upstream burdens relating to ground meat",
and alleges that the Panel disregarded evid ence and arguments submitted by Canada. 579 In this
connection, Canada points out that, in its second written submission to the Panel, Canada had
explained that, in practice, ground beef is produc ed from trimmings resulting from the cutting of
beef carcasses into steaks and roasts. Canada explains that these beef carcasses are derived from
cattle that are subject to the increased record keeping burden entailed by the amended COOL
measure. Thus, livestock used, or partly used, for the production of ground meat are subject to
the onerous tracking and verification requiremen ts of the amended COOL measure, even though
the information conveyed to consumers is far less detailed than that which is required to be
tracked and verified. For Canada, the Panel disregarded evidence and arguments submitted by
Canada and, therefore, acted inconsistently with its mandate under Article 11 of the DSU.
580
5.161. For its part, Mexico takes issue with the Panel's finding that, because the requirements for
Label E have not been shown to demonstrate a detrimental impact on imported livestock, Label E
"does not constitute a relevant regulatory distinction of the amended COOL measure for the
purposes of Article 2.1".
581 Mexico submits that this finding is entirely inconsistent with the Panel's
acknowledgement that the analysis under Article 2.1 must take into account "the 'overall
architecture' of the measure, and encompass[es] aspects of the measure that [are] not
themselves 'relevant regulatory distinctions' or independent sources of detrimental impact."
582
5.162. Mexico, like Canada, also contends that the Panel erred by relying on the different forms of
processing undergone by muscle cuts and ground meat as support for its conclusion concerning
the requirements for Label E. For Mexico, this is evident in the fact that muscle cuts of beef,
processed beef products, and products served in food service establishments, were all considered
by the Panel to be relevant for the purposes of the analysis under Article 2.1, despite the fact that
they all involve distinct production processes. Accordingly, Mexico asserts that the production
process for ground meat cannot constitute a legitimate justification for excluding Label E from the
analysis under Article 2.1.
583 Mexico submits that, as a central component of the amended COOL
measure that applies to a substantial proportion of covered beef products, the requirements for
Label E are relevant to the question of whether the detrimental impact of that measure stems
exclusively from legitimate regulatory distinctions.584
5.163. The United States responds that the clai ms of Canada and Mexico concerning the Panel's
treatment of the requirements for Label E are premised on the incorrect proposition that a
regulatory distinction that does not account for the detrimental impact on imported products is
relevant for the assessment of whether such detrimental impact stems exclusively from legitimate
regulatory distinctions. The United States emphasizes that, in the light of the findings of the
original panel, Label E, unquestionably, does not account for the detrimental impact on imported
livestock. Noting Mexico's argument that the Panel's approach to Label E, on the one hand, and its
approach to the exemptions under the amen ded COOL measure, on the other hand, are
inconsistent because both elements do not account for the detrimental impact on imported
livestock, the United States agrees with Mexico that, in this regard, the Panel's analysis is
inconsistent and is, therefore, in error. The United States clarifies that this incoherence, however,
proves only that the exemptions are not relevant for the analysis under Article 2.1, and that the
Panel erred in relying on them as a basis for finding that the amended COOL measure is
inconsistent with Article 2.1.
585
5.164. The United States further contends that Canada and Mexico incorrectly criticize the Panel
for relying on the fact that ground meat is produced from meat derived from different suppliers,
and through different means of processing, as a basis for concluding that the requirements for

578 Canada's other appellant's submission, para. 166.
579 Canada's other appellant's submission, para. 168 (quoting Panel Reports, para. 7.280).
580 Canada's other appellant's submission, para. 171.
581 Mexico's other appellant's submission, para. 186 (quoting Panel Reports, para. 7.207).
582 Mexico's other appellant's submission, para. 187 (quoting Panel Reports, para. 7.202).
583 Mexico's other appellant's submission, paras. 191-192.
584 Mexico's other appellant's submission, para. 189.
585 United States' appellee's submission, para. 264.
WT/DS384/AB/RW • WT/DS386/AB/RW

Label E do not evidence that the detrimental impact of the amended COOL measure reflects
discrimination. In the United States' view, Article 2.1 does not require the United States to apply
the same labelling rules to different products. As the United States explained to the Panel, the
USDA created separate labelling rules for ground meat based on the unique attributes regarding
the production of ground meat, which differs substantially from the production of muscle cuts.
586
5.165. We note that Canada and, in particular, Mexico suggest that the Panel found that Label E is
not relevant for the analysis of whether the detrimental impact of the amended COOL measure
stems exclusively from legitimate regulatory distinctions. 587 We observe that the Panel found that
the requirements for Label E do not constitute a relevant regulatory distinction under the amended
COOL measure.588 Subsequently, in its overall assessment of whether the detrimental impact of
the amended COOL measure stems exclusively from legitimate regulatory distinctions, the Panel
considered "other factors", including the requirem ents for Label E, on the basis that they "may
pertain to the amended COOL measure's 'design, architecture, revealing structure, operation, and
application' in the context of Article 2.1 of the TBT Agreement".
589 In particular, the Panel
explained that it would address these other factors with a view to examining the "significance of
such aspects" for the determination of whethe r the amended COOL measure is designed and
applied in a manner that constitutes a means of arbitrary or unjustifiable discrimination.590
5.166. Accordingly, although the Panel found that the requirements for Label E do not constitute a
relevant regulatory distinction under the amended COOL measure, it did not find, as Canada and
Mexico suggest, that these requirements were not relevant for the assessment of whether the
detrimental impact of the amended COOL measure stems exclusively from legitimate regulatory
distinctions. After considering the requirements for Label E in its overall assessment of whether the
detrimental impact of the amended COOL measure stems exclusively from legitimate regulatory
distinctions, the Panel stated that it "[did] not consider Label E to evidence the amended COOL
measure's violation of Article 2.1".
591 Canada and Mexico challenge this statement of the Panel as
failing to recognize that the requirements for Label E demonstrate that the detrimental impact of
the amended COOL measure does not stem exclusivel y from legitimate regulatory distinctions but,
instead, reflects arbitrary and unjustifiable discrimination in violation of Article 2.1.
5.167. The Panel's finding that Label E does not evidence the amended COOL measure's violation
of Article 2.1 appears to have rested essentially on two grounds: (i) that it was not clear that the
treatment of ground meat is sufficiently connected to the relevant regulatory distinctions under the
amended COOL measure; and (ii) that the original panel had found that the ground meat label had
not been shown to result in less favourable treatment for imported livestock.
592
5.168. Turning to the first of the two grounds abov e, we recall that the Panel considered that it
was not clear that the treatment of ground meat "is sufficiently connected to the relevant
regulatory distinctions to justify incorporation into [the Panel's] broad assessment" of the design
and operation of the amended COOL measure.
593 In this regard, the Panel noted that the USDA
had explained that the production of ground meat entails the processing of trimmings of diverse
origin that are ground into a final product, and that the ground meat labelling rules had been
adapted to the purchasing, inventory, and production practices of US beef grinders.
594
5.169. Canada and Mexico contend that the Panel's reliance on the differences in the processing
of ground beef and muscle cuts was in error. In this regard, Canada and Mexico claim that the
Panel's reliance on this factor is inconsistent with its correct approach to the exemptions under the
amended COOL measure for the purposes of its analysis under Article 2.1. Canada and Mexico
point out that the exemptions from the COOL requ irements for muscle cuts of beef sold in small
retail establishments, processed beef produc ts, and products served in food service

586 United States' appellee's submission, para. 267.
587 Canada's other appellant's submission, para. 172; Mexico's other appellant's submission, para. 185.
588 Panel Reports, para. 7.207.
589 Panel Reports, para. 7.278.
590 Panel Reports, para. 7.278.
591 Panel Reports, para. 7.280.
592 Panel Reports, para. 7.280.
593 Panel Reports, para. 7.280.
594 Panel Reports, para. 7.280 and fn 635 thereto.
WT/DS384/AB/RW • WT/DS386/AB/RW

establishments, were all considered by the Panel to be relevant for the purposes of the analysis
under Article 2.1, despite the fact that they all involve distinct production processes.595
5.170. Turning to our analysis, we recall that the Appellate Body has stated that technical
regulations are measures that, by their very nature, establish distinctions between products
according to their characteristics or their related processes and production methods. Thus, we do
not consider that differences between products regulated by the same technical regulation are
a priori irrelevant for the assessment of the consistency of that technical regulation with the
requirements of Article 2.1. However, for the reasons stated below, we do not consider that
whether the requirements for Label E support a conclusion that the detrimental impact of the
amended COOL measure stems exclusively from legitimate regulatory distinctions is a function of
the differences between the production processes for muscle cuts of meat, ground meat, and meat
products that are exempt from the coverage of the COOL requirements.
5.171. First, we note that the Panel identified the relevant regulatory distinctions in these disputes
as the distinctions between the three production steps, as well as the mandatory labels to be
affixed to muscle cuts of beef and pork.
596 Moreover, the Panel found that, in the context of the
muscle cut labels, and in comparison with th e original COOL measure, the amended COOL
measure entails increased detrimental impact on imported livestock. 597 The participants have not
appealed these findings. Both Canada and Mexico rely on the exemptions from the coverage of the
COOL requirements as support for their contention that the requirements for Label E demonstrate
that the detrimental impact of the amended CO OL measure does not stem exclusively from
legitimate regulatory distinctions. As we see it , the exemptions from the coverage of the COOL
requirements have a direct connection to the relevant regulatory distinctions under the amended
COOL measure and the source of the detrimental impact on the imported products in these
disputes – i.e. the recordkeeping and verification requirements that create an incentive for
US producers to process exclusively domestic livestock, a disincentive to handle imported
livestock, and, consequently, a detrimental impact on such imported livestock in the context of the
muscle cut labels. This is because, due to these exemptions, the detailed information required to
be tracked and transmitted by upstream producers is not necessarily conveyed to consumers on
the mandatory labels to be affixed to muscle cuts of beef and pork. For this reason, the
detrimental impact caused by the same recordke eping and verification requirements under the
amended COOL measure cannot be explained by the need to provide origin information to
consumers.
5.172. By contrast, we are not persuaded that the requirements applicable to Category E ground
meat have a sufficient connection to the recordkeeping and verification requirements that cause a
detrimental impact on imported livestock " in the context of the muscle cut labels ".
598 Nor do they
have a sufficient connection to the relevant regulatory distinctions at issue, i.e. the distinction
between the three production steps, as well as the mandatory labels to be affixed to muscle cuts
of beef and pork. In this regard, we note that the original panel had found that the flexibility
provided by the 60-day "inventory allowance" fo r the labelling of Category E ground meat was
available not only for meat grinders "but for market participants at every stage of [ground] meat
supply and distribution ".
599 Thus, contrary to what Canada and Mexico suggest, we are not
persuaded that Label E contributes, as the exempt ions do, to the lack of correspondence between,
on the one hand, the recordkeeping and verificati on requirements of the amended COOL measure
and, on the other hand, the limited consumer information conveyed through the retail labelling
requirements for muscle cuts of meat.600
5.173. Thus, we consider that the requirements for Label E are not sufficiently connected to the
relevant regulatory distinctions under the amended COOL measure, or the source of the
detrimental impact on imported livestock, to be probative of whether such detrimental impact
stems exclusively from legitimate regulatory distin ctions. Accordingly, we do not consider that the
Panel erred in stating that it was not clear that the treatment of ground meat "is sufficiently

595 Canada's other appellant's submission, para. 166; Mexico's other appellant's submission,
paras. 191-192.
596 Panel Reports, para. 7.198.
597 Panel Reports, para. 7.176.
599 Original Panel Reports, US – COOL, para. 7.434. (emphasis added)
600 Canada's other appellant's submission, para. 170.
WT/DS384/AB/RW • WT/DS386/AB/RW

connected to the relevant regulatory distinctions to justify incorporation into [the Panel's] broad
assessment" of the design and operation of the amended COOL measure.601
5.174. We note that, for Mexico, the requirements for Label E evidence that the detrimental
impact of the amended COOL measure on import ed livestock does not stem exclusively from
legitimate regulatory distinctions because Label E provides less detailed, and less accurate,
information on Category E ground meat compared with the information provided on the labels for
muscle cuts of meat.
602 As we have stated in connection with Canada's claim concerning the
Panel's consideration of Label D for the purposes of its analysis under Article 2.1, the focus of the
inquiry under Article 2.1 in these disputes is not, in itself, the relative accuracy of the labels
prescribed by the amended COOL measure. Instead, the accuracy of the labels prescribed by the
amended COOL measure is a relevant factor to the extent that it demonstrates that the
recordkeeping and verification requirements of that measure impose a disproportionate burden on
upstream producers and processors compared with the level of information conveyed to
consumers through the mandatory labelling requirements for muscle cuts of meat. For the reasons
stated above, we do not see this to be the case with the requirements for Label E.
5.175. Turning to the second of the two grounds referred to above, we recall Mexico's contention
that the Panel erred in dismissing Mexico's claim concerning the relevance of the requirements for
Label E for the analysis under Article 2.1 on the ba sis that the original panel had found that "the
complainants ha[d] not demonstrated that the ground meat label under the [original] COOL
measure results in less favourable treatment for imported livestock."
603 We recall that, in the
original disputes, the original panel had not specifically considered whether the detrimental impact
of the original COOL measure stemmed exclusively from legitimate regulatory distinctions. 604
Instead, the original panel's finding that the original COOL measure accorded less favourable
treatment to imported livestock than to domestic livestock in violation of Article 2.1 was based
only on the existence of a detrimental impact on imported livestock. Thus, the finding of the
original panel that the compliance Panel relied on was, essentially, a finding that Label E had not
been shown to cause a detrimental impact on imported livestock.
5.176. According to Mexico, the fact that the requirements for Label E do not independently cause
the detrimental impact on the imported products at issue in these disputes is not a sufficient
ground for the Panel's finding that Label E does not evidence that the amended COOL measure is
inconsistent with Article 2.1.
605 We do not consider that whether an element of a challenged
technical regulation is, independently, the cause of the detrimental impact on imported products to
be determinative of its relevance for the analysis of whether such detrimental impact stems
exclusively from legitimate regulatory distinctions. Instead, the relevant question is whether that
element of the challenged technical regulation is probative of whether the detrimental impact of
that technical regulation on imported products stems exclusively from legitimate regulatory
distinctions. For the reasons stated above, we do not consider that the requirements for Label E
are sufficiently connected to the relevant regulatory distinctions under the amended COOL
measure, or the source of the detrimental impact in the context of these disputes, to be probative
of whether such detrimental impact stems exclusively from legitimate regulatory distinctions.
5.177. It remains for us to consider Canada's claim that the Panel acted inconsistently with
Article 11 of the DSU by stating that "[t]he complainants [… did not] submit arguments in this
compliance dispute as to the upstream burdens relating to ground meat."
606 Canada points out
that, in its second written submission to the Pane l, Canada had explained that, in practice, ground

601 Panel Reports, para. 7.280.
602 Mexico's other appellant's submission, para. 195.
603 Original Panel Reports, US – COOL, para. 7.437.
604 In this regard, the Appellate Body noted in the original disputes:
The Panel seems to have considered its finding that the COOL measure alters the conditions of
competition to the detriment of imported livestock to be dispositive, and to lead, without more,
to a finding of violation of the national treatment obligation in Article 2.1. In this sense, the
Panel's legal analysis under Article 2.1 is incomplete. The Panel should have continued its
examination and determined whether the circumstances of this case indicate that the detrimental
impact stems exclusively from a legitimate regulatory distinction, or whether the COOL measure
lacks even-handedness.
(Appellate Body Reports, US – COOL, para. 293)
605 Mexico's other appellant's submission, paras. 186-187.
606 Canada's other appellant's submission, para. 168 (quoting Panel Reports, para. 7.280).
WT/DS384/AB/RW • WT/DS386/AB/RW

beef is produced from trimmings resulting from the cutting of beef carcasses into steaks and
roasts, and that these beef carcasses, in turn, are produced from cattle that are subject to the
"increased recordkeeping burden" resulting from the implementation of the amended COOL
measure. Accordingly, livestock used, or partly used, for the production of ground meat are
subject to the onerous tracking and verification requirements of the amended COOL measure,
even though the information conveyed to consumers is far less detailed than that which is required
to be tracked and verified. Canada submits that the Panel's statement that Canada did not submit
arguments as to the upstream burdens relating to ground meat, thus, "lack[ed] a basis in the
evidence contained in the panel record".
607 Canada further contends that, "[h]ad the [c]ompliance
Panel properly assessed" Canada's arguments and evidence, it "could not have dismissed"
Canada's claim "in the manner that it did".
608
5.178. As we see it, Canada's claim under Article 11 of the DSU implicates issues that we have
already considered in examining the requirements for Label E above. In particular, we have found
that the requirements for Label E are not sufficiently connected to the relevant regulatory
distinctions under the amended COOL measure, or the source of the detrimental impact in the
context of these disputes, to be probative of wh ether such detrimental impact stems exclusively
from legitimate regulatory distinctions. We are not persuaded that further examination of Canada's
claim under Article 11 of the DSU would affect our view of the conclusion of the Panel that the
requirements for Label E do not "evidence the amended COOL measure's violation of
Article 2.1".
609 Thus, we decline to examine further Canada's claim under Article 11 of the DSU.
5.179. For the reasons expressed above, we find that the Panel did not err, in paragraph 7.280 of
the Panel Reports, in finding that the requirements for Label E do not evidence the amended COOL
measure's inconsistency with Article 2.1 of the TBT Agreement.
5.1.3.3 Whether the Panel erred in its assessment of the amended COOL measure's
prohibition of a trace-back system under Article 2.1 of the TBT Agreement
5.180. We turn now to the final claim of Canada under Article 2.1 of the TBT Agreement. Canada
submits that the Panel failed to assess the releva nce of the prohibition of a trace-back system
under the amended COOL measure for the analysis of whether the detrimental impact of that
measure stems exclusively from legitimate regulatory distinctions.
5.181. In its overall assessment of whether the detrimental impact of the amended COOL
measure stems exclusively from legitimate regulatory distinctions, the Panel noted that, although
the complainants had relied on the prohibition of a trace-back system under the amended COOL
measure as evidence of "arbitrariness", they had not provided specific arguments or evidence as to
the nature of the prohibited trace-back measure.
610 Instead, the Panel considered the relevance of
the complainants' argument to be limited to the question of whether the prohibition of a
trace-back mechanism necessitated the same, or similar, audit and verification system as the
amended COOL measure and its related detrimental impact on imported livestock. The Panel, thus,
found that, inasmuch as this argument focused on the claimed deficiencies of the amended COOL
measure's labelling rules, it had already considered this in its analysis under Article 2.1.
611
5.182. Canada submits that the Panel erred in dismissing Canada's argument concerning the
trace-back prohibition, and its relevance for th e assessment of the amended COOL measure under
Article 2.1, on the grounds that it was "limited to whether the trace-back prohibition necessitates
the same (or similar) audit and verification sy stem of the amended COOL measure and that it
'reverts focus to the claimed deficiencies of the amended COOL measure's labelling rules'". 612
Canada observes that it had noted before the Panel that the COOL statute requires that persons
subject to audits provide the Secretary of Agricult ure with verification of the origin of covered
commodities and that origin information be maintained by persons supplying covered commodities

607 Canada's other appellant's submission, para. 169. (fn omitted)
608 Canada's other appellant's submission, para. 171.
609 Panel Reports, para. 7.280.
610 Panel Reports, para. 7.281 (referring to Canada's second written submission to the Panel, para. 45;
and Mexico's second written submission to the Panel, paras. 71-72).
611 Panel Reports, para. 7.281.
612 Canada's other appellant's submission, para. 177 (quoting Panel Reports, para. 7.281).
WT/DS384/AB/RW • WT/DS386/AB/RW

to retailers. According to Canada, a trace-back system and the amended COOL measure's system
of recordkeeping and verification could both meet that origin verification requirement.
5.183. For Canada, the prohibition of a trace-ba ck system demonstrates that the detrimental
impact of the amended COOL measure does not stem exclusively from legitimate regulatory
distinctions but, instead, reflects arbitrary and unjustifiable discrimination in violation of
Article 2.1. This is because, as Canada puts it, by prohibiting a trace-back system that, in Canada's
view, would not cause a detrimental impact on imported livestock, the United States has made an
explicit choice in favour of the recordkeeping requirements under the amended COOL measure –
i.e. the source of the detrimental impact on imported livestock in these disputes. For Canada, this
explicit choice in favour of the recordkeepin g requirements under the amended COOL measure
demonstrates that the detrimental impact resulting therefrom does not stem exclusively from
legitimate regulatory distinctions but, instead, reflects arbitrary or unjustifiable discrimination in
violation of Article 2.1.
613
5.184. Canada submits further that the Panel erred in dismissing Canada's arguments concerning
the relevance of the trace-back prohibition for th e analysis under Article 2.1 on the basis of an
a l l e g e d f a i l u r e o f C a n a d a t o " p r o v i d e s p e c i f i c a r g u m e n t s o r e v i d e n c e … a s t o t h e n a t u r e o f t h e
prohibited trace-back measure".
614 In this regard, Canada asserts that it is clear from the text of
the amended COOL measure that no particular trace-back measure is prohibited. Rather, "the
prohibition applies to a key component – mandatory identification – of any trace-back measure,
thereby precluding the implementation of the origin labelling requirements through such a
measure."615
5.185. The United States responds that Canada's argument that the trace-back prohibition is
relevant for the analysis under Article 2.1 is incorrect because the trace-back prohibition does not
account for the detrimental impact on imported livestock and, therefore, it is not relevant for the
determination of whether such detrimental impact stems exclusively from legitimate regulatory
distinctions. Noting Canada's argument that the trace-back prohibition supports a finding of
violation under Article 2.1 because it represents a "choice" between a trace-back system, on the
one hand, and the recordkeeping and verification requirements of the amended COOL measure, on
the other hand
616, the United States contends that the fact that the United States could have
chosen an alternative that, in Canada's view, does not result in a detrimental impact on imported
livestock does not mean that the amended COOL measure is inconsistent with Article 2.1. The
United States submits that, in this regard, Canada misunderstands the analysis under Article 2.1
for determining whether the detrimental impact of a technical regulation on imported products
stems exclusively from legitimate regulatory distinctions.
617
5.186. In addressing this claim, we recall th at Article 2.1 of the TBT Agreement does not, per se,
prohibit technical regulations that cause a detrimental impact on like imported products. We recall
that technical regulations that have a de facto detrimental impact on imports may not be
inconsistent with Article 2.1 when such impact stems exclusively from legitimate regulatory
distinctions.
618 Thus, if a panel finds that a technical regulation has a detrimental impact on
competitive opportunities for like imported products, the focus of the inquiry under Article 2.1
shifts to whether that detrimental impact stems exclusively from legitimate regulatory distinctions.
This inquiry must focus on the technical regulati on at issue and its detrimental impact on like
imported products with a view to ascertaining whether such detrimental impact stems exclusively
from legitimate regulatory distinctions. The inquiry probes the legitimacy of the relevant regulatory
distinctions drawn by the technical regulation at issue through careful scrutiny of whether they are
designed and applied in an even-handed manner such that they may be considered "legitimate" for
the purposes of Article 2.1.

613 Canada's other appellant's submission, para. 177.
614 Canada's other appellant's submission, para. 176 (quoting Panel Reports, para. 7.281).
615 Canada's other appellant's submission, para. 176. (emphasis original)
616 United States' appellee's submission, para. 272 (quoting Canada's other appellant's submission,
para. 177).
617 United States' appellee's submission, para. 272.
618 Appellate Body Reports, US – COOL, para. 271.
WT/DS384/AB/RW • WT/DS386/AB/RW

5.187. As we see it, because Article 2.1 of the TBT Agreement does not, per se, prohibit technical
regulations that cause a detrimental impact on like imported products, the inquiry into whether the
detrimental impact stems exclusively from legitimate regulatory distinctions is not answered by
comparing the measure at issue and its associated detrimental impact with an alternative measure
that, allegedly, would not cause a detrimental impact on such imported products.
5.188. In our view, the trace-back prohibition is part of the overall architecture of the amended
COOL measure and thus cannot a priori be excluded as a relevant factor in assessing the
consistency of that measure with Article 2.1. That notwithstanding, the trace-back prohibition
under the amended COOL measure is ultimately no t probative of whether the detrimental impact
of that measure stems exclusively from legitimate regulatory distinctions. This is because, as
explained above, the relevant question posed for the purposes of Article 2.1 is whether the
detrimental impact on imported products caused by the recordkeeping and verification
requirements of the amended COOL measure st ems exclusively from legitimate regulatory
distinctions. The question is not, as Canada suggests, whether such detrimental impact can be
avoided by utilizing a trace-back system that could be designed in a manner that avoids
detrimental impact on imported products. We, therefore, disagree with Canada that the trace-back
prohibition is relevant for the inquiry under Article 2.1 because it constitutes an explicit choice
between, on the hand, a trace-back system that, a llegedly, would not create a detrimental impact
on imported livestock and, on the other hand, the recordkeeping and verification requirements of
the amended COOL measure that create a detrimental impact on Canadian livestock. To us, this
"choice", as Canada puts it, is not relevant for the purposes of determining whether the
detrimental impact of the amended COOL measure stems exclusively from legitimate regulatory
distinctions. In our view, Canada's arguments concerning the implications of a trace-back system
as an alternative to the recordkeeping and veri fication requirements under the amended COOL
measure would seem to be more relevant for the analysis under Article 2.2 of the TBT Agreement,
that is, whether the measure is more trade rest rictive than necessary to fulfil a legitimate
objective, taking account of the risks non-fulfilment would create.
5.189. Turning more specifically to the Panel's findings challenged by Canada on appeal, it seems
to us that the Panel dismissed Canada's claim under Article 2.1 concerning the prohibition of a
trace-back system under the amended COOL meas ure on two grounds. First, Canada had not
provided specific arguments or evidence as to the nature of the prohibited trace-back system.
Second, Canada's claim was premised on an assumption that the prohibition of a trace-back
system necessitates the same (or similar) audit and verification system as the amended COOL
measure and its related detrimental impact on imported livestock.
619 Canada faults the Panel for
basing its dismissal of Canada's claim concerning the trace-back prohibition on these grounds.
5.190. We have found, for the reasons stated above, that the prohibition of a trace-back system
under the amended COOL measure is not probativ e of whether the detrimental impact of that
measure on imported livestock stems exclusively from legitimate regulatory distinctions. Thus,
evidence and arguments as to the nature of th e trace-back system prohibited by the amended
COOL measure would not have altered the Panel's ultimate conclusion as to the relevance of the
trace-back prohibition for its analysis under Article 2.1.
5.191. For the reasons expressed above, we find that the Panel did not err, in paragraph 7.281 of
the Panel Reports, in its assessment of the relevance of the amended COOL measure's prohibition
of a trace-back system for the analysis of whet her the detrimental impact of that measure on
imported livestock stems exclusively from legitimate regulatory distinctions.
5.2 Article 2.2 of the TBT Agreement
5.192. Canada and Mexico request us to reverse the Panel's finding that they failed to make a
prima facie case that the amended COOL measure is inconsistent with Article 2.2 of the
TBT Agreement, and to complete the legal analysis in respect of their first and second proposed
alternative measures. In this regard, Canada and Mexico claim that the Panel made a series of
errors of interpretation and application, and failed to make, in respect of certain factual findings,
an objective assessment of the matter as required under Article 11 of the DSU. Canada and Mexico
also request us to find that the Panel erred in the burden of proof it applied in respect of the

619 Panel Reports, para. 7.281.
WT/DS384/AB/RW • WT/DS386/AB/RW

complainants' third and fourth proposed alternative measures, but they do not request completion
of the legal analysis with respect to those proposed alternative measures.
5.193. The United States also makes a claim on appeal in respect of Article 2.2 of the
TBT Agreement, contingent on whether Canada or Mexico appeals the Panel's findings under that
provision. Thus, in the light of Canada's and Mexico's appeals concerning Article 2.2, the
United States' conditional appeal is activated. We are, therefore, called upon to review the
United States' request to reverse the Panel's interpretation of the phrase "taking account of the
risks non-fulfilment would create" in Article 2.2 of the TBT Agreement.
5.194. We begin by setting out our interpretation of Article 2.2 of the TBT Agreement, as relevant
to the claims before us. We then address the specific claims of Canada and Mexico in respect of
the legal test for "more trade-restrictive than necessary" under Article 2.2, followed by their claims
of error in respect of the Panel's finding on the amended COOL measure's degree of contribution to
its objective. We then turn to the series of claims made by the participants on appeal in respect of
the interpretation and application of the phrase "taking account of the risks non-fulfilment would
create" in Article 2.2. These include the United States' claim that the Panel erred in its
interpretation of this phrase, as well as the claims of Canada and Mexico that the Panel erred in
the factors it took into account in assessing "the risks non-fulfilment would create", and that the
Panel erred in finding that it could not ascertain the gravity of the consequences of non-fulfilment
of the amended COOL measure's objective. Finally, we consider whether the Panel erred in finding
t h a t C a n a d a a n d M e x i c o f a i l e d t o m a k e a prima facie case that the first and second proposed
alternative measures would make an equivalent degree of contribution to the amended COOL
measure's objective, before considering the claims of Canada and Mexico in respect of their third
and fourth proposed alternative measures.
5.2.1 Interpretation of Article 2.2 of the TBT Agreement
5.195. We begin by re calling the Appellate Body's interp retation of Article 2.2 of the
TBT Agreement in previous disputes, focusing, in particular, on the sequence and order of the
analysis of whether a technical regulation is "more trade-restrictive than necessary", and on the
relevant considerations of how various factors are to be assessed under Article 2.2 within that
analysis.
5.196. Article 2.2 of the TBT Agreement provides:
Article 2
Preparation, Adoption and Application of Technical Regulations
by Central Government Bodies
With respect to their central government bodies:
…
2.2 Members shall ensure that technical regulations are not prepared, adopted or
applied with a view to or with the effect of creating unnecessary obstacles to
international trade. For this purpose, technical regulations shall not be more trade-
restrictive than necessary to fulfil a legitimate objective, taking account of the risks
non-fulfilment would create. Such legitimate objectives are, inter alia : national
security requirements; the prevention of deceptive practices; protection of human
health or safety, animal or plant life or health, or the environment. In assessing such
risks, relevant elements of consideration are, inter alia : available scientific and
technical information, related processing technology or intended end-uses of products.
5.197. The Appellate Body addressed the approach to determining whether a technical regulation
is more trade restrictive than necessary under Article 2.2 in US – Tuna II (Mexico) and in the
original proceedings in these disputes.
620 Ultimately, the task of a panel under Article 2.2 is to
determine whether the technical regulation at issue restricts international trade beyond what is

620 See Appellate Body Reports, US – Tuna II (Mexico), para. 322; and US – COOL, para. 471.
WT/DS384/AB/RW • WT/DS386/AB/RW

necessary for that technical regulation to achieve the degree of contribution that it makes to the
achievement of a legitimate objective.621 For that purpose, the Appellate Body identified a number
of factors to be evaluated. These include:
… (i) the degree of contribution made by the measure to the legitimate objective at
issue; (ii) the trade-restrictiveness of the me asure; and (iii) the nature of the risks at
issue as well as the gravity of the consequences that would arise from non-fulfilment
of the objective pursued by the Member through the measure. The Appellate Body
further stated that, "[i]n most cases, a comparison of the challenged measure and
possible alternative measures should be undertaken."
[*] In making this comparison, it
will be relevant to consider whether the proposed alternative is less trade restrictive;
whether it would make an equivalent contribution to the relevant legitimate objective,
taking account of the risks non-fulfilment would create; and whether it is reasonably
available. For the reasons that led us to reverse the Panel's finding under Article 2.2,
we consider the present case to be one that calls for an examination of the factors
identified above for both the COOL measure and the alternatives proposed by the
complainants in order to determine whether the COOL measure is more trade
restrictive than "necessary" to fulfil its objective.
622
[*fn original] 950 Appellate Body Report, US – Tuna II (Mexico) , para. 322. As noted above, the
Appellate Body identified two instances where a comparison of the challenged measure with
possible alternative measures may not be required, namely, wh en the measure is not trade
restrictive at all, or when a trade-restrictive measure makes no contribution to the achievement
of the relevant legitimate objective. (Appellate Body Report, US – Tuna II (Mexico), footnote 647
to para. 322)
5.198. The assessment of whether a technical regulation is more trade restrictive than necessary
under Article 2.2 involves the holistic weighing and balancing of the factors as set out above.623
5.199. A complainant may seek to identify a possible alternative measure that is less trade
restrictive, makes an equivalent contribution to the relevant objective, and is reasonably available,
as part of making its prima facie case that a technical regulation is more trade restrictive than
necessary.624 As the Appellate Body has stated, the use of the comparative "more … than" in the
second sentence of Article 2.2 suggests that the existence of an "unnecessary obstacle[] to
international trade" in the first sentence may be established on the basis of a comparative
analysis.
625 This understanding of the comparative character of Article 2.2 is confirmed by the
context afforded by Article 2.3 of the TBT Agreem ent, which provides that "[t]echnical regulations
shall not be maintained … if the changed circumstances or objectives can be addressed in a less
trade-restrictive manner."626
5.200. The Appellate Body has held that a comparison of the technical regulation with possible
alternative measures is required "[i]n most cases". 627 The Appellate Body has also clarified that a
comparison with proposed alternative measures should be understood as a "conceptual tool" for
the purpose of assessing whether a challenged technical regulation is more trade restrictive than
necessary under Article 2.2.
628 This assessment would involve a comparison of the
trade-restrictiveness and the degree of contributi on to the objective achieved by the technical
regulation at issue with those same elements in respect of reasonably available alternative
measures, taking account of the risks non-fulfilment of the objective would create.629

621 Appellate Body Reports, US – COOL, para. 461. See also Appellate Body Report, US – Tuna II
(Mexico), para. 319.
622 Appellate Body Reports, US – COOL, para. 471 and fn 950 thereto. (fns 949 and 951 omitted)
623 See Appellate Body Reports, US – Tuna II (Mexico), fn 643 to para. 318; Brazil – Retreaded Tyres,
624 Appellate Body Reports, US – Tuna II (Mexico), para. 323; US – COOL, para. 379.
625 Appellate Body Reports, US – Tuna II (Mexico), para. 320; US – COOL, para. 376.
626 Emphasis added.
627 Appellate Body Reports, US – Tuna II (Mexico), para. 322 and fn 641 thereto; US – COOL, para. 376
and fn 748 thereto.
628 Appellate Body Reports, US – Tuna II (Mexico), para. 320; US – COOL, fn 749 to para. 376.
629 See Appellate Body Report, US – Tuna II (Mexico), para. 320.
WT/DS384/AB/RW • WT/DS386/AB/RW

5.201. An assessment of whether a proposed alternative measure achieves an equivalent degree
of contribution to the relevant legitimate objective is essential for a panel to determine whether
the technical regulation at issue restricts international trade beyond what is necessary to achieve
the degree of contribution that it makes to the achievement of a legitimate objective.
630 The need
for the equivalence of the respective degrees of contribution as between the challenged technical
regulation and proposed alternative measures also comports with the principle reflected in the
sixth preambular recital of the TBT Agreement – that a Member shall not be prevented from
pursuing a legitimate objective "at the levels it considers appropriate". 631 The level a Member
"considers appropriate" is usually revealed by the degree of contribution that a technical regulation
actually makes to its objective.632
5.202. As we have noted, an assessment of whether a technical regulation is more trade
restrictive than necessary under Article 2.2 ultimately involves the holistic weighing and balancing
of all relevant factors. Article 2.2 does not explicitly prescribe, in rigid terms, the sequence and
order of analysis in assessing whether the technical regulation at issue is more trade restrictive
than necessary.
633 As we explain below, a certain sequence and order of analysis may,
nonetheless, flow logically from the nature of the examination under Article 2.2.
5.203. This sequence and order is discernible both in the Appellate Body's past analyses in
respect of Article 2.2 of the TBT Agreement 634, as well as in the relevant jurisprudence relating to
Article XX of the GATT 1994 and Article XIV of the GATS. 635 For instance, in US – Gambling , the
Appellate Body set out a sequence in respect of the "necessity" analysis under Article XIV of the
GATS as follows: "The process begins with an assessment of …"; " Having ascertained …, a panel
should then turn to the other factors that are to be 'weighed and balanced'"; and "A comparison
between the challenged measure and possible alternatives should then be undertaken."
636
Likewise, with regard to the sequence and order of the "necessity" analysis under Article XX of the
GATT 1994, the Appellate Body in Brazil – Retreaded Tyres mentioned, first, the relevant factors to
be weighed and balanced for the measure sought to be justified, and continued as follows:
If this analysis yields a preliminary conclusion that the measure is necessary, this
result must be confirmed by comparing the measure with its possible alternatives,
which may be less trade restrictive while providing an equivalent contribution to the
achievement of the objective pursued.
637
5.204. The Appellate Body in China – Publications and Audiovisual Products summarized these
approaches to assessing the sequence and order of the "necessity" analysis as "recogniz[ing] that
a comprehensive analysis of the 'necessity' of a measure is a sequential process" that "must
logically begin with a first step, proceed through a number of additional steps, and yield a final
conclusion."638 W e t a k e a s i m i l a r v i e w i n r e s p e c t o f the sequence and order of the "necessity"
analysis under Article 2.2 of the TBT Agreement.

630 Appellate Body Reports, US – COOL, para. 461.
631 See Appellate Body Reports, US – COOL, para. 373.
632 Appellate Body Reports, US – COOL, para. 373. The level at which a Member considers it appropriate
to pursue a legitimate objective may also be discernible in other ways, such as through an express provision or
statement in the instrument at issue.
633 Appellate Body Report, US – Tuna II (Mexico), fn 643 to para. 318 (referring to Appellate Body
Reports, Brazil – Retreaded Tyres, para. 178; and US – Gambling, paras. 306-308).
634 Appellate Body Reports, US – Tuna II (Mexico), paras. 327-329; US – COOL, paras. 472-479.
635 See Appellate Body Report, US – Tuna II (Mexico), para. 320 and fn 645 thereto. The Appellate Body
drew an analogy with the analysis of "necessity" in the context of Article XX of the GATT 1994 and Article XIV
of the GATS, in which a measure found to be inconsistent with a relevant obligation is to be compared with
reasonably available less trade-restrictive alternative measures. (Appellate Body Report, US – Tuna II
(Mexico), fn 645 to para. 320 (referring to Appellate Body Report, Korea – Various Measures on Beef,
para. 166))
636 Appellate Body Report, US – Gambling, paras. 306-307. (emphasis added)
637 Appellate Body Report, Brazil – Retreaded Tyres, para. 156.
638 Appellate Body Report, China – Publications and Audiovisual Products, para. 242 (referring to
Appellate Body Reports, US – Gambling, paras. 306-307; Korea – Various Measures on Beef, para. 166; and
Brazil – Retreaded Tyres, paras. 156 and 178).
WT/DS384/AB/RW • WT/DS386/AB/RW

5.205. Nonetheless, the particular manner of sequencing the steps of this analysis is adaptable,
and may be tailored to the specific claims, measures, facts, and arguments at issue in a given
case.
639 For instance, the sequence and order of analysis appropriate in a given case may depend
on the characteristics of the technical regulation at issue as revealed through its design and
s t r u c t u r e , a s w e l l a s o n t h e n a t u r e o f t h e objective pursued and the quantity, quality, and
availability of evidence. It may also depend on which elements are the focus of contention
between the disputing parties, and which, if any, are conceded or undisputed between the parties.
This adaptability of the sequence or order is indicative of the character of the assessment of "more
trade-restrictive than necessary" under Article 2.2 as a holistic weighing and balancing of all
relevant factors. We note that, in the context of Article XX of the GATT 1994, the sequence and
order of analysis in the circumstances of Brazil – Retreaded Tyres called for a "preliminary
conclusion" on the necessity of the challenged me asure before proceeding to a comparison with
proposed alternatives, whereas such a "preliminary conclusion" was not considered to be a
requisite aspect of the sequence and order of analysis in the circumstances of EC – Seal
Products.
640
5.206. Accordingly, panels are afforded a certain degree of latitude to tailor the sequence and
order of analysis in a given case when assessing the relevant factors and in conducting the overall
weighing and balancing under Article 2.2. This latitude, however, is not boundless. 641 Rather, it is
informed by the specific claims, measures, facts, and arguments at issue, as mentioned above.
Therefore, an appellant challenging the sequence and order of analysis adopted by a panel in a
given case must demonstrate why, by following a particular sequence, the panel committed an
error in the specific circumstances of the case at hand. It is not sufficient for an appellant merely
to claim that a panel erred by deviating from a certain sequence and order of analysis in the
abstract.
5.207. Having set out our considerations with respect to the sequence and order of analysing
relevant factors under Article 2.2 of the TBT Agreement, we turn now to certain observations in
respect of how to assess these factors. While cognizant that these factors are to be assessed as
part of a holistic weighing and balancing, we begin with the factors pertaining to the technical
regulation itself, followed by the factors involved in the comparative analysis with proposed
alternative measures, before turning to the role of "the risks non-fulfilment would create".
5.208. In assessing the relevant factors in respect of the technical regulation itself, we note that,
while a complainant must be held to fulfil its burden to present a prima facie case that the
technical regulation is more trade restrictive than necessary under Article 2.2, it will not always be
possible to quantify a particular factor, or to do so with precision. This may be due to, inter alia,
the nature of the objective pursued and the level of protection sought, as well as the nature,
quantity, and quality of evidence existing at the time the analysis is made, and the characteristics
of the technical regulation at issue as revealed by its design and structure.
642 For instance, in
respect of assessing the trade-restrictiveness of a technical regulation under Article 2.2, the
Appellate Body has considered that the demonstration of a limiting effect on competitive
opportunities in qualitative terms might suffice in the particular circumstances of a given case.
643
5.209. We also consider the jurisprudence under Article XX of the GATT 1994 to be instructive in
this regard. For instance, in Brazil – Retreaded Tyres , the Appellate Body considered that there
was no obligation to quantify the contribution of the challenged measure but, rather, in the specific
circumstances of that case, it sufficed to demonstrate in qualitative terms that the measure was
"apt to produce a material contribution" to its objective at some point in time. 644 In a similar vein,
the Appellate Body considered in EC – Seal Products that there was "limited and uneven

639 See e.g. Appellate Body Report, China – Publications and Audiovisual Products, para. 247.
640 Appellate Body Reports, Brazil – Retreaded Tyres, para. 156; EC – Seal Products, fn 1299 to
para. 5.215.
641 Appellate Body Reports, Brazil – Retreaded Tyres, para. 145; EC – Seal Products, para. 5.211.
642 See Appellate Body Report, Brazil – Retreaded Tyres, para. 145.
643 See Appellate Body Reports, US – COOL, para. 477. At the same time, evidence of actual trade
effects may also be probative in making this assessment. (Ibid.) For instance, a detrimental modification of
competitive opportunities may be self-evident in respect of certain de jure discriminatory measures, whereas
supporting evidence and argumentation of actual trade effects might be required to demonstrate the existence
and extent of trade-restrictiveness in respect of non-discriminatory internal measures that address a legitimate
objective. (See e.g. Appellate Body Report, EC – Poultry, paras. 126-127)
644 Appellate Body Report, Brazil – Retreaded Tyres, para. 151.
WT/DS384/AB/RW • WT/DS386/AB/RW

information relating to the actual operation of the measure on the [p]anel record". 645 In that
context, while the panel's conclusion on contribution did not provide "much information" as to the
precise degree or extent of the measure's contribution, the Appellate Body also recognized that "it
[was] not clear what greater clarity or precision the [p]anel could have achieved in the
circumstances of this case".
646 Thus, the Appellate Body did not find fault with the statement made
by the panel in EC – Seal Products that the measure at issue was " capable of making and does
make some contribution" to its objective, or that it did so "to a certain extent".647
5.210. While panels are afforded a certain degree of latitude in determining how to assess the
relevant factors in an Article 2.2 analysis, this latitude is not boundless. 648 Rather, it is informed,
for example, by the facts and arguments presente d to the panel by the parties. Where different
methodologies for the assessment of a relevant factor are available based on the facts and
arguments submitted by the parties, panels must adopt or develop a methodology that is suited to
yielding a correct assessment of the relevant factor in the circumstances of a given case.
5.211. Thus, in our view, the nature of the obje ctive of the technical regulation at issue, its
characteristics as revealed by its design and st ructure, and the nature, quantity, and quality of
evidence available, may have a bearing on whether a relevant factor, such as the technical
regulation's degree of contribution to its objective, can be assessed in quantitative or qualitative
terms under Article 2.2, as well as on the degree of precision with which such an analysis can be
undertaken. The corollary is that, when a factor such as the contribution of a technical regulation
to its objective can be assessed only with a lesser degree of precision, a panel should not end its
analysis and conclude that the complainant failed to make its prima facie case in this regard. We
note that, in EC – Seal Products , the Appellate Body considered in respect of Article XX of the
GATT 1994 that "a measure's contribution is … only one component of the necessity calculus under
Article XX", and that "whether a measure is 'necessary' cannot be determined by the level of
contribution alone, but will depend on the manner in which the other factors of the necessity
analysis, including a consideration of potential alternative measures, inform the analysis."
649 The
Appellate Body continued that "the very utility of examining the interaction between the various
factors of the necessity analysis, and conducting a comparison with potential alternative measures,
is that it provides a means of testing these factors as part of a holistic weighing and balancing
exercise, whether quantitative or qualitative in nature."
650 We consider this relevant for the
analysis called for under Article 2.2 of the TBT Agreement. The weighing and balancing of the
relevant factors both in respect of the challenged technical regulation and in the comparison with
proposed alternative measures involves a holistic analysis in order to reach an overall conclusion
on claims under Article 2.2. A panel should proceed with this weighing and balancing even if a
particular factor under Article 2.2, such as the challenged technical regulation's degree of
contribution to its objective, cannot be quantified with precision or can only be assessed in
qualitative terms.
5.212. Having addressed the relevant factors pertaining to the technical regulation itself, we now
make some observations on the factors pertaining to the comparison with alternative measures
contemplated under Article 2.2, as relevant to th e case before us. As we have already noted, the
comparative character of Article 2.2 is grounded in its text, namely, the use of the term " more …
than necessary", in addition to the context affo rded by Article 2.3 of the TBT Agreement.
Accordingly, the Appellate Body has clarified that Article 2.2 does not prohibit any or all
trade-restrictiveness, but is, instead, intended to impugn "unnecessary obstacles" to trade and
restrictions on international trade that "exceed what is necessary" to achieve the degree of
contribution that a technical regulation makes to the achievement of a legitimate objective.
651
Thus, the Appellate Body has stated that "the existence of an 'unnecessary obstacle[] to
international trade' in the first sentence [of Article 2.2] may be established on the basis of a
comparative analysis".652

645 Appellate Body Reports, EC – Seal Products, para. 5.228. (emphasis original)
646 Appellate Body Reports, EC – Seal Products, para. 5.228.
647 Appellate Body Reports, EC – Seal Products, para. 5.228 (quoting Panel Reports, EC – Seal Products,
paras. 7.460 and 7.638, respectively). (emphasis added)
648 Appellate Body Reports, Brazil – Retreaded Tyres, para. 145; EC – Seal Products, para. 5.211.
649 Appellate Body Reports, EC – Seal Products, para. 5.215.
650 Appellate Body Reports, EC – Seal Products, para. 5.215. (fn omitted)
651 Appellate Body Reports, US – Tuna II (Mexico), para. 319; US – COOL, para. 375.
652 Appellate Body Reports, US – Tuna II (Mexico), para. 320; US – COOL, para. 376. (emphasis added)
WT/DS384/AB/RW • WT/DS386/AB/RW

5.213. For these reasons, a complainant may seek to identify a possible alternative measure that
is less trade restrictive, makes an equivalent contribution to the relevant objective, and is
reasonably available, as part of making its prima facie case that a technical regulation is more
trade restrictive than necessary.
653 As we have mentioned above, there may be circumstances
where a comparative analysis of this nature may be unnecessary under Article 2.2. 654 In our view,
however, given that an alternative measure proposed by a complainant functions as a "conceptual
tool" to illustrate that a technical regulation is more trade restrictive than necessary, once an
alternative measure has been proposed by the complainant, it should be considered by a panel in
the overall weighing and balancing under Article 2.2.
655
5.214. We recall that, where a comparison is undertaken under Article 2.2, relevant factors to
consider include whether the proposed alternative is less trade restrictive, whether it would make
an equivalent contribution to the legitimate objective at issue, "taking account of the risks
non-fulfilment would create", and whether it is reasonably available. 656 As we have noted above,
an assessment of whether a proposed alternative measure achieves an equivalent degree of
contribution to the relevant legitimate objective is essential for a panel to determine whether the
technical regulation at issue restricts international trade beyond what is necessary for that
technical regulation to achieve the degree of contribution that it makes to a legitimate objective.
657
The need for the equivalence of the respective de grees of contribution as between the challenged
technical regulation and proposed alternative measures also comports with the principle reflected
in the sixth preambular recital of the TBT Agreem ent – that a Member shall not be prevented from
pursuing a legitimate objective "at the levels it considers appropriate".
658
5.215. We do not consider that a complainant must demonstrate that its proposed alternative
measure achieves a degree of contribution identical to that achieved by the challenged technical
regulation in order for it to be found to achieve an equivalent degree. Rather, in our view, there is
a margin of appreciation in the assessment of whether a proposed alternative measure achieves
an equivalent degree of contribution, the contours of which may vary from case to case. For
instance, in assessing the equivalence of the respec tive degrees of contribution, such a margin of
appreciation can be informed by the risks that non-fulfilment of the technical regulation's objective
would create, in particular, it may be affected by the nature of the risks and the gravity of the
consequences arising from the non-fulfilment of the technical regulation's objective. This stems
from the requirement in Article 2.2 that account is to be taken of "the risks non-fulfilment would
create" in assessing whether a technical regulation is "more trade-restrictive than necessary to
fulfil a legitimate objective". The assessment of whether a proposed alternative measure achieves
an equivalent degree of contribution should also be made in the light of the characteristics of the
technical regulation at issue as revealed through its design and structure, as well as the nature of
the objective pursued and the nature, quantity, and quality of the evidence available. We
emphasize, in this respect, that a proposed alternative measure may achieve an equivalent degree
of contribution in ways different from the technical regulation at issue.
5.216. We note that there may be instances where it is difficult to assess with precision whether
there is equivalence between the technical regula tion's degree of contribution and that of a
proposed alternative measure. For instance, as in the present case, a technical regulation and the
proposed alternative measures may deploy various methods or techniques that jointly or
separately contribute to achieving the objective pursued, which may not each be quantifiable in an
isolated manner.
659 For the purpose of assessing the equivalence between the respective degrees
of contribution of the challenged technical regulation and the proposed alternative measures, it is
the overall degree of contribution that the technical regulation makes to the objective pursued that

653 Appellate Body Reports, US – Tuna II (Mexico), para. 323; US – COOL, para. 379.
654 Appellate Body Reports, US – Tuna II (Mexico), fn 647 to para. 322; US – COOL, fn 748 to
para. 376.
656 Appellate Body Report, US – Tuna II (Mexico), para. 322.
657 Appellate Body Reports, US – COOL, para. 461.
658 See Appellate Body Reports, US – COOL, para. 373. As we have noted above, the level a Member
"considers appropriate", as referred to in the sixth preambular recital of the TBT Agreement, is usually revealed
in the degree of contribution that a technical regulation actually makes to its objective under Article 2.2.
659 See e.g. Appellate Body Report, Brazil – Retreaded Tyres, para. 151.
WT/DS384/AB/RW • WT/DS386/AB/RW

is relevant, rather than any individual isolated aspect or component of contribution. 660 We
recognize that a panel may encounter practical difficulties in assessing the overall degree of
contribution made by a technical regulation, and in comparing whether a proposed alternative
measure makes an equivalent degree of contribution. Some imprecision in assessing the
equivalence of the respective degrees of contribu tion of a technical regulation and a proposed
alternative may be inevitable in certain circumstances. However, such imprecision should not, in
and of itself, relieve a panel from its duty to assess the equivalence of the respective degrees of
contribution. In spite of such imprecision, a panel should proceed with the overall weighing and
balancing under Article 2.2.
661
5.217. Article 2.2 of the TBT Agreement further stipulates that the risks non-fulfilment of the
objective would create shall be taken into account. In US – Tuna II (Mexico), the Appellate Body
found that the obligation to "tak[e] account of the risks non-fulfilment would create" suggests that
the comparison of the challenged measure with a possible alternative measure should be made in
the light of the nature of the risks at issue and the gravity of the consequences that would arise
from non-fulfilment of the legitimate objective. 662 I n o u r v i e w , i n o r d e r t o e n g a g e i n t h i s
assessment and ensure that this factor is "tak[e n] account of", the nature of the risks and the
gravity of the consequences that would arise from non-fulfilment would themselves, in the first
place, need to be identified.
5.218. We note that Article 2.2 does not prescribe further a particular methodology for assessing
"the risks non-fulfilment would create" or define how they should be "tak[en] account of".
However, in the context of Article XX of the GA TT 1994, the Appellate Body has recognized that
risks may be assessed in either qualitative or quantitative terms.
663 Some kinds of risks might not
be susceptible to quantification 664, and some types of risk assessment methods might not be of
assistance in respect of particular kinds of objectives listed in Article XX of the GATT 1994. 665 In
order to take account of "the risks non-fulfilment would create" under Article 2.2 of the
TBT Agreement, in some contexts, it might be possible and appropriate to seek to determine
separately the nature of the risks, on the one hand, and to quantify the gravity of the
consequences that would arise from non-fulfilment, on the other hand. In other contexts, however,
it might be difficult, in practice, to determine or quantify those elements separately with precision.
In such contexts, it may be more appropriate to conduct a conjunctive analysis of both the nature
of the risks and the gravity of the consequences of non-fulfilment, in which "the risks
non-fulfilment would create" are assessed in qualitative terms. In any case, difficulties or
imprecision that arise in assessing "the risks non-fulfilment would create" – due to the nature of
the relevant risks or the gravity of the consequences of non-fulfilment at issue – should not, in and
of themselves, relieve a panel from its duty to assess this factor. A panel should proceed further
with a holistic weighing and balancing of all relevant factors, and reach an overall conclusion under
Article 2.2. We recall, in this respect, that the te xt of Article 2.2 requires "taking account of" such
risks. In our view, the term "taking account of" calls for the active and meaningful consideration of
"the risks non-fulfilment would create", even where there is imprecision as to the nature and
magnitude of such risks, in the weighing and bala ncing under Article 2.2 of the TBT Agreement. At
the same time, the manner of such consideration is adaptable to the particularities of a given
case.
666

660 In stating this, we do not exclude that there may be aspects of a technical regulation that may be
manifestly immaterial in a given case in the light of the specific products, processes, or labels at issue, or that
a technical regulation may operate as part of a more complex suite of measures directed at the same
objective. (See Appellate Body Report, Brazil – Retreaded Tyres, para. 151)
661 See Appellate Body Reports, EC – Seal Products, para. 5.215.
662 Appellate Body Report, US – Tuna II (Mexico), para. 321.
663 See e.g. Appellate Body Report, EC – Asbestos, para. 167.
664 Appellate Body Report, EC – Asbestos, para. 167.
665 See e.g. Appellate Body Reports, EC – Seal Products, para. 5.198.
666 See e.g. Panel Reports, EC – Approval and Marketing of Biotech Products, para. 7.1620; US –
Continued Suspension, para. 7.480; US – Clove Cigarettes, paras. 7.632-7.633; and Japan – Apples,
para. 8.241.
WT/DS384/AB/RW • WT/DS386/AB/RW

5.2.2 Claims of error with respect to the legal test for "more trade-restrictive than
necessary" under Article 2.2 of the TBT Agreement
5.219. We now turn to the requests of Canada and Mexico that we find that the Panel erred in the
legal test it applied in assessing whether the amended COOL measure is "more trade-restrictive
than necessary" under Article 2.2 of the TBT Agreement.
5.220. Mexico claims that the Panel erred in stating that a "comparative analysis" would be
redundant "only in exceptional circumstances", and in concluding that such "exceptional
circumstances" must be demonstrated before any "overall" conclusions with respect to Article 2.2
may be drawn from the "relational" analysis. 667 Canada claims that the Panel erred by failing to
articulate correctly the "relational" component of the analysis under Article 2.2, namely, by failing
to indicate that it would assess the three relevant factors pertaining to the amended COOL
measure separately, and then "in relation to each other", and, consequently, by failing to describe
how these factors are to be weighed and balanced against each other under the "relational"
analysis.
668 Further, and relatedly, Canada claims that the Panel erred by not clarifying that the
"comparative" analysis does not necessarily prevail over the "relational" analysis.
5.221. The United States argues that, contrary to the claims of Canada and Mexico, the amended
COOL measure is not more trade restrictive than necessary under Article 2.2. In the United States'
view, since it is uncontested that the amended COOL measure is trade restrictive and that it
makes some contribution to its objective, demonstrating the existence of a less trade-restrictive
alternative that is reasonably available and makes an equivalent degree of contribution is a
necessary part of the complainants' burden of proof under Article 2.2.
669
5.222. We begin our assessment by analysing these claims on appeal and, in particular, by
analysing the understanding of the legal test und er Article 2.2 of the TBT Agreement on which
Canada's and Mexico's claims are predicated.
5.223. As we understand it, Canada and Mexico consider the legal test under Article 2.2 to be
separated into two components. The first component is a "relational" analysis of three factors in
respect of the technical regulation at issue itself, namely, its degree of contribution to its objective,
its trade-restrictiveness, and the risks non-fulfilment would create.
670 We note that the participants
clarified at the oral hearing that they have differing understandings of the term "'relational'
analysis". Canada and Mexico consider it to refer to an assessment of the technical regulation at
issue itself, before proceeding to a comparison with an alternative. By contrast, the United States
considers it to refer to the holistic weighing and balancing under Article 2.2, which includes a
comparison with an alternative.
5.224. Based on Canada's and Mexico's understanding of Article 2.2, the "relational" analysis
constitutes the first component of the legal test, under which the factors pertaining to the technical
regulation at issue should first be ascertained, and then weighed and balanced in relation to one
another.
671 In Mexico's view, a "provisional" conclusion should be drawn from the "relational"
analysis on the "necessity" of the challenged te chnical regulation, while a comparison with an
alternative would also normally need to be undertaken to confirm this conclusion and reach an
overall finding.
672 In Canada's view, a panel could, in principle, conclude at the end of the
"relational" analysis that a technical regulation is more trade restrictive than necessary, but it
should normally also consider any alternative measure identified by the complainant before
reaching a conclusion on its "necessity".673

667 Mexico's other appellant's submission, para. 45 (quoting Panel Reports, para. 7.298). See also Panel
Reports, paras. 7.301-7.303.
668 Canada's other appellant's submission, paras. 92-93. (emphasis original)
669 United States' appellee's submission, paras. 54-67.
670 Canada's other appellant's submission, para. 25; Mexico's other appellant's submission, para. 40.
671 Canada's other appellant's submission, para. 26; Mexico's other appellant's submission, para. 46.
672 Mexico's response to questioning at the oral hearing. We note that, in this regard, Mexico argued
initially in its written submission on appeal that, following the weighing and balancing under the "relational"
analysis, a conclusion must also be drawn as to the necessity of the technical regulation before proceeding, if
still necessary, to a comparison with proposed alternative measures. (See Mexico's other appellant's
submission, paras. 46-47)
673 Canada's other appellant's submission, para. 24.
WT/DS384/AB/RW • WT/DS386/AB/RW

5.225. The second component of the legal test in assessing whether a technical regulation is more
trade restrictive than necessary is, for Canada and Mexico, a "comparative" analysis. This involves
a comparison of the trade-restrictiveness of the te chnical regulation at issue, and the degree of
achievement of its objective, with that of reason ably available alternative measures that are less
trade restrictive than the challenged technical regulation, taking account of "the risks
non-fulfilment would create".
674 For Mexico, the function of such a "comparative" analysis is to
confirm the preliminary conclusion under the "relational" analysis that the technical regulation at
issue is necessary. For Canada, the function of such a "comparative" analysis is to serve as a
"conceptual tool" to assist in determining whether the measure is more trade restrictive than
necessary.
675 It does not, however, supplant the "relatio nal" analysis, and a failure to identify an
alternative measure that achieves an equivalent degree of contribution to the technical regulation's
objective should not be dispositive in the overall weighing and balancing under Article 2.2.676
5.226. It is on the basis of this understanding of the legal test under Article 2.2, namely, that it
engages two separate components, each requiring the drawing of certain conclusions or the
weighing and balancing of certain factors at particular stages, that Canada and Mexico make their
respective claims.
5.227. We recall our interpretation above of Arti cle 2.2 of the TBT Agreement. In our view, an
assessment of whether a technical regulation is more trade restrictive than necessary under
Article 2.2 ultimately involves the holistic weighing and balancing of all relevant factors. Article 2.2
does not explicitly prescribe, in rigid terms, the sequence and order of analysis in assessing
whether the technical regulation at issue is "more trade-restrictive than necessary".
677 That
notwithstanding, a certain sequence and order of analysis may logically flow from the nature of the
examination under Article 2.2.
5.228. This sequence and order is discernible both in the Appellate Body's past analyses in
respect of Article 2.2 of the TBT Agreement 678 and in the relevant jurisprudence relating to
Article XX of the GATT 1994 and Article XIV of the GATS. 679 In particular, the Appellate Body in
China – Publications and Audiovisual Products , having reviewed the approaches to the "necessity"
analysis in US – Gambling , Brazil – Retreaded Tyres , and Korea – Various Measures on Beef ,
considered that those approaches "recognize[d] that a comprehensive analysis of the 'necessity' of
a measure is a sequential process" that "must logically begin with a first step, proceed through a
number of additional steps, and yield a final conclusion."
680 We take a similar view in respect of
the sequence and order of analysis under Article 2.2 of the TBT Agreement.
5.229. Nonetheless, as we have elaborated above, the particular manner of sequencing the steps
of this analysis is adaptable, and may be tailored to the specific claims, measures, facts, and
arguments at issue in a given case. Accordingly, panels are afforded a certain degree of latitude to
tailor the sequence and order of analysis in a given case when assessing the relevant factors and
conducting the overall weighing and balancing under Article 2.2. This latitude, however, is not
boundless.
681 Rather, it is informed by the specific claims, measures, facts, and arguments at
issue, as mentioned above. For instance, while the particular circumstances of a given case may
call for "preliminary conclusions" on the necessity of the trade-restrictiveness of the challenged
measure before proceeding to a comparison with an alternative
682, such preliminary

674 Canada's other appellant's submission, para. 37; Mexico's other appellant's submission, para. 112.
675 Canada's other appellant's submission, para. 37 (quoting Appellate Body Report, US – Tuna II
(Mexico), paras. 320 and 322).
676 Canada's other appellant's submission, para. 53; Mexico's other appellant's submission, para. 49.
677 Appellate Body Report, US – Tuna II (Mexico), fn 643 to para. 318 (referring to Appellate Body
Reports, Brazil – Retreaded Tyres, para. 178; and US – Gambling, paras. 306-308).
678 Appellate Body Reports, US – Tuna II (Mexico), paras. 327-329; US – COOL, paras. 472-479.
679 See Appellate Body Reports, US – Tuna II (Mexico), para. 320. The Appellate Body drew an analogy
with the analysis of "necessity" in the context of Article XX of the GATT 1994 and Article XIV of the GATS, in
which a measure found to be inconsistent with a relevant obligation is to be compared with reasonably
available less trade-restrictive alternative measures. (Appellate Body Report, US – Tuna II (Mexico), fn 645 to
para. 320 (referring to Appellate Body Report, Korea – Various Measures on Beef, para. 166))
680 Appellate Body Report, China – Publications and Audiovisual Products, para. 242 (referring to
Appellate Body Reports, US – Gambling, paras. 306-307; Korea – Various Measures on Beef, para. 166; and
Brazil – Retreaded Tyres, paras. 156 and 178).
681 Appellate Body Reports, Brazil – Retreaded Tyres, para. 145; EC – Seal Products, para. 5.211.
682 Appellate Body Report, Brazil – Retreaded Tyres, paras. 156. See also Appellate Body Report, China
WT/DS384/AB/RW • WT/DS386/AB/RW

determinations are not mandatory, and may not be appropriate in the circumstances of other
cases.683 Therefore, an appellant challenging the se quence and order of analysis adopted by a
panel in a given case must demonstrate why, by following a particular sequence, the panel
committed an error in the specific circumstances of the case at hand. It is not sufficient for an
appellant merely to claim that a panel erred by deviating from a certain sequence and order of
analysis in the abstract.
5.230. With these considerations in mind, we assess the relevant findings and conclusions of the
P a n e l i n t h i s c a s e t h a t a r e r e l e v a n t t o t h e s p e c i f i c c l a i m s o f e r r o r b y C a n a d a a n d M e x i c o w i t h
respect to the sequence and order of the Panel's analysis under Article 2.2 of the TBT Agreement.
In respect of whether it should take into consideration the possible alternative measures proposed
by Canada and Mexico in the weighing and balancing under Article 2.2, the Panel stated:
Our reading of the relevant Appellate Body statements suggests that a "comparative
analysis" would be redundant only in exceptional circumstances where consistency or
inconsistency with Article 2.2 may be deduced by looking solely at certain aspects of
the challenged measure. Mexico has not explained why the Panel is faced with such
exceptional circumstances in this case. In particular, Mexico does not argue that the
amended COOL measure falls into either of the two exceptional scenarios identified by
the Appellate Body; rather, Mexico contends that amended COOL measure represents
a third scenario under which it should be found inconsistent without looking at
alternatives. However, Mexico fails to identify what this third exceptional scenario
entails in the context of the amended COOL measure.
684
5.231. As we have mentioned above, given that an alternative measure proposed by a
complainant functions as a "conceptual tool" to illustrate that a technical regulation is more trade
restrictive than necessary, once an alternative measure has been proposed by the complainant, it
should be considered by a panel in the overall weighing and balancing under Article 2.2.
685
However, we note that, in certain cases, a comp arison with proposed alternatives may be of
limited value. 686 In this regard, Mexico argues that, under the Panel's interpretation, the
"relational" analysis component of the necessity test under Article 2.2 was "erroneously
narrow[ed] … to a determination of whether 'exceptional circumstances' exist". 687 The
Appellate Body has stated that the weighing and balancing under Article 2.2 will involve a
comparison with proposed alternatives "[i]n most cases".
688 The Panel did not exclude the
possibility that a conclusion could be reached under Article 2.2 in the absence of a comparison with
proposed alternatives. Nor did the Panel state that the circumstances identified by the
Appellate Body in past cases in which a comparison with alternatives is not required are
exhaustive.
689 Rather, the Panel considered that Mexico "f ail[ed] to identify" why, in the particular
circumstances of this case, the necessity of the amended COOL measure could be established in
the absence of a comparison with the proposed alternatives.
690 In our view, as both Canada and
Mexico proposed alternative measures in order to make their prima facie case under Article 2.2,
and in the light of the holistic nature of the weig hing and balancing under that provision, the Panel
was correct in conducting a "comparative" analysis of the proposed alternative measures.

683 Appellate Body Reports, EC – Seal Products, fn 1299 to para. 5.215.
684 Panel Reports, para. 7.298.
685 Appellate Body Reports, US – Tuna II (Mexico), para. 323; US – COOL, fn 749 to para. 376. We note
that, in the original proceedings, the Appellate Body found that, by not undertaking a comparison with the
alternative measures proposed by Mexico and Canada, the original panel erroneously relieved Mexico and
Canada of the burden to prove, on the basis of the comparison with the proposed alternative measures, that
the original COOL measure was more trade restrictive than necessary. (Appellate Body Reports, US – COOL,
para. 469)
686 Appellate Body Reports, US – Tuna II (Mexico), fn 647 to para. 322; US – COOL, fn 748 to
para. 376.
687 Mexico's other appellant's submission, para. 39.
688 Appellate Body Reports, US – Tuna II (Mexico), para. 322; US – COOL, para. 376. (emphasis added)
689 Panel Reports, para. 7.298.
690 Panel Reports, para. 7.298.
WT/DS384/AB/RW • WT/DS386/AB/RW

5.232. In respect of the points or stages at which to draw conclusions or engage in the weighing
and balancing of different factors, the Panel considered in relation to the original proceedings that:
[t]he Appellate Body did not draw any conclusions on Article 2.2 consistency at the
end of its "relational analysis". The Appellate Body called this a "preliminary
assessment" of the original COOL measure, and "proceed[ed] to examine the
alternative measures proposed by [the complainants] … to complete [its] assessment
of whether the COOL measure was 'more trad e-restrictive than necessary to fulfil a
legitimate objective'."691
5.233. Thus, in the Panel's view, the Appellate Body in the original proceedings "undertook the
'comparative analysis' before trying to draw 'overall' conclusions with regard to Article 2.2". 692 In
the light of that understanding, the Panel determined to:
… do the same, and draw conclusions as to the consistency of the amended COOL
measure with Article 2.2 of the TBT Agreement only after having considered all
relevant factors. Like the Appellate Body in both US – Tuna II (Mexico) and the
original US – COOL dispute, we address the following six factors before reaching an
overall conclusion on the complainants' Article 2.2 claims:
a. the amended COOL measure's degree of contribution to a legitimate objective;
b. the trade-restrictiveness of the amended COOL measure;
c. the nature of the risks at issue and the gravity of consequences that would arise
from non-fulfilment of the objective pursued by the United States through the
amended COOL measure;
d. whether the alternatives proposed by the complainants are less trade restrictive
than the amended COOL measure;
e. whether the proposed alternatives would make an equivalent contribution to the
relevant legitimate objective, taking account of the risks non-fulfilment would
create; and
f. whether the proposed alternatives are reasonably available.
693
5.234. In addressing the first three factors, the Panel conducted what it termed a "'relational'
analysis" that led it to conclude that: (i) the amended COOL measure pursues a legitimate
objective and contributes to the fulfilment of this objective to a considerable but necessarily partial
degree; (ii) the amended COOL measure ha s increased the "considerable degree of
trade-restrictiveness" found by the Appellate Body in the original disputes; and (iii) the nature of
the risks and consequences of not fulfilling the amended COOL measure's objective are that
consumers would not receive meaningful information on the origin of the covered products and
would, therefore, be misinformed, confused, or not informed at all.
694 However, the Panel was
unable to ascertain the gravity of these conseque nces of non-fulfilment of the amended COOL
measure's objective. 695 Having arrived at these conclusions in respect of the relevant factors
pertaining to the amended COOL measure itself, the Panel proceeded to conduct a "comparative"
analysis of the amended COOL measure with the complainants' four proposed alternative
measures. The Panel found that the complainants had not made a prima facie case that any of
these alternatives demonstrate that the amended COOL measure is more trade restrictive than
necessary within the meaning of Article 2.2 of the TBT Agreement.
696

691 Panel Reports, para. 7.301 (quoting Appellate Body Reports, US – COOL, para. 479). (emphasis
added by the Panel)
693 Panel Reports, para. 7.303 (referring to Appellate Body Reports, US – Tuna II (Mexico), para. 322;
and US – COOL, paras. 471-491).
694 Panel Reports, paras. 7.417, 7.611, and 7.612.
695 Panel Reports, paras. 7.418 and 7.424.
696 Panel Reports, para. 7.612.
WT/DS384/AB/RW • WT/DS386/AB/RW

5.235. As we have stated above, a certain sequence and order of analysis may logically flow from
the nature of the examination under Article 2.2. Th is sequence and order is discernible both in the
Appellate Body's past analyses in respect of Article 2.2 of the TBT Agreement 697 and in the
relevant jurisprudence relating to Article XX of the GATT 1994 and Article XIV of the GATS. 698 That
notwithstanding, the particular manner for conducting this analysis is adaptable, and may be
tailored to the specific claims, measures, facts, and arguments at issue in a given case. 699 With
these considerations in mind, and without prejudice to our findings below on specific aspects of the
Panel's analysis that are the subject of separate and more specific claims on appeal, we do not
consider that Canada and Mexico have demonstrated that, in the particular circumstances of the
present case, the sequence and order of analysis chosen by the Panel was outside the bounds of
its latitude to tailor, to the case before it, its approach to the overall weighing and balancing
required under Article 2.2. As the Appellate Body has found in respect of Article XX of the
GATT 1994, it is likewise not mandatory in respect of Article 2.2 of the TBT Agreement for a panel
to draw a preliminary conclusion on "necessity" based on the factors with respect to the technical
regulation itself before engaging further in a comparison with proposed alternative measures.
700
5.236. In the light of both the degree of latitude afforded to panels to tailor the sequence and
order of analysis for assessing "necessity" to the specific claims, measures, arguments, and facts
at issue in a given case, as well as the concomitant requirement on an appellant to demonstrate
why, by following that particular sequence and order of analysis, a panel committed an error in the
context of the case at hand, we find, in respect of Canada's claims, that the Panel did not err:
(i) by failing to articulate correctly, in paragrap hs 7.301-7.303 of the Panel Reports, the relational
component of the analysis under Article 2.2 of the TBT Agreement; (ii) by failing to describe, in
paragraphs 7.301-7.303 of the Panel Reports, how the relevant factors are to be weighed and
balanced against each other under the "relational" analysis; and (iii) by failing to clarify, in
paragraphs 7.297-7.299 of the Panel Reports, that the "comparative" analysis does not necessarily
prevail over the "relational" analysis. For the same reasons, we find, in respect of Mexico's claims,
that the Panel did not err, in paragraph 7.298 of th e Panel Reports, in stating that "a 'comparative
analysis' would be redundant only in exceptional circumstances", and in concluding, in paragraphs
7.301-7.303 and 7.424 of the Panel Reports, that such "exceptional circumstances" must be
demonstrated before any "overall" conclusions with respect to Article 2.2 may be drawn from the
"relational" analysis. These findings are without prejudice to the separate and more specific claims
of error in respect of particular aspects of the Panel's analysis under Article 2.2 of the
TBT Agreement, to which we now turn.
5.2.3 Claims of error with respect to the Panel's finding on the amended COOL
measure's degree of contribution to its objective
5.237. Canada and Mexico request that we reverse the Panel's finding that the amended COOL
measure makes a "considerable but necessarily partial" contribution to its objective.
701 Their
claims and arguments differ in relation to their respective requests. Canada claims that the Panel
erred by omitting to take into account Label D (including the incomplete character of the
information conveyed by that label) and Label E (including the propensity of that label to convey
inaccurate origin information) in ascertaining the amended COOL measure's degree of contribution
to its objective.
702 Canada further claims that, by failing to characterize properly the degree of the
amended COOL measure's coverage for the purposes of determining its degree of contribution, the
Panel acted inconsistently with its duty under Article 11 of the DSU.
703 Mexico claims that the
Panel erred by failing to include Label E in ascertaining the amended COOL measure's degree of
contribution to its objective on the basis that Label E is an "integral component" of the amended
COOL measure.
704

697 Appellate Body Reports, US – Tuna II (Mexico), paras. 327-329; US – COOL, paras. 472-479.
698 See Appellate Body Report, US – Tuna II (Mexico), para. 320 and fn 645 thereto.
699 See e.g. Appellate Body Report, China – Publications and Audiovisual Products, para. 247.
700 Appellate Body Reports, EC – Seal Products, fn 1299 to para. 5.215.
701 Canada's other appellant's submission, paras. 81-90; Mexico's other appellant's submission,
paras. 52-61 (both referring to Panel Reports, para. 7.356).
702 Canada's other appellant's submission, paras. 82 and 88.
703 Canada's other appellant's submission, paras. 88-89.
704 Mexico's other appellant's submission, para. 53.
WT/DS384/AB/RW • WT/DS386/AB/RW

5.238. For its part, the United States argues that the claims of Canada and Mexico are premised
on the misunderstanding that Article 2.2 of th e TBT Agreement requires two separate analyses,
namely, a "relational" analysis and a "comparative" analysis. 705 Instead, the United States
contends that Article 2.2 comprises one analysis requiring the demonstration that an alternative
measure exists that is less trade restrictive, makes an equivalent contribution to the relevant
objective, and is reasonably available. Thus, the Panel correctly sought to ensure that the same
scope was used for the measure and the proposed alternatives to enable a proper comparison.
706
For the United States, the Panel could only make an appropriate comparison by either including
Labels D and E in both sides of the comparison or excluding them from both sides of the
comparison.707
5.239. We begin by addressing the correct scope for the assessment of the degree of contribution
of a measure to its objective. In our view, a technical regulation should, in principle, be reviewed
in its entirety in order to assess its degree of contribution to its objective. We note that
paragraph 1 of Annex 1 to the TBT Agreement defines a "technical regulation", in relevant part, as
a "[d]ocument which lays down product characteristics or their related processes and production
methods".
708 It is, thus, the "document" constituting the technical regulation that should be
assessed under Article 2.2, rather than isolated or disconnected portions of that document. We
note, in this regard, the statement of the Appellate Body in US – Tuna II (Mexico) that a "panel
adjudicating a claim under Article 2.2 of the TB T Agreement must seek to ascertain to what
degree, or if at all, the challenged technical regulation, as written and applied, actually contributes
to the legitimate objective pursued by the Member." 709 In assessing the relevant document
constituting the technical regulation at issue under Article 2.2, the elements contained within it
that contribute to the objective of the technical regulation should first be identified, with all of
those elements then being taken into account when assessing the degree of contribution of the
technical regulation to its objective.
710 Otherwise, to exclude certain elements from that
assessment could yield an incorrect finding as to the technical regulation's degree of contribution
to its objective, and could lead to an imbalance or asymmetry in a comparison with proposed
alternatives.
711
5.240. With those considerations in mind, we turn to the relevant findings of the Panel relating to
the assessment of the degree of contribution of the amended COOL measure to its objective and,
in particular, to the Panel's statements concerni ng the relevance of Label D and Label E for the
assessment of the degree of contribution. The Panel considered that, "[i]n principle, Label D
(muscle cuts from foreign-slaughtered animals) and Label E (ground meat) could potentially be
relevant for [its] assessment of Article 2.2 – including for the amended COOL measure's degree of
contribution".
712 However, the Panel considered that "the complainants have unequivocally stated
that in this compliance dispute they are not bringing claims with respect to Labels D and E" and,
further, that "the alternative measures they have proposed under Article 2.2 specifically apply only
to US-slaughtered muscle cuts that would be eligible for Labels A-C."
713 Since the complainants
provided "no indication of how the conclusions from a relational analysis based on all distinctions
of the amended COOL measure could be meanin gfully compared to alternative measures
pertaining only to Labels A-C" 714, the Panel expressed a concern that including Labels D and E in
its assessment of the contribution of the amended COOL measure to its objective might result in
"an improper comparison" with the proposed alternatives. 715 Accordingly, the Panel declined to
examine in its contribution assessment those aspects of the amended COOL measure, including
Labels D and E, that the complainants did not ch allenge in the Panel proceedings, and that the
complainants excluded from their arguments under the comparative analysis. 716 Ultimately, the

705 United States' appellee's submission, para. 76.
706 United States' appellee's submission, para. 76.
707 United States' appellee's submission, para. 77.
708 Emphasis added. We note that a "document" may comprise multiple legal instruments in a given
circumstance.
709 Appellate Body Report, US – Tuna II (Mexico), para. 317. (fn omitted; emphasis added)
711 See e.g. Appellate Body Report, US – Tuna II (Mexico), paras. 328-331.
712 Panel Reports, para. 7.344.
715 Panel Reports, para. 7.345 (quoting Appellate Body Report, US – Tuna II (Mexico), para. 328).
716 Panel Reports, para. 7.345.
WT/DS384/AB/RW • WT/DS386/AB/RW

Panel concluded that the amended COOL measure makes a considerable but necessarily partial
contribution to its objective of providing consumer information on origin.717
5.241. We agree with the Panel that it is important to ensure a conceptual alignment between a
challenged technical regulation and proposed altern atives in assessing their respective degrees of
contribution in order to preserve the integrity of the subsequent comparison. However, we also
emphasize the importance of assessing the relevant factors in respect of a challenged technical
regulation and proposed alternatives in their entireties. In our view, a challenged technical
regulation should be considered in its entirety even when particular elements of the technical
regulation are common to both the technical regu lation and the proposed alternative measures.
This is because the manner in which such common elements interact with other elements of a
challenged technical regulation or other elements of the proposed alternatives, respectively, may
differ. Hence, even if such common elements are excluded from the assessment of the
contribution of both the technical regulation and the proposed alternatives, this may distort the
result of that assessment. In that context, we note that Labels D and E are common elements of
the amended COOL measure and the proposed alternative measures.
718 We note that Labels D
and E should have been taken into account in the assessment of both the amended COOL
measure's degree of contribution and the degree s of contribution achieved by the proposed
alternatives. Such an approach would have ensured conceptual alignment in the assessment of the
respective degrees of contribution for the purposes of a comparison. It would also have ensured
that all relevant elements of the measure at issue and the proposed alternative measures were
properly taken into account in assessing the respective overall degrees of contribution.
5.242. Canada and Mexico further argue that, notwithstanding its statement that it would not take
Labels D and E into account, the Panel nonetheless inadvertently took those elements into account
in reaching its ultimate conclusion on the amended COOL measure's degree of contribution to its
objective.
719 Thus, before reaching a finding on whether the Panel erred in its conclusion on the
degree of contribution that the amended COOL meas ure made to its objective, we first evaluate
whether the Panel, in fact, took Labels D and E into account.
5.243. We note that the Panel began its assessm ent by seeking to ascertain the proportion of
muscle cuts that are actually labelled, as oppose d to those that are exempt from the labelling
requirements. The Panel considered this to be the "initial determinant" of the degree to which the
amended COOL measure is capable of fulfilling its objective, since no origin information is
conveyed on a mandatory basis for muscle cuts falling within the amended COOL measure's three
exemptions.
720
5.244. It was in this context that the Panel noted that the amended COOL measure covers only
between 33.3% and 42.3% of beef consumed in the United States. 721 Conversely, between 57.7%
and 66.7% of beef consumed in the United Stat es is exempt from carrying a mandatory label
because it is either sold in a food service establishment, as an ingredient in a processed food item,
or by an entity not subject to be licensed as a "retailer". 722 The Panel considered between 57.7%
and 66.7% to be a "substantial portion".723
5.245. However, the Panel also noted that these figures "correspond to all beef consumed in the
United States, including Categories A-C, imported muscle cuts (Category D), and ground meat
(Category E)", and are therefore only "an indica tive approximation of the extent to which the
exemptions prevent any contribution to the COOL objective".724 The Panel expressly acknowledged

717 Panel Reports, para. 7.356.
718 In this respect, we note the Panel's finding that the complainants' proposed alternative measures
would not cover ground meat or muscle cuts from foreign-slaughtered animals, and would not change the
amended COOL measure's Labels D and E. (Panel Reports, fn 1247 to para. 7.565 (referring to Canada's and
Mexico's responses to Panel question Nos. 44 and 47))
719 Canada's other appellant's submission, paras. 86-88; Mexico's other appellant's submission,
paras. 58-60.
720 Panel Reports, para. 7.347.
721 Panel Reports, para. 7.347.
722 Panel Reports, para. 7.347.
723 Panel Reports, para. 7.347.
WT/DS384/AB/RW • WT/DS386/AB/RW

that it was "unable to determine the proportion of exempted products within Categories A-C
specifically".725
5.246. Thus, although the Panel cited percentages that included Labels D and E, it expressly
stated that such percentages could only function as an "indicative approximation", rather than
provide determinative proof, for the very reason that those figures were affected by the inclusion
of Labels D and E.726 We note that, in its concluding paragraph, the Panel stated: "[W]e find that
the amended COOL measure contributes to the ob jective of providing consumer information on
origin to a significant degree for products carrying Labels A-C."727 We consider this to demonstrate
that the Panel's analysis was limited to Labels A-C, despite some of the data analysed by the Panel
incidentally covering Labels D and E. The Panel then stated that, "[a]t the same time, the
amended COOL measure does not make any contribution for products exempted from its coverage
that would otherwise carry such labels."
728 In our view, the reference to "such labels" suggests
that the Panel was referring to Labels A-C in this consideration. In view of the foregoing, we do not
consider that the Panel did, in fact, include Labels D and E in reaching its conclusion that the
amended COOL measure makes a "considerable bu t necessarily partial" contribution to its
objective.
5.247. We recall that, in our view, Labels D and E should have been taken into account in the
assessment of both the amended COOL measure' s degree of contribution and the degrees of
contribution that would be achieved by the proposed alternatives. In the light of our conclusion
that the Panel did not take those labels into account in that assessment, we find that the Panel
erred, in paragraph 7.356 of the Panel Reports, by excluding Labels D and E in reaching its
conclusion that the amended COOL measure makes a "considerable but necessarily partial"
contribution to its objective.
5.2.4 Claims of error with respect to the Panel's interpretation and application of the
phrase "taking account of the risks non-fulf ilment would create" in Article 2.2 of the
TBT Agreement
5.248. Canada, Mexico, and the United States all request us to find that the Panel erred in various
aspects of its interpretation and application of the phrase "taking account of the risks
non-fulfilment would create" in Article 2.2 of the TBT Agreement. In this section, we begin with the
United States' claim on appeal that the Panel erred by interpreting this phrase to mean that either
the first or second proposed alternative measure put forward by Canada and Mexico could be
found to make an equivalent contribution to the amended COOL measure's objective,
notwithstanding that these alternatives provide less information on origin than the amended
measure.
729 We then evaluate the claims of Canada an d Mexico that the Panel erred in the factors
it took into account in assessing "the risks non-fulfilment would create", before turning to their
claims that the Panel erred in finding that it could not ascertain the gravity of the consequences of
non-fulfilment of the amended COOL measure's objective. Finally, we address the request of
Canada and Mexico that we find that the Panel erred in concluding that they failed to make a
prima facie case that the first and second proposed alternative measures would be able to make
an equivalent degree of contribution to the am ended COOL measure's objective, and assess their
request that we complete the legal analysis in that regard.
5.2.4.1 The United States' claim that the Panel erred in its interpretation of the phrase
"taking account of the risks non-fulfilment would create"
5.249. The United States requests us to find that the Panel erred in its interpretation of the
phrase "taking account of the risks non-fulfilment would create" in Article 2.2 of the
TBT Agreement. In particular, the United States claims that the Panel erred in contemplating, on
the basis of this phrase, that the first or second proposed alternative measure put forward by
Canada and Mexico could be found to make a contribution to the amended COOL measure's

729 United States' appellant's submission, para. 259.
WT/DS384/AB/RW • WT/DS386/AB/RW

objective that is equivalent to that of the amended COOL measure, notwithstanding that these
alternatives provide less information, or less accurate information, on origin to consumers.730
5.250. In the United States' view, the phrase "taking account of the risks non-fulfilment would
create" should be understood as a reflection that a WTO Member takes such risks into account
when setting its chosen level of fulfilment of th e objective pursued, thus, engaging an assessment
of the degree of contribution. 731 The United States emphasizes that the TBT Agreement makes
clear that it is within a Member's discretion to determine what legitimate objectives it seeks to
pursue, and to what degree it wishes to pursue those objectives. 732 To permit "the risks non-
fulfilment would create" to lessen the degree of contribution that a proposed alternative would
need to achieve in order to find a violatio n would mean to ignore these aspects of the
TBT Agreement. Thus, it is for the United States to decide the level at which it provides consumer
information on origin, regardless of whether "the risks non-fulfilment would create" are high or
low.
733 The United States argues that the Panel erred in suggesting that proposed alternatives that
make a lesser degree of contribution might be satisfactory comparators on the basis of "the risks
non-fulfilment would create". 734 In the United States' view, for a panel to be able to determine
whether adjusting one variable or another would adequately "compensate" for making a lower
degree of contribution than the Member intends to provide, it would have to analyse the Member's
domestic interests, expectations, risks, and concerns, thus encroaching in a Member's policy
space.
735
5.251. In response, Canada and Mexico argue that, for the purposes of Article 2.2, a Member's
right to set its own level of fulfilment, as evidenced through the degree of contribution a measure
makes to its objective, may be qualified by "taking account of the risks non-fulfilment would
create".736 They justify this assertion on a number of grounds. In their view, the reference to "the
levels it considers appropriate" in the preamble of the TBT Agreement is qualified by "otherwise in
accordance with the provisions of this Agreement", thus subordinating that principle to the terms
of Article 2.2.737 Further, if "the risks non-fulfilment would create" were already embodied in the
degree of contribution that a measure achieves in fulfilling its objective, as argued by the
United States, the express inclusion of that expression would be inutile.738
5.252. Before proceeding to assess the Panel's interpretation under appeal and the United States'
claim of error, we consider it useful to recall briefly pertinent aspects of our interpretation of
Article 2.2 set out above.
5.253. In particular, we recall that an assessment of whether a proposed alternative measure
achieves an equivalent degree of contribution to the relevant legitimate objective is essential for a
panel to determine whether the technical regulation at issue restricts international trade beyond
what is necessary to achieve the degree of contribution that it makes to the achievement of a
legitimate objective.
739 The need for the equivalence of the respective degrees of contribution of
the challenged technical regulation and proposed alternative measures also comports with the
principle reflected in the sixth preambular recital of the TBT Agreement that a Member shall not be
prevented from pursuing a legitimate objective "at the levels it considers appropriate".740
5.254. However, as we have elaborated above, we do not consider that a complainant must
demonstrate that its proposed alternative measure achieves a degree of contribution identical to
that achieved by the challenged technical regulation in order for it to be found to achieve an
equivalent degree. Rather, in our view, there is a margin of appreciation in the assessment of
whether a proposed alternative measure achieves an equivalent degree of contribution, whose

730 United States' appellant's submission, para. 259.
731 United States' appellant's submission, paras. 250 and 262; appellee's submission, para. 84.
732 United States' appellant's submission, paras. 250 and 260.
733 United States' appellant's submission, para. 262.
734 United States' appellant's submission, paras. 259-263.
735 United States' appellant's submission, para. 264.
736 Mexico's appellee's submission, paras. 102-108; Canada's appellee's submission, paras. 126-129.
737 Mexico's appellee's submission, para. 106; Canada's appellee's submission, paras. 126-127.
738 Mexico's appellee's submission, paras. 103-104; Canada's appellee's submission, paras. 122-123.
739 Appellate Body Reports, US – COOL, para. 461.
740 Appellate Body Reports, US – COOL, para. 373. As we have noted above, the level a Member
"considers appropriate" is usually revealed by the degree of contribution that a technical regulation actually
makes to its objective under Article 2.2.
WT/DS384/AB/RW • WT/DS386/AB/RW

contours may vary from case to case. In particular, a margin of appreciation in assessing the
equivalence of the respective degrees of contributi on may be affected by the nature of the risks
and the gravity of the consequences arising from the non-fulfilment of the technical regulation's
objective. We further recall that the assessm ent of whether a proposed alternative measure
achieves an equivalent degree of contribution should also be made in the light of the
characteristics of the technical regulation at issue as revealed through its design and structure, as
well as the nature of the objective pursued, and the nature, quantity, and quality of the evidence
available. In our view, a proposed alternative measure may achieve an equivalent degree of
contribution in ways different from the technical regulation at issue.
5.255. For the purpose of assessing the equivalenc e of the respective degrees of contribution of
the challenged technical regulation and proposed alternative measures, it is the overall degree of
contribution that a technical regulation makes to its objective that is relevant, rather than any
individual isolated aspect or component of contribution. 741 This remains the case even where a
technical regulation and proposed alternative measures may deploy various methods or techniques
that jointly or separately contribute to achieving the objective, which may not each be quantifiable
in an isolated manner.742
5.256. In the light of these considerations, we now assess the statements of the Panel pertinent
to the United States' claim of error under appeal. The United States takes issue, in particular, with
the Panel's statement:
Ultimately, the complainants have not persuasively demonstrated how the increased
coverage of their first alternative measure would compensate for less origin
information provided on Labels A-C under the first alternative measure. Accordingly,
we find that the complainants have not made a prima facie case that their first
alternative measure would make an at least equivalent degree of contribution to the
objective of providing origin information to consumers as does the amended COOL
measure.743
5.257. Although this statement was made in respect of the first proposed alternative measure in
particular, we note that the Panel applied the same reasoning mutatis mutandis in respect of the
second proposed alternative measure. 744 The United States understands from this reasoning that
the Panel contemplated that alternatives providing less specific origin information in the case of
the first proposed alternative measure, or less accurate origin information in the case of the
second proposed alternative measure, could be cons idered to make an equivalent contribution to
the objective of the amended COOL measure.
745 However, the United States considers neither
alternatives providing less specific origin information nor alternatives providing less accurate origin
information to be "compatible with the fundamental premise that it is up to the United States to
decide at what level it wants to provide consumer information on origin, regardless of whether the
'risks non-fulfilment would create' are high or low, great or small."
746
5.258. We note that the above statement of the Panel was, in respect of the first proposed
alternative measure, premised, in part, on the Panel's preceding consideration:
Given the potential relevance of risks of non-fulfilment in comparing degrees of
contribution, we consider that providing less origin information to consumers for a
significantly wider range of products through a measure like the complainants' first
alternative measure might achieve an equivalent degree of contribution as the
amended COOL measure.
747

742 See supra, para. 5.216. See also Appellate Body Report, Brazil – Retreaded Tyres, para. 151.
743 See also Panel Reports, para. 7.490; and United States' appellant's submission, para. 263.
744 Panel Reports, para. 7.503
745 United States' appellant's submission, para. 261.
746 United States' appellant's submission, para. 262.
747 Panel Reports, para. 7.488.
WT/DS384/AB/RW • WT/DS386/AB/RW

5.259. We further note that the Panel likewise considered in respect of the second alternative
measure:
We have explained that in light of the risks, we considered that the first alternative
measure might achieve an equivalent degree of contribution as the amended COOL
measure, by providing less origin information to consumers for a significantly wider
range of products. In a similar vein, we consider that by providing less accurate origin
information to consumers for a significantly wider range of products, the second
alternative measure might achieve an equivalent degree of contribution as the
amended COOL measure.748
5.260. In addition, the Panel stated that "an alternative measure making a less than equivalent
contribution to the legitimate objective in question ca nnot prove a violation of Article 2.2 of the
TBT Agreement."749 To us, this suggests that the Panel understood that both the first and second
proposed alternative measures needed to achieve an "equivalent" degree of contribution to the
amended COOL measure's objective.
5.261. The Panel then turned to assess whether these alternative measures proposed by Canada
and Mexico would make an equivalent degree of contribution to the amended COOL measure's
objective. The Panel noted that, under the first alternative measure proposed by Canada and
Mexico, which essentially provides information on where the animal was slaughtered and extends
its coverage to food service establishments and retailers that are otherwise exempt
750, less specific
information would be provided to consumers than under the amended COOL measure and stated
that the proposed alternative, therefore, "does no t seem capable of making an actual contribution
to the objective of providing consumer information on origin at least equivalent to the actual
contribution of the amended COOL measure."
751
5.262. In respect of the second proposed alternative measure, which essentially uses of the
ground beef labelling rule (Label E) for Labels A-C and extends the coverage of those labels to the
products exempt under the amended COOL measure 752, the Panel similarly considered that this
proposed alternative "does not seem capable of making an actual contribution to the objective of
providing consumer information on origin at least equivalent to the actual contribution of the
amended COOL measure" because it "would potentially provide less accurate origin information
than the amended COOL measure for covered muscle cuts of US-slaughtered animals".
753
5.263. For both the first and second proposed alternative measures, the Panel then noted the
complainants' argument that removing the three exemptions of the amended COOL measure
should offset the loss of accuracy or specificity in the origin information provided. 754 Citing
jurisprudence of the Appellate Body, the Panel stat ed that "'the risks non-fulfilment would create'
may be a relevant factor in assessing whether an alternative measure fulfils the legitimate
objective to an equivalent degree as the challenged measure." 755 As we see it, these
considerations informed the Panel's subsequent consideration that, "[g]iven the potential
relevance of risks of non-fulfilment in comparing degrees of contribution", the provision of "less
origin information" or "less accurate origin information" to consumers "for a significantly wider
range of products" could, in principle, "achieve an equivalent degree of contribution as the
amended COOL measure".
756

748 Panel Reports, para. 7.501. (emphasis original; fn omitted)
750 See Panel Reports, paras. 7.468-7.471. The additional information on where the animal was born
and raised may be provided under this alternative on a voluntary basis, such that consumers that place value
on such information can seek it out and pay a premium for it.
752 Panel Reports, para. 7.492.
754 Panel Reports, paras. 7.484 and 7.501.
755 Panel Reports, para. 7.487 (referring to Appellate Body Reports, US – Tuna II (Mexico), para. 321;
and US – COOL, paras. 377 and 471).
756 Panel Reports, paras. 7.488 and 7.501.
WT/DS384/AB/RW • WT/DS386/AB/RW

5.264. The United States deduced from these stat ements of the Panel that the Panel considered
the phrase "taking account of the risks non-fulfilm ent would create" to be capable of potentially
lessening the degree of contribution achieved by an alternative in order to be considered
"equivalent".
757 However, it is evident to us that this was not what the Panel meant when it stated
that "'the risks non-fulfilment would create' may be a relevant factor in assessing whether an
alternative measure fulfils the legitimate objective to an equivalent degree as the challenged
measure."758 The Panel did not state that "taking account of the risks non-fulfilment would create"
may lessen the degree of contribution achieved by a proposed alternative measure in order to be
considered "equivalent"; nor, in our view, is this borne out in its reasoning in applying this phrase
to the alternatives before it. Rather, the Panel stated expressly that "an alternative measure
making a less than equivalent contribution to the legitimate objective in question cannot prove a
violation of Article 2.2 of the TBT Agreement."
759
5.265. Instead of using the phrase "taking account of the risks non-fulfilment would create" to
potentially lessen the degree of contribution needed to be made by an alternative measure, we
consider the Panel to have sought to use "the risks non-fulfilment would create" to assist in
shedding light on whether the respective degrees of contribution of the amended COOL measure
and the proposed alternatives are "equivalent".760
5.266. An interpretation that would potentially lessen the degree of contribution needed to be
made by an alternative measure in order to be considered "equivalent" would not be compatible
with the legal standard for Article 2.2 and could potentially erode the principle that a Member shall
not be prevented from pursuing a legitimate objective "at the levels it considers appropriate"
pursuant to the sixth preambular recital of the TBT Agreement.
761 In this regard, we do not agree
with the arguments of Canada and Mexico that the qualification "subject to the requirement that
they … are otherwise in accordance with the provis ions of this Agreement" in the sixth preambular
recital of the TBT Agreement subordinates the prin ciple expressed in that recital – that a Member
shall not be prevented from pursuing a legitimate objective "at the levels it considers appropriate"
– to the provisions of the TBT Agreement.
762 Rather, this principle functions as interpretive context
to the provisions of the TBT Agreement, including Article 2.2. 763 In the context of Article 2.2, we
understand the qualification "subject to the requir ement that they … are otherwise in accordance
with the provisions of this Agreement" to mean that, while a Member may pursue a legitimate
objective "at the levels it considers appropriate", it may not do so in a manner that is "more trade-
restrictive than necessary". In our view, the obligation to ensure that technical regulations are not
more trade restrictive than necessary under Article 2.2 can be interpreted and applied in a manner
that does not conflict with the principle enunciated in the sixth preambular recital of the
TBT Agreement.
5.267. The United States further argues that no proposed alternative measure that provides less
origin information could ever prove the amended COOL measure to be more trade restrictive than
necessary because this would be incompatible with the "fundamental premise" that it is up to the
United States to decide the level at which it provides consumer information on origin.
764 In our
view, this argument is premised on the understanding that only the amount, type, and accuracy of
origin information to be specifically affixed to a product count towards the contribution of the

757 United States' appellant's submission, para. 261; response to questioning at the oral hearing. We
note that Canada and Mexico share this understanding of the Panel's findings. (Canada's and Mexico's
responses to questioning at the oral hearing)
760 See Panel Reports, paras. 7.488, 7.490, and 7.491.
761 We note that this principle has found expression in other areas of the covered agreements. (See
e.g. Appellate Body Reports, China – Publications and Audiovisual Products, para. 318; Brazil – Retreated
762 Canada's appellee's submission, paras. 126-127; Mexico's appellee's submission, para. 106.
763 Appellate Body Report, US – Tuna II (Mexico), paras. 212-213.
764 United States' appellant's submission, para. 262.
WT/DS384/AB/RW • WT/DS386/AB/RW

amended COOL measure to its objective. 765 However, we note that the amended COOL measure's
objective is framed more broadly than "providing consumers point of production information". In
particular, the Panel rejected the United States' argument that the objective ought to be framed
more specifically as the provision to consumers of information on where livestock were born,
raised, and slaughtered.
766 Rather, the Panel identified the objective of the amended COOL
measure more broadly as "to provide consumer information on origin".767
5.268. We note that the United States has not appealed this finding. 768 We further note that the
Panel considered there to be "two main criteria" in assessing the amended COOL measure's degree
of contribution to its objective: "the proportion of muscle cuts in the United States that actually
carry labels as well as the degree of clarity and accuracy of such labels."
769 The United States has
similarly not appealed this aspect of the Panel's finding in respect of the amended COOL measure's
degree of contribution. In this regard, we observe that there are at least two variables that may
affect the amended COOL measure's degree of contribution. The first variable encompasses the
specificity and accuracy of "information". Th e second variable encompasses the range of
"consumers" that are able to receive the information provided under the amended COOL measure,
which is a function of the scope of that measure and its exemptions from coverage. In this regard,
it follows that a significant expansion in the number of consumers receiving origin information
would increase the degree of contribution to th e amended COOL measure's objective, which could
thus potentially offset a reduction in the degree of contribution effected through the provision of
less specific or less accurate information. In assessing the equivalence of the respective degrees of
contribution made by the technical regulation at issue and the proposed alternative measures, it is
the duty of a panel to consider the implications of the interplay between these variables, on the
basis of the evidence presented, in either quantitative or qualitative terms, as appropriate.
5.269. Where two or more distinct variables in a technical regulation collectively produce an
overall degree of contribution to its objective, as with the amended COOL measure, we see no
reason why, in principle, adjustments that were made with respect to one of those variables could
not compensate for adjustments made with respect to another such variable, so that the overall
degrees of contribution of a measure and a proposed alternative measure would be equivalent.
This would, of course, need to be established by a complainant with sufficient argumentation and
evidence. Relatedly, as we have discussed above, we do not consider that a complainant must
demonstrate that its proposed alternative measure achieves a degree of contribution identical to
that achieved by the challenged technical regulation in order for it to be found to achieve an
equivalent degree. Nor do we consider that a proposed alternative measure cannot achieve an
equivalent degree of contribution in ways different from the technical regulation at issue. In this
regard, we recall that there can be a margin of appreciation in the assessment of whether a
proposed alternative measure achieves an equivalent degree of contribution, whose contours may
vary from case to case. In particular, a margin of appreciation in assessing the equivalence of the
respective degrees of contribution may be affected by the nature of the risks and the gravity of the
consequences arising from non-fulfilment of the technical regulation's objective. Thus, we do not
consider that the Panel erred in contemplating that adjustments made in the proposed alternative
measures with respect to one variable of the amended COOL measure's contribution to its
objective, namely, the range of "consumers" informed, could compensate for adjustments made
with respect to another such element, namely, the specificity and accuracy of the "information"
provided, and that such interplay might have an impact on the assessment of the equivalence of
the respective degrees of contribution.

765 As the Appellate Body has noted, a Member's level of protection need not be determined in the
abstract, but may instead be articulated, implicitly or explicitly, through the degree of contribution that the
measure makes to the legitimate objective. In that sense, and without excluding the possibility that the level a
Member considers appropriate to pursue a legitimate objective may be articulated in other ways, it is the
extent of contribution to achieving the legitimate objective that provides the reference point for ascertaining a
Member's chosen level of fulfilment. (See Appellate Body Reports, US – COOL, para. 373; and US – Tuna II
(Mexico), para. 316)
766 Panel Reports, para. 7.314 (referring to United States' first written submission to the Panel,
paras. 160-166).
767 Panel Reports, para. 7.331 (referring to Appellate Body Reports, US – COOL, paras. 433
and 496(b)(ii)).
768 United States' response to questioning at the oral hearing.
WT/DS384/AB/RW • WT/DS386/AB/RW

5.270. In the light of the above considerations, we find that the Panel did not err, in
paragraphs 7.488 and 7.501 of the Panel Reports, in contemplating that an alternative measure
providing less, or less accurate, origin information to consumers for a significantly wider range of
products might achieve an "equivalent" degree of contribution as the amended COOL measure.
5.2.4.2 Canada's and Mexico's claims that the Panel erred in the factors it took into
account in assessing "the risks non-fulfilment would create"
5.271. Canada and Mexico request us to find that the Panel erred in respect of the factors it took
into account in assessing "the risks non-fulfilment would create" under Article 2.2 of the
TBT Agreement. In particular, Canada and Mexico claim that the Panel erred by failing to take into
account the relative importance of the values or interests pursued by the amended COOL measure,
as well as by failing to take into account its design, structure, and architecture as part of "taking
account of the risks non-fulfilment would create". We provide an overview of the Panel's approach
and conclusions in this regard, before addressing each of these factors in turn.
5.272. The Panel noted that the Appellate Body in the original proceedings addressed the risks
non-fulfilment of the original COOL measure's objective would create by taking into account
consumer interest in, and willingness to pay for, country of origin information.
770 The Panel stated
that, "[l]ike the Appellate Body, we address thes e factors for the risks non-fulfilment of the
amended COOL measure's objective would create." 771 In respect of the argument that the relative
importance of the values or interests pursued by the amended COOL measure must also be taken
into account, the Panel began by recalling its finding in a previous section of its Reports addressing
the legal test under Article 2.2 that the "relative importance of interests or values protected by a
measure is not a separate factor of the Article 2.2 legal test."
772 There the Panel also stated:
As Mexico points out, "the risks non-fulfilment would create" is unique to the text of
Article 2.2 of the TBT Agreement, does no t appear in Article XX of the GATT 1994 and
Article XIV of the GATS. We agree that meaning must be given to this difference. In
our view, the most appropriate way to give meaning to this difference is to address
the risk non-fulfilment of the objective would create in the context of Article 2.2,
which has been specifically identified by the Appellate Body as a factor of the
Article 2.2 legal test. We shall do this, rather than assess as a separate factor "relative
importance of the objective", which does not appear in the text of Article 2.2, and was
developed only in the context of Article XX of the GATT 1994 and Article XIV of the
GATS.
773
5.273. Proceeding with its assessment of the risks of non-fulfilment of the amended COOL
measure's objective, the Panel stated that it did not "exclude the possibility for overlap between
analytical components of the legal obligations of the TBT Agreement and the GATT 1994" in
addressing the argument that the relative impo rtance of interests or values protected by a
measure should be taken into account in assessing "the risks non-fulfilment would create". 774
However, the Panel did not consider it necessary to define "the precise relationship between the
nature of risks and gravity of the consequences of the non-fulfilment of a legitimate objective
under the TBT Agreement, on the one hand, and the relative importance of the interests or values
protected under Article XX of the GATT 1994, on the other".
775 Rather, the Panel determined to
confine its analysis to "the express terms of the TBT Agreement", namely, by "taking account of
the risks non-fulfilment would create", which, it recalled, requires an examination of the nature of
the risks and the gravity of the consequenc es according to the jurisprudence of the
Appellate Body.
776

770 Panel Reports, para. 7.375 (referring to Appellate Body Reports, US – COOL, para. 478).
771 Panel Reports, para. 7.375.
774 Panel Reports, para. 7.379.
775 Panel Reports, para. 7.379.
776 Panel Reports, para. 7.379. See also Panel Reports, para. 7.311 (referring to Appellate Body Report,
WT/DS384/AB/RW • WT/DS386/AB/RW

5.274. In respect of the argument that the design and architecture of the amended COOL
measure should be taken into account in assessing "the risks non-fulfilment would create", such as
the exemptions from product coverage and the provision of potentially less accurate information
for ground beef, the Panel noted that "there may be a variety of possible reasons unrelated to
risks for exempting or treating differently certain product categories under a Member's technical
regulation, such as regulatory or compliance costs."
777 Further, the Panel considered that "the
amended COOL measure's treatment of different categories of meat products is more directly
connected to the degree of contribution under Article 2.2 and the legitimacy of regulatory
distinctions under Article 2.1."778
5.275. Thus, the Panel confined its analysis of "the risks non-fulfilment would create" to assessing
consumer interest in, and willingness to pay for, country of origin information. 779 We now turn to
the specific claims of Canada and Mexico that the Panel erred in this regard. We begin by
assessing whether the Panel erred by failing to take into account the relative importance of the
values or interests pursued by the amended COOL measure, followed by whether the Panel erred
by failing to take into account the design, structure, and architecture of that measure.
5.2.4.2.1 Whether the Panel erred by failing to take into account the relative
importance of the values or interests purs ued by the amended COOL measure in "taking
account of the risks non-fulfilment would create"
5.276. Canada and Mexico claim that the Panel erred by failing to consider in its assessment of
"the risks non-fulfilment would create" that, compared to other objectives such as public health
and the protection of the environment, the mere provision of origin information is not important.
780
For Canada and Mexico, the relatively low importance of providing origin information suggests that
the gravity of the consequences of not providing such information is concomitantly low.
781
5.277. In addressing the question at hand, we turn first to the text of Article 2.2 of the
TBT Agreement, namely, the phrase "taking account of the risks non-fulfilment would create". In
our interpretation of Article 2.2 above, we have noted that, textually, the "risks" to be "tak[en]
account of" under Article 2.2 are those that woul d be created by the "non-fulfilment" of the
"legitimate objective" of the technical regulation at issue. In this regard, the risks that would be
created by the non-fulfilment of legitimate objectives other than the particular legitimate objective
at issue are not referred to in the text of Article 2.2. In other words, because the objective of the
amended COOL measure is the "provision of consumer information on origin", the risks referred to
in Article 2.2 are those that would be created by the non-fulfilment of the "provision of consumer
information on origin", rather than the risks related to other potential legitimate objectives, such
as the protection of public health or the environm ent. In that regard, we do not view the phrase
"taking account of the risks non-fulfilment would create" as providing a direct textual basis for
taking into account the relative importance of the objective pursued, i.e. the importance of the
objective pursued as compared to the importance of other objectives.
5.278. We consider this understanding to be confirmed by the final sentence of Article 2.2, which
provides that, "[i]n assessing such risks, relevant elements of consideration are, inter alia :
available scientific and technical information, related processing technology or intended end-uses
of products." While we agree that this is a non-exhaustive list
782, the terms listed in this sentence,
namely, "scientific and technical information", "related processing technology", and "intended
end-uses of products", provide an indication of the relevant elements of consideration when
"taking account of the risks non-fulfilment would create". 783 In our view, these terms relate to
neutral and observable considerations in respec t of fulfilling the objective of the technical
regulation at issue. By contrast, an evaluation of the relative importance of an objective vis-à-vis
other objectives involves particular opinions or points of view on differing objectives that might be
pursued by a Member. In our view, the terms "scientific and technical information", "related

777 Panel Reports, para. 7.380.
779 Panel Reports, para. 7.381.
780 Canada's other appellant's submission, paras. 98 and 100; Mexico's other appellant's submission,
paras. 77, 78, and 81.
781 Canada's other appellant's submission, paras. 98-100; Mexico's other appellant's submission,
para. 73.
782 Canada's other appellant's submission, para. 32.
783 See e.g. Appellate Body Reports, US – COOL, para. 370.
WT/DS384/AB/RW • WT/DS386/AB/RW

processing technology", and "intended end-uses of products", do not connote the kinds of
judgements that would be necessary to determine whether one objective is, in comparative terms,
more or less important than other objectives.
5.279. However, we consider it useful to distinguish between the relative i m p o r t a n c e o f a n
objective, on the one hand, and the importance of the objective to the Member implementing the
technical regulation at issue , on the other hand. As we see it, the importance of the objective to
the Member implementing the technical regulati on at issue could inform the analysis under
Article 2.2 in some capacity, to the extent it is reflected in the level considered appropriate by the
Member to pursue the relevant objective, or the actual degree of contribution made by the
technical regulation to its objective. For instance, where a Member chooses a high level of
fulfilment for a technical regulation to contribute to its objective, this may be indicative of the
importance this Member places on the fulfilment of that objective, and evidence pertaining to the
importance a Member places on an objective might inform an assessment of the degree of
contribution made by the technical regulation to its objective.
784 Thus, we would ordinarily expect
the gravity of the consequences arising from the non-fulfilment of the technical regulation's
legitimate objective to correlate, at least to some extent, to the importance of the objective to the
Member concerned. However, this does not mean that the relative importance of an objective, as
determined against other potential objectives that a Member might pursue, is a factor directly
pertinent to "taking account of the risks non-fulfilment would create" under Article 2.2.
785
5.280. We further recall that a panel is not bound by a Member's characterization of the objective
of a measure and should conduct its own assessment of the objective pursued. The Appellate Body
has noted, in this regard, that a panel is called upon to make a determination of "legitimacy" of a
measure's objective under Article 2.2. It appears to us that the importance of an objective to the
Member concerned may be relevant for assessing th e "legitimacy" of an objective. Moreover, as
we have explained above, while there is no requirement under Article 2.2 to assess the relative
importance of the objective as a separate factor, we do not mean to suggest that the importance
of an objective is irrelevant for the assessment of the other relevant factors under Article 2.2.
5.281. For these reasons, we find that the Panel did not err, in paragraph 7.379 of the Panel
Reports, by failing to take into account the relati ve importance of the values or interests pursued
by the amended COOL measure in assessing "the risks non-fulfilment would create" under
Article 2.2 of the TBT Agreement.
5.2.4.2.2 Whether the Panel erred by failing to take into account the design, structure,
and architecture of the amended COOL meas ure in assessing "the risks non-fulfilment
would create"
5.282. Canada and Mexico request us to find that the Panel erred by failing to consider the
design, structure, and architecture of the amende d COOL measure, such as the exemptions from
coverage and the potentially less accurate or less specific information for certain products, as part
of "taking account of the risks non-fulfilment would create" under Article 2.2 of the
TBT Agreement.
786 For Canada and Mexico, the existence of these aspects of the amended COOL
measure demonstrates that the gravity of the consequences arising from the non-fulfilment of its
objective is insignificant
787 or not grave. 788 This is because, if the gravity of the consequences
arising from non-fulfilment were significant, then there would not be large exemptions and less-
detailed information for certain products.789
5.283. We begin by noting that both Canada and Mexico clarified in response to questioning at the
oral hearing that their claims relate to an error of law by the Panel. Thus, they claim that the Panel
rejected the design, structure, and architecture of the amended COOL measure as relevant for

784 See e.g. Appellate Body Report, Brazil – Retreaded Tyres, paras. 144 and 151-155.
785 In our view, is not required that the relative importance of the objective concerned be ascertained as
a separate factor in a manner similar to the "necessity" analysis under Article XX of the GATT 1994 or
Article XIV of the GATS.
786 Canada's other appellant's submission, paras. 96, 101-102, and 111; Mexico's other appellant's
submission, paras. 84-89.
787 Mexico's other appellant's submission, para. 86.
788 Canada's other appellant's submission, paras. 101-102.
789 Mexico's other appellant's submission, paras. 85-86. See also Canada's other appellant's submission,
para. 101.
WT/DS384/AB/RW • WT/DS386/AB/RW

assessing "the risks non-fulfilment would create" generally as a matter of legal interpretation. For
Mexico, this error also manifests itself as an inconsistency with Article 11 of the DSU.790
5.284. In this regard, we recall the interpretation of the phrase "taking account of the risks non-
fulfilment would create" set out above, namely, that "taking account" calls for an active and
meaningful consideration of "the risks non-fulfilment would create" in the weighing and balancing
under Article 2.2. At the same time, this requirement is also sufficiently flexible so as to be
adaptable to the particularities of a given case. Thus, certain aspects of a technical regulation may
be salient to "taking account of the risks non-fulfilment would create" in a given case. A technical
regulation itself, or its related instruments, might contain elements pertaining to the nature of the
risks it seeks to address and the gravity of the co nsequences arising from the non-fulfilment of its
objective.
5.285. We now turn to the relevant findings of the Panel. In rejecting the relevance of the design,
structure, and architecture of the amended COOL measure for assessing "the risks non-fulfilment
would create", we recall that the Panel stated that "there may be a variety of possible reasons
unrelated to risks for exempting or treating differently certain product categories under a
Member's technical regulation, such as regulatory or compliance costs."
791 The implication is that
the Panel left open the possibility that there migh t be reasons for exempting or treating differently
certain categories of meat products under the am ended COOL measure that are indeed related to
the risks non-fulfilment would create. As we see it, rather than rejecting the relevance of the
design, structure, and architecture generally as a matter of legal interpretation, the Panel did not
consider that sufficient reasons had been advanced connecting those features to "the risks non-
fulfilment would create" in the particular case at hand. This is supported by the fact that, in its
subsequent analysis, the Panel considered, specifically with respect to the amended COOL
measure, that the "treatment of different categories of meat products is more directly connected
to the degree of contribution under Article 2.2 an d the legitimacy of regulatory distinctions under
Article 2.1".
792 In our view, this suggests that the Panel considered that, in respect of the features
of the particular technical regulation at issue in this case – namely, its exemptions from coverage
and the potentially less accurate or less specific information for certain products – such features
were more suited to consideration as part of ot her aspects of the analysis. We, thus, do not read
the Panel's findings as interpreting the phrase "taking account of the risks non-fulfilment would
create" to exclude, in all instances, the design , structure, and architecture of the technical
regulation at issue.
5.286. We note that, in their arguments on appeal, Canada and Mexico simply assert, without
more, that the very existence of these features demonstrates their connection to "the risks
non-fulfilment would create".
793 In our view, this assertion does not, in and of itself, suffice to
make out a prima facie case that the specific features of the amended COOL measure are pertinent
considerations in "taking account of the risks non-fulfilment would create". As we have stated
above, a technical regulation itself, or its associated instruments, may reveal elements relevant to
the nature and gravity of the risks addressed. Ho wever, the Panel did not consider the evidence
and argumentation presented by Canada and Mexico to substantiate the connection between
specific aspects of the design, architecture, and structure of the amended COOL measure, on the
one hand, and the nature of the risks of the non-fulfilment of its objective or the gravity of the
consequences arising from its non-fulfilment, on the other hand.
794
5.287. For these reasons, we find that the Panel did not err, in paragraph 7.380 of the Panel
Reports, by failing to take into account the de sign, structure, and architecture of the amended
COOL measure in assessing "the risks non-fulfilment would create" under Article 2.2 of the
TBT Agreement. In the light of our finding that th e Panel did not err under Article 2.2 by failing to
take the design, structure, and architecture of the amended COOL measure into account in this
regard, we further find that the Panel did not fail to make an objective assessment of the matter

790 Mexico's other appellant's submission, para. 89; response to questioning at the oral hearing.
791 Panel Reports, para. 7.380.
793 See e.g. Canada's other appellant's submission, para. 101; and Mexico's other appellant's
submission, para. 86.
794 Panel Reports, para. 7.380.
WT/DS384/AB/RW • WT/DS386/AB/RW

before it under Article 11 of the DSU by omitting these factors from its assessment of "the risks
non-fulfilment would create".795
5.2.4.2.3 Whether the Panel erred in finding that it could not ascertain the gravity of
the consequences of non-fulfilment of the amended COOL measure's objective
5.288. Canada and Mexico request us to find that the Panel erred in concluding that it could not
ascertain the gravity of the consequences of non-fulfilment of the amended COOL measure's
objective.796 Canada's request is grounded in the argument that, had the Panel not erred in
considering that certain factors were irrelevant or unnecessary for its assessment of "the risks
non-fulfilment would create", then it would have been able to reach a conclusion on the gravity of
the consequences of non-fulfilment, namely, that such consequences "would not be particularly
grave".
797 Mexico's request engages both a claim that the Panel erred as a matter of law in finding
that it was unable to ascertain the gravity of the consequences that would arise from the non-
fulfilment of the amended COOL measure, as well as a claim that the Panel acted inconsistently
with Article 11 of the DSU in its approach to th e assessment of evidence in relation to consumer
demand for origin information.
798 The United States argues that the Panel did not err in
determining that it was unable to reach a conclusion on the gravity of the consequences of non-
fulfilment in the light of the conflicting evidence, or a lack of evidence, regarding consumer
demand, consumer benefits, and the interest of the Member concerned in pursuing the legitimate
objective at issue.
799
5.289. We begin by setting out the approach of th e Panel that led it to find that it could not
ascertain the gravity of the consequences of not fulfilling the amended COOL measure's objective.
The Panel stated that it would "review the risks non-fulfilment of the amended COOL measure's
objective would create by assessing the nature of the risks and the gravity of the
consequences."
800 As part of this assessment, the Panel undertook "a critical assessment of the
evidence submitted by the parties on consumers' interest in, and willingness to pay for, country of
origin information."801 From this assessment, the Panel yielded a number of findings. In particular,
the Panel found that consumers are interested in both country of origin information in general and
country of origin information according to point of production. 802 The Panel also found that
consumers show some willingness to pay for general country of origin information.803 However, the
Panel did not consider that it had been given pr obative evidence showing consumer willingness to
pay for country of origin information according to point of production. 804 On the basis of these
findings, the Panel concluded there to be "some risk" associated with the non-fulfilment of the
amended COOL measure's legitimate objective, wh ose nature took the form of consumers being
"misinformed, confused, or not informed at all".805
5.290. However, for the Panel, the inability to determine the extent of consumer interest, in either
general country of origin information or country of origin information according to point of
production, based on the evidence on the record meant that it could not ascertain the gravity of
not fulfilling the amended COOL measure's objective. The Panel appears to have treated its
assessment of such gravity as essentially a quantitative exercise. For instance, the Panel stated in
respect of one study that, while it " quantifies the premium consumers would be willing to pay for
labels showing general information on country of origin, neither the study nor the complainants
have translated the implications of this figure for the specific degree of gravity of the
consequences of not fulfilling the objective to provide consumer information."
806

795 See Mexico's other appellant's submission, para. 89.
796 Canada's other appellant's submission, para. 115; Mexico's other appellant's submission, para. 90.
797 Canada's other appellant's submission, paras. 96, 108, and 115.
798 Mexico's other appellant's submission, paras. 90 and 93-94; response to questioning at the oral
hearing.
799 United States' appellant's submission, paras. 124-125.
800 Panel Reports, para. 7.381.
801 Panel Reports, para. 7.383.
802 Panel Reports, para. 7.416.
803 Panel Reports, para. 7.416.
804 Panel Reports, para. 7.416.
805 Panel Reports, para. 7.417.
WT/DS384/AB/RW • WT/DS386/AB/RW

5.291. The Panel then considered that the benefits accruing to consumers from receiving origin
information may also be a determinant of consumer demand for such information. 807 However, the
Panel rejected certain evidence of the USDA submi tted in respect of the economic benefits of the
amended COOL measure because of the USDA's consideration that "the expected benefits from
implementing mandatory COOL requirements remain difficult to quantify ".808 Thus, despite
considering that the benefits that would be fore gone by consumers in the absence of meaningful
origin information are relevant for assessing the gravity of the consequences of such an
eventuality, the Panel concluded that even the USDA was unable to ascertain the benefits to
consumers of the amended COOL measure.809
5.292. The Panel further considered that a Member's interest in pursuing a legitimate objective
might be additionally relevant for ascertaining the gravity of the consequences of not fulfilling the
amended COOL measure's objective. 810 However, with respect to the measure at issue, the Panel
appeared to consider the USDA's aforementioned difficulties in quantifying consumer benefits
under both the original and amended COOL measures as a reason for not being able to quantify
the United States' interest in pursuing the legitimate objective at hand.811
5.293. For the foregoing reasons, the Panel considered that, although it established the nature of
the risks and the consequences of not fulfilling the amended COOL measure's objective, it could
not ascertain the gravity of the consequences of not fulfilling that measure's objective based on
the evidence before it.812
5.294. The Panel cited its inability to ascertain the gravity of the consequences of not fulfilling the
amended COOL measure's objective as the reason for which it could not "tak[e] account of the
risks non-fulfilment would create" in assessing wh ether the first and second proposed alternative
measures demonstrate that the amended COOL measure is "more trade-restrictive than
necessary".
813 Thus, in practical terms, we understand the Panel to have considered that its
inability to quantify the gravity of the conseque nces of not fulfilling the amended COOL measure's
objective meant that it could not make an assessment of "the risks non-fulfilment would create",
and that, consequently, it could not take such risks into account in the overall weighing and
balancing under Article 2.2. In our view, the Panel, upon concluding in effect that it could not
quantify the gravity of the consequences of non-fulfil ment, effectively ceased to take into account
"the risks non-fulfilment would create" in the overall weighing and balancing, as demonstrated in
its further analysis of the first and second proposed alternative measures.
5.295. We recall that the nature of the risks and the gravity of the consequences of non-fulfilment
are merely components of the overall analysis of "the risks non-fulfilment would create". In the
light of our understanding that panels must adopt or develop a methodology that is suited to
yielding a correct assessment of the relevant factors under Article 2.2 in the circumstances of a
given case, we consider that the Panel was correct to seek to assess as precisely as it could the
gravity of the consequences of non-fulfilment of the amended COOL measure's objective in the
circumstances of this case. However, as we have stated above, and as is apparent from the
circumstances of the case before us, it might be difficult, in some contexts, to determine
separately the nature of the risks, on the one hand, and to quantify the gravity of the
consequences that would arise from non-fulfilment, on the other hand. In such contexts, it may be
more appropriate to conduct a conjunctive analysis of both the nature of the risks and the gravity
of the consequences of non-fulfilment, in which "the risks non-fulfilment would create" can be
assessed in qualitative terms.
5.296. In any case, as we have explained above, difficulties or imprecision that arise in assessing
"the risks non-fulfilment would create", due to the nature of the relevant risks or the gravity of the
consequences of non-fulfilment of the objective of the measure at issue, should not, in and of
themselves, relieve a panel from its duty to assess this factor. A panel should proceed further with
a holistic weighing and balancing of all relevant factors, and reach an overall conclusion under

807 Panel Reports, para. 7.419.
808 Panel Reports, para. 7.420 (quoting 2013 Final Rule, p. 31376). (emphasis added)
809 Panel Reports, para. 7.420.
810 Panel Reports, para. 7.422.
811 Panel Reports, para. 7.422.
812 Panel Reports, paras. 7.423-7.424.
813 Panel Reports, paras. 7.488 and 7.501.
WT/DS384/AB/RW • WT/DS386/AB/RW

Article 2.2. In our view, the term "taking a ccount of" calls for the active and meaningful
consideration of "the risks non-fulfilment would create", even where there is imprecision in their
nature or magnitude, in the weighing and balancing under Article 2.2 of the TBT Agreement.
5.297. In the light of these considerations, we find that the Panel erred, in paragraph 7.423 of the
Panel Reports, in concluding that it was unable to ascertain the gravity of the consequences of
non-fulfilment of the amended COOL measure's objective.814
5.2.4.3 Claims of error with respect to the Panel's finding that Canada and Mexico failed
to make a prima facie case that the first and second proposed alternative measures
would make an equivalent degree of cont ribution to the amended COOL measure's
objective
5.298. We turn now to the requests of Canada and Mexico that we find that the Panel erred in
finding that Canada and Mexico failed to make a prima facie case that the first and second
proposed alternative measures would make an equi valent degree of contribution to the amended
COOL measure's objective. Canada and Mexico also request us to complete the legal analysis in
respect of these proposed alternative measures and find that they make an equivalent degree of
contribution to that of the challenged measure. In the alternative, Canada and Mexico request us
to find that, even if these proposed alternativ e measures achieve a lesser degree of contribution
than the amended COOL measure, this is offset by their lower level of trade-restrictiveness and by
the low gravity of "the risks non-fulfilment would create", such that the amended COOL measure is
"more trade-restrictive than necessary" under Article 2.2 of the TBT Agreement.
5.299. Canada and Mexico consider that the Panel's error in relation to assessing the equivalence
between the respective degrees of contribution stems from the Panel's earlier error in failing to
ascertain the gravity of the risks of non-fulfilment.
815 In particular, Canada argues that the Panel
did not take account of "the risks non-fulfilment would create" because of its erroneous finding
that it was unable to assess the gravity of the consequences of non-fulfilment of the amended
COOL measure's objective, and that this led the Panel to find that Canada failed to make a prima
facie case in respect of the equivalence of the degrees of contribution of the first and second
proposed alternative measures with that of the amended COOL measure.816 Mexico argues that the
Panel's error in respect of "the risks non-fulfilme nt would create" had "the effect of compromising
its ability to engage in a fulsome comparative analysis of the amended COOL measure and
Mexico's first and second alternative measures", particularly in assessing whether their respective
degrees of contribution were equivalent to that of the amended COOL measure.
817
5.300. Canada and Mexico argue, in the first instance, that the first and second proposed
alternative measures can be considered to achiev e an equivalent degree of contribution to the
amended COOL measure's objective because their re spectively lower degrees of origin information
and accuracy are applied to a significantly wider range of products.818
5.301. The United States responds that the proposed alternative measures cannot be found to
make an "equivalent" degree of contribution beca use they provide a lesser degree of information
or accuracy. Otherwise, this would effectively prohibit the United States from providing point-of-
production origin information, which is the level of origin information that it considers appropriate
to provide to its consumers.
819 Further, the United States argues that Canada and Mexico have not
explained why or how expanding the scope of products subject to labelling could compensate for
the failure to provide the same degree of point-of-production origin information.820

814 We note that Canada's claim under Article 2.2 of the TBT Agreement, and Mexico's claim under
Article 11 of the DSU, in respect of the Panel's assessment of certain evidence relating to consumer demand,
are addressed in section 5.2.4.4 infra.
815 Canada's other appellant's submission, paras. 119 and 122; Mexico's other appellant's submission,
paras. 113, 114, 132, and 150.
816 Canada's other appellant's submission, paras. 118 and 122;
817 Mexico's other appellant's submission, paras. 113-115.
818 Canada's other appellant's submission, para. 117; Mexico's other appellant's submission, paras. 133
and 152.
819 United States' appellee's submission, para. 154.
820 United States' appellee's submission, paras. 179 and 194.
WT/DS384/AB/RW • WT/DS386/AB/RW

5.302. We begin our analysis by recalling the Panel's findings in respect of the first and second
proposed alternative measures. The Panel considered in respect of the first proposed alternative
measure that, "given the potential relevance of risks of non-fulfilment in comparing degrees of
contribution", the provision of "less origin information to consumers for a significantly wider range
of products through a measure like the complainants' first alternative measure might achieve an
equivalent degree of contribution as the amended COOL measure".
821 The Panel made a
substantially similar observation in respect of the second proposed alternative measure. 822 As we
have noted above, our understanding of the Panel's statements in this regard is that the Panel
considered that taking account of "the risks non-fulfilment would create" might shed light on the
assessment of whether the first and second proposed alternative measures, in fact, would make an
equivalent degree of contribution as the amende d COOL measure does to the objective pursued.
However, the Panel considered that, since it was unable to ascertain the gravity of the
consequences of non-fulfilment of the amended C OOL measure's objective, it could not determine
"the specific implications of risks of non-fulfilment for the interplay between less accurate
information and more extensive coverage".
823 Thus, the Panel considered that, in the particular
circumstances of this case, taking account of "the risks non-fulfilment would create" could not shed
light on whether the respective degrees of cont ribution of the amended COOL measure and the
first and second proposed alternative measures ar e equivalent, because it had not been able to
ascertain the gravity of the consequences of not fulfilling the amended COOL measure's
objective.
824
5.303. The Panel proceeded to conclude, in respect of the first proposed alternative measure,
that, "[u]ltimately, the complainants have not persuasively demonstrated how the increased
coverage of their first alternative measure would compensate for less origin information provided
on Labels A-C under the first alternative measure". 825 In the context of the considerations and
analysis of the Panel preceding this conclusion, we take this statement to mean that, although the
Panel did not in principle exclude the possibility that less specific origin information coupled with
increased product coverage could produce an "equ ivalent" degree of contribution, this had not
been proven by the complainants. For the Panel, an assessment of "taking account of the risks
non-fulfilment would create" could have shed light on whether the increased coverage of the first
proposed alternative measure might compensate for less origin information provided on Labels A-C
to produce an equivalent degree of contribution, but the complainants did not make a prima facie
case in this regard.
826 This was because, in the Panel's view, the complainants had not submitted
probative evidence on the gravity of the conseq uences of non-fulfilment of the amended COOL
measure's objective. 827 Thus, the Panel concluded that "the complainants have not made a
prima facie case that their first alternative measure would make an at least equivalent degree of
contribution to the objective of providing origin information to consumers as does the amended
COOL measure."
828
5.304. The Panel employed substantially the same reasoning and reached substantially the same
conclusions in respect of the second proposed alternative measure, which, the complainants
argued, achieved an equivalent degree of contri bution to the amended COOL measure's objective
by offsetting less accurate information with increased product coverage.829
5.305. Thus, in summary, we understand that the Panel's ultimate findings that the complainants
did not make a prima facie case that their first and second proposed alternative measures would
make an equivalent degree of contribution to the amended COOL measure's objective was based
on its conclusion that the complainants had not proved how or why less origin information, or less
accurate origin information, could be offset by increased product coverage to produce an
equivalent degree of contribution.
830 This conclusion of the Panel, was, in turn, based on its
consideration that, on the evidence before it, the Panel was unable to take account of "the risks
non-fulfilment would create" and, consequently, could not assess whether the respective degrees

821 Panel Reports, para. 7.488.
822 Panel Reports, para. 7.501.
824 Panel Reports, paras. 7.488 and 7.501.
825 Panel Reports, para. 7.490.
826 Panel Reports, paras. 7.488-7.490.
827 Panel Reports, para. 7.423.
828 Panel Reports, para. 7.490.
829 Panel Reports, paras. 7.501-7.503.
830 Panel Reports, paras. 7.490 and 7.502.
WT/DS384/AB/RW • WT/DS386/AB/RW

of contribution of the amended COOL measure and the first and second proposed alternative
measures were equivalent.
5.306. In this regard, we recall our finding above that the Panel erred by ceasing its analysis
when it concluded that it was unable to ascertain the gravity of the consequences that would arise
from the non-fulfilment of the amended COOL meas ure's objective in quantitative terms. As we
have explained above, it might be difficult, in some contexts, to determine separately the nature
of the risks, on the one hand, and to quantify the gravity of the consequences that would arise
from non-fulfilment, on the other hand. In such co ntexts, it may be more appropriate to conduct a
conjunctive analysis of both the nature of th e risks and the gravity of the consequences of
non-fulfilment, in which "the risks non-fulfilment would create" are assessed in qualitative terms.
In any case, difficulties or imprecision that arise in assessing "the risks non-fulfilment would
create", due to the nature of the relevant risks or the gravity of the consequences of non-
fulfilment at issue, should not, in and of themselves, relieve a panel from its duty to assess this
factor and proceed further with a holistic weighing and balancing of all relevant factors, and reach
an overall conclusion under Article 2.2.
5.307. In our view, this error of the Panel effectiv ely meant that the Panel did not fulfil its duty to
take account of "the risks non-fulfilment would create" in its overall assessment under Article 2.2
and, more particularly, in assessing whether the first and second proposed alternative measures
make a contribution to the amended COOL measure's objective that is equivalent in degree to that
made by the amended COOL measure itself.
5.308. We have found the Panel's finding that it was unable to ascertain the gravity of the
consequences of non-fulfilment of the amended COOL measure's objective to be in error. The
Panel cited this inability as its reason for concluding that it could not determine whether the first
and second proposed alternative measures make a degree of contribution equivalent to that of the
amended COOL measure.
831 Thus, we consider that this error also compromised the Panel's
finding, in paragraphs 7.490 and 7.503 of the Panel Reports, that the complainants failed to make
a prima facie case that the first and second proposed alternative measures would make an
equivalent degree of contribution to the amended COOL measure's objective and, subsequently, its
decision to end its analysis as to whether the amended COOL measure is "more trade-restrictive
than necessary" under Article 2.2 of the TBT Agreement on the basis of those proposed alternative
measures.
832 This, in turn, led to the Panel's overall conclusion that the complainants did not make
a prima facie case that the amended COOL measure violates Article 2.2 of the TBT Agreement. 833
Because the Panel's overall conclusion was based on these erroneous intermediate findings, we
reverse the Panel's overall conclusion, in paragraph 7.613 of the Panel Reports, that Canada and
Mexico did not make a prima facie case that the amended COOL measure violates Article 2.2 of the
TBT Agreement. We reach this finding without prejud ice to how, in the circumstances of this case,
"the risks non-fulfilment would create" actually shed any light on whether the first and second
proposed alternative measures make a contribution to the amended COOL measure's objective
that is equivalent in degree to that of the amended COOL measure itself.
5.309. We also express reservations in respect of the Panel's decision to cease its analysis of the
first and second proposed alternative measures due to the difficulties it encountered in assessing,
in precise terms, whether they achieve a degree of contribution equivalent to that of the amended
COOL measure.834 In particular, we understand the Panel to have decided to "end [its] analysis"
and not proceed to assess the other relevant factors in the analysis because it could not, inter alia,
"determine the specific implications of [the] risks of non-fulfilment for the interplay between less
information coupled with more extensive coverage", or determine how less specific or less
accurate information might be compensated by significantly wider product coverage.
835
5.310. As we have recognized above, there may be instances where it is difficult to assess with
precision whether there is equivalence between the technical regulation's degree of contribution
and that of a proposed alternative measure. For in stance, as demonstrated by the case before us,
a technical regulation and proposed alternative measures may deploy various methods or

831 Panel Reports, paras. 7.488 and 7.501.
832 Panel Reports, paras. 7.491 and 7.503.
833 Panel Reports, paras. 7.611-7.613.
835 Panel Reports, para. 7.488 and 7.491.
WT/DS384/AB/RW • WT/DS386/AB/RW

techniques that jointly or separately contribute to achieving the objective, which may not each be
quantifiable in an isolated manner.836 We recognize that, in such instances, a panel may encounter
practical difficulties in assessing the overall degree of contribution made by a technical regulation
and in comparing whether a proposed alternative measure makes an equivalent degree of
contribution. Some imprecision in assessing the respective degrees of contribution of a technical
regulation and proposed alternatives may be inev itable in certain circumstances. However, such
imprecision should not, in and of itself, relieve a panel from its duty to assess the equivalence of
the respective degrees of contribution. In spite of such imprecision, a panel should proceed with
the overall weighing and balancing process under Article 2.2. 837 I n t h i s r e g a r d , a s w e h a v e
elaborated above, there is a margin of appreciation in the assessment of whether a proposed
alternative measure achieves an equivalent degree of contribution, whose contours may vary from
case to case. Having said that, however, we have already reversed the Panel's overall conclusion
that Canada and Mexico failed to make a prima facie case that the amended COOL measure is
"more trade-restrictive than necessary" on the basi s of the first and second proposed alternatives.
We, therefore, do not consider it necessary to evaluate further the Panel's decision to cease its
analysis due to the difficulties it encountered in determining the equivalence of the degree of
contribution made by the first and second proposed alternatives with that of the amended COOL
measure.
5.311. Finally, we recall that, in the alternative, Canada and Mexico request us to find that, even
if these proposed alternative measures are found to achieve a lesser degree of contribution than
the amended COOL measure, this is offset by thei r lower level of trade-restrictiveness and by the
low gravity of "the risks non-fulfilment would create", such that the amended COOL measure is
"more trade-restrictive than necessary". We note that the requests of Canada and Mexico are
slightly different from each other.
5.312. Canada's request in the alternative is premised on us finding that the first and second
alternative measures do not make a degree of contribution to the amended COOL measure's
objective that is at least equivalent to that achieved by the measure itself.
838 In that circumstance,
Canada requests us to complete the legal analysis in respect of the first and second proposed
alternative measures and, after considering the re levant findings under both the "relational" and
"comparative" analyses together, to reverse the Panel's finding that Canada failed to make a prima
facie case that the amended COOL measure vi olates Article 2.2 of the TBT Agreement. 839 In this
regard, we recall that we have already found that the Panel erred in its overall conclusion that the
complainants failed to make a prima facie case that the amended COOL measure violates
Article 2.2 of the TBT Agreement. Canada's request in respect of how we complete the legal
analysis is predicated on the outcome of our assessment of whether the respective degrees of
contribution of the first and second proposed alternative measures, and the amended COOL
measure, are equivalent. We will therefore address Canada's request in the context of assessing
whether we can complete the legal analysis.
5.313. Mexico's request in the alternative is predicated on "any of [its] proposed alternative
measures mak[ing] a somewhat lesser contribution to the consumer information objective".
840 If
Mexico's proposed alternative measures are found to make a "somewhat lesser" contribution,
Mexico argues that they should nonetheless be found to fulfil the amended COOL measure's
objective to an equivalent degree due to "the risks non-fulfilment would create" being insignificant,
and due to their less trade-restrictive nature.
841 Thus, whereas Canada's request presumes that
the first and second proposed alternative measures are not found to be "equivalent" due to us
concluding that they make a lesser degree of contribution, Mexico's request calls for us to find that
they make an "equivalent" degree of contribution notwithstanding us concluding that they make a
lesser degree of contribution. Since Mexico's request is predicated on how we complete the legal
analysis, and is predicated on the outcome of our assessment of whether the first and second
proposed alternative measures make a lesser degree of contribution, we will address its request in
the context of assessing whether we can complete the legal analysis.

836 See e.g. Appellate Body Report, Brazil – Retreaded Tyres, para. 151.
837 See Appellate Body Reports, EC – Seal Products, para. 5.215.
838 Canada's other appellant's submission, para. 131.
839 Canada's other appellant's submission, para. 131.
840 Mexico's other appellant's submission, para. 124.
841 Mexico's other appellant's submission, para. 124.
WT/DS384/AB/RW • WT/DS386/AB/RW

5.2.4.4 Claims of error with respect to th e Panel's assessment of certain evidence and
arguments in respect of consumer demand for origin information
5.314. As part of their requests that we find that the Panel erred in concluding that it could not
ascertain the gravity of the consequences of non-fulfilment of the amended COOL measure's
objective, Canada and Mexico claim that the Panel erred in its assessment of evidence and
arguments relating to consumer demand for origin information.
5.315. In particular, Canada claims that, alth ough the Panel identified "consumer demand for
origin information" as a "relevant indicator" for assessing the gravity of the consequences of not
fulfilling the amended COOL measure's objective, the Panel erred by excluding evidence relating to
the "market failure perspective" in its assessment of consumer demand.
842 In Canada's view, this
was the "single most relevant element" for assessing consumer demand for the purpose of
ascertaining the gravity of the consequences of not fulfilling the amended COOL measure's
objective.843 For Canada, the appropriate inference to dr aw from this evidence is that consumers
have no interest in this information, or that this interest is weak 844, which demonstrates in turn
that the consequences of non-fulfilment are not particularly grave. 845 Canada submits that, in the
light of this error, the Panel erred in concluding that it could not assess the gravity of the
consequences of non-fulfilment.
846
5.316. Mexico requests us to find that the Panel failed to make an objective assessment of the
matter before it, pursuant to Article 11 of the DSU, in respect of a number of pieces of evidence
relating to consumer demand for origin information.
847 In Mexico's view, an objective assessment
of this evidence would have established a prima facie case that consumer demand for origin
information on the covered products is very low. This, in turn, would have supported a conclusion
that the gravity of the consequences arising from non-fulfilment of the amended COOL measure's
objective is very low, rather than a conclusion that such gravity cannot be ascertained on the basis
of the evidence submitted in this case.848
5.317. We recall our finding above that the Panel erred in concluding that it was unable to
ascertain the gravity of the consequences of non-fulfilment of the amended COOL measure's
objective. We have also found that the Panel erred in its overall conclusion with respect to
Article 2.2 of the TBT Agreement.849 Accordingly, we do not consider it necessary, for the purposes
of resolving these disputes, to rule on whether, in the assessment of the evidence and arguments
on consumer demand for origin information, the Panel erred under Article 2.2 of the
TBT Agreement or acted inconsistently with Article 11 of the DSU.
5.2.4.5 Completion of the legal analysis wi th respect to the first and second proposed
alternative measures
5.318. We have reversed the Panel's overall conclu sion that Canada and Mexico failed to make a
prima facie case that the amended COOL measure is "more trade-restrictive than necessary" on
the basis of the first and second proposed altern ative measures. We, thus, turn to the request of
Canada and Mexico that we complete the legal an alysis and find, based on their first and second
proposed alternative measures, that the amended COOL measure is more trade restrictive than
necessary, in violation of Article 2.2 of the TBT Agreement.
5.319. At the outset, we note that, on a number of occasions, the Appellate Body has completed
the legal analysis with a view to facilitating the prompt settlement and effective resolution of the
dispute.850 The Appellate Body has completed the legal analysis when sufficient factual findings by

842 Canada's other appellant's submission, para. 112 (quoting Panel Reports, para. 6.59).
843 Canada's other appellant's submission, para. 112.
844 Canada's other appellant's submission, para. 112.
845 Canada's other appellant's submission, para. 104.
846 Canada's other appellant's submission, para. 115.
847 Mexico's other appellant's submission, para. 93.
848 Mexico's other appellant's submission, para. 93.
849 Panel Reports, para. 7.613.
850 See e.g. Appellate Body Reports, Australia – Salmon, paras. 117-136; US – Wheat Gluten,
paras. 80-92; and Canada – Aircraft (Article 21.5 – Brazil), paras. 43-52.
WT/DS384/AB/RW • WT/DS386/AB/RW

the panel or undisputed facts on the panel record allowed it to do so. 851 The Appellate Body has
declined to complete the legal analysis where doing so would involve addressing claims that the
panel had not examined at all
852, particularly where, at the appellate review stage, the participants
did not sufficiently address the issues the Appellate Body needed to resolve in order to complete
the legal analysis, including the probative value of the evidence not considered by the panel.853
5.320. With these considerations in mind, we recall that the Panel did not make factual findings in
respect of the reasonable availability or trade- restrictiveness of the first and second proposed
alternative measures. 854 Thus, we may only complete the legal analysis if there are sufficient
undisputed facts on the Panel record that allow us to do so. In this case, there would need to be
sufficient undisputed facts to enable us to make an assessment of whether the first and second
proposed alternative measures are less trade restrictive than the amended COOL measure,
reasonably available to the United States, and make an equivalent degree of contribution to the
amended COOL measure's objective. We assess below whether there are undisputed facts on the
Panel record in respect of the first and second proposed alternative measures.
5.321. Turning to the first proposed alternativ e measure, we note that it would involve the
removal of the three exemptions maintained under the amended COOL measure for (i) entities not
meeting the definition of the term "retailer"; (ii) ingredients in "processed food items"; and
(iii) products served in "food service establishments".
855 The United States asserted before the
Panel that these exemptions stemmed from "U.S. policymakers ultimately ma[king] the
determination that the provision of such information in restaurants, by small retailers, and in all
processed foods would cross the threshold for the overall level of cost that consumers and industry
were willing to bear".
856 Canada and Mexico asserted before the Panel that origin information could
be conveyed on products currently exempt from th e scope of the COOL requirements by indicating
origin information on menus, signs, placards, blackboards where daily specials are posted, and on
websites.857 Canada and Mexico acknowledged that this would involve the introduction of
compliance costs for those entities that are currently exempt. 858 Thus, on the one hand, the
United States asserted that the exemptions were designed to contain costs at an overall level that
consumers and industry could bear, whereas, on the other hand, Canada and Mexico suggested
some means by which previously exempt entities could implement the first proposed alternative
measure, while acknowledging that this would involve costs. In that context, it is not apparent to
us that there are sufficient undisputed facts on the Panel record on the basis of which we could
assess the reasonable availability to the United States of the first proposed alternative measure.
Further, Canada and Mexico have not drawn our attention to undisputed facts on the Panel record
on the basis of which we could assess the reasonable availability of the first proposed alternative
measure, especially in respect of the removal of the exemptions.
859
5.322. Turning to the second proposed alternative measure, we note that its degree of trade-
restrictiveness was a contested element on which the Panel made no factual findings. In particular,
the United States asserted before the Panel that Canada and Mexico had not demonstrated that
the second proposed alternative measure would be less trade restrictive than the amended COOL
measure. In this regard, the United States noted that increased costs on previously exempt
entities, including approximately 600,000 restaurants in the United States, could be conceived as
worsening the trade-restrictiveness of the amended COOL measure.
860 Canada and Mexico argued

851 See e.g. Appellate Body Reports, US – Gasoline, p. 19, DSR 1996:I, p. 18; Canada – Periodicals,
p. 24, DSR 1997:I, p. 469; EC – Poultry, para. 156; EC – Hormones, para. 222; US – Shrimp, paras. 123-124;
Japan – Agricultural Products II, para. 112; US – FSC, para. 133; Australia – Salmon, paras. 117-118; US –
Lamb, paras. 150 and 172; US – Section 211 Appropriations Act, para. 352; EC and certain member States –
Large Civil Aircraft, paras. 1174-1178; and US – Large Civil Aircraft (2nd complaint), paras. 1272-1274.
852 Appellate Body Reports, EC – Asbestos, paras. 79 and 82; US – Section 211 Appropriations Act,
853 Appellate Body Report, Japan – DRAMs (Korea), para. 142.
854 Panel Reports, paras. 7.491 and 7.503.
855 Panel Reports, para. 7.471.
856 United States' response to Panel question No. 13, para. 27.
857 Mexico's response to Panel question No. 46, para. 93; Canada's response to Panel question No. 46,
para. 102.
858 Mexico's response to Panel question No. 47, para. 96; Canada's response to Panel question No. 47,
para. 103.
859 Mexico's other appellant's submission, paras. 142-146; Canada's other appellant's submission,
paras.116-126; Canada's and Mexico's responses to questioning at the oral hearing.
860 United States' first written submission to the Panel, paras. 176-177.
WT/DS384/AB/RW • WT/DS386/AB/RW

that the second proposed alternative measure would be less trade restrictive because it included
the flexibility of the 60-day inventory allowance, which the panel in the original proceedings found
to have reduced the magnitude of the cost entailed by segregation. 861 In that context, it is not
apparent to us that there are sufficient undisputed facts on the Panel record on the basis of which
we could assess the respective degrees of trade-re strictiveness of the second proposed alternative
measure vis-à-vis the amended COOL measure. Fu rther, Canada and Mexico have not drawn our
attention to undisputed facts on the Panel record on the basis of which we could assess the
respective degrees of trade-restrictiveness of the second proposed alternative measure vis-à-vis
the amended COOL measure.862
5.323. In view of the foregoing considerations, we find that there are not sufficient undisputed
facts on the record to complete the legal analysis of Canada's and Mexico's claims under Article 2.2
of the TBT Agreement in respect of the firs t and second proposed alternative measures.
Consequently, we are also not in a position to complete the legal analysis with respect to the
alternative claims raised by Canada and Mexico on appeal.
863
5.2.5 Claims of error with respect to the third and fourth proposed alternative measures
5.324. Canada and Mexico request us to reverse the Panel's finding that they did not adequately
identify the third and fourth proposed alternative measures for the purpose of making a prima
facie case that an alternative measure is reasonably available. 864 Canada and Mexico allege, in
particular, that the Panel erred in finding that it is the complainant that bears the burden of
providing precise explanations with respect to th e implementation of the proposed alternative and
of providing evidence substantiating the likely magnitude of the costs that would be associated
with the alternative measure.
865 For Canada and Mexico, the Panel, thus, applied an incorrect
standard of proof, which effectively relieved the Un ited States of its burden to adduce evidence
and arguments in rebuttal. Canada and Mexico do not request the completion of the legal analysis
under Article 2.2 of the TBT Agreement in respec t of the third and fourth proposed alternative
measures.
5.325. We recall that the third proposed alternative measure would apply to muscle cuts from
US-slaughtered animals and would entail a mandatory trace-back system to provide specific
information on the precise location where th e animal was born, raised, and slaughtered. 866 The
fourth proposed alternative measure would prescribe that muscle cuts from US-slaughtered
animals carry labels indicating the place of birth, raising, and slaughter according to "states and/or
province(s)", in addition to the country designations required by the amended COOL measure.
867
5.326. We begin our analysis with an overview of the Appellate Body's jurisprudence on what
needs to be established to demonstrate the "reasonable availability" of a proposed alternative
measure, and how the burden of proof is allocated in that regard under Article 2.2. We then assess
the burden of proof applied by the Panel in respec t of the "reasonable availability" of the third and
fourth proposed alternative measures, and how the Panel allocated that burden among the parties.
Finally, we evaluate whether the Panel erred in resp ect of the burden of proof it required of the
complainants in respect of the "reasonable availability" of the third and fourth proposed alternative
measures.

861 Mexico's response to Panel question No. 47, para. 98 (referring to Original Panel Reports, US –
COOL, para. 7.435); Canada's response to Panel question No. 47, para. 104 (referring to Original Panel
Reports, US – COOL, para. 7.435).
862 Mexico's other appellant's submission, paras. 157-160; Canada's other appellant's submission,
paras.116-126; Canada's and Mexico's responses to questioning at the oral hearing.
863 See supra, paras. 5.311-5.313.
864 Mexico further requests us to reverse the Panel's finding that it did not make a prima facie case that
its proposed third alternative measure would be less trade restrictive than the amended COOL measure.
(Mexico's other appellant's submission, para. 184) We address this request in fn 906 infra.
865 Canada's other appellant's submission, para. 154; Mexico's other appellant's submission, para. 184.
866 Panel Reports, para. 7.504.
867 Panel Reports, para. 7.565.
WT/DS384/AB/RW • WT/DS386/AB/RW

5.327. The Appellate Body stated in US – Tuna II (Mexico) that, "[i]n making its prima facie case,
a complainant may … seek to identify a possible alternative measure that is less trade restrictive,
makes an equivalent contribution to the relevant objective, and is reasonably available."
868 It is
then for the respondent to rebut this case by presenting evidence and arguments showing that the
challenged measure is not more trade restrictive than necessary to achieve the contribution it
makes toward the objective pursued, and by demo nstrating, for example, that the alternative
measure identified by the complainant is not, in fact, "reasonably available". 869 The nature and
degree of evidence required for a complainant to establish the "reasonable availability" of a
proposed alternative measure as part of a claim under Article 2.2 of the TBT Agreement will
necessarily vary from measure to measure and from case to case.
870
5.328. That notwithstanding, we consider certain elements of Article 2.2 to be generally relevant
to the question of what nature and degree of ev idence is required to establish the "reasonable
availability" of a proposed alternative measure. In particular, it is important to keep in mind that
such "reasonable availability" pertains to proposed alternative measures that function as
"conceptual tool[s]" to assist in assessing whether a technical regulation is more trade restrictive
than necessary.
871 Such alternative measures are of a hypothetical nature in the context of the
analysis under Article 2.2 because they do not yet exist in the Member in question, or at least not
in the particular form proposed by the complainant. These considerations should, in our view,
inform the nature and degree of evidence requir ed to establish the "reasonable availability" of
proposed alternative measures in making a prima facie case under Article 2.2 of the
TBT Agreement.
5.329. We also consider relevant jurisprudence relating to Article XX of the GATT 1994 and
Article XIV of the GATS in assessing the appropri ate burden of proof concerning the "reasonable
availability" under Article 2.2 of the TBT Agreement. In this regard, we note that the
Appellate Body has considered Article XX of the GATT 1994 as relevant context for the
interpretation of Article 2.2 of the TBT Agreement. 872 At the same time, we are cognizant of the
fact that Article XX of the GATT 1994 and Article XI V of the GATS are exceptions, while Article 2.2
of the TBT Agreement sets out positive obligations. This may have implications for the allocation of
the burden of proof. In this respect, we recall that the Appellate Body held in US – Clove
Cigarettes that:
… the burden of proof in respect of a part icular provision of the covered agreements
cannot be understood in isolation from the overarching logic of that provision, and the
function which it is designed to serve. On the contrary, it is by having regard for the
function and rationale of a particular provision that an adjudicator can, adequately,
assess the manner in which the burden of proof should be allocated under that
provision.
873
5.330. In US – Gambling , the Appellate Body considered in respect of Article XIV(a) of the GATS
that an alternative measure may be found not to be "reasonably available" where it is "merely
theoretical in nature, for instance, where the responding Member is not capable of taking it, or
where the measure imposes an undue burden on that Member, such as prohibitive costs or
substantial technical difficulties".
874 In a similar vein, in China – Publications and Audiovisual
Products, the Appellate Body stated in respect of Article XX(a) of the GATT 1994 that, "in order to
establish that an alternative measure is not 'rea sonably available', the respondent must establish
that the alternative measure would impose an undue burden on it, and it must support such an

868 Appellate Body Report, US – Tuna II (Mexico), para. 323. (emphasis added) See also Appellate Body
Reports, US – COOL, para. 379.
869 Appellate Body Report, US – Tuna II (Mexico), para. 323. See also Appellate Body Reports, US –
COOL, para. 379.
870 See Appellate Body Report, Chile – Price Band System (Article 21.5 – Argentina), para. 134
(referring to Appellate Body Reports, US – Wool Shirts and Blouses, p. 14, DSR 1997:I, p. 335; and US –
Carbon Steel, para. 157).
871 Appellate Body Report, US – Tuna II (Mexico), para. 320.
872 See Appellate Body Reports, US – COOL, fn 745 to para. 374 and fn 750 to para. 376; and US –
873 Appellate Body Report, US – Clove Cigarettes, para. 286.
874 Appellate Body Report, US – Gambling, para. 308. (fn omitted)
WT/DS384/AB/RW • WT/DS386/AB/RW

assertion with sufficient evidence."875 In that regard, the Appellate Body faulted the respondent for
failing to provide "evidence to the [p]anel substantiating the likely nature or magnitude of the
costs that would be associated with the proposed alternative, as compared to the current
system".
876 The Appellate Body considered "some change or administrative cost" would not suffice
to meet the threshold of an "undue" burden on the respondent that would render it merely
theoretical in nature.877 In the same vein, the Appellate Body held in Korea – Various Measures on
Beef that the relevant proposed alternative in that case "could well entail higher enforcement costs
for the national budget". 878 Additionally, the Appellate Body in EC – Seal Products considered in
respect of Article XX(a) of the GATT 1994 that the impact on the relevant industry might be
pertinent, stating that "an alternative measure may be deemed not reasonably available due to
significant costs or difficulties faced by the affected industry, in particular where such costs or
difficulties could affect the ability or willingness of the industry to comply with the requirements of
that measure."
879 With these considerations in mind, we now assess the burden of proof applied by
the Panel on the complainants in respect of the third and fourth proposed alternative measures.
5.331. We note that, at the outset of its asse ssment of the third proposed alternative measure,
the Panel stated that the complainants' identification of an alternative measure should, at a
minimum, enable a comparison with the challenged measure in terms of the relevant legal
elements, and that an alternative measure may be found not to be reasonably available where, for
example, it is merely theoretical in nature.
880 With respect to the cost of an alternative measure,
the Panel stated that it was guided by the Appellate Body's clarification that a party bearing the
burden of proof in the context of an alternativ e measure's reasonable availability must provide
evidence "substantiating the likely nature or magnitude of the costs that would be associated with
the proposed alternative, as compared to the current system".
881 The Panel noted that, in this
statement, the Appellate Body was referring to the respondent's burden under Article XX of the
GATT 1994 to show that an alternative measure would impose an undue burden. The Panel also
noted that, under Article 2.2 of the TBT Agreement, the burden is on the complainant to make a
prima facie case that the proposed alternative measure is less trade restrictive, reasonably
available, and that it makes an "equivalent" contri bution to the objective of the measure at issue.
While the Panel did "not wish to imply that complainants are required in all cases to describe each
and every specific aspect of an alternative measure and provide quantified cost estimates for
each", it nonetheless considered that "adequate identification of alternative measures requires
more precision than the sometimes vague and in some respects incomplete description of the
implementation and ultimate magnitude of the asso ciate[d] costs provided by the complainants in
this case".
882 Ultimately, the Panel faulted the complainants for having "not sufficiently
explained"883 how their third proposed alternative measure would be implemented in the
United States, and for having "put forward cost estimates that would only partially cover the
[third] alternative".
884
5.332. Regarding the burden of proof to be applied with respect to the fourth proposed alternative
measure, the Panel referred back to its statements regarding the burden of proof with respect to
the third proposed alternative measure. 885 The Panel then found with regard to the fourth
alternative measure that the complainants had not provided a sufficient description of how their
fourth alternative measure would be implemented in the United States 886, and that they had not
advanced sufficient arguments on the cost of the fourth alternative.887

875 Appellate Body Report, China – Publications and Audiovisual Products, para. 327. (emphasis original;
fn omitted)
876 Appellate Body Report, China – Publications and Audiovisual Products, para. 328.
877 Appellate Body Report, China – Publications and Audiovisual Products, para. 327. (emphasis original)
878 Appellate Body Report, Korea – Various Measures on Beef, para. 181.
879 Appellate Body Reports, EC – Seal Products, para. 5.277.
880 Panel Reports, para. 7.506 (referring to Appellate Body Report, Brazil – Retreaded Tyres, para. 156).
881 Panel Reports, para. 7.510 (quoting Appellate Body Report, China – Publications and Audiovisual
Products, paras. 327-328). (fn omitted) See also Panel Reports, para. 7.603.
882 Panel Reports, para. 7.556.
883 Panel Reports, para. 7.553.
885 Panel Reports, para. 7.586 and fn 1286 thereto, and para. 7.603 and fn 1316 thereto.
886 Panel Reports, para. 7.602.
887 Panel Reports, para. 7.609.
WT/DS384/AB/RW • WT/DS386/AB/RW

5.333. We recall that, with regard to the burden of proof for establishing whether the third and
fourth proposed alternative measures were "reasonably available", the Panel noted that, in China –
Publications and Audiovisual Products , the Appellate Body faulted the respondent for failing to
provide evidence to that panel substantiating the likely nature or magnitude of the costs that
would be associated with the proposed alternative, as compared to the measure at issue in that
case.888 The Panel in this case acknowledged the fact that this statement was made in the context
of an analysis under Article XX of the GATT 1994 relating to the question of whether an alternative
measure identified by a complainant would impose an undue burden on the respondent 889;
however, we do not see that the Panel placed this consideration within the particular context of
Article 2.2 of the TBT Agreement in order to assess the manner in which the burden of proof
should be allocated under that provision. As we have noted above, while Article XX provides for
exceptions, Article 2.2 contains positive obligations, and this difference must be taken into account
in the allocation of the burden of proof impo sed on respondents and complainants under the
respective provisions.
5.334. In this regard, we have noted above the Appellate Body's observation in US – Clove
Cigarettes that the burden of proof in respect of a particular WTO provision "cannot be understood
in isolation from the overarching logic of that provision, and the function which it is designed to
serve".
890 We have considered above several elemen ts that inform the nature and degree of
evidence required to establish the "reasonable av ailability", or lack thereof, of a proposed
alternative measure for purposes of Article 2.2. In particular, the function of alternative measures
as "conceptual tool[s]" informs the nature and degree of evidence required. As noted, such
alternative measures are of a hypothetical nature for purposes of an analysis under Article 2.2
because they do not yet exist in the Member in question, or at least not in the particular form
proposed by the complainants. Thus, we do not consider that complainants can be expected to
provide complete and exhaustive descriptions of the alternative measures they propose.
5.335. In the case at hand, we note that Canada and Mexico asserted before the Panel that their
third and fourth proposed alternative measures were based on, inter alia, analogous measures that
had been implemented in the United States and in other Members.
891 With regard to the
complainants' reliance on examples of trace-back systems in other countries, the Panel held that
these provided "little if any clarity about the proposed trace-back system to be implemented in the
United States".892 The Panel also stated that "the complainants' references to other traceability
and foreign trace-back systems do not cohesively span the necessary stages between animal,
carcass, and retail muscle cut", and that the complainants failed to elaborate on the "manner or
cost implications of spanning these stages in the United States under the third alternative
measure".
893 Ultimately, the Panel found, with respect to the third alternative measure, that the
complainants had not addressed the stages of a trace-back system with sufficient clarity. On the
basis that the complainants' explanations on the implementation and cost of the third alternative
measure provide for "extensive flexibility both ov erall and for specific stages", the Panel faulted
the complainants for not providing a "cohesive depiction of the complainants' third alternative
measure".
894 With regard to cost, the Panel faulted the complainants for providing "cost estimates
that would only partially cover the suggested alternative".895
5.336. Similarly, at the outset of its analysis of the fourth proposed alternative measure, the
Panel stated that "adequately explaining how an alternative measure would be implemented is an
essential part of the complainants' burden to identify an alternative measure that is not limited to
a 'concept'."
896 In this regard, the Panel referred back to its statements regarding the allocation of
the burden of proof in the context of the third alternative measure. 897 Ultimately, the Panel found,

888 Panel Reports, para. 7.510 (quoting Appellate Body Report, China – Publications and Audiovisual
Products, para. 328).
890 Appellate Body Report, US – Clove Cigarettes, para. 286. (emphasis omitted)
891 See e.g. Panel Reports, paras. 7.507, 7.513-7.523, 7.531-7.532, 7.535, 7.540-7.541, 7.547-7.549,
7.569, 7.589-7.590, and 7.594.
892 Panel Reports, para. 7.549.
893 Panel Reports, para. 7.551.
894 Panel Reports, para. 7.552.
896 Panel Reports, para. 7.586 (quoting United States' comments on Canada's response to Panel
question No. 74).
WT/DS384/AB/RW • WT/DS386/AB/RW

with regard to the fourth alternative measure, that "the complainants' limited explanations did not
provide a sufficient description of how their fourth alternative measure would be implemented in
the United States."
898 With respect to the cost of the fourth alternative measure, the Panel, at the
beginning of its analysis, referred back to the burd en of proof articulated in its assessment of the
third alternative measure. 899 Ultimately, the Panel concluded that the complainants had "not
advanced sufficient arguments on the costs of the fourth alternative measure". 900 In this respect,
we note that the Appellate Body has held that a proposed alternative measure may be "reasonably
available" even if it involves " some change or administrative cost". 901 In other words, not any
change or any increase in cost by virtue of the implementation of an alternative measure would
render a proposed alternative not "reasonably available". In our view, this has implications on the
allocation of the burden of proof.
5.337. In this respect, we see differences between, on the one hand, the burden on the
respondent under Article XX of the GATT 1994 to prove that an alternative measure proposed by
the complainant would impose an undue burden – e.g. due to prohibitively high cost or substantial
technical difficulties – and that this alternative is therefore not reasonably available and, on the
other hand, the burden on the complainant under Article 2.2 of the TBT Agreement to make a
prima facie case that the alternative measure it proposes would be reasonably available. Under
Article XX of the GATT 1994, a respondent must establish that the alternative measure identified
by the complainant is ultimately not reasonably available to the respondent because it is merely
theoretical in nature – e.g. where the responding Member is not capable of taking it, or where the
measure imposes an undue burden on that Memb er, such as prohibitive costs or substantial
technical difficulties.
902 The particular circumstances of the responding Member – e.g. the capacity
of the respondent to implement a proposed alte rnative measure that would be costly or would
require advanced technologies – may be relevant for the assessment of whether or not a proposed
alternative would impose an undue burden. 903 The question of whether or to what extent a
respondent would be capable of implementing a proposed alternative measure, and the cost
involved in that implementation, depend on the specifics of implementation. While, under
Article XX, the complainant has to identify alternatives, it is the respondent that has to adduce
evidence substantiating why costs are prohibitive or technical difficulties are substantial.
5.338. To the contrary, under Article 2.2 of the TBT Agreement, a complainant must make a
prima facie case that its proposed alternative measure is indeed reasonably available. As under
Article XX of the GATT 1994, we consider that a proposed alternative may be reasonably available
even if it involves " some change or administrative cost".
904 Thus, in the first instance, cost
estimates may be relevant for the assessment of whether a proposed alternative measure is
reasonably available. However, considering th at proposed alternative measures serve as
"conceptual tool[s]", and taking into account that the specific details of implementation may
depend on the capacity and particular circumstances of the implementing Member in question, it
would appear incongruous to expect a complainan t, under Article 2.2 of the TBT Agreement, to
provide detailed information on how a propos ed alternative would be implemented by the
respondent in practice, and precise and comprehensive estimates of the cost that such
implementation would entail. Rather, once a complainant has established prima fa cie that the
proposed alternative is reasonably available to the respondent, it would be for the respondent to
adduce specific evidence showing that associated costs would be prohibitive, or that technical
difficulties would be so substantial that implemen tation of such an alternative would entail an
undue burden for the Member in question.
5.339. Accordingly, in the circumstances of the present case, the Panel should have considered
whether the evidence provided by the complain ants, and, in particular, the examples of
implemented trace-back systems in the United States and elsewhere, could have provided a
sufficient indication that the costs of the proposed alternatives would not be a priori prohibitive,
and that potential technical difficulties associated with their implementation would not be of such a

898 Panel Reports, para. 7.602.
900 Panel Reports, para. 7.608.
901 See Appellate Body Report, China – Publications and Audiovisual Products, para. 327. (emphasis
original; fn omitted)
902 Appellate Body Report, US – Gambling, para. 308.
903 Appellate Body Report, Brazil – Retreaded Tyres, para. 171.
904 See Appellate Body Report, China – Publications and Audiovisual Products, para. 327. (emphasis
original)
WT/DS384/AB/RW • WT/DS386/AB/RW

substantial nature that they would render the proposed alternatives merely theoretical in nature.
The Panel should have then considered to what extent the United States had submitted evidence
substantiating that the proposed alternative measures were indeed merely theoretical in nature, or
entailed an undue burden, for instance, because they involved prohibitively high costs or would
entail substantial technical difficulties.
5.340. Thus, having failed to engage in the inqu iries outlined above, we consider that the Panel
did not properly allocate the burden of proof under Article 2.2 of the TBT Agreement in finding that
Canada and Mexico had not provided sufficient expl anation of how their third and fourth proposed
alternative measures would be implemented in the United States, and of the costs associated with
those alternative measures. 905 Accordingly, we reverse the Panel's findings, in paragraphs 7.564
and 7.610 of the Panel Reports, that Canada and Mexico did not make a prima facie case that their
third and fourth proposed alternative measures are reasonably available for purposes of their
claims under Article 2.2 of the TBT Agreement.906
5.3 Article III:4 and Article IX of the GATT 1994
5.341. We now turn to consider the United States' appeal of the Panel's findings under
Article III:4 and Article IX of the GATT 1994. The Unit ed States requests us to find that the Panel
erred by failing to take into account Article IX as relevant context in interpreting Article III:4. 907
For the United States, the context of Article IX informs the interpretation and application of
Article III:4. The United States alleges that the Panel erred in finding that less favourable
treatment under Article III:4 could be demonstrated based on a finding of detrimental impact
without a further inquiry into the context provided by Article IX.
5.342. Canada and Mexico request us to uphold the Panel's finding in respect of Article III:4 of
the GATT 1994 and to reject the United States' alle gation that the Panel erred by failing to take
into account Article IX of the GATT 1994 as relevant context in its interpretation of Article III:4.
908
Canada also contends that there are strong reasons, based on considerations of due process, not
to entertain the United States' claim based on Article IX because it was not raised before the
Panel, but only on appeal.
909 Mexico maintains that Article IX is not an exception to Article III:4.
For Mexico, both provisions apply cumulatively and Members must comply with both of them
simultaneously.910
5.3.1 The Panel's findings
5.343. Before the Panel, Canada and Mexico argued that the amended COOL measure is
inconsistent with Article III:4 of the GATT 1994 because it modifies the conditions of competition
in the US market to the detriment of Canadian and Mexican livestock. Canada and Mexico
requested the Panel to address their claims under Article III:4 irrespective of the Panel's findings
under Article 2.1 of the TBT Agreement.
911 In response, the United States contended that the
existence of a detrimental impact alone does not imply that the measure accords less favourable
treatment within the meaning of Article III:4 of the GATT 1994.
912 Rather, a panel must examine
whether the detrimental impact can be explained by other circumstances or factors that do not
reflect discrimination.913 In this regard, the United States explained that any detrimental impact of
the amended COOL measure can be explained by th e information to be conveyed to the consumer

905 Panel Reports, paras. 7.553, 7.556, 7.557, 7.602, and 7.608.
906 We see no need, in the light of the present finding to also address Mexico's request for the reversal
of the Panel's intermediate finding that the complainants did not make a prima facie case that the third
alternative measure would be less trade restrictive than the amended COOL measure, in paragraph 7.560 of
the Panel Reports. (Mexico's other appellant's submission, para. 184) Furthermore, we recall that Canada and
Mexico do not request completion of the legal analysis under Article 2.2 of the TBT Agreement in respect of the
third and fourth proposed alternative measures.
907 United States' appellant's submission, para. 290.
908 Canada's appellee's submission, para. 150; Mexico's appellee's submission, para. 138.
909 Canada's appellee's submission, para. 144.
910 Mexico's appellee's submission, para. 128.
911 Panel Reports, para. 7.618 (referring to Canada's first written submission to the Panel, para. 90; and
Mexico's first written submission to the Panel, para. 213).
912 United States' first written submission to the Panel, para. 122 (referring to Appellate Body Report,
913 Panel Reports, para. 7.621 (quoting United States' first written submission to the Panel, para. 123).
WT/DS384/AB/RW • WT/DS386/AB/RW

in the sense that the recordkeeping and verification requirements are the same for companies
processing imported and domestic livestock, and the information conveyed on the labels is also the
same.
914 However, the United States made no claim before the Panel and presented no argument
with respect to Article IX of the GATT 1994.
5.344. The Panel rejected the United States' request that it assess whether any detrimental
impact of the amended COOL measure could be explained by other factors that do not reflect
discrimination in the context of the analysis of less favourable treatment under Article III:4.
915 The
Panel recalled that, in EC – Seal Products , the Appellate Body stated that Article III:4 is
"concerned with ensuring effective equality of competitive opportunities for imported products" 916,
and permits regulatory distinctions to be drawn be tween products "provided that such distinctions
do not modify the conditions of competition between imported and like domestic products". 917
Furthermore, the Panel cited the Appellate Body's statements that, if a measure has a detrimental
impact on the conditions of competition for like imported products, then such detrimental impact
will amount to treatment that is "less favourable" within the meaning of Article III:4, and that, "for
the purposes of an analysis under Article III:4, a panel is [not] required to examine whether the
detrimental impact of a measure on competitive opportunities for like imported products stems
exclusively from a legitimate regulatory distinction."
918 The Panel considered that this "directly
dispose[d] of similar arguments" in the presen t disputes, and rejected, on that basis, the
United States' suggestion to address legitimate regulatory distinctions in the context of less
favourable treatment under Article III:4.
919 Accordingly, the Panel found that the amended COOL
measure is inconsistent with Article III:4 of the GATT 1994. 920 The Panel did not refer to Article IX
of the GATT 1994 in its analysis of Canada's and Mexico's claims under Article III:4.
5.3.2 Article IX of the GATT 1994 as rele vant context for the interpretation of
Article III:4 of the GATT 1994
5.345. We now turn to examine the United St ates' claim that Articl e IX of the GATT 1994
constitutes relevant context for the interpretation of Article III:4 of the GATT 1994, and that the
Panel erred by failing to consider this in its analysis under Article III:4. For the United States,
Articles IX:2 and IX:4 are relevant context in forming the interpretation and application of
Article III:4 in the sense that these provisions recognize that laws and regulations aimed at
providing consumer information on origin may cause "difficulties and inconveniences" to exporting
Members and increase the cost of imported products.
921 On this basis, the United States asserts
that the Panel erred in finding that less favourable treatment could be demonstrated based on the
existence of detrimental impact without further inquiry into the context provided by Article IX.
5.346. For the United States, Article III:4, when read in the context of Article IX, provides
regulatory space for Members to provide consumers with information on the origin of products in
the sense that "reasons for any difficulties and inconveniences caused by the measures" should be
taken into account.
922 This requires consideration of whether difficulties and inconveniences could
"be reduced, with due regard to the necessity of protecting consumers, and what the reasons
would be for any increased cost for imported products caused by the measures, in particular
whether the measures unreasonably increase the cost of imported products."
923
5.347. In response, Canada contends that the legal test under Article III:4 is well established and
should not be modified as suggested by the United States. Moreover, Canada argues that we
should not entertain the United States' argument on appeal based on Article IX because the
"complete absence" of legal arguments in this regard before the compliance Panel raises due
process concerns.
924 Mexico contends that Article IX is not an exception to Article III:4, but that

914 United States' first written submission to the Panel, para. 124.
915 Panel Reports, para. 7.625.
916 Panel Reports, para. 7.623 (quoting Appellate Body Reports, EC – Seal Products, para. 5.101).
917 Panel Reports, para. 7.623 (quoting Appellate Body Reports, EC – Seal Products, para. 5.116).
918 Panel Reports, para. 7.624 (quoting Appellate Body Reports, EC – Seal Products,
paras. 5.116-5.117).
919 Panel Reports, para. 7.625.
920 Panel Reports, para. 7.643.
921 United States' appellant's submission, para. 284.
922 United States' appellant's submission, para. 284.
923 United States' appellant's submission, para. 284.
924 Canada's appellee's submission, para. 144.
WT/DS384/AB/RW • WT/DS386/AB/RW

both provisions apply cumulatively and that Members must comply with both provisions
simultaneously.925
5.348. We begin by addressing the due process concerns raised by Canada. Canada contends that
the United States did not raise an argument based on Article IX before the Panel, and that
entertaining this argument on appeal, therefore, raises due process concerns. 926 We note that,
indeed, the United States did not present arguments with regard to Article IX to the Panel. Only on
appeal does the United States argue that Article IX constitutes relevant context for the
interpretation of Article III:4 of the GATT 1994, an d alleges that the Panel erred by not taking this
into account in its interpretation of Article III:4.
5.349. In this respect, we note that the Appellate Body held in Canada – Aircraft that "new
arguments are not per se excluded from the scope of appellate review, simply because they are
new."
927 At the same time, the Appellate Body recogn ized that Article 17.6 of the DSU precludes
engaging with new arguments where doing so wo uld require the Appellate Body to review new
facts that were not before the panel. Moreover, if complaining parties were allowed to raise on
appeal new arguments that would require the Appellate Body to solicit, receive, and review new
facts, this could also undermine the due process rights of responding parties, which would not
have had the opportunity to rebut such allega tions by submitting evidence in response. 928 We
further note that, in US – FSC, the Appellate Body declined to consider a new argument on appeal
that would have required it "to address legal issues quite different from those which confronted the
[p]anel and which may well [have] require[d] proof of new facts".
929
5.350. In the present case, the United States argues that Article IX constitutes relevant context
for the interpretation of Article III:4 of the GATT 1994. We consider that this is a legal argument
relating to the proper interpretation of the term "treatment no less favourable" in Article III:4. This
issue was before the Panel and was addressed in the Panel Reports. As such, it does not require us
to solicit or review new facts or address issues with which the Panel was not confronted.
Accordingly, we do not consider that addressing the United States' argument based on Article IX of
the GATT 1994 would raise concerns of due process, and we, therefore, proceed with our analysis.
5.351. We note that Article III:4 of the GATT 1994 provides, in relevant part:
National Treatment on Internal Taxation and Regulation
…
4. The products of the territory of any Me mber imported into the territory of any
other Member shall be accorded treatment no less favourable than that accorded to
like products of national origin in respect of all laws, regulations and requirements
affecting their internal sale, offering for sa le, purchase, transportation, distribution or
use. …
5.352. Article IX of the GATT 1994 provides:
Marks of Origin
1. Each Member shall accord to the products of the territories of other Members
treatment with regard to marking requirements no less favourable than the treatment
accorded to like products of any third country.
2. The Members recognize that, in adopting and enforcing laws and regulations
relating to marks of origin, the difficulties and inconveniences which such measures
may cause to the commerce and industry of exporting countries should be reduced to

925 Mexico's appellee's submission, para. 128.
926 Canada's appellee's submission, para. 144 (referring to Appellate Body Reports, EC – Seal Products,
para. 5.69).
927 Appellate Body Report, Canada – Aircraft, para. 211.
928 Appellate Body Report, Canada – Aircraft, para. 211.
929 Appellate Body Report, US – FSC, para. 103.
WT/DS384/AB/RW • WT/DS386/AB/RW

a minimum, due regard being had to the necessity of protecting consumers against
fraudulent or misleading indications.
3. Whenever it is administratively prac ticable to do so, Members should permit
required marks of origin to be affixed at the time of importation.
4. The laws and regulations of Members relating to the marking of imported
products shall be such as to permit compliance without seriously damaging the
products, or materially reducing their value, or unreasonably increasing their cost.
5. As a general rule, no special duty or penalty should be imposed by any Member
for failure to comply with marking requirements prior to importation unless corrective
marking is unreasonably delayed or deceptive marks have been affixed or the
required marking has been intentionally omitted.
6. The Members shall co-operate with each other with a view to preventing the use
of trade names in such manner as to misrepre sent the true origin of a product, to the
detriment of such distinctive regional or geographical names of products of the
territory of a Member as are protected by its legislation. Each Member shall accord full
and sympathetic consideration to such requests or representations as may be made
by any other Member regarding the applicat ion of the undertaking set forth in the
preceding sentence to names of products which have been communicated to it by the
other Member.
5.353. We recall that three elements must be demonstrated to establish that a measure is
inconsistent with Article III:4 of the GATT 1994: (i) that the imported and domestic products are
"like products"; (ii) that the measure at issue is a "law, regulation, or requirement affecting the
internal sale, offering for sale, purchase, transportation, distribution, or use" of the products at
issue; and (iii) that the treatment accorded to imported products is "less favourable" than that
accorded to like domestic products.
930 The United States' claim on appeal relates to the third
element, namely, whether the measure at issue accords less favourable treatment to imported
products than to like domestic products.
5.354. The United States' appeal raises the question of whether Articles IX:2 and IX:4 may be of
contextual relevance for the interpretation of "treatment no less favourable" in Article III:4. 931 In
this regard, we recall the Appellate Body's statement in China – Auto Parts that "context is
relevant for a treaty interpreter to the extent that it may shed light on the interpretative issue to
be resolved, such as the meaning of the term or phrase at issue". 932 Therefore, for a particular
provision to serve as relevant context in any given situation, "it must not only fall within the scope
of the formal boundaries identified in Article 31(2) [of the Vienna Convention
933], it must also have
some pertinence to the language being interpreted that renders it capable of helping the
interpreter to determine the meaning of such language."934
5.355. The "language being interpreted" here is "treatment no less favourable" in Article III:4 of
the GATT 1994. The United States submits that Ar ticles IX:2 and IX:4 of the GATT 1994 recognize
that laws and regulations informing consumers about the origin of products may cause difficulties
and inconveniences to exporting Members and may increase the cost of imported products. For the
United States, Articles IX:2 and IX:4 suggest a particular interpretation of "treatment no less
favourable" in Article III:4, where origin marks are at issue. In particular, the United States
asserts that "treatment no less favourable" in Article III:4 should be interpreted as providing
regulatory space for Members to provide consumers with information as to the origin of products in

930 Appellate Body Reports, EC – Seal Products, para. 5.99 (referring to Appellate Body Report, Thailand
– Cigarettes (Philippines), para. 127, in turn referring to Appellate Body Report, Korea – Various Measures on
Beef, para. 133).
931 In response to questioning at the oral hearing, the United States clarified that it did not seek to raise
Article IX as a defence. Rather, the United States contends that Article IX of the GATT 1994 is context relevant
for the interpretation of Article III:4 of the GATT 1994.
932 Appellate Body Reports, China – Auto Parts, para. 151. (emphasis original)
933 Vienna Convention on the Law of Treaties, done at Vienna, 23 May 1969, UN Treaty Series,
Vol. 1155, p. 331.
934 Appellate Body Reports, China – Auto Parts, para. 151.
WT/DS384/AB/RW • WT/DS386/AB/RW

the sense that "reasons for any difficulties and inconveniences caused by the measures" should be
taken into account.935
5.356. We note that Article IX:2 calls for a reduction of difficulties and inconveniences that laws
and regulations relating to marks of origin may cause to exporters. Furthermore, Article IX:4
requires that compliance with such laws and regulations should be possible without materially
reducing the value of the products, or unnecessarily increasing the cost of the products. Hence,
these provisions call for a limitation of the impact of the use of marks of origin.
5.357. We are not persuaded that the objective of reducing the difficulties and inconveniences
caused by instruments relating to marks of orig in set out in Article IX:2, and the objective of
avoiding an unreasonable increase in the cost of the products at issue under Article IX:4, suggest
a more flexible interpretation of "treatment no less favourable" in Article III:4 of the GATT 1994,
where marking requirements are concerned. In particular, we do not consider that the reference to
"difficulties and inconveniences" in Article IX:2 affects the interpretation of "treatment no less
favourable" under Article III:4. Nor do we consider that the obligation in Article IX:4 that
regulations relating to the marking of products shall be such as to permit compliance without
seriously damaging the products, or materially reducing their value, or unreasonably increasing
their cost, affects the interpretation of "treatment no less favourable" under Article III:4. Rather,
we see Articles IX:2 and IX:4 as setting out obligations with regard to "marking requirements" that
are separate from, and additional to, the national treatment obligation in Article III:4 of the
GATT 1994.
5.358. Finally, we note that the United States' argument is based on the proposition that the
analysis of less favourable treatment under Article III:4 should include an inquiry into whether the
detrimental impact of a measure on imports is unrelated to foreign origin, and can be explained by
other factors that do not reflect discrimination, in this case, the fact that the amended COOL
measure pursues consumer information objectives. However, we note that this argument is based
upon a proposition that was expressly rejected by the Appellate Body in US – Clove Cigarettes . In
that dispute, the Appellate Body rejected the proposition that Article III:4 of the GATT 1994
includes consideration of whether the detrimental impact on imports is unrelated to the foreign
origin of the product.
936 Moreover, in EC – Seal Products, the Appellate Body clarified that the
analysis of whether a measure causes detrimental impact on competitive opportunities for like
imported products under Article III:4 "does not involve an assessment of whether such detrimental
impact stems exclusively from a legitimate regulatory distinction".
937
5.359. For the reasons set out above, we find that the Panel did not err by not attributing
contextual relevance to Article IX of the GATT 19 94 in its interpretation of Article III:4 of the
GATT 1994.
5.4 Article III:4 and Article XX of the GATT 1994
5.360. We now turn to consider the United States' claim that the Panel erred in the way it
addressed the United States' request, at the inte rim review stage, regarding the availability of
Article XX of the GATT 1994 as an exception for Article III:4 of the GATT 1994 with respect to the
amended COOL measure. 938 The United States requests us to complete the legal analysis under
Article XX, and to find that an exception under Article XX would be available with respect to the
amended COOL measure. 939 In particular, the United States submits that the amended COOL
measure should be considered to qualify as "neces sary" within the meaning of Article XX, and that
it satisfies the requirements of the chapeau of Article XX of the GATT 1994.940
5.361. Canada and Mexico request us to uphold the Panel's finding in respect of Article III:4 of
the GATT 1994, and to reject the United States' request to find that the Panel erred by not
addressing the availability of Article XX of th e GATT 1994 as an exception for the amended COOL

935 United States' appellant's submission, para. 284.
936 Appellate Body Report, US – Clove Cigarettes, fn 372 to para. 179.
937 Appellate Body Reports, EC – Seal Products, para. 5.105.
938 United States' appellant's submission, para. 292.
939 United States' appellant's submission, para. 301.
940 United States' appellant's submission, paras. 303-304.
WT/DS384/AB/RW • WT/DS386/AB/RW

measure, as well as the United States' request to complete the legal analysis and determine which
of the Article XX exceptions would be available.941
5.4.1 Interim review section of the Panel Reports
5.362. The United States did not invoke a defence under Article XX of the GATT 1994 either in its
written submissions to the Panel or in its oral statements at the Panel meetings.
5.363. At the interim review stage, the United States requested the Panel to review its analysis
under Article III:4 of the GATT 1994 and "address the availability of Article XX as an exception for
Article III:4 with respect to COOL".
942 The United States noted the Panel's reliance on the
Appellate Body reports in EC – Seal Products , and observed that the circulation of those reports
occurred after the period for the parties to make their arguments and submit evidence to the Panel
had ended.
5.364. In particular, the United States referr ed to the statement by the Appellate Body in EC –
Seal Products that "a Member's right to regulate under the sixth recital [of the preamble of the
TBT Agreement], is not, in principle, different from the balance set out in the GATT 1994, where
obligations such as national treatment in Article III are qualified by the general exceptions
provision of Article XX."
943 The United States contended that the Panel did not find the amended
COOL measure to be inherently inconsistent with Article 2.1 of the TBT Agreement. Rather, the
Panel's analysis suggested that "one would expect there to be a COOL measure that causes a
detrimental impact on imports yet is consistent with Article 2.1 of the TBT Agreement." 944
Accordingly, for the United States, the Appellate Body's approach in EC – Seal Products suggests
that there must be an Article XX exception that would be available for the amended COOL
measure. The United States argued that, because the Appellate Body reports in EC – Seal Products
were circulated only after the period for the parties to make their submissions to the Panel had
ended, it had not been able to shape its submissi ons according to the Appellate Body's finding in
EC – Seal Products regarding a respondent's reliance on an Article XX exception "with respect to a
claim under Article III:4 of the GATT 1994 even where the measure could be consistent with
Article 2.1 of the TBT Agreement."
945
5.365. In response to these comments of the United States at the interim review stage, the Panel
first noted that the United States had not raised a defence under Article XX and had not identified
any paragraph of that provision as relevant to the present disputes. 946 Rather, the United States'
request that the Panel "address the availability of Article XX as an exception with respect to COOL"
was "quite general".947 Furthermore, the Panel stated that the United States' position "appear[ed]
to be predicated" on a perceived conflict between, on the one hand, the Appellate Body's
clarification of the relationship of the national treatment obligation under the GATT 1994 and the
TBT Agreement and, on the other hand, the implications for a hypothetical measure found to be
consistent with Article 2.1 of the TBT Agreem ent but in violation of Article III:4 of the
GATT 1994.
948 The Panel explained that it had found the amended COOL measure to be in violation
of both Article 2.1 of the TBT Agreement and Ar ticle III:4 of the GATT 1994, and that it was,
therefore, not faced with the hypothetical situat ion suggested by the United States. Finally, the
Panel observed that accepting the United States' request at the interim review stage would require
examination of an issue for which neither the United States, nor the complainants, had provided
specific evidence or arguments.949

941 Canada's appellee's submission, para. 150; Mexico's appellee's submission, para. 137.
942 Panel Reports, para. 6.70.
943 Panel Reports, para. 6.70 (quoting Appellate Body Reports, EC – Seal Products, para. 5.122, in turn
referring to Appellate Body Report, US – Clove Cigarettes, paras. 93-96).
944 Panel Reports, para. 6.70.
945 Panel Reports, para. 6.70.
946 Panel Reports, para. 6.73.
947 Panel Reports, para. 6.73.
948 Panel Reports, para. 6.74.
949 Panel Reports, para. 6.75.
WT/DS384/AB/RW • WT/DS386/AB/RW

5.4.2 The availability of an Article XX ex ception with respect to the amended COOL
measure
5.366. We turn now to examine the United States' claim that the Panel erred in the way it
addressed the United States' request, at the inte rim review stage, regarding the availability of
Article XX of the GATT 1994 as an exception to Ar ticle III:4 of the GATT 1994 with respect to the
amended COOL measure. The United States requests us to complete the legal analysis under
Article XX, and to find that an exception under Article XX would be available with respect to the
amended COOL measure.
950 In particular, the United States submits that the amended COOL
measure should be considered to qualify as "neces sary" within the meaning of Article XX, and that
the amended COOL measure satisfies the requirem ents of the chapeau of Article XX of the
GATT 1994.951
5.367. On appeal, the United States presents arguments similar to those it presented at the
interim review stage of the Panel proceedings. Firs t, the United States argues that, because the
Appellate Body reports in EC – Seal Products were circulated only after the conclusion of the period
for the parties in the present disputes to submit evidence and arguments to the Panel, the current
Panel proceedings present an extraordinary situatio n. The United States highlights the statement
of the Appellate Body in EC – Seal Products that the balance between the desire to avoid creating
unnecessary obstacles to international trade and the recognition of Members' right to regulate
under the TBT Agreement is not, in principle, di fferent from the balance set out in the GATT 1994,
where obligations such as national treatment in Article III are qualified by the general exceptions
of Article XX.
952 The United States further argues that, while the Panel found the amended COOL
measure to be inconsistent with Article 2.1 of the TBT Agreement, it nevertheless "contemplate[d]
that the amended COOL measure could be brought into compliance with the Panel's findings on
Article 2.1 of the TBT Agreement".
953 If the amended COOL measure were to be brought into
compliance with Article 2.1 of the TBT Agreement, it would nonetheless be in breach of
Article III:4 of the GATT 1994 because there would remain a detrimental impact, unless the
measure qualified under an exception under Article XX. The United States considers that, if no
exception under Article XX was available for the amended COOL measure, its right to regulate
under the GATT 1994 and under the TBT Agreement wo uld be out of balance. The United States
alleges that the Panel, therefore, erred by not a ddressing the availability of Article XX as an
exception to Article III:4 with respect to the amended COOL measure.
5.368. Canada submits that the United States' request is an attempt to advance a defence under
Article XX of the GATT 1994 at the final stage of these disputes, and that this is incompatible with
the principles of due process. Moreover, in Canada's view, the Panel was correct in denying the
United States' request because the United States had failed to provide specific evidence or
arguments to make a prima facie case that the amended COOL measure is justified under
Article XX. In addition, Canada disagrees with the United States' argument that it could not have
foreseen the outcome of the EC – Seal Products disputes. For Canada, the Appellate Body had
already clarified, in US – Tuna II (Mexico) , that the scope and content of the national treatment
obligations of the TBT Agreement and the GATT 1994 are not the same
954, and the findings in EC –
Seal Products are in keeping with that.
5.369. Mexico submits that the United States failed to indicate before the Panel a specific
paragraph of Article XX that it considers relevant in the present disputes. For Mexico, this made it
impossible to follow the legal test under Article XX, as prescribed by the Appellate Body, and
affected Mexico's due process right to rebut an Ar ticle XX defence. Furthermore, Mexico disagrees
with the United States that the findings of the Appellate Body in EC – Seal Products were
unforeseeable, and notes that these findings are in line with the Appellate Body report in US –
Clove Cigarettes.955

950 United States' appellant's submission, para. 301.
951 United States' appellant's submission, para. 304.
952 United States' appellant's submission, para. 291.
953 United States' appellant's submission, para. 295.
954 Canada's appellee's submission, para. 146 (referring to Appellate Body Report, US – Tuna II
(Mexico), para. 405).
955 Mexico's appellee's submission, para. 134 (referring to Appellate Body Report, US – Clove Cigarettes,
para. 96).
WT/DS384/AB/RW • WT/DS386/AB/RW

5.370. At the outset of our analysis, we note th at Article XX sets out the general exceptions to
substantive obligations of the GATT 1994. 956 It is well established that the analysis under
Article XX is two-tiered: in order to be justified under Article XX, a measure must not only fall
under one of its paragraphs, it must also satisfy the requirements contained in its chapeau.
957
Moreover, the burden of establishing a defence under Article XX rests on the party asserting it. 958
Specifically, it is for the respondent to establish a prima facie case that a measure is justified
under Article XX. It is then for the complainant to rebut such prima facie case.959
5.371. As we have noted above, the United States did not invoke Article XX either in its written
submissions to the Panel or in its oral statements at the Panel meetings. It was not until the
interim review stage of these compliance proceedings before the Panel that the United States
referred for the first time to Article XX of the GATT 1994. Even then, however, the United States
did not identify a specific paragraph of Arti cle XX or provide arguments and evidence to
demonstrate that the amended COOL measure meet s the requirements of one of the paragraphs
of Article XX and of the chapeau. Rather, the United States requested the Panel to "address the
availability of Article XX as an exceptio n for Article III:4 with respect to COOL".
960 On appeal, the
United States alleges that the Panel erred in the way it addressed the United States' request
regarding the availability of Article XX at the interim review stage.
5.372. With regard to the Panel's obligations at the interim review stage, we note that Article 15.3
of the DSU stipulates that "the final panel report shall include a discussion of the arguments made
at the interim review stage." In the present case, the Panel responded to the United States'
request to address the availability of Article XX of the GATT 1994 as an exception for Article III:4
of the GATT 1994 with respect to the amended COOL measure by discussing three different
considerations.
5.373. First, the Panel noted that the United States' request was "quite general".
961 The Panel
observed that the United States had not advanced or argued a defence under Article XX of the
GATT 1994, that it had not identified any paragraph of that Article as relevant to the present
disputes, and that the United States "merely request[ed]" that the Panel "address the availability
of Article XX as an exception with respect to COOL".
962
5.374. Second, the Panel observed that the hypothetical situation suggested by the United States
of a measure found to be consistent with Article 2.1 of the TBT Agreement and, at the same time,
inconsistent with Article III:4 of the GATT 1994 did not arise in these disputes because the Panel
had found the amended COOL measure to be in consistent with both Article 2.1 of the
TBT Agreement and Article III:4 of the GATT 1994.
963
5.375. Third, the Panel noted that addressing the availability of Article XX of the GATT 1994 as an
exception for Article III:4 of the GATT 1994 with respect to the amended COOL measure, at the
interim review stage, would require examination of an issue for which neither the United States,
nor the complainants, had presented specific evidence or arguments. The Panel also noted that the
United States had not invoked Article XX of the GATT 1994 or any relevant paragraph(s) thereof,
or adduced arguments under Article XX at an appropriate stage of the proceedings.
964
5.376. These three considerations show that the Panel Reports include a discussion of the
arguments raised by the United States at the interim review stage, as required by Article 15.3 of
the DSU.
5.377. We see no reason to disagree with the first consideration set out by the Panel in this
regard. The Panel correctly noted that the United States, as the responding Member, had not

956 Appellate Body Report, US – Shrimp, para. 121.
957 Appellate Body Report, US – Gasoline, p. 22, DSR 1996:I, p. 20.
958 Appellate Body Report, US – Wool Shirts and Blouses, p. 16, DSR 1997:I, p. 337.
959 Appellate Body Report, US – Gambling, para. 282.
960 Panel Reports, para. 6.70.
961 Panel Reports, para. 6.73.
962 Panel Reports, para. 6.73.
963 Panel Reports, para. 6.74.
964 Panel Reports, para. 6.75.
WT/DS384/AB/RW • WT/DS386/AB/RW

invoked a defence under Article XX before the Panel, and that it had not identified a specific
paragraph of Article XX that would apply to the amended COOL measure.
5.378. We also agree with the second consideration of the Panel. The hypothetical situation
suggested by the United States, of a measure found to be consistent with Article 2.1 of the
TBT Agreement and, at the same time, found to be inconsistent with Article III:4 of the
GATT 1994, does not arise in these disputes. Rather, the Panel found the amended COOL measure
to be inconsistent with both Article 2.1 of the TBT Agreement and Article III:4 of the GATT 1994.
5.379. Finally, we see no error in the Panel's consideration that addressing, at the interim review
stage, the availability of Article XX as an except ion for Article III:4 of the GATT 1994 with respect
to the amended COOL measure would have required examination of an issue for which neither the
United States, nor the complainants, had provided specific evidence or arguments. We note that
the responding party should invoke a defence in the early stages of panel proceedings because,
once it has received the first written submission of a complaining party, it is likely to be aware of
the defences it might invoke and the evidence needed to support them. 965 Consideration of a
defence raised for the first time at interim review would give rise to due process concerns.
5.380. In the light of the above considerations, we find that the Panel did not err, in paragraphs
6.73 to 6.75 of the Panel Reports, in the way it addressed the United States' request, at the
interim review stage, relating to the availability of Article XX of the GATT 1994 as an exception to
Article III:4 of the GATT 1994 with respect to th e amended COOL measure. Consequently, the
premise of the United States' request on appeal that we complete the legal analysis and find that
the amended COOL measure would be justified under one of the exceptions set out in Article XX of
the GATT 1994 is not fulfilled and we, therefore, do not address it.
5.5 Article XXIII:1(b) of the GATT 1994
5.381. Canada, Mexico, and the United States each conditionally raises an appeal under
Article XXIII:1(b) of the GATT 1994. Specifically, if we were to reverse the Panel's finding of
violation under Article 2.1 of the TBT Agreemen t and Article III:4 of the GATT 1994, Canada and
Mexico request us to reverse the Panel's decision to exercise judicial economy, and to complete
the legal analysis in respect of Canada's and Mexico's non-violation claims under Article XXIII:1(b)
of the GATT 1994.
966
5.382. For its part, in the event that the conditions of Canada's and Mexico's appeals are fulfilled,
the United States appeals the Panel's conclusion that the complainants' claims were within the
Panel's terms of reference. 967 Specifically, the United States argues that the mandate of a panel
under Article 21.5 of the DSU to review the consistency of a measure taken to comply does not
extend to non-violation claims under Article XX III:1(b) of the GATT 1994 and Article 26.1 of the
DSU.
968
5.383. We have upheld the Panel's findings that the amended COOL measure is inconsistent with
Article 2.1 of the TBT Agreement and Article III:4 of the GATT 1994. Accordingly, we find that the
condition upon which Canada's and Mexico's appeals under Article XXIII:1(b) of the GATT 1994 are
premised is not satisfied and, consequently, we make no finding with respect to whether the Panel
erred by exercising judicial economy with re spect to Canada's and Mexico's claims under
Article XXIII:1(b).
5.384. The United States' appeal is premised on the condition of Canada's and Mexico's appeals
being satisfied. We have found that the condition of Canada's and Mexico's appeals is not satisfied.
Consequently, we find that the condition up on which the United States' appeal under
Article XXIII:1(b) of the GATT 1994 is premised is not satisfied either. Accordingly, we make no
finding with respect to whether the Panel erred in finding, in paragraph 7.663 of the Panel Reports,
that Canada's and Mexico's claims under Article XXIII:1(b) were within the Panel's terms of
reference.

965 Appellate Body Report, US – Gambling, para. 271.
966 Canada's other appellant's submission, para. 182; Mexico's other appellant's submission, para. 199.
967 United States' appellant's submission, para. 324.
968 United States' appellant's submission, para. 307.

- CDA-169 -

6 FINDINGS AND CONCLUSIONS IN THE APPELLATE BODY REPORT WT/DS384/AB/RW
6.1. In the appeal of the Panel Report, United States – Certain Country of Origin Labelling (COOL)
Requirements – Recourse to Article 21.5 of the DSU by Canada , WT/DS384/RW (Canada Panel
Report), the Appellate Body makes the findings below.
6.2. For the reasons set out in section 5.1 of this Report, regarding the Panel's findings under
Article 2.1 of the TBT Agreement, the Appellate Body:
a. with respect to the Panel's finding that the amended COOL measure increases the
recordkeeping burden entailed by the original COOL measure:
i. finds that the Panel did not err, in paragraphs 7.87-7.113 of the Canada Panel
Report, in its analysis of the impact of point-of-production labelling;
ii. finds that the Panel did not err, in paragraphs 7.114-7.127 of the Canada Panel
Report, in its analysis of the impact of the elimination of the country order flexibility;
and
iii. finds that the Panel did not err, in Section 7.5.4.2.4.4 of the Canada Panel Report, in
its consideration of the increased record keeping burden entailed by the amended
COOL measure within its analysis of whether the detrimental impact of that measure
on imported livestock stems exclusively from legitimate regulatory distinctions;
b. with respect to the Panel's findings regarding the potential for label inaccuracy under the
amended COOL measure:
i. finds that the Panel did not err, in paragraph 7.269 of the Canada Panel Report, in its
consideration of the potential for label inaccuracy with respect to Labels B and C as
prescribed by the amended COOL measure; and
ii. finds that the Panel did not err, in Section 7.5.4.2.4.4 of the Canada Panel Report, in
its consideration of the potential for label inaccuracy under the amended COOL
measure within its analysis of whether the detrimental impact of that measure on
imported livestock stems exclusively from legitimate regulatory distinctions;
c. with respect to the Panel's findings regarding the exemptions prescribed by the amended
COOL measure:
i. finds that the Panel did not err, in paragraph 7.203 of the Canada Panel Report, in
finding that the exemptions prescribed by the amended COOL measure are relevant
for the analysis of whether the detrimental impact of that measure on imported
livestock stems exclusively from legitimate regulatory distinctions;
ii. finds that the Panel did not err, in paragraphs 7.273-7.276 of the Canada Panel
Report, by not attributing significance to the fact that the exemptions under the
amended COOL measure apply equally to meat derived from imported and domestic
livestock;
iii. finds that the Panel did not err, in paragraph 7.275 of the Canada Panel Report, in
considering, with respect to the cost considerations that allegedly justify the
existence of the exemptions, that cost considerations do not constitute a
supervening justification for discriminatory measures;
iv. finds that the Panel did not err, in paragraph 7.277 of the Canada Panel Report, in
considering that the exemptions prescrib ed by the amended COOL measure support
a conclusion that the detrimental impact of that measure on imported livestock does
not stem exclusively from legitimate regulatory distinctions; and

- CDA-170 -

v. finds that the Panel did not err, in paragraph 7.272 of the Canada Panel Report, by
failing to evaluate the operation of the exemptions prescribed by the amended COOL
measure in the US market;
d. with respect to the Panel's assessment of the relevance of Label D for the analysis of
whether the detrimental impact of the amended COOL measure on imported livestock
stems exclusively from legitimate regulatory distinctions:
i. finds that the Panel did not err, in paragraph 7.279 of the Canada Panel Report, in
finding that the requirements for Label D are not compelling evidence of arbitrary or
unjustifiable discrimination in violation of Article 2.1 of the TBT Agreement;
e. with respect to the Panel's assessment of the relevance of Label E for the analysis of
whether the detrimental impact of the amended COOL measure on imported livestock
stems exclusively from legitimate regulatory distinctions:
i. finds that the Panel did not err, in paragraph 7.280 of the Canada Panel Report, in
finding that the requirements for Label E do not evidence the amended COOL
measure's violation of Article 2.1 of the TBT Agreement; and
f. with respect to the Panel's assessment of the relevance of the amended COOL measure's
prohibition of a trace-back system for the analysis of whether the detrimental impact of
that measure on imported livestock stems exclusively from legitimate regulatory
distinctions:
i. finds that the Panel did not err, in paragraph 7.281 of the Canada Panel Report, in its
assessment of the relevance of the amended COOL measure's prohibition of a
trace-back system for the analysis of whether the detrimental impact of that
measure on imported livestock stems exclusively from legitimate regulatory
distinctions.
6.3. For the reasons set out in section 5.2 of this Report, regarding the Panel's findings under
Article 2.2 of the TBT Agreement, the Appellate Body:
a. with respect to the sequence and order of the Panel's "necessity" analysis:
i. finds that the Panel did not err, in paragraphs 7.301-7.303 of the Canada Panel
Report, by failing to articulate correctly the relational component of the analysis
under Article 2.2;
ii. finds that the Panel did not err, in paragraphs 7.301-7.303 of the Canada Panel
Report, by failing to describe how the relevant factors are to be weighed and
balanced against each other under the "relational" analysis; and
iii. finds that the Panel did not err, in paragraphs 7.297-7.299 of the Canada Panel
Report, by failing to clarify that the "comparative" analysis does not necessarily
prevail over the "relational" analysis;
b. with respect to the Panel's analysis of the contribution of the amended COOL measure to
its objective:
i. finds that the Panel erred, in paragraph 7.356 of the Canada Panel Report, by
excluding Labels D and E in reaching its conclusion that the amended COOL measure
makes a "considerable but necessarily partial" contribution to its objective;

- CDA-171 -

c. with respect to the interpretation and applic ation of the phrase "taking account of the
risks non-fulfilment would create" in Article 2.2 of the TBT Agreement:
i. finds that the Panel did not err, in paragraphs 7.488 and 7.501 of the Canada Panel
Report, in contemplating that an alternative measure providing less, or less accurate,
origin information to consumers for a significantly wider range of products might
achieve an "equivalent" degree of contribution as the amended COOL measure;
ii. finds that the Panel did not err, in paragraph 7.379 of the Canada Panel Report, by
failing to take into account the relative importance of the values or interests pursued
by the amended COOL measure in assessing "the risks non-fulfilment would create";
iii. finds that the Panel did not err, in paragraph 7.380 of the Canada Panel Report, by
failing to take into account the design, structure, and architecture of the amended
COOL measure in assessing "the risks non-fulfilment would create";
iv. finds that the Panel erred, in paragraph 7.423 of the Canada Panel Report, in
concluding that it was unable to ascertain the gravity of the consequences of
non-fulfilment of the amended COOL measure's objective, and finds that the Panel
subsequently erred, in paragraphs 7.490 and 7.503 of the Canada Panel Report, in
finding that Canada failed to make a prima facie case that the first and second
proposed alternative measures would make an "equivalent" degree of contribution to
the measure's objective;
v. consequently, reverses the Panel's overall conclusion, in paragraph 7.613 of the
Canada Panel Report, that Canada did not make a prima facie case that the amended
COOL measure violates Article 2.2 of the TBT Agreement; and
vi. finds that there are not sufficient undisputed facts on the record to complete the
legal analysis of Canada's claims under Article 2.2 of the TBT Agreement in respect
of the first and second proposed alternative measures; and
d. with respect to the third and fourth proposed alternative measures:
i. reverses the Panel's findings, in paragraphs 7.564 and 7.610 of the Canada Panel
Report, that Canada did not make a prima facie case that its third and fourth
proposed alternative measures are reasonably available for purposes of its claims
under Article 2.2 of the TBT Agreement.
6.4. For the reasons set out in section 5.3 of this Report, regarding the Panel's analysis under
Article III:4 of the GATT 1994, the Appellate Body:
a. finds that the Panel did not err by not attributing contextual relevance to Article IX of the
GATT 1994 in its interpretation of Article III:4 of the GATT 1994; and
6.5. For the reasons set out in section 5.4 of this Report, the Appellate Body:
a. finds that the Panel did not err, in paragraphs 6.73 to 6.75 of the Canada Panel Report,
in the way it addressed the United States' request, at the interim review stage, relating
to the availability of Article XX of the GATT 1994 as an exception to Article III:4 of the
GATT 1994 with respect to the amended COOL measure.
6.6. For the reasons set out in section 5.5 of this Report, the Appellate Body:
a. finds that the condition upon which Canada's appeal under Article XXIII:1(b) of the
GATT 1994 is premised is not satisfied and, consequently, makes no finding with respect
to whether the Panel erred by exercising judicial economy with respect to Canada's claim
under Article XXIII:1(b); and
WT /DS384/ AB/RW
- CDA-172 -
b. finds that the condition upon which the United States' appeal under Article XXIII: 1(b) of
the GATT 1994 is premised is not satisfied and, consequently, makes no finding with
respect to whether the Panel erred, in paragraph 7.663 of the Canada Panel Report, in
finding that Canada's claim under Article XXIII: 1(b) was within the Panel's terms of
reference.
6.7. The Appellate Body recommends that the DSB request the United States to bring its
measures found in this Report, and in the Canada Panel Report as modified by this Report, to be
inconsistent with the GATT 1994 and the TBT Agreement into conformity with its obligations under
those Agreements.
Signed in the original in Geneva this 24th day of April 2015 by:
Q . --~
RI~
Presiding Member

- MEX-173 -

6 FINDINGS AND CONCLUSIONS IN THE APPELLATE BODY REPORT WT/DS386/AB/RW
6.1. In the appeal of the Panel Report, United States – Certain Country of Origin Labelling (COOL)
Requirements – Recourse to Article 21.5 of the DSU by Mexico , WT/DS386/RW (Mexico Panel
Report), the Appellate Body makes the findings below.
6.2. For the reasons set out in section 5.1 of this Report, regarding the Panel's findings under
Article 2.1 of the TBT Agreement, the Appellate Body:
a. with respect to the Panel's finding that the amended COOL measure increases the
recordkeeping burden entailed by the original COOL measure:
i. finds that the Panel did not err, in paragraphs 7.87-7.113 of the Mexico Panel
Report, in its analysis of the impact of point-of-production labelling;
ii. finds that the Panel did not err, in paragraphs 7.114-7.127 of the Mexico Panel
Report, in its analysis of the impact of the elimination of the country order flexibility;
and
iii. finds that the Panel did not err, in Section 7.5.4.2.4.4 of the Mexico Panel Report, in
its consideration of the increased record keeping burden entailed by the amended
COOL measure within its analysis of whether the detrimental impact of that measure
on imported livestock stems exclusively from legitimate regulatory distinctions;
b. with respect to the Panel's findings regarding the potential for label inaccuracy under the
amended COOL measure:
i. finds that the Panel did not err, in paragraph 7.269 of the Mexico Panel Report, in its
consideration of the potential for label inaccuracy with respect to Labels B and C as
prescribed by the amended COOL measure; and
ii. finds that the Panel did not err, in Section 7.5.4.2.4.4 of the Mexico Panel Report, in
its consideration of the potential for label inaccuracy under the amended COOL
measure within its analysis of whether the detrimental impact of that measure on
imported livestock stems exclusively from legitimate regulatory distinctions;
c. with respect to the Panel's findings regarding the exemptions prescribed by the amended
COOL measure:
i. finds that the Panel did not err, in paragraph 7.203 of the Mexico Panel Report, in
finding that the exemptions prescribed by the amended COOL measure are relevant
for the analysis of whether the detrimental impact of that measure on imported
livestock stems exclusively from legitimate regulatory distinctions;
ii. finds that the Panel did not err, in paragraphs 7.273-7.276 of the Mexico Panel
Report, by not attributing significance to the fact that the exemptions under the
amended COOL measure apply equally to meat derived from imported and domestic
livestock;
iii. finds that the Panel did not err, in paragraph 7.275 of the Mexico Panel Report, in
considering, with respect to the cost considerations that allegedly justify the
existence of the exemptions, that cost considerations do not constitute a
supervening justification for discriminatory measures;
iv. finds that the Panel did not err, in paragraph 7.277 of the Mexico Panel Report, in
considering that the exemptions prescrib ed by the amended COOL measure support
a conclusion that the detrimental impact of that measure on imported livestock does
not stem exclusively from legitimate regulatory distinctions; and

- MEX-174 -

v. finds that the Panel did not err, in paragraph 7.272 of the Mexico Panel Report, by
failing to evaluate the operation of the exemptions prescribed by the amended COOL
measure in the US market; and
d. with respect to the Panel's assessment of the relevance of Label E for the analysis of
whether the detrimental impact of the amended COOL measure on imported livestock
stems exclusively from legitimate regulatory distinctions:
i. finds that the Panel did not err, in paragraph 7.280 of the Mexico Panel Report, in
finding that the requirements for Label E do not evidence the amended COOL
measure's violation of Article 2.1 of the TBT Agreement.
6.3. For the reasons set out in section 5.2 of this Report, regarding the Panel's findings under
Article 2.2 of the TBT Agreement, the Appellate Body:
a. with respect to the sequence and order of the Panel's "necessity" analysis:
i. finds that the Panel did not err, in paragraph 7.298 of the Mexico Panel Report, in
stating that "a 'comparative analysis' would be redundant only in exceptional
circumstances", and in concluding, in paragraphs 7.301-7.303 and 7.424 of the
Mexico Panel Report, that such "exception al circumstances" must be demonstrated
before any "overall" conclusions with respect to Article 2.2 may be drawn from the
"relational" analysis;
b. with respect to the Panel's analysis of the contribution of the amended COOL measure to
its objective:
i. finds that the Panel erred, in paragraph 7.356 of the Mexico Panel Report, by
excluding Labels D and E in reaching its conclusion that the amended COOL measure
makes a "considerable but necessarily partial" contribution to its objective;
c. with respect to the interpretation and applic ation of the phrase "taking account of the
risks non-fulfilment would create" in Article 2.2 of the TBT Agreement:
i. finds that the Panel did not err, in paragraphs 7.488 and 7.501 of the Mexico Panel
Report, in contemplating that an alternative measure providing less, or less accurate,
origin information to consumers for a significantly wider range of products might
achieve an "equivalent" degree of contribution as the amended COOL measure;
ii. finds that the Panel did not err, in paragraph 7.379 of the Mexico Panel Report, by
failing to take into account the relative importance of the values or interests pursued
by the amended COOL measure in assessing "the risks non-fulfilment would create";
iii. finds that the Panel did not err, in paragraph 7.380 of the Mexico Panel Report, by
failing to take into account the design, structure, and architecture of the amended
COOL measure in assessing "the risks non-fulfilment would create";
iv. finds that the Panel erred, in paragraph 7.423 of the Mexico Panel Report, in
concluding that it was unable to ascertain the gravity of the consequences of
non-fulfilment of the amended COOL measure's objective, and finds that the Panel
subsequently erred, in paragraphs 7.490 and 7.503 of the Mexico Panel Report, in
finding that Mexico failed to make a prima facie case that the first and second
proposed alternative measures would make an "equivalent" degree of contribution to
the measure's objective;
v. consequently, reverses the Panel's overall conclusion, in paragraph 7.613 of the
Mexico Panel Report, that Mexico did not make a prima facie case that the amended
COOL measure violates Article 2.2 of the TBT Agreement; and

- MEX-175 -

vi. finds that there are not sufficient undisputed facts on the record to complete the
legal analysis of Mexico's claims under Article 2.2 of the TBT Agreement in respect of
the first and second proposed alternative measures; and
d. with respect to the third and fourth proposed alternative measures:
i. reverses the Panel's findings, in paragraphs 7.564 and 7.610 of the Mexico Panel
Report, that Mexico did not make a prima facie case that its third and fourth
proposed alternative measures are reasonably available for purposes of its claims
under Article 2.2 of the TBT Agreement.
6.4. For the reasons set out in section 5.3 of this Report, regarding the Panel's analysis under
Article III:4 of the GATT 1994, the Appellate Body:
a. finds that the Panel did not err by not attributing contextual relevance to Article IX of the
GATT 1994 in its interpretation of Article III:4 of the GATT 1994; and
6.5. For the reasons set out in section 5.4 of this Report, the Appellate Body:
a. finds that the Panel did not err, in paragraphs 6.73 to 6.75 of the Mexico Panel Report,
in the way it addressed the United States' request, at the interim review stage, relating
to the availability of Article XX of the GATT 1994 as an exception to Article III:4 of the
GATT 1994 with respect to the amended COOL measure.
6.6. For the reasons set out in section 5.5 of this Report, the Appellate Body:
a. finds that the condition upon which Mexico's appeal under Article XXIII:1(b) of the
GATT 1994 is premised is not satisfied and, consequently, makes no finding with respect
to whether the Panel erred by exercising judi cial economy with respect to Mexico's claim
under Article XXIII:1(b); and
b. finds that the condition upon which the United States' appeal under Article XXIII:1(b) of
the GATT 1994 is premised is not satisfied and, consequently, makes no finding with
respect to whether the Panel erred, in paragraph 7.663 of the Mexico Panel Report, in
finding that Mexico's claim under Article XXIII:1(b) was within the Panel's terms of
reference.
6.7. The Appellate Body recommends that the DSB request the United States to bring its
measures found in this Report, and in the Mexico Panel Report as modified by this Report, to be
inconsistent with the GATT 1994 and the TBT Agreem ent into conformity with its obligations under
those Agreements.
WT /DS386/ AB/RW
- MEX-176-
Signed in the original in Geneva this 24th day of April 2015 by:
1"
Ricardo Ramirez-Hernandez
Presiding Member
WT/DS384/AB/RW • WT/DS386/AB/RW

ANNEX 1

2 December 2014
(14-6999) Page: 1/2
 Original: English

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

RECOURSE TO ARTICLE 21.5 OF THE DSU BY CANADA AND MEXICO
NOTIFICATION OF AN APPEAL BY THE UNITED STATES
UNDER ARTICLE 16.4 AND ARTICLE 17 OF THE UNDERSTANDING ON RULES
AND PROCEDURES GOVERNING THE SETTLEMENT OF DISPUTES (DSU),
AND UNDER RULE 20(1) OF THE WORKING PROCEDURES FOR APPELLATE REVIEW
The following notification, dated 28 November 2014, from the Delegation of the United States, is
being circulated to Members.

Settlement of Disputes ("DSU") and pursuant to Rule 20 of the Working Procedures for Appellate
Review, the United States hereby notifies its decision to appeal to the Appellate Body certain
issues of law covered in the Reports of the Panels in United States – Certain Country of Origin
Labelling (COOL) Requirements: Recourse to Articl e 21.5 of the DSU by Canada / Recourse to
Article 21.5 of the DSU by Mexico (WT/DS384/RW and WT/DS386/RW) ("Panel Reports") and
certain legal interpretations developed by the Panels.
2. The United States seeks review by the Appellate Body of the Panels' findings and
conclusion that amended U.S. COOL measure is inconsistent with Article 2.1 of the Agreement on
Technical Barriers to Trade (the "TBT Agreement") because the amended COOL measure accords
less favorable treatment to complainants' livestock exports.
1 This conclusion is in error and is
based on erroneous findings on issues of law and legal interpretations, including:
(a) the Panels' finding that the detrimental impact does not stem exclusively from
legitimate regulatory distinctions beca use the amended COOL measure entails an
increased recordkeeping burden and increased segregation.2
(b) the Panels' finding that the detrimental impact does not stem exclusively from
legitimate regulatory distinctions because the current labels provided by the
amended COOL measure have a potential for label inaccuracy.3

1 See, e.g., Panel Reports, paras. 7.284-7.285, 8.3(b) (DS384), 8.3(b) (DS386).
2 See, e.g., Panel Reports, paras. 7.134, 7.149-7.150, 7.220-7.221, 7.271-7.272, 7.282.
3 See, e.g., Panel Reports, paras. 7.243-7.244, 7.252-7.254, 7.269-7.270, 7.282.
WT/DS384/AB/RW • WT/DS386/AB/RW

(c) the Panels' finding that the detrimental impact does not stem exclusively from
legitimate regulatory distinctions because the amended COOL measure continues
to exempt a large proportion of muscle cuts.
4
3. In the event that Canada or Mexico appeals the ultimate findings of either Panel that the
amended U.S. COOL measure is not inconsiste nt with Article 2.2 of the TBT Agreement 5, the
United States seeks conditional review of the Panels' legal interpretation of the phrase "the risks
non-fulfilment would create."
6 This analysis is based on erroneous findings on issues of law and
legal interpretations, including: the Panels' interpre tation of what effect a finding with regard to
"the risks non-fulfilment would create" can have as to whether any particular alternative measure
makes a contribution to the objective equivalent to the contribution made by the challenged
measure.
7
4. The United States seeks review by the Appellate Body of the Panels' findings and
conclusion that the amended U.S. COOL measure is inconsistent with Article III:4 of the General
Agreement on Tariffs and Trade 1994 (the "GATT 1994").8 This conclusion is in error and is based
on erroneous findings on issues of law and legal interpretations, including that "the amended COOL
measure accords less favourable treatment within the meaning of Article III:4 of the GATT 1994" 9
and that the amended COOL measure would not be examined under Article XX of the GATT 1994.10
5. The United States seeks review by the Appellate Body of the Panels' failure to address the
aspect of the relationship between Article 2. 1 of the TBT Agreement and Article III:4 of the
GATT 1994 related to the availability of an ex ception under Article XX of the GATT 1994 and the
Panels' failure to address the availability of Ar ticle XX as an exception for Article III:4 of the
GATT 1994 with respect to the amended U.S. COOL measure.11
6. Finally, in the event that Canada or Mexico appeals the determination by either Panel not
to make findings or legal conclusions in relation to the non-violation claim by that complainant
under Article XXIII:1(b) of the GATT 1994, the Un ited States seeks conditional review by the
Appellate Body of the Panels' findings and conclusion that the non-violation claims under
Article XXIII:1(b) of the GATT 1994 were within the Panels' terms of reference.
12 This conclusion is
in error and is based on erroneous findings on issues of law and legal interpretations, including
that "reviewing the 'consistency' of a measure taken to comply under Article 21.5 of the DSU
extends to non-violation claims under Article XXIII:1(b) of the GATT 1994 and Article 26.1 of the
DSU."
WT/DS384/AB/RW • WT/DS386/AB/RW

ANNEX 2

16 December 2014
(14-7279) Page: 1/2
 Original: English

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

RECOURSE TO ARTICLE 21.5 OF THE DSU BY CANADA
NOTIFICATION OF AN OTHER APPEAL BY CANADA
UNDER ARTICLE 16.4 AND ARTICLE 17 OF THE UNDERSTANDING ON RULES
AND PROCEDURES GOVERNING THE SETTLEMENT OF DISPUTES (DSU),
AND UNDER RULE 23(1) OF THE WORKING PROCEDURES FOR APPELLATE REVIEW
The following notification, dated 12 December 2 014, from the Delegation of Canada, is being
circulated to Members.

Pursuant to Article 16 of the Understanding on Rules and Procedures Governing the Settlement of
Disputes (DSU) and Rule 23 of the Working Procedures for Appellate Review , Canada hereby
notifies its decision to appeal to the Appellate Body certain issues of law covered in the Report of
the Panel in United States – Certain Country of Origin Labelling (COOL) Requirements – Recourse
to Article 21.5 of the DSU by Canada (WT/DS384/RW) (Panel Report) and certain legal
interpretations developed by the Panel.

Canada seeks review by the Appellate Body of th e Panel's legal conclusion that Canada has not
made a prima facie case that the amended COOL measure is more trade-restrictive than necessary
within the meaning of Article 2.2 of the TBT Agreement.
1 This conclusion is incorrect as a matter of
law, and is based on erroneous intermediate findings on issues of law and legal interpretation,
including:

a. the Panel's exclusions of Labels D and E from the scope of its analysis of the degree of
contribution to the legitimate objective achieved by the amended COOL measure
2 and its
subsequent erroneous finding that the amended COOL measure makes a "considerable
but necessarily partial contribution to its objective"3;
b. the Panel's articulation and application of an incorrect legal test under Article 2.24 in that
it failed to articulate and apply a proper relational analysis of the relevant factors and to
consider its findings under the relational and comparative analyses together before
reaching a conclusion on the claim of violation;

1 See e.g. Panel Reports, US – COOL (Article 21.5 – Canada and Mexico), para. 7.613.
4 See e.g. ibid. paras. 7.303 and 7.424.
WT/DS384/AB/RW • WT/DS386/AB/RW

c. the Panel's exclusion of certain relevant factors from the assessment of the "risks
non-fulfilment would create" 5 and its resulting incorrect finding that it was unable to
ascertain the gravity of the consequences of not fulfilling the amended COOL measure's
objective6; and
d. the Panel's findings that Canada failed to make a prima facie case that the first and
second alternative measures would make a contribution to the legitimate objective that
is at least equivalent to the contribution made by the amended COOL measure
7, which
resulted from the Panel's failure to correctly assess the "risks non-fulfilment would
create".
In addition, Canada seeks review by the Appellate Body of the Panel's finding under TBT Article 2.2
that Canada has not sufficiently and adequately identified the third and fourth alternative
measures for assessing their reasonable availability and for comparing their respective
trade-restrictiveness and degrees of cont ribution with the amended COOL measure. 8 In reaching
this finding, the Panel erred by imposing on Canada an obligation to describe the alternative
measures with an excessively high level of precision. In particular, Canada seeks review by the
Appellate Body of the Panel's finding that, for the purpose of making a prima facie case that an
alternative measure is reasonably available, a co mplainant bears the burden of providing a cost
estimate of the alternative measure or evidence substantiating the likely magnitude of the costs
that would be associated with the alternative measure.9

Canada also requests the Appellate Body to find that the Panel failed to make an objective
assessment of the matter at issue, including an obje ctive assessment of the facts, as required by
Article 11 of the DSU, with respect to the above- referenced intermediate finding that the amended
COOL measure makes a "considerable but necessarily partial contribution to its objective".
10

While Canada does not take issue with the Panel's overall conclusion and most of its analysis under
Article 2.1 of the TBT Agreement, Canada seeks review by the Appellate Body of:

a. the Panel's legal reasoning in respect of its legitimate regulatory distinction (LRD)
analysis under Article 2.1 of the TBT Agreement that caused it to exclude Labels D and E
as well as the amended COOL measure's prohibition of trace-back from the LRD
analysis
11; and
b. the Panel's failure to make an objective assessment of the facts, as required by
Article 11 of the DSU, because its exclusion of Label E from its LRD analysis also lacked
a basis in the evidence contained in the Panel record.12
In the event that the Appellate Body finds that th ere is no violation of either Article 2.1 of the
TBT Agreement or Article III:4 of the GATT 1994, Ca nada also seeks review by the Appellate Body
of the exercise of judicial economy by the Panel with regard to Canada's non-violation claim under
Article XXIII:1(b) of the GATT 1994.13

WT/DS384/AB/RW • WT/DS386/AB/RW

ANNEX 3

16 December 2014
(14-7280) Page: 1/3
 Original: English

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

RECOURSE TO ARTICLE 21.5 OF THE DSU BY MEXICO
NOTIFICATION OF AN OTHER APPEAL BY MEXICO
UNDER ARTICLE 16.4 AND ARTICLE 17 OF THE UNDERSTANDING ON RULES
AND PROCEDURES GOVERNING THE SETTLEMENT OF DISPUTES (DSU),
AND UNDER RULE 23(1) OF THE WORKING PROCEDURES FOR APPELLATE REVIEW
The following notification, dated 12 December 2 014, from the Delegation of Mexico, is being
circulated to Members.

Certain Country of Origin Labelling (COOL) Requirements – Recourse to Article 21.5 of the DSU by
Mexico (WT/DS386/RW) (Panel Report), and the Panel's failure to make an objective assessment
of the matter as required by Article 11 of the DSU.

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

I. Appeal of the Panel's conclusion that Mexico did not make a prima facie case that
the amended COOL measure is more trade restrictive than necessary within the
meaning of Article 2.2 of the TBT Agreement and the Panel's failure to make an
objective assessment of the matter before i t a s r e q u i r e d u n d e r A r t i c l e 1 1 o f t h e
DSU

3. Mexico seeks review by the Appellate Body of the Panel's findings that Mexico did not make
a prima facie case that the amended COOL measure is more trade restrictive than necessary
within the meaning of Article 2.2 of the Agreement on Technical Barriers to Trade
(TBT Agreement).
1 The Panel's conclusion is in error and is based on erroneous findings on issues
of law, related interpretations, and the Panel's failure to make an objective assessment of the
matter before it as required by Article 11 of the DSU. The Panel erred:

1 Panel Reports, US – COOL (Article 21.5), paras. 7.612-7.613; Panel Report, US – COOL (Article 21.5 –
Mexico), para. 8.3(c).
WT/DS384/AB/RW • WT/DS386/AB/RW

a. by finding that overall conclusions under Article 2.2 may not be drawn from the
"relational analysis" in the first step of the "necessity test" 2, by improperly applying an
"exceptional circumstances" requirement 3, by failing to complete the "relational
analysis", and by failing to make a finding as to whether the amended COOL measure is
more trade-restrictive than necessary at the conclusion of the "relational analysis".4
b. by failing to properly consider and take into account the design and operation of Label E
(the ground beef label) in its assessmen t of the amended COOL measure's degree of
contribution to the fulfilment of the legitimate objective.5
c. by limiting its assessment of the risks that non-fulfilment of the amended COOL
measure's objective would create to consumer interest in country of origin information,
and the willingness of consumers to pay the costs of obtaining country of origin
information on product labels.
6
d. by failing to consider and take into account the relative importance of the interests or
values furthered by the amended COOL measure and the design, architecture, revealing
structure, operation and application of the measure in its assessment of the risks that
non-fulfilment of the measure's objective would create.7
e. by applying an erroneous approach to its assessment of the gravity of the consequences
that would arise from non-fulfilment of the amended COOL measure's objective 8, by
failing to make an objective assessment of the matter before it as required by Article 11
of the DSU with respect to the arguments an d evidence put forward by the parties for
the purpose of assessing the gravity
9, and by failing to make a finding on the gravity of
the consequences that would arise from non- fulfilment of the amended COOL measure's
objective.10
f. by not completing the "comparative analysis" of the amended COOL measure with the
first and second alternative measures because it was unable to determine the specific
implications of risks of non-fulfilment of the amended COOL measure's objective 11 for
the purposes of evaluating whether the first and second alternative measures make an
equivalent degree of contribution, taking into account the risks non-fulfilment would
create.12
g. by failing to undertake an assessment of whether the first and second alternative
measures are reasonably available, less trade-restrictive and provide an equivalent
contribution to the fulfilment of the amended COOL measure's objective.13

2 Panel Reports, US – COOL (Article 21.5), para. 7.298.
3 Panel Reports, US – COOL (Article 21.5), para. 7.298.
4 Panel Reports, US – COOL (Article 21.5), paras. 7.424-7.425.
5 Panel Reports, US – COOL (Article 21.5), paras. 7.343-7.345, 7.346-7.356 and footnote 785 to
para. 7.347, citing data in paragraphs 7.258 and 7.262.
6 Panel Reports, US – COOL (Article 21.5), paras. 7.375, 7.381, 7.383, and 7.418. In this respect, the
Panel erred in its interpretation of the Appellate Body's reasons respecting the assessment of the risks that
non-fulfilment would create under Article 2.2 in the original proceedings. See Panel Reports, US – COOL
7 Panel Reports, US – COOL (Article 21.5), para. 7.379-7.380.
8 Panel Reports, US – COOL (Article 21.5), paras. 7.383, 7.418-7.420, 7.422-7.424.
9 Panel Reports, US – COOL (Article 21.5), 7.384-7.414, 7.416, 7.418-7.422.
10 Panel Reports, US – COOL (Article 21.5), paras. 7.423-7.424, 7.488, 7.501, and 7.611.
11 Panel Reports, US – COOL (Article 21.5), paras. 7.488 and 7.501.
12 Panel Reports, US – COOL (Article 21.5), paras. 7.488-7.491 and 7.501-7.503.
13 Panel Reports, US – COOL (Article 21.5), paras. 7.488, 7.491, 7.500, and 7.503. This includes the
Panel's error in interpreting and applying Article 2.2 of the TBT Agreement by failing to make a finding that
Mexico's second alternative measure would provide a contribution to the fulfilment of the amended COOL
measure's objective that would be at least equivalent to that of the amended COOL measure, because it would
provide exactly the same origin information as that required under Label E (the ground beef label) of the
amended COOL measure.
WT/DS384/AB/RW • WT/DS386/AB/RW

h. by requiring Mexico to adduce unnecessarily precise explanations as to how the third and
fourth alternative measures proposed by Mexico would be implemented in the
United States
14 and by failing to make an objective assessment of the matter before it as
required by Article 11 of the DSU.
II. Appeal of the Panel's finding that Label E (the ground meat label) is not relevant to
the legal analysis under Article 2.1 of the TBT Agreement

4. Mexico seeks review by the Appellate Body of the Panel's erroneous finding that Label E (the
ground meat label) is not relevant to the legal analysis under Article 2.1 of the TBT Agreement.15

III. Conditional appeal of the Panel's deci sion to exercise judicial economy with
respect to Mexico's claim of non-viol ation nullification or impairment under
Article XXIII:1(b) of the GATT 1994

5. In the event that the Appellate Body overturns the Panel's findings that the COOL measure
is inconsistent with Article 2.1 of the TBT Ag reement and Article III:4 of the GATT 1994, Mexico
appeals the Panel's decision to exercise judicial economy with respect to Mexico's claim of
non-violation nullification or impairment under Article XXIII:1(b) of the GATT 1994 and asks the
Appellate Body to complete the analysis.
16

Reports, US – COOL (Article 21.5), paras. 7.522, 7.525, 7.526, 7.538, 7.542, 7.551-7.553, 7.556-7.557,
7.559-7.560, 7.562-7.563, 7.599, 7.601, 7.602 and 7.609-7.610.
15 Panel Reports, US – COOL (Article 21.5), paras. 7.206-7.207 and 7.280.
16 Panel Reports, US – COOL (Article 21.5), paras. 7.716 and 8.4.
WT/DS384/AB/RW • WT/DS386/AB/RW

ANNEX 4

 ORGANISATION MONDIALE ORGANIZACIÓN MUNDIAL
 DU COMMERCE DEL COMERCIO

APPELLATE BODY

Procedural Ruling

1 BACKGROUND

1.1. On Friday, 28 November 2014, the United States notified the Dispute Settlement Body (DSB)
of its intention to appeal certain issues of law covered in the Panel Reports in United States –
Certain Country of Origin Labelling (COOL) Requirem ents – Recourse to Article 21.5 of the DSU by
Canada and Mexico (WT/DS384/RW, WT/DS386/RW) and filed a Notice of Appeal with the
Appellate Body Secretariat. The notification was circulated and the Notice of Appeal filed in
advance of a special meeting of the DSB scheduled for the same day to consider these Panel
Reports. In its Notice of Appeal, the United States challenges the Panel's findings regarding
Article 2.1 of the TBT Agreement and Article III:4 of the GATT 1994. The United States also alleges
that the Panel failed to examine the measure at issue under Article XX of the GATT 1994 and
raises conditional challenges in respect of Arti cle 2.2 of the TBT Agreement and the Panel's terms
of reference.
1.2. At the request of Canada and Mexico, the special meeting of the DSB proceeded as scheduled
to consider these Panel Reports, notwithstandin g the filing of a Notice of Appeal by the
United States earlier in the day. This meeting was subsequently suspended in order to facilitate
informal consultations about a joint request to the Appellate Body by Canada, Mexico, and the
United States (the "participants") to modify the time-periods for filing written submissions in this
appeal.
1.3. At 3:58 p.m. on the same day, the participants filed a joint request with the Division hearing
this appeal to modify certain time-periods for filing written submissions pursuant to Rule 16(2) of
the Working Procedures for Appellate Review (Working Procedures). More specifically, the
participants requested the Division to fix the deadlines for filing the United States' appellant's
submission to 8 December 2014; the other appellants' submissions to 15 December 2014; and the
appellees' submissions to 12 January 2015. The part icipants jointly submitted that "exceptional
circumstances" present in this dispute mean that strict adherence to the regular deadlines would
result in a "manifest unfairness" within the mean ing of Rule 16(2) of the Working Procedures. In
particular, the participants submitted that the time-period set out in Rule 21 would not afford the
United States as appellant sufficient time to present its arguments. This would impede the
development of arguments in subsequent submissions, thereby impeding the orderly conduct of
the appeal. In support of their request, the participants pointed to serious resource constraints due
to concurrent work on other pending proceedings, as well as the constraints imposed by the
contemporaneous holiday period, the multiple complex issues at stake in this dispute, and the
present workload of the Appellate Body.
WT/DS384/AB/RW • WT/DS386/AB/RW

1.4. By letter sent at 4:51 p.m. on the same day, the Presiding Member of the Division invited the
third participants to provide their comments on th e joint request of the participants by 3 p.m. on
1 December 2014. In order to offer the third participants an opportunity to comment on the joint
request of the participants, and to ensure orderly procedure in the conduct of this appeal in
accordance with Rule 16(1) of the Working Proc edures, the Division suspended the deadlines for
the filing of any Notice of Other Appeal, and of the written submissions in this appeal, until the
issuance of this Ruling. Brazil, the European Un ion, India, and Japan submitted comments. All of
them considered that it is within the discretion of the Appellate Body to modify deadlines for filing
written submissions, and no third participant expressed any objections to the extension of
deadlines in the present case. Brazil expressed no view as to whether the request meets the
conditions set out in Rule 16(2) of the Working Procedure, whereas the European Union and Japan
submitted that the factors in this case may give rise to exceptional circumstances, without such
factors necessarily setting a precedent for Rule 16(2) or being categorically accepted as
constituting "exceptional circumstances" in future cases. India submitted that resource constraints,
especially when experienced by developing countri es, could constitute "exceptional circumstances"
for modifying time-periods, and that what is considered to constitute "exceptional circumstances"
in this case could be relevant factors in future appeals. Japan expects that, if the request of the
participants is granted, the time-period for the filing of third participants' submissions would be
extended to 15 January 2015.
2 THE JOINT REQUEST FROM CANADA, MEXICO, AND THE UNITED STATES TO EXTEND
TIME-PERIODS FOR FILING SUBMISSIONS

2.1. Pursuant to Article 17.9 of the Understanding on Rules and Procedures Governing the
Settlement of Disputes (DSU), the Appellate Body has the authority to draw up working
procedures for appellate proceedings in consultati on with the Chair of the DSB and the Director-
General. The Working Procedures, adopted pursuant to this mandate, contain Rule 26(1), which
provides that, "after the commencement of an appeal, the division shall draw up an appropriate
working schedule for that appeal in accordance with the time-periods stipulated in these Rules". In
drawing up an appropriate working schedule, Rule 16(2) permits us to consider requests to
derogate from the time-periods stipulated in the Working Procedures.
2.2. The request before us would require derogation from: Rule 21(1), which requires an
appellant's submission to be filed on the same day as the date of the filing of the Notice of Appeal;
Rule 22(1), which requires the appellees' submissions to be filed within 18 days after the date of
the filing of the Notice of Appeal; and Rule 23(3), which requires the other appellants' submissions
to be filed within 5 days after the filing of the Notice of Appeal. We also note that, in practical
terms, the request implicates a derogation from Rule 18 of the Working Procedures, which
provides that "[n]o document is considered filed with the Appellate Body unless the document is
received by the Secretariat within the time-perio d set out for filing in accordance with these
Rules." Under the terms of Rule 16(2), we may consider requests to derogate from these
provisions "[i]n exceptional circumstances, where strict adherence to a time-period set out in
these Rules would result in a manifest unfairness". Rule 16(2) of the Working Procedures provides:
In exceptional circumstances, where strict adherence to a time-period set out in these
Rules would result in a manifest unfairness, a party to the dispute, a participant, a
third party or a third participant may reques t that a division modify a time-period set
out in these Rules for the filing of documents or the date set out in the working
schedule for the oral hearing. Where such a request is granted by a division, any
modification of time shall be notified to the parties to the dispute, participants, third
parties and third participants in a revised working schedule.
2.3. In assessing the joint request of the participants, we are cognisant that the procedural rules
of WTO dispute settlement, including the Working Procedures, are designed to promote the fair,
prompt, and effective resolution of trade disputes.
1 As the Appellate Body has stated, the Working
Procedures "have been drawn up pursuant to the DSU and as a means of ensuring that the dispute
settlement mechanism achieves the aim of securing a positive solution to a dispute".2

1 Appellate Body Report, US – FSC, para. 166.
2 Appellate Body Report, EC – Sardines, para. 139.
WT/DS384/AB/RW • WT/DS386/AB/RW

2.4. We note, in general terms, that compliance with time-periods in WTO dispute settlement is
an obligation for participants and of systemic interest to all WTO Members. This is reflected clearly
in the DSU, which provides that "[t]he prompt settlement of situations in which a Member
considers that any benefits accruing to it … are being impaired … is essential to the effective
functioning of the WTO".
3 The concern to ensure the prompt settlement of disputes through the
fixing of time-periods is evident throughout the DSU, from provisions on the broader timeframes
for the settlement of disputes 4 to specific time-periods set out for particular stages of
proceedings.5 The time-periods set out in Rules 21(1), 22(1), and 23(3), from which the
participants' request would require derogation, are provisions aimed at facilitating the prompt
settlement of disputes. Rule 16(2) of the Working Procedures subsists within this broader
framework. In particular, we view the use of terms such as "exceptional circumstances", "strict
adherence", and "manifest unfairness" in Rule 16(2) as indicative of the systemic interest of all
Members in maintaining the integrity of the time-periods set out in WTO dispute settlement. In our
view, any derogation from those time-periods pursua nt to Rule 16(2) must be clearly justified in
the specific circumstances of a given case.
2.5. We observe that the WTO dispute settlement sy stem is currently experiencing a high level of
activity. We recognise that this high level of di spute settlement activity is onerous on those WTO
Members actively engaged in multiple, parallel proceedings. We note further that the capacity for
Members involved in multiple, parallel proceedings to manage resource constraints could at times
be limited by the fact that dispute settlement pr oceedings are initiated, and timeframes in one
proceeding are set, independently from other proceedings. As a result, Members engaged in
multiple, parallel proceedings can experience peak demands on their capacity to resource their
dispute settlement activities, especially where filing dates or hearing dates in multiple proceedings
occur contemporaneously or in close sequence. In such situations, a Member's ability to engage
effectively in disputes may be burdened to such a point where its ability to properly exercise its
rights under the DSU may be impaired. We would expect, however, that Members engaged in
multiple, parallel proceedings make adequate re sources available to engage in their dispute
settlement activities. In this regard, we also recognize that the ability of a Member to make
available such resources may depend on its capacities and the frequency with which it participates
in WTO dispute settlement.
2.6. In addition, we consider that other extraneous factors, such as the year-end closure of
government offices, may be relevant to an assessment under Rule 16(2) in a given case. For
instance, the year-end closure of government offices could restrict the ability of personnel to make
sufficient preparations for a submission or hearing.
2.7. At the same time, we are cognisant that modifications to the time-periods in one proceeding
could have broader implications, especially in th e current context of increased dispute settlement
activity. First, modifications could present organizational implications for the Appellate Body. This
may especially be the case where several appellate proceedings are conducted in parallel, with
Appellate Body Members serving concurrently on multiple Divisions. Second, and relatedly,
modifications of the time-periods in one appellate proceeding may require consequential changes
to the time-periods and conduct of other parallel or subsequent proceedings, and thus may affect
the rights and legitimate expectations of other WTO Members to have their cases heard and
completed within the time-periods set out in the DSU. With the foregoing considerations in mind,
we turn to the particular circumstances of the participants in the present dispute.
2.8. We note that the United States is currently a participant in three parallel appeals, as well as
in a number of panel proceedings, some of which could be appealed shortly. We also take note of
the participation of Canada and Mexico in other concurrent proceedings. As we have considered,
such a degree of involvement in multiple, parallel proceedings can lead to acute resource
constraints at particular junctures. Additionally, any changes to the time-periods for one
participant's filing of submissions would likely require modifications to those of other participants.
We also take note of the participants' concerns regarding the concurrence of certain time-periods
for filing written submissions in this dispute with the year-end closure of government offices.

3 Article 3.3 of the DSU. (emphasis added)
4 See e.g. Article 20 of the DSU.
5 See e.g. Articles 4.7, 16.4, and 17.5 of the DSU.
WT/DS384/AB/RW • WT/DS386/AB/RW

2.9. Another element to be considered is that the request before us is made jointly by the
participants. It stands in contrast to other instances where requests to modify time-periods have
been unilateral
6 or were contested. 7 While the agreement of all participants is neither necessary
nor sufficient to the grant of a request under Rule 16(2), it does suggest that the grant of such a
request would be unlikely to prejudice the due process rights of any of the participants.
2.10. A further relevant consideration is that the third participants have not raised any objection
to the participants' request. We thus do not consider that the grant of an extension to the filing
dates would prejudice the due process rights of third participants.
2.11. We are, however, cognisant that the United States' initiation of its appeal has implications
for the participation of third participants in this dispute. In particular, pursuant to the time-period
specified in Rule 24(1) of the Working Procedures, third participants must file written submissions
within 21 days of the United States' filing of its Notice of Appeal. Within that period, third
participants must review the appellant's, other appellants', and appellees' submissions and prepare
their own submissions in response to the Pane l Reports and these submissions. We therefore
consider, in the circumstances of this case, and taking account of the impact of the extensions for
the participants, that this 21-day period may be insufficient to allow the third participants a
meaningful opportunity to review the appellees' submissions and to finalize their own submissions.
2.12. Having considered all of the particular circ umstances of the present case and in the light of
the above considerations as a whole, we consider that in the exceptional circumstances of this
case, "strict adherence" to the regular time-periods for filing submissions set out in Rules 21, 22,
23, and 24 would result in "manifest unfairness". At the same time, we are guided by the Working
Procedures to limit modifications to the time-periods set out in these Rules to the minimum extent
necessary in this case. Accordingly, we have decided to modify, to the extent appropriate, in the
particular circumstances of this case, the time-periods for filing written submissions by the
participants and third participants as follows:
Modified Dates for the Submission of Documents

P r o c e s s R u l e D a t e

Appellant's submission Rules 16 and 21(1) 5 December 2014

Notice(s) of Other Appeal Rules 16 and 23(1) 12 December 2014

Other appellants' submissions Rules 16 and 23(3) 12 December 2014

Appellees' submissions Rules 16, 22, and 23(4) 9 January 2015

Third participants' submissions Rules 16 and 24(1) 12 January 2015

Third participants' notifications Rules 16 and 24(2) 12 January 2015

Signed in Geneva this 2nd day of December 2014 by:

Ricardo Ramírez-Hernández
Presiding Member

Seung Wha Chang
Member

Peter Van den Bossche
Member
WT/DS384/AB/RW • WT/DS386/AB/RW

ANNEX 5

 ORGANISATION MONDIALE ORGANIZACIÓN MUNDIAL
 DU COMMERCE DEL COMERCIO

APPELLATE BODY

Procedural Ruling

1.1. On 11 December 2014, the Appellate Body Division hearing the above appeal received a
letter from Australia requesting that the deadline for the filing of the third participants'
submissions be extended from 12 January to 15 January 2015. We understand that Australia's
letter was copied to the participants and third participants in this appeal.
1.2. Australia notes that, in its Procedural Ruling of 2 December 2014, the Division set the
deadline for the filing of the appellees' submissi ons to Friday, 9 January, and the deadline for the
filing of the third participants' submissions to Monday, 12 January 2015. Australia acknowledges
that a time-period of three days between the filing of the appellees' submissions and the filing of
the third participants' submissions is in line with the standard time-periods set out in the Working
Procedures for Appellate Review (Working Proc edures); however, Australia notes that, in the
particular circumstances of this case, this time-period runs over a weekend, providing third
participants with only one working day to incorporate reactions to the appellees' submissions into
their third participants' submissions. Australia further explains that the challenges it faces in
preparing its submission are exacerbated by the decreased staffing capacity during the peak
summer holiday period in Australia.
1.3. By letter dated 12 December 2014, the Divisi on invited the participants and the other third
participants to comment on Australia's reques t. Brazil, Colombia and New Zealand supported
Australia's request that the deadline for the filing of the third participants' submissions be
extended from 12 January to 15 January 2015. Canada and the United States expressed no
objections to an extension of the deadline. Mexico submitted that it had no objection if the
timetable for the subsequent stages of the appellate proceeding is not affected and if the extension
is granted to all third participants. Japan stated that it had no specific comments on Australia's
request.
1.4. We recall that, pursuant to a joint request by the participants to modify the time-periods for
filing written submissions, we issued a Procedural Ruling on 2 December 2014, extending the time-
periods for the filing of the United States' appellant's submission to 5 December, the Notices of
Other Appeal and the other appellants' submissions to 12 December, and the appellees'
submissions to 9 January. In its comments on the joint request of the participants' request, Japan
had stated that it expected that the filing da tes for third participants' submissions would be
adapted to correspond to standard time-periods, if the joint request of the participants was
granted. However, no request for an extension of the time-period for the filing of third participants'
submission had been made. Accordingly, the deadline was set for 12 January 2014, that is, three
days after the modified date for filing appellees' submissions, in keeping with standard
time-periods set out in the Working Procedures.
WT/DS384/AB/RW • WT/DS386/AB/RW

1.5. Australia's present request would require a modification of the time-periods set out in our
Procedural Ruling of 2 December 2014, which provided derogation from, inter alia, Rule 24 of the
Working Procedures. This rule stipulates that any third participant's submission shall be filed within
21 days after the date of the filing of the Noti ce of Appeal. Pursuant to Rule 16(2), we may
consider requests to derogate from this provision "[i]n exceptional circumstances, where strict
adherence to a time-period set out in these Rules would result in a manifest unfairness".
1.6. In our Procedural Ruling of 2 December 2014, we noted that the procedural rules of WTO
dispute settlement, including the Working Procedur es, are designed to promote the fair, prompt,
and effective resolution of trade disputes
1, and that the Working Procedures "have been drawn up
pursuant to the DSU and as a means of ensuring that the dispute settlement mechanism achieves
the aim of securing a positive solution to a dispute".
2 We also recall our observation that
compliance with time-periods in WTO dispute settlement is an obligation for participants and of
systemic interest to all WTO Members, and that any derogation from those time-periods pursuant
to Rule 16(2) must be clearly justified in the specific circumstances of a given case.
1.7. We note that Australia's request is based partly on similar reasons as the participants' earlier
joint request for extending the time-periods for the filing of written submissions in this appeal,
which we considered to be relevant factors in our assessment of exceptional circumstances
pursuant to Rule 16(2). We note in this regard Australia's reference to decreased staffing capacity
during the peak summer holiday period in Australia and other Southern hemisphere countries.
1.8. Australia also submits that the time-period for the filing of third participants' submissions
ends on a Monday, and that this provides thir d participants with only one working day to
incorporate reactions to the appellees' submissions filed on a Friday into their third participants'
submissions. We do not consider this in itself to be an exceptional situation. On the contrary, this
situation arises under the time-periods set out in the Working Procedures whenever the time-
period for the filing of third participants' submissions ends on a Monday. At the same time,
because this coincides with decreased staffing capacity during the year-end closure and peak
summer holiday period in Southern hemisphere countries, we consider it relevant to the
assessment under Rule 16(2) in the specific circumstances of the present case.
1.9. As a further relevant consideration, we note that the participants and other third participants
have not raised any objection to this request. Accordingly, we consider that granting an extension
to the deadline for the filing of the third part icipants' submissions would not prejudice the due
process rights of the participants. However, in order to ensure due process also with regard to the
other third participants, we must extend any extension granted to Australia also to the other third
participants.
1.10. In the light of all of the above elements, we consider that, in the exceptional circumstances
of this case, "strict adherence" to the regular time-periods for the filing of the third participants'
submissions pursuant to Rule 24 of the Working Procedures would result in "manifest unfairness".
Accordingly, we have decided to extend the de adline for the filing of the third participants'
notifications and third participants' submissions to 15 January 2015.
Signed in Geneva this 17th day of December 2014 by:

Ricardo Ramírez-Hernández
Presiding Member
Seung Wha Chang
Member
Peter Van den Bossche
Member
WT/DS108/AB/R, para. 166.
2 Appellate Body Report, European Communities – Trade Description of Sardines, WT/DS231/AB/R,
para. 139.
WT/DS384/AB/RW • WT/DS386/AB/RW

ANNEX 6

 ORGANISATION MONDIALE ORGANIZACIÓN MUNDIAL
 DU COMMERCE DEL COMERCIO

APPELLATE BODY

Procedural Ruling

1. On 18 December 2014, we received a joint letter from Canada, Mexico, and the
United States in the above proceedings. In that letter, Canada and the United States request that
the oral hearing in this appeal be opened to public observation. Specifically, Canada and the
United States request that we authorize public observation of the statements and answers to
questions of the participants, as well as those of third participants who agree to make their
statements and responses to questions public. Canada and the United States make this request on
the understanding that any information that had been designated as confidential in the documents
filed by any participant in the panel proceedings would be adequately protected in the course of
the oral hearing. They propose that public observation be permitted via simultaneous closed-circuit
television broadcasting with the option for the transmission to be turned off when issues involving
confidential information are discussed, or if a third participant indicates that it wishes to keep its
oral presentation confidential.
2. For its part, Mexico does not object to allowing observation by the public of the oral hearing.
Mexico requests that the Division reflect in its report that Mexico's position is specific to these
proceedings, without prejudice to its systemic views on the matter.
3. On 19 December 2014, we invited any third participant that wished to comment on this
request to do so by 12 noon on 6 January 2015. By that deadline, only Japan had responded,
indicating that it has no objection to this request.
1
4. We recall that requests to allow public observation of the oral hearing have been made, and
have been authorized, in 11 previous appeals. 2 In its rulings, the Appellate Body has held that it
has the power to authorize such requests by the participants, provided that this does not affect the
confidentiality in the relationship between the third participants and the Appellate Body, or impair
the integrity of the appellate process. We concur with the reasons previously expressed by the
Appellate Body, and its interpretation of Article 17.10 of the DSU, in this regard, and consider that
it applies equally in circumstances such as those prevailing in these appellate proceedings.

1 In addition, Brazil and Australia responded in the afternoon of 6 January that they had no objection to
this request.
2 The first time the Appellate Body authorized, at the request of the participants, public observation of
the oral hearing was in 2008 in United States / Canada – Continued Suspension of Obligations in the EC –
Hormones Dispute (WT/DS320/AB/R / WT/DS321/AB/R); most recently the Appellate Body authorized public
observation of the oral hearing in European Communities – Measures Prohibiting the Importation and Marketing
of Seal Products (WT/DS400/AB/R / WT/DS401/AB/R).
WT/DS384/AB/RW • WT/DS386/AB/RW

5. In this appeal, the participants request that the Appellate Body allow observation by the
public of the oral hearing by means of simultaneous closed-circuit television broadcasting, with the
option for the transmission to be turned off when issues involving confidential information are
discussed, or if a third participant indicates that it wishes to keep its oral presentation confidential.
In our view, these modalities would operate to prot ect confidential information in the context of a
hearing that is open to public observation, and would not have an adverse impact on the integrity
of the adjudicative function performed by the Appellate Body. We al so consider that, during public
observation by means of simultaneous closed-circuit television broadcasting in previous appeals,
the confidentiality of information designated as such and the rights of those third participants that
did not wish to have their oral statements made subject to public observation have been fully
protected.
6. We therefore authorize public observation of the oral hearing in this appeal on the terms set
out below. Accordingly, pursuant to Rule 16(1) of the Working Procedures for Appellate Review, we
adopt the following additional procedures for the purpose of these appellate proceedings:
a. The oral hearing will be open to public observation by means of simultaneous
closed-circuit television broadcasting, shown in a separate room to which duly registered
delegates of WTO Members and members of the general public will have access.
b. Oral statements and responses to questions by the third participants that have indicated
their wish to maintain the confidentiality of their submissions, as well as – at the request
of any participant – any discussion of information that the participants designated as
confidential in documents submitted to the Panel, will not be subject to public
observation.
c. Any request by a third participant wishing to maintain the confidentiality of its oral
statements and responses to questions shou ld be received by the Appellate Body
Secretariat no later than 5 p.m. Geneva time on Monday, 9 February 2015.
d. An appropriate number of seats will be reserved in the separate room where the closed-
circuit television broadcast will be shown for delegates of WTO Members that are not
participants or third participants in these proceedings. WTO delegates wishing to observe
the oral hearing are requested to register in advance with the Appellate Body
Secretariat.
e. Notice of the oral hearing will be provided to the general public on the WTO website.
Members of the general public wishing to observe the oral hearing will be required to
register in advance with the Appellate Body Secretariat, in accordance with the
instructions set out in the WTO website notice.
Signed in Geneva this 7th day of January 2015 by:

Ricardo Ramírez-Hernández
Presiding Member

Seung Wha Chang
Member

Peter Van den Bossche
Member