Annex D-2 Executive summary of the opening oral statement of Mexico at the first substantive meeting. Annex D-8 Executive summary of the opening oral statement of Mexico at the second substantive meeting.
INTRODUCTION
C OMPLAINTS OF C ANADA AND M EXICO
E STABLISHMENT AND COMPOSITION OF THE P ANEL
P ANEL PROCEEDINGS
FACTUAL ASPECTS
M EASURES AT ISSUE
P ROCEDURAL HISTORY
Additional procedures for the protection of business confidential information
Procedures for open hearings
Enhanced third party rights
Amicus curiae briefs
Request for separate reports
PARTIES' REQUESTS FOR FINDINGS AND RECOMMENDATIONS
C ANADA
The panel considered that this would facilitate the participation of third parties in the second substantive meeting with the parties. The Panel noted the information contained in the letter and that it was cited in the United States' second written submission.
M EXICO
U NITED S TATES
ARGUMENTS OF THE PARTIES
They are also referred to later in these reports in the context of the Panel's analysis of claims and defences.
ARGUMENTS OF THE THIRD PARTIES
INTERIM REVIEW
M EASURES THAT FALL WITHIN THE P ANEL ' S TERMS OF REFERENCE
Paragraph 7.24
The United States does not believe that "any additional implementing guidance, directives, or policy announcements" are within the scope of the Panel's terms of reference for the reasons set forth above in Sections 6.3-6.5. In other words, these documents, which Mexico categorizes as "associated guidelines" and "non-public pressure", are evidence of the action of the United States in administering the COOL measure (the measure at issue) within the meaning of Article X:3(a) , but are not the measures in question themselves.
Other comments
FACTUAL BACKGROUND
- Paragraph 7.85
- Paragraph 7.93
- Paragraph 7.94
- Paragraph 101
- Paragraph 7.126 and footnote 179
- Paragraphs 7.127-7.131
As Canada notes, we believe that the description of the 2009 Final Rule (AMS) in paragraph 7.94, in combination with paragraphs 7.95 through 7.106, provides sufficient explanation of the circumstances in which the labels may be used interchangeably. The United States does not object to Mexico's request, but proposes that the United States' position on the matter be added.
C LAIMS UNDER THE TBT A GREEMENT
Technical regulation
7.387 We note that the United States does not dispute the appellants' description of the situation preceding the COOL measure. Australia and Peru also agree that the Panel should consider the legitimacy of the objective pursued by the United States through the COOL measure.
Article 1
Article 2.2
The panel was not presented with the United States' argument that reducing compliance costs for market participants also forms part of the objective pursued by the United States through the COOL measure. 22 The United States refers to the following parts of its submissions: United States' responses to Panel Question Nos.
T YPOGRAPHICAL ERRORS AND CLERICAL OBSERVATIONS
FINDINGS
6.114 The United States argues that a discussion of the United States' position regarding the relationship between Article 2.2 of the TBT Agreement and Article XX of the GATT 1994 should reflect its reasoning and evidence presented in support of its position . However, to further clarify the United States' position, we have slightly modified the texts of the relevant paragraphs and moved footnote 880 to the end of the first sentence in paragraph 7.673.
O VERVIEW OF THE MATTERS BEFORE THE PANEL
The United States reiterates its arguments presented in the panel proceedings that the Panel should apply the statutory interpretative approach under Article 5.6 of the SPS Agreement, but not that of Article XX of the GATT 1994, to Article 2.2 of the TBT Agreement. Mexico also argues that the COOL measure is inconsistent with Articles 12.1 and 12.3 of the TBT Agreement.
P RELIMINARY MATTERS
Measures at issue
Most of the provisions in the 2009 Final Rule (AMS) were carried over from those in the Interim Final Rule (AMS).39 These regulatory provisions are codified at 7 C.F.R. We find that the 2009 (FSIS) final rule does not fall within the Board's jurisdiction.46.
Products at issue
Order of analysis
Had the Panel done so, it would not have been necessary for it to address the alleged inconsistency with Article X:3(a) of the GATT 1994". In the words of the Panel in EC – Sardines, "[a]s the drafters of the TBT Agreement intends to further the objective of GATT 1994 with a specialized legal regime applicable only to a limited class of measures, it is necessary to begin our analysis by examining whether the EC Regulation constitutes a technical regulation within the meaning of TBT Agreement".
F ACTUAL B ACKGROUND
The COOL measure
However, "any person engaged in the supply of covered goods to a retailer must provide the retailer with information on the country of origin of the covered goods"131. Label A When 100% of the meat is obtained from animals of category A. ii) Entities subject to country of origin labeling requirements.
The Vilsack letter
Russell National School Lunch Act, or the origin verification system established for the market access program under section 203 of the Agricultural Trade Act of 1978 (7 U.S.C. 7.122) In situations where a violation of compliance with COOL requirements is found, the COOL statute provides a two-step approach to enforcing COOL requirements First, the Secretary of Agriculture notifies the retailer or supplier to a retailer found in violation and gives the retailer or supplier a thirty-day period to comply with the COOL statute and regulations .182 Second. , after that thirty-day period, if the retailer or supplier has not made a good faith effort to comply with the COOL requirements and continues to willfully violate them, the Secretary may fine the retailer or supplier up to $1,000 USD per violation.183 The United States explains that as part of the evolution of the COOL legislative process fines were reduced from USD 10,000 per violation in the 2002 Farm Bill to USD 1,000 per violation in the 2008 Farm Bill.184 The United States explains that as of October 2010 no fines185 were imposed for non-compliance with the 2009 Final Rule (AMS)186.
7.125 First, the letter recommends that "processors should voluntarily include information on what manufacturing step occurred in each country when multiple countries appear on the label".187 For example, this would mean informing on the label: "Born in country X, raised and slaughtered in State Y". This goes beyond the aforementioned obligations contained in the 2009 Final Rule (AMS), where the manufacturing step is not explicitly mentioned on the label and the mixed flexibilities provide some leeway for exchanging the order in which the sites are listed. 7.126 Second, Secretary Vilsack believes that the definition of “processed foods,” a category that is exempt from the COOL requirements, may be drafted too broadly.
In this regard, Vilsack's letter recommends that this period be shortened from 60 to 10 days. 7.128 The specific aspects of the Vilsack letter, as described above, will be examined in more detail in Section VII.D.1(a), where we consider whether the measures at issue in these disputes fall within the scope of the TBT Agreement.
The North American livestock and meat industries and trade
7.140 The livestock and meat markets in Canada, Mexico and the United States are highly interconnected. Various levels of North American livestock and meat production are often carried out in more than one country. Livestock trade takes place between the US and Canada on the one hand and the US and Mexico on the other.
Both Canada and Mexico export livestock to the United States for processing into meat. Canada also exports pigs to the United States.204 The United States also exports a very limited amount of livestock to Mexico and Canada205, but this is not an issue in the current dispute.206. The majority of Canadian livestock exported to the United States are fed cattle: these usually go through the first three stages in Canada and are only exported to the United States for immediate slaughter.
A smaller but significant portion of Canadian cattle are feeder cattle: these are exported to the US directly after the background stage.207 Conversely, Mexico generally exports feeder cattle immediately after the cow/calf stage to US background and feeder operations208, due to a lack of adequate pasture in Mexico and the general lack of well-developed feed grain and cattle feedlot sectors.209 As for Canadian pork exports to the United States, these involve a greater proportion of feeder pigs than fed.210. 7.142 The vast majority of Canadian and Mexican livestock exports are destined for the United States.211 However, as detailed below, livestock imports from Canada and Mexico represent only a small percentage of total livestock slaughter in the United States.212.
C LAIMS UNDER THE TBT A GREEMENT
Mexico's claim under Article 2.4
7.722 Mexico argues that the COOL measure is inconsistent with Article 2.4 because the United States failed to base its regulation on the Common Standard for the Labeling of Prepackaged Foods ("CODEX-STAN an international standard that provides an efficient and appropriate way is for the fulfillment of the legitimate objective pursued by the United States.943 7.723 The United States argues that Mexico has failed to meet its burden of showing that any of the COEL measures violate Article 2.4 Mexico has particularly failed to show that this standard is not an ineffective or inappropriate means to achieve the legitimate objective of the United States.944 7.724 The United States therefore does not dispute that CODEX-STAN 1-1985 is not the basis for the COOL measure is not used.
Given that the United States has not rebutted Mexico's argument on this point, we would be able to find that the United States acted in violation of its obligations under Article 2.4 if we conclude that Mexico has established that CODEX-STAN 1-1985 is an effective and appropriate means of accomplishing the legitimate objective pursued by the United States. We are aware that the parties disagreed on whether CODEX-STAN 1-1985 is a relevant international standard under Article 2.4 of the TBT Agreement. However, for our analysis of Mexico's claim under Article 2.4 of the TBT Agreement, we find it sufficient to assess whether CODEX-STAN 1-1985 is an effective and appropriate means of achieving the identified objective pursued by the United States.
7.735 Based on the above, we find that CODEX-STAN 1-1985 is ineffective and inadequate to meet the specific objective set by the United States. 7.736 In light of the above, we find that Mexico has not established that the COOL measure violates Article 2.4.
Mexico's claims under Articles 12.1 and 12.3
C LAIMS UNDER THE GATT 1994
The complainants' claims under the GATT 1994
Article X:3(a)
Non-violation claim under Article XXIII:1(b)
FINDINGS AND RECOMMENDATIONS
