From the EU response to the Seal Products panel's second set of questions:
Question 127 (All parties) Is the scope of "product characteristics or their related processes and production methods" in TBT Annex 1:1 limited to physical qualities, whether intrinsic or extrinsic, of a product? If so, what is the basis for your position?
105. The Appellate Body interpreted the term "product characteristic" as an "objectively definable" feature or quality, such as "a product's composition, size, shape, colour, texture, hardness, tensile strength, flammability, conductivity, density, or viscosity."75 In the definition of a "technical regulation" in Annex 1.1, the 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.76 A product characteristic is therefore a "distinguishing mark of a product" which is either intrinsic to the product or related to the product.
106. Conditions like the ones imposed under the IC and MRM exceptions under the EU Seal Regime, however, do not concern the intrinsic characteristics or features that are related to the products. These conditions are limited at establishing the identity of the hunter (for the IC exception) and the purpose of the hunt (for the IC and the MRM exception), since only these are relevant in determining whether a product falls under the exception to the general ban or not.
107. As explained already in response to Panel's Question 21, the European Union does not consider that the purpose of production falls within the scope of product characteristics and related process and production methods within the meaning of Annex 1.1 of the TBT Agreement.
108. The fact that not only intrinsic characteristics, but also characteristics related to a product can fall within the scope of Annex 1.1 of the TBT Agreement, does not, support an interpretation of "product characteristics", whereby virtually anything that bares any relation to a product – no matter how indirect and distant that relation may be – would be construed as a product characteristic. In interpreting Annex 1.1 of the TBT Agreement one must not lose sight of the object and purpose of the Agreement which was to avoid the creation of "technical" barriers to trade.
109. The Appellate Body in EC – Asbestos also unequivocally confirmed that the scope of the TBT Agreement is to be considered limited to certain measures and does not cover all internal measures covered by Article III:4 of the GATT 1994.
We note, however – and we emphasize – that this does not mean that all internal measures covered by Article III:4 of the GATT 1994 "affecting" the "sale, offering for sale, purchase, transportation, distribution or use" of a product are, necessarily, "technical regulations" under the TBT Agreement. Rather, we rule only that this particular measure, the Decree at stake, falls within the definition of a "technical regulation" given in Annex 1.1 of that Agreement.
110. This intent to circumscribe the scope of the TBT Agreement is also clearly reflected in negotiating history.77 Indeed, WTO Members only agreed to expand the scope of the Agreement on Technical Barriers to Trade to process or production methods related to product characteristics during the Uruguay round negotiations.78
111. If, however, one were to interpret product characteristics as broadly as Canada and Norway propose, whereby the identity of the hunter and/or purpose of the hunt (or indeed any condition for the placing on the market) would be subsumed into a characteristic related to a product, the category of "process or production methods related to product characteristics" would be virtually deprived of any useful purpose and the requirement that the process or production methods be related would equally be easily circumvented. The European Union submits that such a broad interpretation of product characteristics therefore would not be in accordance with customary rules of treaty interpretation.
I'm not sure I can think of any objective way to decide the scope of "product characteristics or their related processes and production methods." We need to have a clearly defined scope, but should it be broader or narrower? In essence, should the TBT Agreement cover more or fewer measures? I suppose your answer will depend on what you think of the TBT Agreement!
