PRESENTATION

WTO LAW
CASE DS381– RULES ON TBT CASE


Instructor: LL.M Nguyen T. Lan Huong

Class: CLC41B
Group: 7
 GROUP’S MEMBERS

Name Student’s code

Khưu Hồng Linh 1653801013093

Nguyễn Trần Bảo Hân 1653801015058

Đặng Bá Tùng 1653801011330

Nguyễn Cẩm Ninh 1653801011221

Nguyễn Tiến An 1653801012002

Dương Hữu Tiến 1653801011301

Bùi Đức Duy 1653801015044

2
 CONTENTS
A. SUMMARY OF THE CASE ............................................................................................................. 5
I. Parties to disputes ................................................................................................................................ 5
II. Background of the case ...................................................................................................................... 5
B. CASE ANALYSIS ............................................................................................................................. 7
I. Issue raised on Appeal: ..................................................................................................................... 7
II. Legal characterization of the Measure at Issue (definition of technical regulation) ........................ 8
1. Interpretation of Annex 1.1 to the TBT ........................................................................................... 8
2. Whether the Measure at Issue constitutes a Technical Regulation? ............................................... 8
3. Conclusion of the AB: ................................................................................................................... 10
III. Article 2.1 of TBT agreement (NT – technical regulation) ............................................................ 10
1. Panel’s findings and Mexico’s appeal regarding “Treatment no less favorable” ......................... 10
2. “Treatment No Less Favorable” under Article 2.1 of the TBT Agreement .................................. 11
3. Panel’s approach to assessing “Treatment No Less Favorable” ................................................... 11
4. Whether the US Measure is inconsistent with Article 2.1 TBT? .................................................. 13
5. Conclusion: .................................................................................................................................... 14
6. Mexico’s claims under Article 11 of the DSU .............................................................................. 14
IV. Article 2.2 of TBT agreement (not more trade-restrictive than necessary) .................................... 14
1. The United States’ Appeal ............................................................................................................ 15
2. Other Appeal by Mexico ............................................................................................................... 17
3. Conclusion ..................................................................................................................................... 18
V. Article 2.4 of TBT agreement (international standard) .................................................................. 18
1. The United States Appeal .............................................................................................................. 18
2. Mexico’s Appeal ........................................................................................................................... 20
3. Conclusion ..................................................................................................................................... 20
VI. Mexico's claim under Article I:1, III:4 GATT (exercise of judicial economy by the Panel) ......... 20
C. ANSWERING THE QUESTIONS .................................................................................................. 21
I. Whether the US measure was considered as "technical regulation" under TBT agreement? ........ 21
II. Whether US measure was a "discrimination"? ............................................................................... 21
III. Did US measure have a trade restrictive nature? ............................................................................ 22
D. CURRENT STATUS OF THE CASE ............................................................................................. 22
REFERENCES ..................................................................................................................................... 23

3
 ABBREVIATIONS

The United States The US

The Appellate Body The AB

Dispute Settlement Body DSB

Technical barrier of Trade agreement TBT

Dispute Settlement Understanding DSU

Agreement on the International Dolphin

AIDCP
Conservation program

(US) Dolphin Protection Consumer Information

DPCIA
Act

Eastern Tropical Pacific ETP

International Organization for Standardization

/International Electrotechnical Commission Guide
ISO/IEC Guide 2: 1991 2, General Terms and Their Definitions
Concerning Standardization and Related
Activities, sixth edition (1991)

4
 A. SUMMARY OF THE CASE

I. Parties to disputes

In the Report of the Panel In the Report of the Appellate Body

- Appellant: United States

- Complainants: Mexico - The other Appellant: Mexico
- Respondent: United States - Appellee: Mexico
- The other Appelle: United States

- Third parties: Australia; Brazil; Canada; China; Ecuador; European Communities; Guatemala;
India; Japan; Korea, Republic of Venezuela; New Zealand; Norway

II. Background of the case

On 24 October 2008, Mexico requested consultations with the United States with respect to the
following measures:
(i) The United States Code, Title 16, Section 1385 (“Dolphin Protection Consumer Information
Act”);
(ii) The Code of Federal Regulations, Title 50, Section 216.91 (“Dolphin‑safe labeling standards”)
and Section 216.92 ("Dolphin‑safe requirements for tuna harvested in the ETP [Eastern Tropical
Pacific Ocean] by large purse-seine vessels"); and
(iii) The ruling in Earth Island Institute v. Hogarth, 494 F.3d 757 (9th Cir. 2007).

 Together, these measures set out the conditions under which tuna products sold in the United
States may be labelled as “dolphin-safe”. Mexico claimed these measures are inconsistent with
the United States‟ obligations under Articles I:1 and III:4 of the GATT 1994 and Article 2.1, 2.2
and 2.4 of the TBT Agreement.
On 9 March 2009, Mexico requested the establishment of a panel. Mexico's main claims were
that the aforementioned measures were discriminatory, and that they were also unnecessary.

5
 At its meeting on 20 April 2009, the DSB established a panel. Subsequently, the Panel found
that: 1
i. The Panel determined that the US dolphin-safe labelling provisions constitute a technical
regulation, according to Annex 1.1 TBT.
ii. The Panel concluded that Mexican tuna products are not afforded less favorable treatment than
tuna products of US and other origins in respect of the US dolphin safe labelling provisions on
the basis of their origin. US dolphin-safe labelling provisions are therefore not inconsistent with
Article 2.1 TBT.
iii. The Panel rejected Mexico's first claim by finding that the US dolphin-safe labelling provisions
do not discriminate against Mexican tuna products and are therefore not inconsistent with Article
2.1 TBT.
iv. With respect to Mexico's claim under Article 2.2 TBT, the Panel found that Mexico had
demonstrated that the US dolphin-safe labelling provisions are more trade-restrictive than
necessary.
v. The Panel found that the US dolphin-safe labelling provisions are not in violation of Article 2.4
TBT, which requires technical regulations to be based on relevant international standards
(AIDCP “dolphin-safe” definition and certification) where possible, as Mexico's claim.
vi. The Panel declined to rule in addition on Mexico's non-discrimination claims under the GATT
1994 and therefore exercised judicial economy2 with respect to Mexico's claims under Articles
I:1 and III:4 of the GATT.

On 20 January 2012, the United States notified the DSB of its decision to appeal certain issues of
law and legal interpretations developed by the panel.
5 days later, Mexico notified the DSB of its decision to appeal certain issues of law and legal
interpretations developed by the panel, and the panel's failure to make an objective assessment of
the matter as required by Article 11 DSU.3

Note: In particular, tuna products containing tuna caught by “setting on” dolphins were not
eligible for a “dolphin-safe label” in the US, regardless of whether the fishing method was used
inside or outside the ETP. The fishing technique of “setting on” dolphins took advantage of the
fact that tuna tended to swim beneath the schools of dolphins in the ETP. However, the use of a
“dolphin-safe” label was not obligatory for the importation or sale of tuna products in the US.4

1
https://www.wto.org/english/tratop_e/dispu_e/cases_e/ds381_e.htm?fbclid=IwAR1elqDXaOKPWz1og85CEIYbtx
mVhs6Ugbtm7eriDPcUr6NsqItzvOtaoZc
2
A principle which panels are not required to address all the legal claims that the complainant makes. If the panel
has already found that the challenged measure is inconsistent with a particular provision of a covered agreement and
that is necessary to resolve the matter at issue in the dispute, it is generally not necessary for the panel to go on and
to examine whether the same measure is also inconsistent with other provisions the complainant invokes.
3
https://www.wto.org/english/tratop_e/dispu_e/cases_e/ds381_e.htm
4
AB's report, US-Tuna II para 172

6
 B. CASE ANALYSIS
I. Issue raised on Appeal:
The following issues are raised on appeal:5
1. Whether the Panel made a mistake in characterizing the measure at issue as a "technical
regulation" within the meaning of Annex 1.1 TBT;

2. Whether the Panel erred in finding that the US "dolphin-safe" labelling provisions are not
inconsistent with Article 2.1 of the TBT Agreement, and in particular:

(i) Whether the Panel erred in its interpretation and application of the phrase "treatment no
less favorable" in Article 2.1 TBT; and
(ii) Whether the Panel acted inconsistently with Article 11 of the DSU in its evaluation of
Mexico's claim under Article 2.1 TBT.

3. Whether the Panel erred in law, or acted inconsistently with Article 11 of the DSU, that the
measure at issue is more trade restrictive than necessary to fulfil the United States' legitimate
objectives, taking account of the risks non-fulfilment would create, and that, therefore, the
measure at issue is inconsistent with Article 2.2 of the TBT Agreement;

(i) if the AB reverses the Panel's finding that the measure at issue is inconsistent with Article
2.2 TBT, then whether the Panel erred in finding that the United States' objective of
"contributing to the protection of dolphins, byensuring that the US market is not used to
encourage fishing fleets to catch tuna in a manner that adversely affects dolphins" is a
legitimate objective within the meaning of that provision;
(ii) if the AB reverses the Panel's finding that the measure at issue is inconsistent with Article
2.2 TBT and rejects the ground of appeal in item (i) above, then whether the measure at
issue is inconsistent with Article 2.2 TBT based on the Panel's finding that the measure
did not entirely fulfil its objectives;

4. Whether the Panel erred in finding that the AIDCP's "dolphin-safe definition and certification"
constitutes a "relevant international standard" within the meaning of Article 2.4 TBT;
And in finding that Mexico had failed to demonstrate that the AIDCP standard is an effective and
appropriate means to fulfil the US's objectives "at the US's chosen level of protection"; and

5. Whether the Panel acted inconsistently with Article 11 DSU in deciding to exercise judicial
economy with respect to Mexico's claims under Articles I:1 and III:4 GATT 1994

5
AB's report, US-Tuna II paragraph 171

7
II. Legal characterization of the Measure at Issue (definition of technical regulation)
US's appeal focused on the Panel's finding that the measure at issue established labelling
requirements "with which compliance is mandatory" and the Panel's conclusion that the US
measure therefore constituted a "technical regulation" within the meaning of Annex 1.1 TBT.
1. Interpretation of Annex 1.1 to the TBT
Initially, the AB recalled that it had previously in EC – Sardines6 held that to fall under the
definition of "technical regulation", a document must apply to an identifiable product or group of
products, it must lay down one or more characteristics of the product, and "compliance with the
product characteristics must be mandatory".7

The AB further noted that:8

 Annex 1.1 defined the term "technical regulation" by reference to a document "which was
defined quite broadly as something written, inscribed, etc., which furnishes evidence or
information upon any subject"
 Annex 1.1 states that a technical regulation may establish or prescribe "product
characteristics or their related processes and production methods", thus clarify the subject
matter of a technical regulation.
 Regarding "labelling requirement", the word "requirement" meant "a condition which must
be complied with" => Therefore, the term "labelling requirements" referred to provisions that
set out criteria or conditions to be fulfilled in order to use a particular label.

2. Whether the Measure at Issue constitutes a Technical Regulation?

The AB noted that taken together, the DPCIA, the implementing regulation and the Hogarth
ruling set out the requirements for when tuna products sold in the US may be labelled as
“dolphin-safe”. Also, the US measure:
 had established a single and legally mandated set of requirements for making any statement
regarding the broad subject of "dolphin-safety‟ of tuna products in the US; and
 covered the entire field of what "dolphin-safe‟ meant in relation to the tuna products in the
US.9

Furthermore, the AB noted that the US measure possessed specific enforcement mechanisms and
surveillance mechanisms to guarantee compliance with its norms and imposed sanctions in case
of wrong labelling.10

6
AB Report, EC – Trade Description of Sardines, Para. 176
7
AB report, US- Tuna II, para 183
8
AB report, US- Tuna II, paras 184-186
9
AB report, US- Tuna II, para 193

8
 According to the US, whether the measure at issue was legally enforceable did not provide a
basis for drawing distinction between technical regulations and standards.
 However, the AB noted that while it was true that "labelling requirements‟ either in a
standard or in a technical regulation may be subject to enforcement, the US measure:
o set out certain conditions for the use of a label
o enforced a prohibition against the use of any other label containing the terms
"dolphin-safe‟, "dolphins"… on a tuna product that did not comply with the
requirements.
 The measure at issue established a single definition of "dolphin-safe" and treated any
statement on a tuna product regarding "dolphin-safety" that did not meet the conditions of the
measure as a deception.

US also contended that compliance with a labelling requirement was "mandatory" within the
meaning of Annex 1.1 only "if there is also a requirement to use the label in order to place the
product for sale on the market".11
 In the US's view, compliance with a labelling requirement was not mandatory in situations
where producers retained the option of not using the label but still were able to sell the
product on the market
 The AB rejected the US position and held that "the fact that there is no requirement to use a
particular label to sale a product on the market doesn't preclude a finding that a measure
constitutes a "technical regulation" within the meaning of Annex 1.1… while it is possible to
sell tuna products without a "dolphin-safe" label in the US, any "producer, importer, exporter,
distributor or seller" of tuna products must comply with the measure at issue to make any
"dolphin-safe" claim.”

The US also suggested that the Panel's allegedly faulty interpretation of Annex 1.1 was largely
based on its reading of the AB Report in EC – Sardines12.
 According to the US, the Panel's reliance on that AB report was incorrect, because EC –
Sardines involved a requirement that products marketed as "preserved sardines" be prepared
exclusively from a certain type of sardines (that unless "preserved sardines" met this product
characteristic, they were prohibited from being marketed as such).
 US maintained that the measure in the present case did not relate to product characteristics
that tuna products must meet to be sold on the US market and could be sold in the US as tuna
products either with or without a "dolphin-safe" label.
 However, AB noted that the fact that the US had characterized the measure at issue in EC –
Sardines as a "technical regulation" appeared to support the notion that it was legally

10
AB report, US- Tuna II, paras 194-195
11
AB report, US- Tuna II, para 195
12
Appellate Body Report, European Communities – Trade Description of Sardines, WT/DS231/AB/R, adopted 23
October 2002

9
 permissible to sell a product on the market without using a particular label was not
determinative when examining whether a measure was a "technical regulation" within the
meaning of Annex 1.1.

3. Conclusion of the AB:13

- A determination of whether a particular measure constituted a technical regulation must be made
regarding the characteristics of the measure at issue and the circumstances of the case
- "…As a consequence, the US measure covers the entire field of what "dolphin-safe" means in
relation to tuna products.
- …the Panel did not err in characterizing the measure at issue as a "technical regulation" within
the meaning of Annex 1.1 TBT"

III. Article 2.1 of TBT agreement (NT – technical regulation)

Mexico appealed the Panel's finding that it had failed to demonstrate that the US "dolphin-safe‟
labelling provisions were inconsistent with Article 2.1 TBT. 14
 The AB noted that Article 2.1 TBT consisted of three elements that must be demonstrated in
order to establish an inconsistency with the provisions:
(i) that the measure at issue constituted a "technical regulation" within the meaning of
Annex 1.1;
(ii) that the imported products must be like the domestic product and the products of
other origins; and
(iii) that the treatment accorded to imported products must be less favourable than that
accorded to like domestic products and like products from other countries.
 Mexico's appeal the Panel's finding in respect of the third element, namely, the "treatment no
less favorable" standard in Article 2.1.

1. Panel’s findings and Mexico’s appeal regarding “Treatment no less favorable”

The Panel concluded that:15
 Mexico had failed to demonstrate that the US "dolphin-safe" labelling provisions afforded
less favorable treatment to Mexican tuna products within the meaning of Article 2.1 TBT.
 The US "dolphin-safe" labelling provisions did not discriminate on the basis of the origin of
the products, and did not make it impossible for Mexican tuna products to comply with the
requirement not to set on dolphins.

13
AB report, US - Tuna II, para 199
14
Panel report, US - Tuna II, paras 201-201
15
Panel report, US - Tuna II, paras 204-207

10
 Mexico argued that the Panel had erred in its interpretation and application of the phrase
"treatment no less favorable" in Article 2.1 TBT.16
 According to Mexico, the Panel had failed to fully consider the context of Article 2.1 and the
object and purpose of the TBT.

 The US considered that the Panel had properly interpreted Article 2.1 TBT: The Panel rightly
found that the US "dolphin-safe" labelling provisions did not treat Mexican tuna products
"less favorable treatment" than it treated to US tuna products and the ones from other
countries.17

2. “Treatment No Less Favorable” under Article 2.1 of the TBT Agreement

The AB noted that "less favorable treatment" within the meaning of Article 2.1 does not mean as
any distinctions, in particular, the ones that were based exclusively on particular product
characteristics or on particular processes and production methods.18
 Furthermore, AB contended that the context provided by Article 2.2 supported a reading that
Article 2.1 did not operate to prohibit any restriction of international trade, meaning there are
still some exceptions.
The AB also found relevant context in Article III:4 of the GATT 1994 where the expression
"treatment no less favorable‟ can be found as well.19
 The AB considered that conditions of competition in the relevant market should be assessed
to be instructive in evaluating the meaning of the expression, provided that the specific
context in which the term appears in Article 2.1 TBT is taken into account.
In addition, in US – Clove Cigarettes, the AB held that a panel must further analyze "whether the
detrimental impact on imports stemmed exclusively from the legitimate regulatory distinction"
rather than reflecting "discrimination against the group of imported products".20

3. Panel’s approach to assessing “Treatment No Less Favorable”

The Appellate Body examined the following arguments of Mexico, with respect to the Panel's
findings and analyzed the Panel's approach in each of the findings:

16
AB report, US - Tuna II, paras 208-209
17
AB report, US - Tuna II, paras 208-209
18
AB report, US - Tuna II, paras 212-214
19
AB report, US - Tuna II, paras 214-217
20
AB report, US - Tuna II, paras 214-217

11
 First, Mexico argued that the Panel had correctly considered the ordinary meaning of the
phrase “treatment no less favorable”, yet it had failed to fully consider the context of Article
2.1 and the object and purpose of TBT Agreement.
o Mexico, referring to the sixth recital of the Preamble of the TBT21, submitted that
technical regulations that meet all the criteria of the recital should not be prohibited
by Article 2.1, even if they modified the conditions of competition in the relevant
market to the detriment of the imported product in question.
o Mexico however asserted that the US labelling provisions did not meet these criteria.
 The AB noted that while it did consider that the preamble of the TBT informed the meaning
of Article 2.1. However, it did not agree with Mexico's suggested approach that the Preamble
set out a test that was separate and independent from Article 2.122

 Second, Mexico argued that the Panel had departed from the way in which the phrase
"treatment no less favorable" had been examined in previous disputes under Article III:4
GATT 1994; and it faulted the Panel for imposing a standard under which a measure could
be found to be inconsistent with Article 2.1 TBT only if it imposed an "absolute prohibition"
on imports.
 The AB held that contrary to what the Panel assumed, the facts that a complainant could
comply or could have complied with the conditions imposed by a contested measure did not
mean that the challenged measure was therefore consistent with Article 2.1 TBT.23

 Third, Mexico submitted that the Panel had erred in relying on the findings of the AB report
in Dominican Republic – Import and Sale of Cigarettes, to find that the adverse impact of the
challenged measure on Mexican tuna products is "unrelated to the foreign origin of the
product.24
o Mexico stated that a measure that was "origin neutral" on its face could still violate
the NT obligation if it has the effect of modifying the conditions of competition to the
detriment of the imported product.
o In finding that Mexico had failed to demonstrate that the US "dolphin-safe" labelling
afforded "less favorable treatment‟ to Mexican tuna products, the Panel had reasoned,
among other things, that the measures at issue on applying the same origin neutral
requirement to all tuna products, did not inherently discriminate on the basis of the
origin of the products.25
o The Panel seemed to have assumed, incorrectly in the AB's view, that regulatory
distinctions that were based on different "fishing methods" or "geographical location"

21
https://www.wto.org/english/res_e/publications_e/ai17_e/tbt_preamble_jur.pdf
22
AB report, US -Tuna II, paras 218-219
23
AB report, US -Tuna II, paras 220-221
24
AB report, US -Tuna II, para 222
25
Notation of the AB, AB report, US -Tuna II, paras 222-224

12
 rather than national origin per se could not be relevant in assessing the consistency of
a particular measure with Article 2.1 TBT.
 Contrary to the Panel, the AB considered that in an analysis of "less favorable treatment"
under Article 2.1, any adverse impact on competitive opportunities for imported products in
relation to like domestic products that is caused by a particular measure may potentially be
relevant26.27

 Fourth, Mexico faulted the Panel for failing to find that the US measure was "discriminatory",
in that it used a market access restriction to "pressure" Mexico and the Mexican fleet to adopt
essentially the same "dolphin-safe" regime as in force in the US, thereby itself targeting the
origin of the tuna products.
 The AB noted that any adverse impact on competitive opportunities for imported products in
relation to like domestic products that was caused by a technical regulation may potentially
be relevant for an assessment of "less favorable treatment". This alone, however, would not
have been sufficient to establish a breach of Article 2.1.28

 The AB concluded that the Panel had applied an incorrect approach in assessing whether the
measure at issue was inconsistent with Article 2.1 TBT.

4. Whether the US Measure is inconsistent with Article 2.1 TBT?

Aim: the AB dealt with the question that Mexico had established that the US “dolphin-safe”
labelling accord “less favorable treatment” to Mexican tuna products than that accorded to tuna
products of the US and those originating in other countries.

The AB's analysis of this issue proceeded in two parts:

i. First, Whether the Measure modifies the conditions of competition in the US market to the
detriment of Mexican Tuna Products?29
 In this part, the AB concluded that the measure at issue that modified the competitive
conditions in the US market to the detriment of Mexican tuna products, and:
 "…it is the measure at issue rather than private actors, that denies most Mexican tuna
products access to a "dolphin-safe" label in the US market. The fact that the detrimental
impact on Mexican tuna products may involve some element of private choice does not, in
our view, relieve the United States of responsibility under the TBT Agreement, where the
measure it adopts modifies the conditions of competition to the detriment of Mexican tuna
products.”
26
AB Report, United States – Measures Affecting the Production and Sale of Clove Cigarettes, footnote 372 to Para
179
27
AB report, US - Tuna II, para 225
28
AB report, US - Tuna II, para 226
29
AB report, US – Tuna, para 239

13
 ii. Second, whether the detrimental impact reflects discrimination?30
 The US had argued before the Panel that if there were any differences in criteria that must
be satisfied in order to substantiate "dolphin-safe" claims, they were "calibrated" to the risk
that dolphins may be killed or seriously injured when tuna was caught.
 The AB concluded that US failed to demonstrated that the difference in labelling conditions
for tuna products containing tuna caught by setting on dolphins in the ETP and other fishing
methods outside the ETP was "calibrated" to the risks to dolphins arising from different
fishing methods in different areas of the ocean, thus United States had not demonstrated that
the detrimental impact of the US measure on Mexican tuna products stemmed exclusively
from a legitimate regulatory distinction.

5. Conclusion:
The AB decided to:31
 reverse the Panel's finding that the US "dolphin-safe" labelling provisions were not
inconsistent with Article 2.1 TBT
 find that the US "dolphin-safe" labelling provisions were inconsistent with Article 2.1 of the
TBT Agreement, for providing "less favorable treatment" to Mexican tuna products than that
accorded to tuna products of the US and tuna products originating in other countries.

6. Mexico’s claims under Article 11 of the DSU

Mexico alleged that the Panel had acted inconsistently with Article 11 of the DSU by failing to
consider evidence put forward by Mexico that it was impossible for the Mexican tuna industry to
change its fishing practices to adapt to the US "dolphin-safe" labelling provisions.
The AB stated that having already found that the Panel had erred in finding that Mexico failed to
establish that the measure at issue was inconsistent with the US's obligations under Article 2.1 of
the TBT Agreement, it need not determine this issue further.

IV. Article 2.2 of TBT agreement (not more trade-restrictive than necessary)
US appealed the Panel's findings that the measure at issue was more trade restrictive than
necessary to fulfil the legitimate objectives pursued by the US and therefore, the measure was
inconsistent with Article 2.2 TBT32

30
Ab report, US – Tuna, paras 282-297
31
AB report, US - Tuna II, para 299
32
AB report, US - Tuna II, paras 301-304

14
 Mexico also raised a conditional other appeal with respect to the Panel's finding under Article
2.2 of the TBT Agreement.

1. The United States’ Appeal

The US requested the AB to reverse the Panel's finding because:
 In assessing the evidence relating to the extent to which the US's measure fulfilled the US's
objectives, the Panel had failed to make an objective assessment of the matter

Mexico argued that the Panel's finding was correct:

 Because the US's objectives could be fulfilled with a less trade-restrictive alternative measure,
namely, allowing the AIDCP label and the US "dolphin-safe" label to co-exist in the US
market

i. Article 2.2 TBT:

 The AB noted the first sentence of Article 2.2 required WTO Members to ensure that their
technical regulations were not prepared, adopted, or applied with a view to, or with the effect
of, creating unnecessary obstacles to international trade.33
 The AB considered that an assessment of whether a technical regulation was "more trade-
restrictive than necessary" within the meaning of Article 2.2 TBT involved an evaluation of a
number of factors which should be considered by a panel:34
(i) the degree of contribution made by the measure to the legitimate objective at issue;
(ii) the trade - restrictiveness of the measure; and
(iii) the nature of the risks at issue and the gravity of consequences that would arise from
non-fulfilment of the objective(s) pursued by the Member through the measure.
 The AB concluded that the burden of proof in showing that a technical regulation was
inconsistent with Article 2.2, the complaint must prove it claim that challenged measures
created an unnecessary obstacle to trade.35

ii. The Panel's application of Article 2.2:

The US alleged that: the Panel had erred in finding that the "co-existence" of the US "dolphin-
safe" label and the AIDCP label provided a less trade-restrictive means of achieving the
objectives pursued by the US.36

33
AB report, US - Tuna II, paras 312-317
34
AB report, US - Tuna II, paras 318-322
35
AB report, US – Tuna, para 323
36
AB report, US – Tuna, para 324

15
  According to the US, a co-existance between AIDCP label and the US "dolphin-safe"
label would not have addressed risks to dolphins outside the ETP, since by its terms it
only applied to tuna caught inside the ETP.
 The US also alleged that the Panel erred by implying it was required to fulfil its
objective to the same level inside and outside the ETP, regardless of the costs…
According to the AB, the Panel's analysis of whether Mexico had demonstrated that the US
"dolphin-safe" labelling provisions were "more trade-restrictive than necessary" within the
meaning of Article 2.2 was based on an improper comparison:37
 With respect to the dolphin protection objective, the Panel had contrasted the AIDCP
labelling requirements with the US "dolphin-safe" labelling provisions, stating that
"allowing compliance" with the former "to be advertised on the US market would
discourage observed dolphin mortality resulting from setting on dolphins to the same
extent as the existing US dolphin-safe provisions do".
 With respect to the consumer information objective, the Panel noted:

"under the US measures" "under the AIDCP"

"a label would only be granted if no

it was possible that tuna caught during a dolphins were killed, but where certain
trip where dolphins were in fact killed or unobserved adverse effects could
injured may be labelled "dolphin-safe". nonetheless have been caused to
dolphins"

 According to the AB, this comparison, however, failed to take into account that the
alternative measure identified by Mexico was not the AIDCP regime, as such, but
rather the coexistence of the AIDCP rules with the US measure.

According to the AB, for fishing activities:38

 Outside ETP:
o the degree to which the US's objectives were achieved under the alternative
measure would not be higher or lower than that achieved by the US measure,
but would be the same since AIDCP rules was limited to the ETP
 Inside the ETP:
o Alternative measure identified by Mexico, tuna that was caught by "setting on
dolphins" would be eligible for a "dolphin-safe" label if the prerequisites of
the AIDCP label had been complied with.

37
AB report, US - Tuna II, para 328
38
AB report, US - Tuna II, paras 329-330

16
 o Measure at issue prohibited setting on dolphins, and thus tuna harvested
would only be eligible for a "dolphin-safe" label if it was caught by methods
other than setting on dolphins.

 Therefore, according to AB: "…the alternative measure proposed by Mexico would

contribute to both the consumer information objective and the dolphin protection
objective to a lesser degree than the measure at issue, because, overall, it would allow
more tuna harvested in conditions that adversely affect dolphins to be labelled
"dolphin-safe"."

iii. Other Appeal by Mexico

Mexico raised two claims in its appeal with respect to the Panel's finding under Article 2.2 TBT
(if AB reversing the Panel's finding that the measure at issue was inconsistent with Article 2.2
TBT):
i. First, Mexico requested that the AB to reverse the Panel's finding that the US's objective of
measure at issue39, was a legitimate objective within the meaning of Article 2.2.40
 The AB noted that a fact that a WTO member adopted a measure that put a burden on
trade to pursue a particular objective could not provide a sufficient basis to conclude that
the objective that was being pursued was not a "legitimate objective‟ within the meaning
of Article 2.2.
 The AB held that according to the 6th recital of TBT preamble, what must not be applied
in a manner that would constitute a means of arbitrary or unjustifiable discrimination
between countries where the same conditions prevail or a disguised restriction on
international trade was a measure, and not the objective pursued by the technical
regulation.41

ii. In the alternative, Mexico requested that the AB find the measure at issue to be inconsistent
with Article 2.2 based on the Panel's earlier finding that the US measure did not entirely fulfil
the United States' objectives42
 The AB recalled that both with respect to the consumer information objective and the
dolphin protection objective, the Panel had concluded that the measure at issue could
partially achieve the objective and had not found that US "dolphin-safe" labelling
provisions did not fulfil their objectives or were not "capable" of fulfilling the US's
objectives.

39
Contributing to the protection of dolphins by ensuring that the US market was not used to encourage fishing fleets
to catch tuna in a way that adversely affected dolphins
40
AB report, US - Tuna II, para 334
41
AB report, US – Tunba, para 339
42
AB report, US - Tuna II, para 334

17
 iv. Conclusion
The AB held that the Panel's comparison and analysis was flawed and reversed the Panel's finding
that the measure at issue was inconsistent with Article 2.2 TBT. 43
The AB rejected both the Mexico's other claims with respect to Article 2.2 TBT.44

V. Article 2.4 of TBT agreement (international standard)

The US and Mexico each appealed different elements of the Panel's findings under Article 2.4
TBT:45
 The US appealed the Panel's finding that the "AIDCP dolphin-safe definition and
certification" constituted a "relevant international standard" within the meaning of Article
2.4 TBT.
 Mexico appealed the Panel's conclusion that it had failed to demonstrate that the AIDCP
standard was an effective and appropriate means to fulfil the objectives pursued by the
US.
Before the Panel, the US supported the interpretation of the term "international standard" as a
standard that is, among other things, adopted by a body whose membership is open to the
relevant bodies of at least all WTO Members.46
 US argued that AIDCP was a body in which Members may participate by invitation only
and hence was not open. Mexico did not disagree with the interpretation but argued that
AIDCP was open when the AIDCP definition of “dolphin safe” was developed.

1. The United States Appeal

i. The meaning of the term “International Standard”
The AB noted that:47
 The term “international standard” was not defined in Annex 1.1 of the TBT but
Annex 1.2 did48.
 Annex 1.4 to the TBT defined an international body or system, thus established the
characteristics of a standard and of an international body49.

43
AB report, US - Tuna II, para 333
44
AB report, US - Tuna II, para 342
45
AB report, US - Tuna II, para 343
46
AB report, US - Tuna II, para 367
47
AB report, US - Tuna II, paras 349-356
48
Document approved by a recognized body, that provides, for common and repeated use, rules, guidelines or
characteristics for products or related processes and production methods, with which compliance is not mandatory. It
may also include or deal exclusively with terminology, symbols, packaging, marking or labelling requirements as
they apply to a product, process or production method.

18
  The term "international standard" is also defined in the ISO/IEC Guide 2: 1991 as a
"standard that is adopted by an international standardizing/standards organization
and made available to the public”.
 However, the AB noted that the TBT Agreement prevailed over definitions in the
ISO/IEC Guide 2:1991.
Regarding the Panel's interpretation of the term "international", the AB held that the criteria that
a member country become member to the organization upon invitation does not lead to the
conclusion that the membership is open.50
 The AB held that invitation is only a formality
The AB recalled that, for the purposes of the TBT Agreement, international standards needed to
be adopted by "international standardizing bodies", which may, but don't need to be
"international standardizing organizations".51
 The AB concluded that the Panel had thus erred in finding that it had to consider whether the
AIDCP standard was adopted by an "organization", rather than by a "body".

ii. Whether the Panel erred in finding that the AIDCP standard is a “Relevant International
Standard” within the meaning of Article 2.4 of the TBT Agreement?52
The Panel had found that the AIDCP standard was a "relevant international standard" within the
meaning of Article 2.4, based on:
 its intermediate conclusions that the AIDCP "dolphin-safe" definition and
certification constituted a standard
 the AIDCP was an "international standardizing organization"
 the AIDCP standard was made available to the public
The AB however concluded that the AIDCP was not open to the relevant bodies of at least all
Members and thus not an "international standardizing body" for purposes of the TBT Agreement.
 AB held that the Panel erred in finding that the "AIDCP dolphin-safe definition and
certification" constitute a "relevant international standard" within the meaning of the TBT
Agreement.

49
Body or system whose membership is open to the relevant bodies of at least all Members.
50
AB report, US - Tuna II, para 386
51
"body" is a "legal or administrative entity that has specific tasks and composition", whereas an
"organization" is a "body that is based on the membership of other bodies or individuals and has an
established constitution and its own administration"
52
AB report, US - Tuna II, paras 396-399

19
 2. Mexico’s Appeal
Mexico appealed the Panel's finding that it had failed to demonstrate that the AIDCP standard
was an effective and appropriate means to fulfil the US's objectives at the US's chosen level of
protection.53

3. Conclusion
The Appellate Body reversed the Panel's finding, in paragraph 7.693 and 7.707 of the Panel
Report:
 Paragraph 7.693: AIDCP is "open to the relevant body of every country and is
therefore an international standardizing organization" for the purposes of Article 2.4
TBT Agreement.
 Paragraph 7.707: "AIDCP dolphin-safe definition and certification" constitute a
"relevant international standard" within the meaning of the TBT Agreement.
Nonetheless, AB upheld the Panel’s ultimate finding that the measure did not violate Art. 2.454
Regarding Mexico's appeal, AB did not need to address this issue, since it found that the Panel
erred in finding that the AIDCP standard was a "relevant international standard" within the
meaning of Article 2.4 TBT.55

VI. Mexico's claim under Article I:1, III:4 GATT (exercise of judicial economy by the
Panel)56
The AB found that the Panel’s assumption that the obligations under TBT Art. 2.1 and GATT
Arts. I:1 and III:4 were substantially the same was incorrect, because the scope and content of
these provisions are not the same.57
 Moreover, the AB stated that the Panel should have made additional findings under the
GATT 1994 in the event that the Appellate Body were to disagree with its view that the
measure at issue is a "technical regulation" within the meaning of the TBT Agreement
Therefore, the AB concluded that the Panel engaged in “false judicial economy” and acted
inconsistently with DSU Art. 11 in declining to address Mexico’s claims under GATT Arts. I:1
and III:4.

53
AB report, US - Tuna II, para 400
54
AB report, US - Tuna II, para 401
55
AB report, US - Tuna II, para 400
56
AB report, US - Tuna II, para 400 - 405
57
According to the Appellate Body this assumption was incorrect as it had found that the scope and content of these
provisions was not the same

20
 C. ANSWERING THE QUESTIONS

I. Whether the US measure was considered as "technical regulation" under TBT agreement?
- A measure constitutes a technical regulation under Annex 1.1 TBT when:
(i) It is a document
 The AB held that "dolphin safe" label is the regulatory or legislative act of US federal
authorities (DPCIA, the implementing regulations and the Hogarth ruling)
(ii) It applies to an unidentifiable product or group of products (not considered in the Appeal)
(iii) It lays down product characteristics of their related process and production method (PPMS58)
(not considered in the Appeal)
(iv) Its compliance is mandatory
 The AB considered that the measure at issue established a single definition of "dolphin safe"
and treated any statement on a tuna product regarding "dolphin safe" that does not meet the
conditions of the measures as a deceptive practice or act.
 The AB found that the US requirements were mandatory because it stipulated certain
conditions under which tuna can be labelled as "dolphin safe". Further, there were actions
which were imposed against the parties that label tuna as "dolphin safe" without complying
with these conditions.
- The AB concluded that the US measure of marking the tuna as "dolphin safe" constitute a
technical regulation under Annex 1.1 TBT
 US measure was considered to be a "technical regulation" under TBT agreement.

II. Whether US measure was a "discrimination"?

- The AB used an analysis which is parallel to what has been used on Art III:4 GATT 1994.
Furthermore, it also took into account the preamble of the TBT which is a TBT counterpart of
Art XX GATT 1994, regarding the criteria of arbitrary and unjustifiable discrimination for
interpreting Art 2.1 TBT.
- According to the AB, the lack of access to the "dolphin safe" label of tuna products containing
tuna caught by setting on dolphins had a detrimental impact on the competitive opportunities of
Mexican tuna products in the US market.
- The AB concluded that the US did not demonstrate that:
 The measure at issue was applied in fair and impartial manner.

58
processes and production methods

21
  The detrimental impact of the US's measure on Mexican tuna products stemmed solely
from a legitimate regulatory distinction (between tuna caught by setting on dolphin in the
ETP and by using other fishing methods outside ETP.
- Therefore, the AB found that the labelling measures provided less favorable treatment to
Mexican tuna products are contrary to Art 2.1 TBT
 US measure was a "discrimination".

III. Did US measure have a trade restrictive nature?

- A measure violates TBT Art 2.2 if, among other things, it has a trade restrictive nature. The AB
stated that relating to Art 2.2 TBT, a regulation is more trade restrictive than necessary when the
legitimate can be achieved through reasonable and less trade restrictive alternative.
- The AB noted that the alternative measure recommended by Mexico was the co-existence of
both AIDCP and US dolphin safe regulations.
- The AB held that, with regard to the fishing activities outside ETP, the extent to which US's
objective were accomplished by alternative measure would be as same as US's measure did,
owing to the fact that AIDCP rules were limited to ETP zone only. Furthermore, the AB held
that dolphins continue to suffer adverse impact beyond observed mortalities from setting method,
even under the restriction contained in the AIDCP rules.
- Therefore, the AB reversed the Pane's finding that the US measure which is more trade-
restrictive than necessary and thus is contrary to Art 2.2 TBT
 US measure did not have a trade restrictive nature.

D. CURRENT STATUS OF THE CASE

Time Events

At the DSB meeting, US noted that on 13 July 2013, it had made

effective a final rule that amended certain "dolphin-safe" labelling
23/07/2013
requirements and had brought those requirements into compliance
with the DSB recommendations and rulings

14/11/2013 Mexico requested the establishment of a compliance panel

14/04/2015 The compliance panel report was circulated to Members

US notified the DSB of its decision to appeal certain issues of law

05/06/2015
covered in the compliance panel report

10/06/2015 Mexico filed another appeal in the same dispute

22
 20/09/2015 The Appellate Body report was circulated to Members

Mexico requested authorization from the DSB to suspend

10/03/2016
concessions or other obligations pursuant to Article 22.2 DSU

The United States objected to Mexico's proposed level of

22/03/2016 suspension of concessions or other obligations and referred the
matter to arbitration pursuant to Article 22.6 DSU

At the DSB meeting, it was agreed that the matter had been referred
23/03/2016
to arbitration as required by Article 22.6 of the DSU

The Arbitrator circulated its decision to Members

25/04/2017 The Arbitrator determined that the level of nullification or

impairment suffered by Mexico as a result of the 2013 Tuna
Measure is USD 163.23 million per annum

WTO said the U.S. tuna labeling rules were now WTO-compliant,
26/10/2017
derailing Mexico’s case and its claim for sanctions

Mexico notified the DSB of its decision to appeal certain issues of

01/12/2017
law and legal interpretations developed by the compliance panel

The AB dismissed Mexico’s argument that the U.S. labeling rules

14/12/2018
violated WTO rules

REFERENCES
I. Documents
1. The Panel Report, US - Tuna II
2. The Appellate Report, US - Tuna II
3. Raj Bhala & David Gantz (2002), WTO Case Review 2000, Vol.19, No.2, 18 ARIZ. J. INT’L &
COMP
4. Ming Du, “Treatment No Less Favorable” and the Future of National Treatment Obligation in
GATT Article III:4 after EC – Seal Products

II. Website:
1. https://www.wto.org/english/tratop_e/dispu_e/cases_e/ds381_e.htm , 01/09/2019

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2. https://www.reuters.com/article/us-usa-mexico-wto/mexico-loses-10-year-wto-battle-over-u-s-
tuna-labeling-idUSKBN1OD233 , 15/09/2019

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