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WTO disputes

United States - Measures Concerning the Importation, Marketing and Sale of Tuna and Tuna Products (WT/DS381)

Third Party Oral Statement of Australia

Print version

Geneva, 19 October 2010

A. Introduction

Mr Chairman, Members of the Panel.

  1. Today, Australia will address some important questions of interpretation
    in relation to Mexico's claim that the US dolphin safe labelling measures
    at issue in this dispute are inconsistent with Articles 2.1 and 2.2 of the
    TBT Agreement.1 Australia notes that many of these
    questions, which have significant systemic implications, have not yet been
    specifically addressed by a panel or the Appellate Body.

A. Technical Regulation

  1. First, I would like to recall Australia's views on the threshold
    question of whether the US dolphin safe labelling measures constitute a technical
    regulation within the meaning of paragraph 1 of Annex 1 to the TBT Agreement.
  2. On the issue of whether compliance with the US dolphin safe labelling measures
    is mandatory,2 Australia notes that the US dolphin
    safe labelling measures do not require tuna products to be labelled
    or to contain certain information on the label; nor do they prevent the
    sale in the United States of tuna products containing tuna harvested in a
    particular manner or tuna products that do not bear the 'dolphin safe' label.
    Rather, the measures regulate the circumstances in which the 'dolphin safe'
    label may be used on tuna products. Australia therefore considers that the
    US dolphin safe labelling provisions are not mandatory on their face and thus
    on this basis do not fall within the definition of a 'technical regulation'
    in Annex 1.1 of the TBT Agreement.3
  3. Australia notes however Mexico's claim that the US dolphin safe labelling
    measures, if not a priori mandatory, are nonetheless de facto
    mandatory.4 Australia shares New Zealand's
    view5 that there may be circumstances where a
    government's actions in conjunction with an otherwise voluntary measure effectively
    make compliance with the measure mandatory. Australia also agrees with New
    Zealand that 'a measure that is not a priori mandatory will only
    constitute a "technical regulation" in cases where it is clearly
    warranted by the facts'.6 In Australia's view,
    there must be some factor in the measure itself or the governmental actions
    surrounding the measure which mean for the relevant industry that a measure
    which appears to be voluntary on its face is effectively made 'binding or
    compulsory'.7
  4. In the circumstances of this dispute, Mexico's argument would appear to
    require that the effects in the market of consumer purchasing preferences
    flowing from information provided via the 'dolphin safe' label be attributable
    to government as a mandatory measure. However, Australia submits
    that consumer preferences alone cannot determine whether a labelling
    requirement is voluntary or mandatory. Further, such a proposition would result
    in all labelling requirements falling within the definition of a 'technical
    regulation' and render meaningless the definition and disciplines of the TBT
    Agreement applying to standards.

B. Mexico's Claims under Articles 2.1 and 2.2 of the TBT Agreement

  1. Should the Panel find that the US dolphin safe labelling measures
    constitute a 'technical regulation' within the meaning of Annex 1.1 of the
    TBT Agreement, important issues of interpretation would arise for consideration
    by the Panel in relation to Mexico's claims under Articles 2.1 and 2.2 of
    the TBT Agreement.

1. Article 2.1 of the TBT Agreement

  1. I turn first to the interpretation of Article 2.1 of the TBT Agreement.
  2. Australia notes that the panel in EC - Trademarks and Geographical Indications
    (Australia)
    recognised the similarity in the terms used in Article 2.1
    of the TBT Agreement and Article III:4 of the GATT 1994.8
    Australia therefore considers that the analysis of 'treatment no less favourable'
    developed under GATT Article III:4 would assist in the interpretation of Article
    2.1 of the TBT Agreement.
  3. Australia considers that, like Article III:4 of GATT 1994, Article 2.1 of
    the TBT Agreement 'obliges Members of the WTO to provide equality of competitive
    conditions
    for imported products...' in respect of technical regulations.9
  4. Thus, Australia submits that when considering whether Mexican tuna products
    have been accorded 'treatment less favourable' under Article 2.1 of the TBT
    Agreement, the Panel should have regard to the test set out by the Appellate
    Body in Korea - Beef, in the context of Article III: 4 of GATT 1994,
    by examining whether the measures at issue modify the conditions of competition
    in the US market to the detriment of imported Mexican tuna products.10
    Furthermore, Australia considers that whether a measure is 'origin-neutral',
    as asserted by the United States11, while indicative,
    is not in itself determinative of whether a measure accords less favourable
    treatment to imported products.
  5. Australia submits that this Panel could obtain guidance from the Appellate
    Body's views in Korea - Beef that 'the intervention of some private
    choice does not relieve [a Member] of responsibility under the GATT 1994 for
    the resulting establishment of competitive conditions less favourable for
    the imported product...'.12 Nevertheless, the
    Appellate Body also noted that 'what is addressed by Article III:4 is merely
    the governmental intervention that affects the conditions under which
    like goods, domestic and imported, compete in the market within a Member's
    territory'.13
  6. Thus, Australia submits that a relevant question for the Panel is whether,
    having regard to the evidence, the (alleged) inability of Mexican tuna products
    to access the US 'dolphin safe' label is the result of governmental action
    modifying the conditions of competition in the US market to the detriment
    of Mexican tuna products, having regard to the fundamental thrust and effect14
    of the measures at issue.

2. Article 2.2 of the TBT Agreement

(a) Interpretation of Article 2.2
  1. I turn now to important issues of interpretation arising under
    Article 2.2 of the TBT Agreement.
  2. In Australia's view, the first sentence of Article 2.2 establishes the fundamental
    obligation of Members with respect to 'technical regulations' to 'ensure that
    technical regulations are not prepared, adopted or applied with a view to
    or with the effect of creating unnecessary obstacles to international
    trade'.
    The second sentence of Article 2.2 explains that '[f]or this
    purpose,
    technical regulations shall not be more trade-restrictive than
    necessary'.
  3. In other words, the second sentence of Article 2.2 sets out the conditions
    technical regulations must meet in order to satisfy the fundamental obligation
    contained in the first sentence of Article 2.2. Australia submits that the
    Panel should bear in mind this fundamental obligation in assessing whether
    a technical regulation is 'more trade-restrictive than necessary to fulfil
    a legitimate objective'.
(b) Legitimate objective
  1. Turning first to the interpretation of 'legitimate objective', Australia
    recalls the statement of the Panel in EC Sardines that 'Article
    2.2 and [the] preambular text affirm that it is up to the Members to decide
    which policy objectives they wish to pursue and the levels at which they wish
    to pursue them'.15 Australia submits that under
    Article 2.2 of the TBT Agreement, as under Article 2.4, 'there must be an
    examination and a determination on the legitimacy of the objectives
    of the measure'.16 That is, there must be an
    assessment of whether the stated objective(s)17 of
    a technical regulation put forward by the respondent can be considered 'legitimate'
    within the meaning of Article 2.2.
  2. However, Australia submits it is not relevant to this assessment whether
    the objective(s) put forward by the United States for the US dolphin safe
    labelling measures are considered to be appropriate. In particular,
    Australia submits it is not relevant to consider whether the measures at issue
    'protect animal life or health or the environment in the general sense', or
    whether the objective of the US measures 'is narrower than the protection
    of animal life or health or the environment', as argued by Mexico.18
(c) More trade restrictive than necessary to fulfil a legitimate objective
  1. Australia considers that the interpretation of the phrase 'more
    trade restrictive than necessary to fulfil a legitimate objective' under Article
    2.2 calls for a 'weighing and balancing' of the elements contained in that
    phrase, similar to the weighing and balancing process required in a 'necessity'
    analysis under GATT Article XX.
  2. Australia therefore submits that the Panel's examination of the phrase 'more
    trade restrictive than necessary to fulfil a legitimate objective' should
    focus on:
    1. whether the measure is trade restrictive;
    2. whether the measure is 'to fulfil' a legitimate objective; and
    3. whether there are other reasonably available alternatives that may be
      less trade restrictive while still fulfilling the legitimate objective
      at the level of protection the Member considers appropriate.

(i) 'trade restrictive'

  1. Addressing each of these elements in turn, Australia agrees with
    Mexico that measures that are 'trade restrictive' include those that impose
    any form of limitation on imports, discriminate against imports or deny competitive
    opportunities to imports.19

(ii) 'to fulfil' a legitimate objective

  1. Australia considers a relevant issue for the Panel to consider
    is the nexus between the measure and the stated objective in the context of
    Article 2.2 of the TBT Agreement, which requires that a technical regulation
    be 'to fulfiV a legitimate objective.
  2. Australia considers that Article 2.2, in requiring that the measure not
    be more trade restrictive than necessary 'to fulfil' a legitimate objective,
    means that the measure must carry out, or at least have the capacity to carry
    out, its legitimate objective. Thus the relevant question in this dispute
    is whether the US dolphin safe labelling measures carry out, or have the capacity
    to carry out, their stated objectives.20
  3. In addressing this question, the evidence before the Panel concerning the
    perceptions and expectations of US consumers relating to the meaning of the
    'dolphin safe' label and the criteria behind its use will be crucial. In particular,
    Australia submits that a relevant consideration for the Panel is whether the
    evidence before it shows that consumers in fact understand the criteria
    behind the 'dolphin safe' label and accordingly base their purchasing decisions
    not only on whether dolphins were killed or seriously injured during harvesting,
    but also on whether the tuna contained in tuna products was caught in a particular
    manner.

(iii) reasonably available alternatives

  1. Australia submits that the question of whether there are other
    reasonably available, less trade restrictive alternatives21
    is pertinent to the Panel's consideration of whether a measure is 'more trade
    restrictive
    than necessary'.
  2. Australia also considers that the degree of trade-restrictiveness
    of the US dolphin safe labelling measures (and possible alternatives to those
    measures) is a relevant consideration for the Panel in examining this element
    of Article 2.2.22
  3. Australia submits that the level of protection considered appropriate by
    the United States in relation to the US dolphin safe labelling measures is
    another relevant factor in the Panel's examination of this issue.23
  4. Finally, the United States suggests that 'the U.S. dolphin safe labeling
    provisions together with the measure called for under the AIDCP and other
    provisions of U.S. law form part of a comprehensive U.S. strategy to protect
    dolphins'.24 Without commenting on the merits
    of the United States' claim, Australia agrees that the examination of whether
    the US dolphin safe labelling measures form 'part of a comprehensive strategy'
    to address the protection of dolphins is a relevant factor in the Panel's
    consideration of whether there are other reasonably available, less trade
    restrictive alternatives to the measures at issue.25
(d) Taking account of the risks non-fulfilment would create
  1. Australia submits that a finding as to whether a technical regulation
    is 'more trade restrictive than necessary to fulfil a legitimate objective'
    must be weighed against the risks non-fulfilment of the particular legitimate
    objective would create. Such risks may differ depending on the nature
    of the legitimate objective the measure is designed to fulfil and the
    level of protection a Member considers appropriate. If the risks associated
    with non-fulfilment of a particular objective would be high, then the measure
    may still be justified regardless of its trade-restrictiveness.
  2. While the terms of GATT Article XX do not call expressly for an assessment
    of the 'risks non-fulfilment would create', Australia submits there are parallels
    with the 'necessity' test adopted by the Appellate Body, which includes consideration
    of the importance of the interests or values at stake.26
    Australia considers that such consideration is relevant to the determination
    of the issues in this dispute.
  3. Thank you Mr Chairman, Members of the Panel. Australia would be pleased
    to provide answers to any questions from the Panel.

1 First written submission of Mexico, paragraph 192.

2 Appellate Body Report, EC - Sardines, WT/DS231/AB/R,
adopted 23 October 2002, paragraph 176 citing Appellate Body Report, EC
- Asbestos,
paragraphs 67-70.

3 See also First written submission of the United States (corrected
version), paragraph 120.

4 First written submission of Mexico, paragraph 203.

5 Third party written submission of New Zealand, paragraph
23.

6 Third party written submission of New Zealand, paragraph
23.

7 Appellate Body Report, EC - Asbestos, paragraph
68.

8 Panel Report, EC - Trademarks and Geographical Indications
(Australia)
, paragraph 7.464.

9 Appellate Body Report, Korea - Beef, paragraph 135,
citing Appellate Body Report, Japan - Taxes on Alcoholic Beverages, pp
16-17 (emphasis added)

10 Appellate Body Report, Korea - Beef, paragraph
137.

11 First written submission of the United States (corrected
version), paragraph 106.

12 Appellate Body Report, Korea - Beef, paragraph
146.

13 Appellate Body Report, Korea - Beef, paragraph
149.

14 Appellate Body Report, Korea - Beef, paragraph 142.

15 Panel Report, EC - Sardines, paragraph 7.120.

16 Appellate Body Report, EC - Sardines, paragraph
286 (emphasis added).

17 Appellate Body Report, EC - Sardines, paragraph
289.

18 First written submission of Mexico, paragraphs 207-208.

19?First written submission of Mexico, paragraph 217. See
also Panel Report, India - Autos, paragraph 7.265; Panel Report, EC
- Bananas III (Article 21.5 - Ecuador II),
paragraph 7.330; Panel Report,
EC - Bananas III (Article 21.5 - US), paragraph 7.677.

20 See also First written submission of United States, paragraph
154.

21 See e.g. Appellate Body Report, EC - Asbestos, paragraphs
170-174; Appellate Body Report, Korea - Beef, paragraphs 165-166; Panel
Report, US - Gasoline, paragraph 6.24; GATT Panel Report, US -
Section 337 Tariff Act,
paragraph 5.26.

22 Appellate Body Report, Korea - Beef, paragraph
163.

23 Appellate Body Report, Brazil - Tyres, paragraph
156 citing Appellate Body Report, US - Gambling, paragraph 311; see
also sixth preambular paragraph, TBT Agreement.

24 First written submission of the United States (corrected
version), paragraph 171.

25 Appellate Body Report, Brazil - Tyres, paragraphs
154, 172, 211.

26 Appellate Body Report, Brazil - Tyres, paragraph
178.

Last Updated: 9 January 2013
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