US — Tuna II (Mexico), AB-2012-2 - Report of the Appellate Body, 16 May 2012

Short Title	Full case title and citation
Australia – Salmon	Appellate Body Report, Australia – Measures Affecting Importation of Salmon, WT/DS18/AB/R, adopted 6 November 1998, DSR 1998:VIII, 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, 1527
Brazil – Retreaded Tyres	Panel Report, Brazil – Measures Affecting Imports of Retreaded Tyres, WT/DS332/R, adopted 17 December 2007, as modified by Appellate Body Report WT/DS332/AB/R, DSR 2007:V, 1649
Canada – Autos	Panel Report, Canada – Certain Measures Affecting the Automotive Industry, WT/DS139/R, WT/DS142/R, adopted 19 June 2000, as modified by Appellate Body Report WT/DS139/AB/R, WT/DS142/AB/R, DSR 2000:VII, 3043
Canada – Dairy	Panel Report, Canada – Measures Affecting the Importation of Milk and the Exportation of Dairy Products, WT/DS103/R, WT/DS113/R, adopted 27 October 1999, as modified by Appellate Body Report WT/DS103/AB/R, WT/DS113/AB/R, DSR 1999:VI, 2097
Canada – Wheat Exports and Grain Imports	Panel Report, Canada – Measures Relating to Exports of Wheat and Treatment of Imported Grain, WT/DS276/R, adopted 27 September 2004, upheld by Appellate Body Report WT/DS276/AB/R, DSR 2004:VI, 2817
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
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
China – Raw Materials	Appellate Body Reports, China – Measures Related to the Exportation of Various Raw Materials, WT/DS394/AB/R / WT/DS395/AB/R / WT/DS398/AB/R, adopted 22 February 2012
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, 7367
EC – Approval and Marketing of Biotech Products	Panel Report, European Communities – Measures Affecting the Approval and Marketing of Biotech Products, WT/DS291/R, WT/DS292/R, WT/DS293/R, Add.1 to Add.9, and Corr.1, adopted 21 November 2006, DSR 2006:III‑VIII, 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, 3243
EC – Bananas III	Appellate Body Report, European Communities – Regime for the Importation, Sale and Distribution of Bananas ("EC – Bananas III "), WT/DS27/AB/R, adopted 25 September 1997, DSR 1997:II, 591
EC – Bananas III (Article 21.5 – Ecuador II) / EC – Bananas III (Article 21.5 – US)	Appellate Body Reports, European Communities – Regime for the Importation, Sale and Distribution of Bananas – Second Recourse to Article 21.5 of the DSU by Ecuador,WT/DS27/AB/RW2/ECU, adopted 11 December 2008, and Corr.1 / European Communities – Regime for the Importation, Sale and Distribution of Bananas – Recourse to Article 21.5 of the DSU by the United States, WT/DS27/AB/RW/USA and Corr.1, adopted 22 December 2008
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, 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
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, 135
EC – Sardines	Appellate Body Report, European Communities – Trade Description of Sardines, WT/DS231/AB/R, adopted 23 October 2002, DSR 2002:VIII, 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, 3451
EC – Trademarks and Geographical Indications (Australia)	Panel Report, European Communities – Protection of Trademarks and Geographical Indications for Agricultural Products and Foodstuffs, Complaint by Australia, WT/DS290/R, adopted 20 April 2005, DSR 2005:X, 4603
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
India – Autos	Panel Report, India – Measures Affecting the Automotive Sector, WT/DS146/R, WT/DS175/R and Corr.1, adopted 5 April 2002, DSR 2002:V, 1827
Japan – Agricultural Products II	Appellate Body Report, Japan – Measures Affecting Agricultural Products, WT/DS76/AB/R, adopted 19 March 1999, DSR 1999:I, 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, 97
Japan – Apples	Appellate Body Report, Japan – Measures Affecting the Importation of Apples, WT/DS245/AB/R, adopted 10 December 2003, DSR 2003:IX, 4391
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, 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, 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, 5
Mexico – Taxes on Soft Drinks	Panel Report, Mexico – Tax Measures on Soft Drinks and Other Beverages, WT/DS308/R, adopted 24 March 2006, as modified by Appellate Body Report WT/DS308/AB/R, DSR 2006:I, 43
Philippines – Distilled Spirits	Appellate Body Reports, Philippines – Taxes on Distilled Spirits, WT/DS396/AB/R / WT/DS403/AB/R, adopted 20 January 2012
Thailand – Cigarettes (Philippines)	Appellate Body Report, Thailand – Customs and Fiscal Measures on Cigarettes from the Philippines, WT/DS371/AB/R, adopted 15 July 2011
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
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
US – Continued Zeroing	Appellate Body Report, United States – Continued Existence and Application of Zeroing Methodology, WT/DS350/AB/R, adopted 19 February 2009
US – COOL	Panel Reports, United States – Certain Country of Origin Labelling (COOL) Requirements, WT/DS384/R / WT/DS386/R, circulated to WTO Members 18 November 2011 [appeal in progress]
US – FSC (Article 21.5 – EC)	Panel Report, United States – Tax Treatment for "Foreign Sales Corporations" – Recourse to Article 21.5 of the DSU by the European Communities, WT/DS108/RW, adopted 29 January 2002, as modified by Appellate Body Report WT/DS108/AB/RW, DSR 2002:I, 119
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, 5663 (Corr.1, DSR 2006:XII, 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, 3
US – Gasoline	Panel Report, United States – Standards for Reformulated and Conventional Gasoline, WT/DS2/R, adopted 20 May 1996, as modified by Appellate Body Report WT/DS2/AB/R, DSR 1996:I, 29
US – Poultry (China)	Panel Report, United States – Certain Measures Affecting Imports of Poultry from China, WT/DS392/R, adopted 25 October 2010
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, 2755
US – Superfund	GATT Panel Report, United States – Taxes on Petroleum and Certain Imported Substances, L/6175, adopted 17 June 1987, BISD 34S/136
US – Tuna (Mexico)	GATT Panel Report, United States – Restrictions on Imports of Tuna, DS21/R, 3 September 1991, unadopted, BISD 39S/155
US – Tuna II (Mexico)	Panel Report, United States – Measures Concerning the Importation, Marketing and Sale of Tuna and Tuna Products, WT/DS381/R, circulated to WTO Members 15 September 2011
US – Tyres (China)	Appellate Body Report, United States – Measures Affecting Imports of Certain Passenger Vehicle and Light Truck Tyres from China, WT/DS399/AB/R, adopted 5 October 2011
US – Upland Cotton	Appellate Body Report, United States – Subsidies on Upland Cotton, WT/DS267/AB/R, adopted 21 March 2005, DSR 2005:I, 3
US – Upland Cotton	Panel Report, United States – Subsidies on Upland Cotton, WT/DS267/R, Corr.1, and Add.1 to Add.3, adopted 21 March 2005, as modified by Appellate Body Report WT/DS267/AB/R, DSR 2005:II, 299
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, 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, 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, 323

Abbreviation	Definition
AIDCP	Agreement on the International Dolphin Conservation Program (Panel Exhibits US-23a and MEX-11)
DML	dolphin mortality limit
DPCIA	Dolphin Protection Consumer Information Act, United States Code, Title 16, Section 1385 et seq. (Panel Exhibit US-5)
DSB	Dispute Settlement Body
DSU	Understanding on Rules and Procedures Governing the Settlement of Disputes
ETP	Eastern Tropical Pacific Ocean
FADs	fish aggregating devices
GATS	General Agreement on Trade in Services
GATT 1994	General Agreement on Tariffs and Trade 1994
Hogarth Ruling	United States Court of Appeals for the Ninth Circuit, Earth Island Institute v. Hogarth, 494 F.3d 757 (9th Cir. 2007) (Panel Exhibit MEX-31)
IATTC	Inter-American Tropical Tuna Commission
IDCPA	International Dolphin Conservation Program Act, Public Law No. 115-42, 111 Stat. 1122 (15 August 1997) (Panel Exhibit MEX-21)
Implementing regulations	United States 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 by large purse seine vessels") (Panel Exhibit US-6)
ISO/IEC Guide 2: 1991	International Organization for Standardization / International Electrotechnical Commission Guide 2, General Terms and Their Definitions Concerning Standardization and Related Activities, sixth edition (1991)
La Jolla Agreement	La Jolla Agreement for the Reduction of Dolphin Mortality in the Eastern Pacific Ocean, done at La Jolla, California, 21 April 1992
MFN	most favoured nation
NOAA	National Oceanic and Atmospheric Administration
Panel Report	Panel Report, United States – Measures Concerning the Importation, Marketing and Sale of Tuna and Tuna Products, WT/DS381/R
SPS Agreement	Agreement on Sanitary and Phytosanitary Measures
TBT Agreement	Agreement on Technical Barriers to Trade
TBT Committee Decision	Decision of the Committee on Principles for the Development of International Standards, Guides and Recommendations with relation to Articles 2, 5 and Annex 3 of the Agreement, in WTO document G/TBT/1/Rev.9, Decisions and Recommendations adopted by the WTO Committee on Technical Barriers to Trade since 1 January 1995, 8 September 2008, pp. 37-39; and WTO document G/TBT/1/Rev.10, 9 June 2011, pp. 46-48
USDOC	United States Department of Commerce
Vienna Convention	Vienna Convention on the Law of Treaties, done at Vienna, 23 May 1969, 1155 UNTS 331; 8 International Legal Materials 679
WCPO	Western Central Pacific Ocean
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

1.

The United States and Mexico each appeals certain issues of law and legal interpretations developed in the Panel Report, United States – Measures Concerning the Importation, Marketing and Sale of Tuna and Tuna Products (the "Panel Report").¹ The Panel was established to consider a complaint by Mexico² regarding the consistency of certain measures imposed by the United States on the importation, marketing, and sale of tuna and tuna products with the General Agreement on Tariffs and Trade 1994 (the "GATT 1994") and the Agreement on Technical Barriers to Trade (the "TBT Agreement").

2.

Before the Panel, Mexico challenged the United States Code, Title 16, Section 1385 (the "Dolphin Protection Consumer Information Act" or "DPCIA"), the United States Code of Federal Regulations, Title 50, Section 216.91 and Section 216.92 (the "implementing regulations"), and a ruling by a US federal appeals court in Earth Island Institute v. Hogarth³ (the "Hogarth ruling") as inconsistent with the United States' obligations under Article 2 of the TBT Agreement and Articles I and III of the GATT 1994. The Panel reasoned that the legal instruments identified by Mexico in its panel request "set out the terms of the US 'dolphin-safe' labelling scheme" and considered it appropriate therefore to treat them as a single measure for purposes of its analysis of Mexico's claims and its findings.⁴ The Panel thereafter referred to the measure at issue in this dispute as "the US dolphin-safe labelling provisions".⁵

3.

Having found that the US "dolphin-safe" labelling provisions constitute a "technical regulation" within the meaning of Annex 1.1 to the TBT Agreement, the Panel proceeded to examine the substantive claims brought by Mexico under the TBT Agreement. With respect to Mexico's claim that the measure is inconsistent with Article 2.1, the Panel found that Mexico had failed to establish that the measure affords treatment less favourable to Mexican tuna products than to US tuna products and tuna products originating in other countries and concluded, therefore, that the measure is not inconsistent with the United States' obligations under that provision.⁶ Next, the Panel found that the measure is more trade restrictive than necessary to fulfil its legitimate objectives, taking account of the risks non-fulfilment would create. Therefore, the Panel found that the measure is inconsistent with Article 2.2 of the TBT Agreement.⁷ With respect to Mexico's claim under Article 2.4 of the TBT Agreement, the Panel found that the Agreement on the International Dolphin Conservation Program⁸ (the "AIDCP") is a relevant international standard, but that Mexico had failed to prove that it is an effective and appropriate means to fulfil the United States' objectives at its chosen level of protection.⁹ The Panel decided to exercise judicial economy with respect to Mexico's claims under Articles I:1 and III:4 of the GATT 1994.¹⁰

4.

In a communication dated 31 October 2011, Mexico and the United States jointly requested the Dispute Settlement Body (the "DSB") to agree to an extension of the 60-day period provided for in Article 16.4 of the Understanding on Rules and Procedures Governing the Settlement of Disputes (the "DSU") for the adoption or appeal of the Panel Report until 20 January 2012.¹¹ At a meeting held on 11 November 2011, the DSB agreed that, upon a request by Mexico or the United States, it would adopt the Panel Report no later than 20 January 2012, unless the DSB decided by consensus not to do so, or either party to the dispute notified the DSB of its decision to appeal.¹²

5.

On 20 January 2012, the United States notified the DSB of its intention to appeal certain issues of law and certain legal interpretations developed by the Panel, pursuant to Article 16 of the DSU, and filed a Notice of Appeal and an appellant's submission pursuant to Rules 20 and 21, respectively, of the Working Procedures for Appellate Review (the "Working Procedures"). On the same day, the Appellate Body Division hearing this appeal received a request from the United States to hold the oral hearing in this appeal during the week of 19 February 2012 on the ground that a senior member of the US legal team would be unable to travel to Geneva after that time period for medical reasons relating to her pregnancy. In the alternative, the United States proposed, by letter dated 26 January 2012, that the oral hearing be held in the week of 26 March 2012 to provide additional preparation time for the Appellate Body and the participants. On 3 February 2012, having carefully considered the United States' request and the comments received from Mexico and the third participants in this dispute, and having also considered the size and complexity of this appeal, the Division ruled that the oral hearing would be held on 15-16 March 2012.

6.

On 25 January 2012, Mexico notified the DSB of its intention to appeal certain issues of law and certain legal interpretations developed by the Panel, pursuant to Articles 16.4 and 17 of the DSU, and filed a Notice of Other Appeal¹³ and an other appellant's submission, pursuant to Rules 23(1) and 23(3), respectively, of the Working Procedures. On 7 February 2012, Mexico and the United States each filed an appellee's submission.¹⁴

7.

On 10 February 2012, Australia, Brazil, Canada, the European Union, Japan, and New Zealand each filed a third participant's submission.¹⁵ On the same day, Argentina, China, Ecuador, Guatemala, and Korea each notified its intention to appear at the oral hearing as a third participant, pursuant to Rule 24(2) of the Working Procedures, and Turkey notified that it would not be filing a third participant's submission. On 7 March and 12 March 2012, respectively, the Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu and Thailand each notified the Secretariat of its intention to appear at the oral hearing as third participants.¹⁶

8.

On 2, 3, and 17 February 2012, the Appellate Body received unsolicited amicus curiae briefs from, respectively, the Humane Society of the United States/Humane Society International and Washington College of Law (WCL), ASTM International (formerly the American Society for Testing and Materials), and Professor Robert Howse. The participants and the third participants were given an opportunity to express their views on these briefs at the oral hearing. The Division hearing this appeal did not find it necessary to rely on these amicus curiae briefs in rendering its decision.

9.

The oral hearing in this appeal was held on 15-16 March 2012. The participants and nine of the third participants—Argentina, Brazil, Canada, China, Ecuador, Guatemala, Japan, Korea, and Thailand—made oral statements. The participants and third participants responded to questions posed by the Members of the Appellate Body Division hearing the appeal.

10.

On 20 March 2012, the Chair of the Appellate Body informed the Chair of the DSB that, due to the size of this appeal, including the complexity of the issues raised by the participants, along with the large caseload that the Appellate Body was facing and the scheduling constraints resulting therefrom, it was expected that the Appellate Body Report in this appeal would be circulated to WTO Members no later than 16 May 2012.¹⁷

11.

The United States requests the Appellate Body to reverse the Panel's finding that the measure at issue is a "technical regulation" within the meaning of Annex 1.1 to the TBT Agreement.The United States asserts that such reversal would also dispose of Mexico's claims under Article 2 of the TBT Agreement. Therefore, the United States further requests the Appellate Body to declare moot and of no legal effect the Panel's findings with respect to Article 2 of the TBT Agreement.

12.

The United States alleges that the Panel erred in finding that the measure at issue is a "technical regulation", because compliance with the measure is not "mandatory" within the meaning of Annex 1.1 to the TBT Agreement. The United States maintains that the Panel's interpretation of the word "mandatory" is indistinguishable from the term "requirement".¹⁸ However, because the word "requirement" is used in both the definition of "technical regulation" in Annex 1.1 and in the definition of "standard" in Annex 1.2, a finding that compliance with certain labelling requirements is "mandatory" within the meaning of Annex 1.1 must be based on considerations other than the fact that a document establishes criteria for the use of a certain label.¹⁹ The United States submits that compliance with a labelling requirement is "mandatory" within the meaning of Annex 1.1 if there is a requirement to use a particular label in order to place a product for sale on the market.²⁰ By contrast, compliance with a labelling requirement is not mandatory in situations where producers retain the option of not using the label. For the United States, this interpretation "respects the definition" of both a labelling requirement that is a "technical regulation" under Annex 1.1 and the definition of a labelling requirement that is a "standard" under Annex 1.2.²¹

13.

The United States also alleges that the Panel incorrectly applied prior Appellate Body reports interpreting the phrase "with which compliance is mandatory". In particular, the Panel's interpretation of "mandatory" fails to give effect to the Appellate Body's statement in EC – Asbestos that "mandatory compliance" is characterized by being "binding" or "compulsory".²² The United States takes issue with the Panel's statement that it must consider "not only whether the document lays down certain conditions for the use of a label, or prescribes a certain content for a given label", but must also consider "whether the document at issue regulates in a binding fashion these conditions or content".²³ For the United States, the condition of "regulating in a binding fashion" is redundant, because it is not clear how a document could "lay down" or "prescribe" conditions for use of a label or certain content for a label if that "laying down" or "prescription" was not "binding".

14.

The United States further alleges that the Panel incorrectly applied the Appellate Body's distinction between "positive" and "negative" prescriptions in documents. The United States refers to the Appellate Body's statement in EC – Asbestos that a document may provide, positively, that products must possess certain characteristics, or a document may require, negatively, that products must not possess certain characteristics. In the United States' view, this distinction is a device to help explain that there is more than one way to set out product characteristics in a measure. However, it is not a useful tool for distinguishing a technical regulation from a standard, because both types of measures may set forth product characteristics. The United States contends that the Panel erred in finding that the measure at issue was a "negative" requirement because it "impose[s] a prohibition on the offering for sale in the United States of tuna products bearing a label referring to dolphins and not meeting the requirements that they set out".²⁴ The United States submits that standards, like technical regulations, may "reserve access to a label to products that comply with that standard's requirements" and, where "a standard is a measure of a Member, that standard will naturally not permit products that do not meet that standard to claim they do".²⁵

15.

Furthermore, the United States argues that enforceability, as such, does not distinguish technical regulations from standards, and points out that labelling requirements may be subject to enforcement regardless of whether they are set forth in a standard or in a technical regulation.²⁶ In addition, the United States submits that the Panel erred in relying on specific enforcement possibilities in relation to the measure at issue in order to distinguish it from a standard. First, with respect to enforcement in the sense of restricting the use of the label to those products that meet the requirements for the use of the label, the United States contends that this alone does not "make compliance with a labelling requirement 'mandatory'", because denying access to a label for failure to meet the conditions required to use the label is inherent in the term "labelling requirement".²⁷ Second, the United States refers to two "specific enforcement measures" considered by the Panel, namely, a law against deceptive practices and a fine to be levied against ship captains for falsely certifying that dolphins were not set upon. With respect to the law against deceptive practices, the United States maintains that, even "if it is accepted that a specific enforcement measure can make a labeling requirement mandatory, it would still have to be a measure that goes beyond a general prohibition on using deceptive labels".²⁸ Moreover, a "fine to be levied against ship captains" does not apply to false use of a "dolphin-safe" label, but rather is a penalty for false certification by captains and observers aboard tuna-fishing vessels.²⁹

16.

In addition, the United States submits that the Panel's interpretation "was largely based on its reading of the Appellate Body report in EC – Sardines".³⁰ According to the United States, the Panel's reliance on that Appellate Body report is incorrect for two reasons. First, in that dispute, neither the panel nor the Appellate Body considered whether compliance with the document at issue was mandatory. Second, EC – Sardines involved a requirement that products marketed as "preserved sardines" be prepared exclusively from fish of the species Sardina pilchardus. The United States maintains that, unlike the EC regulation at issue in that dispute, the measure in the present case does not specify the product characteristics that tuna products must meet to be sold on the US market. Rather, tuna products can be marketed in the United States as tuna products either with or without a "dolphin-safe" label.³¹

17.

Finally, the United States argues that the Panel erred in finding that a standard becomes a technical regulation if it is "the only standard" available to address an issue.³² The United States argues that "[n]othing in Annex 1.1 provides that a technical regulation must be exclusive, and nothing in Annex 1.2 provides that a standard cannot be exclusive."³³ The United States contends that the only basis the Panel suggests for its view that there must be various competing standards are in definitions contained in the ISO/IEC Guide 2: 1991, General Terms and Their Definitions Concerning Standardization and Related Activities³⁴ (the "ISO/IEC Guide 2: 1991"). The United States submits that it appears that the Panel drew upon the definition of the term "mandatory standard" in the ISO/IEC Guide 2: 1991 and argues that this definition is "irrelevant" because the term "mandatory standard" does not appear in the TBT Agreement.³⁵ The United States further asserts that, if "a labelling requirement sets out multiple similar labels to choose from, but an operator must still use one in order to market its product, then the operator still faces mandatory compliance with respect to that labelling requirement".³⁶ By contrast, "if the operator has the option of not using any of the labels, then it does not face a mandatory compliance obligation".³⁷

18.

According to the United States, the Panel found that the measure at issue is "the only standard available"³⁸ because the measure prohibits labels that make deceptive claims about "dolphin-safety" and also prohibits deceptive labels using similar terms, such as "marine mammal" and "porpoise".³⁹ The United States contends that this contradicts the Panel's earlier finding that standards may be protected against "abusive or misleading use under general law".⁴⁰ According to the United States, it is not clear why a standard may be protected against deceptive use of the label when using the term "dolphin", but not when using similar or overlapping terms, such as "marine mammal" or "porpoise". The United States alleges that the Panel erred in introducing a caveat that "standards must allow similar labels to be used, even if the similar label does not meet the standard's requirements, and even if potentially deceptive."⁴¹ In addition, the United States maintains that the Panel may have made its conclusion on the basis of factual errors and refers to a Panel statement that the prohibition applies to claims about marine mammal and porpoise safety "whether misleading or otherwise".⁴² The United States maintains that, if this statement reflects the belief that references to "marine mammal" and "porpoise" are prohibited even if the labelling requirements are met, this is factually incorrect, because, pursuant to the measure at issue, if the conditions for using a "marine mammal-safe" label are met, such a label can be used. In any event, submits the United States, even if the Panel had made correct legal and factual findings with regard to the measure's prohibition of deceptive labels, it failed to explain the reasons for drawing a distinction between a measure providing for a single standard that need not be used and a measure providing for multiple standards that need not be used. For the United States, "[s]uch a distinction is without logic".⁴³

19.

The United States requests the Appellate Body to reverse the Panel's finding that the US "dolphin-safe" labelling provisions are more trade restrictive than necessary to fulfil their legitimate objectives and are therefore inconsistent with Article 2.2 of the TBT Agreement. The United States alleges that the Panel erred in finding that the measure at issue is more trade restrictive than necessary to fulfil its legitimate objectives. The United States also challenges several intermediate findings and conclusions by the Panel and alleges that the Panel failed to make an objective assessment of the matter before it as required under Article 11 of the DSU.

20.

The United States alleges that the Panel erred in finding that the coexistence of the US "dolphin-safe" label and the AIDCP label would provide a reasonably available, less trade‑restrictive alternative means of achieving the objectives pursued by the United States at the level chosen by the United States. In particular, with respect to the objective of ensuring that consumers are not misled or deceived about whether tuna products contain tuna that was caught in a manner that adversely affects dolphins, the United States takes issue with the Panel's finding that "the extent to which consumers would be misled as to the implications of the manner in which the tuna was caught would not be greater if the AIDCP label were allowed to co-exist with the US dolphin-safe provisions, than it currently is under the existing measures."⁴⁴ With respect to the objective of contributing to the protection of dolphins by ensuring that the US market is not used to encourage fishing fleets to catch tuna in a manner that adversely affects dolphins, the United States disagrees with the Panel's finding that "allowing compliance with the AIDCP labelling requirements 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 and would involve no reduction in the level of protection in this respect."⁴⁵

21.

The United States alleges that both of these conclusions of the Panel are in error for several reasons. First, allowing the AIDCP label to coexist with the US "dolphin-safe" label would not address risks to dolphins outside the Eastern Tropical Pacific Ocean (the "ETP"), since by its terms the former label only applies to tuna caught inside the ETP. In addition, the AIDCP label allows the practice of setting on dolphins to catch tuna, which is harmful to dolphins, and would therefore frustrate the dolphin protection objective. Second, the measure at issue already requires that tuna bearing the US "dolphin-safe" label adhere to the AIDCP requirements if that tuna was caught in the ETP and, in addition to these requirements, it also requires that tuna from the ETP was not caught by setting on dolphins. Therefore, the AIDCP label could not add any further information to consumers. Rather, it would give the impression that tuna caught in the ETP was not caught in a manner that adversely affects dolphins, when in reality it was caught by setting on dolphins. Third, coexistence of the two labels would be confusing for consumers because the two labels are identical, except for the term "AIDCP" or "US Department of Commerce" written on them. Moreover, consumers would have difficulty appreciating the difference between the information conveyed by each label so as to make an informed decision about the tuna they buy. Finally, the Panel "implies" that the United States is required to fulfil its objective to the same level inside and outside the ETP, regardless of the costs.⁴⁶ The United States submits that an approach that weighs costs and benefits is consistent with "well‑established approaches to policymaking" and with the TBT Agreement.⁴⁷ For the United States, the measure reflects the fact that the lower likelihood that a dolphin may be killed or seriously injured in a fishery outside the ETP must be balanced against the additional burden imposed by conditioning the use of a "dolphin-safe" label on a certification based on an independent observer's statement.

22.

The United States alleges that in determining that the measure at issue only partially fulfils its objectives the Panel failed to make an objective assessment of the matter before it as required pursuant to Article 11 of the DSU. The United States alleges that this finding is based on two erroneous factual findings by the Panel. First, the Panel's finding that "the risks to dolphins outside the ETP from other fishing techniques are not lower than similar risks faced by dolphins in the ETP". Second, the Panel's finding that it was not persuaded that "at least some of the dolphin populations affected by fishing techniques other than setting on dolphins are not facing risks at least equivalent to those currently faced by dolphin populations in the ETP under AIDCP monitoring".⁴⁸ The United States alleges that these findings are not based on an objective assessment of the facts and that the Panel therefore acted inconsistently with Article 11 of the DSU. The United States raises six allegations of error in this respect.

23.

First, the United States argues that "[t]he Panel's conclusion that the risk to dolphins from other fishing techniques is not lower than the risk from setting on dolphins" contradicts the Panel's finding that "certain fishing techniques seem to pose greater risks to dolphins than others" and that "setting on dolphins may result in a substantial amount of dolphin mortalities and serious injuries".⁴⁹ This contradiction itself, submits the United States, constitutes a violation of Article 11 of the DSU.

24.

Second, the United States asserts that the Panel found that "harm to dolphins resulting from setting on [dolphins] is equivalent to that resulting from other fishing methods".⁵⁰ This finding is inconsistent with the evidence before the Panel suggesting that setting on dolphins to catch tuna poses greater risks to dolphins than other fishing techniques. In particular, the United States points to its arguments before the Panel that there is a regular and significant tuna-dolphin association in the ETP but not in other oceans, that dolphin populations in the ETP are depleted with abundance levels at less than 30 per cent of the levels they were at before the practice of setting on dolphins began, and that "[o]utside the ETP, dolphin populations have not been depleted on account of their exploitation to catch tuna and do not remain depleted on account of any such exploitation."⁵¹ The United States argues that there was no evidence before the Panel suggesting that the tuna-dolphin association outside the ETP is similar to that within the ETP, and alleges that the Panel failed to address evidence to the effect that the levels of the tuna-dolphin association in the ETP are unique, as well as evidence relating to the fishing methods used to catch tuna based on exploiting that association, and "what that means in terms of risks to dolphins".⁵²

25.

Third, the United States alleges that the Panel erred in finding, on the one hand, that the quantity and the quality of the evidence of the risks faced by dolphin populations outside the ETP is less comprehensive than that of the evidence about dolphin mortality resulting from tuna fishing within the ETP, and in finding, on the other hand, that "significant dolphin mortality also arises outside the ETP from the use of other techniques than setting on dolphins".⁵³ In the United States' view, the Panel "leaps" from what it acknowledges to be minimal evidence that there may be some harm to dolphins outside the ETP to concluding that "significant dolphin mortality" occurs.⁵⁴ Thus, the United States submits that the Panel merely assumed that dolphin mortality stemming from tuna fishing existed outside the ETP.

26.

Fourth, the United States alleges that evidence cited by the Panel regarding harm to dolphins caused by tuna fishing outside the ETP does not support the Panel's finding of significant dolphin mortality outside the ETP. When examining the harm to dolphins from tuna-fishing techniques other than setting on dolphins outside the ETP, the Panel erroneously relied on evidence referring to fishing in general, and not particularly to tuna fishing. The United States asserts that "[s]ources that refer to harms to dolphins from fishing operations other than tuna fishing operations cannot be relied upon to support [the Panel's] conclusion."⁵⁵ Furthermore, many of the sources on which the Panel relies as evincing harm to dolphins outside the ETP refer to tuna caught by driftnet fishing. Yet, the US measure disallows labelling tuna products as "dolphin-safe" when the tuna is caught using this fishing technique on the high seas. The possibility that dolphins may be harmed in driftnet fishing does not support the conclusion that there is significant harm to dolphins outside the ETP that is unaddressed by the measure at issue. If the Panel's references to non-tuna fisheries and driftnet fisheries are removed, the "paucity of evidence" stands in contrast to the substantial evidence submitted by the United States regarding the "unique characteristics of the ETP".⁵⁶ Furthermore, the United States alleges that the Panel erred in, on the one hand, dismissing the value of evidence suggesting that dolphin bycatch in the Western Central Pacific Ocean ("WCPO") is significantly lower than in the ETP on the basis that the authors of the relevant study stated that more detailed analysis would be required and, on the other hand, basing its conclusion that harm to dolphins outside the ETP is significant and greater than in the ETP on studies that similarly noted the need for further study.⁵⁷

27.

Fifth, the United States alleges that the Panel acted inconsistently with Article 11 of the DSU by failing to fully consider two studies submitted by the United States as Panel Exhibits US-21 and US-22.⁵⁸ In particular, the United States disagrees with the Panel's statement that other studies "question[] the conclusions" of the studies contained in Panel Exhibits US-21 and US-22.⁵⁹ The United States submits that in fact they did not, and could not have done so, as the other studies referred to by the Panel largely pre-date the studies contained in the above-mentioned Panel exhibits.

28.

Sixth, the United States alleges that the Panel's findings regarding depleted dolphin stocks are not supported by the facts. The sources cited by the Panel in support of its statement that depleted dolphin populations in the ETP are recovering in fact state that "dolphin stocks are not recovering at expected rates" and that "neither population is recovering at a rate consistent with these levels of depletion and reported kills".⁶⁰ Moreover, the United States takes issue with the Panel's statement that dolphin populations near Ghana and Togo are "severely depleted", because there is "no indication in the source cited that the dolphin stocks off the coast of Ghana and Togo are depleted because of tuna fishing activities".⁶¹ Furthermore, the Panel "neglected to consider" evidence adduced by the United States demonstrating that dolphin populations in the ETP are depleted and that the most likely reason for recovery rates below the expected rates was the continued tuna purse seine fishing in the ETP, even under the AIDCP guidelines.⁶²

29.

Finally, the United States raises a challenge under Article 11 of the DSU relating to the Panel's finding that coexistence of the US "dolphin-safe" label and the AIDCP label would be a less trade-restrictive alternative measure. The United States alleges, first, that Mexico did not offer evidence indicating that consumers appreciate tuna that meets the AIDCP definition of "dolphin-safe" to the same degree as tuna that meets the definition set forth by the US "dolphin-safe" labelling provisions. Second, the Panel misinterpreted the significance of evidence that US consumers prefer tuna that is "dolphin-safe". This evidence suggests that consumers prefer tuna that is "dolphin-safe" as defined under the measure at issue, rather than labelled "dolphin-safe" in accordance with different dolphin-safe conditions. The Panel further erred in evaluating the evidence in connection with its finding that consumers cannot distinguish between tuna caught in a manner that adversely affects dolphins and other tuna. In particular, the United States points to the Panel's statement that an opinion poll offered by Mexico is "the only piece of evidence presented in these proceedings to ascertain what US consumers in fact understand [by] the term[] 'dolphin-safe'."⁶³ However, this poll was not the only piece of evidence presented with regard to US consumers' understanding of "dolphin-safe" labelling. For instance, the United States introduced evidence in support of the contention that, at the time the measure at issue was adopted, "there was strong consumer sentiment that setting on dolphins to catch tuna was unacceptable and that something should be done to ensure that consumers had a choice not to purchase a product that contained tuna caught in association with dolphins."⁶⁴

30.

In the event that the Appellate Body finds the US "dolphin-safe" labelling provisions to constitute a "technical regulation" within the meaning of Annex 1.1 of the TBT Agreement, the United States seeks review by the Appellate Body of the Panel's finding that the AIDCP "dolphin‑safe" definition and certification is an "international standard" within the meaning of Article 2.4 of that Agreement.⁶⁵ According to the United States, the Panel's conclusion is in error and is based on erroneous findings on issues of law and legal interpretations of the TBT Agreement, including the Panel's finding that the AIDCP is an "international standardizing organization" for the purposes of the TBT Agreement.

31.

The United States recalls the Panel's statement that, in order to conclude that the AIDCP definition of "dolphin-safe" constitutes an "international standard", it had to find that: (i) the AIDCP definition is a standard; (ii) the AIDCP is an international standardizing organization; and (iii) the AIDCP standard was made available to the public. The United States asserts that the Panel's conclusion that the AIDCP is an "international standardizing organization" is in error. In support of its position, the United States refers to the Panel's finding that an international standardizing organization is "a legal or administrative entity based on the membership of other bodies or individuals that has an established constitution and its own administration, has recognized activities in standardization, and whose membership is open to the relevant body of every country."⁶⁶ The United States asserts that the AIDCP meets none of these criteria because: (i) it is not "international" within the meaning of the TBT Agreement because its membership was not and is not open to all WTO Members; (ii) it does not have "recognized activities in standardization"; and (iii) the parties to the AIDCP are parties to an international agreement, not to a body or organization.⁶⁷

32.

With respect to the question of whether the AIDCP is "open to the relevant bodies of at least all Members" and hence "international" for the purposes of the TBT Agreement, the United States submits that the Panel's conclusion that the AIDCP is "international" was based on "an incorrect understanding of what is required for an organization to be 'open'".⁶⁸ The United States contends that the AIDCP "was not open when the dolphin safe definition was developed, and the AIDCP is not open today".⁶⁹

33.

The United States points out that both Annex 1 to the TBT Agreement and the ISO/IEC Guide 2: 1991 refer to the openness of a body in the present tense ("a body that is open"). On this basis, the United States argues that the "organization must be open to all Members during the period during which the standard in question was developed and it must remain open thereafter."⁷⁰ The United States finds support for this interpretation in the TBT Committee's Decision on Principles for the Development of International Standards, Guides and Recommendations with Relation to Articles 2, 5, and Annex 3 to the Agreement⁷¹ (the "TBT Committee Decision"), which defines openness to all Members as including "openness without discrimination with respect to the participation at the policy development level and at every stage of standards development".⁷²

34.

The United States notes that the period for signature of the AIDCP ended on 14 May 1999, but that the AIDCP resolutions in question were not adopted until 15 June 2001. For the United States, the closing of the signature period before the development of the definition at issue "precludes a finding that the AIDCP was open through signature for purposes of the definition at issue".⁷³ Moreover, the United States disagrees with the Panel's finding that the fact that all States whose vessels fished for tuna in the agreement area during the signature period were eligible to join the AIDCP and that there were no prohibitions of fishing in the agreement area at the time means that the AIDCP was open to all Members, "since other Members who may have an interest in the AIDCP's activities other than fishing (such as consumer or conservation interests) were ineligible to become parties to the AIDCP."⁷⁴

35.

With respect to the Panel's finding that the AIDCP remains open to all Members on a non-discriminatory basis, since any State or regional economic integration organization can be invited to accede to the agreement on the basis of a decision by the parties, the United States asserts that "[a] body in which Members may participate by invitation only is not a body that is 'open'."⁷⁵ The United States stresses that "becoming a party to the AIDCP is not an option available to at least all Members; it is an option available only to those Members invited".⁷⁶ For the United States, it follows therefore that "not all Members have the ability to participate in review or revision of the definitions at issue."⁷⁷

36.

The United States elaborates on the reasons why standardizing organizations must be open to all Members in order to be considered "international" for the purposes of the TBT Agreement. Referring to Articles 2.4 and 2.5 of the TBT Agreement, the United States submits that international standardizing organizations have the "power to affect" the rights and obligations of Members, and that all Members must therefore be able to participate in their work.⁷⁸ The United States stresses that, if "international standards" could be developed by bodies that are not open to all Members, all Members would be required to base their technical regulations on those international standards, despite the inability of some of them to participate in the development, review, and revision of those standards. Finally, the United States highlights that the TBT Agreement specifically recognizes that some transnational standardizing bodies are not "international bodies" for the purposes of the TBT Agreement. Thus, Annex 1.5 specifies that a "regional body" is a body not open to at least all Members.

37.

With respect to the question whether the AIDCP has "recognized activities in standardization", the United States recalls the Panel's finding that recognition of standardizing activities can occur in two ways: either by participation in a body's standardization activities, or by acknowledgment of the "existence, legality and validity" of the body's standards.⁷⁹ The United States submits that the first criterion articulated by the Panel is flawed, and that the second, while valid in principle, was not properly applied by the Panel.

38.

According to the United States, by suggesting that participation in standardizing activities is evidence of the recognition of those activities, the Panel "effectively read the term 'recognized' out of the definition".⁸⁰ The United States suggests that, if the act of creating a standard was at the same time an act of recognition by the creators, "there would be no need to specify that standardization activity need to be recognized", since the existence of a standard would in itself establish that recognition occurred.⁸¹ The Panel's criterion would thus fail to give meaning to the element of "recognition" in the definition of a "standardizing body".

39.

The United States concedes that the Panel's second criterion of how recognition of standardizing activity occurs, namely, "through acknowledgment of a body's standards", is valid, but argues that the Panel did not apply it properly.⁸² In particular, the United States asserts that the Panel "cited no facts and provided no findings" in support of its assertion that the parties to the AIDCP had acknowledged the existence, legality, and validity of the AIDCP "dolphin-safe" definition.⁸³

40.

In the United States' view, the passage from a court ruling cited by the Panel as evidence of the United States' recognition of the AIDCP standard does not support the Panel's conclusion, because the passage does not refer to the AIDCP standard, but instead to the definition of "dolphin-safe" envisaged for adoption into US law by the Panama Declaration. Moreover, the United States points out that the quoted passage discusses this definition in the context of its rejection by the US Congress for the United States' labelling scheme.⁸⁴

41.

The United States submits that, in any event, recognition of a single standard would not amount to recognition of a body's "standardizing activities". For the United States, the plural "activities" implies that "the body has been involved in the development of more than one standard."⁸⁵ The United States asserts that "[i]f recognition of a single standard were sufficient to make a body a 'standardizing body' then it would be impossible for Members to know at the time they were working on a standard whether that standard would be an international standard … that would trigger the obligations under the TBT Agreement."⁸⁶ In the United States' view, the "better approach is to give meaning to 'standardizing activities' as being more than a single standard, such that the body's standardizing activities would have been recognized before the development of the standard at issue."⁸⁷ This would mean that all WTO Members would "be on notice that the standard being developed would trigger the TBT Agreement obligations".⁸⁸

42.

Finally, the United States argues that the Panel does not explain why recognition by one Member would be sufficient to satisfy the requirement of "recognition" of a body's "standardizing activities" for purposes of the TBT Agreement. If this were so, the United States submits, "Members would be unable to dispute the existence, legality, and validity of a standard that may be acknowledged by another Member."⁸⁹

43.

With respect to the question of whether the AIDCP is an "organization", the United States recalls that the Panel relied upon the ISO/IEC Guide 2: 1991 to determine that an "organization" is a "legal or administrative entity" that is "based on the membership of other bodies" and has "an established constitution and its own administration".⁹⁰ The United States submits that the Panel "correctly concluded that the parties to the AIDCP do not meet this definition, but then proceeded to analyze an entirely different organization" to find that the AIDCP may nonetheless be deemed to constitute an "organization".⁹¹ The United States challenges both the legal reasoning and the factual basis of this finding.

44.

The United States recalls the Panel's observation that "[t]he AIDCP is an international agreement concluded among States" and "does not as such have an established constitution or its own administration".⁹² The United States agrees with this statement and argues that this should have been the end of the Panel's enquiry. The United States faults the Panel for relying on the characteristics of "a separate organization—the Inter-American Tropical Tuna Commission ["IATTC"]" in order to conclude that the parties to the AIDCP constitute an organization.⁹³ In the United States' view, the alleged "institutional links" between the AIDCP and the IATTC were insufficient to attribute to the parties to the AIDCP the institutional structure maintained by a separate entity. The United States therefore argues that the Panel's examination of the IATTC was "irrelevant".⁹⁴

45.

The United States additionally alleges that the Panel acted inconsistently with Article 11 of the DSU by failing to make an objective assessment of the facts concerning the links it found to exist between the AIDCP and the IATTC. The United States submits that the Panel ignored the "many key attributes that distinguish the two entities".⁹⁵ The United States emphasizes that the AIDCP is legally distinct from the IATTC and that the IATTC has no legal authority to make decisions regarding the subject matter of the AIDCP. According to the United States, these "uncontested facts" support a reversal of the Panel's finding that the "institutional links" between the AIDCP and the IATTC are "sufficient to consider the attributes of the IATTC as attributes of the parties to the AIDCP".⁹⁶

46.

Mexico requests the Appellate Body to uphold the Panel's finding that the measure at issue constitutes a "technical regulation" within the meaning of Annex 1.1 of the TBT Agreement. Mexico disagrees with the United States' contention that the Panel's interpretation of "mandatory" is indistinguishable from the term "requirements". Mexico contends that the Panel carefully explained how its interpretation distinguished the meaning of "mandatory" from the meaning of "requirements". Mexico agrees, however, with the United States that: (i) labelling requirements may be equally prescribed by technical regulations and standards; (ii) a conclusion that compliance with certain labelling requirements is "mandatory" within the meaning of Annex 1.1 must be based on considerations other than, or beyond, the mere fact that such documents establish criteria for the use of a certain label; and (iii) a labelling requirement sets out the conditions that a product is required to meet in order to use a label.

47.

Mexico maintains that what makes the US "dolphin-safe" labelling provisions mandatory is not whether a label is de jure required in order to sell tuna products in the market. Rather, it is the fact that the US "dolphin-safe" labelling provisions restrict retailers, consumers, and producers to a single choice for labelling tuna products as "dolphin-safe", because it is not possible to label tuna products as "dolphin-safe" under any other definition. No other label, term, or symbol that claims or suggests dolphin-safe can be used unless it meets the requirements in the US "dolphin-safe" labelling provisions. Mexico contends that the prohibition of using a label based on any standard other than the US standard is a measure that is separate from and in addition to the "labelling requirements". It is this prohibition that transforms what would otherwise be a standard into a technical regulation.

48.

Mexico takes issue with the United States' argument that only the interpretation set out in the separate opinion would leave space for characterizing voluntary labelling schemes as standards. Mexico contends that, in the absence of the prohibition in the US "dolphin-safe" labelling provisions, both the AIDCP dolphin-safe standard and the US dolphin-safe standard could co-exist, each subject to its own labelling requirements. This would constitute a voluntary labelling scheme using "standards" (that is, documents with which compliance is not mandatory), as opposed to the current scheme of a "technical regulation" (that is, a document with which compliance is mandatory).

49.

Mexico also disagrees with the United States' contention that the Panel failed to give effect to the statement by the Appellate Body in EC – Asbestos that mandatory compliance is characterized by being "binding" or "compulsory".⁹⁷ Contrary to what the United States argues, the relevant statements by the Appellate Body in EC – Asbestos and by the Panel in the present dispute make it clear that "regulation … in a binding and compulsory fashion" relates to the "product characteristics" (that is, the "dolphin-safe" label) and not to the sale, importation, distribution, or marketing of the tuna product. Mexico argues that this exposes a "fundamental flaw" in the United States' argument and in the separate opinion, because, under their interpretation, whether or not the product is permitted to be sold in the market is pivotal to the meaning of "mandatory". Mexico, however, contends that what matters is not whether the "sale" of tuna products is regulated but whether the "product characteristics"—that is, the "dolphin-safe" label—are regulated.⁹⁸

50.

Mexico disagrees with the United States' argument that the Panel incorrectly applied the "positive and negative distinction" employed by the Appellate Body in EC – Asbestos.⁹⁹ For Mexico, the Appellate Body's reference to "prescribing or imposing" product characteristics relates to the mandatory criterion contained in the definition of "technical regulation", in particular, to the fact that a technical regulation can prescribe or impose characteristics in a positive or negative form. Thus, for Mexico, the reference to "positive or negative form" is relevant to the mandatory criterion in the definition of a "technical regulation".¹⁰⁰

51.

With respect to the United States' allegation that the Panel erred in relying on the fact that the measure at issue is legally enforceable and binding under US law in its analysis of whether the measure constitutes a technical regulation, Mexico contends that the United States confuses the enforcement of "labelling requirements" with the enforcement of the single "dolphin-safe" definition. Mexico maintains that it is the "separate and distinct prohibition" of any other label that is the focus of the Panel's analysis with respect to "enforceability".¹⁰¹

52.

Mexico also takes issue with the United States' arguments regarding "exclusivity". Mexico contends that what the United States refers to as "exclusivity" is the single exclusive definition of "dolphin-safe" under US law. Mexico disagrees with the United States' argument that the Panel's finding of "exclusivity" and its reference to "mandatory standard" in the ISO/IEC Guide 2: 1991 is not based on the text of the TBT Agreement.¹⁰² Mexico maintains that the introductory clause of Annex 1 to the TBT Agreement allows recourse to the definitions contained in the ISO/IEC Guide 2: 1991. Accordingly, the ISO/IEC Guide 2: 1991 provides that a "mandatory standard" is one that is made compulsory by, inter alia, an "exclusive reference" in a regulation, and an "exclusive reference (to standards)" is a reference that states that the only way to meet the relevant requirements of a technical regulation is to comply with the standard(s) referred to. Mexico contends that the Explanatory Note to Annex 1.2 to the TBT Agreement provides the "relevant textual link" to support the proposition that a "mandatory standard" under the ISO/IEC Guide 2: 1991 is a "technical regulation" under the TBT Agreement.¹⁰³ Mexico concludes that the "standard" set out in the US "dolphin-safe" labelling provisions is a "mandatory standard" within the meaning of the ISO/IEC Guide 2: 1991 and is therefore, by virtue of the Explanatory Note to Annex 1.2, a "technical regulation" within the meaning of the TBT Agreement.

53.

Mexico further submits that the Panel acknowledged that the situation in this dispute closely resembles the disputes in EC – Sardines and EC – Trademarks and Geographical Indications (Australia). For Mexico, these rulings indicate that the mere fact that it is legally permissible to place a product on the market without using the designation that is regulated by the measure at issue does not compel the conclusion that the measure is not "mandatory" within the meaning of Annex 1.1, where the measure "effectively regulate[s] in a binding manner the use of the appellation".¹⁰⁴ Mexico disagrees with the separate opinion that the Appellate Body's findings in EC – Sardines are irrelevant to the present case, because the situation in that dispute was different to the present case in that it involved a prohibition to market certain preserved sardines as "sardines", and thus these products were prohibited to enter the sardine market altogether. Mexico submits that, in EC – Sardines, the product at issue could be marketed as "sardines" only if it were a certain species of fish, but it could in any event be sold in the EU market—although not as "sardines"—if it consisted of another species. Similarly, in this dispute, the tuna products at issue can be marketed as "dolphin-safe" only if they comply with the requirements of the US "dolphin-safe" labelling provisions. If they do not comply with these requirements, they may be sold in the US market, but not as "dolphin-safe".¹⁰⁵

54.

Furthermore, Mexico maintains that the US "dolphin-safe" labelling provisions concern "regulation" and not "standardization". According to Mexico, the act of regulation has an imperative and binding nature, whereas standardization is not imperative or binding in nature. Standardizing bodies have knowledge and expertise in the relevant area of standardization. Market participants understand the benefits of standardization and, for that reason, apply standards. They are not compelled by a regulatory measure to use specific standards because, by their very nature, standards are optional and voluntary. To the contrary, in the present case, US central government bodies have pursued certain policy objectives by adopting "dolphin-safe" labelling requirements with which market participants must comply if they are to use any form of "dolphin-safe" designation. Thus, Mexico concludes that the US "dolphin-safe" labelling provisions do not standardize, but rather regulate.

55.

Finally, in the event that the Appellate Body reverses the Panel's finding that the measure at issue is of a de jure mandatory nature, Mexico requests the Appellate Body to affirm the Panel's conclusion on the basis that the measure is de facto mandatory. Mexico contends that the measure at issue is de facto mandatory, because market conditions in the United States are such that it is impossible to effectively market and sell tuna products without a "dolphin-safe" designation.

56.

Mexico requests the Appellate Body to uphold the Panel's finding that the US "dolphin-safe" labelling provisions are more trade restrictive than necessary to fulfil their legitimate objectives and are therefore inconsistent with Article 2.2 of the TBT Agreement. According to Mexico, the Panel's finding is correct because the United States' objectives can be fulfilled with a less trade-restrictive alternative measure, namely, allowing the AIDCP label and the US "dolphin-safe" label to coexist in the US market.

57.

Mexico maintains that the Panel correctly found that coexistence of the AIDCP label with the US "dolphin-safe" label would be a less trade-restrictive alternative measure that would fulfil the United States' objectives. In particular, with respect to the objective of ensuring that consumers are not misled or deceived about whether tuna products contain tuna that was caught in a manner that adversely affects dolphins, Mexico contends that the Panel was correct in finding that the US "dolphin-safe" label currently does not provide certainty to consumers and that the extent to which consumers would be misled would not be greater if the AIDCP label were also allowed. Mexico considers that the Panel found that it was misleading not to allow consumers to be aware that tuna was caught in compliance with the AIDCP, because the Panel stated that, to the extent the measure at issue makes no distinction between setting on dolphins in general and setting on dolphins under AIDCP standards, it would not allow the US consumer to be informed of the AIDCP dolphin protection measures. Mexico also points to the Panel's statement that it was not persuaded that allowing consumers to be fully informed about the efforts made in the context of the AIDCP for the protection of dolphins in the ETP would be more misleading than allowing a "dolphin-safe" label to be applied to tuna caught outside the ETP in the absence of any monitoring of observed or unobserved killing of dolphins in those fisheries.

58.

Regarding the United States' argument that coexistence of the AIDCP label and the US "dolphin-safe" label on the US market would be confusing for consumers, Mexico contends that the Panel did not share the United States' scepticism that consumers could understand the difference between the two labels. Moreover, Mexico alleges that the United States makes little effort to provide consumers with accurate information on what its "dolphin-safe" label means. The relevant website¹⁰⁶ only provides information on what the "dolphin-safe" label means for tuna caught in the ETP, but does not provide information about the meaning of the label for tuna harvested in other ocean regions. This gives the false impression that tuna caught in those other regions have been certified as not causing death or serious injury to dolphins. Mexico further argues that the fact that in January 2003 tuna products complying with the AIDCP standard could be labelled "dolphin-safe" in the United States demonstrates that, prior to this dispute, the United States agreed that the AIDCP standard met the expectations of producers, retailers, and consumers, and that the United States had the ability to alter the definition.

59.

With respect to the United States' objective of contributing to the protection of dolphins by ensuring that the US market is not used to encourage fishing fleets to catch tuna in a manner that adversely affects dolphins, Mexico takes issue with the United States' argument that allowing the AIDCP label would not address the risks to dolphins outside the ETP. Mexico contends that the Panel found that the measure at issue may actually be harmful to dolphin populations worldwide, because it has the effect of encouraging fleets to fish outside the tightly regulated ETP and to fish instead in other ocean regions where dolphins are unprotected. Thus, Mexico considers that the Panel found the US dolphin protection provisions to be "counter-productive" and contrary to the objective of dolphin protection outside the ETP.¹⁰⁷

60.

In addition, in response to the United States' argument that allowing setting on dolphins is inherently harmful to dolphins and would therefore frustrate the dolphin protection objective, Mexico submits that the United States is suggesting that its goal is to eliminate the possibility of even a single dolphin mortality in all fishing operations. However, it has been established that dolphin mortalities occur in relation to all the major commercial tuna-fishing methods, including fish aggregating devices ("FAD") sets, unassociated sets, gillnet fishing, and longline fishing.¹⁰⁸ In the ETP, the incidental mortalities of dolphins in relation to their populations are lower than the rate of incidental mortalities of marine mammals permitted by the United States in its domestic fisheries.

61.

Mexico maintains that, even if the Appellate Body were to find merit in the United States' arguments, the US "dolphin-safe" labelling provisions are nonetheless more trade restrictive than necessary within the meaning of Article 2.2 of the TBT Agreement, because they are applied in a manner that constitutes a means of arbitrary and unjustifiable discrimination and thus constitute an unnecessary obstacle to international trade contrary to the sixth recital of the preamble of the TBT Agreement. Mexico contends that Article 2.2 must be read together with the sixth recital, which requires Members not to apply technical regulations 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. Noting similarity between the present dispute and the factual situation in US – Shrimp, Mexico submits that the US "dolphin-safe" labelling provisions have created a "rigid and unbending standard".¹⁰⁹ The purpose of the measure at issue is to "unilaterally and extraterritorially impose U.S. fishing method requirements" as a condition for access to the principal distribution channels in the US tuna products market, and in that manner to pressure foreign tuna fleets to change their fishing methods.¹¹⁰

62.

Finally, in response to the United States' contention that the Panel implied that the United States was required to fulfil its objective to the same extent inside and outside the ETP, regardless of the cost, Mexico asserts that the Panel was correct in rejecting the United States' argument that the measure at issue is "calibrated" to risks to dolphins in different ocean regions. The Panel was correct in taking into account the absence of any requirement to certify that no dolphin has been killed or seriously injured in situations where dolphins may in fact have been killed or seriously injured.¹¹¹ Mexico further submits that the United States Department of Commerce (the "USDOC") has never conducted an inquiry into whether it should consider designating any ocean region as having "regular and significant association between marine mammals and tuna" or as having "a regular and significant mortality or serious injury to dolphins", and therefore never evaluated the risk to dolphins from tuna fishing in other ocean regions.¹¹² In addition, the United States did not submit to the Panel any information regarding cost for the tuna industry of carrying independent observers. Mexico contends that, in the absence of such evidence, it would not have been appropriate for the Panel to rely on such factors as a justification for the failure of the US measure to fulfil its objectives outside the ETP.

63.

Furthermore, Mexico requests the Appellate Body to reject the United States' allegations that the Panel failed to make an objective assessment of the facts and therefore acted inconsistently with Article 11 of the DSU.

64.

First, Mexico disagrees with the United States that the Panel made contradictory findings regarding the relative risks to dolphins arising from different fishing techniques. Mexico alleges that the United States relies on a "selective quotation" that omits important information when it quoted the Panel Report, In particular, Mexico asserts that the United States omitted the underlined part of the sentence: "[i]t is undisputed, in particular, that the fishing method known as setting on dolphins may result in a substantial amount of dolphin mortalities and serious injuries, especially when used without applying certain fishing gear and procedures designed to reduce dolphin bycatch."¹¹³ Mexico asserts that it submitted substantial evidence demonstrating that the fishing methods permitted under the AIDCP have been successful in limiting dolphin mortalities to levels considered acceptable in fisheries subject to US territorial jurisdiction. Mexico agrees that high risks to dolphins exist in other ocean regions where nets are being set on dolphins.¹¹⁴

65.

Second, in response to the United States' challenge of the Panel's findings relating to the harm to dolphins resulting from setting on dolphins to catch tuna as compared to the harm to dolphins resulting from other fishing methods, Mexico disagrees with the United States that the Panel failed to address evidence suggesting that the levels of the tuna-dolphin association in the ETP are unique, and the implications of that for risks to dolphins. Mexico maintains that the Panel extensively analyzed the United States' contention that certain environmental conditions in the ETP (such as the intensity of tuna-dolphin association) are unique, and refers to the Panel's statement that, even assuming this were the case, "the evidence submitted to the Panel suggests that the risks faced by dolphin populations in the ETP are not."¹¹⁵

66.

Third, Mexico submits that the Panel objectively assessed the evidence concerning relative harm to dolphins inside and outside the ETP. Mexico submits that the Panel did not say that the evidence regarding risks to dolphins arising from tuna fishing outside the ETP was "minimal", as the United States asserts.¹¹⁶ Mexico argues that the United States omits a number of the Panel's references to relevant evidence and takes statements by the Panel out of context. According to Mexico, while the United States alleges that the Panel failed to address evidence it had put forward, the United States acknowledges that the Panel cited other evidence demonstrating that there are "multiple examples of numerous dolphins being killed annually in other fisheries."¹¹⁷ For Mexico, the United States itself thus acknowledges that the Panel engaged in weighing that evidence. In any event, Mexico contends that panels have a margin of discretion in the assessment of the facts and not according the weight that one of the parties believes should be accorded to the evidence does not in itself constitute legal error.

67.

Fourth, Mexico disagrees with the United States that the evidence relating to risks to dolphins outside the ETP did not support the Panel's conclusion. Mexico contends that the United States ignores much of the evidence before the Panel or argues that the Panel should have construed evidence differently.¹¹⁸ In respect of the United States' argument that the Panel erred in relying on evidence relating to harm to dolphins from driftnet fishing because tuna caught using this fishing method in the high seas is not eligible for the US "dolphin-safe" label, Mexico submits that most of the evidence cited by the Panel does not involve driftnet fishing on the high seas, but instead refers to the use of driftnets in coastal waters. Mexico emphasizes that tuna caught in this manner is eligible for the US "dolphin-safe" label under the measure at issue. Moreover, restrictions concerning tuna caught with driftnets on the high seas do not apply automatically. To "trigger the enforcement mechanism", a country must be designated by the USDOC as a nation fishing with large scale driftnets.¹¹⁹ The only country to have been so designated is Italy.¹²⁰

68.

Fifth, Mexico disagrees with the United States that the Panel failed to consider fully two studies submitted by the United States as Panel Exhibits US-21 and US-22 regarding the unobserved effects on dolphins from being chased and encircled in the ETP. Mexico contends that the validity and reliability of these two studies was a major topic of the panel proceedings and that these studies were based on estimates of population and population growth that the USDOC own 2008 abundance estimate considered to be incorrect.¹²¹ The 2008 study concluded that each of the depleted dolphin stocks (coastal and northeastern offshore spotted and eastern spinner dolphins) were estimated to be growing at rates near the 4-8% maximum possible for dolphins.¹²² Furthermore, the AIDCP's Scientific Advisory Board produced a report recommending increases in the dolphin mortality limits enforced by the AIDCP based on the fact that the populations of these stocks are significantly larger than previously believed.¹²³

69.

Sixth, Mexico disagrees with the United States that the Panel's findings regarding depleted dolphin stocks are not supported by facts. Mexico maintains that the Panel fully acknowledged the United States' argument that dolphin populations are not increasing fast enough.¹²⁴ With respect to the United States' allegation that the Panel "neglected to consider" evidence that two dolphin stock populations are not growing at the expected rates because of unobserved harm resulting from setting on dolphins, Mexico contends that the Panel described and analyzed the studies and evidence referred to by the United States.¹²⁵ Therefore, in Mexico's view, the United States' claim of "neglect" is in reality a complaint that the Panel did not agree with the United States.¹²⁶

70.

Finally, Mexico rejects the United States' claim that the Panel acted inconsistently with Article 11 of the DSU in reaching its finding that the coexistence of the US "dolphin-safe" label and the AIDCP label would be a less trade-restrictive alternative measure. Mexico maintains that the Panel did not disregard, as alleged by the United States, "ample evidence" that retailers will sell and consumers will purchase tuna products that are "dolphin-safe" as defined under the measure at issue, rather than labelled "dolphin-safe" in accordance with different conditions, such as the AIDCP.¹²⁷ Mexico contends that the Panel considered in its analysis of Article 2.1, evidence suggesting that, contrary to Mexico's position, while the AIDCP label would not be acceptable to retailers as an alternative "dolphin-safe" certification, US retailers would be prepared to offer Mexican tuna products for sale if they meet the conditions for labelling under the existing US measure.¹²⁸ For Mexico, this demonstrates that the Panel considered relevant evidence and did not fail to make an objective assessment of the matter.

71.

Moreover, Mexico submits that the Panel did not exceed its margin of discretion in assessing evidence when finding that a poll was the only piece of evidence presented in respect of the US consumers' understanding of "dolphin-safe" labelling. Additional evidence adduced by the United States refers to consumers' perception from more than 20 years ago and is thus irrelevant to determine consumer perceptions today. For Mexico, the Panel properly exercised its discretion as the trier of facts in deciding which evidence to utilize in making its findings.¹²⁹

72.

Mexico requests the Appellate Body to reject the United States' appeal and to uphold the Panel's findings that the AIDCP standard is an "international standard" within the meaning of Article 2.4 of the TBT Agreement.¹³⁰

73.

At the outset, Mexico stresses that the United States is a founding member of the AIDCP and "fully participated in the creation and establishment of the AIDCP's dolphin-safe standard".¹³¹ Mexico highlights that "the very purpose of that standard was to facilitate access of tuna products into the U.S. market" and that the United States enacted the International Dolphin Conservation Program Act¹³² (the "IDCPA") in 1997 in order to, inter alia, bring the United States' definition of "dolphin‑safe" into conformity with the AIDCP standard.¹³³

74.

Mexico rejects the United States' argument that the AIDCP is not "open" to the relevant bodies of at least all WTO Members and therefore not "international" for the purposes of the TBT Agreement. Mexico submits that the Panel correctly concluded otherwise, on the basis that the AIDCP provides for accession by new States or regional economic integration organizations, that it was open for signature from 1998 to 1999, and that it remains open to accession by any States or regional economic integration organizations that are invited to accede to the AIDCP on the basis of a decision by the parties.¹³⁴

75.

Mexico disagrees with the United States' argument that the AIDCP was not open when the AIDCP "dolphin-safe" definition was developed. Mexico submits that the definition embodied in the resolutions of the AIDCP was based on "the definition initially developed in the Panama Declaration in 1995", and that the parties to the AIDCP were "well aware" of this definition when the AIDCP was enacted.¹³⁵ Mexico further claims that the AIDCP "dolphin-safe" definition was elaborated during the period for signature of the AIDCP. Hence, Mexico submits, the AIDCP was open when the AIDCP definition of "dolphin-safe" was developed.¹³⁶

76.

Mexico argues that the requirement that new parties need to be invited in order to join the AIDCP does not mean that the AIDCP is not open to the relevant bodies of at least all WTO Members. Mexico contends that, considering the particular nature of the AIDCP regime that regulates tuna fishing in the ETP, it is understandable that any State or regional organization that has interest in the AIDCP regulation of tuna fishing techniques can accede today "by a simple invitation of the rest of members".¹³⁷ Mexico suggests that being invited to accede to the AIDCP is a "formality". Mexico further notes that no additional countries or regional economic integration organizations have expressed an interest in joining the AIDCP and that "it is common that during the AIDCP meetings, Parties to the Agreement invite observer countries that regularly attend such meetings with the intention in the future to become Parties."¹³⁸

77.

Mexico stresses that, unlike the Agreement on Sanitary and Phytosanitary Measures (the "SPS Agreement"), which identifies three specific international standardizing organizations, the TBT Agreement "retains flexibility for determining what are relevant and applicable international standards on a case by case basis".¹³⁹

78.

Mexico supports the Panel's conclusion that the AIDCP has "recognized activities in standardization". Mexico submits that it has demonstrated the recognition of the AIDCP's standardizing activities by the United States by showing that the United States "was a founding and fully participating member of the AIDCP".¹⁴⁰ Mexico agrees with the Panel that participation by countries in the development of a standard "is sufficient evidence of their recognition".¹⁴¹ Mexico further submits that the elaboration of the "dolphin-safe" definition was one of the main reasons for many members to participate in the AIDCP. Mexico suggests that this is a "clear signal of acknowledgement".¹⁴²

79.

In Mexico's view, the fact that the United States has disallowed the use of the AIDCP "dolphin-safe" label "does not mean that the AIDCP does not have 'standardizing activities' or that the AIDCP dolphin-safe label is not currently being used."¹⁴³ Moreover, Mexico submits that the AIDCP's main role is to establish rules and procedures related to the "interaction between fishing and dolphins" and that, with regard to the protection of dolphins in the ETP, the AIDCP is the exclusive organization with recognized activities in standardization.¹⁴⁴ Mexico points out that the AIDCP's members have issued "a number of other standards", including "Procedures for Maintaining the AIDCP List of Qualified Captains", "Technical Guidelines to Prevent High Mortality During Sets on Large Dolphin Herds", and "Guidelines for Required Raft for the Observation and Rescue of Dolphins".¹⁴⁵

80.

Mexico rejects the United States' argument that the parties to the AIDCP are merely parties to an international agreement, not to a body or an organization. Mexico further submits that the Panel correctly identified the "institutional link" between the AIDPC and the IATTC.¹⁴⁶ Mexico emphasizes that this institutional link is "well established in the AIDCP itself".¹⁴⁷ In this respect, Mexico notes that Article XIV of the AIDCP states that the parties to the AIDCP shall "request the IATTC to provide Secretariat support and to perform such other functions as are set forth in this Agreement or are agreed upon pursuant to this Agreement".¹⁴⁸ Mexico also points to other provisions of the AIDCP that demonstrate the "integral role" that the IATTC has in coordinating the implementation of the AIDCP.¹⁴⁹

81.

Mexico requests the Appellate Body to reject the United States' claims under Article 11 of the DSU, and in particular the United States' argument that the parties to the AIDCP are not the same as the members of the IATTC. Mexico points out that both the AIDCP and the IATTC remain open to accession by any State. Mexico concludes that the Panel did not fail to make an objective assessment of the facts before it as required by Article 11 of the DSU.

82.

Mexico alleges various errors in the Panel's analysis andrequests the Appellate Body to reverse the Panel's finding that the US "dolphin-safe" labelling provisions are not inconsistent with Article 2.1 of the TBT Agreement, and to find instead that the measure at issue is inconsistent with the United States' obligations under Article 2.1. In particular, Mexico alleges that the Panel erred in its interpretation and application of the phrase "treatment no less favourable" in Article 2.1. Additionally, Mexico challenges several intermediate findings and conclusions by the Panel as legally erroneous and contrary to the Panel's duty to make an objective assessment of the matter before it as required under Article 11 of the DSU.

83.

Mexico faults the Panel for applying what Mexico refers to as a "'denial of access to an advantage' test" for determining whether a measure provides "less favourable treatment" within the meaning of Article 2.1.¹⁵⁰ Mexico agrees that "the denial of an advantage could lead to the denial of competitive opportunities and therefore to a violation of the non-discrimination obligations in Article 2.1."¹⁵¹ Mexico suggests, however, that the Panel applied a standard under which a measure could be found to be inconsistent with Article 2.1 of the TBT Agreement only to the extent that it imposes an "absolute prohibition or bar" on imports.¹⁵²

84.

Regarding the Panel's interpretation of Article 2.1 of the TBT Agreement, Mexico acknowledges that the Panel correctly considered the ordinary meaning of the phrase "treatment no less favourable". Yet, in Mexico's view, the Panel failed to "fully consider the context of Article 2.1 and the object and purpose of the TBT Agreement".¹⁵³ Referring in particular to past jurisprudence interpreting the national treatment and most favoured nation ("MFN") provisions in the context of the GATT 1994, Mexico argues that the "applicable test" under Article 2.1 of the TBT Agreement is to assess "whether a measure modifies the conditions of competition in the relevant market to the detriment of the imported products in question".¹⁵⁴ However, Mexico also highlights that the "immediate context" of Article 2.1 of the TBT Agreement is different from the non-discrimination obligations in the GATT 1994 and the GATS, in that the TBT Agreement does not contain a "substantive equivalent" to the general exception provisions found in Article XX of the GATT 1994and Article XIV of the GATS.¹⁵⁵ Mexico submits that, even though the TBT Agreement does not provide for general exceptions, the sixth recital of its preamble includes language suggesting that "certain technical regulations which would violate the above-noted interpretation of Article 2.1 should not be prohibited if they fall within the specified criteria" of the recital.¹⁵⁶ While Mexico acknowledges that language in the preamble of the TBT Agreement is "not substantive", it contends that the substantive provisions of the TBT Agreement must be "interpreted in a manner that is consistent with this important context".¹⁵⁷ In Mexico's view, this implies that technical regulations that meet all the criteria of the recital should not be prohibited by Article 2.1, even if they modify the conditions of competition in the relevant market to the detriment of the imported product in question. Mexico emphasizes that this interpretation does not transform the recital into an exception analogous to general exceptions, but "modifies the meaning of the substantive obligation in Article 2.1 so that the discrimination that is prohibited in that Article does not extend to measures meeting the criteria of the preamble".¹⁵⁸ According to Mexico, a measure that modifies the conditions of competition in the relevant market to the detriment of an imported product will thus not be prohibited by Article 2.1 if: (i) the measure is necessary to pursue one of the objectives mentioned in the sixth recital; (ii) the measure is not applied in a manner that would constitute a means of arbitrary or unjustifiable discrimination between countries where the same conditions prevail; (iii) the measure is not applied in a manner that would constitute a disguised restriction on international trade; and (iv) the measure is otherwise in accordance with the provisions of the TBT Agreement.¹⁵⁹

85.

Referring to the Appellate Body's jurisprudence under Article XX of the GATT 1994, Mexico argues that the US "dolphin-safe" labelling provisions are not necessary for the protection of animal life or health or for the prevention of deceptive practices. Mexico argues, in particular, that the "exclusive single definition of dolphin-safe" established by the US measure "does not contribute to the realization of these two objectives through consumer choice".¹⁶⁰ First, according to Mexico, there is "no evidence of 'deceptive practices'" in connection with the AIDCP label that would need to be prevented.¹⁶¹ Mexico also recalls, in this regard, the Panel's finding that "allowing the AIDCP label to be used in the U.S. market 'may have the potential to reduce the possibilities of consumer deception more than the current US dolphin-safe label'."¹⁶² Second, with respect to the objective of protecting dolphins through consumer choice, Mexico argues that prohibiting the AIDCP label restricts how consumers can express their preferences for "dolphin-safe" tuna products and "limits to a single definition an objective that, in reality, is much more complex".¹⁶³ Mexico concludes that the measure at issue is therefore "unnecessary" within the meaning of the sixth recital.¹⁶⁴

86.

With respect to the requirement that a measure not be applied in a manner that constitutes a means of arbitrary or unjustifiable discrimination, Mexico argues that the current dispute presents a factual situation that is "closely similar" to the one in US – Shrimp, because, in that dispute, the United States was seeking to "coerce" other countries into adopting the United States' approach to the conservation of turtles.¹⁶⁵ Referring to the Appellate Body's findings in that case, Mexico submits that the measure at issue in this dispute "unilaterally and extraterritorially impose[s] U.S. fishing method requirements as a condition for access to the principal distribution channels in the U.S. tuna products market".¹⁶⁶ Mexico further argues that, in this dispute, the United States has established a "rigid and unbending standard" that does not allow the extensive measures taken by Mexico to protect dolphins and other changing conditions to be taken into account.¹⁶⁷ Mexico emphasizes that, even if the United States were to find now, or in the future, that the dolphin stocks that it deems to be depleted had fully recovered, the US measure would not allow the definition of "dolphin-safe" to be amended to accommodate the AIDCP standard. Mexico also argues that the US "dolphin-safe" labelling provisions are discriminatory because tuna products produced from tuna harvested outside the ETP can be labelled as "dolphin-safe" "under relaxed compliance standards even though there are no protections for dolphins outside the ETP".¹⁶⁸ By contrast, tuna products from Mexican producers—who have taken "extensive and demonstrably highly successful measures to protect dolphins"—are prohibited from using the label.¹⁶⁹ Furthermore, Mexico refers to the Appellate Body's statement in US – Shrimp that the United States' failure to engage the appellees in that case in "serious, across the board negotiations with the objective of concluding bilateral or multilateral agreements for the protection and conservation of sea turtles" "bears heavily in any appraisal of justifiable or unjustifiable discrimination".¹⁷⁰ Mexico submits that, in the present case, the situation is even more aggravated because the United States entered into the AIDCP, which has been extremely successful in protecting dolphins, and then disregarded the standard established by the AIDCP in maintaining its own unilateral measure.

87.

With respect to the requirement that a measure not be applied in a manner that would constitute a disguised restriction on international trade, Mexico submits that a measure that constitutes arbitrary and unjustifiable discrimination also represents a disguised restriction on international trade. Moreover, Mexico argues that the US measure, by restricting the information available to US consumers, interferes with the free operation of consumer choice. This converts "an otherwise valid consumer choice measure into a disguised restriction on international trade".¹⁷¹

88.

With respect to the last phrase of the sixth recital, namely, that the measure be otherwise in accordance with the provisions of the TBT Agreement, Mexico argues that, because the Panel found that the US "dolphin-safe" labelling provisions are inconsistent with Article 2.2 of the TBT Agreement, there is no basis on the facts of this dispute "to narrow the interpretation of the non‑discrimination obligations" in Article 2.1 to take into account the sixth recital.¹⁷² According to Mexico, the "traditional interpretation" of "no less favourable treatment" therefore applies. Hence, if the US "dolphin-safe" labelling provisions are found to "modify the conditions of competition in the relevant market to the detriment of Mexican tuna products, they are inconsistent with Article 2.1 and are prohibited".¹⁷³

89.

In this respect, Mexico recalls the Panel's finding that access to the "dolphin-safe" label is an advantage on the US market and that the measure at issue controls access to the label. Mexico further submits that the evidence before the Panel shows that most Mexican tuna products do not have access to the "dolphin-safe" label, while all like US tuna products and most tuna products of other countries have access to that label. In addition, Mexico notes the Panel's finding that allowing the AIDCP label in the US market would provide greater competitive opportunities for Mexican tuna products. For Mexico, the corollary of this finding is that "prohibiting the use of the AIDCP label denies imports competitive opportunities".¹⁷⁴ On this basis, Mexico contends that it is clear that the US "dolphin‑safe" labelling provisions modify the conditions of competition in the relevant market to the detriment of imported Mexican tuna products and in favour of like tuna products from the United States and other countries, and thereby violate Article 2.1.

90.

Thus, Mexico submits that the Panel could have confined its analysis to finding that access to the "dolphin-safe" label was an "advantage", that access to the label was controlled by the US "dolphin-safe" labelling provisions, and that most Mexican tuna products do not have access to the label, while all or most tuna products from the United States and other countries do have access.¹⁷⁵ Mexico suggests that this would have been a sufficient basis to conclude that the US measure results in de facto discrimination. Mexico submits that the Panel erred by conducting a detailed analysis of whether "Mexican tuna products could somehow get access to the label."¹⁷⁶ According to Mexico, the Panel was essentially ruling that, if there is an alternative way to obtain the advantage, there is no less favourable treatment under Article 2.1. Mexico submits that this interpretation goes against established jurisprudence that "the availability of alternatives to avoid less favourable treatment does not eliminate the less favourable treatment."¹⁷⁷ Mexico adds that the Panel's interpretation of Article 2.1 would, in this case, require a developing country to give up its natural comparative advantage and force it to adopt environmentally unsustainable fishing methods.

91.

Mexico further alleges that the Panel erred by relying on the Appellate Body 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".¹⁷⁸ Mexico submits that the Appellate Body's findings in that case are "readily distinguishable from the facts in this case".¹⁷⁹ Mexico points out that, in this dispute, the discriminatory effect exists not between certain producers and importers but between the group of Mexican tuna products overall compared to the group of like tuna products from the United States and, in the case of Mexico's MFN claims, between the group of Mexican tuna products and the group of tuna products from other countries. Further, the discrimination in this dispute does not depend upon the characteristics of individual importers, but rather on the fishing practices of the fleets that catch the tuna and the canneries that produce the tuna products for exportation to the United States. Mexico adds that a measure that is "origin neutral" on its face can violate the national treatment obligation if it has the effect of modifying the conditions of competition to the detriment of the imported product by denying the imported product the equality of competitive opportunities with a like domestic product in the market of the importing WTO Member.¹⁸⁰ Mexico emphasizes that, by its very nature, de facto discrimination occurs when the challenged measure does not, on its face, discriminate based on origin. Mexico adds that it is only when the relevant facts are examined as a whole that de facto discrimination becomes apparent. Mexico concludes that, since the challenged measure uses a market access restriction "to pressure Mexico and the Mexican fleet to adopt essentially the same dolphin-safe regime as in force in the United States", the measure "per se target[s] the origin of the tuna products—i.e., Mexican tuna products".¹⁸¹ If it did not do so, Mexico submits, the underlying objective of the US "dolphin-safe" labelling provisions to change Mexico's fishing methods would not be met.

92.

Finally, Mexico claims that the Panel erred in concluding that the adverse impact on Mexican tuna products is caused by the actions of private actors. Referring to the Appellate Body report in Korea – Various Measures on Beef, Mexico argues that the measure at issue, by laying down exclusive conditions for the use of the "dolphin-safe" label, restricts the conditions under which the label may be used and, therefore, also restricts the nature of the choice that can be made by US consumers. In particular, Mexico points to the Panel's finding that the measure at issue creates an exclusive standard to inform consumers about the "dolphin-safety" of tuna products and that there is no possibility for any alternative definitions of what is "dolphin-safe" on the US market (such as AIDCP "dolphin-safe"), except in compliance with the exclusive criteria set out in the measure. According to Mexico, both parties agree that US consumers will make choices based on whether or not the "dolphin-safe" label is displayed on a tuna product. As a direct consequence of the measure, US consumers are denied the option of choosing Mexican tuna products that are labelled with the international AIDCP "dolphin-safe" label. Mexico maintains that, to the extent some element of private choice is involved, it does not relieve the United States' responsibility to comply with its non-discrimination obligations given the "undeniable impact" of the US measure on the consumers' choice.¹⁸² Mexico concludes that it is the government intervention in the form of a technical regulation that adversely affects the conditions of competition in the relevant market to the detriment of imported products, and not the actions of private parties.

93.

In the event that the Appellate Body finds that the Panel did not err in its interpretation and application of Article 2.1 of the TBT Agreement, Mexico claims that the Panel acted inconsistently with Article 11 of the DSU in 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.¹⁸³ Mexico explains that a change in its fishing practices or fishing areas would make the Mexican tuna industry unprofitable and unable to compete. According to Mexico, the only way for the industry to remain viable is by fishing mature yellowfin tuna in association with dolphins within its exclusive economic zone and adjacent waters. In support of its position, Mexico points to evidence provided by Mexico to the Panel "in which the three major companies making up the Mexican tuna industry clearly state that it is impossible to change their fishing practices or fishing area due to financial, administrative, environmental and practical constraints".¹⁸⁴ According to Mexico, this evidence also "confirms" that the Mexican tuna industry's principal concern is not the adaptation costs but the impossibility of adapting to the US measure.¹⁸⁵ In Mexico's view, the Panel should have properly weighed the costs that the Mexican industry would have to bear in order to obtain access to the advantage provided by the US "dolphin-safe" label. For Mexico, this is relevant for evaluating whether the suggested approach is feasible taking into account the particular circumstances of the Mexican fleet.

94.

Mexico also claims that, in finding that it was not clear that the AIDCP label had value to retailers and that retailers had similar perceptions to canneries, the Panel acted inconsistently with Article 11 of the DSU because it omitted from its analysis relevant factual findings, evidence, and arguments. In particular, Mexico takes issue with what it describes as the Panel's "view that there was evidence that a dolphin-safe label associated with no setting on dolphins had value in the U.S. market but the evidence was less clear that the AIDCP dolphin-safe label, which allows for setting on dolphins under the strict requirements of the AIDCP, has value in that market."¹⁸⁶ Additionally, Mexico submits that the Panel's analysis is "faulty" because it is based primarily on the perceptions of canneries, who are consumers of tuna and producers of tuna products.¹⁸⁷ Mexico argues that the perceptions of canneries must be distinguished from those of retailers because: (i) canneries and retailers operate at different levels of trade; (ii) retailers do not label tuna products themselves, but rather receive tuna products already labelled by the canneries; and (iii) retailers do not have a legal need to know precisely what the label means; rather, their concern is to have tuna products that can be lawfully labelled as "dolphin-safe".¹⁸⁸ Mexico further alleges that the Panel acted inconsistently with Article 11 of the DSU by failing to address Mexico's argument that allowing the use of the AIDCP "dolphin-safe" label will enable Mexico to fully inform US consumers and promote its tuna products and the sustainability of its fishing practices to rebalance the competitive opportunities and that this in turn would "unlock latent demand" in the market for those tuna products.¹⁸⁹ Finally, Mexico contends that the Panel's conclusion is inconsistent with evidence indicating that some of the major US chains have expressly indicated that, if the tuna product at issue qualified to be labelled "dolphin-safe", they would sell it, and that a company's inability to place the "dolphin-safe" label on the cans has directly affected its ability to sell the Mexican brand in the United States.

95.

Mexico raises two claims in its conditional appeal of the Panel's finding under Article 2.2 of the TBT Agreement. Each of these claims is conditional upon the Appellate Body reversing the Panel's finding that the measure at issue is inconsistent with Article 2.2 of the TBT Agreement. First, Mexico requests the Appellate Body to reverse the Panel's intermediate finding that the United States' objective of contributing to the protection of dolphins by ensuring 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, and to find, instead, that it is not a legitimate objective within the meaning of Article 2.2 of the TBT Agreement. In the alternative, Mexico requests the Appellate Body to confirm that the US "dolphin-safe" labelling provisions are inconsistent with Article 2.2 of the TBT Agreement based on the Panel's finding that the US "dolphin-safe" labelling provisions did not fulfil the United States' objectives.

96.

With respect to its first claim, Mexico submits that the Panel formulated the legal test of whether an objective is legitimate within the meaning of Article 2.2 of the TBT Agreement as whether the "objective[] 'go[es] against the object and purpose'" of the TBT Agreement.¹⁹⁰ According to Mexico, this legal test is incorrect, because it allows for "coercive objective[s]" creating barriers to trade to be considered legitimate. Mexico further alleges that the Panel erred in finding the United States' dolphin protection objective to be a legitimate objective.¹⁹¹ The list of examples of legitimate objectives in Article 2.2 of the TBT Agreement informs the interpretation of the term "legitimate objective" in that provision. None of the listed objectives includes language similar to "by ensuring that the US market is not used to encourage". These examples do not contemplate a "coercive and trade restrictive objective".¹⁹² The United States' dolphin protection objective, however, is a "coercive objective", because its purpose is to "coerce" another WTO Member to change its practices to comply with the unilateral policy of the United States.

97.

Moreover, Mexico alleges that the dolphin protection objective is unnecessary, and constitutes a means of arbitrary or unjustifiable discrimination or a disguised restriction on trade. Mexico submits that the Panel's references to the Appellate Body reports in US – Gasoline and US – Shrimp do not support the proposition for which the Panel cited them, namely, that Members can identify whatever objectives they wish. Yet, Mexico asserts that the situation in US – Gasoline is "closely analogous" to the situation in the present case.¹⁹³ In US – Gasoline, the measure at issue was found to be inconsistent with Article III:4 of the GATT 1994 and could not be justified under Article XX, because it constituted a "disguised restriction on trade" and "unjustifiable discrimination" inconsistent with the chapeau of Article XX. Mexico asserts that the basis of these findings of breach was that the United States had acted unilaterally, without first attempting to achieve its goal through cooperation with the affected Members. For Mexico, the situation in the present case is similar to that in US – Gasoline, in that the United States disregarded a multilateral agreement that addresses the very same subject as the measure at issue, namely, the protection of dolphins and the prerequisites for labelling tuna products as "dolphin-safe".¹⁹⁴

98.

In addition, Mexico asserts that the fifth recital of the preamble of the TBT Agreement refers to ensuring that technical regulations do not create unnecessary obstacles to international trade. Yet, a coercive and trade restrictive objective can only be "fulfilled" within the meaning of Article 2.2 by a measure that is coercive and trade restrictive and, thus, such obstacles to trade would always be "necessary". In the face of such an objective, it would be difficult to give meaning to the term "unnecessary obstacles to trade" in the preamble. However, Mexico considers it important that this language in the preamble be given meaning, because otherwise WTO Members could define the objectives of their technical regulations so narrowly, and with such high levels of protection, that no other alternative measure could fulfil those objectives.

99.

With respect to its alternative claim, Mexico alleges that the Panel erred in proceeding to examine whether there was a less trade-restrictive alternative measure after it had found that the measure at issue could, at best, only partially fulfil the two objectives. For Mexico, it is not possible to find that there is a less trade-restrictive alternative measure that fulfils the objectives when the US measure itself does not fulfil the objectives. In addition, it would be impossible to take account of the risks non-fulfilment would create if, in fact, non-fulfilment already exists with the measure at issue. Mexico alleges that, upon concluding that the US "dolphin-safe" labelling provisions did not fulfil the two objectives, the Panel's analysis should have ended and it should have found that the US "dolphin-safe" labelling provisions were inconsistent with Article 2.2.¹⁹⁵

100.

Mexico appeals the Panel's finding that the AIDCP standard would be an ineffective or inappropriate means for the fulfilment of the legitimate objectives pursued by the United States.¹⁹⁶ Mexico submits that there is "some flexibility … between the standard and the fulfillment of the legitimate objectives" and that the "necessary degree of fulfillment" will depend on the individual facts and circumstances of each case.¹⁹⁷ Mexico further submits that, in this dispute, "the fact that the U.S. dolphin-safe labelling provisions do not themselves completely fulfill either of the two legitimate objectives … is relevant to the determination of whether the AIDCP standard is 'ineffective or inappropriate'."¹⁹⁸

101.

Mexico clarifies that the relevant international standard that it has identified is "the definition of 'dolphin safe' established by the AIDCP's 'Resolution to Establish Procedures for AIDCP Dolphin Safe Tuna Certification'". This definition, in turn, incorporates by reference the definition of "dolphin-safe" from the AIDCP's "Resolution to Adopt the Modified System for Tracking and Verification of Tuna".¹⁹⁹ The definition provides that "[d]olphin safe tuna" is "tuna captured in sets in which there is no mortality or serious injury of dolphins", and "[n]on-dolphin safe tuna" is "tuna captured in sets in which mortality or serious injury occurs".²⁰⁰ Mexico stresses that it "expressly defined 'AIDCP standard' to mean this definition".²⁰¹

102.

Mexico argues that the Panel erred in not evaluating whether the AIDCP standard would be an effective and appropriate means to fulfil the United States' objectives in fisheries outside the ETP. Mexico recalls the Panel's statement that "to the extent that the US objectives are not limited to the ETP, and that the AIDCP standard addresses fishing conditions in the ETP and not in any other fishery, the AIDCP standard alone would not have the capacity to address US concerns in relation to the manner in which tuna is caught beyond the ETP."²⁰² Mexico submits that there is "nothing inherent about the definition 'captured in sets in which there is no mortality or serious injury of dolphins' that is limited in applicability to the ETP."²⁰³ For Mexico, it appears that the Panel was referring to the measures taken by the AIDCP to implement and enforce the AIDCP's requirements. In Mexico's view, the fact that these measures "have not yet been implemented outside the ETP" does not justify the conclusion that the AIDCP standard would be ineffective outside the ETP.²⁰⁴ Mexico argues that the Panel appears to have "confused" the definition of "dolphin-safe" with the means for verifying compliance with the applicable definition of "dolphin-safe".²⁰⁵

103.

Mexico further submits that, even assuming that the AIDCP enforcement mechanisms were relevant, the Panel "did not explain" why implementing the same enforcement mechanisms outside the ETP would not address the United States' concern of protecting dolphins. In Mexico's view, the Panel's statement that it could not assume that a regime modelled on the AIDCP would lead to the achievement of the United States' objectives outside the ETP contradicts its earlier finding regarding the "pertinence" of the AIDCP's independent observer programme for other fisheries.²⁰⁶

104.

Mexico contends that the Panel's "limited approach" in analyzing the effectiveness and appropriateness of the AIDCP "dolphin-safe" definition led it to ignore evidence showing that most tuna products sold in the US market contain tuna sourced from the WCPO.²⁰⁷ As Mexico sees it, this evidence, reviewed by the Panel under Article 2.2 of the TBT Agreement, would have shown that "the potential effectiveness and appropriateness of applying the definition of dolphin-safe of the AIDCP standard to non-ETP tuna products was crucial to a proper evaluation of the Article 2.4 claim."²⁰⁸ In addition, Mexico alleges that the Panel's failure to evaluate whether the AIDCP definition of "dolphin-safe" would be effective and appropriate in fulfilling the United States' objectives outside the ETP was inconsistent with the Panel's obligation under Article 11 of the DSU to make an objective assessment of the matter before it.

105.

Turning to the Panel's evaluation of whether the AIDCP standard would be effective and appropriate for the fulfilment of the United States' objectives inside the ETP, Mexico faults the Panel for applying an "incorrect legal test" and conducting an "inconsistent and incomplete" analysis.²⁰⁹ With regard to the consumer information objective, Mexico takes issue with the Panel's finding that the AIDCP standard "does not convey 'any information on the fishing method that has been used …, or on the impact [that] such method may have on dolphins'".²¹⁰ Mexico submits that this statement "incorrectly" describes the AIDCP standard, since "[b]y its express terms and as reflected in its implementation, the AIDCP standard is not limited in application to any specific fishing method."²¹¹

106.

Mexico further alleges that the Panel did not properly assess whether the AIDCP standard would be "ineffective". Mexico submits that for over 90 per cent of the tuna products sold in the US market the AIDCP standard would accomplish the legitimate objectives pursued by the United States "in a more effective manner than the U.S. dolphin-safe labelling provisions".²¹² In Mexico's view, it would be illogical to conclude that the AIDCP standard would be ineffective in fulfilling the consumer information objective when it is "overall much more effective" than the measure at issue in fulfilling this objective.²¹³

107.

With regard to the dolphin protection objective, Mexico recalls what it views as the Panel's finding in the context of Article 2.2 of the TBT Agreement, namely, that the US measure does not fulfil this objective and in fact undermines it.²¹⁴ Mexico argues that, because the Panel "chose not to evaluate the potential application of the AIDCP standard to tuna products made from tuna harvested outside the ETP, it did not address the inconsistency arising from its prior finding that the U.S. dolphin-safe label is ineffective in fulfilling the U.S. objective outside the ETP."²¹⁵ Mexico submits that "if the AIDCP standard is more effective at fulfilling the U.S. objective for over 90 percent of the tuna products sold in the U.S. market, … the only logical conclusion is that the AIDCP standard overall would be effective at fulfilling the U.S. objective."²¹⁶ Finally, Mexico submits that the AIDCP standard would also be "appropriate" to fulfil the United States' objectives. In particular, Mexico claims that "the United States has already determined that the 'no dolphins killed or seriously injured' standard is appropriate for the ETP".²¹⁷ Hence, Mexico suggests that "certainly it is also appropriate for application outside the ETP."²¹⁸

108.

Mexico argues that the Panel exercised false judicial economy and acted inconsistently with its obligations under Article 11 of the DSU by declining to rule on Mexico's claims under Articles I:1 and III:4 of the GATT 1994. Mexico points out that, although Article 2.1 of the TBT Agreement and Articles I:1 and III:4 of the GATT 1994 deal with non-discrimination obligations, each of them is different in scope and application. Referring to the panel report in US – Upland Cotton, Mexico further argues that the obligations in Articles I:1 and III:4 of the GATT 1994 and Article 2.1 of the TBT Agreement apply simultaneously to the US measure and should be read cumulatively. Thus, after finding no violation of Article 2.1 of the TBT Agreement, the Panel should have continued with an analysis of Mexico's claims under the GATT 1994. Referring to the Appellate Body report in Australia – Salmon,Mexico further argues that a panel cannot exercise judicial economy "where only a partial resolution of a dispute would result'".²¹⁹

109.

Mexico further argues that the Panel's finding that the challenged measure is inconsistent with Article 2.2 of the TBT Agreement is not sufficient to provide a positive solution to the dispute with respect to Mexico's discrimination claims under the GATT 1994. Mexico recalls that in US – Poultry (China) the panel declined to limit its examination to the SPS Agreement and a claim under Article XI of the GATT 1994 and proceeded to examine China's claim under Article I of the GATT 1994.²²⁰ Similarly, in US – Clove Cigarettes, the panel stated that, if it did not make a finding of violation under Article 2.1 of the TBT Agreement, it would examine the alternative claim under Article III:4 of the GATT 1994.²²¹ According to Mexico, these disputes resemble the present case where the Panel should have ruled on Mexico's claims under Articles I:1 and III:4 of the GATT 1994. Mexico also requests the Appellate Body to rule that the United States acted inconsistently with these provisions.

110.

In support of its position that the US "dolphin-safe" labelling provisions are inconsistent with Article I:1 of the GATT 1994, Mexico argues that tuna products from Mexico, the United States, and other countries were correctly found by the Panel to be "like products". Mexico further posits that the advantage of access to the label is not granted "immediately and unconditionally" to the like product of Mexico, since the US "dolphin-safe" labelling provisions make the advantage (that is, the right to use the "dolphin-safe" label) subject to conditions with respect to the situation or conduct of Mexico (that is, fishing methods for tuna). In Mexico's view, these conditions discriminate de facto against Mexican tuna products in favour of tuna products from other countries.

111.

With respect to Article III:4 of the GATT 1994, Mexico recalls that the products at issue in the present dispute were found to be "like products" and submits that the US measure constitutes a law, regulation, or requirement within the meaning of Article III:4. Mexico further contends that the measure at issue "affects" the internal sale, offering for sale, purchase, transportation, distribution, or use of tuna products and tuna, since participants in the US tuna and tuna product market are highly sensitive to issues related to dolphin mortality and will make decisions on whether or not to purchase, offer for sale, distribute, process, or use tuna products on the basis of whether they are designated as "dolphin-safe" or, in the case of tuna, can be designated as "dolphin-safe" after processing. Finally, referring to its arguments regarding less favourable treatment in the context of Article 2.1 of the TBT Agreement, Mexico claims that, for the same reasons, the US measure accords less favourable treatment to imported Mexican tuna compared to that accorded to like US tuna products.

112.

The United States requests the Appellate Body to reject Mexico's other appeal of the Panel's finding that the US "dolphin-safe" labelling provisions are not inconsistent with Article 2.1 of the TBT Agreement. According to the United States, the Panel properly interpreted and applied Article 2.1 in concluding that the measure at issue does not accord Mexican tuna products less favourable treatment than US tuna products and tuna products originating in other countries.

113.

The United States disagrees with Mexico's assertion that the Panel erred in its interpretation of the phrase "treatment no less favourable" in Article 2.1. According to the United States, the Panel's interpretation is fully consistent with the ordinary meaning of the term, in both the immediate context of Article 2.1 and in the context of similar provisions in other WTO agreements, as well as the object and purpose of the TBT Agreement.

114.

In the United States' view, "an inquiry into whether a measure provides 'less favourable treatment' requires a determination of whether a measure accords different treatment to imported products versus domestic products and whether it does so based on origin."²²² According to the United States, "[t]he notion that the different treatment must be based on origin (as opposed to origin-neutral criteria) is evident from Article 2.1 itself", as well as relevant context provided by that of Article III of the GATT 1994 and the TBT Agreement.²²³ The United States quotes the Appellate Body's statement in EC – Asbestos that "[t]he broad and fundamental purpose of Article III is to avoid protectionism in the application of internal tax and regulatory measures."²²⁴ The United States argues that, given the "similar nature of the obligations" in Article III:4 of the GATT 1994 and Article 2.1 of the TBT Agreement, the "broad and fundamental purpose" of Article 2.1 may also be considered as avoiding protectionism in the application of technical regulations.²²⁵ For the United States, the fact that Article 2.1 is part of the TBT Agreement is also relevant context. The United States notes in this regard that standards, technical regulations, and conformity assessment procedures, by definition, draw distinctions among products. According to the United States, this supports the view that the types of measures with which Article 2.1 is concerned are those that accord different treatment based on origin, not those that provide different treatment based on factors other than origin (such as whether a product possesses characteristics that may be harmful to humans or the environment or is produced in a manner that would make a particular label deceptive or misleading). For the United States, the language in the sixth recital of the preamble of the TBT Agreement confirms this interpretation.

115.

The United States acknowledges that the WTO agreements "do not specify a precise approach" to the question when the treatment accorded to imported products is "less favourable".²²⁶ However, in previous cases addressing this question in the context of Article III of the GATT 1994, panels and the Appellate Body have "typically assessed" whether a measure "modifies the conditions of competition to the detriment of like imported products".²²⁷ In the United States' view, "these cases reflect the fact that, even if a measure modifies conditions of competition, it does not provide 'less favourable treatment' within the meaning of Article 2.1 if it does so for reasons other than origin."²²⁸ According to the United States, this "critical element" of the analysis is absent from Mexico's theory of less favourable treatment.²²⁹ By contrast, the Panel's analysis of "less favourable treatment" was "fully consistent" with this framework.²³⁰ The United States notes, in particular, that the Panel's assessment focused on whether any different treatment was accorded to Mexican tuna products under the measure and whether the difference was attributable to origin, and that the Panel "rejected Mexico's argument on both counts".²³¹

116.

The United States dismisses Mexico's criticism of the Panel's "denial of access to an advantage" test for whether "treatment no less favourable" exists. The United States submits that, to the extent that the Panel referred to "denial of access", it did so to address what Mexico itself described as "the factual basis" for its claim under Article 2.1, namely, that Mexican tuna products are "prohibited" from using the "dolphin-safe" label and are therefore denied competitive opportunities as compared to like products from the United States and other countries.²³² Moreover, argues the United States, the Panel's discussion of the existence of an "advantage" does not indicate a failure to consider conditions of competition in its analysis because, in several parts of its analysis, the Panel explicitly referred to conditions of competition.²³³ The United States further contends that nothing in the Panel's analysis suggests that it viewed less favourable treatment as arising only when an "absolute prohibition or bar" exists.²³⁴ Finally, the United States argues that the ability of Mexican tuna products to qualify for the US "dolphin-safe" label through other means "bears on the threshold question of whether different treatment is attributable to origin", which Mexico failed to establish.²³⁵

117.

Turning to Mexico's proposed interpretation of the phrase "treatment no less favourable" in Article 2.1 of the TBT Agreement, the United States asserts that Mexico's understanding of the concept is "flawed".²³⁶ As the United States sees it, Mexico asks, under the guise of "context", that the Appellate Body "read into the text of Article 2.1 an entire set of obligations that are not there".²³⁷ Mexico's suggestion that the Panel should have evaluated in the light of the sixth recital whether the measure is "necessary, is applied in a manner which would constitute a means of arbitrary or unjustifiable discrimination between countries where the same conditions prevail, or is applied in a manner which would constitute a disguised restriction on trade", represents, in the United States' view, a "misuse of context" and has no basis in the text of Article 2.1.²³⁸ The United States also submits that Mexico equates a conditions-of-competition analysis with the concept of "equality of competitive opportunities".²³⁹ To the United States, this reflects Mexico's view that the non-discrimination obligation in Article 2.1 seeks to ensure not only that a measure does not modify the conditions of competition to the detriment of imports, but that a measure also preserves "equality of competitive opportunities" for all products.²⁴⁰ The United States submits that this interpretation does not comport with how prior panel and Appellate Body reports have applied a conditions-of-competition analysis, as well as with the terms of Article 2.1.

118.

Finally, the United States submits that Mexico's interpretation would create a "serious obstacle" for legitimate regulatory action.²⁴¹ The United States points out that it is impossible for a Member to know in advance the precise costs that a measure will impose on each producer in every other Member, and that it would be "nearly impossible" to calibrate a measure such that it does not have a greater impact on one or another Member's products relative to its own or other Members.²⁴² According to the United States, under Mexico's interpretation, Members would not be able to adopt origin-neutral technical regulations without breaching their non-discrimination obligations "unless they were able to 'justify' the measure under Mexico's quasi-Article XX analysis."²⁴³ For the United States, this would be "at odds" with the TBT Agreement's approach to respecting Members' legitimate objectives, since the TBT Agreement does not limit the legitimate objectives that a Member may pursue through technical regulations.²⁴⁴ By contrast, Mexico's interpretation would prevent Members from adopting technical regulations except to fulfil the limited number of objectives specified in the sixth recital of the preamble of the TBT Agreement.

119.

The United States rejects Mexico's assertion that the Panel erred in concluding that the adverse impact felt by Mexican tuna products in the US market is the result of factors or circumstances unrelated to the foreign origin of the product. The United States argues that it is not the Panel, but Mexico, that misconstrues the findings of the Appellate Body in Dominican Republic – Import and Sale of Cigarettes. The United States agrees with Mexico that discrimination in this dispute does not depend upon the characteristics of individual importers but, rather, on the fishing practices of the fleet that caught the tuna and the canneries that produced the tuna products for exportation to the United States. According to the United States, this is "precisely the argument that, based on the facts before it, left the Panel unpersuaded"²⁴⁵, since Mexico did not provide sufficient evidence to demonstrate that the fishing methods used by a country's fleet "correlated" to the origin of that country's tuna products.²⁴⁶ The United States also disagrees with Mexico's assertion that the Panel's interpretation is "somehow at odds with the notion that discrimination may be de facto as well as de jure".²⁴⁷ According to the United States, the Panel fully understood the notion and ambit of de facto discrimination. Yet, the fact that some imported products may fall within the group of like products that are subject to different treatment that may be less favourable is not evidence that a measure accords less favourable treatment to imported products as compared to like domestic products, particularly where there is evidence that the different treatment is not based on origin. The United States finds support for its position in the Appellate Body report in EC – Asbestos, noting that "distinctions based on criteria other than origin are not distinctions that accord less favourable treatment … and neither Article III:4 nor Article 2.1 prohibit such distinctions."²⁴⁸

120.

The United States further argues that Mexico misinterprets and misapplies the Appellate Body's findings in Korea – Various Measures on Beef when it claims that the Panel erred in concluding that the adverse impact is caused by private actors, rather than the measure at issue. The United States submits that, unlike the measure in Korea – Various Measures on Beef, the US "dolphin-safe" labelling provisions do not "require retailers to choose between … tuna products that are labeled dolphin-safe and those that are not or that contain tuna caught by setting on dolphins and those that do not."²⁴⁹ Instead, any decision to sell one or the other is "purely" the choice of private actors.²⁵⁰ Recalling the Panel's finding that there is a preference in the US market for "dolphin-safe" tuna products, the United States argues that the preference of private actors for "dolphin-safe" tuna products cannot form the basis for concluding that the measure at issue modifies the conditions of competition because "[t]he limited demand for non-dolphin safe tuna products is a result of preferences of market operators not the U.S. measure."²⁵¹ The United States agrees with Mexico that the measure at issue restricts the option of selling tuna products labelled "dolphin-safe" that contain tuna caught by setting on dolphins. However, it argues that this is not evidence that "establishes competitive conditions that are less favorable for imported products".²⁵² According to the United States, "any change the U.S. measure introduced regarding the conditions under which tuna products compete is not one that modified the conditions of competition to the detriment of imported products or tuna products originating in some countries as compared to others", since "all tuna products compete under the same conditions", irrespective of their origin.²⁵³ In addition, the United States asserts that Mexico confuses the Panel's conclusion that the measure accords an advantage in the form of access to the label with the question of whether the US measure accords that advantage to Mexican tuna products. The United States agrees with the Panel's finding that the measure at issue does not deny the advantage to Mexican tuna products.

121.

The United States requests the Appellate Body to dismiss Mexico's argument that the Panel failed to consider and take into account evidence put forward by Mexico that it was impossible for the Mexican tuna industry to change its fishing practices to adapt to the US measure. The United States asserts that the Panel did consider and take into account the evidence regarding the adaptation costs incurred by Mexican producers and therefore did not fail to make an objective assessment of the matter as required by Article 11 of the DSU.²⁵⁴ The United States notes that the Panel summarized Mexico's arguments on this issue.²⁵⁵ Moreover, the United States contends that the Panel exhibits on which Mexico relies do not stand for the proposition that it is impossible for Mexican producers to meet the conditions for labelling tuna products "dolphin-safe".²⁵⁶ The United States points out that the affidavits contained in the Panel exhibits cover the same points regarding costs associated with fishing for tuna using techniques other than setting on dolphins that the Panel summarized in its Report.²⁵⁷ For the United States, a panel fails to make an objective assessment of the facts if it wilfully disregards or distorts the evidence before it or makes affirmative findings that lack a basis in the evidence. The fact that the Panel, having considered the evidence, did not conclude that it would be impossible for Mexican producers to meet the labelling conditions does not, in the United States' view, amount to a failure of the Panel to assess the matter in an objective manner.

122.

In addition, the United States asserts that Mexico disregards the Panel's finding that not only is it possible for Mexican producers to adapt to catching tuna in a manner that would give them access to the US "dolphin-safe" label, but also that Mexican producers already catch tuna in a manner that makes them eligible for the label. The United States recalls the Panel's observations that a part of the Mexican fleet already catches tuna by methods other than setting on dolphins.²⁵⁸ The United States also asserts that Mexico's arguments ignore the fact that the measure at issue does not require a nation's entire shipping fleet to completely abandon the practice of setting on dolphins in order to gain access to the label. For the United States, the Panel's finding that Mexican producers could choose to use tuna harvested by vessels flagged to other nations whose fleets do not set on dolphins, shows that the costs Mexico cites with respect to modifying fishing techniques or location could be avoided.

123.

Contrary to Mexico's view, the United States argues that the Panel did not fail to consider evidence regarding retailer preferences. The Panel evaluated the evidence regarding retailer preferences and concluded that the evidence did not support the conclusion that retailers would purchase tuna products that contained tuna caught by setting on dolphins if they could be labelled "dolphin-safe".²⁵⁹ According to the United States, the Panel considered the affidavits submitted by Mexico, and cited evidence that retailers are concerned with consumer acceptance of tuna products, and not with whether the product can legally be labelled "dolphin-safe" or not.²⁶⁰ Thus, the United States argues that, contrary to Mexico's assertion, the Panel did not rely solely upon the perceptions of canneries to reach its conclusion regarding retailers' preferences. Therefore, the United States asserts that the Panel did not act inconsistently with Article 11 of the DSU.

124.

Regarding Mexico's claim that the Panel failed to properly assess the "value" of the AIDCP label on the US market, the United States contends that the findings and evidence Mexico cites do not support its contention that the AIDCP label has value in the US market. The United States submits that the mere existence of the measure at issue does not support Mexico's position. This is so because the reason for prohibiting the use of the AIDCP label on tuna products containing tuna caught by setting on dolphins is not that the AIDCP label has value, but because allowing its use on such products would be misleading.

125.

The United States rejects Mexico's argument that the Panel failed to consider that there could be "latent demand" for tuna products containing tuna caught by setting on dolphins and labelled with the AIDCP label.²⁶¹ The United States begins by noting that Mexico cites no evidence in this regard, and relies only upon past Appellate Body reports. These Appellate Body reports cited by Mexico are distinguishable from the situation at hand because the measure at issue does not affect consumers' ability to purchase tuna products.²⁶² As the United States sees it, what affects consumer and retailer demand for Mexican tuna products is whether the tuna is "dolphin-safe", and not where the tuna product originates.²⁶³ Thus, unlike in Philippines – Distilled Spirits, there is no basis for the Panel to have considered that there might be any "latent demand" for Mexican tuna products that contain tuna caught by setting on dolphins. Furthermore, for the United States, the evidence before the Panel indicates the strong preference of US market operators for tuna products that do not contain tuna caught in association with dolphins, and does not support the conclusion that market operators would accept such tuna products if they could bear the AIDCP label. Therefore, it is not the measure at issue but market operators that are responsible for the absence of Mexican tuna products in major distribution channels. Consequently, the United States requests the Appellate Body to reject Mexico's claim that the Panel acted inconsistently with its obligations under Article 11 of the DSU in assessing the "value" of the AIDCP label.²⁶⁴

126.

The United States requests the Appellate Body to reject Mexico's conditional appeal of the Panel's findings regarding Article 2.2 of the TBT Agreement. With respect to Mexico's first ground of appeal, the United States argues that the Panel correctly interpreted and applied the term "legitimate objective" in Article 2.2 to the United States' dolphin protection objective. The United States contends that the Panel did not formulate a "legal test" for determining whether a measure is legitimate based on whether the objectives of the measure "go against the object and purpose of the TBT Agreement".²⁶⁵ Rather, it reviewed several factors relevant to whether the second objective of the US measure is "legitimate". The Panel found that the protection of dolphins may be understood as intended to protect animal life or health or the environment. When the Panel stated that the United States' objective "do[es] not go against the object and purpose of the TBT Agreement", it addressed and rejected an argument by Mexico that the measure at issue was not in fact concerned with protecting dolphins because it did not also protect other marine species. In that respect, the United States points out that the phrase "do[es] not go against the object and purpose of the TBT Agreement" is followed by the phrase "even in light of the existence of potentially conflicting objectives that could also be recognized as legitimate".²⁶⁶

127.

In respect of Mexico's argument that a "coercive and trade restrictive" objective is not "legitimate" within the meaning of Article 2.2 of the TBT Agreement, the United States submits that the Panel did not find that the objectives of the US measure include "coercion or trade restrictiveness" and that Mexico does not appeal these factual findings. There is no basis for equating an objective aimed at discouraging or encouraging certain practices harmful to animal life or health with an objective that is "coercive and trade-restrictive". This would render "illegitimate" the objective of any labelling scheme that seeks to inform consumers about products that reflect their preferences.²⁶⁷

128.

Furthermore, the United States maintains that Mexico confuses the objectives of a measure with how that objective is achieved. A measure may pursue a legitimate objective but do so through means that restrict the marketing of certain products. In addition, the United States contends that the Panel correctly pointed out that the terms of Article 2.2 suggest that some restrictions on international trade may arise from the preparation, adoption, and application of technical regulations that pursue legitimate objectives. A measure's objective is not illegitimate merely because the measure restricts trade. Finally, while Mexico is correct that the measures at issue in US – Shrimp and US – Gasoline were found to constitute "arbitrary and unjustifiable discrimination" and a "disguised restriction on international trade", that was not because the objectives of the measures at issue in those disputes were illegitimate.

129.

The United States requests the Appellate Body also to reject the second claim of Mexico's other appeal. The United States maintains that the Panel's approach for examining whether the measure at issue is more trade restrictive than necessary is consistent with Article 2.2 of the TBT Agreement. Mexico's argument that a measure that does not fully meet its objective is per se a breach of Article 2.2 is based on a "misreading" of this provision. The United States emphasizes that Article 2.2 does not include an obligation that technical regulations fulfil their objectives at a particular level, let alone at a "100% level".²⁶⁸ In deciding what level of fulfilment a Member seeks to achieve, the Member may weigh a number of factors, such as technical feasibility, costs, and enforcement resources. Article 2.2 requires technical regulations not to restrict trade more than necessary to achieve legitimate objectives. The preamble of the TBT Agreement, in particular the words "at the levels it considers appropriate" in the sixth recital, confirms that Members remain free to determine at what level they seek to achieve an objective. The fact that a Member is not seeking to fulfil an objective to the utmost extent does not render the measure per se more trade restrictive than necessary. Therefore, the Panel was correct in proceeding to examine the alternative measure put forward by Mexico after it had made the finding that the United States' measure only "partially" achieves its objectives.²⁶⁹

130.

The United States observes, first, that Mexico has not challenged "the Panel's findings that support the conclusion that, inside the ETP, the AIDCP standard would be ineffective and inappropriate for fulfilling the U.S. objectives as they relate to ensuring consumers are not misled or deceived about whether tuna products contain tuna caught in a manner harmful to dolphins".²⁷⁰ The United States argues that the Panel's ultimate conclusions should therefore remain unaltered even if the Appellate Body were to agree with the arguments advanced by Mexico on appeal.

131.

The United States contends that Mexico mischaracterizes the Panel's findings when it describes the "AIDCP definition of 'dolphin safe'" as the "standard at issue".²⁷¹ The United States emphasizes that the basis for the Panel's finding that the AIDCP resolutions constitute a standard is that the resolutions establish "a system" for tracking, certifying, and labelling tuna caught in the ETP by vessels fishing under the AIDCP.²⁷² The United States contends that the Panel did not find that the AIDCP "dolphin-safe" definition "was, in itself, a standard".²⁷³ In response to Mexico's argument that the AIDCP standard could be transposed to other fishing regions, the United States submits that "the standard the Panel examined by its terms could not readily be used in other oceans."²⁷⁴ This is so because the system for tracking, certifying, and labelling tuna caught in the ETP depends on the independent observer programme implemented under the AIDCP. The United States asserts that a standard cannot be effective or appropriate "if it requires a Member to base its domestic standard on regimes that do not actually exist".²⁷⁵

132.

Given that the AIDCP standard "is built upon the international dolphin conservation program set out in the AIDCP"²⁷⁶, the United States argues that it was appropriate for the Panel to inquire whether the AIDCP standard would be effective and appropriate for fulfilling the objectives of the US measure in the ocean for which it was designed, where it is applied, and where it should be at its most effective.²⁷⁷ The Panel's finding that the AIDCP standard is "ineffective or inappropriate" for achieving the United States' objectives within the ETP was a sufficient basis to conclude that the AIDCP standard is ineffective and inappropriate overall.²⁷⁸ The United States submits, therefore, that there was no need for the Panel "to consider the hypothetical application of the AIDCP standard outside of the ETP"²⁷⁹, and that the Panel did not act inconsistently with Article 11 of the DSU in declining to do so.²⁸⁰

133.

The United States further contends that Mexico's arguments concerning the appropriateness and effectiveness of the AIDCP standard do not account for the full scope of the United States' objectives.²⁸¹ In support of its position, the United States refers to the Appellate Body's statement in EC – Sardines that a relevant international standard "would be effective if it had the capacity to accomplish all three of these objectives [of the EC measure], and it would be appropriate if it were suitable for the fulfilment of all three of these objectives".²⁸² The United States observes that Mexico's argument disregards that the United States' objectives pertain to both observed mortality and serious injury to dolphins and to unobserved mortality and serious injury, as well as "other adverse effects".²⁸³ Consequently, Mexico's argument that the AIDCP definition of "dolphin-safe" would fulfil one aspect of the United States' objectives is "beside the point", as it does not account for the full scope of the United States' objectives.²⁸⁴ The United States also notes that Mexico appears to accept the Panel's conclusion that the AIDCP standard would be ineffective and inappropriate with respect to "unobserved" mortality and serious injury to dolphins.²⁸⁵

134.

The United States disagrees with Mexico that the AIDCP standard would be more effective than the measure at issue. The United States submits that the focus of the inquiry under Article 2.4 is "whether use of a technical regulation based on the relevant international standard at issue fulfills the Member's legitimate objectives, rather than the extent to which the challenged technical regulation fulfills those objectives".²⁸⁶ The United States submits, therefore, that Mexico's arguments concerning the relative effectiveness of the United States' measure, as compared to the AIDCP standard, are "inapposite".²⁸⁷

135.

The United States argues that the Panel acted within its discretion to exercise judicial economy with respect to Mexico's claims under Articles I:1 and III:4 of the GATT 1994. The United States asserts that Mexico has not explained why it believes that a finding of non‑discrimination made under Article 2.1 of the TBT Agreement would be different if examined under Articles I:1 and III:4 of the GATT 1994. The United States agrees with the Panel that Mexico's arguments under Article 2.1 "derived directly" from its arguments under the GATT 1994, and the Panel could therefore properly address all of Mexico's non-discrimination claims and arguments through its examination of Article 2.1.²⁸⁸

136.

The United States alleges that, in asserting that the Panel's findings under Article 2.2 of the TBT Agreement failed to resolve the dispute, Mexico "misconstrued" the Panel Report. To the contrary, argues the United States, the Panel "addressed 'all aspects of Mexico's claims, including non-discrimination aspects under Article 2.1, and other aspects under Article[s] 2.2 and 2.4', such that it was not 'necessary for it to consider separately and additionally Mexico's claims under Articles I:1 and III:4 of the GATT 1994.'"²⁸⁹ With respect to Mexico's reference to the Appellate Body's findings in Australia – Salmon, the United States submits that the same report also stated that false judicial economy occurs if exercising it does not "enable the DSB to make sufficiently precise recommendations and rulings so as to allow for prompt compliance by a Member with those recommendations and rulings".²⁹⁰ According to the United States, Mexico does not explain how reconsidering those claims under Articles I:1 and III:4, using the same facts and arguments that were provided under Article 2.1, would lead to a different result and different DSB recommendations or rulings.

137.

Finally, in respect of Mexico's argument that the alleged false judicial economy constitutes a violation of Article 11 of the DSU, the United States recalls the Appellate Body's finding that "a claim under [that provision] must stand by itself and be substantiated with specific arguments, rather than merely being put forth as a subsidiary argument or claim in support of a claim of a panel's failure to construe or apply correctly a particular provision of a covered agreement."²⁹¹ Since Mexico relies on the same arguments and facts, the United States concludes that its claim under Article 11 of the DSU does not "stand by itself". Furthermore, the United States argues that the invocation of Article 11 of the DSU does not relieve Mexico from showing that the Panel's use of judicial economy would not allow the DSB to make recommendations and rulings that would help achieve a satisfactory resolution of the dispute.

138.

In relation to whether the US "dolphin-safe" labelling provisions constitute a technical regulation within the meaning of Annex 1.1 of the TBT Agreement, Australia endorses the reasoning set out in the separate opinion, in particular, the view that private actions alone cannot make a measure de facto mandatory. Accordingly, Australia supports the United States' request that the Appellate Body reverse the Panel's finding in this regard.

139.

In Australia's view, the Panel erred in exercising judicial economy in respect of Mexico's claims under Articles I:1 and III:4 of the GATT 1994. Recalling that the aim of the dispute settlement system is "to secure a positive solution to a dispute" and that the Appellate Body has emphasized that "[t]o provide only a partial resolution of the matter at issue would be false judicial economy", Australia considers that the Panel exercised false judicial economy, given the lack of consensus among the panelists as to whether the measure at issue constitutes a technical regulation.²⁹² Australia takes this view having regard to: (i) the possibility of the Panel's finding being reversed; (ii) the simultaneous and cumulative application of Articles I:1 and III:4 of the GATT 1994 and Article 2.1 of the TBT Agreement; and (iii) the differences in scope and application of each of the non‑discrimination obligations contained in those provisions. Australia states that it would welcome the Appellate Body completing the analysis in relation to Articles I:1 and III:4 should the Appellate Body consider that the findings of fact on the Panel record enable it to do so.²⁹³

140.

Brazil submits that the main question to be solved in this dispute is whether compliance with the labelling requirements in the US "dolphin-safe" scheme is mandatory, that is, whether the term "mandatory" is related to: (i) a condition to have access to the US market; or (ii) to binding requirements regarding labelling. Brazil understands that there is no mention in the text—either in Annex 1.1 or Annex 1.2 to the TBT Agreement—to the effect that these requirements should be read in the light of a product's access to the market. Therefore, it would seem that, if a product must necessarily comply with specific requirements related to its characteristics, irrespective of the market access conditions available for that product, these requirements are closer to a "technical regulation" than to a "standard".²⁹⁴ Brazil argues that the fact that labelling requirements are: (i) defined by US regulations; (ii) enforceable by the US authorities; and (iii) a basis for sanctions in cases where they are not strictly followed, demonstrates the binding and obligatory effect they have for tuna traders as they establish a pattern of conduct that cannot be avoided or "bypassed".²⁹⁵

141.

Brazil emphasizes that, if a "market access" criterion were to be adopted without further qualification, a "significant loophole" would be created in the implementation of the TBT Agreement. As a consequence, Members would be given space to create "voluntary" labelling schemes, which, albeit exclusive and distortive of the competitive environment in the Members' markets, would not be classifiable as technical regulations and would thus be exempt from complying with most of the provisions of the TBT Agreement.²⁹⁶ Finally, Brazil submits that, if the Appellate Body were to accept the reasoning developed in the separate opinion, it should interpret "market access" as meaning "market access in the same competitive position" as granted to domestic products.²⁹⁷

142.

Brazil believes that the Panel erred in its analysis of the term "necessary" in Article 2.2 of the TBT Agreement. According to Brazil, the Panel considered that the word "necessary" in the second sentence of Article 2.2 relates to the "trade-restrictiveness" of the measure and not to the measure itself and its legitimate objective.²⁹⁸ In Brazil's view, the Panel did not give due account to the first sentence of Article 2.2, which connects the expression "unnecessary obstacles to international trade" with "technical regulations", and not with "trade-restrictiveness". Further, the word "necessary" in the second sentence is directly linked with "the fulfilment of a legitimate objective", which indicates that these terms should be analyzed together.²⁹⁹

143.

In addition, Brazil argues that it is of "crucial importance" to draw on the jurisprudence developed under Article XX of the GATT 1994 when interpreting Article 2.2.³⁰⁰ Brazil notes that, in Brazil – Retreaded Tyres, the Appellate Body held that "[a] contribution exists when there is a genuine relationship of ends and means between the objective pursued and the measure at issue" and that such a "contribution to the achievement of the objective must be material, not merely marginal or insignificant".³⁰¹ As a result, Brazil suggests that, if the measure adopted by a Member is not able to significantly contribute to the achievement of the legitimate objectives, there is no need further to assess the "trade-restrictiveness" criterion, as the relevant measure would not be in conformity with Article 2.2.³⁰² In the light of the above, Brazil argues that the Panel should have inquired whether the measure at issue significantly contributes to the objectives of providing consumer information and of promoting the protection of dolphins.

144.

With regard to whether a measure is more trade restrictive than necessary, Brazil contends that once a measure has been found to genuinely contribute to the fulfilment of the legitimate objectives, then the analysis of its "trade-restrictiveness" may occur. In Brazil's view, the Panel erred in its interpretation of Article 2.2 of the TBT Agreement by drawing guidance from Article 5.6 of the SPS Agreement. Under the SPS Agreement, Members are faced with a "stricter policy space", such as requirements of a scientific justification and a risk assessment.³⁰³ In this regard, Brazil points out certain differences between the two agreements, such as the differences in scope and objectives, the differences in wording between Article 5.6 and Article 2.2, and the fact that the TBT Agreement requires no risk assessment when deviating from international standards.³⁰⁴ On this basis, Brazil concludes that Article 5.6 does not seem to be relevant for the interpretation of Article 2.2.³⁰⁵

145.

With respect to the question of what constitutes an "international standard" within the meaning of Article 2.4 of the TBT Agreement, Brazil argues that the meaning of "international" in Article 2.4 should be interpreted carefully. In particular, Brazil submits that Annex 1.4 to the TBT Agreement, which defines "international body or system" as a "[b]ody or system whose membership is open to the relevant bodies of at least all Members", establishes that "Members should have the opportunity to accede to [international] standardizing organizations whenever they consider adequate."³⁰⁶ Moreover, the fact that Annex 1.4 is written in the present tense indicates that membership of an international body or system should be open to all WTO Members at any time, and especially during the process of development and/or review of a standard.³⁰⁷ Therefore, where the accession of new members was possible during a specific period in the past but is currently contingent, for example, upon the invitation and further acceptance by its members, an organization would not, in Brazil's view, seem to comply with the provisions of Annex 1 to the TBT Agreement.³⁰⁸ According to Brazil, this interpretation is supported by the TBT Committee Decision, which sets out principles and procedures that should be observed when international standards are elaborated. Finally, Brazil argues that, as the WTO Members wishing to accede to a standardizing organization may face political or legal difficulties in the accession process, a case-by-case analysis may be required to determine the level of "openness" of the organization to new members.³⁰⁹

146.

Canada submits that, because of the virtually identical wording of Article 2.1 of the TBT Agreement and Article III:4 of the GATT 1994, the interpretation of the terms found in both provisions, in particular, the term "treatment no less favourable", as developed by the jurisprudence under Article III:4, should be substantially the same.³¹⁰ Referring to previous Appellate Body reports, Canada contends that an examination of whether imported products are treated "less favourably" than like domestic products requires a consideration of whether there is detriment to imported products—not, as the United States suggests, a determination of whether the discrimination is "based on" or "for reasons of" origin.³¹¹ Canada argues that, if the United States' suggestion were accepted, de facto discrimination claims would virtually be removed from the ambit of both Article III:4 of the GATT 1994 and Article 2.1 of the TBT Agreement.

147.

In addition, Canada submits that the "legitimacy" of a technical regulation is not relevant for the less favourable treatment analysis under Article 2.1 of the TBT Agreement. If the drafters of the TBT Agreement had intended that issues regarding the legitimacy of regulatory action should factor into the less favourable treatment test, they could have drafted the text accordingly. Canada disagrees with what it describes as Mexico's attempt to incorporate elements of the test pertaining to Article XX of the GATT 1994through the recitals of the preamble of the TBT Agreement. Canada also opposes the United States' similar argument that "legitimate regulatory action" and "legitimate objectives" are elements to consider in assessing whether there is less favourable treatment under Article 2.1.³¹² However, Canada points out that Article 2.1, like Article III:4 of the GATT 1994, provides significant flexibility to WTO Members to impose measures that distinguish between products for "legitimate" purposes. This is illustrated by the Appellate Body's finding in EC – Asbestos that an otherwise essentially identical product may not be "like" another product if that other product imposes greater health risks.³¹³

148.

Canada supports Mexico's claim that the Panel should have made findings under Articles I:1 and III:4 of the GATT 1994, particularly since the relationship between Article 2.1 of the TBT Agreement and Articles I:1 and III:4 of the GATT 1994 is "not settled".³¹⁴ In particular, Canada submits that, unless the result of the application of Article 2.1 and the corresponding provisions of the GATT 1994 to a particular measure will necessarily be the same, it is false judicial economy for panels to fail to make findings under both agreements. Canada further notes that making findings on additional claims allows the Appellate Body to consider additional provisions and to resolve the dispute if it reverses other findings made by the Panel.³¹⁵ In the present case, Canada considers that, by failing to make findings under the TBT Agreement and the GATT 1994, the Panel risked providing only a partial resolution of the matter at issue.³¹⁶

149.

With respect to the interpretation of Article 2.2 of the TBT Agreement, Canada suggests a five-step test, which it considers generally consistent with the panel reports in the present case, in US – COOL,and in US – Clove Cigarettes.³¹⁷

150.

According to Canada, a panel should first determine if the technical regulation restricts international trade. If it does not, the measure cannot violate Article 2.2. In the present case, Canada argues that there does not appear to be any dispute about whether the measure at issue restricts international trade. As a second step, a panel should identify the objective of the technical regulation by looking at the design, structure, and architecture of the measure, as well as other relevant documents.

151.

Canada argues that, as a third step, a panel should determine if the objective of the technical regulation is legitimate. If it is not, the technical regulation violates Article 2.2 of the TBT Agreement. In this regard, Canada agrees with the Panel that a proper analysis starts by determining whether the objective falls within the explicitly listed objectives in Article 2.2. If the objective does not fall within the list, it is necessary to determine if it is nevertheless "legitimate" within the broader scope of that term as used in this provision. Canada agrees with Mexico that Members do not have an unlimited right to adopt any policy objective and cannot establish legitimacy on the basis of a mere assertion. It further notes that whether policies address a "legitimate objective" within the meaning of Article 2.2 is a question of legal interpretation for a panel. Referring to the ejusdem generis principle, Canada submits that a general term, such as "legitimate objectives", followed by an illustrative list of specific items means that the general term is limited to the type of items specifically listed. In order to distinguish non-legitimate objectives from legitimate ones, a panel should take into account the importance of the specifically listed objectives and the "common interests or values that are at stake".³¹⁸

152.

In Canada's view, as a fourth step, a panel should determine if the technical regulation fulfils the legitimate objective. If it does not, the technical regulation violates Article 2.2 and it is not necessary to consider alternative less trade-restrictive measures. Canada observes that, although the Panel did not address this issue as an independent element, it did in essence perform this analysis and concluded that the measure "can only partially ensure that consumers are informed about whether tuna was caught by using a method that adversely affects dolphins".³¹⁹ For Canada, the Panel's finding that consumers "could be misled into thinking that a tuna product did not involve injury or killing of a dolphin when this may in fact have been the case" may be the same as a finding that the challenged measure does not meet the fourth step of the test.³²⁰ Alternatively, the Appellate Body may interpret the Panel's finding as a determination that the measure meets this fourth step, but that the level of fulfilment is limited. If so, Canada argues that the level of fulfilment of the objective is a factor to consider in assessing the alternative measure proposed by Mexico in the next step.³²¹

153.

As a last step, Canada submits that a panel should assess alternative measures that would fulfil the legitimate objective in a less trade-restrictive way, "taking account of the risks non-fulfilment would create". If there are such alternative measures, the technical regulation violates Article 2.2. Canada emphasizes that what the text requires to be considered are the risks that would arise from a failure to fulfil the legitimate objective and not the "risks of non-fulfilment" in the sense of an assessment of the likelihood that a measure will not fulfil its objective. Canada alleges that the panels in this case and in US – Clove Cigarettes appear to have equated the two terms.³²² Furthermore, although not explicitly envisaged by Article 2.2, the extent of fulfilment of the objective by both the challenged measure and the proposed alternative measure should be taken into account. Similarly, the harm that would arise from the failure to fulfil an objective should be considered with the "trade-restrictiveness" of an alternative measure. Finally, Canada argues that a reduction of potential costs on domestic products is not a factor to consider in balancing a challenged measure against an alternative measure.

154.

Recalling the Appellate Body's finding in EC – Asbestos that the term "mandatory" suggests that a measure regulates the characteristics of a product "in a binding or compulsory fashion" with the "effect of prescribing or imposing" one or more of them, the European Union argues that the mere fact that the US "dolphin-safe" labelling scheme is contained in a law is not sufficient to conclude that it is "binding or compulsory".³²³ Such an argument would "formalistically" focus on the binding nature of the document containing the labelling scheme and would disregard the substance of the product characteristics, that is, that the labelling requirements leave economic operators the choice of whether they want to market their products with or without the label.³²⁴ Additionally, the US measure cannot be considered "binding or compulsory" simply because it establishes conditions or requirements for the use of the "dolphin-safe" label, as such a reading would conflate the meaning of the terms "mandatory" and "requirement" and thus leave no space for the voluntary labelling requirements addressed in Annex 1.2 to the TBT Agreement.³²⁵ In addition, the European Union submits that the fact that compliance with the conditions of the US "dolphin-safe" labelling scheme is legally enforceable does not appear to be sufficient either to render compliance "mandatory". As the separate opinion points out, legally binding norms, such as consumer protection or fair competition laws, which compel producers to fulfil promises concerning (voluntary) standards, should not "transform" such standards into mandatory technical regulations.³²⁶

155.

Although the European Union disagrees that the "exclusivity" of a labelling scheme is always the dividing line between mandatory and voluntary schemes, it accepts that there may be circumstances in which this factor could contribute to the mandatory nature of a labelling scheme.³²⁷ However, in the European Union's view, the Panel did not properly explain how the "exclusivity" of a labelling scheme makes compliance therewith "binding or compulsory". First, the Panel's assertion that "the measures prescribe 'in a negative form' … that no tuna product may be labelled dolphin‑safe or otherwise refer to dolphins, porpoises or marine mammals if it does not meet the conditions set out in the measures" does not address why this situation makes compliance mandatory.³²⁸ This is so because economic operators remain free to market tuna without any labels relating to their "dolphin‑safety". Second, contrary to the Panel's position, the European Union considers that EC – Sardines provides no support for the Panel's "exclusivity" argument. In EC – Sardines, the imported product could not be sold as preserved sardines unless it complied with the labelling requirements, whereas in the present case tuna products may be sold as "tuna" even if they do not comply with the "dolphin-safe" labelling requirements.³²⁹

156.

The European Union notes that, in order to distinguish between the exercise of regulatory autonomy that is acceptable and that which is not, one must look at the effects of a measure as well as its aim, which includes an enquiry into the design of the measure. This further entails an examination of whether or not the measure has some other purpose (as opposed to discriminating against imports), whether or not that purpose is "justified" or "legitimate", whether the measure reasonably contributes to achieving that objective (as opposed to being "arbitrary"), and whether or not there is another measure available equally capable of contributing to the objective but "less restrictive of trade".³³⁰ Further, the European Union submits that numerous provisions of the covered agreements express this basic approach, most obviously the chapeau of Article XX of the GATT 1994 and in the "necessity" language of that article, as well as Article III:4, and that these GATT 1994 provisions are "re-cast" in Articles 2.1 and 2.2 of the TBT Agreement.³³¹

157.

Regarding the question of an "in fact" claim of a national treatment violation, the European Union notes that the outcome depends mostly on what is meant by "'factors or circumstances' related to the foreign origin of the product". It also depends on whether this concept is to be construed relatively narrowly or relatively broadly, and whether any countervailing explanations are to be considered only in case such a "relation" is identified, or rather at the same time as considering whether there is any "relation" at all. The European Union argues for a broader concept, including, for example, consumer preferences and/or regulations in the exporting country, but highlights that any countervailing explanations should be considered at the same time as considering whether or not there is any such "relation" with foreign origin. Such an approach would be sufficiently flexible and broadly similar to the approach under the GATT 1994.³³² Concerning the present case, the European Union is of the view that the Panel carefully considered all of the evidence before it and made an objective assessment pursuant to Article 11 of the DSU.³³³

158.

The European Union agrees with the United States that Mexico had the initial burden of proof with respect to all aspects of its claim under Article 2.2 of the TBT Agreement. Furthermore, the European Union stresses the importance of the way in which the legitimate objective is framed (either more broadly or more narrowly) for the analysis under this provision. The United States' approach of narrowing the objective so as to correspond to the subject matter of the complaint ("setting on dolphins") is, in the European Union's view, somewhat "mechanistic". It would not leave much room for the balanced consideration of all the facts, such as, for example, why the circumstances of death might be relevant to circumscribe the objective itself if, presumably, the United States and its consumers really do care about dolphin mortality.³³⁴ As to the question of whether the costs associated with a measure should play a role in the assessment under Article 2.2, the European Union submits that it may be relevant to examine the balance between the objective and the costs, as well as the manner in which the costs are distributed amongst different WTO Members, particularly in the long-term.³³⁵ Finally, the European Union agrees with the United States that the relative risk to dolphins inside and outside the ETP would be relevant to the assessment.³³⁶

159.

The European Union submits that the determination of which documents qualify as "international standards" must be undertaken with great care, since such standards trigger the obligation in Article 2.4 of the TBT Agreement. As regards the requirement of "recognition" of an entity as an international standardizing organization, the European Union argues that this relates to the standardization activities of a body and that it would be circular to infer "recognition" from "participation" by countries in a body's standardizing activities as this would devoid the "recognition" element of any meaning.³³⁷

160.

In addition, the European Union argues that "recognition" by only one country regarding only one document should not qualify as recognition that the relevant entity is an international standards organization. Recognition of standardization activity should depend on those who establish and use standards, that is, the market participants, and not governments or courts.³³⁸ The European Union advances additional factors, which, in its view, indicate that the AIDCP may not be an entity with recognized activities in standardization. The European Union points out that the issuance of standards is not mentioned as one of the objectives of the AIDCP and that there is no indication that the AIDCP has accepted the Code of Good Practice for the Preparation, Adoption and Application of Standards in Annex 3 to the TBT Agreement, which would have indicatedthat the AIDCP sees itself as a standardizing body. Finally, the European Union doubts that the AIDCP has the necessary institutional structure to qualify as an "organization" and is sufficiently "open" to qualify as "international" for the purposes of the TBT Agreement.

161.

Japan agrees with the Panel's analysis concerning the mandatory nature of the measure at issue. In Japan's view, no single factor of the three listed by the Panel should be decisive on its own. Japan submits, however, that all three considered together should be given considerable weight in determining whether a measure is a technical regulation that regulates the "characteristics of products" in a binding or compulsoryfashion.³³⁹ According to Japan, the distinguishing characteristic of the US measure is that it privileges and enforces a single definition of "dolphin-safety" and excludes other definitions, thereby restricting the choice to use indications on products regardless of whether that tuna was actually harvested in a "dolphin-safe" manner.³⁴⁰ In Japan's view, if the measure permitted alternative descriptive labels addressing the "dolphin-safety" of tuna, then it would most likely not be mandatory because products not satisfying one description could indicate their product characteristics or quality appropriately.³⁴¹

162.

Japan suggests that the reports of the panels in EC – Sardines and EC – Trademarks and Geographical Indications (Australia) should guide the Appellate Body's analysis in this case. In the former case, the European Communities argued that its regulation did not bar the sale of the product at issue in the European Communities at all, unless labelled as "preserved sardines". In the lattercase, the regulation at issue did not bar the importation or sale of a product as such, but simply prohibited the marketing of certain products in the EC if the product used a particular label. Japan notes that, in this dispute, the measure at issue similarly bars marketing of tuna products that bear a non‑conforming "dolphin-safe" label suggesting that it is therefore a "technical regulation" for purposes of the TBT Agreement.³⁴²

163.

In Japan's opinion, the Appellate Body should not conclude that a labelling requirement can only be a technical regulation if the requirement mandates that a label must be used in order for the good to be sold on the market. This reading would be "too narrow", inconsistent with prior cases, and would leave many potentially trade-distorting measures outside the scope of the TBT Agreement.³⁴³

164.

With respect to the Panel's finding regarding Article 2.4 of the TBT Agreement, Japan is of the view that "no purported international standard should be recognized as such" if the six principles set out in the TBT Committee Decision were disregarded in its elaboration.³⁴⁴

165.

Japan agrees with the United States that the Panel was incorrect in finding that the AIDCP definition is an "international standard" within the meaning of Article 2.4. In particular, Japan disagrees that the AIDCP is "international" as it is not "open" in the sense of the TBT Committee Decision, which calls for "openness without discrimination with respect to participation at the policy development level and at every stage of standards development".³⁴⁵ Japan requests the Appellate Body to consider the relevant facts and carefully assess whether an organization with participation as narrow as the AIDCP should be deemed to be "open" within the meaning of Annex 1.4 to the TBT Agreement.³⁴⁶

166.

In New Zealand's view, the Panel erred in its analysis of whether the US measure constitutes a "technical regulation" within the meaning of Annex 1.1 of the TBT Agreement. According to New Zealand, the Panel's focus should have been on whether there was a mandatory requirement for tuna producers to label their product as "dolphin-safe" to be sold in the US market, rather than whether the labelling criteria were binding in nature.³⁴⁷

167.

New Zealand submits that the Appellate Body should first consider whether there is a de jure mandatory requirement for tuna producers to label their product as "dolphin-safe". If it determines that no such requirement exists and that the use of the label is only voluntary, the second step should be to consider whether there are facts and circumstances that imply that the criteria for use of the "dolphin-safe" label could nevertheless be considered a de facto mandatory requirement to label, and thus constitute a technical regulation.³⁴⁸ According to New Zealand, a conclusion that a measure is de facto mandatory must be clearly supported by the facts of the case so as to maintain the distinction between technical regulations and standards in the TBT Agreement. New Zealand notes, in this regard, that the Appellate Body may wish to consider the relevance of the fact that the US measure appears to prohibit the use of other terms or statements relating to "dolphin-safety".³⁴⁹

168.

In New Zealand's view, the Panel appropriately considered whether the measure fell within any of the legitimate objectives listed under Article 2.2. While agreeing with the Panel's finding that Article 2.2 provides a non-exhaustive list of legitimate objectives, New Zealand argues that the phrase "legitimate objectives" also implies that some objectives are illegitimate. Therefore, an objective not included in the illustrative list (such as "consumer information") should only be considered legitimate where the regulating Member is able to provide clear and compelling evidence as to its legitimacy.³⁵⁰

169.

New Zealand disagrees with the Panel's conclusion that the consumer information objective of the US measure fits within the broader goal of preventing deceptive practices. New Zealand notes that these objectives are not interchangeable and that, from a systemic perspective, there is a fundamental distinction between the objectives of consumer information and the prevention of deceptive practices. A Member regulating to prevent deceptive practices (which is specifically recognized as a legitimate objective in Article 2.2) only has to show that its measure is in fact aimed at preventing deceptive practices. Conversely, a Member regulating to provide consumer information must first demonstrate that consumer information is indeed a legitimate objective in the circumstances of the case. When determining whether "consumer information" is a legitimate objective, a panel should take the nature of the objectives in the illustrative list in Article 2.2 into account.³⁵¹

170.

New Zealand supports the Panel's approach to ascertaining whether the AIDCP "dolphin‑safe" standard is an "international standard" for the purposes of Article 2.4 of the TBT Agreement. This approach allows for a careful consideration of any standard claimed to be an international standard and should ensure that an inappropriate burden is not imposed on regulating Members with respect to the use of international standards. Moreover, New Zealand agrees with the Panel's approach to determining whether an organization is an international standardizing/standards organization. It also endorses the Panel's examination of whether standardizing activities are "recognized activities" carried out by the organization, and whether membership of an organization is open on a non-discriminatory basis to relevant bodies of at least all WTO Members.³⁵²

171.

The following issues are raised on appeal:

(a) whether the Panel erred in characterizing the measure at issue as a "technical regulation" within the meaning of Annex 1.1 to the TBT Agreement;

(b) whether the Panel erred in finding, in paragraphs 7,374 and 8.1(a) of the Panel Report, 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 favourable" in Article 2.1 of the TBT Agreement; and

(ii) whether the Panel acted inconsistently with Article 11 of the DSU in its evaluation of Mexico's claim under Article 2.1 of the TBT Agreement.

(c) whether the Panel erred in law, or acted inconsistently with Article 11 of the DSU, in finding, in paragraph 7,620 of the Panel Report, 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;

(d) if the Appellate Body reverses the Panel's finding that the measure at issue is inconsistent with Article 2.2 of the TBT Agreement, then whether the Panel erred in finding that the United States' objective of "contributing to the protection of dolphins, by ensuring 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;

(e) if the Appellate Body reverses the Panel's finding that the measure at issue is inconsistent with Article 2.2 of the TBT Agreement and rejects the ground of appeal in item (d) above, then whether the measure at issue is inconsistent with Article 2.2 of the TBT Agreement based on the Panel's finding that the measure did not entirely fulfil its objectives;

(f) whether the Panel erred in finding, in paragraph 7,707 of the Panel Report, that the AIDCP "dolphin-safe definition and certification" constitute a "relevant international standard" within the meaning of Article 2.4 of the TBT Agreement; and in finding, in paragraph 7,740 of the Panel Report, that Mexico had failed to demonstrate that the AIDCP standard is an effective and appropriate means to fulfil the United States' objectives "at the United States' chosen level of protection"; and

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

172.

This dispute arises out of a challenge brought by Mexico against certain legal instruments of the United States establishing the conditions for the use of a "dolphin-safe" label on tuna products. In particular, Mexico identified the following legal instruments as the object of its challenge: the United States Code, Title 16, Section 1385 (the "Dolphin Protection Consumer Information Act" or "DPCIA"); the United States Code of Federal Regulations, Title 50, Section 216.91 and Section 216.92 (the "implementing regulations"); and a ruling by a US federal appeals court in Earth Island Institute v. Hogarth³⁵³ (the "Hogarth ruling"). Taken together, the DPCIA, the implementing regulations, and the Hogarth ruling set out the requirements for when tuna products sold in the United States may be labelled as "dolphin-safe".³⁵⁴ More specifically, they condition eligibility for a "dolphin-safe" label upon certain documentary evidence that varies depending on the area where the tuna contained in the tuna product is harvested and the type of vessel and fishing method by which it is harvested. In particular, tuna caught by "setting on"³⁵⁵ dolphins is currently not eligible for a "dolphin-safe" label in the United States, regardless of whether this fishing method is used inside or outside the Eastern Tropical Pacific Ocean (the "ETP").³⁵⁶ The DPCIA and the implementing regulations also prohibit any reference to dolphins, porpoises, or marine mammals on the label of a tuna product if the tuna contained in the product does not comply with the labelling conditions spelled out in the DPCIA. However, they do not make the use of a "dolphin-safe" label obligatory for the importation or sale of tuna products in the United States. We refer to the legal instruments challenged by Mexico collectively as the "measure at issue", the "US measure", or "the US 'dolphin-safe' labelling provisions" for ease of reference and uniformity with the Panel.³⁵⁷

Yuejiao Zhang	President
Ujal Singh Bhatia	Member
Thomas R. Graham	Member

US — Tuna II (Mexico)

Documents of the case

Lawyers, other representatives, expert(s), tribunal’s secretary

AB-2012-2 - Report of the Appellate Body

CASES CITED IN THIS REPORT

ABBREVIATIONS

I. INTRODUCTION

II. ARGUMENTS OF THE PARTICIPANTS AND THE THIRD PARTICIPANTS

A. CLAIMS OF ERROR BY THE UNITED STATES – APPELLANT

1. Annex 1.1 to the TBT Agreement and the Definition of "Technical Regulation"

2. Consistency of the Measure at Issue with Article 2.2 of the TBT Agreement

3. Article 2.4 of the TBT Agreement and the Notion of "International Standard"

B. ARGUMENTS OF MEXICO – APPELLEE

1. Annex 1.1 to the TBT Agreement and the Definition of "Technical Regulation"

2. Consistency of the Measure at Issue with Article 2.2 of the TBT Agreement

3. Article 2.4 of the TBT Agreement and the Notion of "International Standard"

C. CLAIMS OF ERROR BY MEXICO – OTHER APPELLANT

1. Consistency of the Measure at Issue with Article 2.1 of the TBT Agreement

(a) Interpretation and Application of Article 2.1 of the TBT Agreement

(b) Article 11 of the DSU

2. Consistency of the Measure at Issue with Article 2.2 of the TBT Agreement

3. Article 2.4 of the TBT Agreement and the Effectiveness and Appropriateness of the AIDCP Standard as a Means to Fulfil the United States' Objectives

4. The Panel's Exercise of Judicial Economy

D. ARGUMENTS OF THE UNITED STATES – APPELLEE

1. Consistency of the Measure at Issue with Article 2.1 of the TBT Agreement

(a) Interpretation and Application of Article 2.1 of the TBT Agreement

(b) Article 11 of the DSU

2. Consistency of the Measure at Issue with Article 2.2 of the TBT Agreement

3. Article 2.4 of the TBT Agreement and the Effectiveness and Appropriateness of the AIDCP Standard as a Means to Fulfil the United States' Objectives

4. The Panel's Exercise of Judicial Economy

E. ARGUMENTS OF THE THIRD PARTICIPANTS

1. Australia

(a) Annex 1.1 to the TBT Agreement and the Definition of "Technical Regulation"

(b) The Panel's Exercise of Judicial Economy

2. Brazil

(a) Annex 1.1 to the TBT Agreement and the Definition of "Technical Regulation"

(b) Consistency of the Measure at Issue with Article 2.2 of the TBT Agreement

(c) Article 2.4 of the TBT Agreement and the Notion of "International Standard"

3. Canada

(a) Article 2.1 of the TBT Agreement and Article III:4 of the GATT 1994

(b) The Panel's Exercise of Judicial Economy

(c) Consistency of the Measure at Issue with Article 2.2 of the TBT Agreement

4. European Union

(a) Annex 1.1 to the TBT Agreement and the Definition of "Technical Regulation"

(b) Consistency of the Measure at Issue with Article 2.1 of the TBT Agreement

(c) Consistency of the Measure at Issue with Article 2.2 of the TBT Agreement

(d) Article 2.4 of the TBT Agreement and the Notion of "International Standard"

5. Japan

(a) Annex 1.1 to the TBT Agreement and the Definition of "Technical Regulation"

(b) Article 2.4 of the TBT Agreement and the Notion of "International Standard"

6. New Zealand

(a) Annex 1.1 to the TBT Agreement and the Definition of "Technical Regulation"

(b) Consistency of the Measure at Issue with Article 2.2 of the TBT Agreement

(c) Article 2.4 of the TBT Agreement and the Notion of "International Standard"

III. ISSUES RAISED ON APPEAL

IV. BACKGROUND AND OVERVIEW OF THE MEASURE AT ISSUE