SUMMARY OF KEY PANEL/AB FINDINGS. TBT Annex 1.1 (definition of technical regulation): The Appellate Body found that “the US 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”. Thus, it upheld the Panel’s ruling characterizing the measure at issue as a “technical regulation” within the meaning of TBT Annex 1. • TBT Art. 2.1 (national treatment – technical regulations): According to the Appellate Body, the measure at issue modified the competitive conditions in the US market to the detriment of Mexican tuna products and the United States did not demonstrate that this stemmed solely from “legitimate regulatory distinctions”. The Appellate Body, therefore found that the US “’dolphin-safe” labelling measure was inconsistent with Art. 2.1 and reversed the Panel’s contrary finding. • TBT Art. 2.2 (not more trade-restrictive than necessary): The Appellate Body disagreed with the Panel’s ruling that the measure at issue was more trade-restrictive than necessary to fulfil US legitimate objectives, and found instead that “the alternative measure proposed by Mexico [AIDCP ‘dolphin safe’ labelling combined with the existing US standard] would contribute to both the consumer information objective and the dolphin protection objective to a lesser degree than the measure at issue”. The Appellate Body thus reversed the Panel’s finding that the measure was inconsistent with Art. 2.2.
SUMMARY OF KEY PANEL/AB FINDINGS. TBT Art. 2.1 (holistic analysis of measure at issue): The Appellate Body criticized the panel for analysing the measure in what it called a “segmented” fashion. According to the Appellate Body, analysing a measure in a segmented manner may raise concerns when the constituent parts of the measure are interrelated and operate in an integrated way. The Appellate Body explained that while it is not necessarily inappropriate for a panel, in analysing the conformity of a measure with obligations under the WTO covered agreements, to proceed by assessing different elements of the measure in a sequential manner, a segmented approach may raise concerns when a panel fails to make an overall assessment that synthesizes its reasoning or intermediate conclusions concerning related elements of a measure at issue so as to reach a proper finding of consistency or inconsistency in respect of that measure.
SUMMARY OF KEY PANEL/AB FINDINGS. TBT Art. 2.1 (treatment less favourable – whether detrimental impact stems exclusively from a legitimate regulatory distinction): The Panels assessed the even-handedness of the 2016 Tuna Measure through the lens of calibration – that is, whether the measure’s relevant regulatory distinctions were calibrated to the risks to dolphins arising from the use of different fishing methods in different areas of the ocean. The Panels proceeded to establish the risk profiles of the relevant fishing methods and extensively reviewed the evidence pertaining to such risks. On the basis of detailed factual findings, the Panels concluded that the different elements of the measure, that is (a) the eligibility criteria, (b) the certification requirements, (c) the tracking and verification requirements, and (d) the determination provisions, were calibrated to the differences in the overall risks to dolphins. Consequently, the Panels found that the treatment accorded to Mexican tuna products was based on legitimate regulatory distinctions and consistent with TBT Art. 2.1. On appeal, the Appellate Body upheld the Panels’ reasoning and conclusions.
SUMMARY OF KEY PANEL/AB FINDINGS. GATT Art. I (most-favoured-nation treatment): The Appellate Body upheld the Panel's finding that the duty exemption was inconsistent with the most-favoured-nation treatment obligation under Art. I:1 on the ground that Art. I:1 covers not only de jure but also de facto discrimination and that the duty exemption at issue in reality was given only to the imports from a small number of countries in which an exporter was affiliated with eligible Canadian manufacturers/importers. The Panel rejected Canada's defence that Art. XXIV allows the duty exemption for NAFTA members (Mexico and the United States), because it found that the exemption was provided to countries other than the United States and Mexico and because the exemption did not apply to all manufacturers from these countries. • GATT Art. III:4 (national treatment – domestic laws and regulations): The Panel found that the CVA requirements forcing the use of domestic materials to be eligible for tax exemption resulted in “less favourable treatment” to imports under Art. III:4 by adversely affecting the conditions of competition for imports.
SUMMARY OF KEY PANEL/AB FINDINGS. GATT Art. I:1 (most-favoured-nation treatment): The Panel found that the tariff advantages under the Drug Arrangements were inconsistent with Art. I:1, as the tariff advantages were accorded only to the products originating in the 12 beneficiary countries, and not to the like products originating in all other Members, including those originating in India. • Enabling Clause, para. 2(a): The Appellate Body agreed with the Panel that the Enabling Clause is an “exception” to GATT Art. I:1, and concluded that the Drug Arrangements were not justified under para. 2(a) of the Enabling Clause, as the measure, inter alia, did not set out any objective criteria, that, if met, would allow for other developing countries “that are similarly affected by the drug problem” to be included as beneficiaries under the measure. In this regard, although upholding the Panel's conclusion, the Appellate Body disagreed with the Panel's reasoning and found that not every difference in tariff treatment of GSP beneficiaries necessarily constituted discriminatory treatment. Granting different tariff preferences to products originating in different GSP beneficiaries is allowed under the term 'non-discriminatory' in footnote 3 to para. 2, provided that the relevant tariff preferences respond positively to a particular “development, financial or trade need” and are made available on the basis of an objective standard to “all beneficiaries that share that need”.
SUMMARY OF KEY PANEL/AB FINDINGS. SPS Art. 5.1 (risk assessment): The Appellate Body, although reversing the Panel's finding because the Panel had examined the wrong measures (i.e. heat-treatment requirement), still found that the correct measure at issue – Australia's import prohibition – violated Art. 5.1 (and, by implication, Art. 2.2) because it was not based on a “risk assessment” requirement under Art. 5.1. • SPS Art. 5.5 (prohibition on discrimination and disguised restriction on international trade): The Appellate Body upheld the Panel's finding that the import prohibition violated Art. 5.5 (and, by implication Art. 2.3) as “arbitrary or unjustifiable” levels of protection were applied to several different yet comparable situations so as to result in “discrimination or a disguised restriction” (i.e. more strict restriction) on imports of salmon, compared to imports of other fish and fish products such as xxxxxxx and finfish. • SPS Art. 5.6 (appropriate level of protection): The Appellate Body reversed the Panel's finding that the heat-treatment violated Art. 5.6 by being “more trade-restrictive than required”, because heat treatment was the wrong measure. The Appellate Body, however, could not complete the Panel's analysis of this issue under Art. 5.6 due to insufficient facts on the record. (In this regard, the Appellate Body said that it would complete the Panel's analysis in a situation like this “to the extent possible on the basis of the factual findings of the Panel and/or of undisputed facts in the Panel record”.)
SUMMARY OF KEY PANEL/AB FINDINGS. ASCM Art. 1.1 (definition of a subsidy): The Panel found that a “financial contribution” confers a “benefit” and constitutes a subsidy under Art. 1 when provided on terms more advantageous than those otherwise available to the recipient on the market. The Appellate Body, while upholding this finding, concluded that the word “conferred”, in conjunction with “thereby”, calls for an inquiry into what was conferred on the recipient, not an inquiry into the cost to the government as argued by Canada.
SUMMARY OF KEY PANEL/AB FINDINGS. ADA Art. 2.4.2 (dumping determination – zeroing in T-T comparisons): Having set out that the Appellate Body's findings in the original proceedings, including the prohibition of the zeroing practice, were limited to the “W-W comparison” and did not apply to the “T-T comparison” under Art. 2.4.2, the Panel found that “the US interpretation of the first sentence of Art. 2.4.2, in the context of the T-T comparison methodology, as not precluding zeroing would seem at a minimum to be permissible”. The Appellate Body however reversed the Panel's findings and found, instead, that the use of zeroing is not permitted under the T-T comparison methodology set out in Art. 2.4.2 because “[t]he 'margins of dumping' established under this methodology are the results of the aggregation of the transaction-specific comparisons of export prices and normal value”, and “[i]n aggregating these results, an investigating authority must consider the results of all of the comparisons and may not disregard the results of comparisons in which export prices are above normal value.”
SUMMARY OF KEY PANEL/AB FINDINGS. ADA Art. 2.4.2, second sentence (pattern): The Appellate Body considered that a “pattern” comprises all export prices to a purchaser (or region or time period) which differ significantly from the export prices to other purchasers (or regions or time periods) because they are significantly lower than those other prices. The Appellate Body also found that the requirement to identify prices which differ significantly means that the authority is required to assess the price differences in a quantitative and qualitative manner. The Appellate Body thus reversed the Panel's findings to the extent it found that a pattern of export prices which differ significantly can be established “on the basis of purely quantitative criteria”. The Appellate Body held that an investigating authority must also explain why both the weighted average-to-weighted average (W-W) and the transaction-to-transaction methodologies (T-T) cannot take into account appropriately the identified differences in export prices before having recourse to the weighted average-to-transaction (W-T) methodology. It thus reversed the Panel's findings that the United States did not act inconsistently with Art. 2.4.2 by providing an explanation only in respect of the W-W methodology.
SUMMARY OF KEY PANEL/AB FINDINGS. ADA Art. 6.8 (evidence – facts available): The Appellate Body upheld the Panel's findings that the United States acted inconsistently with Art. 6.8 in applying facts available to exporters, as the United States Department of Commerce (USDOC) had rejected certain information submitted after the deadline without considering whether it was still submitted within a reasonable period of time. The Appellate Body upheld the Panel's finding that the United States acted inconsistently with Art. 6.8 and Annex II when it applied “adverse” facts available to an exporter in respect of certain resale prices by its affiliated company despite the difficulties faced by that exporter in obtaining the requested information and USDOC's reluctance to take any step to assist it. • ADA Art. 9.4 (imposition of anti-dumping duties – “all others” rate): Having found that margins established based in part on facts available are to be excluded in calculating an “all others” rate under Art. 9.4, the Appellate Body upheld the Panel's finding that the relevant US statute requiring the inclusion of margins based partially on facts available was inconsistent as such and as applied with Art. 9.4. • ADA Art. 2.1 (dumping determination – “ordinary course of trade”): The Appellate Body concluded that the USDOC's
