Appellate Body COOL Ruling Clarifies Obligations Under TBT Agreement

摘要

The World Trade Organization's Appellate Body last week sided with Mexico and Canada in upholding a ruling that the U.S. country-of-origin labeling (COOL) system for beef and pork violates WTO rules because it is discriminatory, but narrowed the scope of the victory in a way that could have implications for future battles over whether government regulations are more trade-restrictive than necessary. The Appellate Body agreed with an earlier panel finding that the COOL measure violates Article 2.1 of the Agreement on Technical Barriers to Trade (TBT Agreement), although it based this finding on different grounds than the panel. Article 2.1 states that products imported from WTO member countries shall be accorded treatment "no less favorable" than domestic products. On the other hand, the Appellate Body reversed the panel's finding that COOL also violates Article 2.2 of the TBT Agreement, after determining that the panel had applied the wrong standard for determining compliance with that article. Article 2.2 states that "technical regulations shall not be more trade-restrictive than necessary to fulfill a legitimate objective, taking account of the risks non-fulfillment would create."