Global Trade and Customs Journal

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Editorial Board

Edwin Vermulst, VVGB Advocaten, Brussels, Belgium, Immediate Past General EditorJohn P. Barker, Arnold & Porter, Washington, DCLourdes Catrain, Hogan Lovells, Brussels, BelgiumPatricio Diaz Gavier, Van Bael & Bellis, Brussels, BelgiumLaura Fraedrich, Kirkland & Ellis, Washington, DCGary Horlick, Gary Horlick, Law Offices of Gary N. Horlick, Washington, DCArnaud Idiart, Corporate Export Control Advisor of EADSs HQ and affiliates in FranceJesse G. Kreier, Counsellor and Chief Legal Officer, Rules Division, World Trade OrganizationMichael Lux, Graf von Westphalen, Brussels, BelgiumKunio Mikuriya, Secretary General, World Customs OrganizationFernando Piérola, ACWL, Geneva, SwitzerlandProf. Dr. Reinhard Quick, Verband der Chemischen Industrie, e.V., Frankfurt, GermanyDavide Rovetta, Avv. Davide Rovetta – Of Counsel – Grayston & Company (Brussels)Cliff Sosnow, Blakes, Ottawa, CanadaPaolo R. Vergano, FratiniVergano, Brussels, BelgiumDr. Carsten Weerth, Main Customs Office Bremen; Lecturer for International Trade Law, Jacobs University BremenSamuel X. Zhang, SZ Legal, Hong Kong

The TBT Agreement: Examining the Line BetweenTechnical Regulations and Standards

Faisal Al-Nabhani*

1 INTRODUCTION

The Agreement on Technical Barriers to Trade (TBTAgreement) has recently attracted unprecedented attentionand given rise to a number of WTO disputes.1 Articles 2.1and 2.2 of the TBT Agreement are now becoming theinstruments of choice for Members to combat unnecessaryobstacles to international trade in the form of technicalmeasures.2 Invoking these provisions involves challengingtechnical measures of other Members on the basis thatthey are discriminatory (Article 2.1) and/or unnecessarilyhamper international trade (Article 2.2).

An important challenge for the WTO’s DisputeSettlement Body (DSB) in recent years has been to definethe scope of technical measures that may be challengedunder these strict provisions. The TBT Agreement dealswith three types of measures: ‘technical regulations’,‘standards’, and procedures taken by the government toassess conformity with technical regulations and standardsalso known as ‘conformity assessment procedures’. Thejurisprudence shows that the difference between technicalregulations and standards is not always clear3 for reasonswhich we will come to later. Yet the distinction isimportant as only technical regulations are covered byArticle 2, whereas standards are subject to the arguablyless strict provisions of Article 4 and Annex 3 to the TBTAgreement.

In United States-Measures Concerning the Importation,Marketing and Sale of Tuna and Tuna Products (US-Tuna II),

the Appellate Body was called on to give guidance on thepurview of Article 2 by interpreting the definitional textof the term ‘technical regulation’. The issue concernedwhether certain dolphin-safe labelling provisionsconstitute a technical regulation under the TBTAgreement. The Appellate Body affirmed the Panel’scharacterization of these labelling requirements as a‘technical regulation’ and that consequently they weresubject to the disciplines contained in Article 2 of theTBT Agreement. The threshold issue concerned themeaning that should be afforded to the term ‘mandatory’,which features on the definitional texts of ‘technicalregulation’ and ‘standard’.

The Appellate Body Report is important because itaffirmed certain considerations that were relied upon bythe Panel in determining a ‘technical regulation’ in thecontext of labelling requirements. Broadly, theseconsiderations included,

(i) the specificity of legal enforceability;

(ii) the degree of control over claims reflected by thelabel; and

(iii) the exclusivity of the standard embodied in themeasure.4

At the Panel stage the panellists were divided on thisseminal issue, one of whom had issued a dissentingopinion.5 It is arguable that, by adopting the Panel

Notes* Faisal Al-Nabhani worked as a Junior Counsel at the ACWL at the time of writing; Mr Al-Nabhani currently works as a Senior Legal Researcher at the Ministry of Legal

Affairs of the Sultanate of Oman. E-mail: faisalnabhani@gmail.com. The Author is grateful to Mr Fernando Pierola and Mr Alejandro Sanchez for their invaluable commentsand support in writing this paper. The views expressed in this paper are the Author’s alone and do not reflect the views of either the ACWL or the Ministry of Legal Affairs.The Author acknowledges that all mistakes remain his own.

1 Such as US – Tuna II, US – Clove Cigarettes, US – COOL and currently in consultations Australia-Plain Packaging.2 ‘technical measures’ denotes measures subject to the TBT Agreement.3 See, Appellate Body Report on United States – Measures Concerning the Importation, Marketing and Sale of Tuna and Tuna Products (hereinafter “US – Tuna II”), WT/DS381/AB/R,

June 13, 2012.4 See flowchart at the end of the paper for more details.5 The dissenting member expressed an opposing opinion only with respect to the issue concerning mandatory compliance, he agreed with the majority for the rest of the report.

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interpretation for ‘mandatory’, the Appellate Body reportblurred the distinction between a ‘technical regulation’and a ‘standard’. Accordingly, this paper is divided inthree parts.

Part I considers the evolution of the definition oftechnical regulation in light of US-Tuna II. In Part II weattempt to extrapolate a methodology from thejurisprudence to distinguish a technical regulation from astandard. Finally, Part III looks at some of the implicationsof an expansive definition of ‘technical regulation’.

2 THE ‘MANDATORY’ QUESTION

2.1 The importance of the distinctionbetween technical regulations &standards

The Appellate Body provided a tripartite test fordetermining whether a document qualifies as a technicalregulation. The document:

[i] must apply to an identifiable product or group ofproducts, [ii] it must lay down one or morecharacteristics of the product, and [iii] ‘compliance withthe product characteristics must be mandatory’.6

The terms ‘technical regulation’ and ‘standard’ are definedin the TBT Agreement. A technical regulation is definedin paragraph 1 of Annex 1 to the TBT Agreement as:

[A] [d]ocument which lays down productcharacteristics or their related processes and productionsmethods, including the applicable administrativeprovisions, with which compliance is mandatory. It mayalso include or deal exclusively with terminology,symbols, packaging, marking or labelling requirementsas they apply to a product, process or productionmethod.

Paragraph 2 of Annex 1 to the TBT Agreement defines astandard as:

[A] [d]ocument approved by a recognised body, thatprovides, for common and repeated use, rules,guidelines or characteristics for products or relatedprocesses and productions methods, with whichcompliance is not mandatory. It may also include ordeal exclusively with terminology, symbols, packaging,

marking or labelling requirements as they apply to aproduct, process or production method.

A cursory look at the text reveals that the main differencebetween the two texts is that compliance with a technicalregulation is mandatory whereas for a standard it isvoluntary. This may seem straightforward, but it isprecisely the nature of the mandatory requirement that hasbeen the subject of extensive debate. We proceed on thebasis that the mandatory question is the determinantfactor for drawing a distinction between a technicalregulation and a standard.

The characterization of a measure in terms of whether itis a technical regulation or a standard is important becausethe provisions under Article 2 of the TBT Agreement onlyapply to technical regulations. Therefore from a strategicperspective, it would invariably be the case thatcomplainants wishing to invoke Articles 2.1 and/or 2.2will argue that the measure at issue is a technicalregulation, whereas, as a general rule, respondents wouldwant to have it characterized as a standard. Respondentsgenerally prefer this because characterizing a measure as astandard means that it is outside the scope of Article 2 andis instead dealt with under Article 4 and Annex 3 of theTBT Agreement. If a complainant wishes to challenge astandard, they would have the arduous task of provingthat it does not meet the conditions set out in the Code ofGood Practice for the Preparation, Adoption andApplication of Standards.7 It follows that if the standard atissue was created by an international institution, such asthe WHO, or the ITU, it would be almost impossible tosuccessfully challenge it.8 If, on the other hand, themeasure embodies a standard that is deemed to be‘mandatory’ such that it becomes a technical regulation,9

it would then be possible to challenge it under theprovisions of Article 2 of the TBT Agreement, including:Article 2.1 on the basis of a de facto discrimination, and/or, Article 2.2 on the basis of the measure being moretrade restrictive than necessary to achieve a legitimateobjective, and/or, Article 2.4 on the basis of aninconsistency with an international standard. Asmentioned above, the characterization of a measure asbetween a technical regulation or a standard would restalmost exclusively on the determination of whether or notcompliance with the measure is mandatory.

Notes6 Appellate Body Report, US – Tuna II, para. 183, referring to Appellate Body Report, EC – Sardines, para. 176.7 See Annex 3 of the TBT Agreement.8 To date no challenge has been brought under Article 4 or Annex 3 of the TBT to the WTO’s Dispute Settlement Body. For a discussion on standardizing bodies, see Chapter

VIII of Appellate Body Report in US – Tuna II particularly para. 357.9 The Explanatory note to paragraph 2 of Annex 1 of the TBT Agreement acknowledges that standards as defined by the ISO/IEC Guide 2 may be mandatory or voluntary. It

goes on to state that for the purpose of the TBT Agreement, standards are defined as voluntary and technical regulations as mandatory documents.

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2.2 US-Tuna II on the mandatory nature oflabelling requirements

The Tuna Disputes go as far back as 1990 when Mexicobrought a complaint before the GATT challenging theMarine Mammal Protection Act 1972 (MMPA) of theUnited States.10 The MMPA imposed certain limits onacceptable dolphin mortality rates and required US shipsharvesting tuna to carry on board official observers.Through the Direct Embargo Provision of 1984, importsof tuna products from countries that did not maintainconservation programmes similar to the US wereprohibited. As a result, in 1990, the United Statesimposed a temporary embargo on imports from a numberof countries, including Mexico, on the basis of failing tocomply with the MMPA.

Consequently, Mexico brought a challenge under GATTArticles III, XI and XIII, arguing on the basis ofinconsistencies with the national treatment obligation andthe obligation not to impose quantitative restrictions. TheGATT Panel delivered its report in 1991. The report didnot opine on the appropriateness of the conservationpolicies of either party. Instead, it stated that there waslittle scope to consider the GATT Article XX exceptionsunder Paragraphs (b) and (g) that were invoked by theUnited States because of the absence of specific criteria. Itconcluded therefore that the matter could only be resolvedthrough a waiver or amendment of the text of the GATT.However, the report was never adopted and therefore didnot become part of GATT jurisprudence. It is noteworthythat the US and Mexico settled their dispute bilaterallyoutside the GATT. In 1992, the EU brought the secondtuna dispute to the GATT,11 arguing that the MMPA wasstill not amended and that the inconsistencies identified inthe unadopted Panel Report in Tuna-Dolphin- Case I stillexisted. The panel proceedings were subsequentlysuspended after the United States amended certainprovisions of the MMPA.12

On 9 March 2009, Mexico formally requested theestablishment of a panel for its second tuna dispute againstthe United States, this time before the Dispute Settlement

Body (DSB) of the WTO.13 In this dispute, Mexicochallenged a number of US regulations that laid down theconditions for use of a ‘dolphin-safe’ label on tunaproducts.14 It challenged the labelling regime claimingthat it was inconsistent with, inter alia, Articles 2.1(National Treatment) and 2.2 (Unnecessarily TradeRestrictive) of the TBT Agreement. In the interest ofremaining within the confines of the topic, we restrictourselves to outlining the main claims and facts as theypertain specifically to the mandatory issue.

The dispute revolved around a US measure thatessentially provided two regulatory regimes for obtaininga dolphin-safe label on tuna products. One regime wasdedicated to tuna harvested from the Eastern TropicalPacific (ETP)15 and the other was for areas of the seafalling outside the ETP. With respect to the ETP, theDolphin Protection Consumer Information Act 1990(DPCIA) prevented the granting of a dolphin-safe label totuna harvested using ‘purse seine nets’, irrespective ofwhether dolphins were actually killed or injured. Bycontrast, it was permitted to use purse seine nets toharvest tuna outside the ETP, provided the captain of thevessel certifies that no dolphins were intentionallyencircled in the process of catching the tuna. The UnitedStates justifies the dual-regimes on the basis of scientificevidence indicating that within the ETP tuna tend to beaccompanied by dolphins at higher levels as compared tooutside the ETP. Therefore, according to the UnitedStates, the risk that dolphins are injured or killed in theprocess of catching tuna becomes particularly acute withinthe ETP. It is worth noting that despite this differentialtreatment, dolphin-safe labels are not a prerequisite forselling tuna in the US market. Mexico argued thatalthough the label is not required for access to the market,in practice most of the consumer markets are open only todolphin-safe tuna. As an example, Mexico providedevidence showing that large US retailers and grocerychains refuse to purchase tuna that is not certified asdolphin-safe.16 This regulatory regime was the onlyavailable method for obtaining a dolphin safe label. Theproblem is accentuated by the fact that the primary

Notes10 Panel Report on United States – Restrictions on Imports of Tuna ( hereinafter “Tuna-Dolphin-Case I”), 30 ILM 1594, adopted 1991.11 Panel Report on United States – Restrictions on Imports of Tuna (hereinafter “Tuna-Dolphin-Case II”), 33 ILM 839, adopted1994.12 For a more complete account of the background and issues dealt with in the Tuna Dolphin Cases, see N Perdikis & R Read, The WTO and the Regulation of International Trade:

Recent Trade Disputes between the European Union and the United States 248–253 (Edward Elgar Publishing Ltd, 2005).13 Panel Report on United States – Measures Concerning the Importation, Marketing and Sale of Tuna and Tuna Products (hereinafter US-Tuna II), WT/DS381/R, Sep. 15, 2011.14 This included the Dolphin Protection Consumer Information Act 1990 (DPCIA); Note, the DPCIA had been considered by the Panel in Tuna-Dolphin-Case I in light of the

Most Favoured Nation obligation under GATT Article I. The Panel held that the measure was not inconsistent with Article I as any advantage derived from labelling wasdeemed origin neutral.

15 The ETP includes the Gulf of Mexico. Various countries have fleets that fish in the ETP including, Belize, Bolivia, Colombia, Guatemala, Honduras, Nicaragua, Panama,Vanuatu, Venezuela, Peru and the US.

16 Panel Report, US-Tuna II, para 7.184.

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fishing method used by Mexican vessels in catching tunais through using purse seine nets. It is for these reasonsMexico argued that the measures were de jure mandatoryand that they constituted a technical regulation subject tothe disciplines of Article 2 of the TBT Agreement and notthe less stringent disciplines of Article 4 applicable tostandards.

In its concluding statements, the Panel rejected theArticle 2.1 claim but accepted the measure was more traderestrictive than necessary and consequently found forMexico holding that the US measure was inconsistentwith Article 2.2. Both these findings were reversed onappeal, the Appellate Body holding that there wasdiscrimination but that the measure was not more traderestrictive than necessary to achieve a legitimate objective.

2.3 Mandatory for what?

Conceptually, one might assume that in order todetermine the meaning of mandatory compliance, onewould have to first determine the purpose for whichcompliance is mandatory. Thus, in the context of US-TunaII, the issue becomes whether the purpose for, or theobject of, mandatory compliance is to obtain the labelitself, or rather the ability to market and ultimately sellthe product.

In EC-Asbestos17 the Appellate Body looked into themeaning of the term mandatory stating that a technicalregulation must regulate the characteristics of a product ina ‘binding or compulsory fashion’,18 such that it wouldhave the effect of ‘prescribing or imposing one or morecharacteristics’.19 It added that product characteristics maybe imposed in either a positive or negative form.

The TBT disputes that have been litigated so far relatedto technical measures regulating: product characteristics,20

labelling requirements as they apply to a product,21

labelling requirements as they apply to a PPM,22 and

packaging23 as it applies to a product.24 In all cases, exceptfor US-Tuna II, the mandatory nature of the measure wasnot disputed. This begs the question why is US-Tuna IIdifferent? One important characteristic would seem to bethat the measure in US-Tuna II was in the form oflabelling requirements and, therefore, the focus of themandatory assessment was the requirements thatconditioned the obtaining of a label, as opposed to thelabel itself. Thus mandatory compliance was not market-oriented, or in other words, it was not determined byreference to the degree to which the label itself is requiredin order to access the market. The Appellate Body notedin this regard ‘the text of Annex 1.1 to the TBTAgreement does not use the word “market” or“territory”’.25

However, from the perspective of a bystander, suchrequirements could be regarded as having the two-tieredpurpose of obtaining the label, and ultimately marketingand selling the product. The same cannot be said of all thetechnical measures that were in dispute, since with respectto some, one can only conceive of a single-tiered purposefor which compliance could be said to be mandatory,namely, market/territory access.

The following examples are instructive:

(i) A measure banning production, processing,importation and sale of asbestos and asbestos-containing products. The only way to regard this banas mandatory is by reference to the premise that non-compliance would prevent production, processing,importation or selling the product.26

(ii) A measure banning production, importation and saleof cigarettes containing certain flavouring additives.Here also, the ban is mandatory to the extent that ifthe products do not comply with it they may not beproduced, imported or offered for sale.27

(iii) A measure regulating the appearance and packagingof all tobacco products being imported or offered for

Notes17 Appellate Body Report on European Communities - Measures Affecting Asbestos and Asbestos-Containing Products (hereinafter “EC-Asbestos”), WT/DS135/AB/R, adopted 5 April

2001.18 Appellate Body Report, EC-Asbestos, para. 68.19 Id.20 EC-Asbestos and US-Clove Cigarettes.21 EC-Sardines.22 US-Tuna II and US-COOL.23 Or potentially ‘packaging requirements’, we do not know at this point.24 Australia- Plain Packaging, (note: this dispute was still at the consultation stage during time of writing).25 Appellate Body Report, US-Tuna (II), para. 196.26 See, Appellate Body Report, EC-Asbestos, para. 72: ‘We also observe that compliance with the prohibition against products containing asbestos is mandatory and is, indeed,

enforceable through criminal sanctions.’27 See, Panel Report, US-Clove Cigarettes, para 7.39: ‘The mandatory nature of [the measure] is apparent to us from the language of that provision, which provides that a cigarette

or any component part “shall not” contain as a constituent or additive, any artificial or natural flavour (other than tobacco or menthol) or an herb or spice that is acharacterizing flavour. In addition, the effect of the law is “to prohibit the manufacture and sale” of cigarettes with certain characterizing flavours. The FDA Guidanceexplains how “this ban [will] be enforced”.’

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sale. This again is a measure with which complianceis mandatory for no other reason than because itcontrols what may be put on the market.28

The following is an example of a measure in the form oflabelling requirements,

(iv) A regulation imposing requirements conditioning theobtaining of a ‘preserved sardines’ label on theproduct being wholly composed of one species ofsardines ‘Sardina Pilchardus’ to the exclusion of twentyother internationally recognized species of sardines.Like US-Tuna II, this measure constitutes ‘labellingrequirements’. Following the approach in US-Tuna II,the focus of the exercise should be the requirements,and their mandatoriness would therefore be two-tieredthat is, one way to perceive the requirements as beingmandatory is by reference to the need to comply withthem in order to obtain the ‘preserved sardines’ label,or alternatively, the requirements could be perceivedas mandatory to the extent that their immediateobject, namely the label itself, is required in order toaccess the sardines market.

The facts of example (iv) were at issue in EC-Sardines.However, the mandatory character of the measure was notdisputed. The Appellate Body noted,

The third and final criterion that a document mustfulfil to meet the definition of ‘technical regulation’ inthe TBT Agreement is that compliance must bemandatory. The European Communities does notcontest that compliance with the EC Regulation ismandatory. [Footnote 110: European Community’sresponse to questioning at the oral hearing].We alsofind that it is mandatory. [Footnote 111: Article 9 ofthe EC Regulation states in relevant part that ‘[t]hisRegulation shall be binding in its entirety and directlyapplicable in all Member States.’].29

It begs the question that since EC-Sardines, like US-TunaII, involved labelling requirements and a conceptuallytwo-tiered mandatory question, why was the mandatorynature not disputed in the former? In other words, whydid the EC not argue, as the US did in US-Tuna II, thatthe measure was voluntary and therefore should becharacterized as a standard instead of a technicalregulation?

The definitions of both ‘technical regulation’ and‘standard’ pose yet a further problem, this time of a textual

nature. In particular, the second sentence of both textsreads,

It may also include or deal exclusively withterminology, symbols, packaging, marking or labellingrequirements as they apply to a product, process orproduction method (emphasis added).

It is unclear whether the term ‘requirements’ should beread to refer to only ‘labelling’ or whether it should referalso to ‘terminology, symbols, packaging, marking’. TheTuna reports provide no guidance on this. In our theory,the two-tier mandatory question, such as the one raised inUS-Tuna II, only arises where the focus of the assessment ison ‘requirements’. By logical extension, this would meanthat the considerations given to determine ‘mandatoriness’in US-Tuna II, would only apply to those examples oftechnical measures contained in the second sentence thattake the form of ‘requirements’.

Interestingly, the French and Spanish versions of thetext are different to their English counterpart as well asinter se. For instance, the French text explicitly indicatesthat ‘requirements’ are relevant to packaging, markingand labelling. In contrast, the Spanish version indicatesthat ‘requirements’ are relevant to all of terminology,symbols, packaging, marking and labelling.

Article XVI:6 of the Agreement Establishing the WorldTrade Organization provides that the texts in all WTOlanguages shall be equally authentic where it states,

DONE at Marrakesh this fifteenth day of April onethousand nine hundred and ninety-four, in a singlecopy, in the English, French and Spanish languages,each text being authentic.

We are therefore faced with the conundrum of not beingable to determine the scope of measures that may besubject to the ‘mandatory’ considerations developed underUS-Tuna II. Considering that the French version issomewhere in the middle, it could well be the one to befollowed in this respect. In which case, the scope ofapplication of US-Tuna II could go beyond covering onlylabelling requirements with respect to a product or PPM,and could potentially include technical measures in theform of packaging requirements with respect to a productor PPM, and marking requirements with respect to aproduct or PPM.

Notes28 This assumes that the Panel in Australia-Plain Packaging will determine that the measure at issue concerns ‘packaging as it relates to a product’. The conclusion would be

different if the Panel decides that the measure concerns ‘packaging requirements as it relates to a product’, as the focus of the assessment would then be on the requirements asopposed to the packaging itself and will give rise to a two-tier mandatory question. See discussion on following page.

29 Appellate Body Report, EC-Sardines, para. 194.

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2.4 Labelling requirements and themandatory problem

It is useful to recall some of the features of US-Tuna II tosee if it can be distinguished from EC-Sardines. It wouldseem, in light of the specific circumstances of the case,that the determinative factor in US-Tuna II was that themeasures defined the entire stretch of the ‘dolphin safe’regime. In other words, the measures defined in anexclusive manner the full range of possibilities by which adolphin safe label may be acquired. It regulated what maybe stated on the label and prohibited appellation inrelation to any dolphin-safe relevant information unless itcomplied with the measure.

In EC-Sardines, a measure was challenged that excludedthe use of the appellation ‘preserved sardines’ on twentyspecies of fish recognized by international standards30 asbeing ‘sardines’, and only allowed the species ‘SardinaPilchardus’ from being marketed under that appellation. Athreshold question was whether the appellation ‘sardines’was reserved for only one specific type of sardines to theexclusion of other types. The Appellate Body in US-TunaII drew on its ruling in EC-Sardines. In particular itsreasoning that the simple fact it was permissible to sellsardines without the label ‘sardines’ did not preclude aconclusion that the measure is mandatory.31 Perhaps thereal problem with that verdict is that it failed to considerthe more pertinent and obvious argument that, withoutthis particular appellation, the product would be deprivedfrom its ability to communicate to the consumers what theproduct is and would thereby be prevented from accessingthe sardines market. Thus, an important distinction is thatin US-Tuna II the label was related to a process andproduction method reflecting the product’s animal-friendliness, whereas in EC-Sardines the label was relevantto the physical characteristics of the product.

Perhaps the two sets of facts are sufficiently remote anddistinguishable from one another to an extent where, incontrast to the US in US-Tuna II, it made no sense for theEC in EC-Sardines to dispute the mandatory nature of the‘sardines’ labelling requirements.32

It is true that the definition of technical regulationincludes labelling requirements that apply to bothproducts as well as process and production methodswithout distinguishing between them in terms of

importance. One might nevertheless argue that it wouldnot be inappropriate to allow practical considerations toinform a mandatory assessment. The fact that the EC didnot contest mandatoriness in EC-Sardines comes as nosurprise as it was clear that the measure laid outcharacteristics that preserved sardines were required topossess in order for the product to enter the sardinesmarket! Thus compliance seemed mandatory on its face.

Based on the foregoing, it might seem unfair that theAppellate Body drew such a close analogy between the twofactually distinct sets of circumstances of EC-Sardines onthe one hand and US-Tuna II on the other. Nevertheless, itis in accordance with the Appellate Body’s uncom-promising tradition of adhering to the letter of the legaltext at all costs.33 It goes without saying that a religiousand strict adherence to legal text is liable to occasionallycompel absurd conclusions, such as the analogy drawnbetween EC-Sardines and US-Tuna II, or the conclusionthat the main purpose of labelling requirements isobtaining the label as opposed to marketing and sellingthe product.

3 DISTINGUISHING TECHNICAL REGULATIONS

FROM STANDARDS

Given the Appellate Body ruling in US-Tuna II, what arethe rules for distinguishing between mandatory and non-mandatory compliance, and therefore between a technicalregulation and a standard? In this section we attempt toidentify some of the main considerations that coulddetermine the mandatory nature of labelling requirementsin light of the Appellate Body ruling. It is useful to bearin mind a couple of points at the outset. First, it is notclear at this stage whether US-Tuna II provides guidanceon technical measures other than labelling requirements,34

and second, a finding of voluntary compliance will notautomatically render a measure a standard.35

3.1 Issuing body

This section was not dealt with in WTO jurisprudence,nevertheless it is important as it inquires into whether thegovernment/non-government status of the issuing bodycan inform a mandatory assessment. The main provisionsrelating to technical regulations are found in Article 2,

Notes30 See, Codex Alimentarius Commission of the United Nations Food and Agriculture Organisation and the World Health Organisation. Article 2.1 of Codex Stan 94.31 Appellate Body Report, US-Tuna II, para. 198.32 See, Panel Report , EC-Sardines, para. 7.22, the EC did not dispute that the measure was a technical regulation. Their argument was that the labelling scheme laid out

requirements with respect to only one species of sardines ‘Sardina Pilchardus’ and that therefore the requirements were not mandatory vis-a-vis other types of sardines. Thisargument was rejected.

33 This tradition has been observed by some notable WTO practitioners, for instance see R. Hudec, GATT/WTO Constraints on National Regulation: Requiem for an “Aim andEffects” Test, 32 Intl. Law. 619 (1998), at 22 where he criticises the Appellate Body’s strict adherence to the letter of the legal text in its approach to the ‘like-product analysis’.

34 As previously mentioned, it is unclear whether the term ‘requirements’ in the second sentence of the definitions of both technical regulation and standard should be read torefer to only ‘labelling’ or whether it should refer also to ‘terminology, symbols, packaging, marking’. Therefore, we shall restrict the assessment to labelling requirements.

35 There are other qualifiers in the definition of ‘standard’ that must be met before a standard may be found, such as approval by a ‘standardising body’ and ‘common andrepeated use’.

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which bears the title ‘Preparation, Adoption andApplication of Technical Regulations by CentralGovernment Bodies’. The title explicitly confines thescope of Article 2 to technical regulations issued by‘Central Government’. However, by virtue of Article 3.1,36

the scope of Article 2 rules is extended to cover ‘TechnicalRegulations by Local Government and Non-GovernmentalBodies.’37

Given that technical regulations are by defaultmandatory, the fact that the title of Article 3 includestechnical regulations by ‘Non-Governmental Bodies’(emphasis added) may tempt a conclusion that‘mandatoriness’ is independent of the government/non-government nature of the issuing body.

Annex 1.8 to the Agreement on TBT defines ‘Non-governmental body’ as:

[A] [b]ody other than a central government body or alocal government body, including a non-governmentalbody which has legal power to enforce a technicalregulation (emphasis added).

Although the definition is technically wide enough tocapture bodies that have no relation to the government, itremains uncertain how a private institution not vestedwith governmental authorities may impose mandatorytechnical measures.

Article 4 regulating the ‘Preparation, Adoption andApplication of Standards’, applies to central governmentstandardizing bodies, and obliges Members to ensure theacceptance of and compliance with the Code of GoodPractice by ‘local government and non-governmentalstandardizing bodies within their territories, as well asregional standardizing bodies of which they…aremembers’. Article 4, however, is silent on what constitutesa ‘standardizing body’. The closest there is to a definitionis found in paragraph B of Annex 3 to the TBTAgreement,

This Code is open to acceptance by any standardizingbody within the territory of a Member of the WTO,whether a central government body, a local government body,or a non-governmental body; to any governmental regionalstandardizing body one or more members of which areMembers of the WTO; and to any non-governmentalregional standardizing body one or more members ofwhich are situated within the territory of a Member ofthe WTO (referred to in this Code collectively as

‘standardizing bodies’ and individually as ‘thestandardizing body’) (emphasis added).

It would seem that the government/non-governmentstatus of the body that introduced the measure is oflimited use in assessing the mandatory question. However,where a measure is issued by central government, such asParliament, compliance would perhaps be more likely thannot deemed mandatory.

3.2 Legal enforceability

The fact that a measure is legally enforceable and bindingis, to use the words of the Panel in US-Tuna II, ‘animportant component of the “mandatory” character of themeasures’.38 However, the Appellate Body cautioned thatthe conditions imposed by both technical regulations andstandards could be compulsory, or binding andenforceable, and that therefore ‘such characteristics, takenalone, cannot therefore be dispositive of the proper legalcharacterisation’.39

The Panel indicated that in order for it to be ofdeterminative value, legal enforceability must go beyondthe type of protection offered to standards against ‘abusiveor misleading use under general law, such as trade markprotection or laws against deceptive practices’.40

The point is clear: where there is a legally bindingmeasure that is enforceable and imposes sanctions for non-compliance, this may give rise to an inclination favouringa mandatory finding. However, this is only true to theextent that legal enforceability goes beyond simplyprotecting a label from abusive or misleading use. Anexample of misleading use is where business proprietorsexploit the benefits of having a label on their productswhile knowingly not complying with the claim reflectedby the label. Since compliance with both technicalregulations and standards may be subject to legalenforceability against deceptive practice, general law is ipsofacto of no determinative value to the mandatory question.

In this regard, it is useful to recall the US’s appellantsubmission contending that legal enforceability is not agood basis to draw a distinction between technicalregulations and standards.41 The Appellate Body agreedwith the US that ‘labelling requirements’ may beenforceable whether they took the form of a standard or atechnical regulation.42 However, in line with the Panel,the Appellate Body expressed the view that the measure

Notes36 Article 3.1 states that, ‘Members shall take such reasonable measures as may be available to them to ensure compliance by such bodies with the provisions of Article 2 …’.37 See, S. Lester et al., World Trade Law Text, Materials and Commentary 582 (Hart Publishing, 2008), for a similar conclusion.38 Panel Report, US-Tuna (II), para. 7.142.39 Appellate Body Report, US-Tuna (II), para. 188.40 Supra n. 38.41 United State’s appellant’s submission, para. 51, referred to in Appellate Body Report, US-Tuna (II), para. 195.42 Id.

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establishes a ‘single definition’ of dolphin-safe indicatingthat enforceability in this instance goes beyond mereprotection under a general law sanctioning deceptivepractices.43 This view was on the basis that enforcement ofthe measure does not require proving deception undergeneral law, but rather regards any reference to dolphinsafety that does not meet the conditions of the measure adeceptive practice ab initio.

In sum, the Appellate Body seems to suggest that if themeasure was legally enforceable in a manner that wentbeyond general law it would inform the mandatoryassessment in favour of mandatory compliance.

3.3 Degree of control over claims reflected bylabel

This issue goes to the level of control exercised by themeasure on what may or may not be stated on the label. InUS-Tuna II for instance, not only did the measure regulatethe appellation of the specific terms ‘dolphin-safe’ but itwent beyond that and regulated any and all references thathave a bearing on dolphins, porpoises or any other marinemammal. Therefore, in practical terms, the measureprohibits any reference to the range of the aforementionedspecies of animals from being contained in the label unlessthe measure’s conditions have been met.

In reference to this finding by the Panel, the AppellateBody commented on the importance of suchconsiderations in informing the mandatory assessmentstating that the measure ‘covers the entire field of whatdolphin-safe means in relation to tuna products in the US.We attach importance to these characteristics of themeasure at issue in assessing whether it can properly becharacterized as a technical regulation within the meaningof the TBT Agreement’.44

In sum, the more control the measure exercises overwhat may or may not be put on the label, the more likelyit will be found to be mandatory.

3.4 Exclusivity of standard embodied inmeasure

The Panel noted that the measures reflect a specificstandard with which compliance was required in order toobtain the label. The applicant would have to adhere to

the specific requirements of the measures and there was noroom to resort to any other standard that may be availablefor similar or related claims. It observed that the measuresregulate access to dolphin-safe status ‘in a binding andexclusive manner and prescribe, both in a positive and in anegative manner, the requirements for “dolphin-safe”claims to be made’.45

The Appellate Body made reference to the exclusivity ofthe labelling scheme in its analysis, stating that ‘[o]therlabelling schemes that do not satisfy the specificrequirements in the US measure are therefore prohibitedby virtue of the measure at issue’.46

Interestingly, nothing in the reports of the AppellateBody or Panel addresses the situation where a technicalmeasure permits the use of a number of different standardsto obtain a label to the exclusion of others. For instance,were a measure to allow the use of three methods byreference to three different standards, but does not includea standard that the complainant wants to rely on, wouldthe measure still be mandatory? Although the Panel doesbriefly contrast a situation where a measure contains anexclusive reference to a standard from one where ‘variouscompeting standards may co-exist in relation to the sameissue, with different but related claims, each of which maybe protected in its own right’.47 Yet, it is not helpful as itdoes not address the example given above.

In sum, if the measure embodies only one standard tothe exclusion of others available for similar or relatedclaims, the scale tips in favour of a mandatory finding.

4 CONCLUSION

The ‘technical regulation’ versus ‘standard’ distinction isimportant for the purpose of determining the scope oftechnical measures covered by Article 2 of the TBTAgreement. The distinction rests almost exclusively on theinterpretation of the term ‘mandatory’.48 In US-Tuna II,the Appellate Body provided some guidance in this regardand notably refrained from considering ‘consumerperceptions’ as a factor in attaching meaning to‘mandatory’. The result was a formalistic interpretationthat rendered the purpose of labelling requirementsrelative to ‘obtaining the label’ as opposed to ‘accessingthe market’. This interpretation directly applies totechnical measures in the form of ‘labelling requirements’,

Notes43 Id.44 Appellate Body Report, US-Tuna (II), para. 193.45 Panel Report, US-Tuna (II), para. 7.144.46 Supra n. 44.47 Panel Report, US-Tuna (II), para. 7.144.48 There are a few distinctions in the definition of the two terms, such as the qualifier that a standard be approved by a ‘standardizing body’. However, a finding that a given

measure was issued by a standardizing body will not reverse a mandatory finding. Similarly, the definition of technical regulation does not preclude its introduction by astandardizing body. Therefore, the ‘standardizing body’ qualifier does not bear upon the technical regulation versus standard distinction. Its relevance is limited to thequestion of whether a given voluntary measure is a standard covered by Article 4 and Annex 3 to the TBT agreement, or a measure that does not constitute a technicalmeasure and is therefore outside the scope of the TBT Agreement.

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especially those that apply to process and productionmethods.49 It would therefore have ramifications onlabelling schemes ranging from certifying products as ‘safefrom child labour’ to labelling agricultural products asbeing ‘organic’, as well as more broadly, productappellation reflecting environmental impact. It representsa triumph for countries that want the benefit of invokingArticle 2 to challenge measures laying down labellingrequirements. It restricts the ability of countries toregulate ‘labelling requirements’ in general, andparticularly precludes the ability to use the voluntaryaspect of a mandatory standard50 as a pretext for

introducing protectionist measures in the form of labellingrequirements.

The following is an outline of the considerations used bythe Panel in US-Tuna II, and affirmed by the Appellate Body,in determining the mandatory character of labelling re-quirements. Upon an examination of the measures layingout the labelling requirements, if all of questions (a), (b), (c)and (d) are answered in the affirmative, the labelling require-ments will most likely be deemed to be mandatory and willconstitute Technical Regulations.

Notes49 Depending on the interpretation that will be given to the second sentence of the definition of ‘technical regulation’, the scope of application of US-Tuna II could potentially

extend to requirements regulating packaging and marking ,as they apply to products or PPMs.50 Within the meaning of the ISO/IEC Guide 2, ‘mandatory standard’: ‘standard the application of which is made compulsory by virtue of a general law or exclusive reference in

a regulation’. Note, technical regulations are treated in the TBT Agreement as including mandatory standards, see Explanatory note to paragraph 2 of Annex 1 to the TBTAgreement.

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REFERENCES

Publications

Hudec, R, ‘GATT/WTO Constraints on NationalRegulation: Requiem for an “Aim and Effects” Test’, 32International Lawyer (1998), 619.

Lester, S. & Mercurio, B. & Davies, A. & Leitner, K.,World Trade Law Text, Materials and Commentary, (US: HartPublishing, 2008).

Nottage, H & Sanchez, A, ‘Navigating UnchartedWaters: A Review of US-Tuna II’, Global Trade and CustomsJournal, Vol. 7(2), 2012

Perdikis, N & Read, R, The WTO and the Regulation ofInternational Trade: Recent Trade Disputes between the EuropeanUnion and the United States, (UK: Edward Elgar PublishingLtd, 2005)

Wilke, S & Schloemann, H, ‘Not-So-Voluntarylabelling in the WTO tuna-dolphin dispute’, Bridges TradeBioRes Review, Vol. 5(3), Nov. 2011, <www.ictsd.org/i/news/biosreview/117757>, 5 June 2012

WTO jurisprudence

Appellate Body Report, United States – Certain Country ofOrigin Labelling (COOL) Requirements, WT/DS384/AB/R,(not yet adopted at time of writing)

Appellate Body Report, United States - MeasuresConcerning the Importation, Marketing and Sale of Tuna andTuna Products, WT/DS381/AB/R, 13 Jun. 2012

Appellate Body Report, United States – MeasuresAffecting the Production and Sale of Clove Cigarettes, WT/DS406/AB/R, adopted 4 Apr. 2012.

Panel Report, United States - Measures Concerning theImportation, Marketing and Sale of Tuna and Tuna Products,WT/DS381/R, 15 Sep. 2011.

Appellate Body Report, European Communities - TradeDescription of Sardines, WT/DS231/AB/R, adopted 23 Oct.2002.

Appellate Body Report, European Communities - MeasuresAffecting Asbestos and Asbestos-Containing Products, WT/DS135/AB/R, adopted 5 Apr. 2001

GATT Panel Report, United States - Restrictions onImports of Tuna, DS21/R (unadopted), 39S/155.

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