Agriculture Trade Negotiation and SPS/TBT Legitimate Regulatory Distinction 2/24/2017 Group 5 Members: 1. Tô Thị Hoàng Duyên 1606060011 2. Trung Thị Thùy Giang 1606060012 3. Vũ Thị Thu Hà 1606060013 4. Nguyễn Thị Ngọc Hà 1606060014 5. Hoàng Thị Thanh Hải 1606060015 6. Nguyễn Thị Hoa 1606060016 7. Phan Thị Thu Hương 1606060017 Question Legitimate regulatory distinction (LRD): please discuss the panel’s duties, and the “legitimate objective” imposed 9by the Appellate Body in US – Tuna II and in US – COOL Do you agree with these rulings? How can the US label “dolphin free” tuna and the country of origin of meat from imported cattle and pigs without violating WTO rules? Legitimate Regulatory Distinction (LRD) is mentioned in 15Article 2.1 and 2. 2 of the Agreement on Technical Barriers to Trade (TBT) as a regulation related to 6non-discrimination in respect of technical regulations. These Articles includes 20both the principles of Most-Favoured-Nation as well as National Treatment. The5Article 2.1 states that “Members 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”. Consequently, products from Member states 6will be accorded no less favourable treatment than like products of domestic and other Member states products. Besides prohibiting imported goods from protecting domestic industries by technical regulations, the TBT in Article 2.2 11requires that using technical regulations does not create unnecessary barriers to prevent trade, i.e .technical regulations is no more trade-restrictive than necessary to fulfill a legitimate objective. LRD is a necessary rule to determine violation under 25Article 2.1 of the TBT and also a measure to differentiate 6products in pursuance of a reasonable and justifiable objective, in a fair and justifiable manner. Evaluating a LRD regulation requires a competent authority such as the 17Panel or the Appellate Body (AB) to be careful in scrutinizing the17particular circumstances of the case, especially, paying attention to16the design, architecture, revealing structure, operation and application of the technical regulation at issue. Of which, 18US – Clove Cigarettes, US – Tuna II, and US – COOL are three cases that areintroduced to interpret the concept of LRD. Among all, the US – Tuna II dispute will be hereinafter examined in order to understand this concept properly. In original proceedings, the 2Panel concluded that the measure at issue was inconsistent with Article 2.2 of the TBT, because it is more trade restrictive than necessary to fulfill the legitimate objectives pursued by the United States, taking account of the risks non- fulfillment would create. 1The panel maintained that the measure partly addressed the legitimate objectives including “consumer information objective” 3(ensuring that consumers are not misled or deceived about whether tuna products contain tuna that was caught in a manner that adversely affects dolphins2) and “dolphin protection objective” (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 dolphins3). Additionally, the AB concluded that27the measure is consistent with the Article 2.2, however, the panel had concluded the flaw analysis and the 12alternative measure recommended by Mexico would not make an equivalent to the US’s objectives as the US measure in all ocean area. The conclusion of AB was reasonable than that of the Panel because in fact, 2the Panel did not formulate a "legal test" for determining whether a measure is legitimate 1 Panel Report, para 7.531 2 2Panel Report, para 7.401 and 7.413 3 Panel Report, para 7.401 and 7.4252based on whether the objectives of the measure "go against the object and purpose of the TBT Agreement" 4. 8The Panel also found that the measure at issue did not8accord products imported from Mexico treatment no less favorable than that accorded to like products of national origin and that the22measure was consistent with Article 2. 1 of the TBT on the grounds that the U.S. 1law was non- discriminatory because the Mexican fleet had the equal opportunity to comply with the U.S. labeling standards by not using purse seine nets in the Eastern Tropical Pacific Ocean 24(ETP) or by fishing outside of the ETP. However, The AB assumed that the U.S. 1labeling provisions adversely affected “the conditions for competition in the U.S. market” to the detriment of Mexican tuna products by citing the factual findings of the Panel that the U.S. applied stringent “dolphin-safe” labeling requirements for tuna caught in the ETP, but significantly more lenient labeling rules for tuna caught outside of the ETP, even though tuna fleets in other oceans used fishing techniques which 1resulted in significant harm to dolphins. Moreover, the U.S did not demonstrate persuasively that these adverse effects stemmed solely from the LRD. The AB, therefore, concluded that the U.S. 13“dolphin-safe” labeling measure was inconsistent with Art.2.1 and reversed the Panel’s contrary finding. Regarding to the “international standards” regulated in 4Article 2.4 of the TBT, The Panel agreed with Mexico that the Agreement on the International Dolphin Conservation Program (AIDCP) standard for “dolphin-safe”1was an international standard which is an effective and appropriate mean to meet the U.S. legitimate objectives1and that the U.S. had failed to base its labeling provisions on it. The Panel nonetheless found that Mexico failed to demonstrate that the AIDCP standard constituted an effective means to meet the U.S. objectives because the U.S. standard was more protective of dolphins in the ETP than the AIDCP alternative. The 1AB overruled the Panel on the issue of whether the AIDCP labeling standard was an “international standard” for the reasons that the AIDCP did not constitute 1an “international standard body” as one “whose membership is open to the relevant bodies of at least all Members5”. In this point, we agree with the AB’s conclusion that the AICDP’s standard was not an “international standard”, therefore, the measure at issue did not violate the Art 2.4. In the second proceedings, (after the U.S. modified its original tuna measure), the Panel conducted segment analyses for each of the labeling conditions under the amended tuna measure of the6 U.S. Firstly, 2“dolphin-safe requirements for tuna harvested in the ETP” was amended by “all tuna sought to be entered into the U.S. as “dolphin-safe” 21regardless of where it was caught or the nationality of the fishing vessel”. Secondly, the Panel reaffirmed the AB’s 4finding in the original proceedings that depending on harmful levels to dolphin, the U.S. has right to differently treat those tuna fishing methods. Therefore, the “eligibility criteria” of the amended tuna 4 United States’ appellee’s submission, para 136, para 266, para 7.443 5 AB-2012-2 – Para 359 6 7DS381: United States — Measures Concerning the Importation, Marketing and Sale of Tuna and Tuna Products https://www.wto.org/english/tratop_e/dispu_e/cases_e/ds381_e.htm measure was consistent 4with Article 2.1 of TBT. Regarding to the “certification requirements” and the “tracking and verification requirements”, the Panel found that these requirements were not related to or justified by the policy goals of protecting dolphin and providing information for consumers. Accordingly, these requirements did not stem from LRD and were not even-handed. Besides, the U.S. imposed different requirements depending on where the tuna was caught. Hence, these requirements were 9inconsistent with Article 2. 1 of TBT. Panel's findings was reversed by the AB again.Arguements supporting for judgement of The AB in this case are some points as follow. Legitimate objective of U.S to adopt the measure is “dolphin safe” – safety animal and environment under 2Article 2.2 of TBT. According to Mexico’ s claim, the measure makes a less favorites treatment on setting dolphin safe labeling condition with 23tuna caught by setting on dolphins in the ETP (where is Mexico’s fishery) than tuna caught by other methods in other fishing area to prevent Mexico’s tuna imported into U.S. In order to rebutting prima facie case made by Mexico7, U.S shall provide reasonable demonstrabilities to proof that there is more harm for dolphin while 4tuna caught by setting on dolphins in ETP fishery than other methods in other fishing area, however, U.S’ responsibility had not been done before AB Report8. Therefore, the measure was not even-handed. 19In US-Tuna II, the phrase “treatment no less favourable” under article 2.1 of TBT is clearer. A technical regulation cannot violate 2the phrase “treatment no less favourable” under Article 2.1 of TBT only because of different treatment regulation between like products in its each separate element. Beside that, a LRD can treat differently between like products with reasonable demonstrabilities as a whole. In short, it is highly recommended that the U.S., Mexico as well as other relevant countries should sit together and draft a regional trade agreement (RTA) to form a standard procedure for labelling “dolphin free” on imported tuna. By that method, the dispute will no longer exist since all parties have reached a mutual agreement satisfying their needs and interest. Besides, if an RTA is quite impossible or too difficult to conclude, the U.S. is suggested to pay more attention in finding out scientific evidence supporting their legitimate regulation before 26the dispute settlement court of the World Trade Organization (WTO) as long as they still want to apply the “dolphin free” label in imported tuna. Overall, there is no exact definition for the term 6“Legitimate Regulatory Distinction” and its relevance on even-handedness. Therefore, the WTO or the AB should provide an official concept for LRD so that it can become a clear and precise platform for other similar cases in the future. 147Van den Bossche and Zdouc,(2013),The Law and Policy of the World Trade Organization, P871, note 98 and 10Appellate Body Report, US – TUNA (Mexico) (2012), para 216. 8Van den Bossche and Zdouc,( 2013 ),The Law and Policy of the World Trade Organization, P871