United States: WTO Appellate Body Brings Coherence to Trade Rules on Technical Regulations

Last Updated: July 10 2012
Article by Duane W. Layton, Paulette Vander Schueren and Margaret-Rose Sales

Originally published July 9, 2012

Keywords: WTO, COOL, mandatory labeling regime, appellate body

On June 29, 2012, the Appellate Body of the World Trade Organization (WTO) circulated its decision in a dispute over US country-of-origin labeling (COOL) requirements for beef and pork products (WT/DS384/AB/R, WT/DS386/AB/R). This is the third decision this year by the Appellate Body dealing with the rules under the WTO Agreement on Technical Barriers to Trade (TBT Agreement). It is also the third time this year that the Appellate Body has found US technical (product) regulations inconsistent with the rules of the TBT Agreement. Through this trifecta of decisions, the Appellate Body has developed a more coherent approach to the interpretation of the TBT Agreement.

Mexico and Canada challenged the US mandatory labeling regime for beef and pork as inconsistent with the TBT Agreement before a WTO panel. The panel found that the COOL requirements were inconsistent with Articles 2.1 and 2.2 of the TBT Agreement. Article 2.1 requires WTO Members to ensure that technical regulations do not treat imported products less favorably than similar (i.e., "like") domestic products. Article 2.2 mandates that technical regulations be no more trade restrictive than necessary to fulfill a legitimate objective. The United States appealed the COOL panel's decision. 

The Appellate Body has now upheld the panel's finding under TBT Article 2.1, but reversed the ruling on Article 2.2. The Appellate Body's decision brings the interpretation of these articles of the TBT Agreement in line with its recent decisions in two other cases against the United States—Mexico's case against US dolphin-safe labeling requirements for tuna (the "Tuna-Dolphin" case) and Indonesia's case against a US ban on clove cigarettes (the "Clove Cigarettes" case). See our earlier Legal Update for a discussion of these cases, The WTO Appellate Body Finds US Dolphin-Safe Label Rules Discriminatory, May 23, 2012.

On the Article 2.1 finding, the Appellate Body agreed with the panel that the COOL measure modifies the conditions of competition to the detriment of imported livestock because the measure's recordkeeping and verification requirements create an incentive for meat processors to use exclusively domestic livestock, and a disincentive against using like imported livestock. However, the Appellate Body faulted the panel for not completing its analysis under Article 2.1. 

The Appellate Body noted that the panel should have considered whether this de facto discrimination derives exclusively from a legitimate regulatory distinction, in which case it would not violate Article 2.1. Through its own analysis, the Appellate Body found that the COOL measure is not applied in an "even-handed manner" because the measure's recordkeeping and verification requirements impose a disproportionate burden on upstream producers and processors of livestock as compared to the information conveyed to consumers through the mandatory labeling requirements for meat sold at the retail level. The detailed information that upstream producers record and transmit is not necessarily communicated to consumers on the COOL labels, either because the labels do not provide all of this information or because the meat products are exempt from the labeling requirements altogether. For these reasons, the Appellate Body concluded that the discrimination against imported livestock does not stem exclusively from a legitimate regulatory distinction and is inconsistent with Article 2.1 of the TBT Agreement.

On the Article 2.2 finding, the Appellate Body sided with the United States and reversed the WTO panel. The panel had agreed with Canada and Mexico that the COOL measure was inconsistent with Article 2.2 of the TBT Agreement because it is more trade-restrictive than necessary to fulfill the legitimate objective of providing information on origin to consumers. The panel found that the COOL measure does not fulfill this objective because it fails to convey meaningful origin information to consumers. The Appellate Body disagreed and found that the panel had erred in its interpretation of Article 2.2. 

In its decision, the Appellate Body faulted the panel for incorrectly considering that a measure could be consistent with Article 2.2 only if it fulfilled its objective completely or exceeded some minimum level of fulfillment. Moreover, the Appellate Body noted that the panel appeared to ignore its own findings that the COOL measure does, to some extent, provide origin information to consumers. Because it lacked sufficient factual findings by the panel, the Appellate Body was unable to complete the panel's analysis to determine whether the COOL measure violated Article 2.2 because it is more trade restrictive than necessary. For these reasons, the Appellate Body reversed the panel's finding on Article 2.2.

The Appellate Body's report in the COOL case follows recent decisions in the Tuna-Dolphin and Clove Cigarettes cases. Before these decisions, there was scant WTO jurisprudence on the TBT Agreement. A framework for interpreting this agreement has emerged from these cases. First, in analyzing claims under Article 2.1, the Appellate Body has prioritized the competitive relationship between products subject to a technical regulation in its review of a panel's decision. The Appellate Body in all three cases based its conclusion on whether imported products receive less favorable treatment by examining how the imported and domestic products compete in the marketplace. Second, when the Appellate Body finds that a technical regulation has a detrimental effect on imported products, it then considers whether there is a legitimate regulatory distinction for the disparate treatment. The Appellate Body has indicated that this is a necessary part of an analysis under Article 2.1. Finally, the Appellate Body has signified that a technical regulation need only make some contribution to its objective, and need not fulfill its objective completely or meet a de minimis level of fulfillment, to be consistent with Article 2.2.

The decisions in the COOL, Tuna-Dolphin, and Clove Cigarette cases will provide guidance not only to WTO Members bringing and defending against disputes under the TBT Agreement, but also to the panels who will preside over these disputes in the future. 

Learn more about our International Trade and Government practices.

Visit us at mayerbrown.com

Mayer Brown is a global legal services provider comprising legal practices that are separate entities (the "Mayer Brown Practices"). The Mayer Brown Practices are: Mayer Brown LLP and Mayer Brown Europe – Brussels LLP, both limited liability partnerships established in Illinois USA; Mayer Brown International LLP, a limited liability partnership incorporated in England and Wales (authorized and regulated by the Solicitors Regulation Authority and registered in England and Wales number OC 303359); Mayer Brown, a SELAS established in France; Mayer Brown JSM, a Hong Kong partnership and its associated entities in Asia; and Tauil & Chequer Advogados, a Brazilian law partnership with which Mayer Brown is associated. "Mayer Brown" and the Mayer Brown logo are the trademarks of the Mayer Brown Practices in their respective jurisdictions.

© Copyright 2012. The Mayer Brown Practices. All rights reserved.

This Mayer Brown article provides information and comments on legal issues and developments of interest. The foregoing is not a comprehensive treatment of the subject matter covered and is not intended to provide legal advice. Readers should seek specific legal advice before taking any action with respect to the matters discussed herein.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Similar Articles
Relevancy Powered by MondaqAI
In association with
Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions