1. S ELECTED T OPICS ON THE I NTERPRETATION OF THE TBT A GREEMENT Geneva, 15 May 2014 Fernando González-Rojas S ELECTED T OPICS ON THE I NTERPRETATION OF THE TBT A GREEMENT Geneva, 15 May 2014 Fernando González-Rojas Presentation for Kaliningrad

2. Outline Part 1. The Definition of a “Technical Regulation” under Annex 1.1 of the TBT Agreement Part 2. The Equilibrium between Trade Liberalization and the WTO Member’s Ability to Exercise their Legitimate Regulatory Powers

3. The Definition of a “Technical Regulation”

4. Annex 1.1 Document which lays down product characteristics or their related processes and production methods, including the applicable administrative provisions, with which compliance is mandatory. It may also include or deal exclusively with terminology, symbols, packaging, marking or labelling requirements as they apply to a product, process or production method.

5. Annex 1.1 Document which lays down product characteristics or their related processes and production methods, including the applicable administrative provisions, with which compliance is mandatory. It may also include or deal exclusively with terminology, symbols, packaging, marking or labelling requirements as they apply to a product, process or production method.

6. Annex 1.1 Document which lays down product characteristics or their related processes and production methods, including the applicable administrative provisions, with which compliance is mandatory. It may also include or deal exclusively with terminology, symbols, packaging, marking or labelling requirements as they apply to a product, process or production method.

7. Annex 1.1 Document which lays down product characteristics or their related processes and production methods, including the applicable administrative provisions, with which compliance is mandatory. It may also include or deal exclusively with terminology, symbols, packaging, marking or labelling requirements as they apply to a product, process or production method.

8. Elements of the Definition Applies to an identifiable product Lays down product characteristics or their related processes and production methods It is mandatory

9. EC – Asbestos (AB) “The heart of the definition of a ‘technical regulation’ is that a ‘document’ must ‘lay down’ – that is, set forth, stipulate or provide – ‘product characteristics’. […] Thus, the ‘characteristics’ of a product include, in our view, any objectively definable ‘features’, ‘qualities’, ‘attributes’, or other ‘distinguishing mark’ of a product”. “[T]he TBT Agreement itself gives certain examples of ‘product characteristics’ – ‘terminology, symbols, packaging, marking or labelling requirements’. These examples indicate that ‘product characteristics’ include, not only features and qualities intrinsic to the product itself, but also related ‘characteristics’, such as the means of identification, the presentation and the appearance of a product”. “Further, we note that the definition of a ‘technical regulation’ provides that such a regulation ‘may also include or deal exclusively with terminology, symbols, packaging, marking or labelling requirements’. The use here of the word ‘exclusively’ and the disjunctive word ‘or’ indicates that a ‘technical regulation’ may be confined to laying down only one or a few ‘product characteristics’.

10. EC – Asbestos (AB) “product characteristics” “terminology, symbols, packaging, marking or labelling requirements” “It may also include or deal exclusively” “Including” “It may also include or deal exclusively” “In addition”

11. Annex 1.1 Document which lays down product characteristics or their related processes and production methods, including the applicable administrative provisions, with which compliance is mandatory. It may also include or deal exclusively with terminology, symbols, packaging, marking or labelling requirements as they apply to a product, process or production method.

12. Typical Example of Non-Related PPM Fishing Techniques

13. Recent Cases US - Tuna II 7.79. We do not find it necessary to consider in addition whether the labelling requirements in the US dolphin ‑ safe labelling provisions also fall within the scope of the first sentence as "product characteristics or related production or processing methods", since, as the Appellate Body has observed, the terms of the second sentence make it clear that the subject- matter of a technical regulation may be confined to one of the items enumerated in the second sentence. US - COOL 7.214. We therefore find that, by imposing a country of origin labelling requirement, the COOL measure fulfils the criterion of laying down one or more product characteristics.

14. Implication Technical Regulation Related PPM Non- Related PPM

15. Some Reactions: “The End of the PPM Distinction?” “[…] WTO members can be legitimately concerned about the welfare of animals (here dolphins) outside of their own territory […] at least to the extent their action is limited to avoiding that their own, domestic market is used to encourage adversely affecting those animals. What many observers […] would see as “extraterritorial legislation” thereby becomes legitimate/territorial legislation at least when it is limited to the sale of products […] on the domestic market of the regulating country”. Joost Pauwelyn. May 22, 2012.

16. Elements of the Definition Applies to an identifiable product Lays down product characteristics or their related processes and production methods – Positive: Must have X; or – Negative: Must not have X It is mandatory

17. Ordinary Meaning of Mandatory Dictionary Definition (The New Shorter Oxford English Dictionary) “Of the nature of, pertaining to, or conveying a command or mandate. Obligatory in consequence of a command, compulsory”

18. EC – Asbestos (AB) 68. […] A “technical regulation” must, in other words, regulate the “characteristics” of products in a biding or compulsory fashion. It follows that, with respect to products, a “technical regulation” has the effect of prescribing or imposing one or more “characteristics” – “features”, “qualities”, “attributes”, or other “distinguishing mark”.

19. Criteria Used by the Panels I.1.2. What are the requirements for a document to be considered "mandatory" within the meaning of Annex 1.1? US - Clove Cigarettes (7.39)US - COOL (7.156, 7.179, 7.192)US - Tuna II (7.111/7.150, 7.151) Panel The criteria are: the language of the measure; its effect; and the existence of enforcement provisions. The criteria are: the language of the measure; the effects; the existence of enforcement mechanisms; and the type of instrument in question; The document in question must: prescribe or impose in a binding or compulsory fashion that certain product must or must not possess certain characteristics, terminology, symbols, packaging, marking or labels or that it must or must not be produced by using certain processes and production methods. US - Clove CigarettesUS - Tuna IIUS - COOL AB

20. Labelling Requirements in Both Definitions Technical Regulation Document which lays down product characteristics or their related processes and production methods, including the applicable administrative provisions, with which compliance is mandatory. It may also include or deal exclusively with terminology, symbols, packaging, marking or labelling requirements as they apply to a product, process or production method. Standard Document approved by a recognized body, that provides, for common and repeated use, rules, guidelines or characteristics for products or related processes and production methods, with which compliance is not mandatory. It may also include or deal exclusively with terminology, symbols, packaging, marking or labelling requirements as they apply to a product, process or production method.

21. Difference between “Requirement” and “Mandatory” Labeling Requirements Mandatory

22. Singularity of Labelling Schemes Necessary to market product in US Not necessary to market product in US Use of Dolphin-Safe Label Use of COOL Label

23. US – Tuna II (dissenting) One of the panelists, in a separate opinion, considered that a technical regulation is mandatory if the use of the label is required to sell the products on the market.

24. Different TBT Regimes Standards Conformity Assessment Procedures Technical Regulations

25. Definitions in Annex 1 Technical Regulation Document which lays down product characteristics or their related processes and production methods, including the applicable administrative provisions, with which compliance is mandatory. It may also include or deal exclusively with terminology, symbols, packaging, marking or labelling requirements as they apply to a product, process or production method. Standard Document approved by a recognized body, that provides, for common and repeated use, rules, guidelines or characteristics for products or related processes and production methods, with which compliance is not mandatory. It may also include or deal exclusively with terminology, symbols, packaging, marking or labelling requirements as they apply to a product, process or production method.

26. AB’s Findings 193. “[…] They also prohibit any reference to dolphins, porpoises, or marine mammals on the label for tuna products if the tuna contained in such products does not comply with the labelling conditions spelled out in the DPCIA. Other labelling schemes that do not satisfy the specific requirements in the US measure are therefore prohibited by virtue of the measure at issue. Consequently, the measure establishes a single and legally mandated set of requirements for making any statement with respect to the broad subject of ‘dolphin-safety’ of tuna products in the United States. As the Panel found, the US ‘dolphin-safe’ labelling provisions set out ‘certain requirements that must be complied with in order to make any claim relating to the manner in which the tuna contained in [a] tuna product was caught, in relation to dolphins’. The US measure covers the entire field of what ‘dolphin-safe’ means in relation to tuna products in the United States. We attach importance to these characteristics of the measure at issue in assessing whether it can properly be characterized as a ‘technical regulation’ within the meaning of the TBT Agreement”.

27. Conditioning other Advantages

28. The Preservation of the Ability to Adopt Legitimate Regulations

29. Balance “96. The balance set out in the preamble of the TBT Agreement between, on the one hand, the desire to avoid creating unnecessary obstacles to international trade and, on the other hand, the recognition of Members’ right to regulate, is not, in principle, different from the balance set out in the GATT 1994, where obligations such as national treatment in Article III are qualified by the general exceptions provision of Article XX”.

30. Article XX General Exceptions Subject to the requirement that such measures are not applied in a manner which would constitute a means of arbitrary or unjustifiable discrimination between countries where the same conditions prevail, or a disguised restriction on international trade, nothing in this Agreement shall be construed to prevent the adoption or enforcement by any contracting party of measures: (a)necessary to protect public morals; (b)necessary to protect human, animal or plant life or health; (c)relating to the importations or exportations of gold or silver; (d)necessary to secure compliance with laws or regulations which are not inconsistent with the provisions of this Agreement, including those relating to customs enforcement, the enforcement of monopolies operated under paragraph 4 of Article II and Article XVII, the protection of patents, trade marks and copyrights, and the prevention of deceptive practices; (e)relating to the products of prison labour; (f)imposed for the protection of national treasures of artistic, historic or archaeological value; (g)relating to the conservation of exhaustible natural resources if such measures are made effective in conjunction with restrictions on domestic production or consumption; (h)undertaken in pursuance of obligations under any intergovernmental commodity agreement which conforms to criteria submitted to the CONTRACTING PARTIES and not disapproved by them or which is itself so submitted and not so disapproved;* (i)involving restrictions on exports of domestic materials necessary to ensure essential quantities of such materials to a domestic processing industry during periods when the domestic price of such materials is held below the world price as part of a governmental stabilization plan; Provided that such restrictions shall not operate to increase the exports of or the protection afforded to such domestic industry, and shall not depart from the provisions of this Agreement relating to non- discrimination; involving restrictions on exports of domestic materials necessary to ensure essential quantities of such materials to a domestic processing industry during periods when the domestic price of such materials is held below the world price as part of a governmental stabilization plan; Provided that such restrictions shall not operate to increase the exports of or the protection afforded to such domestic industry, and shall not depart from the provisions of this Agreement relating to non-discrimination; (j)essential to the acquisition or distribution of products in general or local short supply; Provided that any such measures shall be consistent with the principle that all contracting parties are entitled to an equitable share of the international supply of such products, and that any such measures, which are inconsistent with the other provisions of the Agreement shall be discontinued as soon as the conditions giving rise to them have ceased to exist. The CONTRACTING PARTIES shall review the need for this sub-paragraph not later than 30 June 1960.

31. The Controls in Article XX Article XX General Exceptions Subject to the requirement that such measures are not applied in a manner which would constitute a means of arbitrary or unjustifiable discrimination between countries where the same conditions prevail, or a disguised restriction on international trade, nothing in this Agreement shall be construed to prevent the adoption or enforcement by any contracting party of measures: […] (b)necessary to protect human, animal or plant life or health; LETIMACY TEST WEIGHING & BALANCING: PROPORTIONALITY TEST LESS TRADE RESTRICTIVE ALTERNATIVE: EFFICIENCY TEST CONSISTENCY TEST: EVEN-HANDED

32. US – Clove Cigarettes Clove CigarettesMenthol Cigarettes

33. Even-Handed Requirement Article 2.1 “225. […] To the extent that this particular characteristic is present in both clove and menthol cigarettes, menthol cigarettes have the same product characteristic that, from the perspective of the stated objective of Section 907(a)(1)(A), justified the prohibition of clove cigarettes”

34. Even-Handed Requirement No killings or serious injuries No setting on dolphins

35. Even-Handed Requirement 2.1Members shall ensure that in respect of technical regulations, products imported from the territory of any Member shall be accorded treatment no less favourable than that accorded to like products of national origin and to like products originating in any other country. CONSISTENCY TEST: EVEN-HANDED

36. Legitimacy Test 2.2Members shall 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. For this purpose, technical regulations shall not be more trade-restrictive than necessary to fulfil a legitimate objective, taking account of the risks non-fulfilment would create. Such legitimate objectives are, inter alia: national security requirements; the prevention of deceptive practices; protection of human health or safety, animal or plant life or health, or the environment. In assessing such risks, relevant elements of consideration are, inter alia: available scientific and technical information, related processing technology or intended end-uses of products.

37. Legitimacy Test 2.2Members shall 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. For this purpose, technical regulations shall not be more trade-restrictive than necessary to fulfil a legitimate objective, taking account of the risks non-fulfilment would create. Such legitimate objectives are, inter alia: national security requirements; the prevention of deceptive practices; protection of human health or safety, animal or plant life or health, or the environment. In assessing such risks, relevant elements of consideration are, inter alia: available scientific and technical information, related processing technology or intended end-uses of products. LETIMACY TEST

38. Legitimacy Test 2.2Members shall 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. For this purpose, technical regulations shall not be more trade-restrictive than necessary to fulfil a legitimate objective, taking account of the risks non-fulfilment would create. Such legitimate objectives are, inter alia: national security requirements; the prevention of deceptive practices; protection of human health or safety, animal or plant life or health, or the environment. In assessing such risks, relevant elements of consideration are, inter alia: available scientific and technical information, related processing technology or intended end-uses of products.

39. Contribution Measure needs to be apt to make a material contribution Qualitative Analysis is also acceptable LEGITIMATE OBJECTIVE PURSUED LEGITIMATE OBJECTIVE PURSUED 2 3 4 1 5 Quantitative analysis is not indispensable

40. The necessity test Weighing andBalancing Contribution Protected values Restriction on trade Confirmation: Comparison reasonably available alternatives 40

41. Alternative Level of Protection Trade Restrictiveness Is there a reasonably available alternative that would achieve the same level of protection with less-trade restrictive effects?

42. US – Tuna II (AB) “318. […] In the context of Article 2.2, the assessment of "necessity" involves a relational analysis of the trade-restrictiveness of the technical regulation, the degree of contribution that it makes to the achievement of a legitimate objective, and the risks non-fulfilment would create. We consider, therefore, that all these factors provide the basis for the determination of what is to be considered "necessary" in the sense of Article 2.2 in a particular case”. “322. […] This suggests a further element of weighing and balancing in the determination of whether the trade-restrictiveness of a technical regulation is "necessary" or, alternatively, whether a possible alternative measure, which is less trade restrictive, would make an equivalent contribution to the relevant legitimate objective, taking account of the risks non- fulfilment would create, and would be reasonably available”. “322. […] In most cases, a comparison of the challenged measure and possible alternative measures should be undertaken.".

43. Efficiency Test 2.2Members shall 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. For this purpose, technical regulations shall not be more trade-restrictive than necessary to fulfil a legitimate objective, taking account of the risks non-fulfilment would create. Such legitimate objectives are, inter alia: national security requirements; the prevention of deceptive practices; protection of human health or safety, animal or plant life or health, or the environment. In assessing such risks, relevant elements of consideration are, inter alia: available scientific and technical information, related processing technology or intended end-uses of products.

44. T HANK Y OU F OR Y OUR A TTENTION ! T HANK Y OU F OR Y OUR A TTENTION ! fernando.gonzalez-rojas@wto.org