   
  
WT/DS435/AB/R/Add.1  
WT/DS441/AB/R/Add.1  
 
9 June 2020  
(20-4082) Page: 1/95 
  Original: English   
 
AUSTRALIA – CERTAIN MEASURES CONCERNING TRADEMARKS, 
GEOGRAPHICAL INDICAT IONS AND OTHER PLAIN  PACKAGING 
REQUIREMENTS APPLICA BLE TO TOBACCO PRODU CTS AND PACKAGING  
AB-2018-4 
AB-2018-6 
Report s of the Appellate  Body 
Addendum  
This Addendum contains Annexes A to C to the Report s of the Appellate  Body circulated as  
documents  WT/DS435/AB/R, WT/DS441/AB/R . 
 
The Notices of Appeal s and the executive summaries of written submissions contained in this 
Addendum are attached as they were recei ved from the participants and third participants. The 
content has not been revised or edited by the Appellate  Body, except that paragraph and 
footnote  numbers that did not start at 1 in the original may have been renumbered to do so, and 
the text may have been formatted in order to adhere to WTO style. The executive summaries do not 
serve as substitutes for the submissions of the participants and third participants in the 
Appellate  Body's examination of the appeal.  
 
 
_______________  
 
 WT/DS435/AB/R/Add.1 • WT/DS441/AB/R/Add.1  
 
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LIST OF ANNEXES  
ANNEX A  
NOTICES OF APPEAL S  
Contents  Page  
Annex  A-1 Honduras ' Notice of Appeal  4 
Annex  A-2 Dominican  Republic 's Notice of Appeal  10 
ANNEX B  
ARGUMENTS OF THE PARTICIPANTS  
Contents  Page  
Annex  B-1 Executive summary of Honduras ' appellant's submission  14 
Annex  B-2 Executive summary of the Dominican  Republic 's appellant's submission  26 
Annex  B-3 Executive summary of Australia 's appellee's submission  51 
ANNEX C  
ARGUMENTS OF THE THI RD PA RTICIPANTS  
Contents  Page  
Annex  C-1 Executive summary of Argentina 's third participant's submission  70 
Annex  C-2 Executive summary of Brazil 's third participant's submission  71 
Annex  C-3 Executive summary of Canada 's third participant's submission  72 
Annex  C-4 Executive summary of China's third participant's submission  73 
Annex  C-5 Executive summary of the Dominican  Republic 's third participant's submission  74 
Annex  C-6 Executive summary of the European  Union 's third participant's submission  75 
Annex  C-7 Executive summary of Indonesia's third participant's submission  77 
Annex  C-8 Executive summary of Japan's third participant's submission  81 
Annex  C-9 Executive summary of Malawi's third participant's submission  82 
Annex  C-10 Executive summary of Mexico's third participant's submission  83 
Annex  C-11 Executive summary of New Zealand's third participant's submission  84 
Annex  C-12 Executive summary of Nigeria's third participant's submission  86 
Annex  C-13 Executive summary of Norway's third partici pant's submission  87 
Annex  C-14 Executive summary of the Philippines' third participant's submission  88 
Annex  C-15 Executive summary of Singapore's third participant's submission  89 
Annex  C-16 Executive summary of Thailand's third participant's submission  91 
Annex  C-17 Executive summary of the United  States ' third participant's submission  92 
Annex  C-18 Executive summary of Zambia's third participant's submission  94 
Annex  C-19 Executive summary of Zimbabwe's third participant's submission  95 
 WT/DS435/AB/R/Add.1 • WT/DS441/AB/R/Add.1  
 
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  ANNEX  A 
NOTICES OF APPEAL S  
Contents  Page  
Annex  A-1 Honduras ' Notice of Appeal  4 
Annex  A-2 Dominican  Republic 's Notice of Appeal  10 
 
 WT/DS435/AB/R/Add.1 • WT/DS441/AB/R/Add.1  
 
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  ANNEX  A-1 
HONDURAS'  NOTICE OF APPEAL 
Pursuant to Articles 16.4 and 17 of the Understanding on Rules and Procedures Governing the 
Settlement of Disputes ("DSU") and Rule 20 of the Working Procedures for Appellate Review 
(WT/AB/WP/6, 16  August 2010) ("Working Procedures"), Honduras hereby notifies the Dispute 
Settlement Body ("DSB") of its decision to appeal certain issues of law and legal interpretation in 
the Panel  Report  in Australia – Certain Measures Concerning Trademarks, Geographical Indications 
and Other Plain Packaging Requirements Applicable to Tobacco Products and Packaging  (WT/DS435)  
("Panel  Report "). 
Pursuant to Rules 20(1) and 21(1) of the Working Procedures, Honduras files this Notice of Appeal 
together with its Appellant Submission with the Appellate  Body Secretariat.  
Pursuant to Rule 20(2)(d)(iii) of the Working Proced ures, this Notice of Appeal includes an indicative 
list of the paragraphs of the Panel  Report  containing the alleged errors, without prejudice to 
Honduras' ability to rely on other paragraphs of the Panel  Report  in its appeal.  
Honduras seeks the Appellate  Body's review of the Panel's conclusions that Honduras has not 
demonstrated that Australia's Tobacco Plain Packaging measures, as identified in Honduras' request 
for the establishment of a panel (the "TPP  measure s" or "plain packaging measures"),  are 
inconsistent with Australia's obligations under Articles 20 and 16.1 of the Agreement on 
Trade -Related Aspects of Intellectual Property Rights ("TRIPS  Agreement ");1 and Article  2.2 of the 
Agreement on Technical Barriers to Trade ("TBT  Agreement ").2  
In particular, Honduras has identified the following errors of law and legal interpretation, including 
the failure of the Panel to make an objective assessment of the matter as required by Article  11 of 
the DSU.  
I. REVIEW OF THE PAN EL'S FINDINGS UNDER THE TRIPS AGREEMENT  
 1. The Panel's interpretation and application of the term "unjustifiably" in 
Article  20 of the TRIPS  Agreement  is in error  
Honduras appeals the Panel's finding that Honduras has not demonstrated that the TPP  measure s 
are inconsistent with Article  20 of the TRIPS  Agreement  since this finding is based on an erroneous 
legal interpretation of the term "unjustifiably" in Article  20. In addition, and in the alternative, the 
Panel's application of Article  20 of the TRIPS  Agreement  to the plain pac kaging measures constitutes 
an error of law.  
First, the Panel's interpretation of the term "unjustifiably" as referring to "good reasons" sufficient 
to support special requirements encumbering the use of a trademark is in error.3 The Panel fails to 
interp ret the term "unjustifiably" on the basis of its ordinary meaning, in the context of Section  2 of 
the TRIPS  Agreement  on trademarks, and in the light of the object and purpose of the 
TRIPS  Agreement. In addition, the Panel errs in law in its analysis by finding that paragraph 5 of the 
Doha Declaration on the TRIPS  Agreement  and Public Health constitutes a subsequent agre ement 
under Article  31.3(a) of the Vienna Convention on the Law of Treaties.4 
 
 This document, dated 19 July 2018, was circulated to Members as document WT/DS435/23.  
 
1 Panel  Report, paras.  8.1(d) and (e).  
2 Panel  Report, para.  8.1(a).  
3 Panel  Report, paras.  7.2394 -7.2396, 7.2430, and related paras.  7.2439 -7.2442, and 7.2492 -7.2508.  
4 Panel  Report, paras.  7.2409 -7.2411.  WT/DS435/AB/R/Add.1 • WT/DS441/AB/R/Add.1  
 
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  Second, and in the alternative, should the Appellate  Body find that the Panel's legal interpretation 
was correct, the Panel errs in law in the application of Article  20 of the TR IPS Agreement  to the plain 
packaging measures.5 In particular, among others:  
• The Panel errs in its failure to focus the analysis on the impact on the distinguishing 
function of a trademark.6  
• The Panel errs in its application of Article  20 of the TRIPS  Agreement  to the product as 
its finding are focused on the packaging only.7  
• The Panel errs in its examination of available alternative measures that are less 
trademark encumbering while providing an equivalent contribution;8  
• The Panel errs by relying on non -covered agreements to justify the plain packaging 
measures.9  
Honduras requests the Appellate  Body to reverse the Panel's findings under Article  20 of the 
TRIPS  Agreement, which are vitiated by the above errors of law and legal interpretatio n,10 and thus 
to declare moot and of no legal effect the Panel's findings that Honduras has not demonstrated that 
the TPP  measure s are inconsistent with Article  20 of the TRIPS  Agreement .11 
 2. The Panel's interpretation and application of the "rights confer red" under 
Article  16.1 of the TRIPS  Agreement  is in error  
Honduras appeals the Panel's finding that Honduras has not demonstrated that the TPP  measure s 
are inconsistent with Article  16.1 of the TRIPS  Agreement .12 This finding is based on an erroneous 
legal interpretation of the "rights conferred" by Article  16.1 and the related obligation on Members 
to ensure the minimum guaranteed level of protection for trademark owners, and is vitiated by an 
error of law in the  application of Article  16.1 of the TRIPS  Agreement  to the plain packaging 
measures.  
First, the Panel's interpretation of Article  16.1 of the TRIPS  Agreement  on the "rights conferred" to 
trademark owners is in error, as the Panel fails to interpret this p rovision in good faith, based on the 
ordinary meaning of all of the terms used, in their context, and in the light of the object and purpose 
of the TRIPS  Agreement .13 The Panel's erroneous approach led to a number of related errors of law, 
including among o thers the following:  
• The Panel errs in finding that Article  16.1 of the TRIPS  Agreement  does not protect the 
distinctiveness of a trademark.14  
• The Panel errs in finding that Article  16.1 of the TRIPS  Agreement  is not engaged and 
can therefore not be violat ed unless there is a risk of actual confusion.15  
Second, the Panel errs in its application of Article  16.1 of the TRIPS  Agreement  to the plain 
packaging measures as it does not consider it necessary to address the relevant question of whether 
the plain pac kaging measures reduce the distinctiveness of the trademark and its scope of protection 
such that the level of protection falls below the minimum level that Members are required to 
guarantee under Article  16.1 of the TRIPS  Agreement .16 The Panel's erroneous exercise of judicial 
economy is an error of law. In addition, as a result of this false exercise of judicial economy, the 
 
5 Panel  Report, paras.  7.2556 -7.2574, 7.2586 -7.2589, and 7.2590 -7.2606.  
6 See, e.g. Panel  Report, paras.  7.2569 -7.2571, and 7.2604 -7.2606.  
7 See, e.g. Panel  Report, para.  7.2570.  
8 See, e.g. Panel  Report, paras.  7.2600 -7.2601.  
9 See, e.g. Panel  Report, paras.  7.2595 -7.2596, and 7.2604.  
10 See, e.g. Panel  Report, paras.  7.2393 -7.2431, and 7.2556 -7.2606.  
11 Panel  Report, paras.  7.2606, and 8.1(e).  
12 Panel  Report, para.  8.1(d).  
13 Panel  Report, paras.  7.1966 -7.2032, and 7.2051.  
14 See, e.g. Panel  Report, paras.  7.2005 -7.2016.  
15 See, e.g. Panel  Report, paras.  7.2000, and 7.2010.  
16 Panel  Report, paras.  7.2015, and 7.2032.  WT/DS435/AB/R/Add.1 • WT/DS441/AB/R/Add.1  
 
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  Panel also fails to comply with its obligation under Article  11 of the DSU to make an objective 
assessment of t he matter.  
Honduras requests the Appellate  Body to reverse the Panel's findings which are vitiated by the above 
errors of law and legal interpretation, and thus to declare moot and of no legal effect also the Panel's 
finding that Honduras has not demonstra ted that the TPP  measure s are inconsistent with Australia's 
obligations under Article  16.1 of the TRIPS  Agreement .17  
II. REVIEW OF THE PA NEL'S FINDINGS UNDER  ARTICLE  2.2 OF THE TBT  AGREEMENT  
Honduras appeals the Panel's finding that Honduras has not demons trated that the plain packaging 
measures are inconsistent with Article  2.2 of the TBT  Agreement .18 The Panel's finding is vitiated by 
a number of errors of law and legal interpretation with respect to each aspect of the enquiry under 
Article  2.2 of the TBT  Agreement  relating to (1) the trade -restrictive nature of the plain packaging 
measures; (2) the degree of contribution by the plain packaging measures to the legitimate objective 
of Australia; and (3) the availability of less trade -restrictive alternative measures that provide an 
equivalent contribution to that legitimate objective.  
 1. The Panel's interpretation of the term "trade -restrictive" in Article  2.2 of the 
TBT Agreement  and its application to the TPP  measure s is in error  
The Panel errs in its inte rpretation and application of the term "trade -restrictive" in Article  2.2 of the 
TBT Agreement , and Honduras therefore requests the Appellate  Body to modify the Panel's 
conclusion that the plain packaging measures are trade restrictive.19 In particular, among others, 
the Panel commits the following errors of law and legal interpretation:  
• The Panel errs in its finding that a modification or distortion of conditions of competition 
or the competitive opportunities for imported products is onl y a "trade" distortion if it 
de jure  restricts imports or is discriminatory in nature.20  
• The Panel errs in imposing a different and higher evidentiary standard of demonstrating 
actual trade effects for measures that are not challenged as being discriminato ry in 
nature and by thus requiring that evidence must be adduced of actual trade effects of 
the plain packaging measures on prices and sales to demonstrate that this distortion 
amounts to a restriction on trade.21 
 2. The Panel's application of the legal st andard with respect to the degree of 
contribution to the TPP  measure s is in error  
The Panel errs in its application of the legal standard for assessing the degree of contribution of the 
plain packaging measures.22 In particular, among others, the Panel commits the following errors:  
• The Panel errs by examining the degree of contribution of the measures to the specific 
"mechanisms" by which the measures were expected to achieve the objective rather 
than by examining  the degree of contribution to the fulfilment of the legitimate objective 
as identified.23  
• The Panel errs when failing to examine the "actual" contribution of the plain packaging 
measures instead basing its finding on unsubstantiated speculation about an u ncertain 
future impact of the measures "over time" without any qualitative or quantitative 
projections supported by sufficient evidence.24 
 
17 Panel  Report, para.  8.1(d).  
18 Panel  Report, paras.  8.1(a), and 7.1724 -7.1732.  
19 Panel  Report, paras.  7.1071 -7.1089, and 7.1160 -7.1255.  
20 Panel  Report, paras.  7.1166 -7.1168, 7.1196 -7.1197, 7.1214 -7.1218, and 7.1255.  
21 Panel  Report, paras.  7.1074 -7.1075, 7.1166, 7.1208, and 7.1255.  
22 Panel  Report, paras.  7.483 -7.1045.  
23 See, e.g. Panel  Report, paras.  7.1024 -7.1034.  
24 Panel  Report, para.  7.1044.  WT/DS435/AB/R/Add.1 • WT/DS441/AB/R/Add.1  
 
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  • The Panel errs by not determining the degree of contribution of the challenged plain 
packaging measures themselves.25 
• The Panel errs in its application of the legal standard it set for itself for examining the 
evidence.26  
Honduras requests the Appellate  Body to reverse the Panel's findings on the degree of contribution 
of the plain packaging measures since these are vitiat ed by the above errors of law and legal 
interpretation.27 
 3. The Panel errs in law in its interpretation and application of Article  2.2 of the 
TBT Agreement  with respect to the availability of less trade -restrictive 
alternative measures  
The Panel errs in i ts interpretation and application of Article  2.2 of the TBT  Agreement  with respect 
to the availability of less trade -restrictive alternative measures that provide an equivalent 
contribution to the legitimate objective.28 In particular, among others, the Pan el commits the 
following legal errors:  
• The Panel errs in its interpretation and examination of whether the alternative measures 
that were presented by Honduras were less "trade restrictive" by failing to examine 
their impact on the conditions of competitio n and on competitive opportunities, instead 
unduly focusing on their degree of contribution to the objective.29  
• The Panel errs in its interpretation and application of the legal standard for assessing 
whether the alternative measures provided an "equivalent" contribution to the 
challenged measures. In particular:  
o The Panel fails to examine the degree of contributio n of the proposed alternative 
measures in light of the legitimate objective as identified;30 
o The Panel errs by requiring that the alternative measures provide an identical 
contribution as a "substitute" to the challenged measures, rather than an 
"equivalent " contribution;31  
o The Panel errs by requiring a greater degree of contribution by the proposed 
alternatives;32 and 
o The Panel errs when applying a different standard for assessing equivalence 
depending on whether a measure is part of a suite of measures.33  
Honduras requests the Appellate  Body to reverse the Panel findings on the availability of less trade 
restrictive alternative measures which are vitiated by the above errors of law and legal 
interpretation.34  
 
25 See, e.g. Panel  Report, paras.  7.974, 7.1036, and 7.1043.  
26 See, e.g. Panel  Report, paras.  7.499, 7.622, 7.643 -644, 7.660, 7.695, and 7.697.  
27 Panel  Report, paras.  7.1024 -7.1045, and 7.1724 -7.1732.  
28 Panel  Report, paras.  7.1362 -7.1723, and 7.1724 -7.1732.  
29 See, e.g. Panel  Report paras.  7.1411 -7.1417 (MLPA); and 7.1490 -7.1495 (Taxation increase).  
30 See, e.g. Panel  Report, paras.  7.232. (Defining the legitimate objective); 7.1459 -7.1460, 7.1464, 
7.1468 -7.1471 (MLPA); and 7.1526 -7.1527, 7.1531, 7.1542 -7.1545 (Taxation increase).  
31 See, e.g. Panel  Report, paras.  7.1455 -7.1461, 7.1464 (MLPA); and 7.1526 -7.1527, 7.1529, 7.1531 
(Taxation increase).  
32 See, e.g. Panel  Report, paras.  7.1376, 7.1391, 7.1461, 7.1528, and 7.1721 -7.1722.  
33 Panel  Report, paras.  7.1376 -7.1391.  
34 See, e.g. Panel  Report, paras.  7.1468 -7.1471 (MLPA); 7.1542 -7.1545 (Taxation increase); and 
7.1724 -7.1732 (Overall conclusion).  WT/DS435/AB/R/Add.1 • WT/DS441/AB/R/Add.1  
 
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  III. REVIEW OF THE P ANEL'S ASSESSMENT OF  THE EVID ENCE ON THE DEGREE O F 
 CONTRIBUTION OF THE  TPP MEASURE S 
Honduras requests the Appellate  Body's review of the assessment the Panel made of the evidence 
that was presented on the degree of contribution of the plain packaging measures to the 
achievement of Au stralia's identified legitimate objective. Honduras submits that the Panel fails to 
conduct an "objective examination" of the evidence on the plain packaging measures' contribution 
to the objective of reducing the use of tobacco products in violation of it s obligation under Article  11 
of the DSU. In particular, among others:  
• The Panel fails to provide a reasoned and adequate explanation of how the facts before 
it supported the conclusion that the plain packaging measures were apt to, and do, 
make a meaningf ul contribution to their legitimate objective because, inter alia : 
o The Panel's own findings on actual smoking behaviour, proximal and distal 
outcomes do not support its conclusion.35  
o The Panel's intermediate findings on the effect of the plain packaging measures 
are not based on the totality of the evidence on the record and are not supported 
by a reasoned and adequate explanation;  
o The Panel's findings on the effects of the measures " over time" are not based on 
any quantitative or qualitative analysis or reasoned explanation supported by 
sufficient evidence;  
o The Panel's intermediate findings on the relevance of the behavioural science 
theories are internally inconsistent and not suppor ted by a reasoned and adequate 
explanation;  
o The Panel's findings on the contribution of the measures to the reduction in cigar 
smoking do not have a sufficient basis in the evidence on the record and are not 
supported by a reasoned and adequate explanation.  
• The Panel disregards, ignores and misrepr esents the evidence presented by the 
complainants.  
• The Panel fails to examine the evidence on contribution in an even -handed manner and 
applies a double standard of proof in favour of Australia.  
• The Panel  fails to respect the due process rights of the part ies by not exercising its 
authority under Article  14.2 of the TBT  Agreement  or Article  13 of the DSU to appoint a 
technical expert and by instead relying on a "ghost expert" raising alleged "robustness" 
concerns not identified by any of the parties without  ever offering the parties an 
opportunity to comment on or subsequently review the concerns and methodologies of 
this ghost expert.  
Honduras therefore requests the Appellate  Body to reverse the Panel's findings and conclusions 
relating to the degree of co ntribution of the measures in the Panel  Report  and its Appendices,36 as 
such findings were not the result of an objective assessment of the matter. The failure to objectively 
assess the evidence vitiates the Panel's findings on the degree of contribution of  the measures and 
thus its findings under Article  2.2 of the TBT  Agreement  and Article  20 of the TRIPS  Agreement, 
which should therefore be reversed.  
 
35 Panel  Report, paras.  7.945 -7.958 and Appendix A (Proximal outcomes); 7.959 -7.963 and Appendix B 
(Distal outcomes); 7.968 -7.972 and Appendix C  (Smoking prevalence); paras.  7.973 -7.979 and Appendix D 
(Consumption and sales impact); 7.980 -7.986 and 7.1024 -7.1045 (Overall conclusions); see also 
Panel  Report: Appendix A, paras.  86-87; Appendix B, paras.  120-121; Appendix C, paras.  123-124; and 
Appen dix D, paras.  137-138 (leading to the unqualified finding in para.  7.1043 of the Panel  Report on actual 
smoking behaviour).  
36 Panel  Report, paras.  7.1024 -7.1045 and Appendices.  WT/DS435/AB/R/Add.1 • WT/DS441/AB/R/Add.1  
 
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  For this reason as well, Honduras requests the Appellate  Body to declare moot and of no effect the 
Panel' s findings that Honduras has not demonstrated that the TPP  measure s are inconsistent with 
Australia's obligations under Article  2.2 of the TBT  Agreement ,37 and the related finding that 
Honduras has not demonstrated that the TPP  measure s are inconsistent wit h Australia's obligations 
under Article  20 of the TRIPS agreement.38 
 
 
37 Panel  Report, paras.  7.1732, and 8.1(a).  
38 Panel  Report, paras.  7.2606, and 8.1(e).  WT/DS435/AB/R/Add.1 • WT/DS441/AB/R/Add.1  
 
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  ANNEX A -2 
DOMINICAN REPUBLIC'S NOTICE OF APPEAL 
1. Pursuant to Article  16.4 and Article  17.1 of the Understanding on Rules and Procedures 
Governing the Settlement of Disputes ("DSU"), the Dominican  Republic  hereby notifies to the 
Dispute Settlement Body its decision to appeal to the Appellate  Body certain issues of law covered 
in the Panel  Report  and certain legal interpretations developed by the Panel in  the dispute Australia 
– Certain Measures Concerning Trademarks, Geographical Indications and other Plain Packaging 
Requirements Applicable to Tobacco Products and Packaging (DS441).  
2. Pursuant to Rule 20(1) of the Working Procedures for Appellate Review , the 
Dominican  Republic simultaneously files this Notice of Appeal with the Appellate  Body Secretariat.  
3. The Dominican  Republic  restricts its appeal to those errors that it believes constitute serious 
errors of law and legal interpretation that need to be cor rected. Non -appeal of an issue does not 
signify agreement therewith. The Dominican  Republic  also believes that it may not be necessary for 
the Appellate  Body to decide all the issues raised in this notice of appeal since some may become 
moot as a result of  decisions on other issues.  
4. For the reasons to be further elaborated in its submissions to the Appellate  Body, the 
Dominican  Republic  appeals, and requests the Appellate  Body to reverse, modify, or declare moot 
and of no legal effect certain findings and c onclusions of the Panel, with respect to the following 
errors of law and legal interpretations contained in the Panel  Report : 
I. APPEALS OF THE PA NEL'S FINDINGS UNDER  ARTICLE  2.2 OF THE TBT AGREEMENT1 
 ON THE CONTRIBUTION  OF THE TPP  MEASURE S  
5. The Dominican  Republic  appeals the Panel's finding that "the Dominican  Republic  has not 
demonstrated that the TPP  measure s are inconsistent with Australia's obligations under Article  2.2 
of the TBT  Agreement ".2 The Panel failed to make an objective assessment of the matter before it, 
as required under Article  11 of the DSU, as elaborated below.  
6. The Dominican  Republic  appeals the Panel's overall conclusion on the contribution of the 
TPP measures to Australia's objective.3 The Panel failed to make an objective assessment of the 
matter before it, as required under Article  11 of the DSU.  
7. The Dominican  Republic  appeals the Panel's overall findings4 and intermediate findings5 
resulting from its assessment of the evidence from the period after the implementation of the 
TPP measure s ("post -implementation" evidence) on the actual  impact of the TPP  measure s on 
smoking behaviours – i.e., prevalence and consumption – in Australia. The Panel failed to make an 
objective assessment of t he matter before it, as required under Article  11 of the DSU.  
8. The Dominican  Republic  appeals the Panel's overall findings6 and intermediate findings7 
resulting from its assessment of the evidence from the period prior to  the implementation of the 
TPP measu res ("pre -implementation evidence") on the anticipated  impact of the TPP  measure s. The 
 
 This document, dated 23 August 2018, was circulated to Members as document WT/DS441/23.  
 
1 The Agreement on Technical Barriers to Trade  ("TBT Agreement "). 
2 Panel  Repor t, paras.  8.1(b)(i). See also Panel  Report, para.  7.1732.  
3 Panel  Report, paras.  7.1025, 7.1040 -7.1043, 7.1045, 7.1725(b).  
4 Panel  Report, paras.  7.972, 7.979, 7.980 -7.986, 7.1037, 7.1039; Appendix C, paras.  122 and 123; 
and Appendix D, paras.  117 and 13 7. 
5 Panel  Report, paras.  7.964 -7.971, 7.973 -7.978; Appendix C, paras.  8, 51-57, and 96 -122; and 
Appendix D, paras.  101-116.  
6 Panel  Report, paras.  7.929 -7.931, 7.1024 -7.1034, and 7.1038.  
7 Panel  Report, paras.  7.518 -7.928.  WT/DS435/AB/R/Add.1 • WT/DS441/AB/R/Add.1  
 
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  Panel failed to make an objective assessment of the matter before it, as required under Article  11 
of the DSU.  
9. The Dominican  Republic  appeals the Panel's overall finding s8 and intermediate findings9 
resulting from its assessment of the post-implementation evidence  on the actual  impact of the 
TPP measure s on proximal and distal outcomes. The Panel failed to make an objective assessment 
under Article  11 of the DSU.  
10. The Domi nican  Republic  appeals the Panel's overall finding10 and intermediate findings11 
regarding the potential future impact of the TPP  measure s. The Panel erred in the application of 
Article  2.2 of the TBT Agreement . In addition, the Panel failed to make an objec tive assessment 
under Article  11 of the DSU.  
II. APPEALS OF THE P ANEL'S FINDINGS UNDE R ARTICLE  2.2 OF THE TBT AGREEMENT  
 ON THE TRADE -RESTRI CTIVENESS OF THE TPP  MEASURE S  
11. The Dominican  Republic  appeals the Panel's finding that "the Dominican  Republic  has not 
demonstrated that the TPP  measure s are inconsistent with Australia's obligations under Article  2.2 
of the TBT  Agreement ".12 The Dominican  Republic  appeals the Panel's overall findings and 
intermediate findings on the trade -restrictiveness of the TPP  measure s, in the context of its analysis 
under Article  2.2 of the TBT Agreement .13 The Panel failed to make an objective assessment under 
Article  11 of the DSU. In addition, the Panel erred in the application of Article  2.2 of the 
TBT Agreement . 
III. APPEAL OF THE P ANEL'S FINDINGS UNDE R ARTICLE  2.2 OF THE TBT AGREEMENT  ON 
THE AVAILABILITY OF LESS TRADE -RESTRICTI VE ALTERNATIVE MEASU RES  
12. The Dominican  Republic  appeals the Panel's finding that "the Dominican  Republic  has not 
demonstrated that the TPP  measure s are inconsistent with Australia's obligations under Article  2.2 
of the TBT  Agreement ".14 The Dominican  Republic  appeals the Panel's overall findings and 
intermediate findings on the trade -restrictiveness of the Dominican  Republic 's proposed altern ative 
measures (relative to the trade restrictiveness of the TPP  measure s), made in the context of the 
Panel's evaluation under Article  2.2 of the TBT Agreement .15 The Panel failed to make an objective 
assessment under Article  11 of the DSU. In addition, al so with respect to its analysis of the 
trade -restrictiveness of the proposed alternatives, the Panel erred in the application of Article  2.2 of 
the TBT Agreement .  
13. The Dominican  Republic  appeals the Panel's overall findings and intermediate findings on the  
contribution of the Dominican  Republic 's proposed alternative measures to Australia's objective 
(relative to the contribution of the TPP  measure s), made in the context of the Panel's evaluation 
under Article  2.2 of the TBT Agreement .16 On this issue, the Panel failed to make an objective 
assessment under Article  11 of the DSU. In addition, also with respect to its analysis of the 
contribution of the proposed alternatives, the Panel erred in the application of Article  2.2 of the 
TBT Agreement . 
 
8 Panel  Report, paras.  7.985, 7 .1036, 7.1038, and 7.1039.  
9 Panel  Report, paras.  7.945 -7.963, 7.980 -7.984, 7.1040 -7.1042; Appendix A, paras.  28-32, 66 -72, 
83-86; and, Appendix B, paras.  36-41, 71 -77, 99 -103, and 113 -120. 
10 Panel  Report, para.  7.1044.  
11 Panel  Report, paras.  7.938 -7.943.  
12 Panel  Report, paras.  8.1(b)(i). See also Panel  Report, para.  7.1732.  
13 Panel  Report, paras.  7.1071 -7.1089, 7.1166 -7.1171, 7.1196 -7.1225; and, Appendix E, paras.  12-15, 
24-32, and 47 -56. 
14 Panel  Report, paras.  8.1(b)(i). See also Panel  Report, para.  7.1732.  
15 Panel  Report, paras.  7.1362 -7.1391, 7.1411 -7.1418, 7.1459, 7.1468 -7.1471, 7.1490 -7.1496, 
and 7.1542 -7.1545.  
16 Panel  Report, paras.  7.1362 -7.1391, 7.1398 -7.1402, 7.1432 -7.1464, 7.1468 -7.1471, 7.1476 -7.1480, 
7.1506 -7.1531, 7.1542 -7.1545, and 7.1717 -7.1723.  WT/DS435/AB/R/Add.1 • WT/DS441/AB/R/Add.1  
 
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  IV. APPEALS OF THE P ANEL'S FINDINGS UNDE R A RTICLE  20 OF THE 
 TRIPS  AGREEMENT17 
14. The Dominican  Republic  appeals the Panel's overall findings and intermediate findings that the 
TPP measure s, to the extent that they prohibit the use of trademarks on ciga rette sticks, do not 
unjustifiably encumber the use of a trademark in the course of trade, under Article  20 of the 
TRIPS  Agreement .18 The Panel failed to examine part of the matter referred to the DSB, in violation 
of Article  7.1 of the DSU. In addition, th e Panel failed to make an assessment of part of the matter 
under Article  11 of the DSU.  
15. The Dominican  Republic  appeals the Panel's overall findings and intermediate findings that the 
TPP measure s do not unjustifiably encumber the use of a trademark in the course of trade, under 
Article  20 of the TRIPS  Agreement .19 These Panel findings derive from the Panel's failure to make 
an objective assessment under Article  11 of the DSU, in the course of its analysis under Article  2.2 
of the TBT Agreement  (regarding the  contribution of the TPP  measure s to Australia's objective, and 
the existence of less trade -restrictive alternatives that make an equivalent contribution to Australia's 
objective).20 
V. INCORPORATION OF CLAIMS ON APPEAL BY HONDURAS IN DS435  
16. The Dominican  Republic  incorporates by reference into this appeal the claims on appeal made 
by Honduras in the dispute Australia – Certain Measures Concerning Trademarks, Geographical 
Indications and Other Plain Packaging Requirements Applicable to Tobacco Products and Pa ckaging 
(DS435).21 
_______________  
 
 
 
17 The Agreement on Trade -Related Aspects of Intellectual Property Rights  ("TRIPS  Agreement "). 
18 Panel  Report, paras.  7.2240 -7.2247, 7.2260 -7.2264, 7.2287 -7.2292, 7.2556 -7.2574, and 
7.2590 -7.2606.  
19 Panel  Report, paras.  7.2236, 7.2240 -7.7.2247, 7.2260 -7.2264, 7.2287 -7.2292, 7.2556 -7.2574, 
and 7.2590 -7.2606.  
20 Panel  Report, paras.  7.2236, 7.2240 -7.7.2247, 7.2260 -7.2264, 7.2287 -7.2292, 7.2556 -7.2574, 
and 7.2590 -7.2606.  
21 Notice of Appeal by Honduras, WT/DS435/23.  WT/DS435/AB/R/Add.1 • WT/DS441/AB/R/Add.1  
 
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  ANNEX B  
ARGUMENTS OF THE PAR TICIPANTS  
Contents  Page  
Annex  B-1 Executive summary of Honduras'  appellant's submission  14 
Annex  B-2 Executive summary of the Dominican  Republic 's appellant's submission  26 
Annex  B-3 Executive summary of Australia 's appellee's submission  51 
 
 
 
 WT/DS435/AB/R/Add.1 • WT/DS441/AB/R/Add.1  
 
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  ANNEX  B-1 
EXECUTIVE SUMMARY OF HONDURAS' APPELLANT'S SUBMISSION  
INTRODUCTION1 
1. Honduras seeks the Appellate  Body's review and reversal of a number of errors of law and 
legal interpretation reflected in the Panel  Report . In particular, as stated in the Notice of Appeal, 
Honduras' appeal concerns a number of the Panel's findings under the Agreement on Trade -Related 
Aspects of Intellectual Proper ty Rights ("TRIPS  Agreement ") and the Agreement on Technical 
Barriers to Trade ("TBT  Agreement "). In addition, Honduras considers that the Panel failed to make 
an "objective assessment" of the evidence before it relating in particular to the degree of cont ribution 
of Australia's tobacco plain packaging measures (hereinafter the "TPP  measures" or "plain packaging 
measures") to the fulfilment of the objective of the measure, i.e.  the reduction of the use of tobacco 
products. The Panel thus acted inconsistentl y with Article  11 of the Understanding on the Rules and 
Procedures Governing the Settlement of Disputes ("DSU").  
II. CLAIM 1: THE PAN EL'S INTERPRETATION AND APPLICATION OF T HE TERM 
"UNJUSTIFIABLY" IN A RTICLE  20 OF THE TRIPS  AGREEMENT  IS IN ERROR  
2. Honduras s ubmits that the Panel's findings in relation to Article  20 of the TRIPS  Agreement  
are based on an erroneous interpretation of the term "unjustifiably". Alternatively, Honduras 
considers that the Panel committed legal error in applying its legal standard to  the facts of this case 
and its finding under Article  20 thus constituted an error of law for that reason as well.  
3. First, the Panel develops an erroneous legal standard for justifying even the most far -reaching 
encumbrances on the use of trademarks on law fully available products. The Panel finds that as long 
as there are "good reasons" sufficient to support the measures, any trademark  encumbering 
requirement, no matter how intrusive, is justifiable. The approach of the Panel and the legal 
reasoning support ing it reflects several errors of law and legal interpretation. In particular:  
• The Panel fails to read the term "unjustifiably" in its trademark -specific context. The Panel 
errs in considering that the term "unjustifiably" effectively introduces a general exception that 
justifies any restriction on the use of a trademark when adopted for purposes of furthering 
certain otherwise undefined policy objectives or "good reasons". Honduras submits that 
whether a requirement "unjustifiably" encumbers the use of a v alidly registered trademark 
with respect to a lawfully available product requires the interpreter to examine the specific 
concern raised by the encumbered trademark rather than the product to which it applies and 
to examine the extent of the encumbrance. W hether the special requirements are 
encumbering the use of a trademark in an "undue or disproportionate manner", 
i.e. "unjustifiably" must thus be based on an assessment of the particular trademark and of 
the manner in which it is encumbered. However, unde r the Panel's approach there is no need 
to examine whether a particular trademark may be problematic and thus be encumbered in 
its use, including being prohibited from being used.  
In fact, the Panel acknowledges that many of the prohibited trademarks are not problematic 
per se. Nevertheless, under its approach to the term "unjustifiably", it considers that their use 
may be justifiably prohibited simply because they are trademarks that identify a product. That 
cannot be a correct approach given the internat ional protection of trademarks and their use. 
For other products as well, the use of trademarks may be encumbered for reasons related to 
health or consumer protection. But for no other product are trademarks prevented from being 
used simply because they ar e trademarks or because they belong to a particular category of 
trademarks such as figurative marks. Never in the past has it been argued that such a blunt 
approach was necessary to protect, for example, health. This confirms the error in the Panel's 
 
1 In line with the requirements of the Working Procedures of the Appellate  Body, the total number of 
words of the Appellant Submission (including footnotes but excluding the Executive Summary) is = 154,529; 
and the total number of words of the Executive Summary is = 8,021.  WT/DS435/AB/R/Add.1 • WT/DS441/AB/R/Add.1  
 
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  appro ach. The Panel's failure to read the term "unjustifiably" in its trademark -specific context 
constitutes an error of law and legal interpretation.  
• Alternatively, at a minimum, the Panel should have read the term "unjustifiably" as referring 
to measures tha t are more trademark encumbering than "necessary" by including an analysis 
of potentially less trademark -restrictive alternatives. If a less trademark encumbering 
requirement provides an equivalent contribution to the legitimate objective, such alternative  
must be preferred. The Panel's novel and intention -based "good reasons" -approach does not 
include as part of the legal standard the need to prefer less trademark encumbering 
alternatives. Therefore, it is not consistent with the principle of Article  8.1 o f the 
TRIPS  Agreement  relating to the adoption of measures "necessary" to protect health. It thus 
constitutes an error of law and legal interpretation.  
• Related to this error of interpretation relating to Article  20 and Article  8.1 of the 
TRIPS  Agreement  is the Panel's erroneous finding that paragraph 5 of the Doha Declaration 
on TRIPS and Public Health constitutes a "subsequent agreement" in the sense of 
Article  31.3(a) of the Vienna Convention on the Law of Treaties that must be taken into 
consideration as  part of the context of the term "unjustifiably" in Article  20 of the 
TRIPS  Agreement. Paragraph 5 of the Doha Declaration is not a relevant subsequent 
agreement for purposes of interpreting the term "unjustifiably in Article  20 of the 
TRIPS  Agreement. Par agraph 5 of the Doha Declaration merely confirms the general 
interpretive rule of reading all provisions of the TRIPS  Agreement  in the light of the objectives 
and principles of the Agreement. Therefore, it does not "bear specifically" on the interpretation  
and application of the respective term or provision and cannot be said to "clearly express a 
common understanding, and an acceptance of that understanding among Members" with 
regard to the meaning of the term "unjustifiably" in Article  20 of the TRIPS  Agreement. The 
Panel's consideration of paragraph 5 of the Doha Declaration as a "subsequent agreement" 
constitutes another error of law that materially affected its analysis under Article  20 of the 
TRIPS  Agreement . 
4. Second, assuming arguendo that the Panel's "justifiability" standard based on whether there 
are "good reasons" sufficient to encumber the use of a trademark was correct, the Panel's  application 
of that legal standard to the facts of the case in the context of its three  step test reflects ad ditional 
errors of law. These errors undermine the Panel's analysis of the term "unjustifiably" in the context 
of the facts of this case and thus vitiate its findings under Article  20 of the TRIPS  Agreement . In 
particular:  
• The Panel erred by failing to pr operly determine the nature and extent of the encumbrance 
on the basis of the impact of the measures on the distinguishing function of the trademark. 
The Panel erroneously focused on the effect of the measures on the "economic value" of the 
trademarks and its considerations relating to the alleged "mitigating" factors are thus in error.  
• The Panel erred in its application of Article  20 to the facts of this case which concerned both 
tobacco products and their packaging. The Panel's reasoning fails to take in to account 
important differences in terms of the application of the measures to, in particular, cigarette 
sticks (i.e. the product itself). The Panel attached particular weight in its justifiability analysis 
to the fact that the encumbering requirements' e ffects on trademarks were mitigated by the 
facts that word marks could still be used, albeit in a standardised form and font. But this is 
not correct in so far as the actual product (i.e. cigarette sticks) is concerned since no word 
mark may be used on the  product under plain packaging. The Panel's failure to apply its 
reasoning to cigarette sticks invalidates its findings in so far as they apply also to the product.  
• The Panel erred in its examination of the available alternatives as it failed to properly consider 
whether the proposed alternatives that Honduras presented were less trademark encumbering 
than plain packaging while providing an equivalent  contribution. The Panel's approach reflects 
two important errors of law. First, the Panel erroneously assu med that the test under Article  20 
was exactly the same as the test under Article  2.2 of the TBT  Agreement. However, the 
TBT Agreement  concerns "trade" restrictiveness, while the TRIPS  Agreement relates to 
"trademark" - encumbrance. Second, the Panel erred in its interpretation of what constitutes 
an "equivalent" contribution effectively requiring an "identical" contribution by the alternative WT/DS435/AB/R/Add.1 • WT/DS441/AB/R/Add.1  
 
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  measures or even requiring that the proposed alternatives must be " manifestly better  in 
contributing towards Austral ia's public health objectives".2 
• The Panel erroneously relied on the recommendation in the WHO Framework Convention on 
Tobacco Control ("FCTC") Guidelines to consider adopting plain packaging when it concluded 
that that there existed "good reasons sufficient to support" the extreme restriction on the use 
of trademarks by plain packaging. The Panel effectively disregarded the non -binding nature 
of these recommendations. In addition, the Panel completely failed to examine the legal 
relevance of the FC TC and its Guidelines in the context of this dispute. The FCTC or its 
Guidelines do not apply to three of the four complaining parties since Indonesia and 
Dominican  Republic  are not parties to the FCTC and Cuba has not ratified the FCTC. The Panel 
therefor e erred in law by giving undue contextual weight to the FCTC and the FCTC  Guidelines 
when examining the "justifiability" of the plain packaging measures under the legal standard 
it developed.   
5. Honduras therefore requests the Appellate  Body to reverse the P anel's findings, in particular, 
in paragraphs 7.2393 -7.2431, and paragraphs 7.2604 -7.2605, and to declare moot and of no  effect 
the Panel's findings in paragraphs 7.2606 and 8.1(e) that Honduras has not demonstrated that the 
TPP measure s are inconsistent w ith Australia's obligations under Article  20 of the TRIPS  Agreement .  
III. CLAIM 2: THE PA NEL'S ANALYSIS OF A RTICLE  16.1 OF THE TRIPS  AGREEMENT  IS IN 
ERROR AS IS ITS FAIL URE TO APPLY THE LAW  TO THE FACTS OF THI S CASE  
6. Honduras submits that the Panel's inter pretation of Article  16.1 of the TRIPS  Agreement  on 
the "rights conferred" to trademark owners is in error and that its failure to apply the law to the 
facts constitutes an error of law. The Panel's false exercise of judicial economy also constitutes a 
violation of Article  11 of the DSU.  
7. First, the Panel fails to conduct a holistic interpretation of Article  16.1 that takes into 
consideration the context of this provision as well as its object and purpose. In particular, the Panel 
erred in law by finding tha t Article  16.1 does not protect distinctiveness and that Article  16.1 is not 
engaged if there is no risk of confusion, for example because of the government's deliberate 
weakening of the trademark. Honduras submits that Article  16.1 provides private partie s with a 
means to an end. The "rights conferred" are guaranteed in order to allow the trademark owner to 
protect the distinctiveness of the trademark so that it can perform its important function in the 
course of trade, allowing the trademark owner to deve lop goodwill based on that trademark. The 
Panel's finding that Article  16.1 does not protect distinctiveness divorces the means from its end, 
and is in error.  
8. Furthermore, the Panel erred in finding that the right to prevent unauthorised use of the 
tradem ark is not adversely affected if there is less or no likelihood of confusion as a result of 
regulation that deprives the consumer of familiarity with the mark. The scope of mandatory rights 
defined in Article  16.1 by reference to the concept of "likelihood  of confusion" is not tied solely to 
the existence of actual marketplace confusion. The Panel's conclusion that Article  16.1 does not 
provide a so -called "right to confusion" is a caricature of Honduras' argument rather than an 
assessment of it. The "likel ihood of confusion" -test is a normative benchmark that determines the 
boundaries of that sphere, similar to the role fulfilled in Article  16.3 for well -known marks by the 
"interest" -test. Plain packaging significantly reduces that sphere of exclusivity out side the control of 
the trademark owner.  
9. Whether this deliberate weakening of the rights conferred is justified may be a matter for 
discussion under Article  17 of the TRIPS  Agreement  and must be assessed on the basis of the terms 
of this provision which pe rmits "limited exceptions" to the rights conferred. However, that is not 
what the Panel did as it erroneously found that a measure that deliberately seeks to reduce the 
strength of the mark and the goodwill developed on the basis of the mark does not even engage 
Article  16 of the TRIPS  Agreement . The Panel finds that "the negative Article  16.1 right to prevent 
infringing uses does not extend to an entitlement to maintain or extend the distinctiveness of an 
individual trademark, which inevitably fluctuates a ccording to market conditions and the impact of 
regulatory measures on those market conditions".3 That is correct but that does not mean that a 
 
2 Panel  Report, para.  7.2601. (emphasis added)  
3 See, Panel  Report, para.  7.2015.  WT/DS435/AB/R/Add.1 • WT/DS441/AB/R/Add.1  
 
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  Member can deliberately reduce the distinctiveness of the trademark by prohibiting its use. In fact, 
and demonst rating the failure of the Panel to read Article  16.1 in its context, the Panel itself finds 
that the TRIPS  Agreement  (Article  20) prevents Members from imposing certain requirements 
including a prohibition on the use of trademarks, unless it can be justifi ed based on "good reasons". 
Honduras considers that while the distinctiveness of the trademark may fluctuate according to 
market conditions and the impact of regulatory measures on those market conditions, it is clear that 
this does not mean that a Member is entitled to deliberately seek to reduce the distinctiveness of 
the trademark by imposing encumbering requirements such as the prohibition on the use of 
trademarks.  
10. A good faith reading of Article  16.1 in the context of TRIPS Section 2 on trademarks and 
Article  20 of the TRIPS  Agreement  and in the light of the object and purpose of this provision and of 
the TRIPS  Agreement  as a whole reveals the flaws in the Panel's formalistic interpretation of 
Article  16.1. The Panel failed to even begin to examine many  of the terms used in Article  16.1. The 
Panel's narrow textual reading of parts of this provision that does not take into consideration the 
context and object and purpose of the words as used in Article  16.1 constitutes an error of law and 
legal interpreta tion.  
11. The prohibition on the use of the trademark unduly restricts the trademark owner's private 
right to prevent unauthorised use of similar signs on similar products. Whether this restriction is 
"limited" and thus permitted by Article  17 is the relevant  question the Panel failed to examine.  
12. Second, the Panel errs in its application of the law to the facts as it completely and deliberately 
fails to address the relevant question at hand. The TRIPS  Agreement  imposes certain disciplines on 
Members and requi res them to confer minimum private rights to intellectual property owners, 
including trademark owners. The relevant question that the Panel failed to even examine is whether 
a measure that prohibits the use of the trademark on the lawfully available produc t reduces the 
distinctiveness of the trademark and thus its scope of protection such that the level of protection 
falls below the minimum level that Members are required to guarantee under Article  16 of the 
TRIPS  Agreement. The Panel itself considers this to be the essential question, but then refuses to 
examine it. By failing to apply the law to the facts, the Panel errs in law and as a result of this false 
exercise of judicial economy also fails to comply with its obligation under Article  11 of the DSU.  
13. For these reasons, Honduras requests the Appellate  Body to reverse the Panel's relevant 
findings in paragraphs 7.1966 -7.2030, 7.2031 -7.2032, and 7.2051, and therefore to reverse and 
declare moot and of no legal effect the Panel's finding paragraph 8.1(d) t hat Honduras has not 
demonstrated that the TPP  measure s are inconsistent with Australia's obligations under Article  16.1 
of the TRIPS  Agreement . 
IV. CLAIM 3: THE PAN EL'S INTERPRETATION OF THE TERM "TRADE -RESTRICTIVE" IN 
ARTICLE  2.2 OF THE TBT  AGREEMENT  AND ITS APPLICATION  TO THE FACTS OF THI S CASE 
IS IN ERROR  
14. Although Honduras agrees with the ultimate conclusion that the plain packaging measures are 
trade restrictive, the Panel's interpretation of the term "trade -restrictive" in Article  2.2 of  the 
TBT Agreement and its application to the facts of this case is in error. In particular, the Panel makes 
two separate but related errors of law.  
15. First, the Panel erroneously rejects the notion that a modification or distortion of the conditions 
of comp etition and a restriction of competitive opportunities for imported products is a "trade" 
distortion. The Panel confirms that the plain packaging measures reduce product differentiation and 
it acknowledges that plain packaging modified imported products' c onditions of competition and 
affected their competitive opportunities. It also acknowledges that there is evidence that shows that 
plain packaging has led to "down -trading" in favour of lower value products. But, erroneously, it 
does not consider that this  evidence of the measures' effect on the conditions of competition and 
competitive opportunities suffices to establish a restriction on trade. The Panel unduly considered 
that trade restrictiveness is not determined by the extent to which the measures modi fy the 
conditions of competition and limit competitive opportunities for imported products, and instead 
required evidence of a discriminatory modification of competitive opportunities to the detriment of 
imported products. The Panel confused the requiremen ts of Articles 2.1 and 2.2 of the WT/DS435/AB/R/Add.1 • WT/DS441/AB/R/Add.1  
 
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  TBT Agreement and unduly required evidence of discrimination to determine the trade -restrictive 
nature of a technical regulation.  
16. Second, the Panel erroneously finds that with respect to non -discriminatory measures, it doe s 
not suffice to point to the measures' competition -distorting nature. According to the Panel, for non -
discriminatory measures, evidence must be adduced of the actual effect of the measures on prices 
and sales in order to demonstrate that this distortion a mounts to a restriction on trade. In so doing, 
the Panel effectively introduces a "trade effects" test for measures that restrict trade but that are 
not otherwise discriminatory. This is another error of law since it is well established that both 
Article  III of the GATT  1994 (on "National Treatment") and Article  XI of the GATT  1994 (on the 
"Elimination of Quantitative Restrictions") protect competitive opportunities and equality of 
conditions of competition, without the need to demonstrate actual trade effe cts. These key 
GATT  1994 provisions are functionally equivalent to Articles 2.1 and 2.2 of the TBT  Agreement  
respectively. The Panel erroneously imposed a higher evidentiary burden of demonstrating actual 
trade effects with respect to "non -discriminatory" technical regulations. The Panel's distinction 
between "discriminatory" and "non -discriminatory" measures for purposes of determining the 
meaning of the term "trade -restrictive" and the evidence to be adduced is baseless and constitutes 
an error of law. In  error is also the Panel's related requirement that it be demonstrated that the 
plain packaging measures actually reduced prices and sales of the product.  
17. Honduras therefore requests the Appellate  Body to modify and, where relevant, reverse the 
Panel's fi ndings in paragraphs 7.1166 -7.1168, 7.1196 -7.1197, and 7.1255 – and thus to declare 
moot and of no effect the Panel's findings in paragraph 8.1(a) that Honduras has not demonstrated 
that the TPP  measure s are inconsistent with Australia's obligations under Article  2.2 of the 
TBT Agreement.  
V. CLAIM 4: THE PANE L ERRS IN LAW IN ITS  APPLICATION OF THE LEGAL STANDARD 
ON THE DEGREE OF CON TRIBUTION OF THE TPP  MEASURE S 
18. The Panel may have correctly articulated the legal standard for determining the degree of 
contrib ution of the challenged measures to the fulfilment of the legitimate objective, but it fails to 
properly apply this standard to the facts of the case. The failure to properly apply the law to the 
facts is an error of law, even if aspects of the Panel's ana lysis also support a claim of a failure to 
make an "objective assessment" of the matter. Honduras' claim of error of law concerns 
four separate but related claims concerning the findings of the Panel in respect of the determination 
of the degree of contrib ution of the plain packaging measures to the fulfilment of the legitimate 
objective.  
19. First, the Panel correctly states that it is to examine the actual contribution of the measures 
"to the fulfilment of the objective of reducing the use of tobacco product s". However, the Panel errs 
in its application of this standard to the facts before it since it does not in fact examine the actual 
contribution of the measures to the legitimate objective of "reducing the use of tobacco products". 
Instead, it examines the  contribution of the measures to the specific "mechanisms" of reducing 
appeal, increasing the effectiveness of health warnings and the reduction of the ability of tobacco 
packaging to mislead consumers.4  
20. Second, despite its statement that it must examine the "actual contribution" of the measures, 
the Panel did not focus on the "actual impact" of the measures on the use of tobacco products. 
Instead it included baseless speculation about an uncertain future impact of the measures "over 
time" in light of unco rroborated statements about perceptions and intentions and without any 
qualitative or quantitative projections supported by sufficient evidence.5  
21. Third, the Panel correctly notes that the "broader context [of tobacco control in Australia] does 
not remove or reduce the need to identify the contribution that the challenged measures themselves 
make to Australia's objectives".6 However, it subsequently fails to correctly apply this test as it no 
longer focuses on the "contribution that the challenged [plain pa ckaging] measures themselves" 
 
4 This is clear from its  findings which discuss the non -behavioural evidence at length (paragraphs 7.980 -
7.986) before drawing unsupported conclusions on the behavioural effect of the measures in one paragraph 
(paragraph 7.1025).  
5 Panel  Report, para.  7.1044.  
6 Panel  Report, par a. 7.506. (emphasis added)  WT/DS435/AB/R/Add.1 • WT/DS441/AB/R/Add.1  
 
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  make. Instead it determines the degree of contribution of the measures in combination with  and as 
a component of a broader suite of complementary tobacco control measures. This is clear from its 
finding that "the evidence befo re us supports the view that, as applied in combination with the 
comprehensive range of other tobacco control measures maintained by Australia and not challenged 
in these proceedings, including a prohibition on the use of other means through which branding  
could otherwise contribute to the appeal of tobacco products and to misleading consumers about the 
harmful effects of smoking, the TPP  measure s are apt to, and do, make a meaningful contribution 
to Australia's objective of reducing the use of, and exposur e to, tobacco products".7 
22. Fourth, the Panel errs in its application of the legal standard it set for itself for examining the 
evidence. This claim relates to a number of findings the Panel made which are not in line with the 
legal standard it set for itsel f in this respect.  
23. For example, the Panel correctly articulates the appropriate standard for examining the 
evidence relating to the measures' contribution noting that it has a "duty… to 'evaluate the relevance 
and probative force of each piece thereof'".8 However, the Panel fails to apply this standard to the 
facts and evidence of the case since it never properly evaluates the relevance and "probative weight" 
of the different pieces of evidence effectively giving equal weight to all of the evidence. Its "t otality 
of the facts" approach includes evidence that is neither probative nor relevant such as the 
pre-implementation studies which the Panel itself considers to have clear "limitations".  
24. Furthermore, the Panel correctly articulates the relevant approach  to the assessment of 
"scientific evidence" when it states that "[t]o the extent that scientific evidence is relied upon, our 
assessment may include in particular a consideration of whether such evidence 'comes from a 
qualified and respected source', wheth er it has the 'necessary scientific and methodological rigor to 
be considered reputable science' or reflects 'legitimate science according to the standards of the 
relevant scientific community', and 'whether the reasoning articulated on the basis of the sc ientific 
evidence is objective and coherent'".9 However, it fails to correctly apply this legal standard for 
approaching scientific evidence to the facts of the case since even evidence that clearly did not meet 
the standard of scientific and methodologica l rigor was included in the Panel's analysis, for example 
because it was the "only pre -implementation study submitted in these proceedings that sought to 
investigate the impact of tobacco plain packaging on cigars and cigarillos" and that the Panel would 
"therefore take its conclusions into account in our subsequent analysis".10 
25. Finally, and despite its repeated statements about its approach to the econometric evidence 
that would not involve the Panel undertaking its own econometric analysis, it did in fact do just that. 
The Panel conducted its own (flawed) econometric assessment of the evidence as it developed 
certain calculations and estimation methods that were never discussed with the parties and that 
remain unexplained even in the Panel's own final report.11 
26. Honduras acknowledges that there may be an overlap with the claims it is making under 
Article  11 of the DSU relating to the lack of objective assessment of the matter. However, Honduras 
requests that the failure to correctly apply the legal standa rd relating to the determination of the 
degree of contribution of the measures to the facts of the case be considered as a stand -alone claim 
of violation since it constitutes an error of law, irrespective of whether related errors of appreciation 
of the ev idence by the Panel may also be qualified as failure to "objectively" assess the matter.  
27. Honduras therefore requests the Appellate  Body to reverse the Panel's findings in 
paragraphs  7.1024 -7.1044, 7.1724 -7.1732, and 7.2604 -7.2606 of the Panel  Report , and thus to 
declare moot and of no effect the Panel's findings in paragraph 8.1(a) that Honduras has not 
demonstrated that the TPP  measure s are inconsistent with Australia's obligations under Article  2.2 
of the TBT  Agreement  and in paragraph 8.1(e) that Hondur as has not demonstrated that the 
TPP measures are inconsistent with Australia's obligations under Article  20 of the TRIPS  Agreement . 
 
7 Panel  Report, para.  7.1043.  
8 Panel  Report, para.  7.517.  
9 Panel  Report, para.  7.516.  
10 Panel  Report, para.  7.622.  
11 Panel  Report, Appendix C, para.  107; Appendix D, paras.  44, 106, 109 -110; Appendix E, 
paras.  29-54. WT/DS435/AB/R/Add.1 • WT/DS441/AB/R/Add.1  
 
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  VI. CLAIM 5: THE PAN EL ERRS IN LAW IN IT S INTERPRETATION AND  APPLICATION OF 
ARTICLE  2.2 OF THE TBT  AGREEMENT  WITH RESPECT T O THE AVAILABILITY O F LESS 
TRADE -RESTRICTIVE AL TERNATIVE MEASURES  
28. The Panel's findings relating to the proposed "less trade restrictive alternative measures" 
reflect a number of errors of law and legal interpretation.  
29. First, the Panel fails to examine whet her the alternative measures are less "trade restrictive" 
based on a correct interpretation of this term. Instead, the Panel erroneously concludes that the 
proposed alternative measures are equally trade restrictive because they are at least equally 
effect ive in reducing smoking. The Panel should have examined the restrictive effect of the proposed 
alternatives on the conditions of competition of imported products in order to determine whether 
the proposed alternatives were "less trade restrictive". The Pan el's failure to do so vitiates its findings 
on alternative measures.  
30. Second, the Panel correctly articulates the legal standard for determining whether the 
alternative measures provide an "equivalent" (but not necessarily an "identical") contribution and 
correctly finds that "a proposed alternative measure may achieve an equivalent degree of 
contribution in ways different from the technical regulation at issue".12 However, the Panel errs in 
its application of the law to the facts of this dispute.  
31. In partic ular, (a) the Panel fails to examine the degree of contribution of the proposed 
alternative measures in the light of the legitimate objective actually found to exist; (b) the Panel 
erroneously requires that the alternative measures provide an identical  contribution as a "substitute" 
rather than an "equivalent" contribution; (c) the Panel errs by engaging in an asymmetrical 
comparison that imposes a greater degree of contribution on the alternatives than required by the 
"equivalence" test.  
32. The Panel's findi ng that none of the proposed alternative measures are capable of operating 
as a substitute for plain packaging is based on the erroneous comparison of the alleged contribution 
of plain packaging in combination with the enlarged GHWs , on the one hand, with the alternative 
measure as a substitute for both the plain packaging measures and the enlarged GHWs. This is 
incorrect since the enlarged GHWs were never part of the dispute. To the extent that the Panel was 
justified in considering the combined effect of the plain packaging measures with the enlarged GHWs, 
it should also have examined the contribution of the alternative measures in combination with  the 
large GHWs covering 75% of the front of the pack and 90% of the back.  
33. In addition, and related to the ab ove errors, the Panel errs in law when applying a different 
standard for "equivalence" in the context of an alleged "suite of measures" and in making its findings 
on the basis of an alleged lack of "synergies".  
34. Honduras therefore requests the Appellate  Body to reverse the Panel's findings in 
paragraphs  7.1464, 7.1468 -7.1471, 7.1531, and 7.1542 -7.1545 – and thus to declare moot and of 
no effect the Panel's findings in paragraph 8.1(a) that Honduras has not demonstrated that the 
TPP measures are inconsistent with Australia's obligations under Article  2.2 of the TBT  Agreement 
as well as the related findings in paragraphs 7.2606 and 8.1(e) that Honduras has not demonstrated 
that the TPP  measure s are inconsistent with Australia's obligations under Art icle 20 of the 
TRIPS  Agreement.  
VII. CLAIM 6: THE PA NEL FAILS TO CONDUCT  AN "OBJECTIVE ASSES SMENT" OF THE 
MATTER, INCLUDING TH E EVIDENCE ON THE TP P MEASURE S' CONTRIBUTION TO T HE 
OBJECTIVE OF REDUCIN G THE USE OF TOBACCO  PRODUCTS, IN VIOLAT ION OF 
ARTICLE  11 OF THE DSU  
35. The Panel's review of the evidence relating to the degree of contribution of the plain packaging 
measures to the fulfilment of the legitimate objective of reducing smoking does not reflect the 
required "objective assessment" of the matter and th e Panel thus acted in violation of Article  11 of 
the DSU.  
 
12 Panel  Report, para.  7.1369.  WT/DS435/AB/R/Add.1 • WT/DS441/AB/R/Add.1  
 
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  36. The Panel failed to make an objective assessment of the facts, as required under Article  11 of 
the DSU, inter alia , because:  
• The Panel failed to provide a reasoned and adequate explanation of how th e facts supported 
the determination made that "plain packaging has resulted in a reduction in smoking 
prevalence and in consumption of tobacco products";  
• The Panel failed to examine the evidence in an even -handed manner, applying a double 
standard of proof ; 
• The Panel ignored material pieces of evidence submitted by the complaining parties; and  
• The Panel failed to respect the basic principles of due process and procedural fairness by 
involving a "ghost expert" which developed criticisms of the parties' evide nce that the parties 
were never given an opportunity to comment on and which are never explained in the report 
thus shielding them from proper scrutiny. The Panel could have, and in this case should have 
appointed an expert of its own in consultation with the parties as provided for in Article  14.2 
of the TBT  Agreement  and Article  13 of the DSU.  
37. These failures of the Panel, taken individually and together, are of such a pervasive nature as 
to cast doubt on the objectivity of the Panel in the context of thi s dispute which related to a 
controversial product and a well -intended but unlawful, ineffective, and disproportionate measure. 
The Panel thus failed to make an objective assessment of the evidence on the degree of contribution 
of the plain packaging measu res in violation of its obligation under Article  11 of the DSU.  
VII.1  The Panel fails to provide a reasoned and adequate explanation of how the facts 
before it supports a conclusion that the TPP  measure s were apt to, and do, make a 
meaningful contribution  to their legitimate objective  
38. The Panel makes the ultimate finding that the TPP  measure s are not more trade restrictive 
than necessary because, inter alia , they "are apt to, and do make a meaningful contribution" to their 
public health objective by reduci ng the use of, and exposure to, tobacco products in Australia.13 
However, a review of the facts before the Panel, when examined in light of the evidentiary standard 
and approach adopted by the Panel in this dispute, reveals that there simply is no basis in the facts 
to support this conclusion. The Panel has thus failed to provide the required reasoned and adequate 
explanation that the facts support the determination made. In particular:  
• The Panel's own limited findings on actual behaviour do not support this  conclusion;  
• The Panel's own findings on the proximal and distal outcomes (i.e.  on perceptions, attitudes 
and intentions) do not warrant such a conclusion, even assuming that these proximal and 
distal outcomes are informative of actual behaviour; and  
• The P anel's own findings on the literature and behavioural science theories do not support this 
finding, even assuming the literature and underlying surveys and theories are informative of 
actual behaviour.  
39. There was simply no positive evidence in the sense of  relevant and probative evidence showing 
that the TPP  measure s actually contributed to their objective. Relatedly, the Panel failed to provide 
"reasoned and adequate explanations" and "coherent reasoning" for its unsupported findings.  
40. The Panel also fails  to explain how it is possible that it finds no evidence of a contribution to 
the "distal" outcomes such as quitting attempts or cognitive processing of the risks of smoking after 
three years of plain packaging but nevertheless concludes that there is evid ence that less people 
smoke and that people smoke less because of plain packaging. The Panel never acknowledges, let 
alone explains the gap in the analytical framework which was proposed by Australia and which was 
apparently accepted by the Panel. The Pane l bases its finding on actual contribution on the 
econometric analysis presented by Australia's expert of one of many datasets without explaining this 
 
13 Panel  Report, para.  7.1725(b).  WT/DS435/AB/R/Add.1 • WT/DS441/AB/R/Add.1  
 
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  conclusion in the light of plausible alternative explanations and contradictory facts it has itself 
estab lished.  
41. Furthermore, the Panel states that it needs to evaluate the relevance and "probative value" 
of the different pieces of evidence but in fact fails to do as it gives equal weight to all evidence as 
part of its flawed "totality of the facts" approach. In part icular, the Panel fails to provide an adequate 
explanation for why it includes certain pre -implementation studies that are so obviously flawed that 
they should not have been included and relies on studies and behavioural theories even when the 
facts do not  support them. The Panel fails to provide an explanation of why such studies and theories 
are relevant as part of the totality of facts if they have not been supported by the empirical evidence 
that the Panel itself considered essential for taking these st udies into account.  
42. In addition, the Panel asserts that "the impact of the TPP measures may evolve over time",14 
but fails to support this speculative assertion with the necessary "quantitative projections into the 
future or qualitative reasoning based on a set of hypotheses that are tested and supported by 
sufficient evidence" that it itself acknowledged to be required.15 Taking into consideration that the 
evidence submitted covered a period of almost three years of a measure that was planned to have 
met it s objective over a six year period (i.e. reducing prevalence to 10% by 2018), and in light of 
the fact that there was no basis to assume that the measures' contribution would become visible 
only over time, the unsupported suggestion that the measures' cont ribution would further evolve 
over time remains unexplained and is pure speculation.  
43. The Panel's finding on cigars are particularly disconcerting since there is a close to total lack 
of evidentiary basis for the Panel's conclusions that the plain packagin g measures are apt to, and 
actually do, contribute to the reduction in the use of cigars. The Panel's conclusions relating to all 
tobacco products, including cigars, are not supported by the facts on the record and there is 
no reasoned and adequate explana tion of the Panel's findings on cigar smoking.  
44. At a more granular level, the Panel jumps to conclusions without any apparent explanation, 
let alone an adequate and reasoned explanation of why it disregards certain pieces of evidence and 
considers others t o be probative. Therefore, even the intermediate findings that the Panel makes 
are not the result of a reasoned and adequate explanation. For example, it merely states 23  times 
that it conducted a "careful review" before simply repeating the arguments of A ustralia's  experts 
without reflecting, let alone addressing, the different rebuttal arguments made by the experts of the 
complainants with respect to the probative nature of the evidence presented.  
45. The Panel notes a number of limitations about the reliabi lity and relevance of numerous pieces 
of evidence relied on by Australia but still takes this evidence into account as part of its "totality of 
facts" approach. It fails to explain which of the many pieces of evidence examined it considered to 
be relevant and probative or what value it attaches to evidence that ostensibly fails to meet the 
standard of "scientific evidence" that it articulates. The Panel's analysis of the evidence is not "critical 
and searching" as it simply notes the weaknesses of the evide nce in isolation without doing anything 
with these weaknesses. It fails to examine the evidence in a holistic manner and it never conducts 
a critical analysis of the entirety of the evidence considered in combination. Nor does the Panel 
provide a reasoned and adequate explanation why the alleged flaws in the evidence submitted by 
the complainants on consumption and prevalence were of such nature that it justified disregarding 
these analyses completely. The Panel accepts all of Australia's  evidence, even if it has acknowledged 
flaws and limitations but "zeroes" out all of the complainants' evidence as soon as it allegedly is not 
perfect without providing the required adequate explanation.   
VII.2  The Panel disregards and thus misrepresents material pieces of e vidence presented 
by the complainants  
46. The Panel disregards and misrepresents the complainants' evidence as it completely omits the 
important rebuttal points made by its experts to the criticism of Australia which the Panel effectively 
simply adopts as its own. In addition, the Panel quotes the conclusions of the experts out of their 
context, highlights alleged admissions without even reflecting the explanations of the experts that 
put these alleged admission in their proper context. The extent to which the Panel disregarded and 
 
14 Panel  Report, para.  7.1044.  
15 Panel  Report, para.  7.982.  WT/DS435/AB/R/Add.1 • WT/DS441/AB/R/Add.1  
 
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  thus distorted the complainants' expert evidence on contribution is pervasive, as evidenced in an 
Annex to this submission.   
47. Honduras notes in particular the unexplained disregard by the Panel of the evidence presented 
by Professor Kl ick both in terms of demonstrating the lack of contribution of the measures and for 
purposes of rebutting the criticisms expressed by Australia's experts related to his analysis and 
evidence which includes the only "ideal" longitudinal pre/post analysis th at was presented in this 
dispute. By not acknowledging let alone addressing the points made by the complainants' experts 
to rebut the criticisms of their own evidence or for purposes of criticising Australia's evidence, the 
Panel failed to undertake an obj ective assessment that does not skew the analysis in favour of either 
of the parties.  
VII.3  The Panel's analysis lacks even -handedness and reflects a double standard of proof  
48. The Panel's assessment of the facts reveals a lack of even -handedness and the app lication of 
a double standard of proof at various levels.  
49. First, the Panel's "totality of the facts" approach operated as a technique of wiping out the 
acknowledged individual flaws of Australia's pre -and post -implementation evidence which the Panel 
considered to form a "body of evidence". In contrast, each individual concern, including numerous 
purely hypothetical or possible minor concerns relating to the evidence presented by the 
complainants formed the basis for completely disregarding the complainants ' evidence. The many 
expert reports prepared by high -calibre experts recognised as such in their respective fields and 
related evidence presented by the complaining parties was never considered to form a "body of 
evidence" because of alleged minor individu al flaws affecting such evidence, thus "zeroing" much of 
the complainants' evidence. The double standard is clear.   
50. Second, the Panel permitted Australia to allocate the combined effects of plain packaging and 
GHWs to the plain packaging measures while req uiring the complainants to effectively demonstrate 
that neither provided any contribution whatsoever, even though the complainants did not challenge 
the large GHWs. This is most evident in the context of the Panel's analysis of the proposed alternative 
measures which the Panel refused to examine in combination with the GHWs. In so doing, the Panel 
effectively required that the alternative measure provide not only an equivalent contribution to plain 
packaging but in fact an equivalent contribution to plain p ackaging in combination with the enlarged 
GHWs. If the Panel considered that it was not possible to separate the effects of plain packaging 
from the effects of the enlarged GHWs that were introduced at the same time, an even -handed 
assessment would also ha ve examined the alternatives assuming they would be applied in 
combination with the enlarged GHWs. The Panel failed to undertake such an objective and even -
handed analysis.  
51. Third, the Panel rejects the complainants' evidence and a number of its econometri c models 
mainly because they reveal that under certain conditions the evidence shows a statistically significant 
increase in smoking rather than a decrease. The Panel cannot accept a conclusion that is not 
consistent with the conclusion it expects to find.  Furthermore, the Panel errs in its appreciation of 
the concept of "statistical significance", and as a result blames the complainants for failing to 
establish with certainty that the measures are not working, while not requiring similar certainty from 
Australia. However, it does not allow the complainants to conservatively reach this conclusion based 
on an evident effect in the opposite direction. The Panel is consistently giving the benefit of the 
doubt to Australia.  
52. Finally, the Panel's ghost expert ide ntified certain "robustness" concerns relating to the 
evidence submitted by the complaining parties such as the problem of "multi -collinearity" for 
example. The Panel rejects a lot of the complainants' evidence on the basis of this newly developed 
concern that Australia never raised. In addition to the fact that the Panel was thus clearly making 
the case for Australia, it also and importantly fails to examine if the same "robustness" concern does 
not also affect the evidence of Australia's experts. The Pane l is deliberately looking for flaws in the 
complaining parties' evidence but omits to examine, let alone apply a similarly strict approach to 
Australia's evidence.   
53. In sum, the Panel's treatment of the evidence reflects a "double standard of proof" in its 
consideration of the qualitative and quantitative evidence. The Panel effectively gives a zero to every WT/DS435/AB/R/Add.1 • WT/DS441/AB/R/Add.1  
 
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  piece of evidence presented by the complainants that it considers not to be perfect; however, in 
contrast, the Panel accepts the combined presentation o f obviously flawed pieces of evidence 
presented by Australia as probative of a certain degree of contribution by the plain packaging 
measures even if each of these pieces of evidence individually does not meet the standard set by 
the Panel in terms of scie ntific and methodological rigour. It uses the combined effect of plain 
packaging in combination with the enlarged GHWs as the starting point and assigns the combined 
effect to plain packaging while not assigning any possible effects of GHWs to the measures  that are 
proposed as alternatives to plain packaging for example. The Panel raises novel robustness concerns 
with respect to the evidence presented by the complainants without even examining if the same 
robustness concerns apply equally to the evidence of  Australia. This difference in approach is evident 
and is not in line with the requirement to conduct an even -handed examination. The double standard 
of proof is clear.   
VII.4  The Panel fails to respect the due process rights of the parties  
54. The Panel condu cted its own analysis of the very technical evidence that was submitted even 
though, objectively speaking, it did not possess the necessary technical skills for doing so. The Panel 
did not share with the parties any of the questions or concerns it had with  respect to the technical 
evidence that was submitted and never confronted the parties with its own alternative analysis which 
was critical to its conclusions on the evidence. The Panel did not appoint an expert of its own in 
consultation with the parties in line with the authority given to it under Article  14.2 of the 
TBT Agreement and Article  13 of the DSU. Instead, it relied on a ghost expert to re -do the analysis 
of the parties and to find alleged flaws that even the parties did not identify. In additio n, it shielded 
such criticisms from scrutiny by the parties during the proceeding and even to date by not disclosing 
the manner in which it reached certain conclusions based on its "re -working" of the "back -up" data 
provided by the parties. In so doing, th e Panel failed to respect the parties' due process rights.  
55. Honduras considers that the Panel's discretion to appoint experts under Article  13 of the DSU 
and Article  14.2 of the TBT  Agreement  is not boundless. If, as was the case here, the arguments are 
of such a technical and fundamental nature, the Panel was effectively under a requirement to appoint 
an expert. Furthermore, the failure of the Panel to do so meant that the parties were not in a position 
to respond to a number of the (misguided) criticisms that the Panel independently developed through 
its ghost expert. This failure to give the parties an opportunity to address new points raised for the 
first time in the interim report, and that were never included in any of the more than 200 questions 
the P anel posed, adversely affects the fundamental due process rights of in particular the 
complainants. In developing these new points of criticism, the Panel was effectively making the case 
for Australia, and the Panel was doing so in secret with the assistan ce of a ghost expert rather than 
by appointing an expert of its own through a transparent and objective process.   
56. These errors, when examined individually as well as in combination with each other, 
demonstrate the lack of objective assessment of the Panel' s assessment of the evidence relating to 
the degree of contribution of the measures, thus violating Article  11 of the DSU. For that reason as 
well, the Panel's findings on the degree of contribution should be reversed.  
57. Honduras therefore requests the Appel late Body to reverse the Panel's findings on the 
evidence on the degree of contribution of the measures as reflected in the Appendix and in 
paragraphs 7.1024 -7.1045 of the Panel  Report  as such findings were not the result of an objective 
assessment of the matter by the Panel in violation of Article  11 of the DSU and thus to declare moot 
and of no effect the Panel's findings in paragraph 8.1(a) that Honduras has not demonstrated that 
the TPP  measure s are inconsistent with Australia's obligations under Articl e 2.2 of the 
TBT Agreement  and the related findings in paragraphs 7.2606 and 8.1(e) that Honduras has not 
demonstrated that the TPP  measure s are inconsistent with Australia's obligations under Article  20 of 
the TRIPS  Agreement.  
VIII.  CONCLUSION  
58. For the reasons stated in Honduras' Appellant Submission, and based on the errors of law and 
legal interpretation as well as the lack of objective assessment that vitiate the relevant findings of 
the Panel, Honduras respectfully requests the Appellate  Body to reve rse and declare moot and of 
no effect the Panel's findings as set out in this submission by:  WT/DS435/AB/R/Add.1 • WT/DS441/AB/R/Add.1  
 
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  • finding  that the Panel erred when it found in paragraph 8.1(e) that Honduras has not 
demonstrated that the TPP  measure s are inconsistent with Australia's obligatio ns under 
Article  20 of the TRIPS  Agreement ; 
• finding  that the Panel erred when it found in paragraph 8.1(d) that Honduras has not 
demonstrated that the TPP  measure s are inconsistent with Australia's obligations under 
Article  16.1 of the TRIPS  Agreement ; 
• finding that the Panel erred when it found in paragraph 8.1(a) that Honduras has not 
demonstrated that the TPP  measure s are inconsistent with Australia's obligations under 
Article  2.2 of the TBT  Agreement ; and  
• finding that the Panel failed to make an objectiv e assessment of the matter in violation of 
Article  11 of the DSU.  
 WT/DS435/AB/R/Add.1 • WT/DS441/AB/R/Add.1  
 
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  ANNEX B -2 
EXECUTIVE SUMMARY OF  THE DOMINICAN REPUBLIC'S APPELLANT'S SUBMISSION  
INTRODUCTION  
1. On 1 December 2012, Australia introduced the tobacco plain packaging ("TPP") measures. 
These measures ban all design features on tobacco retail packaging and tobacco products 
themselves, and branding of any kind on cigarette sticks, in an attempt to reduce smoking.  
2. The Dominican  Republic  did not lightly decide to challenge the TPP  measure s. Nor has it lightly 
decided to maintain that challenge on appeal. The Dominican  Republic  recognizes that any legal 
challenge to a tobacco control measure will be met with scepticism.  
3. Yet, the value of WTO dispute settlement is that the ad judicator must make its decision on an 
objective basis. Over several decades, panels and the Appellate  Body have rightly earned a 
reputation for basing decisions on a transparent and rigorous review of reliable evidence, with judges 
of the International Co urt of Justice ("ICJ") praising the WTO as establishing "best practice".1  
4. In bringing this dispute to the WTO, the Dominican  Republic  did not seek to constrain 
Australia's legitimate right to protect public health by reducing smoking. Indeed, before the P anel, 
the Dominican  Republic  showed that the TPP  measure s do not achieve their objective to reduce 
smoking and proposed that Australia could adopt alternative, stringent tobacco control measures 
with a proven track record. In particular, Australia could ra ise the minimum legal purchase age 
("MLPA") to 21 years and it could increase taxes. As the Panel acknowledged, these measures are 
universally accepted, including by the World Health Organization, to be effective at reducing 
smoking, particularly among you ng people.  
5. Whilst respecting Australia's prerogative to take measures to reduce smoking, the 
Dominican  Republic  turned to the WTO in an effort to preserve the competitive opportunities that 
could flow from the display of trademarks, geographical indications ("GIs"), and other design 
features on the residual parts of the packaging, left after respecting the Graphic Health Warning 
("GHW") requirements.  
6. The Panel agreed that these features create competitive opportunities through brand 
differentiation, which "engenders consumer loyalty and increases consumers' willingness to pay".2 
As the Panel found, "the TPP  measure s limit the opportunity for tobacco manufacturers to compete 
on the basis of such brand differentiation".3 
7. It is well -known that many developing countries resisted the legal protections for intellectual 
property that developed nations insisted upon in the Uruguay Round negotiations, skeptical of the 
benefits that the protection of such rights could bring to their economies.  
8. Yet, the protection of trademarks and GIs has taken on considerable importance to the 
Dominican  Republic  now that it has transformed i tself from an exporter of unprocessed tobacco leaf 
into the world's leading producer and exporter of premium branded cigars. This remarkable 
transformation occurred in no small part due to the ability of its producers to develop well -known 
brands with a re putation for quality and consistency.  
9. The Panel rejected each of the Dominican  Republic 's claims in its Report in Australia – Certain 
Measures Concerning Trademarks, Geographical Indications and Other Plain Packaging 
Requirements Applicable to Tobacco Prod ucts and Packaging  ("Panel  Report ").4 
 
1 Pulp Mills Case , Joint Dissent of Judges Al -Khasawneh and Simma, para.  16. 
2 Panel  Report, para.  7.1167.  
3 Panel  Report, para.  7.1167.  
4 Panel Report, para.  8.1. WT/DS435/AB/R/Add.1 • WT/DS441/AB/R/Add.1  
 
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  10. The Dominican  Republic  is disappointed with the Panel's findings. The Dominican  Republic  had 
always recognized that a dispute of this type could be influenced by adverse attitudes about the 
product. Yet, the Dominican  Republic  trusted that a WTO panel would undertake its assessment with 
the usual standards of objectivity for which the WTO dispute settlement system is justly renowned. 
The Dominican  Republic 's disappointment stems from its conviction that the Panel did no t act with 
such objectivity.  
11. The claims that the Panel lacked objectivity are important not only to the Dominican  Republic , 
but also, in its view, to the WTO system. The Dominican  Republic  remains of the view that the value 
of the WTO, as a forum for disp ute settlement, lies in its willingness and capacity to undertake an 
objective review of difficult and sensitive international disputes. This appeal is designed to preserve 
that systemic value.  
12. The claims of lack of objectivity focus, in part, on the proce ss that the Panel followed in 
summarily rejecting the Dominican  Republic 's econometric evidence. The Panel developed and 
executed its own detailed econometric tests; it wrote its own computer code to operate the tests 
and then ran the tests on the data for  itself; and it referred to the results of its work as "evidence".5 
The Dominican  Republic  had no opportunity to be heard  on considerations that were decisive in 
rejecting its evidence. This manner of proceeding is not consistent with the dictates of objec tivity – 
fair and independent decision -making consistent with due process.  
13. Other claims of lack of objectivity concern the Panel's inconsistent treatment of the evidence 
and incoherent reasoning. To illustrate, the Panel rejected the Dominican  Republic 's evidence 
because it was affected by a particular issue, yet it accepted Australia's evidence, even though it 
was affected by the same issue. In reaching such conclusions, the Panel failed to reconcile 
contradictory parts of its own reasoning, and also fail ed to reconcile its reasoning with contradictory 
evidence in its record.  
14. The Panel, in this case, has strayed beyond the realms of fair and independent adjudication 
not once or twice, but repeatedly. Below, in this introduction, we set out two examples tha t provide 
a snapshot of the lack of objectivity that runs throughout the Panel's assessment. In the sections 
that follow, we provide an overview of the remaining claims.  
15. Alongside appeals regarding the Panel's objectivity, the Dominican  Republic  makes dis tinct 
appeals regarding the interpretation and application of the law. The Panel found that, by design, the 
TPP measure s restrict competitive opportunities that "engender […] consumer loyalty and increase 
[…] consumers' willingness to pay".6 However, for t he Panel, these restrictions do not amount to a 
"restriction" on international trade under Article  2.2 of the Agreement on Technical Barriers to Trade 
("TBT  Agreement ").  
16. It suggests that this is because the TPP  measure s are non -discriminatory. For such me asures, 
the complainant must prove the actual "effects" of the alleged restriction, taking account of the 
impact on both consumers and suppliers, and their respective responses to the measures. The 
Panel's finding is contrary to long -standing case law that  WTO obligations protect competitive 
opportunities  and that a complainant need not prove actual trade effects  in the marketplace.  
17. The Dominican  Republic  proposed less restrictive alternative measures, including raising the 
MLPA to 21 years, and increasing taxes. The Panel found that these alternatives would not be less 
trade -restrictive than the TPP  measure s and would not make an equivalent contribution to Australia's 
objective, under Article  2.2 of the TBT  Agreement . This is despite the fact that the Panel  considered 
that these two alternatives were just as effective in reducing smoking , which is Australia's objective, 
and the fact that they would not reduce the competitive opportunities that arise from differentiating 
tobacco products with branding. The al ternatives did not, however, make an equivalent contribution 
to the TPP  measures because they did not work through the same means or mechanism  as the 
TPP measures, namely, by reducing the appeal of tobacco packaging and products. However, 
according to well -established case law, the equivalence of a contribution must be assessed in light 
of a measure's objective , and not the mechanism  it uses to achieve that objective. The Panel has 
wrongly confused the means  and the end.  
 
5 Panel  Report, Appendix C, para.  107. 
6 Panel  Report, para.  7.1167.  WT/DS435/AB/R/Add.1 • WT/DS441/AB/R/Add.1  
 
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  18. The TPP  measure s prohibit the display of word marks on cigarette sticks, whereas they permit 
the display of word marks on tobacco packaging and cigar sticks. The Dominican  Republic  claimed 
that the prohibition on the use of word marks on cigarette sticks was contrary to Article  20 of t he 
Agreement on Trade -Related Aspects of Intellectual Property Rights ("TRIPS Agreement"). The Panel 
failed to examine this part of the Dominican  Republic 's claims, thereby failing to respect its terms of 
reference.  
19. Finally, the Dominican  Republic  has also  exercised care in asking the Appellate  Body to 
complete the analysis. For the most part, should the Appellate  Body uphold a ground of appeal, the 
Dominican  Republic  does not ask the Appellate  Body to complete the analysis. The 
Dominican  Republic recognize s that the Appellate  Body is generally cautious in so doing and requires 
a clear record of uncontested facts or factual findings. For the most part, there is no such record to 
which the Dominican  Republic  could, in good faith, direct the Appellate  Body. 
A. Example (1): the Panel's own development of a "non -stationarity" test  
20. The first example concerns one of the detailed econometric criteria that the Panel developed 
on its own, namely " non-stationarity ", which the Panel used to reject certain of the compl ainants' 
econometric evidence. For the time being, we leave to one side the substance of what this 
econometric concept means, and focus simply on the Panel's process .  
21.  Before reading the Panel  Report , the Dominican  Republic 's team of government officials and 
outside lawyers had never heard of the term "non -stationarity", and had no idea what it meant. The 
reason is that the concept of "non -stationarity" had never been discussed with the parties during 
the briefing phase of the panel proceedings, which last ed one and a half years. The concept did not 
arise in the parties' 50 -plus submissions to the Panel or in the 20 -plus expert econometric reports 
submitted by the parties. The Panel met twice with the parties and their experts, and the Panel 
posed a total o f 207 written questions to the parties. Yet, the Panel did not, at any time, ask a single 
question about "non -stationarity". For its part, Australia had never suggested that the 
Dominican  Republic 's econometric evidence was flawed because of "non -stationar ity", even though 
it made many submissions on that evidence and identified many other econometric criticisms.  
22. Yet, the Panel rejected the Dominican  Republic 's econometric evidence – but not Australia's – 
because of "non -stationarity" concerns that the Pan el had identified by itself, using an econometric 
test that the Panel had developed and executed on its own , without giving the parties  any 
opportunity whatsoever  to comment .  
23. As a result, the Dominican  Republic  was deprived of an opportunity to comment on  important 
issues such as: the relevance of this test to the facts, how the test should be applied, how the results 
of the test should be interpreted, and whether the models could easily be adjusted to resolve a 
perceived "non -stationarity" problem. Suffic e it to say that these issues are consequential.  
24. First, "non -stationarity" and its partner "stationarity" are not always relevant in econometric 
analysis. The relevance of the test and the interpretation of the results depend on the circumstances.  
25. Second , if the circumstances suggest that non -stationarity might indeed be relevant, there is 
no standard way to test for it. Among the many tests available, three different tests are often used 
to test for non -stationarity, with the different tests potentially l eading to different results. To run 
any one of the tests, a researcher must write computer code that will implement the test, and the 
researcher must then allow a computer to run the test on the dataset.   
26. Third, after running the tests, a researcher must d ecide how to interpret the results generated 
to decide if they indicate a "non -stationarity" problem or not. To assist with interpreting the results, 
a researcher may need to run additional econometric tests, using new computer code, to establish 
whether t here is, in fact, a "non -stationarity" issue.  
27. The way in which the Panel developed and executed the "non -stationarity" tests, including for 
example the computer code it used, and the results its test generated, are not described in the 
Panel  Report , and ar e not part of the Panel's record.  WT/DS435/AB/R/Add.1 • WT/DS441/AB/R/Add.1  
 
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  28. The Dominican  Republic  is shocked that a WTO panel would deem it appropriate to take it 
upon itself to develop and execute a detailed econometric test along these lines, and reject 
one party's evidence on that basis, witho ut any input whatsoever from the parties . 
29. This is not simply a question of who did the underlying work and whether they were properly 
appointed to do so. It is rather a fundamental denial of due process rights, which lie at the heart of 
any fair and indepe ndent dispute resolution system. It is simply not fair and independent for an 
adjudicator to: develop and execute an econometric test on its own, without the issue ever being 
raised by any party; use that test to reject one party's evidence; and, deprive t hat party of any 
opportunity to comment on the adjudicator's own test.  
30. The same two ICJ judges who praised the WTO for establishing "best practice" in its treatment 
of evidence rebuked the ICJ for its reliance on "ghost experts". They observed that recours e to 
"ghost experts" deprives the adjudicative process of "transparency, openness, procedural fairness, 
and the ability for Parties to comment upon or otherwise assist the Court in understanding the 
evidence before it".7 The ICJ's use of "ghost experts" ha s also drawn considerable criticism in 
academic literature for the same reasons.8 
31. At the same time that the Panel deprived the Dominican  Republic  of its due process rights, it 
"made the case" for Australia. It developed and executed a detailed econometric test that Australia 
had never even mentioned, much less asserted as part of its "case". Yet, the Panel's own econometric 
test became an important part of its finding that the TPP  measure s were not inconsistent with 
Australia's WTO obligations. In using its own econometric test in this way, the Panel has strayed far 
beyond reasonable, fair, and independent adjudication.  
32. The Panel seems to assume that Australia's econometric models do not have a "non -
stationarity" problem because of the modeling tech nique used. However, the Panel does not indicate 
whether it tested that assumption by applying the same "non -stationarity" test to Australia's models. 
When the three different "non -stationarity" tests commonly used are applied to Australia's models, 
they g enerate the same results as they do when applied to the Dominican  Republic 's evidence. Yet, 
the Panel accepted Australia's models, at the same time it rejected the Dominican  Republic 's. This 
unexplained inconsistent treatment of the evidence underscores th e fundamental due process issue.  
33. Had the Dominican  Republic  been granted its due process right to comment on "non -
stationarity" in the econometric evidence:  
• it could have addressed issues, such as:  
o the relevance of this concept;  
o how to test for it, inclu ding how to run follow -up testing; and,  
o how to write appropriate computer code to run the test;  
• it could have provided evidence, with computer code, testing its own and Australia's evidence 
for "non -stationarity", ensuring that all of the materials and re sults constitute evidence of 
record; and,  
• it could have addressed:  
o how to interpret the results of testing;  
o whether follow -up testing is needed and, if so, how to conduct that testing, and the results 
of that testing;  
o how to adjust models to account for "non -stationarity"; and,  
o whether the overall modeling results are valid, despite possible "non -stationarity" issues.  
34. For both the Dominican  Republic 's and Australia's models, the results of Dominican  Republic 's 
"non-stationarity" testing using the three commonly -used methods suggest – in both cases – that 
follow -up testing is needed to establish if there is a non -stationarity issue. The results of that 
follow -up testing suggest, in both cases, that non -stationarity is n ot an issue. It is impossible for the 
 
7 Pulp Mills Case , Joint Dissent of Judges Al -Khasawneh and Simma, para.  14. 
8 See e.g. Kate Parlett, "Parties' Engagement with Experts in International Litigation", Journal of 
International Dispute Settlement , 2018, 1 -13, p.  6 WT/DS435/AB/R/Add.1 • WT/DS441/AB/R/Add.1  
 
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  Dominican  Republic  to know whether the Panel conducted any follow -up testing and, if so, how it 
ran that follow -up testing, and what the results of that testing were.  
35. The Dominican  Republic  does not ask the Appellate  Body to decide if the evidence is, or is not, 
affected by "non -stationarity". The appeal focuses on the Panel's process in assessing 
"non-stationarity", which was conducted in a vacuum, without respecting the Dominican  Republic 's 
due process right to be he ard. Had the Dominican  Republic  been given an opportunity to comment 
on "non -stationarity", it could have addressed all these issues.  
36. The Panel's shocking approach to "non -stationarity" may be contrasted with the approach 
taken to the same issue by the Ar bitrator in US – COOL .9 In that case, as the Dominican  Republic 's 
team has subsequently learned, the Arbitrator explored "non -stationarity" with the parties: it asked 
them questions about the issue; it allowed them to submit evidence on the topic; it allow ed them to 
adjust models to resolve perceived concerns over "non -stationarity"; and it even relied on 
econometric models with a "non -stationarity" problem because the problem did not render the model 
results invalid. In short, the Arbitrator respected due process, and acted with fairness and 
independence.  
B. Example (2): the Panel's contradictory reliance on a consumption model that was 
by Australia's own account "nonsensical"  
37. A second example of a lack of objectivity illustrates the inconsistent treatment  of the evidence, 
coupled with incoherent and inadequate reasoning. In assessing whether the TPP  measure s reduced 
smoking, the parties and the Panel agreed that it was important to take into account the impact on 
smoking of increases in Australia's excise taxes . It is universally accepted that, when taxes increase, 
smoking declines .  
38. In the relevant period, Australia raised excise taxes several times. With the agreement of the 
parties, the Panel found that any econometric assessment of whether the TPP  measu res had reduced 
smoking must control for excise tax increases.10 This "tobacco costliness" control seeks to ensure 
that the TPP  measure s are not wrongly credited with a drop -in smoking that is, in reality, attributable 
to an excise tax increase.  
39. With respec t to the Dominican  Republic 's models, the Panel applied this control strictly. It 
uniformly rejected Dominican  Republic  models where the tobacco costliness control did not show a 
statistically significant decline  in smoking in response to increased costlin ess.11 
40. The Panel did not apply the same strict standard to Australia's econometric models. Late in 
the proceedings, Australia submitted a model that purported to show that the TPP  measure s had led 
to a reduction in cigarette consumption. Australia's model t ried to control for each of the three large 
excise tax increases that took place in the relevant period, including an increase of 12.5  percent in 
December 2013. However, Australia's model found that this tax increase had led to a statistically 
significant increase  in cigarette consumption.  
41. In other words, according to this model, people bought more cigarettes when tobacco taxes 
went up by 12.5  percent . Earlier in the proceedings, Australia's own expert had rightly described 
such a modeling result as "nonsensical".12 
42. Because Australia's evidence was filed late in the proceedings, the Dominican  Republic  was 
granted special leave to explain this "nonsensical" result in Australia's model. The 
Dominican  Republic  explained that this result drove the model's finding that the TPP  measure s 
reduced consumption. In short, the TPP  measure s were wrongly credited with a drop -in smoking 
that was attributable to the 12.5  percent excise tax increase. The Dominican  Republic  thus brought 
to the Panel's attention an issue which the Panel found of fundamental importance when it addressed 
the Dominican  Republic 's evidence, namely, whether a model is able to detect (correctly) the impact 
of tobacco costliness.  
 
9 Decision by the Arbitrator, US – COOL (Article  22.6 – US), paras.  5.61 and 6.37.  
10 Panel  Report, Appendix C, paras.  103-105. 
11 Panel  Report, Appendix C, paras.  103-105.  
12 Chipty Rebuttal Report, (Exhibit AUS -535) (SCI), para.  39. WT/DS435/AB/R/Add.1 • WT/DS441/AB/R/Add.1  
 
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  43. How did the Panel assess Australia's "nonsensical" evidence, and th e Dominican  Republic 's 
rebuttal? The Panel found that the TPP  measure s had led to a decline in cigarette consumption. The 
only evidence cited by the Panel to support this finding was Australia's consumption model with the 
"nonsensical" finding that a 12.5  percent tax increase had led to a statistically significant increase  
in cigarette consumption.13  
44. In doing so, the Panel never even mentioned  that Australia's model produced a "nonsensical" 
result, even though the Dominican  Republic  had alerted the Panel to  this result in a special 
submission devoted exclusively to this issue. The Dominican  Republic 's submission was not 
mentioned, let alone addressed.  
45. In contrast, the Panel certainly mentioned each instance in which a Dominican  Republic  model 
failed to find a statistically significant decline  in smoking in response to increased taxes/costliness. 
Any such evidence from the Dominican  Republic  was uniformly rejected. The Panel, however, 
entirely failed to reconcile this contradictory treatment of Australian and Dominican  Republic  models.  
46. The Panel's assessment of Australia's "nonsensical" model also strays beyond the realms of 
reasonable, independent, and fair adjudication.  
47. These are just two examples of the Panel's failure to conduct an objective assessment, but  
they illustrate the Panel's lack of objectivity in assessing the facts, which consistently redounded to 
Australia's advantage. In the next sections, the Dominican  Republic  explores these examples in more 
detail, together with many other instances of the P anel's lack of objectivity.  
48. In the sections that follow, we provide a summary of the Dominican  Republic 's claims in 
relation to the Panel's assessment, under Article  2.2 of the TBT  Agreement , of the contribution of 
the TPP  measure s to Australia's objectiv e; the trade -restrictiveness of the TPP  measure s; and, the 
availability of less trade -restrictive alternatives. We then address our claims related to the Panel's 
findings under Article  20 of the TRIPS  Agreement . 
II. THE PANEL ERRED IN FINDING THAT THE TPP MEASURES CONTRIBUTE TO 
AUSTRALIA'S OBJECTIV E  
49. The Dominican  Republic  appeals the Panel's finding that the TPP  measure s are apt to, and do, 
contribute  to Australia's objective of reducing the use of, and exposure to, tobacco products.14  
50. As the Panel explained, "the TPP  measure s [were] intended to operate on the basis of a 'causal 
chain model'", acting first on " proximal " outcomes, including the appeal of tobacco packaging, then 
on more " distal " outcomes, such as quit -related intentions, and, finally, on actual  smoking 
behaviours, as depicted in the "causal chain" below.15 
 
 
51. The fulfilment of the objective of the TPP  measure s was "predicated on their ability to influence 
smoking behaviours " themselves. Accordingly, the Panel highlighted the importance of assessing the 
actual  impact of the TPP  measure s on smoking behaviours  in Australia  based on evidence from the 
period after the implementation of the measures ("post -implementation" evidence ).16  
52. In light of the predicted "causal chain", the Panel also assessed two additional categories of 
evidence: the anticipated  impact of the TPP  measure s based on evidence from the period before  the 
implementation of the TPP  measure s ("pre-implementation ev idence "); and, the actual  impact of the 
 
13 Panel  Report, Appendix D, para.  117; and Chipty Third Rebuttal Report, (Exhibit AUS -605), p.  53. 
14 Panel  Report, para.  7.1043. See also Panel  Report, para.  7.1025.  
15 Panel  Report, para.  7.488.  
16 Panel  Report, para.  7.495. (emphasis in the original)  
WT/DS435/AB/R/Add.1 • WT/DS441/AB/R/Add.1  
 
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  TPP measures on proximal and distal outcomes  based on post -implementation  evidence regarding 
these outcomes.17 
53. Based on its assessment of these three categories of evidence, the Panel reached its overall 
conclusion th at "the evidence before us, taken in its totality, supports the view that the 
TPP measures, […], are apt to, and do in fact, contribute  to Australia's objective of reducing the use 
of, and exposure to, tobacco products".18 Having reached this finding, the P anel also considered that 
it was "reasonable" to expect that the TPP  measure s may be expected to have an impact in the 
future .19 
54. In the sections that follow, the Dominican  Republic  summarizes its claims regarding each of 
these categories of evidence. To fac ilitate, the Panel's findings with respect to each category, and 
the corresponding ground of appeal, are visualized in Figure 1, below.  
Figure 1: The structure of the Dominican  Republic 's appeal  
 
 
 
A. The Panel erred in assessing post -implementation evidence on the actual impact of 
the TPP  measure s on smoking behaviours  
55. The Dominican  Republic 's first ground of appeal  concerns the Panel's failure to make an 
objective assessment of the post-implementation  evidence concerning the actual  impact of the 
TPP measures on cigarette and cigar smoking prevalence and consumption . 
 
17 See e.g. Panel  Report, 7.983. The post -implementation evidence shows the combined effects of the 
TPP measures and the enlarged GHWs, because they were introduced on the s ame day (i.e.  1 December 
2012).  
18 Panel  Report, para.  7.1025. See also  paras.  7.1037, 7.1039, 7.1043, 7.1045.  
19 Panel  Report, para.  7.1044.  
WT/DS435/AB/R/Add.1 • WT/DS441/AB/R/Add.1  
 
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  56. The Dominican  Republic  and Australia presented competing post -implementation evidence on 
the actual impact of the TPP  measures on cigarette and cigar smoking behaviours – i.e. prevalence 
and consumption – in Australia.  
57. The Panel  rejected the Dominican  Republic 's evidence that the TPP  measure s had not affected 
prevalence and consumption for cigarettes and cigars because of perceived flaws in that evidence. 
It accepted Australia's evidence that the TPP  measure s had (i) reduced ciga rette and cigar smoking 
prevalence; and (ii) reduced cigarette consumption.20 The Panel found that the evidence did not 
allow it to reach a conclusion regarding cigar consumption.21  
58. In reaching this finding, the Panel failed to make an objective assessment under Article  11 of 
the DSU in relation to the evidence on the benchmark rate  of decline in smoking (i.e.  the trend), 
and to the robustness criteria  used by the Panel to assess the parties' evidence.  
1. The Panel's errors related to the benchmark rate of decline  
a. The Panel erred in its assessment of the benchmark rate of decline for cigarette 
 smoking prevalence  
59. The parties agreed that there was a declining trend in smoking prevalence in Australia before 
the introduction of the TPP  measure s that continu ed after their introduction.22 The parties also 
agreed that it was necessary to control for this pre -existing "benchmark rate of decline" (trend) in 
estimating the impact of the TPP  measure s using econometric models.23  
60. The Dominican  Republic 's experts demon strated that the benchmark rate of decline 
accelerated after 2006, and controlled for this acceleration by including a trend break in 2006.24 
Australia's expert asserted that the benchmark rate of decline in smoking was unchanged between 
2001 and 2015, and used a single constant linear trend in her models.25  
61. This disagreement about the correct benchmark rate of decline was important, because it had 
a decisive impact on the parties' estimates of the actual impact of the TPP  measure s on smoking 
prevalence in A ustralia. For example, when the accelerated post -2006 rate of decline is applied to 
Australia's prevalence models, these models no longer show a reduction in smoking prevalence 
attributable to the TPP  measure s.26 
62. The Panel agreed that it was important to ac count for the long -standing declining trend in 
smoking to avoid attributing to the TPP  measure s a decline resulting from the trend.27 It decided to 
proceed in a three -step analysis  of cigarette smoking prevalence, examining: first, "whether smoking 
prevalen ce has decreased following the implementation of the TPP measures";28 second , "whether 
the reduction of smoking prevalence has accelerated following [TPP] implementation";29 and, third, 
whether any acceleration identified in step 2 was attributable to the TP P measure s.30  
63. At each of these three steps, without acknowledgment or explanation, the Panel adopted a 
different  benchmark rate of decline, with the rate used progressively decelerating  at each step 
(i.e. becoming flatter ):  
 
20 Panel  Report, Appendix C, paras.  55, 102, 103 -108, 111, 118, 119 and 123(c); and Appendix D, 
paras.  44, 106 -108 an d 109 -114, 137(c).  
21 Panel  Report, Appendix D, para.  137(d).  
22 Chipty Second Rebuttal Report, (Exhibit AUS -591), para.  11; and IPE Third Updated Report, 
(Exhibit  DOM-375), paras.  32-40. 
23 Chipty Third Rebuttal Report, (Exhibit AUS -605), para.  39; and IPE T hird Updated Report, 
(Exhibit  DOM-375), para.  40. 
24 See e.g. IPE Third Updated Report, (Exhibit DOM -375), paras.  49, 55, 59 and 65.  
25 Chipty Third Rebuttal Report, (Exhibit AUS 605), paras.  3(d), 35.  
26 IPE Third Updated Report, (Exhibit DOM -375), Table 2.1 -2. 
27 Panel  Report, Appendix C, para.  41. 
28 Panel  Report, Appendix C, para.  5. 
29 Panel  Report, Appendix C, para.  5. 
30 Panel  Report, Appendix C, para.  5. WT/DS435/AB/R/Add.1 • WT/DS441/AB/R/Add.1  
 
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  o In step 1 , the Panel agreed  with the Dominican  Republic  that the rate of decline had 
accelerated in 2006.  
o In step 2 , the Panel applied a different – flatter  – benchmark rate of decline that fails to 
account for the 2006 acceleration in the rate of decline found in step 1.  
 The Panel's step 2 trend line was presented in Figure C.19, which was developed by the 
Panel itself and is not part of the Panel record.31 On interim review, Australia informed the 
Panel that the Panel had wrongly attributed this figure to Australia's expert. T he 
Dominican  Republic  has been unable to reproduce this figure.  
o In step 3 , the Panel adopted a third benchmark rate of decline, this time the one used by 
Australia's expert, which was even flatter  than the rate used in step 2, and also failed to 
account for the 2006 acceleration in the rate of decline found in step 1.  
64. In Figure  2, the Dominican  Republic  shows the three different trend lines used by the Panel:  
Figure 2: Benchmark rate of decline foun d in steps 1 to 3  
 
 
65. The flatter the trend line used immediately before the TPP  measure s were implemented (black 
vertical line), and the higher the prevalence rate at that time (the intercept of the trend lines and 
the vertical black line), the more likely  it is to find a TPP effect by comparison with the actual data 
in the post -implementation period.  
66. Thus, the Panel's progressive flattening of the rate of decline made it more likely that it would 
find, in step 2, that the rate of decline in cigarette smoki ng prevalence accelerated after introduction 
of the TPP  measure s; and, more likely that it would find, in step 3, that the TPP  measures had 
contributed to reducing cigarette smoking prevalence. As noted, had the Panel consistently used the 
green trend line , found in step 1, it would have found no TPP effects. In its finding on the trend lines, 
the Panel did not conduct an objective assessment of the evidence under Article  11 of the DSU.32  
67. First, as a result of the Panel's failure, in steps 2 and 3 , to adopt  the benchmark rate of decline 
that it established in step 1, the Panel's reasoning was "internally incoherent".33 The Panel's findings 
 
31 Panel  Report, Appendix C, Figure C.19.  
32 Appellate  Body Report, US – Continued Zeroing , para.  338. 
33 Appellate  Body Report, Argentina – Import Measures , footnote 543 to para.  5.179.  
WT/DS435/AB/R/Add.1 • WT/DS441/AB/R/Add.1  
 
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  in steps 2 and 3 "[did] not follow logically" from its finding, in step 1, that the rate of decline had 
accelerated in 20 06.34 The Panel did not acknowledge or explain this incoherence in its Report.  
68. Second , the Panel did not, in step 2, "provide reasoned and adequate explanations" for its 
findings. 35 Instead, it made findings that "lack a basis in the evidence contained in the panel record", 
adducing its own evidence in Figure C.19, that it initially attributed – incorrectly – to Australia.36 
Neither the Panel  Report  nor the Panel Record explain how th e Panel produced Figure  C.19.  
69. The Panel also compromised the Dominican  Republic 's due process rights because it did not 
"explore" Figure C.19 with the parties.37 Had the Dominican  Republic  been allowed to comment, it 
would have explained that Figure C.19 is  mis-specified because it fails to account for the trend 
acceleration in 2006, as the Panel found in step 1. Finally, in relying on its own evidence in step 2, 
the Panel "ma[d]e the case" for Australia.38  
b. The Panel erred in its assessment of the benchma rk rate of decline for smoking 
 prevalence in relation to cigars  
70. In their econometric models relating to cigar smoking prevalence, the parties also controlled 
for the benchmark rate of decline in smoking. The Dominican  Republic 's expert explained that, for  
cigar smoking, the data not only shows an acceleration  of a downward trend in 2006 (similar to 
cigarette smoking prevalence), but also a directional change in the trend in 2006: it went from an 
upward  sloping trend until 2006 (an increasing  rate of smokin g), to a downward  sloping trend 
thereafter (a decreasing  rate of smoking). The Dominican  Republic 's expert controlled for this trend 
break in 2006. Australia's expert did not and, instead, used a constant linear trend from 
2001-2015.39  
71. As with cigarette pr evalence, this difference was critical to the Panel's finding, based on 
Australia's model, that the TPP  measure s had reduced cigar smoking prevalence.40 In reaching this 
finding, the Panel failed to objectively assess the benchmark rate of decline, in viola tion of Article  11 
of the DSU.  
72. First, the Panel failed to engage with evidence that was relevant to its reasoning, and of 
importance to the Dominican  Republic 's case. The Dominican  Republic  provided evidence showing 
that Australia's model was mis -specified  because it failed to account for the "obvious and marked" 
2006 trend break.41 However, the Panel accepted Australia's results without addressing the 
Dominican  Republic 's evidence.  
73. Second , the Panel's treatment of the parties' competing evidence was "intern ally 
inconsistent".42 In the context of cigarette smoking prevalence, the Panel rejected  the complainants' 
models if they did not find a statistically significant effect of the trend on prevalence, because it 
considered this result "at odds" with the agreed  existence of a pre -TPP decline in prevalence.43 In 
contrast, in the context of cigar smoking prevalence, the Panel accepted  Dr Chipty's model even 
though it did not find a statistically significant effect of the trend.44 The Panel provided no explanation 
for this inconsistency.  
 
34 Appellate  Body Report, Colombia – Textiles , paras.  5.27 and 6.2.  
35 Appellate  Body Report, US – Upland Cotton (Article  21.5 – Brazil) , footnote 618 to para.  293. 
36 Panel  Report, Appendix C, Figure C.19; and Appellate  Body Report, EC and certain member States – 
Large Civil Aircraft , (Article  21.5 – US), para.  5.146.  
37 Appellate  Body Report, US – Large Civil Aircraft  (2nd complaint), para.  1137.  
38 Appellate  Body Report, EC and c ertain member States – Large Civil Aircraft (Article  21.5 – US), 
para. 5.221; Appellate  Body Report, EC – Fasteners (China) , para.  566; and Appellate  Body Report,  
US – Continued Zeroing , para.  343. 
39 IPE, Updated Report, (Exhibit DOM -303); IPE Third Updat ed Report, (Exhibit DOM -375); 
IPE Summary Report, (Exhibit DOM -379), paras.  115-119; and Chipty Surrebuttal Report, (Exhibit AUS -586), 
paras.  58-60. 
40 Panel  Report, paras.  7.972(c), 7.986, 7.1037; and Appendix C, paras.  122, 123(c).  
41 IPE Third Updated Report, (Exhibit DOM -375), para.  83. 
42 Appellate  Body Report, Argentina – Import Measures , footnote 543 to para.  5.179.  
43 Panel  Report, Appendix C, para.  116.  
44 Panel  Report, Appendix C, paras.  120-122; and Chipty Surrebuttal Report, (Exhibit AUS -586), 
Table  8. WT/DS435/AB/R/Add.1 • WT/DS441/AB/R/Add.1  
 
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  2. The Panel's errors related to robustness criteria used by the Panel to assess the 
parties' evidence  
74. The second category of error in the Panel's assessment of the post -implementation evidence 
on the actual effects of the TPP  measur es on prevalence and consumption relates to the robustness 
criteria it used to assess the parties' econometric evidence. The Panel's errors do not arise from the 
selection of robustness criteria, but from its failure to apply  those criteria objectively . The Panel's 
assessment lacked objectivity for a catalogue of reasons, including a failure to respect the 
Dominican  Republic's due process rights and a failure to apply the criteria in a coherent and even -
handed manner.  
75. The Panel's failure to make an objectiv e assessment applies to robustness criteria that the 
Panel developed and executed itself, without  giving the parties any opportunity to comment, as well 
as to criteria that were the subject of some exchange with the parties.  
a. The Panel's errors related to robustness criteria not debated with the parties  
76. The Panel failed to make an objective assessment regarding two robustness criteria that the 
Panel developed and executed itself, without any involvement of the parties. The first robustness 
criterion that  the Panel developed itself concerns the econometric concept of " non-stationarity ". The 
Dominican  Republic  has already addressed "non -stationarity" in the introduction above.  
77. The second robustness criterion that the Panel developed itself concerns the econometric 
concept of " multicollinearity ". The Panel defined multicollinearity as arising "when two (or more) 
explanatory variables convey the same information".45 
78. Instead, the Panel itself identified multicollinearity as an issue, without the parties ever raising 
it. The Panel developed and executed testing for multicollinearity on its own (using the so -called 
"variance inflation factor" ("VIF") test statistic); it wrote and ran computer code to implement its 
chosen test; and, it interpreted the results, and determined the consequences of those results. The 
Panel referred to the results of its work as "evidence", although none of this "evidence" is part of 
the Panel' s record.  
79. The Panel undertook all of this work in a vacuum, without giving the parties any opportunity 
to comment.  
80. The Panel found that the Dominican  Republic 's models were affected by multicollinearity, and 
rejected them on this basis.46 It asserted that  Australia's models were not affected by 
multicollinearity and relied on them. For similar reasons to those given regarding non -stationarity, 
the Panel failed to make an objective assessment under Article  11 of the DSU in assessing 
multicollinearity.  
81. First, the Panel violated the Dominican  Republic 's due process rights by failing to afford it "a 
meaningful opportunity to comment".47 Had the Dominican  Republic  been granted an opportunity to 
comment, it could have addressed, for example, the circumstances  in which multicollinearity is 
problematic; how to test  for multicollinearity; and, whether multicollinearity was a problem  in the 
parties' models.  
82. Second , the Panel treated the "same class of quantitative evidence" inconsistently.48 The Panel 
found Australia's  prevalence models to be unaffected by multicollinearity, although it gave no 
supporting information.49 It said nothing at all about whether Australia's consumption models are 
affected by multicollinearity. There is also nothing in the Panel record to confi rm whether and how 
the Panel tested Australia's models.  
83. The Dominican  Republic  has replicated the Panel's analysis of multicollinearity, using the 
VIF test statistic. The results show that several of Australia's prevalence and consumption models 
 
45 Panel  Report, Appendix B, para.  116. 
46 Panel  Report, Appendix C, para.  107. 
47 Appellate  Body Report, US — Tuna II (Article  21.5 – Mexico) , para.  7.177.  
48 Appellate  Body Report, US – Upland Cotton (Article  21.5 – Brazil) , paras.  294-295. 
49 Panel  Report, Appendix C, para.  120. WT/DS435/AB/R/Add.1 • WT/DS441/AB/R/Add.1  
 
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  are affect ed by multicollinearity. Australia's models thus "suffered from the same limitation" that led 
the Panel to reject the Dominican  Republic 's models.50 Had the Dominican  Republic  been granted its 
due process rights, it could have presented this analysis to the  Panel.  
84. Third, the Panel failed to provide "reasoned and adequate explanations" for its finding.51 With 
the Panel  Report  in hand, the Dominican  Republic  is uncertain how the Panel assessed 
multicollinearity – for example, whether and how it tested Australia 's models, and, if so, what the 
results were.  
85. Fourth , the Panel "ma[d]e the case" for Australia.52 Australia never mentioned, much less 
asserted, multicollinearity as part of its "case". By developing testing for multicollinearity, which was 
used to reject the Dominican  Republic 's models, the Panel developed its own line of evidence and 
argument that served Australia's case.53 
b. The Panel's errors related to robustness criteria debated with the parties  
86. In relation to the evidence on smoking prevalence and c onsumption, the Panel also failed to 
assess objectively robustness criteria that had been the subject of some exchange with the parties. 
The Panel erred in its application of four criteria relating to: tobacco costliness, reweighting, 
endogeneity, and the proportionality assumption. Tobacco costliness was addressed as an example 
in the introduction above.  
i. Reweighting  
87. When a researcher uses survey data to estimate the impact of a policy intervention on a 
population (like the TPP  measure s on the Australia n population), s/he must ensure that the dataset 
is representative of the underlying population. As demographic changes to the underlying population 
occur, data providers periodically reweigh  the surveyed sample to ensure that it remains 
representative, an d a researcher must control for these reweighting events.  
88. The Panel recognized the importance of reweighting for correctly estimating the actual impact 
of the TPP  measure s on smoking prevalence in the Roy Morgan Single Source ("RMSS") dataset.54 
The Panel also found that the parties controlled for reweighting events in the RMSS dataset.55 
However, the Panel rejected the robustness of the Dominican  Republic 's controls for those 
reweighting events in the RMSS dataset, while accepting the robustness of Australi a's. In so doing, 
the Panel failed to undertake an objective assessment of the matter.  
89. The Panel's finding that Australia's evidence was "robust" to reweighting involved inconsistent 
treatment of the parties' evidence.56 The Panel's errors relate to the fac t that the Panel found that 
Australia's evidence was robust to reweighting, despite the fact that the models on which Australia 
relied, and which were accepted by the Panel, were affected by issues that the Panel found 
problematic when present in the Domin ican Republic 's evidence.  
90. First, the Panel accepted  Australia's evidence when Australia's expert, Dr Chipty, relied on a 
model submitted by the Dominican  Republic 's expert, Professor List, that controlled for reweighting 
events. The Panel had rejected  the robustness of the very same model  when presented by 
Professor  List. 
91. Second,  the Panel accepted Dr Chipty's evidence relying on Professor  List's model that 
control led for reweighting, despite the fact that Dr Chipty relied on an intermediate specification that 
did not control for the declining trend in smoking. However, the Panel elsewhere insisted that the 
complainants' models were not acceptable if they did not control for the declining trend in smoking.  
 
50 Appellate  Body Report, US – Upland Cotton  (Article  21.5 - Brazil), para.  292. 
51 Panel  Report, Appendix C, para.  107. 
52 Appellate  Body Report, EC and certain member States – Large Civil Aircraft (Article  21.5 – US), 
para. 5.221.  
53 Panel  Report, Appendix C, para.  107. 
54 Panel  Report, Appendix C, para.  108. 
55 Panel  Report, Appendix C, para.  108. 
56 Panel  Report, Appendix C, para.  120. WT/DS435/AB/R/Add.1 • WT/DS441/AB/R/Add.1  
 
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  92. Third, the Panel treated the parties' evidence inconsistently in relation to multicollinearity. On 
the one hand, the Panel rejected the Dominican  Republic 's models when they controlled for 
reweighting, on the view  that reweighting increased multicollinearity.57 On the other hand, the Panel 
accepted Dr Chipty's models when she controlled for reweighting, despite the fact that all of her 
models were also affected by multicollinearity, and that, for each model, reweigh ting increased 
multicollinearity.  
93. Moreover, the Panel's reasoning regarding the treatment of reweighting events in the parties' 
evidence was "internally incoherent".58 The Panel "recognize[d] the importance of attempting to 
control" for reweighting, and co nsidered it important that Australia's prevalence results were 
"robust" to controlling for reweighting.59 However, the Panel ignored that Dr Chipty's models did not 
"attempt […] to control" for all four reweighting events in the RMSS dataset.  
ii. Endogeneit y  
94. As one of the criteria used to assess the econometric robustness, the Panel assessed whether 
the models are affected by "endogeneity". Endogeneity can arise where the TPP  measure s 
(indirectly) affect smoking by impacting other variables (such as price) that are included as controls 
in the models.60 The Panel expressed concern that, were such an "indirect" effect on smoking to 
occur (i.e. TPP  measure s → change in price → change in smoking), it would not be attributed to the 
TPP measure s but to the price.  
95. The issue of endogeneity relates, therefore, to the way the parties' models controlled for 
tobacco costliness. The parties disagreed how to control for tobacco costliness in their prevalence 
and consumption models. Three different approaches were discussed : (i) price (using retail prices, 
which account for tax and non -tax changes in price); (ii) tax levels  (which account for all tax 
changes, but not for non -tax changes in price); and, (iii) tax dummies  (which account solely for the 
three major tax hikes ado pted by Australia in 2010, 2013, and 2014).  
96. The Panel explained that the price control has the advantage of "account[ing] implicitly for all 
the factors that affect tobacco price, including the excise tax increases but not only that", but, unlike 
tax leve ls and tax dummies, potentially raises an endogeneity problem (because the TPP  measure s 
may affect price).61 
97. The Panel, therefore, rejected the Dominican  Republic 's models which used a price control. It 
accepted Australia's models because, by using tax dumm ies, they avoided a potential endogeneity 
problem.62 In so doing, the Panel failed to make an objective assessment of the matter, in violation 
of Article  11 of the DSU.  
98. The Panel treated the "same class of quantitative evidence" in an internally inconsisten t way.63 
First, the Panel credited Australia, but not the Dominican  Republic , for avoiding endogeneity in any 
models that used a non -price control (i.e. tax dummies or tax levels).64 The Dominican  Republic  
submitted several models that used tax dummies and tax levels, but these were also rejected. 
Second , the Panel dismissed the Dominican  Republic 's evidence that used a price control – but not 
Australia's – because of a potential endogeneity problem.65 Austr alia submitted model specifications 
that used price (instead of tax dummies or tax levels), and the Panel relied on them.66 
99. The Panel also failed to provide "reasoned and adequate explanations" for its finding that the 
Dominican  Republic 's experts did not a ddress "the potential impact of the TPP  measure s on prices".67 
To the contrary, for endogeneity reasons, the Dominican  Republic 's experts presented models that 
 
57 Panel  Report, Appendix C, para.  108. 
58 Appellate  Body Report, Argentina – Import Measures , footnote 543 to para.  5.179.  
59 Panel  Report, Appendix C, para.  108. 
60 Panel  Report, Appendix C, para.  120; and Appendix D, para.  115. 
61 Panel  Report, Appendix C, par a. 106. 
62 Panel  Report, Appendix C, paras.  107 and 120; and Appendix D, paras.  106 and 115.  
63 Appellate  Body Report, US – Upland Cotton (Article  21.5 – Brazil) , para.  294. 
64 Panel  Report, Appendix D, para.  115. 
65 Panel  Report, Appendix D, para.  115. 
66 Chipty Second Rebuttal Report, (Exhibit AUS -591), Table 5, Row [B]; and List Third Supplemental 
Report, (Exhibit DOM/IDN -7), Table 5.  
67 Panel  Report, Appendix C, para.  107. WT/DS435/AB/R/Add.1 • WT/DS441/AB/R/Add.1  
 
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  used tax dummies and tax levels – and not price – and still found no TPP effect on smoking. As th e 
experts explained, these results demonstrated that the TPP  measure s did not affect smoking through 
price, and that models using a price control were not affected by endogeneity.68 The Panel did not 
reconcile its statement that the Dominican  Republic  did n ot address "the potential impact of the 
TPP measure s on prices" with this evidence and argument.  
iii. Proportionality assumption  
100.  In cigarette consumption models, the Panel also considered how to control for tobacco 
costliness. The Dominican  Republic  had p resented models that used tax levels (and price) as a 
control, while Australia used only tax dummies. The Panel acknowledged that when tax levels – 
instead of tax dummies – are used, there is no TPP effect on consumption, even in Australia's 
models.69 Tax l evels accounted for all tax increases, whereas tax dummies accounted for only 
59 percent of those increases.  
101.  However, the Panel concluded that the use of tax levels was inappropriate. Tax levels assume 
proportionality between the size of a given tax increase and the  impact  of that increase on tobacco 
consumption.70 The Panel accepted Dr Chipty's assertion that thi s so-called "proportionality 
assumption" did not hold in this case.  
102.  The Panel, therefore, rejected the Dominican  Republic  consumption models that used tax 
levels.71 In so doing, the Panel failed to provide "reasoned and adequate explanations" for this 
finding, in violation of Article  11 of the DSU.72  
103.  Dr Chipty's assertion that the proportionality assumption did not hold was based on her own 
cigarette consumption model. However, as the Dominican  Republic  explained above, this model 
produced " nonsensical " resu lts, showing that a 12.5  percent increase in tax, in 2013, led to a 
statistically significant increase  in consumption.  
104.  The Panel did not "explain how it reconciled" its acceptance of Dr Chipty's assertions regarding 
the proportionality assumption, using he r "nonsensical" consumption model with the 
Dominican  Republic 's contrary "rebuttal arguments and evidence". These showed that Dr Chipty's 
assertions that the proportionality assumption did not hold were a direct consequence of her 
"nonsensical" tax result.73  
B. The Panel failed to make an objective assessment of the pre -implementation 
evidence on the anticipated impact of the TPP  measure s  
105.  The Dominican  Republic 's second ground of appeal  concerns the Panel's failure to assess 
objectively the pre-implementat ion evidence concerning the anticipated  impact of the TPP  measure s. 
For several reasons, taken individually and collectively, the Panel acted inconsistently with Article  11 
of the DSU.  
106.  The pre -implementation evidence sought to predict  the potential  effects of the TPP  measures. 
The evidence included the pre -implementation "TPP literature", along with research based on 
behavioural theory, expert opinion, and industry documents.  
1. The Pan el failed to make an objective assessment of the matter in relation to the 
evidence and argument on the appeal of tobacco products prior to the implementation of 
the TPP  measure s  
107.  The parties presented evidence and argument on whether the TPP  measure s coul d be 
expected  to have an effect on the appeal of tobacco products, and, if so, whether a change in appeal 
could be expected  to carry through to actual smoking behaviours. To recall, reduced pack appeal 
was one of three "proximal outcomes" ("mechanisms") th rough which Australia's TPP  measures were 
 
68 IPE Third Updated Report, (Exhibit DOM -375), para.  64. 
69 Panel  Report, Appendix D, p ara. 116. 
70 Panel  Report, Appendix D, paras.  106 and 116.  
71 Panel  Report, Appendix D, para.  106; Panel  Report, Appendix D, para.  116. 
72 Appellate  Body Report, US – Upland Cotton (Article  21.5 – Brazil) , footnote 618 to para.  293. 
73 Appellate  Body Report, EC and certain member States – Large Civil Aircraft , para.  918. WT/DS435/AB/R/Add.1 • WT/DS441/AB/R/Add.1  
 
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  hypothesized to influence more distal outcomes (e.g. quit -related intentions) and ultimately smoking 
behaviours.74  
108.  The context for the parties' arguments was Australia's so -called "dark market", in which 
traditiona l advertising of tobacco products was prohibited,75 and large GHWs were displayed on 
packaging, both before  and after the TPP  measure s were implemented.76 
109.  According to Australia, the TPP  measure s would reduce appeal and, ultimately, reduce 
smoking, by reduci ng consumers' "positive perceptions" of tobacco products, especially in a dark 
market.77  
110.  The Dominican  Republic  explained that Australia's assertion depended on the existence of 
positive  perceptions before the TPP  measure  were introduced. However, data col lected by Australian 
anti-tobacco entities demonstrated the exact opposite: before the TPP  measure s were introduced, 
Australian youth and adults had negative perceptions regarding  partially branded Australian packs, 
with large GHWs.78 
111.  The Dominican  Republic  also demonstrated that the relationship that Australia predicted 
between pack appeal and smoking behaviours was not supported by pre -implementation consumer 
behavior: brands described as highly appealing to Australian youth had no Australian consumers, 
while the most smoked  brands in Australia were among the least appealing  to young and adult 
Australians.79  
112.  The Panel predominantly assessed pre -implementation evidence that was not specific to 
Australia. It concluded that tobacco packaging "may be used, and has in fact been used, to generate 
positive perceptions  of tobacco products", and that plain packaging would reduce the appeal of 
tobacco products.80 The Panel also found that it was "reasonable to hypothesize  some correlation" 
between reduced appeal and sm oking behaviours in a context where packaging provided the "only 
opportunity to convey a positive perception ".81 In reaching these findings, the Panel failed to make 
an objective assessment in at least two ways.  
113.  First, despite making over 20 intermediate f indings about supposed positive  consumer 
perceptions of tobacco packaging, the Panel nowhere engaged with the Dominican  Republic 's 
evidence that: (1) before the TPP  measures, Australians already had negative  perceptions about 
partially branded packs with large GHWs; and (2) there was no relationship between brand appeal 
and smoking in Australia.82  
114.  Second , the Panel's reasoning was "incoherent". In finding that plain packaging would succeed 
by changing positiv e perceptions about tobacco packaging, the Panel emphasized the importance of 
the Australian context.83 However, the Panel failed to reconcile this finding with the only evidence 
on the record addressing perceptions about tobacco packaging in the Australian  context prior to the 
 
74 See section II, above.  
75 Panel  Report, footnote 1338 to para.  7.450; for advertising, see Panel  Report, 2.56 -2.60 and 2.67.  
76 GHWs covered 30  percent of the front face and 90  percent of the back face of tobacco packaging prior 
to the TPP  measures, and 7 5 percent and 90  percent, respectively, afterwards (Panel  Report, 
paras.  2.53-2.55).  
77 Panel  Report, paras.  7.670 and 7.848; and  Australia's first written submission, paras.  152 and 182.  
78 Dominican  Republic opening oral statement at the second substantive meeting with the Panel; 
Dominican  Republic's comments on Australia's response to question No.  170 from the Panel following the  
second substantive meeting, para.  273; White et al. 2015a, (Exhibits AUS -186, DOM -235), p.  ii43; and 
ASSAD  2011 Report, (Exhibit DOM -360), p.  115 and 257.  
79 Dominican  Republic's comments on Australia's response to question No.  160, para.  280; 
Dominican  Republic's response to Panel question No.  108, paras.  143 and 144, referring to Parr et al. (2011a), 
(Exhibits AUS -117, JE -24(49)), p.  43 and White and Bariola (2012), (Exhibit DOM -227), p.  19; 
Dominican  Republic's second written submission, para.  254; and D ominican  Republic's comments on Australia's 
response to question No.  160, para.  280.  
80 Panel  Report, paras.  7.663 (emphasis added), 7.682, and 7.778.  
81 Panel  Report, para.  7.1034 (emphasis added).  
82 Appellate  Body Report, EC and certain member States – Large Civil Aircraft , paras.  918-920. 
83 Panel  Report, para.  7.1034.  WT/DS435/AB/R/Add.1 • WT/DS441/AB/R/Add.1  
 
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  TPP measure s, which was the Dominican  Republic 's evidence that partially branded packs, with large 
GHWs, already conveyed negative  perceptions.  
2. The Panel failed to assess objectively whether the "anticipated effects" of the 
TPP measures were confirmed by the "actual effects"  
115.  The parties agreed that it was essential to assess whether the effects anticipated  in the 
pre-implementation evidence were borne out by actual  effects in the post -implementation period.84 
The parties disagreed, however, on whether the predictions in the pre -implementation evidence 
were confirmed in the post -implementation evidence.  
116.  Australia submitted that the pre -implementation TPP literature correctly predicted the actual 
effects of the TPP  measure s in Austral ia. The Dominican  Republic  submitted that this literature 
"vastly overstated" the effects actually arising from the TPP  measure s. The Panel failed to make an 
objective assessment of the parties' evidence and argument.  
117.  The Panel assessed whether the predic ted impact was borne out by the actual impact only 
with regard to the appeal  of tobacco products. The Panel found that the actual effects on appeal 
"confirm[ed] , rather than discredit[ed]" the predicted effects.85 On the other hand, the Panel did not 
simila rly verify whether the predicted impact on other proximal outcomes (GHWs, and deception) 
and on distal outcomes (e.g. quit intentions, quit attempts) were confirmed in the actual effects of 
the TPP  measure s. More generally, the Panel did not address whethe r the actual effects confirmed 
the hypothesis that the TPP  measure s would set in motion the predicted chain of effects (proximal 
outcomes → distal outcomes → smoking behaviour).  
118.  The Panel's failure to adopt a "coherent" approach to its assessment of this c ausal chain is 
particularly problematic because the Panel failed to verify precisely those variables, including 
variables closer to smoking behaviour (i.e. distal outcomes), for which the predicted effects were 
not confirmed in the post -implementation evid ence.  
3. The Panel failed to make an objective assessment of the cigar -specific evidence  
119.  The Parr et al 2011b study, commissioned by Australia, was the only pre -implementation 
study to examine the anticipated impact of plain packaging on cigar smoking.86 This study suffered 
from serious methodological flaws, some of which the authors themselves admitted.87  
120.  The Panel acknowledged the study's scientific flaws, yet relied on the study.88 In so doing, the 
Panel failed to make an objective assessment of the matte r, as required by Article  11 of the DSU.  
121.  First, the Panel failed "to provide reasoned and adequate explanations" for accepting Parr et 
al. 2011b.89 The Panel stated that the authors provided "relevant" reasons for the flaws in their 
study, which all related to practical considerations, such as time constraints.90 The Panel failed, 
however, to explain why practical considerations, or the admission of such flaws, can overcome 
scientific flaws. The evidence remains flawed in terms of scientific method.  
122.  Second, the Panel treated competing evidence inconsistently.91 For instance, the Panel 
accepted Parr et al. 2011b despite significant confounding factors in the study. The Panel was 
satisfied because these confounding factors resulted from practical considera tions. Yet, the Panel 
rejected evidence submitted by the complainants when practical considerations led to confounding 
factors.  
 
84 Dominican  Republic's comments on Australia's response to Panel question No.196, para.  573. 
85 Panel  Report, para.  7.954. (emphasis added)  
86 Panel  Report, para.  7.622.  
87 Panel  Report, para.  7.621. (emphasis added)  
88 Panel  Report, footnote 1809 to para.  7.659.  
89 Appellate  Body Report, US – Upland Cotton (Article  21.5 – Brazil) , footnote 618 to para.  293. 
90 Panel  Report, para.  7.622.  
91 Appellate  Body Report, Argentina – Import Measures , footnot e 543 to para.  5.179.  WT/DS435/AB/R/Add.1 • WT/DS441/AB/R/Add.1  
 
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  C. The Panel erred in assessing the post -implementation evidence on the actual impact 
of the TPP  measure s on proximal and dista l outcomes  
123.  The Dominican  Republic 's third ground of appeal  concerns the Panel's failure to make an 
objective assessment of the post-implementation  evidence concerning the actual  impact of the 
TPP measures on proximal and distal  outcomes.  
124.  In addition to providing post -implementation evidence on the actual impact on smoking 
prevalence and consumption, the parties submitted post -implementation evidence on the impact of 
the TPP  measure s on proximal  outcomes (i.e. appeal, GHWs, and deception mecha nisms) and distal  
outcomes closer to smoking behaviour (e.g. intentions, quit attempts).  
 
 
 
 
125.  The parties considered this evidence relevant to show whether the TPP  measure s had set in 
motion the causal chain through which the Panel expected the measures t o reduce smoking 
(proximal outcomes → distal outcomes → smoking behaviour). Australia had, for instance, funded a 
National Tobacco Plain Packaging Tracking Survey ("NTPPTS"), which was designed to evaluate 
whether the TPP  measure s were bringing about chang es at each step in the causal chain. A series 
of papers were published regarding the NTPPTS and other post -implementation datasets in which 
the authors concluded that the TPP  measure s were working as intended through the causal chain.  
126.  At the Panel's reque st, the Dominican  Republic  was given access to the NTPPTS dataset and 
certain other data, as well as computer codes used by the authors of the published papers.92 Based 
on the data provided, the Dominican  Republic  showed that the TPP  measure s had not set in  motion 
the predicted causal chain, and that the published TPP papers "provide an inaccurate picture of the 
empirical evidence", including "greatly underreporting" results that showed no impact of the 
TPP measures.93 
127.  Yet, the Panel concluded that the TPP  measure s (combined with enlarged GHWs) have "in fact 
reduced the appeal of tobacco products" and had "some impact on the effectiveness of GHWs".94 In 
its conclusion, the Panel made no reference to the evidence on other proximal outcomes or the distal 
outco mes – of which there were many – for which there were no positive TPP effects.  
128.  For a variety of reasons, individually and collectively, the Panel failed to make an objective 
assessment, as required by Article  11 of the DSU.  
1. The Panel findings on proxim al and distal outcomes are incoherent  
129.  The Panel's findings in relation to proximal and distal outcomes were incoherent. First, the 
Panel made findings that were incoherent with its findings that it was necessary to assess the 
successive links in the causal  chain, and that it was not sufficient to consider proximal outcomes 
alone.95 
130.  The Panel, and the parties, recognized the need to adopt a holistic approach to assessing the 
evidence on each successive link in the causal chain.96 The Panel specified that proxi mal outcomes 
"alone would not be sufficient  to draw conclusions about the contribution of the TPP measures to 
 
92 Panel paras.  1.78-1.100.  
93 Ajzen et al. Data Report, (Exhibit DOM/IDN -2), para.  9. 
94 Panel  Report, 7.1036.  
95 Panel  Report, footnote 2303 to para.  7.843 and para.  7.564.  
96 See e.g. Panel  Report, paras.  7.488, 7.491, 7.519, 7.580, 7. 610, 7.648, 7.684, and 7.1030.  
WT/DS435/AB/R/Add.1 • WT/DS441/AB/R/Add.1  
 
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  their public health objective", and that the impact of the TPP  measure s "depends on successive 'links 
in the [causal] chain'".97  
131.  However, the Pane l did not carry out a holistic assessment of the links in the causal chain. It 
instead adopted an atomistic assessment of each individual proximal and distal outcome. In reaching 
its overall finding, it then relied on the limited evidence of "positive" out comes, and did not take into 
account the remaining evidence of "negative" outcomes that showed no TPP effects. This "positive" 
evidence concerned certain proximal outcomes (appeal and a few GHW outcomes). However, this 
"positive" evidence was not considere d holistically with the "negative" evidence for other proximal 
outcomes (other GHW outcomes, deception, smoking enjoyment) and for all distal outcomes. This 
remaining evidence showed that the limited positive effects on proximal outcomes had not carried 
through to any other outcomes, including those closer to smoking.98 As the "enjoyment" outcome 
showed, consumers found their pack less appealing, but they still enjoyed smoking just as much .  
132.  Second , the Panel's summary of the impact of the TPP  measure s on di stal outcomes is not 
faithful to the Panel's own findings. The Panel failed to acknowledge that, for the two distal outcomes 
for which an initial TPP effect was found (i.e. calls to the Quitline and avoiding plain packs), that 
effect wore out within a year . 
2. The Panel erred in assessing the robustness of the parties' evidence  
133.  The pattern of the Panel's errors with respect to its assessment of the evidence on proximal 
and distal outcomes mirrors the errors relating to its assessment of the evidence on prev alence and 
consumption, discussed above. As with its assessment of prevalence and consumption, the Panel 
failed to adopt a process  that respected the parties' due process rights, and it failed to assess the 
evidence in a coherent and even -handed manner.  
134.  For instance, the Panel failed to make an objective assessment of the parties' evidence on 
calls to the Quitline. Without posing any question during the proceedings, the Panel identified several 
flaws in the analysis by the Dominican  Republic 's expert, Ajzen  et al, of calls to the Quitline. The 
parties did not raise, or have any opportunity to address, the critiques identified by the Panel. For 
example, the Panel developed its own graphical analysis, incorrectly presenting Ajzen et al's 
econometric model. The  parties were never able to comment on this analysis, which suffers from an 
obvious flaw. Had the Dominican  Republic  been granted its due process rights, it could have 
addressed the Panel's critique.99  
135.  The Panel also treated the parties' evidence inconsist ently by not addressing whether the 
published TPP paper on which Australia relied (Young et al 2014) was subject to the "same 
[perceived] limitation[s]" as Ajzen et al.100 In fact, Australia's evidence displays the same perceived 
flaws that the Panel identif ied in Ajzen et al. Yet, the Panel accepted Young et al 2014, without any 
critique.  
136.  Finally, the Panel "made the case" for Australia. Australia did not assert, as part of its case, 
that Ajzen et al was affected by any of the critiques identified by the Pan el. 
3. The Panel failed to make an objective assessment in finding that the datasets are 
less suited to measuring the impact on distal outcomes  
137.  At the outset of the proceedings, Australia relied on published TPP  papers examining 
Australia's datasets (e.g. NTPPTS) to assert that the TPP  measure s were working though the "causal 
chain" as intended in respect of proximal and distal outcomes.101  
138.  However, given access to the datasets and the computer code used by the authors of the 
TPP papers, Ajzen et al found th at the TPP  measure s led to very few changes in distal outcomes, 
and that none of these changes lasted even a year. Australia's data, therefore, showed that 
 
97 Panel  Report, paras.  7.564 (emphasis added), 7.693, and 7.699.  
98 Panel  Report, paras.  7.963(b), 7.1036 and 7.1043; Appendix A, paras.  30-31, 68, 84, and 86(b); 
and, Appendix B, paras.  40, 59, 71 -72, 75, 91, 100, 103, and 12 0.  
99 Appellate  Body Report , US – Continued Zeroing, para.  347. (emphasis added)  
100 Appellate  Body Report, US – Upland Cotton (Article  21.5) , para.  292. 
101 Ajzen et al. Data Report, (Exhibit DOM/IDN -2). WT/DS435/AB/R/Add.1 • WT/DS441/AB/R/Add.1  
 
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  TPP measures had failed to set in motion the predicted causal chain.102 In response, Australia 
asserte d that its datasets were not actually suited to assessing distal outcomes.103 
139.  The Panel did not explicitly address the suitability of the datasets. However, in reaching a 
conclusion on distal outcomes, it said that the NTPPTS data "may […] be more suited" to  analysing 
proximal outcomes "than more distal outcomes", in part because survey questions were not put to 
"recent quitters".104 This finding is not based on an objective assessment of the matter, as required 
by Article  11 of the DSU.  
140.  First, the Panel failed  to engage with the Dominican  Republic 's contrary evidence showing that 
the datasets were not "less suited" to assessing distal outcomes.105 The Dominican  Republic  pointed 
out that Australia's dataset designers decided to measure, and the authors of the TPP papers decided 
to report on, the TPP impact on distal outcomes. Neither the designers nor the authors – who 
overlapped – ever suggested that the datasets were not suited to assess distal outcomes. The 
Dominican  Republic  also showed that the suitability of the datasets was confirmed by the empirical 
evidence.   
141.  Second , the Panel's reasoning is internally incoherent. The Panel explained that the datasets 
were unreliable because questions on distal outcomes "were not asked to 'recent quitters'", which 
necessarily assumes that the TPP  measure s induced increased quitting within the first year of 
implementation (the survey period).106 However, the Panel elsewhere accepted that the 
TPP measure s had no positive impact on quitting in the first year of implement ation.107 
4. The Panel failed to make an objective assessment regarding cigar -specific evidence  
142.  Only one paper – by Miller et al 2015 – examined the post -implementation impact of the 
TPP measures on cigar smoking.108 Australia relied on Miller et al 2015 as affirmative evidence of 
such an impact.109  
143.  However, Ajzen et al identified serious methodological shortcomings in the study. They also 
explained that the results, even if taken at face value, show that the TPP  measu res had failed to 
produce the anticipated effects on cigar smoking.110 
144.  The Panel accepted Miller et al 2015 because: the study acknowledged  the methodological 
shortcomings; it was the only paper addressing the impact of the TPP  measure s on cigar smokers; 
and it was unclear  to what extent a different methodology would have changed the results of the 
study.111 In so finding, the Panel erred under Article  11 of the DSU.  
145.  First, the Panel treated competing evidence inconsistently. On one hand, for Miller et al 2015,  
the Panel used the following as reasons to accept the study: the authors' acknowledgement of 
shortcomings, ambiguity in the consequences of changing methodology, and the absence of other 
relevant data.112 On the other hand, in assessing the complainants' ev idence, the Panel used similar 
considerations as reasons to reject  the robustness of evidence.113 
 
102 Dominican  Republic's comments on Australia's response to Panel question No. 198, paras.  394 
and 713. 
103 Australia's response to Panel question No 196, para.  237. 
104 Panel  Report, Appendix B, para. 118.  
105 Australia's response to Panel question No 196, para.  237. 
106 Panel  Report, Appendix B, para.  118; and Ajzen et al. Second Data Rebuttal Report, 
(Exhibit  DOM/IDN -8), para.  14. 
107 Panel  Report, Appendix A, footnote 163 to para.  101; and Appendix D, footnote 50 to para.  46, and 
paras.  90, 111, and 113.  
108 Panel  Report, para.  7.622.  
109 Australia's first written submission, paras.  82, 173, 184, 197, and footnote 618 to para.  439. 
110 Dominican  Republic's second written submissi on, paras.  457-462; Ajzen et al. Data Report 
(Exhibit  DOM/IDN -2), paras.  251-262. 
111 Panel  Report, Appendix A, paras.  32 and 71; and, Appendix B, paras.  40 and 76.  
112 Panel  Report, Appendix A, paras.  32 and 71; see also para. 72; and, Appendix B, paras.  40 and 76.  
113 Panel  Report, para.  7.955; Appendix A, para.  69; Appendix B, paras.  38, and 115 -116; Appendix D, 
para. 114; and Appendix E, paras.  30-31. WT/DS435/AB/R/Add.1 • WT/DS441/AB/R/Add.1  
 
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  146.  Second , the Panel failed to provide reasoned and adequate explanations, and failed to engage 
with the Dominican  Republic 's evidence, in its assessment of Ajzen et al and Miller et al 2015. In 
one instance, the Panel explicitly cited Ajzen et al as the basis for findings that were, in fact, 
contradictory to the evidence presented by Ajzen et al.114 The Panel also failed to address, in its 
assessment of the impact of  the TPP  measure s on cigar smoking, the Dominican  Republic 's evidence 
that the TPP  measure s had no impact on certain distal outcomes.115 The Panel's failure to engage 
with this evidence had "an explicit bearing on the objectivity of [its] factual assessment" .116 
5. The Panel erred in relation to the evidence on the correlation between the appeal of 
tobacco products and smoking behaviours  
147.  Both the Dominican  Republic  and Australia presented post-implementation  evidence on the 
existence of a correlation between th e appeal of the tobacco products and smoking behaviours, as 
discussed above. In the absence of such a correlation, a reduction in the appeal of tobacco products 
cannot cause a change in smoking behaviours.  
148.  Australia relied on data analysis in one of the T PP papers, by Brennan et al 2015, to assert 
that a correlation existed.117  
149.  With access to the authors' data and computer code, Ajzen et al re -analysed Brennan et al, 
and found that it did not correct for systematic bias towards finding false positives.118 Ajzen et al 
then corrected for this bias, and found that there was no correlation.119  
150.  While the Panel accepted Brennan et al's results, it did not discuss Ajzen et al's criticisms of 
the paper, in particular the systematic bias towards finding false positives.120 Instead, the Panel 
separately criticized Ajzen et al's analysis on the basis that it detected " only one or two " statistically 
significant explanatory variables, and could therefore be subject to multicollinearity.121 The Panel 
failed, once again, to make an objective assessment of the parties' evidence and argument.  
151.  First, the Panel compromised the Dominican  Republic 's due process rights by applying 
econometric criteria that it did not "explore" with the parties.122 The Panel determined, on its own 
initiative, and without providing the parties with an opportunity to comment, that the number of 
statistical significant control variables , and multicollinearity , were pertinent to assessing Ajzen et 
al.123  
152.  Second , the Panel t reated the parties' evidence inconsistently. It criticized Ajzen et al for 
perceived flaws related to the number of statistically significant control variables and 
multicollinearity, yet accepted analysis by Brennan et al 2015, which was subject to exactly  the 
"same  limitation[s]".124 
153.  Third, the Panel failed to provide reasoned and adequate explanations for its assertion that 
Ajzen et al is affected by an insufficient number of statistically significant control variables and by 
multicollinearity. Even with th e Panel  Report  in hand, the Dominican  Republic  is left to guess the 
basis for the Panel's criticisms, including any basis in the economic literature.  
 
114 See Panel  Report, Appendix A, para.  71 (emphasis added); and Ajzen et al. Data Report, 
(Exhibit  DOM/IDN -2), para. 257. The Panel's findings can also not be based on Miller et al. for the simple 
reason that these authors failed to reports these results.  
115 See Panel  Report, Appendix B, paras.  40 and 120(e); and Ajzen et al. Data Report, 
(Exhibit  DOM/IDN -2), para . 257; and Dominican  Republic's second written submission, paras.  457-462. 
116 Appellate  Body Report, EC – Fasteners (China) , para.  442. 
117 Australia's first written submission, para.  204. 
118 Ajzen et al. Data Report, (Exhibit DOM/IDN -2), para.  75(e); and Ajze n et al. Second Data Rebuttal 
Report, (DOM/IDN -8). 
119 Ajzen et al. Data Report, (Exhibit DOM/IDN -2), para.  203. 
120 Panel  Report, Appendix B, para.  116.  
121 Panel  Report, Appendix B, para.  116.  
122 Appellate  Body Report, US – Large Civil Aircraft (2nd complaint ), para.  1137.  
123 Panel  Report, Appendix B, para.  116; and Appellate  Body Report, US – Large Civil Aircraft 
(2nd complaint) , para.  1137.  
124 Appellate  Body Report, US – Upland Cotton (Article  21.5) , para.  292 (emphasis added).  WT/DS435/AB/R/Add.1 • WT/DS441/AB/R/Add.1  
 
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  154.  Fourth , and finally, the Panel "made the case" for Australia. Australia "did not claim before the 
Panel" t hat the complainants' econometric models should be assessed on the basis of the number of 
statistically significant control variables and of multicollinearity.125 It never mentioned these criteria 
as part of its case.  
D. The Panel erred in assessing the evid ence on the potential future impact of the 
TPP measures  
155.  The Dominican  Republic 's fourth ground of appeal  concerns the Panel's failure to make an 
objective assessment of the evidence on the potential future impact of the TPP  measure s on smoking 
behaviours.   
156.  At the outset of the proceedings, Australia argued that it was too soon to evaluate the actual 
impact of the TPP  measure s on prevalence and consumption, because such effects would only 
materialize, or be detectable, at some point in the future.126 Australi a subsequently changed its 
position when its expert, Dr Chipty, claimed to find that the TPP  measure s had already had an actual 
impact on smoking behaviour.127  
157.  At the same time, Australia maintained that the greatest effect on smoking behaviour would 
occur "in the long term".128 Australia advanced two hypotheses: the first is that TPP effects on youth 
initiation will be delayed ("delayed initiation" argument); and, the second is that TPP effects on 
cessation will be delayed ("delayed cessation" argument).  
158.  The Dominican  Republic  demonstrated that Australia's two hypotheses were not "tested and 
supported by sufficient evidence".129 The "delayed initiation" theory relied on an assumption that 
Australian youth had positive perceptions of tobacco packaging before the  introduction of the 
TPP measures, which the Dominican  Republic  had shown to be false.130 The "delayed cessation" 
theory relied on an assumption that the TPP  measure s had caused an increase in quit attempts, 
which the Dominican  Republic  had also shown to be false.131 Further, the evidence that certain 
TPP effects had worn out in less than a year contradicted Australia's hypothesis that the TPP effects 
would strengthen over time.132 
159.  The Panel did not consider any of this evidence and argument in its assessment of potential 
future contribution. Instead, it merely stated that it considered " reasonable " Australia's  "suggestion " 
that the TPP  measures may have delayed initiation and cessation effects, and may, therefore, 
contribute to Australia's objective in future.133 In so doing, the Panel erred in two ways.  
160.  First, the Panel incorrectly applied the legal standard for assessing a "future" contribution 
under Article  2.2 of the TBT Agreement . The Appellate  Body has underscored that panels must 
establish a measure's potential future contribution on the basis of "quantitative projections in the 
future, or qualitative reasoning based on a set of hypotheses that are  tested and supported by 
sufficient evidence ".134 In this case, the Panel failed t o address any evidence to establish that 
Australia's hypotheses were properly "tested and supported by sufficient evidence".135 
 
125 Appellate  Body Report, EC and certain member States – Large Civil Aircraft  (Article  21.5 – US), 
para. 5.221.  
126 Australia's first written submission, para.  670. 
127 See e.g. Australia's second written submission, para.  509; response to Panel question No. 196, 
para. 238. See also  Integrated executive summary of the arguments of the Dominican  Republic, Annex B -1, 
paras.  55-71. 
128 Australia's second written submission, paras.  6, 495 and 498.  
129 Dominican  Republic's second written submission, paras.  379-380. 
130 See Section above, related to the evidence on consumer perceptions.  
131 Dominican  Republic's second written submission, para.  500; Ajzen et al. Data Report, 
(Exhibit  DOM/IDN -2), p.  42, Table 5A.  
132 Dominican  Republic's second written submission, para.  483. 
133 Panel  Report, para.  7.1044.  
134 Appellate  Body Report, Brazil – Retreaded Tyres , para.  151 (emphasis added); and Panel  Report, 
para. 7.982.  
135 Panel  Report, para.  7.982; and Appellate  Body Report, Brazil – Retreaded Tyres , para.  151 
(emphasis added).  WT/DS435/AB/R/Add.1 • WT/DS441/AB/R/Add.1  
 
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  161.  Second , the Panel erred under Article  11 of the DSU. Specifically, the Panel failed to engage 
with the Dominican  Republic 's eviden ce on Australia's hypothesized future TPP effects. This evidence 
refuted the premises of Australia's hypotheses and was, therefore, highly relevant to the Panel's 
assessment. The Panel offered no explanation to show how the asserted "reasonableness" of 
Australia's "suggestion" of future effects was grounded in anything more than speculation.136 
III. THE PANEL'S FIN DINGS ON THE TRADE -RESTRICTIVENESS OF TH E TPP MEASURES 
DERIVE FROM ERRONEOU S APPLICATION OF A RTICLE  2.2 OF THE TBT AGREEMENT , AND 
FAILURE TO MAKE A N OBJECTIVE ASSESSME NT UNDER A RTICLE  11 OF THE DSU  
162.  Before the Panel, the Dominican  Republic  explained that Article  2.2 prohibits technical 
regulations that are "more trade -restrictive than necessary to fulfil a legitimate objective, taking 
account of the r isks non -fulfillment would create". As the Appellate  Body has explained, a measure 
is trade -restrictive if it has a limiting effect on international trade,137 including by limiting 
"competitive opportunities" of imported products as revealed through the desi gn, structure and 
expected operation of a measure.138 In this section, the Dominican  Republic  summarizes the Panel's 
errors in its assessment of the trade -restrictiveness of the TPP  measure s.  
A. The Panel erred in applying the concept of "trade -restrictive"  under Article  2.2 of 
the TBT  Agreement  
1. The Panel erroneously applied Article  2.2 of the TBT  Agreement  in finding that a 
limitation on competitive opportunities was not a sufficient basis to constitute trade -
restrictiveness  
163.  Before the Panel, the Dominican  Republic  explained that a measure is "trade -restrictive" under 
Article  2.2 of the TBT Agreement  if it has a "limiting effect" on "competitive opportunities" for 
imported products.139 Consistent with this standard, the Dominican  Republic  explained t hat the 
TPP measures are trade -restrictive because they require all tobacco products to be sold as 
"undifferentiated commodity products that appear to be virtually identical to any other tobacco 
product on the Australian market" .140 Thus, by their design and structure alone , the TPP  measure s 
restrict the competitive opportunities enabled by product differentiation.141 Evidence of actual 
trade  effects is supplementary and not necessary to find trade -restrictiveness.142  
164.  The Panel agreed, in principle, th at a limitation on competitive opportunities may be shown 
through a qualitative assessment of the design and operation of the measures, and need not "be 
based on actual trade effects".143 The Panel also agreed that the TPP  measure s "limit the opportunity 
for tobacco manufacturers to compete on the basis of […] brand differentiation", which has a 
detrimental impact on consumers' "loyalty" and "willingness to pay".144 
165.  However, despite acknowledging that, by their very design, the TPP  measure s limit 
competitive op portunities, the Panel found that this was not sufficient to demonstrate trade -
restrictiveness. Instead, the Panel found that it must be shown, using "appropriate evidence", " how 
such effects on the conditions of competition on the market give rise to limi ting effects on 
international trade in tobacco products".145 This finding relied on an improperly narrow conception 
of "competitive opportunities" as relating exclusively to price -related (perfect) competition.  
166.  The Panel further erred in applying Article  2.2 of the TBT Agreement  by improperly 
distinguishing between an assessment of the trade -restrictiveness of discriminatory versus non -
discriminatory measures, which is inconsistent with case law under Article  2.2. The Panel effectively 
 
136 Panel  Report, para.  7.1044.  
137 Appellate  Body Report, US – COOL , paras.  375 and 477. See also  Panel  Report, US – Tuna II 
(Mexico) , para.  7.455.  
138 Appellate  Body Report, US – Tuna II (Mexico) , para.  319. 
139 Panel  Report, para.  7.1049.  
140 Panel  Report, para.  7.1104.  
141 Panel  Report, para.  7.1107.  
142 Panel  Report, para.  7.1049.  
143 Panel  Report, para.  7.1076; see also Appellate  Body Report,  Argentina – Import Measures , 
para. 5.217 (referring to the Appellate  Body Reports, China – Raw Materials , paras.  319-320).  
144 Panel  Report, para.  7.1167. (emphasis added) (internal footnote omitted)  
145 Panel  Report, paras.  7.1168. (emphasis in the original)  WT/DS435/AB/R/Add.1 • WT/DS441/AB/R/Add.1  
 
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  found that, while disc riminatory measures do not  require evidence of trade effects to demonstrate 
trade -restrictiveness, non -discriminatory measures do.146  
2. The Panel erroneously applied Article  2.2 of the TBT  Agreement  by requiring that 
the data on cigarette sales "exclusivel y" show the form of trade -restrictiveness alleged 
by the Dominican  Republic   
167.  The Dominican  Republic  presented evidence of actual trade  effects of the TPP  measure s, 
notwithstanding that such evidence was not necessary because the TPP  measure s restrict 
compe titive opportunities by design.147 Specifically, the Dominican  Republic  presented evidence of 
"downtrading", i.e.  a substitution of high -end products to low -end products due to consumers' 
diminished loyalty and willingness to pay.148 The Panel rejected this as  evidence of trade -
restrictiveness, because it found the complainants had not demonstrated that the reduction in the 
ratio of high -end to low -end cigarettes was exclusively the result of downtrading caused by the 
TPP measures.149 Such a rigid causation requi rement constitutes a misapplication of Article  2.2.150 
3. The Panel erred in application of Article  2.2 of the TBT  Agreement  by requiring 
consideration of possible actions by suppliers to counteract the trade -restrictive effects 
of the TPP  measure s on consumers  
168.  The Panel further erred in its application of Article  2.2 of the TBT Agreement  by treating the 
commercial response of suppliers to the TPP  measure s as a necessary aspect of an analysis of trade -
restrictiveness. In particular, the Panel reasoned that, because suppliers might be able to adjust 
their commercial strategy to offset the trade -restrictive impact of the TPP  measu res, this could 
prevent a finding of trade -restrictiveness.151 However, in establishing trade -restrictiveness, a 
complainant is not required to demonstrate that suppliers cannot take steps to overcome a 
measures' limitations on competitive opportunities.152  
B. The Panel failed to make an objective assessment, under Article  11 of the DSU, of 
the parties' evidence and argument on the actual trade effects of the TPP  measure s 
169.  The Dominican  Republic  submitted evidence showing that the TPP  measure s led to 
downtradin g. The Panel agreed that the TPP  measure s contributed to the reduction in the ratio of 
high-end to low -end cigarettes in Australia. However, the Panel found this did not  demonstrate actual 
trade effects, on the basis of the Panel's own "graphical analysis" .153 The Panel found that its own 
"graphical analysis" "implie[d]" that "at least part" of this reduction in ratio was due to the overall 
reduction in sales – i.e. to quitting – and not to switching to low -end products.154 However, neither 
the complainants nor  Australia submitted the "graphical analysis" on which the Panel relied. Instead, 
this material was produced by the Panel on its own initiative. The Panel failed to make an objective 
assessment under Article  11 in the following three  respects.  
170.  First, in denying the Dominican  Republic  an opportunity to comment on the Panel's graphical 
analysis, and its interpretation thereof, the Panel compromised the Dominican  Republic 's due 
process rights. Second , the Panel failed to provide "reasoned and adequate explana tions" for the 
inferences it drew from its own graphical analysis, which are incorrect. Third, by rejecting the 
complainants' evidence based on the Panel's own graphical analysis, the Panel "made the case" for 
Australia.  
 
146 See Panel  Report, paras.  7.1168.  
147 See Dominican  Republic's first written submission, para.  978; second written submission, para.  938; 
and comments on Australia's response to Panel question No. 151.  
148 Panel  Report, para.  7.1197.  
149 See Panel  Report, Appendix E, para.  56(c); see also  Appendix E, para.  55. 
150 See Appellate  Body Report, US – Tuna II (Mexico) , para.  236-239. 
151 Panel  Report , paras.  7.1201, 7.1221, 7.1218 and 7.1181.  
152 See Appellate  Body Report, Thailand – Cigarettes (Philippines) , para.  117. 
153 Panel  Report, Appendix E, para.  55. 
154 Panel  Report, Appendix E, para.  55. WT/DS435/AB/R/Add.1 • WT/DS441/AB/R/Add.1  
 
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  IV. THE PANEL'S ANALYSI S OF THE LE SS TRADE -RESTRICTIVE  ALTERNATIVES 
PROPOSED BY THE D OMINICAN  REPUBLIC  REFLECTS ERRORS IN APPLICATION OF 
ARTICLE  2.2 OF THE TBT AGREEMENT , AND FAILURES TO MAK E AN OBJECTIVE 
ASSESSMENT UNDER A RTICLE  11 OF THE DSU  
171.  Section IV.A summarizes the Panel's multiple e rrors in assessing two of the alternatives that 
the Dominican  Republic  argued would be less trade -restrictive, and make an equivalent contribution, 
to Australia's objective. These were: (1) an increase in the minimum legal purchase age of tobacco 
products from 18 to 21 ("MLPA increase") and (2) an increase in excise taxation of tobacco products 
("tax increase").  
A. The Panel erred in evaluating the trade -restrictiveness of the proposed alternatives  
172.  The Dominican  Republic  explained that, in addition to a vo lume based -restriction, the 
TPP measures entailed an additional type of trade -restriction  arising from the elimination of 
competitive opportunities associated with the ability to differentiate products through branding. By 
contrast, the Dominican  Republic 's proposed alternatives would restrict trade only by reducing sales 
volumes. Thus, the Dominican  Republic  explained that the challenged measures are more trade -
restrictive than the proposed alternatives.155  
173.  Earlier in its findings, the Panel rejec ted the Dominican  Republic 's argument that the 
TPP measures' limitation on the competitive opportunities associated with branding constitutes a 
trade -restriction, and found that the TPP  measure s were trade -restrictive only by virtue of their 
impact on the volume of trade. Recalling these findings, the Panel concluded that, to the extent that 
the Dominican  Republic 's proposed alternatives made an equivalent contribution to 
Australia's  objective, they would reduce trade volumes to a commensurate degree. The P anel was, 
therefore, not persuaded that the complainants had demonstrated that an MLPA increase or tax 
increase would be less trade -restrictive.156  
174.  However, the Panel had erred in assessing the trade -restrictiveness of the TPP  measure s. 
Accordingly, when as sessing whether the proposed alternatives were less trade -restrictive than the 
TPP measure s, the Panel's benchmark – the degree of trade -restrictiveness of the TPP  measure s – 
was improper. The Panel thus erred in finding that the increased MLPA and tax inc rease alternatives 
were not less trade -restrictive than the TPP  measure s. 
175.  In addition, the Panel erred in evaluating the MLPA increase. In making this evaluation, the 
Panel took into account the "future effects" of the trade -restrictiveness  of an MLPA incr ease.157 
However, when assessing the contribution  of an MLPA increase to Australia's objective, the Panel 
failed  to take into account the "future effects" of an MLPA increase. Thus, the Panel provided 
"incoherent" reasoning, inconsistently with Article  11 of the DSU.  
B. The Panel erred in evaluating the contribution of the proposed alternatives  
176.  Before the Panel, the Dominican  Republic  argued that an MLPA increase and a tax increase 
would contribute to Australia's objective by banning youth access, and loweri ng financial access, to 
tobacco products. The Panel found that, while these measures were apt to contribute to Australia's 
objective, they would not make an equivalent  contribution to Australia's objective, because absent 
the TPP  measure s, the effects of t obacco packaging would not be addressed "at all", which would 
weaken the "synergies" in Australia's tobacco control policy.158 This finding resulted from errors 
under Article  11 of the DSU, as well as an erroneous application of Article  2.2 of the TBT Agreem ent. 
1. The Panel's errors under Article  11 of the DSU  
177.  Elsewhere in its reasoning, the Panel agreed that other elements of Australia's tobacco control 
policy – including the GHW, point of sale bans, and existing laws against misleading tobacco 
packaging – addressed the effects of tobacco packaging. The Dominican  Republic  also submitted 
argument and evidence to this effect. Thus, the Panel's finding that, without the TPP  measures, 
 
155 See Dominican  Republic's response to Panel question No. 151.  
156 Panel  Report, para.  7.1417 (MLPA increase) and para.  7.1495 (tax increase).  
157 Panel  Report, para.  7.1413.  
158 Panel  Report, para.  7.1459, 7.1462, 7.1526 -7.1531.  WT/DS435/AB/R/Add.1 • WT/DS441/AB/R/Add.1  
 
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  tobacco packaging as a means of communication would not be addressed "at all",  is simply incorrect. 
The Panel failed to provide reasoned and adequate explanations and coherent reasoning, and failed 
to engage with the Dominican  Republic 's argument and evidence.  
178.  In assessing the "future effects" of an MLPA increase, the Panel also pr ovided "incoherent" 
reasoning. When the potential future effects of a measure worked in favor of Australia , the Panel 
took them into account. But, when the potential future effects worked in favor of the 
Dominican  Republic , the Panel did not.  
2. The Panel's errors in the application of Article  2.2 of the TBT  Agreement  
a. The Panel erred in rejecting the proposed alternatives on the basis that they 
contributed to Australia's objective using different means than the TPP  measure s 
179.  The Panel accurately articulated the standard under Article  2.2 of the TBT  Agreement , finding 
that "a proposed alternative may achieve an equivalent degree  of contribution in ways different  from 
the technical regulation at issue, and that what is relevant is the ove rall degree of contribution that 
the technical regulation makes to the objective pursued ".159  
180.  However, in evaluating the facts, the Panel found that, in order to make a contribution 
equivalent to that of the challenged measures, the proposed alternatives must address " the aspect 
of the problem  that the challenged measures seek to address".160 Thus, for the Panel, alternatives 
working through a different mechanism could never make the degree of contribution , because they 
would " necessarily leave  in place those aspects of tobacco product and retail packaging that the 
TPP measures address".161 Essentially, the Panel rejected any alternatives that work through a 
mechanism different than the TPP  measure s. This approach is not consistent with the legal standard 
under A rticle 2.2, as articulated by the Panel itself.  
b. The Panel erred in its application of Article  2.2 of the TBT Agreement  when assessing 
the presence of synergies on a one -sided basis  
181.  A key aspect of the Panel's reasoning was that "synergies" may be lost if the TPP  measure s 
were replaced with the proposed alternatives.162 By "synergies", the Panel referred to a situation 
where the TPP  measure s make another, existing tobacco control measure more effective in reducing 
smoking. However, the Panel took into acco unt only the loss of synergies that could arise from 
replacing the TPP  measure s; the Panel did not take into account synergies that could be gained  from 
implementing the proposed alternatives, despite evidence of such synergies.163 The Panel therefore 
failed  to assess the proposed alternatives in the same way it assessed the TPP  measures.  
V. THE PANEL'S ANALY SIS OF THE D OMINICAN  REPUBLIC 'S CLAIMS UNDER 
ARTICLE  20 OF THE TRIPS  AGREEMENT  FAILED TO FULFIL TH E REQUIREMENTS OF 
ARTICLE  7.1 OF THE DSU, AND FAILED TO AMOUNT TO AN OBJECTIVE ASSESSM ENT OF 
THE MATTER UNDER A RTICLE  11 OF THE DSU  
182.  The Dominican  Republic  argued that the TPP  measure s impose "special requirements" that 
"unjustifiably encumber[]" the "use of a trademark in the course of trade", under A rticle 20 of the 
TRIPS  Agreement .164 In assessing this claim, contrary to Articles 7.1 and 11 of the DSU, the Panel 
completely failed to assess the justifiability of the encumbrance required by a distinct aspect of the 
TPP measure s, namely the TPP  measure s' prohibition on word marks on cigarette sticks. Further, 
the Panel's findings under Article  20 of the TRIPS  Agreement  derived from its erroneous findings 
under Article  2.2 of the TBT Agreement  on the contribution of the TPP  measure s and on the 
Dominican  Republic's proposed alternative measures.165 
 
159 Panel  Report, para.  7.1454 (emphasis added), citing Appellate  Body Report, US – COOL 
(Article  21.5 – Canada and Mexico) , para.  5.215.  
160 Panel  Report, para.  7.1731.  
161 Panel  Report, para.  7.1526. (emphasis added)  
162 See Panel  Report, para.  7.1528.  
163 See Dominican  Republic's comments on Australia's response to Panel question No. 148, para.  111. 
164 See Dominican  Republic's second written submission, para.  549. 
165 See Panel  Report, paras.  7.2592 -7.2593, 7.2600.  WT/DS435/AB/R/Add.1 • WT/DS441/AB/R/Add.1  
 
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  ANNEX B -3 
EXECUTIVE SUMMARY OF AUSTRALIA'S APPELLEE'S SUBMISSION  
1. This dispute involves challenges to Australia's tobacco plain packaging measures ("the 
TPP measures"), which operate to prevent the tobacco industry's well -documented exploitation of 
product and packaging design features to influence consumer behaviour, particularly the behaviour 
of young people. Australia implemented these measures on the basis of three decades of evidence 
and an expl icit recommendation in the Guidelines to the World Health Organization ("WHO") 
Framework Convention on Tobacco Control ("FCTC").  
2. The four original complainants instituted this dispute to challenge Australia's TPP  measure s, 
and the Panel rejected their cla ims in full. Two of the original complainants have accepted the 
findings and conclusions of the Dispute Settlement Body ("DSB"), and those reports have been 
adopted. Only the Dominican  Republic  and Honduras have appealed the report of the Panel in their 
respective disputes.  
3. In challenging the Panel's findings and conclusions on appeal, neither the Dominican  Republic  
nor Honduras advances any credible claim that the Panel erred in its legal interpretations of the 
relevant provisions of the covered agreements , or in their application. With respect to the 
TRIPS  Agreement, Honduras pursues on appeal only two of its ten original claims, arguing that the 
Panel incorrectly interpreted and applied Article  16.1 and Article  20 of the TRIPS  Agreement . The 
Dominican  Republic does not even advance its own arguments on these points, but merely 
incorporates by reference Honduras' claims of error into its appeal. With respect to Article  2.2 of the 
TBT Agreement , both appellants acknowledge that the Panel "correctly articulat ed the legal standard 
that applies under the TBT  Agreement ",1 yet proceed nonetheless to advance a claim of "legal error" 
on the part of the Panel.  
4. Instead of advancing credible legal claims, the appellants have brought an unprecedented 
challenge to the factual findings of a panel under Article  11 of the Understanding on Rules and 
Procedures Governing the Settlement of Disputes ("DSU"). The appellants ' claims that the Panel did 
not undertake an objective assessment of the matter before it relate overwhelmingly to the Panel's 
factual findings in support of its conclusion that the complainants failed to demonstrate that the 
TPP measures are not apt to co ntribute to Australia's legitimate public health objective.  
5. The appellants' contentions are, however, utterly belied by the depth and thoroughness of the 
Panel's 1,266 page report.2 Instead of rushing to judgment, as the appellants contend, the Panel 
engaged in a comprehensive review of over 5,000 pages of party submissions, over 1,600 exhibits, 
and over 80 expert reports.3 In Australia's view, it is fair to say that the Panel  Report  before the 
Appellate  Body represents the most far -reaching assessment of an evidentiary record in the history 
of the DSB, encompassing, inter alia , complex issues of public health, behavioural theory, marketing, 
and econometrics.  
6. The attack on the Panel's findings of fact under Article  11 of the DSU far exceed the scope of 
any prior challenge to a panel's exercise of its fact -finding function. Having failed to persuade the 
Panel that the TPP  measure s are not apt to contribute to Australia's legitimate public health 
objective, the appellants have used their right to appellate rev iew under Article  17.6 of the DSU to 
try to discredit the manner  in which the Panel evaluated nearly every piece of contested evidence, 
especially the available quantitative evidence of contribution in the limited period following the 
implementation of the  TPP measure s. The appellants' attacks upon the objectivity of the Panel in 
 
1 Honduras' appellant's submission, para.  11. See als o Dominican  Republic's appellant's submission, 
para. 1245.  
2 The Panel  Report consists of 889 pages in the main body of the Report, plus 152 pages of analysis of 
the post -implementation evidence and 226 pages of annexures.  
3 The expert reports submitted by  the parties included nearly 30 reports addressing complex 
econometric analyses of data; nearly 25 reports on public health, psychology and behavioural theory; 
seven  literature reviews commissioned by the complainants; eight reports on marketing theory; fo ur reports on 
illicit trade and market conditions; and six reports on alternative measures and regulatory compliance.  WT/DS435/AB/R/Add.1 • WT/DS441/AB/R/Add.1  
 
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  evaluating this evidence are completely unfounded and, more broadly, implicate grave systemic 
concerns about the use of appellate review to re -litigate a panel's findings of fact.  
I. THE CONTEXT OF TH IS APPEAL  
7. Australia implemented the TPP  measure s as the next logical step in its comprehensive 
approach to tobacco control, on the basis of over three decades of research. The evidence supporting 
this decision has been reviewed by pre -eminent bodies such as successive United  States  Surgeons 
General, the United  States  National Cancer Institute, the United  States  Institute of Medicine, and 
the WHO, as well as subsequent reviews by independent experts commissioned by governments and 
nationa l courts.  
8. The evidence overwhelmingly confirmed: (i) the importance to the tobacco industry of 
recruiting youth and adolescents to sustain their business model; (ii) that the tobacco industry by 
its own admission has, over the course of decades, used toba cco packaging as a medium for 
advertising and promoting tobacco products; (iii)  that in a dark market like Australia, where all other 
forms of tobacco advertising and promotion are banned, the tobacco industry has openly admitted 
that the tobacco pack oper ates as a mobile "billboard"; and (iv) that the appearance of tobacco 
packaging, including the appearance of the product itself, is capable of affecting smoking -related 
behaviours including initiation by young people, cessation and relapse.  
9. The complainan ts came to the panel proceedings in full knowledge of these conclusive findings. 
They therefore assumed the burden of demonstrating a series of counter -intuitive  propositions in an 
attempt to establish that the TPP  measure s are not "apt" to contribute to A ustralia's objective. The 
complainants first made these arguments by attacking the extensive qualitative  evidence before the 
Panel, arguing that:  
• the pre -implementation evidence, as contained in numerous studies published in 
peer-reviewed journals, was no t of "a quality or methodological rigour" sufficient to 
provide a reliable basis for implementing the TPP  measure s;  
• tobacco packaging is not a form of advertising or promotion, despite tobacco industry 
documents confirming that it is, and has been used as  such over decades;  
• even if tobacco packaging is a form of advertising or promotion, it cannot serve this 
function in the context of Australia's dark market; and  
• even if branding on tobacco packaging influences consumer behaviour, this influence is 
limited to existing  consumers' choices to smoke one br and over another (secondary 
demand) as opposed to attracting new smokers to initiate smoking (primary demand).  
10. Perhaps recognising that these arguments would not be sufficient to discharge their burden in 
the face of the clear qualitative evidence supporti ng tobacco plain packaging, the complainants 
contended that the TPP  measure s could only be considered capable of contributing to 
Australia's  objective if they had made a quantifiable  contribution to this objective in the limited 
period since their implemen tation. To this end, the complainants sought to shift the focus of the 
dispute away from the design, structure, and operation of the TPP  measure s and toward complex 
econometric and statistical analyses of data gathered in the short period of time following  the 
implementation of the measures in December 2012. The  complainants' approach to these analyses 
evolved over the course of the proceedings, with new theories being presented to the Panel to 
substitute for those Australia had refuted.  
11. The complainants f irst argued that the TPP  measure s had "backfired" by causing an increase 
in the proportion of the population who smoke (prevalence) and total cigarette sales volumes 
(consumption). In the face of corrective analyses by Australia's experts, this line of arg ument was 
not pursued by the complainants in later stages of the proceedings. The complainants then pivoted 
to argue that the econometric evidence submitted by their experts proved definitively that no part  
of the observed declines in prevalence and consum ption could be attributed  to the measures' effects.  WT/DS435/AB/R/Add.1 • WT/DS441/AB/R/Add.1  
 
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  12. Based on its thorough assessment of these arguments, the Panel concluded that the 
complainants had failed to discharge their burden of proving that the TPP  measure s are not capable 
of contributing to Aus tralia's objective.  
13. With respect to the pre -implementation evidence, the Panel engaged in a detailed review of 
this evidence over the course of 100 pages, and concluded that the complainants had:  
• failed to demonstrate that the pre -implementation evidence  was so fundamentally flawed 
as to provide no support for the operation of the TPP  measure s; 
• failed to persuade the Panel that tobacco packaging has no influence on smoking 
behaviours, particularly in a dark market like Australia;  
• failed to persuade the P anel that the effects of branding on tobacco packaging are limited 
to secondary demand, to the exclusion of primary demand for such products;  
• failed to demonstrate that the TPP  measure s would not be capable of reducing the appeal 
of tobacco products and, c onsequently, affect smoking behaviours;  
• failed to demonstrate that existing levels of health knowledge and risk awareness in 
Australia were such that they could not be increased by enhancing the effectiveness of 
graphic health warnings ("GHWs") and, conseq uently, affect smoking behaviours; and  
• failed to demonstrate that the TPP  measure s, by design, would not be capable of reducing 
the ability of tobacco packaging to mislead consumers and, consequently, affect smoking 
behaviours.  
14. The Panel likewise engaged in lengthy analyses of the complainants' post -implementation 
evidence, as well as the associated rebuttal evidence submitted by Australia, detailing its findings in 
four separate appendices. Ultimately, the Panel considered that the evidence relating to th e post -
implementation quantitative  evidence supported its overall conclusion that the complainants had 
failed to demonstrate that the TPP  measure s are not apt to contribute to Australia's objective, finding 
in particular that:  
• the post -implementation evid ence suggests that the introduction of tobacco plain 
packaging "has in fact, reduced the appeal of tobacco products, as anticipated" and 
suggests that plain packaging has "had some impact on the effectiveness of GHWs";4 and  
• the post -implementation evidenc e on smoking behaviours "is consistent with a finding that 
the TPP measures contribute to a reduction in the use of tobacco products".5 
15. Despite the inordinate amount of time and number of expert reports the complainants devoted 
to contesting these issues d uring the panel proceedings, the appellants now appear to concede many 
of these points, which only highlights the hollowness of their case. In particular, the appellants 
appear to have conceded  that:  
• packaging does function as advertising and promotion, a nd operates to sustain primary 
demand for tobacco products to replace those smokers who quit or die;  
• tobacco plain packaging affects consumer behaviour;  
• tobacco plain packaging has reduced the appeal of tobacco products and increased the 
effectiveness of  GHWs in precisely the manner intended; and  
• the TPP  measure s have not backfired, and that rates of prevalence and consumption in 
Australia continued to decline  following the implementation of the measures.  
 
4 Panel  Report, para.  7.636.  
5 Panel  Report, para.  7.1037.  WT/DS435/AB/R/Add.1 • WT/DS441/AB/R/Add.1  
 
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  16. Based on these uncontested findings of the Panel, it is clear and obvious that the TPP  measure s 
are capable of contributing to Australia's objective .  
II. CLAIMS UNDER THE  TRIPS AGREEMENT  
17. The four complainants in the original disputes pursued ten separate claims under the 
TRIPS  Agreement against the TPP  measure s – all of which the Panel rejected.  
18. In its appeal of the Panel  Report  in DS435, Honduras alleges error by the Panel in respect of 
only two of these original claims: those under Article  16.1 and Arti cle 20 of the TRIPS  Agreement . 
The Dominican  Republic 's arguments on appeal concerning the TRIPS  Agreement  are limited to 
certain claims of error under Article  11 of the DSU.  
19. In relation to its claims under Article  16.1 and Article  20 of the TRIPS  Agreemen t, Honduras' 
interpretative strategy is unchanged from the panel proceedings. Honduras conflates distinct 
trademark -related provisions in order to contrive support for its overarching and erroneous 
contention that these provisions confer a "right of use" u pon the owners of registered trademarks.  
20. With respect to Article  16.1, the Panel properly rejected all of the complainants' claims based 
on its conclusion that Article  16.1 "formulates an obligation on Members to provide to the owner of 
a registered trade mark the right to 'stop, or hinder' all those not having the owner's consent from 
using certain signs on certain goods or services, where such use would result in a likelihood of 
confusion."6 The Panel found that Article  16.1 "does not formulate any other right of the trademark 
owner, nor does it mention the use of the registered trademark by its owner."7  
21. Honduras insists that its interpretation of Article  16.1 is not based on a "positive right to use" 
a trademark.8 At the same time, Honduras argues that a  Member "fails to abide by its commitment 
to guarantee a minimum level of protection" under Article  16.1 when it adopts a measure that 
prevents the use of a mark, and thus "has so weakened the mark that almost any claim for 
infringement will be rejected".9  
22. In this way, Honduras' appeal of the Panel's interpretation of Article  16.1 is premised on the 
same fundamental defect as its original arguments before the Panel, and should be rejected by the 
Appellate  Body for the same reasons. As the Panel properly fo und, nothing in the text of Article  16.1 
suggests that Members must "maintain market conditions that would enable the circumstances set 
out in this provision, including a likelihood of confusion, to actually occur in any particular situation. 
Rather, Membe rs must ensure that in the event that these circumstances do arise, a right to prevent 
such use is provided."10  
23. Honduras' appeal of the Panel's interpretation of Article  20 is divided into two parts. In its 
principal appeal, Honduras alleges that "the Panel erred by failing to adopt a trademark -specific 
approach".11 Honduras' basic contention is that Members may never  impose special requirements 
that encumber the use of trademarks for reasons relating to public health or other public policy 
consideration s, unless the resulting encumbrance is "limited" (a term that does not appear in 
Article  20) or is "justified by a concern inherent in the particular trademark", such as the types of 
reasons that would warrant a denial of registration of the trademark in t he first instance.12 In 
Honduras' view, a prohibition on the use of a category of trademarks (such as figurative trademarks) 
for a particular purpose (such as to prevent the advertising and promotion of tobacco products) is 
unjustifiable per se.  
24. Honduras' e xtreme interpretation of the term "unjustifiably" finds no support in the ordinary 
meaning of this term, properly interpreted in its context and in light of the object and purpose of 
the TRIPS  Agreement  (or its negotiating history). Rather,  the interpretat ion of the term 
"unjustifiably" that Honduras advocates is based on an unfounded attempt to read a "right of use" 
 
6 Panel  Report, para.  7.1974.  
7 Panel  Report, para.  7.1974.  
8 Honduras' appella nt's submission, para.  349. 
9 Honduras' appellant's submission, para.  429. 
10 Panel  Report, para.  7.2000. (emphasis original)  
11 Honduras' appellant's submission, para.  52. 
12 Honduras' appellant's submission, para.  146. WT/DS435/AB/R/Add.1 • WT/DS441/AB/R/Add.1  
 
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  into Part  II, Section 2 of the TRIPS  Agreement  and to interpret Article  20 of the TRIPS  Agreement  
as a "limited" exception to this "right". Th e Panel properly rejected Honduras' interpretative strategy, 
and so should the Appellate  Body. 
25. The second part of Honduras'  challenge to the Panel's interpretation of Article  20 is formulated 
"in the alternative" and assumes " arguendo  that the Panel is cor rect that the term 'unjustifiably' in 
Article  20 stands for a more broadly applicable policy exception."13 In that event, Honduras argues 
that the Panel erred by not interpreting the term "unjustifiably" "as requiring that less trademark 
encumbering alterna tive measures that provide an equivalent contribution be preferred."14 
26. This second part of Honduras'  interpretative appeal is equally unfounded, given the Panel 
effectively did interpret Article  20 to require an examination of proposed alternatives and did in fact  
examine the alternatives proposed by the complainants. In other words, the Panel did what Honduras 
alleges it was required to do.  
27. In Part  III.3 of its appeal, Honduras assumes arguendo that the Panel properly interpreted 
the term "unjustifiably", b ut claims that the Panel misapplied Article  20 to the facts of the case.  
28. Honduras contends, for example, that the Panel placed "undue emphasis on the loss of 
economic value of the trademarks rather than focusing on the impact of the TPP measures on the 
use of a trademark in terms of its distinguishing function."15 However, the Panel clearly stated that 
its examination of the nature and extent of the encumbrance would "focus on the implications of the 
TPP trademark requirements on a trademark's ability to di stinguish goods and services of 
undertakings in the course of trade ".16 In other words, the Panel's analysis focused on precisely what 
Honduras claims it was required to focus on. Honduras'  numerous other arguments in support of its 
application claims are l ikewise unfounded.  
29. The Dominican  Republic  advances only one distinct claim of error in respect of the Panel's 
findings under Article  20 of the TRIPS  Agreement . The Dominican  Republic  alleges that the Panel did 
not undertake any assessment of the Dominican  Republic 's claims under Article  20 concerning the 
prohibition on the use of trademarks on cigarette sticks, and that the Panel thereby acted 
inconsistently with Article  11 of the DSU . 
30. It is abundantly clear from the Panel  Report  that the Panel did, in fact, examine the 
Dominican  Republic 's claims under Article  20 concerning cigarette sticks. As best as Australia can 
discern, the Dominican  Republic  appears to consider that the Panel wa s required to have a distinct 
subsection  in its report in which it separately addressed those claims. No such requirement to this 
effect exists under Articles  7 and 11 of the DSU.  
31. For the foregoing reasons, Australia requests that the Appellate  Body reject  all of the 
appellants' claims of error under Articles  16.1 and 20 of the TRIPS  Agreement .  
III. CLAIMS UNDER TH E TBT AGREEMENT  
A. Claims Under Article  2.2 of the TBT  Agreement  – Trade -Restrictiveness  
1. The Panel Did Not Err in its Interpretation and App lication of the Term "Trade -
Restrictive" under Article  2.2 of the TBT  Agreement   
32. At the core of the appellants' claim of error lies a disagreement as to whether any limitations 
on "competitive opportunities" in the marketplace, and in particular the reduce d opportunity to 
compete on the basis of brand differentiation, sufficed to establish that the TPP  measure s are 
"trade -restrictive" under Article  2.2 of the TBT  Agreement . In Australia's view, the "competitive 
opportunities" standard of trade -restrictivene ss espoused by the appellants finds no basis in either 
the text of Article  2.2, properly interpreted, or in the Appellate  Body's findings in prior cases. This 
 
13 Honduras' appellant's submission, pa ra. 54. 
14 Honduras' appellant's submission, para.  231. 
15 Honduras' appellant's submission, para.  266. 
16 Panel  Report, para.  7.2563. (emphasis added)  WT/DS435/AB/R/Add.1 • WT/DS441/AB/R/Add.1  
 
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  overly broad legal standard would read the terms "trade -restrictive" and "obstacles to internatio nal 
trade" out of the text of Article  2.2.  
33. In US – Tuna II (Mexico) , the Appellate  Body expressly held that the term "trade -restrictive" 
requires a demonstration that a technical regulation has a "limiting effect on international trade".17 
Contrary to the appellants' argument, the Appellate  Body in US – COOL did not re -articulate the 
relevant legal standard of trade -restrictiveness as one of "competitive opportunities" for imported 
products. Rather, the Appellate  Body found that the panel's finding that the  COOL measure modified 
the conditions of competition to the detriment of imported products vis -à-vis domestic like products 
sufficed to establish that it had a limiting effect on international trade.18  
34. If any limitation on "competitive opportunities" were sufficient to establish that a technical 
regulation is trade -restrictive, as the appellants suggest, evidence of actual trade effects would never 
be required. Virtually all technical regulations will impose, in respect of at least one market 
participant, a  limiting condition that did not exist prior to its enactment. Thus, the Appellate  Body's 
recognition in US – COOL (Article  21.5 – Canada and Mexico)  that evidence of actual trade effects 
might be required to establish that a non -discriminatory technical r egulation is trade -restrictive not 
only contradicts the complainants' erroneous "competitive opportunities" construct, but also 
confirms that the relevant legal standard is one of a "limiting effect on international trade."19  
35. Accordingly, the Panel did not  err in finding that any limitation on the ability to compete on 
the basis of brand differentiation was insufficient, without more, to establish that the TPP  measure s 
are "trade -restrictive" within the meaning of Article  2.2. In so finding, the Panel did not require that 
the TPP  measure s be discriminatory, as Honduras incorrectly posits. The Panel expressly observed 
that "a  determination of 'trade -restrictiveness' is not dependent on the existence of discriminatory 
treatment of imported products"20, and in n o instance did the Panel engage in a "comparative 
assessment" of the conditions of competition for imported products vis-à-vis domestic tobacco 
products. Neither did the Panel consider that evidence of actual trade effects was required. Rather, 
the Panel c arefully examined both qualitative and quantitative evidence on the panel record, and 
expressly recognised that the "trade -restrictiveness" of the TPP  measure s could be established on 
the basis of qualitative evidence alone.  
36. Moreover, it is unclear to Aus tralia whether the Panel imposed an "exclusive cause" standard 
in its analysis of the downtrading evidence, as the Dominican  Republic  argues. However, even if the 
Panel did impose an exclusive cause standard, that would be immaterial and insufficient to ov erturn 
the Panel's findings under Article  2.2. This is because the alternative measures proposed by the 
complainants, applied cumulatively, would have greater downtrading effects than the TPP  measures. 
Thus, in no circumstance would any of the alternative measures proposed by the complainants be 
less trade -restrictive than the TPP  measure s. 
37. Finally, contrary to the Dominican  Republic 's suggestion, the Panel did not err in taking into 
account consumption (i.e. sales) data in its assessment of trade -restricti veness. Rather than finding 
that any degree of trade -restrictiveness could be "mitigated" by supplier responses, the Panel 
appropriately relied on the complainants' own expert in concluding that both supply and demand 
factors should be taken into account i n determining the trade -restrictive effects of the TPP  measures 
in the marketplace.  
2. The Panel Did Not Act Inconsistently with Article  11 of the DSU in Its Assessment of 
Trade -Restrictiveness  
38. The Dominican  Republic  has failed to establish that the Panel  exceeded the bounds of its 
discretion as trier of fact under Article  11 of the DSU in finding that the TPP  measure s were 
"trade -restrictive" under Article  2.2 of the TBT  Agreement .  
39. The Panel neither compromised the Dominican  Republic 's due process rights  nor "made the 
case" for Australia in its graphical analysis in Figure E.6. A panel has the authority under Article  11 
 
17 Appellate  Body Report, US – Tuna II (Mexico) , para.  319. 
18 Appellate  Body Report, US – COOL , para.  477. 
19 See Appellate  Body Report, US – COOL (Article  21.5 – Canada and Mexico) , para.  5.208 and 
footnote  643 thereto.  
20 Panel  Report, para.  7.1074.  WT/DS435/AB/R/Add.1 • WT/DS441/AB/R/Add.1  
 
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  of the DSU to develop its own reasoning and is not required to restrict itself to the evidence and 
arguments presented by the parties.21 Such discretion encompasses the ability to conduct additional 
statistical analysis, engage with economic models and evidence, and draw inferences on the basis 
of the record evidence.22 Moreover, the Panel is "not required to test its intended reasoning with the 
parties",23 and any concerns the Dominican  Republic  might have had about Figure E.6 could have 
been raised in the interim review stage under Article  15 of the DSU.  
40. Finally, the Dominican  Republic 's allegation that the Panel failed to provide a reasoned and 
adequate explanation for its finding amounts to a request that the Appellate  Body re-weigh  the 
record evidence on downtrading. Contrary to what the Dominican  Republic  suggests, the Panel's 
conclusion that downtrading was partly attributable to  the overall reduction in total wholesales 
volume as a result of the TPP  measure s is fully consistent  with the Panel's earlier finding that the 
TPP measure s are apt to, and do in fact, contribute to their objective of reducing the use of tobacco 
products i n Australia.  
41. For all of the foregoing reasons, Australia requests that the Appellate  Body reject the 
appellants' claims under Article  2.2 of the TBT  Agreement , and Article  11 of the DSU, as they relate 
to the Panel's finding that the TPP  measure s are "tra de-restrictive".  
B. Claims under Article  2.2 of the TBT  Agreement  – Alternative Measures  
1. The Panel Did Not Err in Its Application of Article  2.2 of the TBT  Agreement  in Its 
Analysis of Alternative Measures  
42. Australia submits that the Appellate  Body should summarily dismiss the appellants' claims of 
error in relation to the Panel's analysis of alternative measures under Article  2.2 of the 
TBT Agreement without addressing the substance of those claims, for two reasons.  
43. First, the appellants' claim in relation to the Panel's analysis of the "trade -restrictiveness" of 
the alternatives is entirely consequential to their earlier claim that the Panel applied an erroneous 
legal standard in ascertaining the trade -restrictiveness of the TPP  measure s. Thus, if the 
Appellate  Body upholds the Panel's legal standard of trade -restrictiveness under Article  2.2 of the 
TBT Agreement, it necessarily follows that the Panel did not err in applying that same standard when 
determining the trade -restrictiveness of each of th e proposed alternatives.  
44. Second, in the circumstances of this dispute, where the market is entirely supplied by imports, 
any equivalent contribution  to reducing the use of, and exposure to, tobacco products would 
necessarily entail an equivalent limiting effect  on international trade in tobacco products. 
Accordingly, if the Appellate  Body were to uphold the Panel's interpretation of trade -restrictiveness 
under Article  2.2, any alternative measure that would make an equivalent contribution to the 
TPP measur es would necessarily be at least as trade -restrictive as the TPP  measure s.  
45. In any event, the complainants' claims that the Panel erred in its analysis of the contribution 
of alternative measures under Article  2.2 of the TBT  Agreement  are unfounded. Contra ry to the 
complainants' argument, the Panel did not reject increases in the minimum legal purchase age 
("MLPA") and in excise taxes because they would not operate through the same causal mechanisms 
as the TPP  measure s. Rather, the Panel properly held that an increase in the MLPA would only 
address the availability of tobacco products to individuals below 21 years of age, and would leave 
unaddressed those design features of the pack that make tobacco packaging more appealing. 
Moreover, the Panel correctly he ld that any contribution that increased excise taxes would make to 
Australia's objective would be undermined  by those elements of tobacco packaging that would 
continue to be used to convey positive imagery or messaging, especially to adolescents and young 
adults. Therefore, the Panel properly held that an increase in excise taxes would not make an 
equivalent contribution to Australia's objective as the TPP  measure s.  
46. The Panel was further correct in holding that neither an increase in the MLPA nor an increa se 
in excise taxes would have any synergistic effects with other elements of Australia's comprehensive 
tobacco control policy, in particular enlarged GHWs. The Panel correctly found that neither of these 
 
21 Appellate  Body Report, EC – Hormones , para.  156. 
22 Appellate  Body Report, US – Upland Cotton (Article  21.5 – Brazil) , paras.  357-358 and 406.  
23 Appellate  Body Report, US – Tuna II (Article  21.5 – Mexico) , para.  7.177.  WT/DS435/AB/R/Add.1 • WT/DS441/AB/R/Add.1  
 
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  alternatives would have any effect on the communicat ion functions of the pack, while the 
TPP measures have the effect of increasing the effectiveness of GHWs by increasing their salience, 
making them easier to see, more noticeable, and perceived as more credible and more serious.  
47. Finally, Honduras is incorr ect that the Panel's references to "substitute" measures implies that 
the Panel imposed a standard of "identical" degree of contribution, or imposed a more rigorous 
standard of equivalence in the context of a comprehensive suite of measures. Rather, the Pa nel 
properly sought to ascertain whether each of the alternatives made an "equivalent" contribution to 
Australia's objective as the TPP  measure s, and consistent with the Appellate  Body's guidance in 
Brazil – Retreaded Tyres , considered the contribution of the TPP  measure s in the context of 
Australia's comprehensive tobacco control policy.  
2. The Panel Did Not Act Inconsistently with Article  11 of the DSU in Its Assessment of 
the Alternatives  
48. Finally, the Dominican  Republic  has failed to demonstrate that t he Panel acted inconsistently 
with Article  11 of the DSU in its assessment of the alternatives. The  Panel's assessment of the 
trade -restrictiveness of an increase in the MLPA is not "internally contradictory" with the Panel's 
assessment of the contribution  of that alternative, because the Panel did not rely on "future effects" 
in reaching its findings, as the Dominican  Republic  incorrectly posits. Rather, the Panel's findings in 
relation to both the element of trade -restrictiveness and the contribution of a n increase in the MLPA 
were based on the immediate effects of this purported alternative.  
49. Moreover, the Panel neither failed to engage with the Dominican  Republic 's evidence nor failed 
to provide a reasoned and adequate explanation in finding that, in the absence of the TPP  measure s, 
the communication functions of tobacco packaging would not be addressed "at all". The fact that 
other existing elements of Australia's comprehensive tobacco control policy, such as enlarged GHWs, 
may restrict the space availabl e for the tobacco industry to use tobacco packaging as a means of 
promotion does not establish that an increase in the MLPA has those same effects.  
50. Accordingly, the appellants have failed to establish that the Panel erred in its application of 
Article  2.2, or acted inconsistently with Article  11 of the DSU, in its analysis of alternative measures.  
IV. CLAIMS UNDER ART ICLE  11 OF THE DSU R EGARDING THE PANEL'S  CONTRIBUTION 
FINDINGS  
51. The appellants' claims under Article  11 of the DSU form the core of their ap peals, collectively 
comprising nearly 450 pages of their appellant submissions. This far exceeds the scope of any prior 
Article  11 challenge and constitutes an unprecedented assault on a panel's performance of its 
fact-finding function.  
52. The appellants' as surance that they have followed "the Appellate  Body's guidance" and 
"carefully considered whether, and in which specific instances, to challenge the lack of objectivity of 
the Panel's assessment of the matter" rings hollow given both the scale and nature o f their Article  11 
claims.24 Together, the appellants have alleged, inter alia , that the Panel: denied them due process 
because they were denied any meaningful opportunity to comment on various aspects of the Panel's 
evaluation of the expert evidence; denie d them due process by relying on the technical staff of the 
WTO Secretariat (disparagingly referred to as a "ghost expert") instead of appointing an expert; 
lacked "even -handedness" in its approach to the evidence; and failed to provide reasoned and 
adequa te explanations for its findings. In making these far -reaching claims, the appellants' strategy 
appears to be to re -litigate factual issues that they lost before the Panel.  
53. While the appellants' particular claims are dealt with below, Australia observes a t the outset 
that: 
• A premise of many of the appellants' claims is that the Panel was required to test all of its 
reasoning with the parties in order to afford due process. The Appellate  Body has 
previously rejected this proposition.25 Due process does not require that a panel "engage 
 
24 See Dominican  Republic's appellant's submission, para.  33. 
25 Appellate  Body Report, US – Tuna II (Mexico) (Article  21.5 – Mexico) , para.  7.177.  WT/DS435/AB/R/Add.1 • WT/DS441/AB/R/Add.1  
 
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  with the parties upon the findings and conclusions that it intends to adopt in resolving the 
dispute", so long as the panel's approach does not "depart so radically" from the case 
presented that the partie s were "left guessing as to what proof they would have needed 
to adduce."26 While the appellants assert that the Panel "depart[ed] … radically" from the 
evidence and arguments presented by the parties, the evidentiary record demonstrates 
otherwise.  
• The com plainants did not utilise the interim review process to raise substantive concerns 
about the evaluation of the evidence, as provided for under Article  15 of the DSU. Neither 
appellant raised concerns regarding the Panel's assessment of the factual evidence  or 
identified errors with respect to the Panel's evaluation of the statistical or econometric 
evidence when they provided their written comments on the interim report, nor did either 
appellant request a further meeting with the Panel to discuss any aspect  of that evaluation. 
In these circumstances, there was no failure to accord due process.  
• The complainants made no request for the Panel to exercise its authority to appoint an 
expert or group of experts during the course of the proceedings under Article  14.2 of the 
TBT Agreement  or Article  13.2 of the DSU. In  light of this, the appellants' arguments that 
the Panel failed to afford them due process by not appointing an expert, and criticising the 
Panel for utilising the WTO Secretariat (as the "ghost expert ") for technical support, as 
contemplated under Article  27 of the DSU, must be rejected.  
• The complainants entirely ignore that they bore the burden of proving that the 
TPP measures are incapable  of contributing to Australia's objective, as outlined below, and 
that the Panel properly scrutinised both parties' evidence for the purpose for which it was 
provided.  
• The complainants' claims that the Panel failed to provide reasoned and adequate 
explanations are unfounded given that the Panel  Report  included over 300 pages of 
detailed analysis of the evidence relating to the contribution of the TPP  measure s.27  
A. Legal Standard for Article  11 of the DSU  
54. Under Article  11 of the DSU, a panel must "consider all the evidence presented to it, assess 
its credibility, det ermine its weight and ensure that its factual findings have a proper basis in that 
evidence."28 The Appellate  Body has repeatedly stated that "panels enjoy a 'margin of discretion' as 
triers of fact",29 and that "[c]onsistent with this margin of discretion, … 'not every error in the 
appreciation of the evidence… may be characterized as a failure to make an objective assessment 
of the facts.'"30 
55. The appellants therefore cannot sustain their Article  11 claims unless the Appellate  Body is 
satisfied that both of t he following conditions have been fulfilled:  
• First, that the Panel erred by "exceed[ing] the bounds of its discretion, as the trier of 
facts".31 This discretionary authority includes, inter alia , weighing the evidence, developing 
reasoning independent of th e parties, framing the explanation for its findings, and 
balancing due process rights.  
• Second, that the error is so material that it "undermine[s] the objectivity of the panel's 
assessment of the matter before it".32 That is, even if the appellants could e stablish that 
the Panel exceeded the bounds of its discretion, they would still need to demonstrate that 
 
26 Appellate  Body Report, US – Tuna II (Mexico) (Article  21.5 – Mexico) , para.  7.177.  
27 Including a 152 -page analysis of the post -implementation evidence in Appendices A -E. 
28 Appellate  Body Report, Philippines – Distill ed Spirits , para.  135, quoting Appellate  Body Report, 
Brazil  – Retreaded Tyres , para.  185, in turn referring to Appellate  Body Report, EC – Hormones , 
paras.  132-133. 
29 See Appellate  Body Report, Japan – Apples , para.  221. 
30 See Appellate  Body Report, Japan  – Apples , para.  222. 
31 See Appellate  Body Report, EC – Aircraft (Article  21.5 – US), para.  5.148.  
32 Appellate  Body Report, US – Aircraft , para.  992. WT/DS435/AB/R/Add.1 • WT/DS441/AB/R/Add.1  
 
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  the Panel's errors materially  undermined its findings, by invalidating or vitiating the basis 
for those findings.33 
56. As explained below, none of the appe llants' alleged errors, individually or cumulatively, 
materially undermine the Panel's ultimate legal conclusion that the complainants failed to meet their 
burden of proving that the TPP  measure s are not apt to make a contribution to Australia's legitimate  
objective.  
B. The Complainants' Burden of Proof  
57. At the outset, it is pertinent to recall the proper allocation of the burden of proof in this dispute, 
and how that burden of proof informed the Panel's assessment of the record evidence.34  
58. The complainants sought to make their prima facie case under Article  2.2 of the 
TBT Agreement by arguing, inter alia , that the TPP  measure s "cannot contribute to their objective  
through the mechanisms identified in the TPP Act, and that post -implementation  evidence shows 
that smoking prevalence has not in fact been reduced  as a result of the TPP measures."35 The 
complainants therefore undertook the burden of demonstrating that, based on their design, structure 
and intended operation, the TPP  measure s constit uted an unnecessary  obstacle to international trade 
because they were incapable of contributing  to Australia's objective of reducing the use of, and 
exposure to, tobacco products. They further undertook to substantiate this allegation through 
quantitative evidence purportedly demonstrating that the TTP measures had in fact made 
no contribution  to reducing smoking prevalence in Australia in the limited period of time following 
their implementation.36  
59. The complainants undertook this burden in the particular c ircumstances of this dispute, in 
which it was undisputed that Australia's market for tobacco products is entirely  sourced from 
imports.37 In these circumstances, the degree to which the TPP  measure s contribute to 
Australia's  objective of reducing the use of  and exposure to tobacco products necessarily 
corresponds  to the degree to which the measures have a limiting effect on international trade in 
tobacco products. Critically, because the TPP  measure s only restrict trade in tobacco products to the 
extent required to contribute to Australia's public health objective, the TPP  measure s are not more 
trade -restrictive than necessary and, therefore, do not violate Article  2.2. In these circumstances, 
the complainants sought to prove that the TPP  measure s were incapable of making any  contribution 
to reducing the use of and exposure to tobacco products in an attempt to discharge their burden of 
establishing that the TPP  measure s constitute an unnecessary obstacle to international trade.  
60. These circumstances – and their bearing on the Panel's analysis under Article  2.2 – also 
explain why the complainants sought to fundamentally redefine the concept of trade -restrictiveness 
to avoid having to establish a limiting effect on international trade in tobacco products. But  even 
under their erroneous definition of trade -restrictiveness, the prima facie  case that the complainants 
sought to establish is that the TPP  measure s are incapable  of making any contribution to reducing 
the use of, and exposure to, tobacco products.  
61. The Panel approached its assessment of the pre - and post -implementation evidence submitted 
by the parties in light of the burden of proof that the complainants undertook. In relation to the 
design, structure and operation of the TPP  measure s, the Panel expla ined that it was not persuaded 
 
33 See Appellate  Body Reports, EC – Aircraft , para.  1335; US – Upland Cotton (Article  21.5 – Brazil) , 
para. 294; US – COOL , para.  323. 
34 Australia notes that the appellants only challenge the Panel's analysis of contribution under Article  2.2 
of the TBT  Agreement, and therefore discusses the proper allocation of the burden of proof under that 
provision. Hondura s alone claims that the Panel acted inconsistently with Article  11 of the DSU in its 
assessment of contribution under Article  20 of the TRIPS  Agreement, but does not distinguish between the 
arguments under that provision and under Article  2.2 of the TBT  Agreement. The arguments advanced by 
Australia in this section apply mutatis mutandis  in the context of Article  20 of the TRIPS  Agreement as well.  
35 Panel  Report, para.  7.485. (emphasis added)  
36 See, e.g. Dominican  Republic's first written submission, para.  377; Dominican  Republic's 
second  written submission, para.  368; Honduras' first written submission, para.  581; Honduras' second  written 
submission, para.  55. 
37 Panel  Report, para.  7.1207.  WT/DS435/AB/R/Add.1 • WT/DS441/AB/R/Add.1  
 
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  that, " as the complainants argue, [the measures] would not be capable of contributing to Australia's 
objective".38  
62. In relation to the post -implementation evidence, the Panel concluded that there was evidence 
that the TPP  meas ures were having the effects "anticipated in a number of the pre -implementation 
studies",39 and that the evidence in relation to smoking behaviours was consistent  with the intended 
operation of the TPP  measure s.40  
63. Based on the totality of the record evidenc e, the Panel found that " the complainants have not 
demonstrated that the TPP  measure s are not apt to make a contribution to Australia's objective of 
improving public health by reducing the use of, and exposure to, tobacco products."41  
64. Thus, crucially, and contrary to what the appellants imply in their submissions, Australia did 
not bear the burden of establishing that the TPP  measure s contribute to reducing the use of, and 
exposure to, tobacco products. Rather, the evidence submitted by Australia sought to demonstrate 
that the complainants  had failed to establish their prima facie case that the TPP  measure s are 
incapable of contributing to Australia's public health objective. The appellants have not appealed the 
Panel's understanding of the complainants' bur den of proof.  
65. The appellants' claims under Article  11 of the DSU concerning the Panel's assessment of that 
evidence must therefore be viewed in light of the complainants'  burden of establishing that the 
TPP measures are incapable of contributing to Austra lia's objective of reducing the use of, and 
exposure to, tobacco products.  
C. Materiality of Alleged Errors  
66. Australia will demonstrate below that the appellants' claims under Article  11 of the DSU are 
without merit. However, even if the appellants could e stablish that the Panel "exceeded the bounds 
of its discretion, as the trier of facts" in relation to the alleged errors, the appellants would still need 
to demonstrate that the Panel's errors materially undermine its findings.42 
67. In relation to the Panel's overall  conclusion that the complainants had failed to discharge their 
burden of proving that the TPP  measure s were incapable of contributing to their objective, the 
appellants have not demonstrated that any of the errors that they have identified are mate rial. 
68. Honduras simply asserts that, "individually or in combination with one another", all of the 
errors that it identifies are material to the Panel's overall contribution finding. The only "materiality" 
argument that either of the appellants actually dev elops in relation to the Panel's overall  contribution 
finding is the Dominican  Republic 's argument that this finding would not stand in the absence of the 
Panel's findings on prevalence and consumption. The Dominican  Republic  claims that if the 
Appellate  Body were to conclude that the Panel exceeded the bounds of its discretion in its 
assessment of the evidence in Appendices C and D, and if the Appellate  Body were to conclude that 
those errors materially undermine the Panel's findings in relation to the pos t-implementation 
evidence on smoking behaviour, these conclusions would invalidate the Panel's overall finding on 
contribution.43  
69. There is no legal foundation for the Dominican  Republic 's claim, because the 
Dominican  Republic  did not even attempt to demonstrate that the Panel's alleged failures of 
objectivity in respect of the relevant evidence would materially undermine its findings in 
Appendices  C and D . However, even if  the Appellate  Body were to conclude that the Panel erred in 
its assessment o f the evidence in Appendices C and D, and that those errors materially undermined 
the Panel's findings with respect to that evidence, these errors would not be material to the Panel's 
overall contribution finding.  
 
38 Panel  Report, para.  7.929. (emphasis added)  
39 Panel  Report, para.  7.1036.  
40 Panel  Report, para.  7.1037.  
41 Panel  Report, para.  7.1025. (emphasis added)  
42 See, e.g. Appellate  Body Report, US – Large Civil Aircraft (2nd Complaint) , para.  722. 
43 See, e.g. Dominican  Republic's appellant's submission, para.  626. WT/DS435/AB/R/Add.1 • WT/DS441/AB/R/Add.1  
 
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  70. The Dominican  Republic 's argument that th e disputed Panel findings concerning the effect of 
the TPP  measure s on smoking behaviours are "a necessary, indispensable component  of its overall 
conclusion on the contribution of the TPP  measure s to Australia's objective" reflects a fundamental 
misunders tanding of the Panel's contribution analysis.  
71. The Panel engaged in its assessment of the post -implementation evidence expressly aware of 
the inherent limitations of that evidence in the early period of application of the TPP  measure s. In 
particular, the Pa nel recognised that "certain measures to protect public health, including, as is the 
case here, certain measures based on behavioural responses to expected changes in beliefs and 
attitudes, may take some time to materialize fully or be perceptible in the r elevant data."44  
72. With respect to the evidence on smoking prevalence and consumption (Appendices C and D), 
the Panel explained that "overall", it found this evidence " consistent with  a finding that the 
TPP measures contribute to a reduction in the use of to bacco products,"45 but did not state that this 
conclusion was necessary to its overall conclusion that the complainants had failed to demonstrate 
that the TPP  measure s are not apt to contribute to Australia's objective.  
73. The Panel's overall contribution fin ding reflects the Panel's consideration of the totality  of the 
evidence. The Panel's finding would stand on the basis of the body of pre - and post -implementation 
evidence that is essentially uncontested  on appeal. Even if  the appellants could sustain their  claims 
of error under Article  11 of the DSU, this finding would still leave intact:  
• the pre -implementation evidence demonstrating that: (1) tobacco packaging is a form of 
advertising and promotion, used in the Australian market to appeal to current and p otential 
consumers and to distract from the serious health effects of tobacco use; (2) tobacco plain 
packaging could be expected to reduce the appeal of tobacco products, increase the 
effectiveness of GHWs and reduce the ability of the pack to mislead; and  (3) these effects 
are capable of affecting smoking behaviour, including initiation, cessation and relapse;  
• the post -implementation evidence demonstrating that the TPP  measure s have reduced 
appeal and increased the effectiveness of GHWs;  
• the post -impleme ntation evidence demonstrating that prevalence and consumption have 
declined following the implementation of the TPP  measure s; and  
• the post -implementation evidence demonstrating that the decline in prevalence and 
consumption accelerated following the impl ementation of the TPP  measure s.46 
74. This evidence is more than sufficient to support the Panel's overall  finding that the 
complainants had "not demonstrated that the TPP  measure s are not apt to  make a contribution to 
Australia's objective of improving public health by reducing the use of, and exposure to, tobacco 
products".47 Accordingly, while Australia will proceed to demonstrate that the appellants' claims of 
error are unfounded, these claims of error are not material to the Panel's overall conclusion.  
D. Claims Regarding the Pre -Implementation Evidence  
1. The Panel's Findings on the Pre -Implementation Evidence  
75. As outlined in brief above, the Panel began its contribution analysis by examining the design, 
structure, and operation of the TPP  measure s, and accep ted that the evidence available to Australia 
prior to the implementation of the measures supported the operation of the "causal chain" model 
under the TPP Act. In relation to the three causal mechanisms of the TPP  measure s (reducing the 
appeal of tobacco p roducts, increasing the effectiveness of GHWs and reducing the ability of the 
 
44 Panel  Report, para.  7.938.  
45 Panel  Report, para.  7.1037.  
46 While the Dominican  Republic challenges the Panel's finding that declines in smoking prevalence 
accelerated  following the implem entation of the TPP  measures, Australia demonstrates that this claim is based 
on a clear misreading of the Panel's findings.  
47 Panel  Report, para.  7.1025. (emphasis added)  WT/DS435/AB/R/Add.1 • WT/DS441/AB/R/Add.1  
 
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  pack to mislead consumers about the harmful effects of smoking), the Panel concluded on the basis 
of the pre -implementation evidence that:  
• The complainants had not persuaded the Panel that the TPP  measure s would not be 
capable of reducing the appeal of tobacco products (the first mechanism)  and thereby 
contribute to Australia's objective by affecting smoking behaviours such as initiation, 
cessation and relapse.48 In reaching this c onclusion, the Panel made a series of 
intermediate findings that: (i)  branded packaging can act as an advertising or promotional 
tool, and has been utilised as such by tobacco companies operating in Australia's dark 
market;49 (ii) there is a body of evidenc e emanating from qualified sources supporting the 
proposition that the plain packaging of tobacco products reduces the appeal of those 
products to consumers;50 and (iii) the complainants had not shown that this reduction in 
appeal would not be capable of in fluencing young people's perceptions and 
decision -making to impact upon initiation of tobacco use, or that tobacco plain packaging 
would not be capable of affecting the ability of smokers to quit smoking or to remain quit.51  
• The complainants had not persua ded the Panel that the TPP  measure s would not be 
capable of increasing the effectiveness of GHWs (the second mechanism)  and thereby 
contribute to Australia's objective by affecting smoking behaviours such as initiation, 
cessation and relapse.52 In reaching this conclusion, the Panel likewise made a series of 
intermediate findings that: (i)  the complainants had failed to est ablish that GHWs could 
not be made more effective, despite the high level of knowledge or risk awareness in 
Australia;53 (ii) there was evidence supporting the proposition that, in the presence of 
tobacco plain packaging, the impact and effectiveness of GHW s was increased;54 and 
(iii) the complainants had not demonstrated that the removal of branding elements which 
communicate messages which compete with or detract from GHWs could not be capable 
of influencing smoking behaviours, including initiation and cess ation.55  
• The complainants had not persuaded the Panel that the TPP  measure s, by reducing the 
ability of tobacco packaging to mislead consumers about the harmful effects of smoking 
(the third mechanism ), would not be capable of impacting smoking cessation.56 In 
reaching this conclusion the Panel again made a series of intermediate findings that: (i)  the 
complainants had not demonstrated that the TPP  measure s were not capable of reducing 
the ability of the pack to mislead consumers about the harmfulness of tobacco use;57 
(ii) the complainants had not persuaded the Panel that the TPP  measure s could not 
operate as intended to a greater extent than what was already possible under existing 
laws;58 and (iii) the co mplainants had not demonstrated that the TPP  measure s, by 
reducing the ability of tobacco packaging to mislead consumers about the harmful effects 
of smoking, would not have an effect on smoking behaviours, such as cessation.59  
76. After spending over 100 page s of its report carefully reviewing the pre -implementation 
evidence, the Panel concluded that the complainants had not demonstrated that the TPP  measure s 
were incapable of contributing to Australia's public health objective based on the design, structure, 
and operation of the measures.  
2. The Appellants' Assertions that the Panel Acted Inconsistently with Article  11 of the 
DSU with Respect to the Pre -Implementation Evidence Are Unfounded  
77. The Dominican  Republic  claims that the Panel acted inconsistently wit h Article  11 of the DSU 
by failing to engage with evidence demonstrating that branded tobacco packaging in Australia was 
 
48 Panel  Report, paras.  7.777, 7.778.  
49 Panel  Report, paras.  7.655 -7.662, 7.659, 7.63 8. 
50 Panel  Report, paras.  7.667, 7.682, 7.683.  
51 Panel  Report, paras.  7.774 -7.778.  
52 Panel  Report, para.  7.869.  
53 Panel  Report, para.  7.843.  
54 Panel  Report, para.  7.825.  
55 Panel  Report, paras.  7.860, 7.863.  
56 Panel  Report, para.  7.924.  
57 Panel  Report, para.  7.904.  
58 Panel  Report, para.  7.917.  
59 Panel  Report, para.  7.924.  WT/DS435/AB/R/Add.1 • WT/DS441/AB/R/Add.1  
 
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  not appealing.60 The Dominican  Republic  also claims that the Panel's reasoning was "internally 
incoherent", because the Dominican  Republ ic alleges that its evidence directly contradicts the Panel's 
finding that tobacco packaging is used to convey positive associations to the consumers.61 These 
claims are unsustainable.  
78. The Panel expressly took into account evidence specific to the Australia n market and 
acknowledged the Dominican  Republic 's argument that "even before the TPP  measure s were 
introduced, Australia's packaging had negative appeal".62 Moreover, the Dominican  Republic 's 
argument regarding the internal coherence of the Panel's finding s implies that the perception of 
tobacco products prior to the introduction of the TPP  measure s was as negative as Australia could 
reasonably hope to achieve . The Dominican  Republic 's claim that the pre -implementation evidence 
demonstrated that the appeal of tobacco packaging could not be further reduced in Australia is also 
irreconcilable with the findings of its own expert that the TPP  measure s have in fact reduced the 
appeal of tobacco packaging in Australia .63  
79. In addition, Honduras claims that the Panel  failed to conduct an objective assessment of the 
matter before it because it assigned probative value to the pre -implementation evidence, despite 
"serious limitations" in that evidence,64 and maintains that the Panel erroneously concluded that any 
limitati ons in the pre -implementation evidence could be overcome when viewed in the context of 
the wider literature.65 These claims of error must be rejected, because Honduras'  assertions are 
squarely directed at the Panel's discretion to assess the credibility, de termine the weight, and make 
findings on the basis of the evidence on the panel record.  
80. Finally, both the Dominican  Republic  and Honduras claim that the Panel acted inconsistently 
with Article  11 of the DSU by failing to ascertain whether the pre -implementation evidence was 
corroborated by the post -implementation evidence.66 This assertion is demonstrably false. In relation 
to the post -implementation "proximal" outcomes evidence, for example, the Panel found that the 
TPP measure s have "in fact reduc ed the appeal of tobacco products, as anticipated in a number of 
the pre -implementation studies criticized by the complainants ."67  
81. In sum, the appellants' limited claims of error in relation to the Panel's analysis of the 
pre-implementation evidence are mi sleading and incorrect, and must be rejected.  
E. Claims Regarding the Post -Implementation Evidence  
82. The appellants have focused the bulk of their extensive claims under Article  11 on the Panel's 
analysis of the empirical evidence relating to the applicatio n of the measures following their entry 
into force in December 2012 (i.e. the " post-implementation  evidence"). Australia will address the 
appellants' claims in relation to the Panel's analysis of the evidence concerning "proximal" outcomes 
(Appendix A) and  "distal" outcomes (Appendix B) in Part 0 below, and will address the appellants' 
claims in relation to the Panel's analysis of the evidence relati ng to smoking behaviours 
(Appendices  C and D) in Part 0 below.  
1. The Appellants' Claims Regarding Appendices A and B Are Unfounded  
83. The Panel comm enced its analysis of the post -implementation evidence in Appendix A  by 
assessing the studies that focused on the impact of the TPP  measure s and enlarged GHWs on 
non-behavioural proximal outcomes (i.e. reduced appeal of tobacco products, increased 
effectiv eness of GHWs, and reduced ability of the pack to mislead consumers about the harmful 
effects of smoking). The Panel concluded that there was empirical evidence, supported by findings 
of the complainants' own experts, that the TPP  measure s have reduced the  appeal of tobacco 
 
60 Dominican  Republic's appellant's submission, para.  700. 
61 Dominican  Republic's appellant's submission, para.  740. 
62 Panel  Report, paras.  7.657, 7.436.  
63 Ajzen et al. Data Report (DOM/IDN -2), paras.  90 and 106.  
64 Honduras' appellant's submission, para.  800. 
65 Honduras' appellant's submission, para.  801. 
66 Dominican  Republic's appellant's submission, para.  747-779; Honduras' appellant's submiss ion, 
paras.  806-814. 
67 Panel  Report, para.  7.1036. (emphasis added)  WT/DS435/AB/R/Add.1 • WT/DS441/AB/R/Add.1  
 
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  products and increased the noticeability of GHWs.68 The Panel considered that this evidence 
"confirms, rather than discredits, the 'hypothesized direction'" of the TPP  measure s.69  
84. Having made these findings, the Panel then considered the impact of the TPP  measure s on 
"distal outcomes" in Appendix B  (i.e. quitting -related cognitions, pack concealment, quit attempts, 
etc.). Despite the inherent challenges in the data, as identified by the Panel,70 the Panel nonetheless 
concluded that while so me of the results were "limited" or "limited and mixed", the available 
post-implementation empirical evidence on the "distal" outcomes suggests that the TPP  measure s 
are operating as expected in terms of statistically significant effects on avoidant behavi ours and 
increased calls to Quitline.71 Furthermore, the Panel rejected the complainants' argument that, even 
if the TPP  measure s had the expected effects on antecedent behaviours (which they maintained, it 
had not), then these effects would be susceptible to "wear out".72 
85. The appellants' claims under Article  11 of the DSU in relation to the Panel's analysis of the 
evidence in Appendices A and B also lack merit and should be rejected.  
86.  First, both appellants argue that the Panel's findings are "incoherent" or  lack a "reasoned and 
adequate basis".73 Specifically, the appellants argue that, in its holistic assessment of the evidence, 
the Panel relied on the "positive" evidence of "proximal" outcomes in Appendix A demonstrating that 
the TPP  measure s were having th e effects anticipated in the pre -implementation studies, while 
"ignoring" or "zeroing out" other "limited" or "limited and mixed" evidence in Appendices A and B.74  
87. What the appellants are challenging is the Panel's discretion to assess the credibility, 
determine the weight, and make findings on the basis of the evidence on the panel record. The 
appellants ignore the fact that the Panel weighed the evidence in Appendices A and B cognizant of 
the limitations of the post -implementation data and in relation to the complainants' undisputed 
burden of proving that the TPP  measure s are incapable  of contributing to Australia's objective 
through the operation of the proposed "causal chain". The evidence in Appendices A and B was more 
than sufficient to support the Pan el's overall finding that the complainants had not met this 
prima  facie burden.  
88. Second, the Dominican  Republic  argues that the Panel's summary of the effect of the 
TPP measures on distal outcomes "lacks coherence" with the Panel's own findings in Appendix B of 
its Report.75 These arguments need not detain the Appellate  Body long. Each of the 
Dominican  Republic 's allegations under this "second claim of error" relies on a selective reading of 
the Panel's analysis and conclusions. Once the Dominican  Republic 's misrepresentations are 
corrected, its arguments lack any foundation.  
89. Third, the Dominican  Republic  argues that the Panel's assessment of the robustness of certain 
of the parties' evidence in Appendix B was inconsistent with Article  11 of the DSU. Given  that these 
claims of error are self -evidently not material to the Panel contribution findings,76 Australia does not 
believe that they merit further attention.  
 
68 Panel  Report, para.  7.955; Panel  Report, Appendix A, para.  29. 
69 Panel  Report, para.  7.954.  
70 Panel  Report, Appendix B, para.  118 (the Panel noted that the survey data used in the studie s may be 
more suited to analysing the impact of the TPP  measures and enlarged GHWs on "proximal" outcomes than 
more "distal" outcomes, especially because none of the survey datasets "track non -smokers who might have 
taken up smoking in the absence of the T PP measures and enlarged GHWs.").  
71 Panel  Report, para.  7.963.  
72 Panel  Report, para.  7.941. The Panel noted that it was not persuaded that the examples cited by the 
complainants to support this argument were directly transposable to the effects of the TPP  measures on 
relevant behavioural outcomes.  
73 See, e.g. Dominican  Republic's appellant submission, paras.  893-919; Honduras' appellant 
submission, paras.  755-794. 
74 See, e.g. Dominican  Republic's appellant's submission, paras.  877-878, 881; Honduras' appell ant's 
submission, paras.  773-775. 
75 Dominican  Republic's appellant's submission, section II.F.3.c.  
76 The Dominican  Republic expressly acknowledges in relation to its first "robustness claim" that "[f]rom 
a 'big picture' perspective, this difference [in dur ation of the statistically significant increase in calls to Quitline] 
is not material to an assessment of the success of the TPP  measures." Dominican  Republic's appellant's 
submission, para.  971. Nonetheless, the Dominican  Republic devotes nearly 20 pages  of its appellant 
submission to its argument that the Panel erred in its assessment of the Quitline calls evidence.  WT/DS435/AB/R/Add.1 • WT/DS441/AB/R/Add.1  
 
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  90. In sum, the appellants' claims under Article  11 with respect to "proximal" and "distal" 
outcomes  are wholly lacking in merit, and should be rejected.  
2. The Appellants' Claims Regarding Appendices C and D Are Unfounded  
91. Having found that the early post -implementation evidence on proximal and distal outcomes 
confirmed that the TPP  measure s were opera ting "as intended", the Panel proceeded to examine the 
post-implementation evidence concerning rates of tobacco smoking (prevalence) and the volume of 
tobacco products sold (consumption). The Panel detailed its findings on prevalence and consumption 
in App endices C and D, respectively.  
92. Initially, the complainants sought to demonstrate that the TPP  measure s are not apt to 
contribute to Australia's legitimate objective because the measures had "backfired" by causing an 
increase  in at least certain categories of prevalence and consumption. The complainants abandoned 
this position when the evidence established that rates of prevalence and consumption had continued 
to decline  following the implementation of the TPP  measure s. The complainants then changed tactics 
and sought to prove that no portion  of the observed declines in prevalence and consumption could 
be attributed  to the effects of the TPP  measure s. To this end, the complainants sought to prove, 
first, that declines in prevalence and consumption had not accelerated since the implementation of 
the TPP  measure s in December 2012.77 Second, the complainants submitted econometric models 
purporting to show that the TPP  measure s had not made a statistically significant contribution to the 
observed declines.78 
93. In its assessment of the evidence on prevalence (Appendix C) and consumption (Appendix D), 
the Panel divided its analysis into three steps. First, the Panel examined evidence relating to whether 
prevalence or consumption "has decreased following the implementatio n of the TPP measures".79 
Second, the Panel examined evidence relating to whether the reduction in prevalence or 
consumption "has accelerated" following the implementation of the TPP  measure s.80 Third, the Panel 
examined evidence relating to whether the TPP  measure s "have contributed to a reduction" in 
smoking prevalence or consumption, "by isolating and quantifying the different factors that can 
explain the evolution" of prevalence and consumption.81 
94. With respect to the first and second steps in its analyses,  the Panel found that prevalence and 
consumption had declined  and the rate of decline had accelerated  following the implementation of 
the TPP  measure s. The appellants do not challenge the first finding. Only the Dominican  Republic  
challenges the finding of  acceleration in the case of prevalence, but this challenge is based on a 
blatant mischaracterisation of the Panel's earlier findings. In Australia's view, there is no credible 
dispute that prevalence and consumption declined following the implementation o f the 
TPP measures, and that the rates of decline accelerated in both cases.  
95. With respect to the third step in its analyses, the Panel identified multiple flaws in the 
complainants' econometric models purporting to demonstrate that no portion of the observ ed 
declines in prevalence and consumption could be attributed to the TPP  measure s, as opposed to 
other factors that affect prevalence and consumption. Among the principal flaws that the Panel 
identified was the fact that many of the complainants' prevalenc e models suggested that undisputed  
determinants of prevalence – such as the price of tobacco products and increases in excise taxes – 
did not have a statistically significant effect upon rates of prevalence. The Panel identified similar 
flaws in the compla inants' consumption models, including the fact that many of these models sought 
to control for tobacco prices as a separate determinant of consumption without acknowledging that 
the TPP  measure s themselves affect tobacco prices. The Panel questioned the va lidity and probative 
value of econometric evidence that produced these types of anomalous results and that contained 
these types of flaws, while purporting to prove that the TPP  measure s had made no contribution to 
the observed declines in prevalence and c onsumption.  
96. During the course of the panel proceedings, Australia's econometric experts, principally 
Dr Tasneem Chipty, submitted rebuttal evidence identifying flaws in the complainants' econometric 
 
77 Panel  Report, para.  7.971(b); Panel  Report, para.  7.977(b).  
78 Panel  Report, para.  7.971(c); Panel  Report, para.  7.977(c).  
79 Panel  Report, Appendix C, para.  5; Panel  Report, Appendix D, para.  6. 
80 Panel  Report, Appendix C, para.  5; Panel  Report, Appendix D, para.  6. 
81 Panel  Report, Appendix C, para.  5; Panel  Report, Appendix D, para.  6. WT/DS435/AB/R/Add.1 • WT/DS441/AB/R/Add.1  
 
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  models and further demonstrating that, once the principal  flaws in these models were corrected, the 
model results were consistent with a negative and statistically significant contribution of the 
TPP measures to the observed declines in prevalence and consumption. The Panel found that 
Dr Chipty's modifications o f the complainants' models had addressed "some" or "a number of" the 
concerns that the Panel had identified while reviewing those models.82 So modified, and in light of 
all the econometric evidence on the record, the Panel considered that there was "some ec onometric 
evidence" suggesting that the TPP  measure s had contributed, along with enlarged GHWs, to the 
observed declines in prevalence and consumption.83  
97. The appellants' challenges to the Panel's factual findings on prevalence and consumption relate 
overwhelmingly to the third step of its analyses, i.e. to the Panel's evaluation of the complainants' 
evidence that purported to isolate and quantify the determinants of prevalence and consumption, 
and thereby prove that no portion of the observed declines  in prevalence and consumption could be 
attributed to the TPP  measure s. Most of the appellants' claims under Article  11 of the DSU in respect 
of these findings involve a challenge to the manner in which the Panel evaluated complex 
econometric evidence. The se claims centre on issues such as the appropriate econometric controls 
for the effects of tobacco prices and taxes, the proper specification of time trends within econometric 
models, whether certain variables within the models were correlated and therefor e conveyed the 
same information, and whether certain explanatory and dependent variables were potentially 
endogenous.  
98. In lieu of summarising Australia's rebuttal on each and every one of these technical issues, it 
suffices to note that the appellants' chal lenges to the Panel's factual findings are based on several 
recurring errors by the appellants.  
99. The appellants' claims are based on mischaracterisations of what the Panel found . A 
prime example of this phenomenon is the Dominican  Republic 's claim that the Panel failed to 
undertake an objective assessment of the "benchmark rate of decline" in steps 2 and 3 of its 
prevalence analysis. This claim is based on the premise that the Panel identified a "benchmark rate 
of decline" in the first step of its analysis, when in fact it did not.  
100.  The appellants misapprehend the Panel's role as trier of fact . Many of the appellants' 
claims presuppose that the Panel was required to act as a mere passive recipient of evidence 
submitted by the parties and was not allowed to eng age meaningfully with that evidence. The 
appellants' claims ignore the Appellate  Body's prior recognition that, in order to discharge its duty 
as the trier of fact, a panel must properly "scrutinize" econometric evidence and "reach conclusions 
with respect  to the probative value it accords".84 That is exactly what the Panel did in this dispute.  
101.  The appellants' claims misapprehend the burden of proof and the role that it played in the 
Panel's assessment of the statistical and econometric evidence. The  Panel properly understood that 
the complainants submitted econometric evidence to prove  that no portion of the observed declines 
in prevalence and consum ption could be attributed to the TPP  measure s. The Panel also understood 
that Australia's econometric evidence was rebuttal  evidence submitted to show that the 
complainants' models did not prove what they purported to prove. The appellants repeatedly 
misch aracterise the nature of the Panel's findings in respect of Australia's rebuttal evidence. The 
Panel did not find, and had no need to find, that Australia's rebuttal evidence had fully resolved all 
of the concerns that the Panel had identified in respect o f the complainants'  econometric evidence 
in order to conclude that the complainants' evidence, as modified by Dr Chipty, provided "some 
econometric evidence" in support of the conclusion that the TPP  measure s had contributed to the 
observed declines in pre valence and consumption.  
102.  Many of the appellants' claims overlook the well -settled principle that a panel is not required 
to test its reasoning with the parties in advance of circulating its report.85 A panel does not violate 
due process so long as its reas oning does not "depart so radically" from issues and evidence 
presented to the panel that the parties were "left guessing as to what proof they would have needed 
to adduce."86 The allegedly "new" issues raised in the Panel  Report  that the appellants now 
 
82 Panel  Report, Appendix D, para.  115; Appendix C, para.  120. 
83 Panel  Report, Appendix C, para.  123(c); Appendix D, 137(c).  
84 Appellate  Body Report, US – Upland Cotton (Article  21.5 – Brazil), para.  357. 
85 See e.g. Appellate  Body Report, US – Tuna II (Article  21.5 – Mexico),  para. 7.177.  
86 Appellate  Body Report, US – Tuna II (Article  21.5 – Mexico),  para. 7.177.  WT/DS435/AB/R/Add.1 • WT/DS441/AB/R/Add.1  
 
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  challenge, such as the Panel's references to potential multicollinearity and non -stationarity in their 
models, were issues that emerged directly from the parties' extensive expert submissions. The 
appellants had more than ample opportunity to persuade the Pan el of the validity and probative 
value of their econometric evidence, and ultimately were unable to do so.  
103.  The appellants' claims that they were "denied an opportunity to comment" on certain of the 
Panel's findings, and thereby deprived of their right to d ue process, overlook the availability of 
interim review under Article  15.2 of the DSU . The appellants raised none of the issues that they 
now identify on appeal during the interim review stage, even though every one of these issues is a 
type of issue that parties to other disputes have raised in prior interim reviews. To whatever extent 
the Panel identified issues in its interim report that the appellants could not reasonably have 
anticipated, the appellants had an opportunity to raises their concerns with the Panel and elected 
not to do so.  
104.  The appellants overlook the fact that the Panel evaluated the validity and probative value of 
their econometric evidence in light of the constantly changing nature of the complainants' 
evidence . The Panel identified nume rous instances in which the complainants' experts changed 
their positions on important methodological issues, often with the effect of invalidating the results 
reported in their prior submissions. Instead of confronting the implications of flaws identified  in their 
earlier model specifications, the complainants' experts frequently changed other  aspects of their 
models, or abandoned prior models altogether, in an attempt to move the goalposts and start the 
debate all over again. The Panel appropriately took this consideration into account when evaluating 
the weight to accord to the complainants' econometric evidence.  
105.  Finally, many of the appellants' challenges to the Panel's factual findings on prevalence and 
consumption are a thinly -disguised attempt to re-litigate factual issues or have the 
Appellate  Body re -weigh the evidence.  
106.  Each of the appellants' challenges to the Panel's findings on prevalence and consumption are 
unfounded for one or more of the reasons enumerated above.  
107.  In addition to their failure t o establish a lack of objective assessment in any respect, the 
appellants do not even attempt  to demonstrate, beyond sheer assertion, that any one of the alleged 
errors of objective assessment, or any combination thereof, was material  to the Panel's interm ediate 
findings on prevalence and consumption. As summarised in Part 0 above, the appellants' claims that 
the Panel's findings on prevalence and con sumption reflect a lack of objective assessment are a key 
input to their challenge to the Panel's overall  finding on contribution. The appellants have failed to 
establish the essential predicate of this broader challenge.  
F. CONCLUSION  
108.  Australia submits th at the appellants' requests for reversal of the Panel's findings should be 
dismissed in their entirety, for the reasons outlined above.  
109.  The appellants' claims of legal error are specious, and their numerous claims that the Panel 
acted inconsistently with Article  11 of the DSU in its assessment of contribution are unfounded. As 
is evident from the foregoing, the appellants have failed to establish that the Panel exceeded the 
bounds of its discretion as the trier of fact under Article  11 of the DSU in findin g that the 
complainants failed to demonstrate that the TPP  measure s are not apt to make a contribution to 
Australia's public health objectives.87  
 
_______________  
 
 
 
87 Pursuant to the Guidelines in Respect of Executive Summaries of Written Su bmissions , WT/AB/23 
(11 March 2015), Australia indicates that this executive summary contains 11,767 words (including footnotes), 
and that this is ten percent or less of the total word count of Australia's appellee submission, which is 
129,096  words.  WT/DS435/AB/R/Add.1 • WT/DS441/AB/R/Add.1  
 
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  ANNEX C  
ARGUMENTS OF THE THI RD PARTICIPANTS  
Contents  Page  
Annex  C-1 Executive summary of Argentina's third participant's submission  70 
Annex  C-2 Executive summary of Brazil's third participant's submission  71 
Annex  C-3 Executive summary of Canada's third participant's submission  72 
Annex  C-4 Executive summary of China's third participant's submission  73 
Annex  C-5 Executive summary of the Dominican  Republic's third participant's submission  74 
Annex  C-6 Executive summary of the European  Union's third participant's submission  75 
Annex  C-7 Executive summary of Indonesia's third participant's submission  77 
Annex  C-8 Executive summary of Japan's third participant's submission  81 
Annex  C-9 Executive summary of Malawi's third participant's submission  82 
Annex  C-10 Executive summary of Mexico's third participant's submission  83 
Annex  C-11 Executive summary of New Zealand's third participant's submission  84 
Annex  C-12 Executive summary of Nigeria's third participant's submission  86 
Annex  C-13 Executive summary of Norway's third participant's submission  87 
Annex  C-14 Executive summary of the Philippines' third participant's submission  88 
Annex  C-15 Executive summary of Singapore's third participant's submission  89 
Annex  C-16 Executive summary of Thailand's third participant's submission  91 
Annex  C-17 Executive summary of the United  States' third participant's submission  92 
Annex  C-18 Executive summary of Zambia's third participant's submission  94 
Annex  C-19 Executive summary of Zimbabwe's third participant's submission  95 
 WT/DS435/AB/R/Add.1 • WT/DS441/AB/R/Add.1  
 
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  ANNEX  C-1 
EXECUTIVE SUMMARY OF ARGENTINA'S THIRD PARTICIPANT'S SUBMISSION* 
I. Article  16.1 of the Agreement on Trade -Related Aspects of Intellectual Property 
Rights (TRIPS).  
1. Argentina understands that the rights conferred by Article  16.1 of the TRIPS  Agreement  are, 
in essence, rights of exclusion granted to the owner of the trademark to prevent third parties from 
using in the course of trade identical or similar signs.  
2. Consequently, Argentina understands th at the Panel correctly interpreted the said article in 
finding that the obligation to provide protection does not extend to the obligation to maintain market 
conditions that permit the occurrence of certain factual circumstances provided for in that articl e, 
including the likelihood of confusion.  
II.  Article  20 of the Agreement on Trade -Related Aspects of Intellectual Property Rights 
(TRIPS).  
3. Argentina considers that the Panel has properly interpreted the adverb "unjustifiably" in the 
context of Article  20. 
4. Argentina understands that the analysis of "justifiability" under Article  20 of the 
TRIPS  Agreement  has its own specificity and differs from other standards contained in other 
provisions of the covered agreements.  
5. Argentina shares the Panel's view, also as regards the factors taken into account when 
conducting the "justifiability" analysis under Article  20. 
6. Argentina considers that the Panel was correct in its interpretation that the contribution of the 
measure analysed to the objective pursued should be comprehensively evaluated.  
7. Finally, Argentina submits that Article  8 of the TRIPS  Agreement  offers us eful contextual 
guidance for the interpretation of the term "unjustifiably" in Article  20. Specifically, the intention of 
the principles reflected in Article  8.1 is to preserve the ability of WTO Members to pursue certain 
legitimate societal interests, suc h as public health.  
 
 
 
* This text was originally submitted in Spanish by Argentina.  WT/DS435/AB/R/Add.1 • WT/DS441/AB/R/Add.1  
 
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  ANNEX C -2 
EXECUTIVE SUMMARY OF BRAZIL'S THIRD PARTICIPANT'S SUBMISSION  
1. In its submission, Brazil highlights the importance of analyzing this dispute in the context of 
the WHO's Framework Convention on Tobacco Control. Brazil then comments on: the "trade 
restrictiveness" test under Article  2.2 of the TBT  Agreement ; the interpretation of "unjustifiably 
encumber" under Article  20 of the TRIPS  Agreement ; and the Members' policy space in implementing 
public policies.  
2. Concerning the "trade -restrictiveness" test, Brazil notes that, by performing only a "trade 
effects" test under Article  2.2 of the TBT  Agreement , the Panel established a higher threshold for 
the analysis of non -discriminatory measures. Brazil und erstands the qualitative test could be omitted 
only if a Panel could gather precise quantitative information concerning the trade restriction caused 
by a TBT measure and its effects in competitive opportunities. Brazil also views the claimant is not 
requir ed to demonstrate trade effects to meet its evidentiary burden of proof.  
3. Regarding the interpretation of "unjustifiably encumber" under Article  20 of the TRIPS, Brazil 
maintains the Panel recognized the need for the encumbrance to be proportionate to the i mportance 
of the objective pursued by finding that the reasons for the application of special requirements 
should provide "sufficient support" for the encumbrance. Brazil agrees that Article  20 presupposes 
a balancing between the owners' interest to use th eir trademarks and Members' ability to adopt 
measures for achieving societal goals . 
4. Lastly, Brazil maintains that WTO Members may encumber the use of trademarks with special 
requirements, such as use in a special form, on the only condition that the encumb rance is justifiable. 
The TRIPS  Agreement  does not mention which kinds of motivation would legitimize the adoption of 
special requirements, nor defines any limit to encumber the use of a trademark other than its 
justifiable nature.  
 WT/DS435/AB/R/Add.1 • WT/DS441/AB/R/Add.1  
 
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  ANNE X C-3 
EXECUTIVE SUMMARY OF CANADA'S THIRD PARTICIPANT'S SUBMISSION  
1. The findings of the Appellate  Body in this dispute will have important systemic consequences 
for all WTO Members. This dispute addresses the critical balance between the protection of 
intellectual property rights and trade facilitation, and a Member's right to take legitimate public 
health measures under the TRIPS  Agreement  and the TBT  Agreement .  
2. The appellants' claims that the Panel erred in its interpretation of Articles 16.1 and 20 of th e 
TRIPS  Agreement , and Article  2.2 of the TBT  Agreement  are without merit and should be dismissed.  
3. The Panel was correct to conclude that TRIPS Article  16.1 of the TRIPS  Agreement  does not  
include a right to: use a trademark; preserve or strengthen the di stinctiveness of a trademark; or 
protect an owner's ability to demonstrate that a "likelihood of confusion" exists in the context of 
domestic infringement proceedings. A finding otherwise, under this provision or elsewhere in the 
TRIPS  Agreement , would lea d to the untenable result of restricting or nullifying Members' ability to 
take legitimate public policy measures, including measures to protect public health.  
4. The appellants misrepresent the Panel's findings with respect to the interpretation of the term  
"unjustifiably" under TRIPS Article  20. The Panel did not find that Article  20 establishes a "policy 
exception". The Panel properly concluded that Article  20 establishes an affirmative obligation on 
Members not to impose special requirements that unjustifiably encumber the use of a trademark. 
Further, the Panel properly found that an assessment of individual trademarks and their specific 
features is not required, as a matter of course, to determine whether a measure is justifiable under 
Article  20.  
5. Canada agrees with the Panel that the test for "unjustifiably" should not be akin to an 
"unnecessary" test. When the ordinary meanings of "necessary" and "justifiably" are compared, it is 
evident that the threshold to establish that a measure is "necessary" must be higher and more 
stringent that the threshold to establish that a measure is "justifiable". There is no basis in the text 
or negotiating history to adopt a "necessary" test in Article  20. Consequently, the appellants' claim 
that the comp arative component of the "necessity" test should be imported into Article  20 must be 
rejected.  
6. Canada proposes additional elements to the Panel's "unjustifiably" test to ensure that the 
critical and deliberate balance is preserved between the protection of  IP rights and a Member's  right 
to take legitimate public policy measures. In particular, the test must include whether: the "reasons" 
for the requirement are legitimate; there exists a nexus or connection between the requirement and 
the reasons; and the r equirement contributes to or is capable of contributing to the reasons. The 
test should not include a comparative analysis of the requirement at issue and the existence of 
alternative requirements.  
7. The appellants' claims under Article  2.2 of the TBT  Agreem ent should be dismissed as they 
are not substantiated by a plain reading of the Panel's findings and are without merit. The Panel's 
interpretation of "trade restrictiveness" is consistent with existing case law and does not constitute 
an error of law.  
8.  Canada encourages the Appellate  Body to rigorously apply the standard under Article  11 of 
the DSU to dismiss any arguments that simply seek to have factual findings overturned on appeal1. 
 
 
1 Pursuant to the Guidelines in Respect of Executive Summaries of Written Submissions , WT/AB/23 
(11 March 2015), Canada indicates that this executive summary contains 542 words, and that this is 
ten percent or less of the total word count of Canada's third participant submission (including footnotes), which 
is 5,483  words.  WT/DS435/AB/R/Add.1 • WT/DS441/AB/R/Add.1  
 
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  ANNEX C -4 
EXECUTIVE SUMMARY OF CHINA'S THIRD PARTIC IPANT'S SUBMISSION  
1. These disputes touch upon important issues concerning the balance between health interests, 
trade interests and intellectual property interests under the WTO covered agreements. It is 
undisputed that WTO Members may take appropriate meas ures for the purpose of protection of 
public health.  
2. While not taking a position on the specific merits of the disputes and evidentiary assessment 
issues, China would like to provide its observations on legal interpretation of two provisions of 
covered agr eement: Article  20 of Agreement on Trade -Related Aspects of Intellectual Property 
Rights (TRIPS  Agreement ) and Article  2.2 of the Agreement on Technical Barriers to Trade 
(TBT Agreement).  
3. With respect to Article  20 of the TRIPS  Agreement , the standard of "unjustifiably" under 
Article  20 of the TRIPS  Agreement  is not necessarily the same as that of "necessary" under 
Article  2.2 of the TBT  Agreement  or Article  XX of the GATT  1994.  
4. The "unjustifiably" test appears to be neither a test identical or similar to  that under Article  2.2 
of the TBT  Agreement  or the GATT  1994, nor an "all or nothing" test in terms of the rational 
connection between the measure and the policy objective. The existence of less restrictive 
alternatives might not, in itself, establish tha t the measure at issue is unjustifiable. Equally, rational 
connection that is de minimis might not, in itself, demonstrate the measure is justifiable.  
5. With respect to Article  2.2 of the TBT  Agreement , China hopes AB could clarify the relationship 
between Article  2.2 and Article  2.1 of the TBT  Agreement  and whether a higher evidentiary burden 
of demonstrating actual trade effects was imposed on non -discriminatory technical regulations in 
order to illuminate trade -restiveness.  
6. China has concern on the rigid and narrow interpretation of "equivalent degree of contribution 
to relevant legitimate objective". China hope AB could clarify the scope of the legitimate objective 
here, which refers to the main policy purpose, protecting human health, or the effect of th e 
challenged measure, reducing the attraction of the tobacco package.  
 WT/DS435/AB/R/Add.1 • WT/DS441/AB/R/Add.1  
 
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  ANNEX C -5 
EXECUTIVE SUMMARY OF THE DOMINICAN REPUBLIC'S THIRD PARTICIPANT'S SUBMISSION  
1. The Dominican  Republic  presents interpretive arguments on one issue raised in Honduras' 
appeal under Article  20 of the Agreement on Trade -Related Aspects of Intellectual Property Rights 
("TRIPS  Agreement "): the Panel's failure to take appropriate account of the individual chara cteristics 
of each affected trademark in examining the nature and extent of the encumbrances, and the 
justifiability of the encumbrance as it relates to the affected trademarks.  
2. Establishing whether trade "use" has been "unjustifiably encumbered" involves , first, an 
assessment of the existence of an encumbrance, and, second, an assessment of its justifiability. 
Both stages of this analysis must be conducted based on an assessment of "each affected trademark 
individually".1 The Panel failed to apply Article  20 to require appropriate account be taken of each 
affected trademark.2  
3. As Honduras explains, the context of Articles 15, 16, 17, and footnote 3 of the 
TRIPS  Agreement confirms that Article  20 requires an individualized assessment of each specific 
tradem ark.3 Under the TRIPS  Agreement , all aspects of trademark regulation, including the content , 
acquisition , enjoyment , and enforcement  of trademark rights, are based on individual consideration 
of each particular trademark. The regulation of use is equally i mportant, as use is essential to ensure 
that a trademark fulfills its basic distinguishing function. As is the case for other aspects of trademark 
regulation, the regulation of use must take account of the individual characteristics of each affected 
tradem ark. 
4. The Panel failed to do so. It found that the prohibition on stylized word marks, composite 
marks and figurative marks is "partly mitigated" by the continued use of non -stylized word marks. 
This finding collapses the legal and factual distinctions betw een different trademarks and different 
categories of trademarks that perform distinct functions. A prohibition on the use of one trademark 
is not lessened by the use of another. A mark whose use is prohibited cannot fulfill its basic function.  
5. Similarly, the Panel erred in finding that individual assessment was unnecessary because 
Australia "did not intend  to address individual trademarks".4 The WTO -consistency of a measure 
does not hinge on a respondent's intentions. The Panel should have assessed the TPP  trademark 
requirements by reference to their  effects  on trademarks.  
6. The Panel also confuses the regulation of trademarks  with the regulation of products . The 
encumbrance on trademarks that must be shown to be unjustifiable is not the "standardization" of 
tobacco products, as the Panel said.5 It is a prohibition on the use of stylized word marks, composite 
marks and figurative marks on a particular product.  
 
 
 
1 Honduras Appellant's Submission, paras.  140, 181.  
2 See generally Honduras Appellant's Submission, Section III.  
3 Honduras Appel lant's Submission, para.  163. (emphases added)  
4 Panel  Report, para.  7.2594. (emphasis added)  
5 Panel  Report, para.  7.2594.  WT/DS435/AB/R/Add.1 • WT/DS441/AB/R/Add.1  
 
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  ANNEX C -6 
EXECUTIVE SUMMARY OF THE EUROPEAN UNION'S THIRD P ARTICIPANT'S SUBMISSION1 
1.1  Article  2.2 of the TBT  Agreement  
1. The European  Union  shares the concern that, in order  to ensure due process, panels are 
required to share factual evidence on which they rely with the parties to a dispute  in order 
to allow them to provide their views with regard to the value and use of this evidence. However, 
even if the Panel's assessment of the post -implementation evidence would be affected by a failure 
under Article  11 DSU, it would need to be considere d to what extent the Panel could still have 
reached its conclusion that the TPP  measure  is apt to make a material contribution to its stated 
objectives. The European  Union  is rather of the view that such a conclusion would be sound. It 
should be possible t o reach such a conclusion on the basis of considering a reasonable amount of 
evidence, including qualitative reasoning. For regulatory space to be meaningful, regulatory 
authorities must be afforded sufficient latitude to choose between different available  options, without 
being continuously second -guessed by WTO adjudicators. They should not have to live in fear of 
being swamped by excessive quantities of litigant -generated "evidence", turning the regulatory 
process into a battle of attrition.  
2. With regard  the claim that the Panel erred in the application of Article  2.2 of the 
TBT Agreement when assessing the contribution of the TPP  measure , the European  Union  
notes that the Panel found the considerations by Australia that the impact of the measures can onl y 
manifest itself fully over a longer period of application to be persuasive. Rather than merely 
accepting that it was "reasonable" that the measures were apt to make a material contribution, the 
Panel was referring to the expected effect of the measures a t issue over the longer term . 
It recognised that the evidence in the early period of application of the measures "may not provide 
a complete picture" and that its determination was "not intended to prejudge the future evolution of 
the contribution of the T PP measure s to the reduction of the use of, and exposure to, tobacco 
products". Yet, it considered that the evidence on "proximal" and "distal" outcomes corroborated 
Australia's claim.  
3. With regard to the standard of trade -restrictiveness, the European  Union agrees that any 
measure regulating economic activity would likely alter the conditions of competition for all relevant 
products and producers. One cannot conclude from this that there is – necessarily – also a restriction 
of international trade. The comp lainants' attempt to transpose the "competitive opportunities" 
language from the context of de facto  discrimination reflects an attempt to escape from the 
consequences of how they have framed their cases. If their real concern would have been how the 
measu res have impacted upon them differently, then they should have brought an MFN  claim. They 
have not done so. This has forced them into a conundrum of their own making. They must argue 
that the measures are ineffective  and yet, at the same time, trade restri ctive. That is why they seek 
to extend the concept of trade restrictiveness to include the manner in which the measure, allegedly, 
impacts them differently. This confounds the concept of de facto  discrimination with the different 
concept of trade restricti veness.  
4. With regard to the complaint that the Panel would have examined the alternative 
measures' contribution in light of the specific "mechanisms" by which the TPP  measure s 
operate, rather than the objectives , the European  Union  considers that the Panel  appropriately 
recognised that the TPP  measure  is part of a "suite of measures" addressing a multifaceted problem, 
seeking to achieve the more general and ultimate objective of reducing tobacco consumption. 
Reducing the appeal of tobacco products for youth  by removing the possibility to compete based on 
brand image and diversification would appear to be one of the causal mechanisms by which that 
overarching objective is to be achieved. It seems reasonable to posit that the complex and multi -
faceted socio -economic objective pursued by Australia may need to be approached from all available 
angles, simultaneously, each measure bearing down on a particular facet of the problem. However, 
 
1 Total words of the submission (including footnotes but excluding the executive summary) = 13451; 
total words of the executive summ ary = 1263.  WT/DS435/AB/R/Add.1 • WT/DS441/AB/R/Add.1  
 
- 76 - 
 
  if one measure would be omitted from the suite, there is every risk that a g ap would open up, 
reducing the effectiveness of the entire suite.  
5. The European  Union  does not consider that a different standard of "equivalence" was 
imposed in case of a "suite of measures" . The Panel stressed, in line with the Appellate  Body in 
Brazil – Retreaded Tyres , that the specific elements of Australia's tobacco strategy cannot be 
replaced by alternatives that are a modification or improvement of existing measures that are 
already part of the suite of measures when these would not, in themselves, adequately address the 
particular causal mechanism at issue, thus leaving the suite incomplete. To the European  Union, 
addressing specifically the effect of the images and messages conveyed by the figurative and other 
design features of the tobacco packagi ng is a particular causal mechanism, leading to the longer -
term objective of an overall reduction of smoking. It may reasonably be considered a necessary 
element of the overall suite of measures, essential to ensure the effectiveness of the suite considere d 
as a whole. In other words, we consider that a regulator should have the possibility, as part of an 
overall suite of measures, to address a specific form of competition that is proven to attract 
consumers.  
1.2  Article  20 of the TRIPS  Agreement  
6. The Panel set out a legal standard regarding the term "unjustifiably" that resembles the 
justifications under Article  XX of the GATT  1994 and appears to be in line with Article  20. The concept 
of "justifiable" is broad enough to capture the various types of justificatio n, with their various types 
of nexus and ensures, as stated in Article  8.1 of the TRIPS  Agreement , that there is scope within 
the TRIPS  Agreement  to accommodate measures necessary to protect public health.  
7. The term "unjustifiably" implies the existence of certain objectives behind the "special 
requirements" as it refers to the ability to provide a "justification" or "good reason" for the relevant 
action or situation that is reasonable. Article  20 does not expressly identify the types of reasons that 
may form the basis for the "justifiability" of an encumbrance. The broad wording of Article  20 
indicates that WTO Members could take into account public  policy objectives; useful guidance can 
be found in the context of the other provisions of the TRIPS  Agreement , in particular Articles 7 and  8.  
8. The legal standard adopted by the Panel is not limited to providing "good reasons". It actually 
weighs and bala nces in each specific case several elements: the nature and extent of the 
encumbrance resulting from the special requirements; the legitimate interest of the trademark; the 
reasons underlying the special requirements; and whether these reasons provide suff icient support. 
The legal standard appears to consider also the specific concerns raised by the trademarks concerned 
as part of the analysis.  
9. The ordinary meaning, the context and the objective and purpose of Article  20 of the 
TRIPS  Agreement do not appear  to show that Article  20 only allows encumbrances that rely on 
"trademark -specific concerns" and are applied in "limited manner" or "with minimal impact on its 
distinguishing function". The examples introduced by "such as" in Article  20 and the "special" n ature 
of the requirements do not imply that the term "unjustifiably" has to be read as allowing only limited 
encumbrances. Furthermore, since the relevant "use" for the purposes of Article  20 is not limited to 
distinguishing the goods and services of one u ndertaking from those of other undertakings, the 
"minimal impact on its distinguishing function" appears thus not to be decisive.  
 
 
 
 
 WT/DS435/AB/R/Add.1 • WT/DS441/AB/R/Add.1  
 
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  ANNEX C -7 
EXECUTIVE SUMMARY OF INDONESIA'S THIRD PARTICIPANT'S SUBMISSION  
I. INTRODUCTION1 
1. The Dominican  Republic  and Honduras ("the Appellants") challenge various aspects of the 
Panel's report. They seek reversal of legal interpretations by the Panel of Article  2.2 of the Agreement 
on Technical Barriers to Trade ("TBT  Agreement "), and Articles 16.1  and 20 of the Agreement on 
Trade -Related Aspects of Intellectual Property ("TRIPS  Agreement "). The Appellants also believe the 
Panel failed to make an objective assessment of the matter in violation of Article  11 of the 
Understanding on the Rules and Proc edures Government the Settlement of Disputes ("DSU"). They 
present argument and evidence showing that the Panel failed to examine the matter in an even -
handed manner, applying a double  standard of proof that repeatedly benefited Australia. Finally, the 
Appellants maintain that the Panel failed to respect their due process rights. In their written 
submissions they detail how the Panel rejected the complainants' evidence that Australia's tobacco 
plain packaging measures ("TPP  measure s") do not contribute to t heir objective using econometric 
tests that the Panel (a) developed on its own, (b) gave the complainants no opportunity to comment 
on, and (c) are not part of the Panel's record.  
II. THE PANEL ERRED IN FINDING THAT AUST RALIA'S TPP MEASURES  ARE NOT 
INCONSI STENT WITH ARTICLE 2 .2 OF THE TBT AGREEM ENT 
A. The Panel Erred When Assessing The Trade -Restrictiveness Of The TPP Measures  
2. The Panel should have based its trade -restrictiveness finding on whether the challenged 
measures modify the conditions of competitio n to the detriment of imported products. Instead, the 
Panel embraced a "trade effects" test based on the extent to which Australia's TPP  measure s reduced 
the volume of imports. The Panel compounded its error by insisting that any trade effects be caused 
exclusively  by the TPP  measure s. 
3. The Appellate  Body has made clear that panels should assess the trade -restrictiveness of 
technical regulations under Article  2.2 with reference to their limiting effect on the "'competitive 
opportunities' available to imported products".2 The concept of "trade -restrictivene ss is broad" and 
its presence may be demonstrated without having to quantify the trade effects.3 
4. The complainants presented evidence that TPP's design, structure, and expected operation 
restricts the competitive opportunities available to imported tobacco products. Australia admits that 
TPP is intended to prevent tobacco companies from using trademarks to distinguish their products 
and enhance competitive opportunities. Despite this, the Panel stated that "it needs to be shown 
how such effects on the condit ions of competition on the market give rise to a limiting effect on 
international trade in tobacco products".4 
5. The complainants presented evidence of trade effects. They proffered evidence (not rebutted 
by Australia) showing that TPP led some  consumers to shift to lower -priced tobacco products.5 
However, the Panel still found no trade restriction on these grounds. The Panel claimed the evidence 
did not show that the relative increase in sales of lower -priced tobacco products was "exclusively" 
due to down -trading caused by the TPP  measure s. 
 
1 In line with the Working Procedures of the Appellate  Body, the total number of words in Indonesia's 
Third Participant Submission is 20,697. The total number of words in this Executive Summary is 2,051.  
2 Appellate  Body Reports, US – COOL, para. 477. 
3 Id. 
4 Panel  Report, para.  7.1168.  
5 Id., para.  7.1197.  WT/DS435/AB/R/Add.1 • WT/DS441/AB/R/Add.1  
 
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  B. The Panel Erred In Assessing Whether There Were Less Trade -Restrictive 
Alternatives To The TPP Measures  
6. In describing how it would assess the relative contribution of less trade -restrictive alternatives 
("LRAs") to Aust ralia's objective, the Panel notes (correctly in Indonesia's view) the Appellate  Body's 
guidance that  
[w]hat is relevant in an assessment of 'equivalence' is  'the overall  degree of contribution 
that the technical regulation makes to the objective pursued … rather than any 
individual isolated aspect or component  of contribution'.6 
7. Unfortunately, the Panel then proceeds to assess the relative contributions of LRAs and TPP, 
not in terms of their overall contribution to reducing the use of and exposure to toba cco products, 
but rather on their contributions to TPP's "mechanisms" (i.e. reducing appeal, increasing the 
effectiveness of graphic health warnings ("GHWs"), and eliminating the ability of tobacco 
manufacturers to mislead consumers).  This approach runs co unter to the Appellate  Body's guidance 
not to link equivalence to an individual aspect or component of contribution and reflects a violation 
of TBT  2.2. 
C. The Panel  Let Australia Show That TPP Might Work In The Future, But Complainants 
Had To Show That Th e Pre -Vetting Alternative Was Certain To Work  
8. Even though Indonesia disagrees that an LRA must contribute through the same mechanisms 
as TPP, the complainants included at least one alternative, pre -vetting, that did just that. The Panel 
agreed:  
pre-vettin g … would … achieve Australia's objective of improving public health by 
reducing use of, and exposure to, tobacco products through the same causal 
mechanisms as those employed by the TPP  measures, namely reducing appeal, 
increasing the effectiveness of the GHWs, and reducing the ability of the retail packaging 
of tobacco products to mislead consumers about the harmful effects of smoking or using 
tobacco products.7 
9. Despite these findings, the Panel concluded that the contribution made by pre -vetting was not 
equivalent to the contribution made by TPP because of the possibility  that it might make a lesser 
degree of contribution to Australia's objective.8 The Panel speculates that pre -vetting could result in  
certain design elements of tobacco packaging being allo wed onto the market and that allowing these 
products to appear on the market, even for a short period, could have adverse health effects.9 
III. THE PANEL'S FIN DINGS ON THE CONTRIB UTION OF TPP TO ITS OBJECTIVE UNDER 
TBT 2.2 AND TRIPS 20  ARE VITIATED BY LEG AL ERRORS AND INCONSI STENT WITH THE 
REQUIREMENTS OF AN O BJECTIVE ASSESSMENT UNDER ARTICLE 11 OF THE DSU  
A. The Panel Erred When It Conflated The Effects Of TPP With The Effects Of Enlarged 
GHWs  
10. The complainants argued that TPP does not make a meaningful con tribution to its objective. 
In making this showing the complainants faced the "perfect confound".10 Specifically, concurrent 
with its move to TPP, Australia substantially increased the size of its GHWs on packaging.  
11. In order to get around this conundrum the  complainants' experts assumed that all of the effect 
on smoking prevalence was attributed to TPP and none resulted from the GHWs. When they did, the 
evidence still showed that TPP did not have a sustained effect  on smoking prevalence.  
 
6 Id., para.  7.1368.  
7 Id., para.  7.1664.  
8 Id., paras.  7.1680 - 7.1683.  
9 Id., para.  7.1680.  
10 "A Consideration of the Empirical Evidence on the Effect of Australia's Tobacco Plain Packaging 
Legislation", Prof. J. List, p.  30, 1 June 2015, Exhibit DR/IND -1. WT/DS435/AB/R/Add.1 • WT/DS441/AB/R/Add.1  
 
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  12. Unfortunately, the P anel never addresses complainants' claim that the TPP  measure s do not 
contribute to their objective. Instead, it finds that TPP and enlarged GHWs contribute to Australia's 
objective.11 
13. The failure of the Panel to address complainants' claim vitiates its fin dings on contribution 
under TBT Article  2.2. It also reflects a failure to comply with the obligation under DSU Article  11 to 
make an objective assessment of the matter.12 
B. The Panel Supported Its Findings Of Contribution On The Basis Of Assessments That 
Are Not Specific To Australia Or The Australian Context  
14. In order to conduct "an objective assessment of the matter before it, including the facts of 
the case" in accordance with DSU Article  11, a panel must interpret WTO agreements in a hi ghly 
contextualized manner. It must consider the facts and "circumstances that prevail in any given 
case".13 
15. The Dominican  Republic  submits that the Panel supported its finding of contribution on the 
basis of evidentiary assessments that are not specific to  Australia or the Australian context.14 
Indonesia agrees.  
16. The Panel based its assessment of TPP's contribution to its objective, including its impact on 
package appeal, effectiveness of GHWs, and the ability of the pack to mislead, on hypothetical 
scenarios  or stale facts.  
C. The Panel Denied The Complainants The Opportunity To Comment On "Robustness" 
Criteria Applied By The Panel To Assess Complainants' Post -Implementation Evidence On 
Contribution  
17. The parties presented numerous studies on whether the TPP  measure s make a contribution to 
their objective. Many of these studies were based on extensive data sets and econometric models.  
18. The Panel rejected the views of complainants' experts, not based on anything argued or 
presented by Australia, but on the basis o f "robustness criteria" developed by the Panel, but never  
raised with the parties. Had the complainants been afforded the opportunity to comment on the 
robustness criteria developed by the Panel, they would have been able to address specific flaws in 
the w ay the criteria were applied and provide a rebuttal to the conclusion that the complainants' 
evidence was not robust.  
19. The Panel's approach to assessing the robustness of the econometric evidence presented by 
the complainants is inconsistent with Article  11 because it failed to accord the complainants due 
process. The Panel did not allow complainants to comment on the criteria it used, nor its conclusion 
that certain evidence presented by complainants' experts could not be relied upon because it was 
not suff iciently robust.  
D. The Panel Applied Robustness Criteria To Complainants' Post -Implementation 
Evidence Of Contribution, But Not To Substantially Similar Evidence Presented By 
Australia  
20. In addition to denying complainants due process, the Panel also applie d its robustness criteria 
in a discriminatory manner. Instead of applying them equally to data developed by the complainants 
and Australia, the Panel appears to have applied the criteria only to the data developed by the 
complainants. Had the Panel applied  the same robustness criteria it used to critique complainants' 
data to substantially similar data presented by Australia, it would have presumably voiced similar 
concerns. For example, according to the Dominican  Republic , Dr Chipty's work (proffered by 
Australia) suffers from the same robustness concerns as the Panel  claims to have found with 
 
11 See, e.g., Panel  Report, para.  7.1025.  
12 Appellate  Body Report, US – Carbon Steel (India) , para.  4.233.  
13 Appellate  Body Reports, Japan – Alcoholic Beverages II , p. 21. 
14 Dominican  Republic's Appellant Submission, paras.  652-825. WT/DS435/AB/R/Add.1 • WT/DS441/AB/R/Add.1  
 
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  evidence developed by Professors Klick and List. This lack of even -handedness is contrary to DSU 
Article  11. 
IV. THE PANEL ERRED IN FINDING THAT AUST RALIA'S TPP MEASU RES ARE NOT 
INCONSISTENT WITH A RTICLE  16.1 OF THE TRIPS  AGREEMENT  
21. Indonesia supports Honduras' appeal of the Panel's finding that TPP does not violate 
Article  16.1 of the TRIPS  Agreement . First, Indonesia agrees that "[a] Member that directly and 
deliberately seeks to reduce the strength of the mark, thereby making it impossible, over time, to 
demonstrate a likelihood of confusion ... violates Article  16.1 of the TRIPS  Agreement ".15 
Second,  Indonesia agrees that the Panel mistakenly exercised judici al economy when it refused to 
examine whether TPP limits the right of tobacco trademark owners to prevent an infringing use.16 
V. THE PANEL ERRED I N FINDING THAT AUSTR ALIA'S TPP MEASURES ARE NOT 
INCONSISTENT WITH A RTICLE  20 OF THE TRIPS  AGREEMENT  
22. First, Art icle 20 prohibits Members from imposing "special requirements" that "unjustifiably 
encumber[]" the "use of a trademark in the course of trade". The Panel's findings in relation to 
Article  20 reflect an erroneous interpretation of the term "unjustifiably".17 A proper interpretation 
would have led to the conclusion that the term "unjustifiably" qualifies the extent to which use of a 
particular trademark  may be encumbered, rather than whether the requirements imposed are 
justifiable based on "good reasons".  
23. Second, the Panel failed to consider the claims of Honduras and other complainants regarding 
the unjustifiability of the encumbrance caused by the prohibition of all marks on cigarette sticks . 
This prohibition entirely eliminates the ability to differentiate between cigarettes once they are 
removed from their packaging.18 This failure on the part of the Panel to address the complainants' 
arguments is also a failure to "comply with the obligation under Article  11 of the DSU to make an 
objective assessment of the  matter".19 
VI. CONCLUSION  
24. Indonesia wishes to thank the Appellate  Body for its consideration of these views.  
 
 
 
 
15 Honduras' Appellant Submission, para.  435. 
16 Id., para.  445. 
17 Honduras' Appellant Submission, paras.  52-322. 
18 The Panel's failure to apply the law to the facts of this case as they pertain to cigarette sticks is legal 
error.  Honduras' Appellant Submission, para.  58. 
19 Appellate  Body Report, US – Carbon Steel (India ), para. 4.233.  WT/DS435/AB/R/Add.1 • WT/DS441/AB/R/Add.1  
 
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  ANNEX C -8 
EXECUTIVE SUMMARY OF JAPAN'S THIRD PARTICIPANT'S SUBMISSION  
1. When conducting an examination of whether a trademark has been "unjustifiably" 
encumbered by the special requirements under TRIPS Article  20, Japan is of the view that it is 
essential to identify the policy objective of the challenged measure objectively and accurately at the 
outset. Otherwise, it w ould be impracticable to assess whether the measure is reasonably calibrated 
to contribute to its policy objective.  
2. Regarding the first factor of such an examination, Japan notes that effects on the use of 
figurative and design aspects of trademarks by the  TPP measure s, and the resulting effects of the 
economic value of the trademarks, should be properly taken into account when evaluating the nature 
and extent of the encumbrance.  
3. Regarding the second factor, Japan notes that policy objectives should be ass essed based on 
the measure's objective structure, design, and architecture. This does not mean that the policy 
objective should be specified at the level of detail which describes the manner in which the measure 
achieves the policy objective. The more deta iled the objective, the greater the risk that a measure 
will always be found to contribute to the objective and that no alternative measures could equally 
contribute.  
4. Japan makes two points regarding the third factor. First, Japan notes that labelling regu lations 
are generally intended, by their structure and design, to prevent consumer confusion regarding the 
content, qualities and characteristics of the goods at issue. It is therefore inappropriate to conclude 
that any or all advertising or promotion func tion of trademarks should be prohibited for any products 
with harmful effects, particularly if the trademarks do not create misunderstandings about the 
harmful effects. Second, Japan takes issue with the Panel's finding that the TPP  measure s ensured 
that o bjectives of other measures (outside its terms of reference) were not undermined. Japan 
considers that the proper framework to analyze the supporting effects of the measure at issue on 
other measures should be, first, to assess the contribution of such oth er measures to their own 
objectives.  
5. Japan makes two points regarding Article  2.2 of the TBT  Agreement . First, Japan submits that 
the examination of "trade -restrictiveness" under the second sentence of Article  2.2 should be 
primarily based on an examinati on of the measure's design, architecture, structure and operation. 
Qualitative analysis may suffice. Japan also notes that actual trade effects may not necessarily reveal 
trade -restrictiveness due to the interaction of various market factors. So long as a Member 
demonstrates that a modification of competitive opportunities, which is detrimental to imports, it 
should logically follow that there is a limiting effect on international trade.  
6. Second, Japan considers that the Panel applied an incorre ct standard by requiring alternative 
measures to "substitute" for the measures at issue. Giving weight to the unique characteristics or 
direct effects of the measure at issue and therefore requiring proposed alternative measures to 
completely substitute th e challenged measure, may lead to effectively requiring a contribution that 
is not just "equivalent" but rather "identical" to it.  
 
 
 
 WT/DS435/AB/R/Add.1 • WT/DS441/AB/R/Add.1  
 
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  ANNEX C -9 
EXECUTIVE SUMMARY OF MALAWI'S THIRD PARTICIPANT'S SUBMISSION  
1. Malawi appreciates the opportun ity to provide its views on the Panel's findings in Australia – 
Certain Measures Concerning Trademarks, Geographical Indications and Other Plain Packaging 
Requirements Applicable to Tobacco Products and Packaging . Malawi has a deep interest in the 
outcomes  of this dispute, and in its implications for the cardinal principles underlying the multilateral 
trading system.  
2. Tobacco accounts for the majority of Malawi's exports by value, and supports 70  per cent of 
its citizens' livelihoods. Malawi is a major glob al producer of Burley and unmanufactured tobacco. 
Tobacco plain packaging measures have the potential to greatly and negatively impact 
Malawi's  economic and trade interests by restricting trade.  
3. Malawi is therefore concerned that the Panel's approach to th e loss of competitive 
opportunities to differentiate between tobacco products appears to be at odds with the meaning of 
"trade -restrictiveness" under Article  2.2 of the TBT  Agreement .  
4. First, for the Panel, the loss of competitive opportunities was insuffi cient to demonstrate that 
the TPP  measure s are "trade -restrictive", absent actual trade effects. However, under Article  2.2, 
there is no need to consider trade effects when a measure, by design, limits significant competitive 
opportunities.  
5. Second, the Pan el concluded that while the measures may affect the overall value of tobacco 
imports over time, they did not have a limiting effect because the evidence "to date" did not show 
an effect. However, under Article  2.2, competitive opportunities are protected b oth now and in 
future.  
6. Malawi also urges the Appellate  Body to ensure that the Panel conducted an objective 
assessment of the facts under Article  11 of the DSU. Due process is essential to a panel's neutral 
balancing of Members' competing interests, and is  therefore an important part of the legitimacy of 
the WTO's dispute settlement system. The allegations that the panel devised its own econometric 
tests, and used the results of its own internal testing as "evidence", warrant thorough review.  
 
 
 WT/DS435/AB/R/Add.1 • WT/DS441/AB/R/Add.1  
 
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  ANNEX C -10 
EXECUTIVE SUMMARY OF MEXICO'S THIRD PARTICIPANT'S SUBMISSION 
1. Mexico has a systemic interest in the procedures for appellate review of the report issued by 
the Panel in this dispute. Specifically, Mexico considers certain elements in the Panel's interpretation 
to be inconsistent with the case law to date on technical barriers to trade. The purpose of this 
third participant's submission is therefore to contribute to the analysis being conducted by the 
Appellate  Body to clarify the rights and obligations of Members with respect to the provisions in 
dispute.  
2. The interpretation of international trade -restrictiveness in the light of the examination of 
"necessity" in terms of Article  2.2 of the Agreement on Technical Barri ers to Trade (TBT  Agreement) 
is the key to determining whether a technical regulation is permitted or prohibited under that 
provision.  
3. Mexico believes that there are inconsistencies as regards the legal analysis carried out by the 
Panel of: (i) the meanin g of the term "trade -restrictive" and (ii) the application of the standard to 
the challenged measures.  
4. Regarding the term "trade -restrictive", although the TBT Committee's recommendation may 
be relevant in assessing the restrictiveness of trade, Mexico co nsiders that Article  2.1 of the 
TBT Agreement and the interpretations regarding the assessment of a detrimental impact on 
competitive conditions provide relevant context for evaluating restrictiveness. Although these are 
provisions that establish different  obligations, each one can inform the other. Thus, regardless of 
whether we are dealing with a discriminatory or non -discriminatory measure, Mexico believes that 
the change in the competitive conditions may constitute a limiting effect on trade which may b e 
evaluated according to the design, structure and operation of the measure. Likewise, although 
evidence of actual trade effects may be relevant, there is no need to demonstrate the existence of 
actual effects on trade as the result of a technical regulati on in order to determine its inconsistency 
with Article  2.2 of the TBT  Agreement.  
5. As regards application to the challenged measures, Mexico submits that the Panel did not 
conduct an analysis based on the design, structure and operation of the measure to d etermine 
whether there was a limiting effect on competitive opportunities resulting from the limitation of the 
ability to compete on the basis of trademarks. Moreover, although the Panel noted that the analysis 
of the measures may be qualitative, it in fac t conducted an analysis of the actual effects of the 
measures. At the same time, in concluding that the decrease in the consumption and imports of 
premium tobacco products was not exclusively the result of "downtrading" the Panel appears to have 
considered  that a certain threshold for restrictiveness had to be met. In Mexico's view, although the 
Panel must try to determine to what extent a measure restricts trade, that determination does not 
require that a particular threshold be met. In other words, it is not indispensable that the restriction 
should attain a particular level of limitation, but rather, that it should be possible to determine at 
what level or to what degree, and in what manner trade is limited. The joint assessment of whether 
a measure is "m ore trade -restrictive than necessary" requires, in addition and necessarily, an 
examination of other factors to help determine whether or not the measure is, in fact, an 
unnecessary barrier.  
6. Finally, although Mexico does not dismiss the possibility that th e analysis of the effects of a 
measure on supply could be relevant, it does not consider that because there has been an increase 
in prices or those prices have remained at the same level, it necessarily follows that the restrictive 
effects of a measure hav e been neutralized. Mexico believes that it is necessary to examine whether 
there is a genuine relationship between the measure and a detrimental impact on competitive 
opportunities, since there may be situations in which the measure itself leads individua ls to act in a 
certain way.  
 
 
 This text was originally submitted in Spanish by Mexico.  WT/DS435/AB/R/Add.1 • WT/DS441/AB/R/Add.1  
 
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  ANNEX C -11 
EXECUTIVE SUMMARY OF NEW ZEALAND'S THIRD PARTICIPANT'S SUBMISSION  
I. INTRODUCTION  
1. This appeal is directly concerned with the legitimacy of Australia's Tobacco Plain Packaging 
measures (" TPP Measures "). More broadly, however, it is concerned with the right of 
WTO Members to protect public health within their countries, and the need to preserve the balance 
achieved in the WTO agreements between members' trade commitments and their right to regu late 
to address legitimate policy objectives. The appeals represent an unfounded challenge to this 
balance, and to the proper interpretation of the WTO agreements concerned.  
II.  ARTICLE 11 DSU  
2. There are four overarching defects that run through the appel lants' Article  11 claims.  
3. The first is the framing of impermissible challenges to the Panel's factual findings  as 
claims that the Panel breached its obligation to act with objectivity under Article  11. Of particular 
concern is the framing of purely factua l appeals as allegations that the Panel "failed to provide a 
reasoned or adequate explanation of its findings", or that its findings "lack an evidentiary basis". 
New Zealand does not accept either of these two contentions. More importantly, however, 
New Zealand is concerned that, if the two suggested failings were accepted as touchstones of a 
breach of Article  11, the focus would shift from an assessment of the Panel's objectivity to an 
assessment of whether the Panel's decision was correct. This would be i nconsistent with the plain 
meaning of Article  111, and would transform Article  11 into a gateway to challenge the Panel's factual 
findings, contrary to Article  17.6 DSU.  
4. The second defect is the failure to appreciate the allocation of the burden of proof 
between the parties. The appellants imply that the task of the Panel was to decide which out of the 
complainants or Australia had the stronger case. This is incorrect. The onus of proof was on the 
complainants to establish a prima facie case that, in imple menting the TPP  measure s, Australia 
breached its WTO  obligations. One of the ways that the complainants sought to prove their case was 
by arguing that the TPP  measure s cannot  and do not  contribute to the reduction in tobacco use and 
exposure.2 Australia's objective at the Panel stage was not to prove its own case, but rather to 
demonstrate that the complainants had failed to establish theirs. The Panel acted in accordance with 
this allocation of the burden of proof and the case that the complainants set out  to prove.  
5. The third issue is the incorrect characterisation of the exercise of the Panel's discretion  
as a failure to act with objectivity. New Zealand is particularly concerned with the challenges brought 
to the Panel's discretion to choose the evidence  that it relies upon in its Report, and its discretion to 
choose whether to instruct an expert. It is within the Panel's discretion to decide which evidence to 
refer to in its Report.3 The fact that the Panel did not agree with the complainants' view on th e 
weight and meaning to be attributed to the evidence does not mean that the Panel did not act 
objectively.4 The Panel was also within its discretion to not elect to instruct an expert. The wording 
of Articles 13 DSU and Article  14.2 TBT are permissive, no t mandatory. The Appellate  Body made it 
clear in EC-Sardines  that the exercise of the discretion to instruct an expert or not will not amount 
to a contravention of Article  11.5 
6. The final issue is the misrepresentation of the Panel's findings . This is large ly as a result 
of selective reproduction of particular findings. Removed from their wider context, these statements 
are easily misunderstood. The Appellate  Body should be aware, in the Article  11 claims, of the ease 
 
1 In particular, Article  11 is concerned only with whether a Panel's decision was "objective".  
2 Panel  Report at para.  7.485.  
3 Appellate  Body Report, EC – Hormones  at paras.  135 an d 138.  
4 Appellate  Body Report, Australia – Salmon  at para.  267. 
5 Appellate  Body Report, EC – Sardines  at para.  302. WT/DS435/AB/R/Add.1 • WT/DS441/AB/R/Add.1  
 
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  with which parties can create the appear ance of inconsistencies in a panel's reasons through the 
selective and potentially misleading manner in which they are presented.  
III. LEGAL STANDARD IN DETERMINING CONTR IBUTION OF TPP MEASU RES  
7. Honduras argues that the Panel failed to apply the correct legal standard to assess the 
contribution of the TPP  measure s to the objective of reducing tobacco use and exposure.6 
New Zealand makes two key observations:  
a. First, this is an attempt to re -package the Article  11 claims as a fresh legal issue, and an 
inappropriate challenge to the Panel's factual findings that should not be entertained by 
the Appellate  Body.  
b. Second, Honduras'  discussion of the legal standard identified by the Panel misrepresents 
a number of key aspects. It overstates the weight that the Panel found should be placed 
on the post -implementation evidence;7 understates the Panel's acknowledgment of the 
relevance of  the wider suite of tobacco control measures;8 and misquotes the Panel on the 
limits on its ability to carry out its own assessment of the impact of the measures.9 
IV. ARTICLES 16.1 AND 20  TRIPS  
8. Honduras challenges the Panel's interpretation of Article  16.1 TRIPS. The Panel properly 
interpreted this provision as providing the exclusive right to prevent the use of certain signs where 
such use would result in the likelihood of confusion, rather than a positive right obliging 
WTO Members to ensure a trademark  owner can use the trademark.  
9. Honduras also alleges that the Panel failed to take a trademark -specific approach to its 
interpretation of Article  20 TRIPS, and argues that the term "unjustifiably" requires a consideration 
of less trademark  numbering equiva lent measures, similar to the "necessity" test other covered 
agreements. This is incorrect and would undermine the meaning of the term "unjustifiably", properly 
interpreted in its context and in light of its object and purpose. The Panel rightfully conclud ed that 
the complainants failed to demonstrate that any encumbrance imposed by Australia on the use of 
trademarks was "unjustifiable".  
V. ARTICLE 2.2 TBT A GREEMENT  
10. The appellants allege that the Panel erred in its interpretation of the term "trade -restric tive" 
in Article  2.2 TBT  Agreement . The Panel properly interpreted this provision to confirm that 
modification to the conditions under which all manufacturers will compete would not, in itself, be 
sufficient to demonstrate trade -restrictiveness. New  Zealan d also disagrees with the appellants that 
the Panel introduced a higher standard when considering the "trade restrictiveness" of discriminatory 
measures.  
11. The appellants further contend that the Panel erred in its comparative analysis of their 
proposed alt ernative measures. This claim is entirely consequential to their claim that the Panel 
applied the incorrect legal standard in ascertaining the "trade -restrictiveness" of the measures. In 
any event, the Panel's finding that the measures do not make an equiv alent contribution to 
Australia's legitimate objective was correct.  
 
 
 
6 Honduras' Appellant submission at paras.  532 - 558.  
7 Compare Honduras' Appellant submission at para.  541 with Panel  Report at para.  7.500.  
8 Compare Honduras' Appellant Submission at para.  553(iii) with Panel  Report at para.  7.506.  
9 Compare Honduras' Appellant Submission at para.  553(vi) with Panel  Report, Appendix A, at para.  5. WT/DS435/AB/R/Add.1 • WT/DS441/AB/R/Add.1  
 
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  ANNEX C -12 
EXECUTIVE SUMMARY OF NIGERIA'S THIRD PARTICIPANT'S SUBMISSION  
1. Nigeria is pleased to provide its views to the Appellate  Body in disputes DS435 and DS441. 
Tobacco is important to Nigeria's economic development, and Nigeria has an interest in the 
implications of plain packaging for manufacturers seeking to enter foreign markets. Nigeria believes 
that Australia's TPP  measure s may set a precedent for similar trad emark restrictions on other 
products.  
2. Nigeria asks the Appellate  Body to address any failure by the Panel to conduct an objective 
assessment under Article  11 of the DSU. The Panel's apparent lack of objectivity does not inspire 
confidence in a country, lik e Nigeria, that aspires to greater use of the WTO's dispute settlement 
system.  
3. Further, the Panel applied an overly burdensome trade -restrictiveness standard under 
Article  2.2 of the TBT  Agreement . The trade -restrictiveness of a measure may be shown throug h its 
"design, architecture and revealing structure". The Panel agreed that the TPP  measure s, by design, 
limit the ability to compete on the basis of brand differentiation. However, it also required evidence 
of trade effects, on the grounds that the TPP  measure s are non -discriminatory. There is no basis for 
this additional requirement.  
4. Nigeria is also concerned that the Panel placed an undue burden on complainants presenting 
evidence of trade effects. The Panel found that evidence of down -trading must show that down -
trading was the exclusive cause of changes in consumption, and required evidence that producers 
had changed prices. Nigeria does not understand why the Panel believed that complainants must go 
to these lengths to show trade restriction.  
5. Nigeria notes that this flawed application of the standard was also used as the basis for 
comparing the trade restrictiveness of the less trade restrictive alternatives and the TPP  measure s. 
Further, the Panel effectively made it impossible to identify an alternat ive measure, by requiring 
that alternatives work through the same mechanisms as the TPP  measure s. 
6. The Panel's assessment under Article  20 of the TRIPS  Agreement  is also questionable. Any 
encumbrance on a trademark must be justifiable and relate to a proble m with an individual 
trademark. However, the Panel required no consideration of the individual trademarks affected. The 
Panel also acted contrary to Articles 7.1 and 11 of the DSU by not addressing the use of word marks 
on cigarettes.  
 
 
 
 
 WT/DS435/AB/R/Add.1 • WT/DS441/AB/R/Add.1  
 
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  ANNEX C -13 
EXECUTIVE SUMMARY OF NORWAY'S THIRD PARTICIPANT'S SUBMISSION  
1. Norway disagrees with the appellants' argument that any modification of "competitive 
opportunities" per se  would have an actual limiting effect on international tra de and thereby violate 
the TBT  Agreement  Article  2.2. Rather, the Panel was correct in finding that "what needs to be shown 
[is] how such effects on the conditions of competition on the market give rise to a limiting effect on 
international trade in tobacco products".1 
2. The proposed alternative measures of increased MLPA and excise taxes would not eliminate 
packaging as a tool for adver tising and promotion, and thereby not  make an equivalent contribution 
to the objectives of the TPP  measure . Furthermore, the MLPA only targets young people and 
consequently is less effective than the TPP  measure  which is directed at all age groups. When a 
Member's market is supplied only by imported tobacco products, any equivalent contribution  would 
also necessarily entail an equivalent limiting effect  on international trade.  
3. It is up to complainants to demonstrate that proposed alternative measures would  make an 
equivalent contribution due to synergistic effects they would have with other aspects of 
comprehensive strategies implemented to fight a particular complex health problem.  
4. The appellants' claim that the Panel's assessment of the TPP's contributio n lacked even -
handedness in violation of the DSU Article  11, failing to acknowledge that the complainants bear the 
burden of proof in establishing their prima facie  case that the TPP  measure s do not contribute to the 
objective.2 
 
 
 
 
 
 
 
1 Panel  Report, para.  7.1168. (emphasis original)  
2 Australia's Appellee Submission, para.  491. WT/DS435/AB/R/Add.1 • WT/DS441/AB/R/Add.1  
 
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  ANNEX C -14 
EXECUTIVE SUMMARY OF THE PHILIPPINES' THIRD PARTICIPANT'S SUBMISSION  
1. As a committed party to the Framework Convention on Tobacco Control, and as a grower, 
producer, and exporter of tobacco products, the Philippines has multi -dimensional interests in this 
case. The Philippines acknowledges Australia's public health objectives and does not address issues 
related to these objectives. Instead, the Philippines addresses three systemic issues under the 
covered agreements, which relate to the Panel's find ings on contribution, trade restrictiveness and 
alternative measures under Article  2.2 of the TBT  Agreement . 
2. In relation to the contribution  findings, panels must respect the parties' due process rights. 
The Philippines appreciates that a panel might obtai n assistance to understand econometric evidence 
from unseen or undisclosed experts. However, panels must give the parties an appropriate 
opportunity to be heard on issues critical to its assessment. If a panel develops its own econometric 
"evidence"1 – possibly using unseen experts – using tests not identified by the parties, the parties 
should have an opportunity to comment. This ensures due process and transparency – the parties 
are not left to "guess" what evidence is relevant. Consulting the parties als o provides panels with a 
better foundation for their findings. In any event, panels must ensure that their findings have a 
transparent and verifiable basis in the panel record.  
3. The Philippines recalls that trade restrictiveness  is considered through the pr ism of 
competitive opportunities arising from the design, structure and operation of a measure. Evidence 
of trade effects "might be" required if a limiting effect on competitive opportunities is not established 
from the design of the measure. This Panel's conclusion that proof of trade effects must always be 
shown in the case of non -discriminatory measures seems to depart from this understanding.  
4. The Philippines understands that proposed alternative measures  must, by definition, 
operate through a different mechanism to achieve the same result as the measure at issue. However, 
the Panel seems to have adopted an unduly narrow conception, finding that the contribution of the 
alternative measures and the tobacco plain packaging measures cannot be "equivalent" because 
they work through different mechanisms.   
 
 
 
 
 
 
 
 
1 Panel  Report, Appendix C, para.  107 . WT/DS435/AB/R/Add.1 • WT/DS441/AB/R/Add.1  
 
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  ANNEX C -15 
EXECUTIVE SUMMARY OF SINGAPORE'S THIRD PARTICIPANT'S SUBMISSION  
1. Singapore welcomes the opportunity to present its views in  this appeal. In the written 
submission, Singapore addresses the following issues.1 
(a) The Panel did not err in its interpretation of the term "unjustifiably" in Article  20 of 
the TRIPS  Agreement  
2. The Panel's finding that the unjustifiability of encumbranc es under Article  20 does not require 
an assessment in respect of individual trademarks is correct and supported by WTO  jurisprudence. 
The Panel was also correct in concluding that public health is a recognised societal interest that may 
provide a justifica tion for encumbrances under the terms of Article  20. Singapore reiterates that the 
assessment of Article  20 is of unjustifiability and not necessity and therefore does not require  one 
to consider available alternative measures.  
(b) The Panel did not err in its application of the term "unjustifiably" in Article  20 of the 
TRIPS  Agreement  
3. The Panel did not err in its application of the first step  of the three -step test. Honduras' 
allegation that there was undue emphasis on the loss of economic value of the trademarks is 
misplaced. The Panel also did not err in its application of the third step  of the three -step test. Given 
that the necessity standard should not be used to determine th e justifiability of the measure under 
Article  20, there is no need for the Panel to consider the availability of alternatives measures.  
(c) The Panel did not err in its interpretation of Article  16.1 of the TRIPS  Agreement  
4. Singapore considers that the Pan el's interpretation of Article  16.1 is correct. Article  16.1 
provides for a right, belonging solely to the registered trademark owner, to exclude, not a right to 
use. The latter does not exist as a consequence of a right to exclude others from using the tr ademark. 
Even if trademark owners may have a legitimate interest to preserve the distinctiveness of their 
trademarks, this does not rise to the level of a "right" as such under Article  16.1, much less a right 
to use a trademark.  
(d) The Panel did not err in its assessment of trade -restrictiveness pursuant to 
Article  2.2 of the TBT  Agreement  
5. Honduras' assertion that "the issue of trade restrictiveness requires a demonstration of a 
limiting effect on competitive opportunities" in every case is overly restric tive and is not supported 
by jurisprudence. In any event, the complainants failed to adequately establish how the restriction 
of competitive opportunities by the TPP  measure s would, without more, have a limiting effect on 
international trade. Singapore als o disagrees that the Panel applied a higher standard in its analysis 
of whether the TPP  measure s are trade -restrictive by requiring a demonstration of actual trade 
effects. In fact, the Panel considered evidence which did not concern actual trade effects w hen it 
took into account the design of the TPP  measure s to conclude that the measures were trade -
restrictive.  
(e) The Panel did not err in its interpretation and application of Article  2.2 of the 
TBT Agreement with respect to the availability of less trade -restrictive alternative 
measures  
6. Singapore agrees with the Panel that the alternative measures proposed by the complainants 
would not be less trade -restrictive than the TPP  measure s. Having determined that the 
TPP measure s are trade -restrictive both in terms of their intended and actual impact on the volume 
 
1 This Executive Summary totals 1096 words (including footnotes). Singapore's Third Party Written 
Submission totals 10989 words (including footnotes).  WT/DS435/AB/R/Add.1 • WT/DS441/AB/R/Add.1  
 
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  of trade in tobacco products, the Panel did not err in finding that the alternative measures would be 
equally trade -restrictive, to the extent that they are designed to  achieve the same degree of 
contribution as the TPP  measure s. This is in view of the particular circumstances where the Australian 
market is supplied entirely by imported tobacco products, and the fact that the TPP  measures were 
found to be trade -restricti ve solely on the basis of their impact on the volume of trade.  
7. The Panel did not err in its evaluation of the equivalence of the contribution of the alternative 
measures to Australia's objective. The Panel did not require the alternative measures to opera te 
through the same "means" or "mechanisms" to reduce smoking as the TPP  measure s. The fact that 
a challenged measure is part of a broader regulatory framework, alone, should not preclude a finding 
that an alternative measure would make an equivalent contr ibution to the Member's objective, even 
if the alternative measure does not provide an identical contribution through the same "means" or 
"mechanisms" as the challenged measure. However, Singapore does not understand the Panel to 
have imposed or applied su ch a requirement.  
8. On the other hand, Singapore agrees that the way in which proposed alternative measures 
would operate within a suite of measures and their effect on synergies within the suite of measures, 
including  the creation of new synergies, would b e relevant considerations. However, there is nothing 
in the Panel's report which warrants the assertion that the Panel disregarded the possibility of new 
synergies being created by the alternative measures.  
(f) The Panel did not violate Article  11 of the DSU 
9. Many of the allegations concern the Panel's assessment and treatment of conflicting evidence 
presented about the efficacy (or lack thereof) of the TPP  measure s. In essence, the appellants 
disagree with the Panel over the weight to be accorded to the ev idence. However, a panel does not 
err simply because it declines to accord to the evidence the weight that one of the parties believes 
should be accorded to it. In this case, it was reasonable and correct of the Panel to have assessed 
that the evidence, taken in its totality , supported its conclusion regarding the efficacy of the 
TPP measures. The burden rests with the appellants to prove their claims and not on Australia to 
prove otherwise.  
10. There is no merit to the claim that the Panel was biased, e.g. in  its approach on graphic health 
warnings (GHWs). A body of studies supports the proposition that plain packaging of tobacco 
products (independent of GHWs) would reduce their appeal to the consumer and increase the 
effectiveness of GHWs. The same cannot be said of the alternative measures proposed.  
11. Finally, it is surprising how forcefully the appellants now make their due process allegations. 
Honduras never suggested or requested the Panel to consult experts pursuant to Article  13 of the 
DSU or Article  14.2 of the TBT  Agreement . Nor did either appellant express any concern regarding 
the lack of due process during the interim review stage of the panel proceedings. In any event, the 
Panel's findings should not be lightly interfered with in the absence of compel ling evidence otherwise.  
 
 
 
 
 WT/DS435/AB/R/Add.1 • WT/DS441/AB/R/Add.1  
 
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  ANNEX C -16 
EXECUTIVE SUMMARY OF THAILAND'S THIRD PARTICIPANT'S SUBMISSION  
1. In Thailand 's view, the Panel has properly adhered to customary  rules of treaty interpretation 
in its interpretation of the term "unjustifiably" in TRIPS Article  20, by reading the term in its context 
and in the light of its object and purpose as found in the Preamble and Articles  7 and 8 of the 
TRIPS  Agreement, as we ll as the Doha Declaration. In this regard, Thailand would like to make 
two specific comments.  
2. Firstly, Thailand agrees with the Panel that TRIPS Article  20 provides no legal basis to suggest 
that any measures, even ones with the "ultimate encumbrance"1 is inherently unjustifiable.2 Special 
requirements would be prohibited, pursuant to this provision, only if they "unjustifiably encumber[]" 
the use of a trademark in the course of trade.  
3. Secondly, Thailand does not consider that The Panel has transposed the  "trade restrictiveness" 
test under TBT Article  2.2  as is to the "trademark -use encumbrance" analysis under TRIPS Article  20. 
Rather than erroneously reading into existence a standard of "necessity" in the context of 
TRIPS  Article  20, the Panel simply ackn owledged that the availability of an alternative measure that 
involves a lesser encumbrance could  inform  an assessment of "unjustifiably" and thus may call into 
question  whether the justification provided sufficiently support encumbrances on the use of a 
trademark.3 Precisely how the availability of alternative measures would form part of the overall 
analysis should  be determined on a case -by-case basis, taking into account the balance between 
intellectual property rights and public interests.  
 
 
 
 
 
 
 
 
1 Appellan t Submission by Honduras, para.  267. 
2 Panel Report paras  7.2441 -7.2442.  
3 Panel Report para.  7.2598.  WT/DS435/AB/R/Add.1 • WT/DS441/AB/R/Add.1  
 
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  ANNEX C -17 
EXECUTIVE SUMMARY OF THE UNITED STATES' THIRD PARTICIPANT'S SUBMISSION  
I. INTRODUCTION1 
1. The United  States  welcomes the opportunity to present its views on issues raised on appeal 
by Honduras and the Dominican  Republic . Pursuant to the communication from the Division on 
July 23, 2018, the United  States  is providing its third  participant submissions in the appe als in these 
two disputes as a single document.2 In this document, the United  States  will present its views on 
the proper legal treatment of the Declaration on the TRIPS  Agreement  and Public Health  
("Doha  Declaration on TRIPS") and the claims raised in rel ation to Articles 7.1 and 11 of the 
Understanding on Rules and Procedures Governing the Settlement of Disputes  ("DSU").  
2. The United  States  focuses on the two sets of issues identified above to address systemic 
concerns that arise from these appeals. A prope r resolution of these two sets of issues would not 
disturb the ultimate conclusions of the Panel in these disputes.  
II. CLARIFICATION RE GARDING THE PANEL'S TREATMENT OF THE DOH A DECLARATION 
ON THE TRIPS  AGREEMENT  AND PUBLIC HEALTH  
3. In its report, the Panel considered the types of reasons that would sufficiently support the 
application of an encumbrance on the use of a trademark so as to determine the meaning of the 
term "unjustifiably" in Article  20 of the TRIPS  Agreement .3 The Panel correctly understood tha t, 
consistent with Article  3.2 of the DSU, it should interpret the term applying customary rules of 
interpretation of public international law, reflected in Articles 31 and 32 of the Vienna  Convention 
on the Law of Treaties  ("Vienna  Convention ").  
4. As part of its analysis, the Panel stated that paragraph 5(a) of the Doha Declaration on TRIPS 
"may, in our view, be considered to constitute a 'subsequent agreement' of WTO Members within 
the meaning of Article  31(3)(a) of the Vienna  Convention ."4 
5. On appeal, Hond uras argues that the Panel committed legal error finding that paragraph 5 of 
the Doha Declaration on TRIPS "constitutes a 'subsequent agreement' in the sense of Article  31.3(a) 
of the Vienna  Convention  that must be taken into consideration as part of the c ontext of the term 
'unjustifiably' in Article  20 of the TRIPS  Agreement ."5  
6. The issue of whether statements agreed by Members may constitute a "subsequent agreement 
on interpretation" has raised difficulties for the functioning of some WTO committees. Rath er than 
engage in this appeal on this issue, the Appellate  Body could instead exercise judicial economy over 
Honduras'  claim of error, which has no bearing on the appeal of the Panel's legal interpretation or 
conclusion.  
III. COMPLAINANTS' C LAIMS OF ERROR UNDER  THE DSU  
7. Honduras and the Dominican  Republic  both appeal dozens of factual findings under 
DSU Article  11. Both ap peals by Honduras and the Dominican  Republic  to the Appellate  Body make 
numerous claims under Article  11 of the DSU of what clearly are alleged factual errors by the Panel. 
By agreement of all WTO Members, the DSU expressly limits the scope of an appeal to  alleged legal 
errors  by a panel, not factual errors.6 The United  States  disagrees with these attempts to re -litigate 
 
1 This executive summary contains a total of 776 words (including footnotes), and the 
U.S. third participant submission contains 8573 words (including foo tnotes).  
2 See Appellate  Body Procedural Ruling ( 23 July 2018 ). 
3 Panel  Report, para.  7.2396 et seq . 
4 Id. at para.  7.2409 (italics added).  
5 Honduras Appellant Submission, para.  254. 
6 See DSU Article  17.6. WT/DS435/AB/R/Add.1 • WT/DS441/AB/R/Add.1  
 
- 93 - 
 
  dozens of unfavorable factual determinations by the Panel through claims of breach of Article  11 of 
the DSU.  
8. The Appellate  Body has an op portunity in this appeal to reconsider how its originally limited 
approach to review the "objective assessment" of a panel has been seized by appellants to cover 
practically all factual determinations by a panel. Given the lack of textual basis in the DSU for 
appellate review of panel fact -finding, the Appellate  Body could instead reassert that the proper 
issues for appeal are issues of law and legal interpretations covered by a panel report.7 
9. In addition, the United  States  agrees with Australia that the Do minican  Republic 's claim of a 
breach under Article  7.1 of the DSU is unfounded. The claim appears to be an attempt to reopen the 
dispute by incorrectly alleging that the Panel failed to address the Dominican  Republic 's claim that 
Australia's plain packagin g measures as to individual cigarette packaging breach Article  20 of the 
TRIPS  Agreement . The Panel did address this claim, and the issue would in any event go to an 
erroneous legal conclusion, not a terms of reference issue. Both of these bases for appeal  are 
seriously flawed and must be rejected.  
 
 
 
 
 
 
 
7 Id. ("An appeal shall be limited to issues of law covered in the panel report and legal interpretations 
developed by the panel.").  WT/DS435/AB/R/Add.1 • WT/DS441/AB/R/Add.1  
 
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  ANNEX C -18 
EXECUTIVE SUMMARY OF ZAMBIA'S THIRD PARTICIPANT'S SUBMISSION  
1. Zambia thanks the Panel for its work and requests the Appellate  Body to consider its 
submissions, as well as the points raised by Honduras and the Dominican  Republic  in their appeals.  
2. Zambia raises concerns with the Panel's application of Article  2.2 of the TBT  Agreement . The 
alternative measure should provide an equivalen t "meaningful contribution", but not provide an 
"identical contribution" to the objective. Therefore, the Panel should not have rejected the alternative 
measures of Honduras and the other Complainants, since they would be as effective in reducing 
smoking a nd less trade restrictive than Australia's plain packaging rules. Further, the Panel should 
have analysed the "actual contribution" of the plain packaging measures as is the usual test under 
Article  2.2. 
3. Zambia submits that the Panel's approach to interpre ting the term "unjustifiably" under 
Article  20 of the TRIPS  Agreement  may not be the appropriate understanding of that provision. 
Instead of referring to any "good reasons" that would be sufficient to support the measure, the test 
ought to consider whether  there is anything wrong with the specific trademark. Zambia supports the 
Complainants view of Article  16 of the TRIPS  Agreement  as providing important rights for 
trademarks in commerce.  
4. Zambia submits that, in ignoring any contrary evidence presented by t he complainants, the 
Panel does not appear to have examined the evidence in an even -handed manner in line with its 
obligations under Article  11 of the DSU.  
 
 
 
 
 
 WT/DS435/AB/R/Add.1 • WT/DS441/AB/R/Add. 1 
 
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  ANNEX C -19 
EXECU TIVE SUMMARY OF ZIMBABWE'S THIRD PARTICIPANT'S SUBMISSION  
1. Zimbabwe is pleased to present its concerns to the Appellate  Body with the Panel  Report  in 
this dispute, which may impact it as a developing country whose economy is dependent on 
agricultural commodities . Zimbabwe supports the important arguments expressed by the Appellants 
and respectfully requests the Appellate  Body to take these arguments into account, as set out below.  
2. The Panel appears to have failed to treat the Complainants'  evidence equitably and to not 
have balanced it objectively with the Respondent's evidence. The Panel could have been aided by 
appointing an independent expert under the dispute settlement rules, but it did not do that.  
3. Panel's application of Article  2.2 o f the TBT  Agreement  does not appear to accurately reflect 
that WTO obligation. Zimbabwe supports arguments made by Honduras concerning the Panel's 
evaluation of the "trade restrictiveness" of the measures by its trade effects as opposed to its design 
and o verall architecture; the alternative measures being required to provide an "identical" 
contribution to the objective rather than an "equivalent" one; and assessing the potential future 
contribution of the plain packaging measures instead of their actual co ntribution.   
4. The Panel provides an interpretation of the term "unjustifiably" in Article  20 of the 
TRIPS  Agreement that is separated from the trademark context. Zimbabwe believes, as Honduras 
argues, that the Panel did not review whether there were any iss ues with the trademarks themselves 
and whether any limitations could be justified based on the analysis of each trademark.  
5. Finally, the Panel found that Article  16 of the TRIPS  Agreement  only confers a limited number 
of enforcement rights to trademark own ers to oppose unauthorized use in situations where there is 
a risk of actual confusion in the market.  Zimbabwe is concerned that this interpretation may be too 
limited to provide trademark owners appropriate protections under the TRIPS  Agreement , 
particula rly Article  20 of the TRIPS  Agreement . 
 
__________  