WT/DS26/AB/R
WT/DS48/AB/R
16 January 1998
EC MEASURES CONCERNING
MEAT AND MEAT PRODUCTS
(HORMONES)
1. The
European Communities, the United States and Canada appeal from certain issues
of law and legal interpretations in the Panel Reports, EC Measures
Concerning Meat and Meat Products (Hormones). These two Panel Reports,
circulated to Members of the World Trade Organization ("WTO") on 18
August 1997, were rendered by two Panels composed of the same three persons.These Panel Reports are similar,
but they are not identical in every respect.The Panel in the complaint brought
by the United States was established by the Dispute Settlement Body (the
"DSB") on 20 May 1996.On 16 October 1996, the DSB established the
Panel in the complaint brought by Canada.The European Communities and Canada
agreed, on 4 November 1996, that the composition of the latter Panel would be
identical to the composition of the Panel established at the request of the
United States.
2. The Panel
dealt with a complaint against the European Communities relating to an EC
prohibition of imports of meat and meat products derived from cattle to which
either the natural hormones:oestradiol-17b, progesterone or testosterone, or
the synthetic hormones:trenbolone acetate, zeranol or melengestrol acetate
("MGA"), had been administered for growth promotion purposes.This
import prohibition was set forth in a series of Directives of the Council of
Ministers that were enacted before 1 January 1995.Those Directives were:
1. Council
Directive 81/602/EEC of 31 July 1981 ("Directive 81/602");
2. Council
Directive 88/146/EEC of 7 March 1988 ("Directive 88/146");and
3. Council
Directive 88/299/EEC of 17 May 1988 ("Directive 88/299").
3. Directive
81/602 prohibited the administration to farm animals of substances having a
hormonal action and of substances having a thyrostatic action.It also
prohibited the placing on the European market of both domestically produced and
imported meat and meat products derived from farm animals to which such
substances had been administered.Two exceptions to this prohibition were
provided for.One exception covered substances with an oestrogenic, androgenic
or gestagenic action when used for therapeutic or zootechnical purposes and
administered by a veterinarian or under a veterinarian's responsibility.The
other exception related to three natural hormones (oestradiol - 17b, progesterone and testosterone)
and two synthetic hormones (trenbolone acetate and zeranol) used for growth
promotion purposes if allowed under the regulations of the Member States of the
European Economic Community ("EEC"), until a detailed examination of
the effects of these substances could be carried out and until the EEC could
take a decision on the use of these substances for growth promotion.The sixth
hormone involved in this appeal, MGA, was not included in the second
exception;it was covered by the general prohibition concerning substances
having a hormonal or thyrostatic action.
4. Seven years
later, Directive 88/146 was promulgated prohibiting the administration to farm
animals of the synthetic hormones:trenbolone acetate and zeranol, for any
purposes, as well as the administration of the natural hormones:oestradiol - 17b, progesterone and testosterone,
for growth promotion or fattening purposes.This Directive permitted Member
States of the EEC to authorize, under specified conditions, the use of the
three natural hormones for therapeutic and zootechnical purposes.Directive 88/146
explicitly prohibited both the intra-EEC trade and the importation from third
countries of meat and meat products obtained from animals to which substances
having oestrogenic, androgenic, gestagenic or thyrostatic action had been
administered.Trade in meat and meat products derived from animals treated with
such substances for therapeutic or zootechnical purposes was allowed only under
certain conditions.Those conditions were set out in Directive 88/299.
5. Effective
as of 1 July 1997, Directives 81/602, 88/146 and 88/299 were repealed and
replaced with Council Directive 96/22/EC of 29 April 1996 ("Directive
96/22").This Directive maintains the
prohibition of the administration to farm animals of substances having a
hormonal or thyrostatic action.As under the previously applicable Directives,
it is prohibited to place on the market, or to import from third countries,
meat and meat products from animals to which such substances, including the six
hormones at issue in this dispute, were administered.This Directive also
continues to allow Member States to authorize the administration, for
therapeutic and zootechnical purposes, of certain substances having a hormonal
or thyrostatic action.Under certain conditions, Directive 96/22 allows the
placing on the market, and the importation from third countries, of meat and
meat products from animals to which these substances have been administered for
therapeutic and zootechnical purposes.
6. The Panel
circulated its Reports to the Members of the WTO on 18 August 1997.The US Panel
Report and the Canada Panel Report reached the same conclusions in paragraph
9.1:
(i) The
European Communities, by maintaining sanitary measures which are not based on a
risk assessment, has acted inconsistently with the requirements contained in
Article 5.1 of the Agreement on the Application of Sanitary and Phytosanitary
Measures.
(ii) The European
Communities, by adopting arbitrary or unjustifiable distinctions in the levels
of sanitary protection it considers to be appropriate in different situations
which result in discrimination or a disguised restriction on international
trade, has acted inconsistently with the requirement contained in Article 5.5
of the Agreement on the Application of Sanitary and Phytosanitary Measures.
(iii) The European
Communities, by maintaining sanitary measures which are not based on existing
international standards without justification under Article 3.3 of the
Agreement on the Application of Sanitary and Phytosanitary Measures, has acted
inconsistently with the requirements of Article 3.1 of that Agreement.
In
both Reports, the Panel recommended in paragraph 9.2:
...
that the Dispute Settlement Body requests the European Communities to bring its
measures in dispute into conformity with its obligations under the Agreement on
the Application of Sanitary and Phytosanitary Measures.
7. On 24
September 1997, the European Communities notified the DSB of its decision to
appeal certain issues of law covered in the Panel Reports and certain legal
interpretations developed by the Panel, pursuant to paragraph 4 of Article 16
of the Understanding on Rules and Procedures Governing the Settlement of
Disputes (the "DSU"), and filed two notices of appeal with the
Appellate Body pursuant to Rule 20 of the Working Procedures for Appellate
Review (the "Working Procedures").Pursuant to Rule 21 of
the Working Procedures, the European Communities filed an appellant's
submission on 6 October 1997.On 9 October 1997, the United States and Canada
filed appellants' submissions pursuant to Rule 23(1) of the Working
Procedures.On 20 October 1997, the United States and Canada each filed an
appellee's submission pursuant to Rule 22 of the Working Procedures and
the European Communities filed its own appellee's submission pursuant to Rule
23(3) of the Working Procedures.On the same day, Australia, New Zealand
and Norway filed separate third participants' submissions in accordance with
Rule 24 of the Working Procedures.
8. The oral
hearing was held on 4 and 5 November 1997.The participants and third
participants presented oral arguments and responded to questions put to them by
the Members of the Division hearing this appeal.The participants and third
participants also gave oral concluding statements.
XIV. Findings and ConclusionsXIV. Findings and Conclusions
253. For the reasons set out in
the preceding sections of this Report, the Appellate Body:
(a) reverses the
Panel's general interpretative ruling that the SPS Agreement allocates
the evidentiary burden to the Member imposing an SPS measure, and also reverses
the Panel's conclusion that when a Member's measure is not based on an
international standard in accordance with Article 3.1, the burden is on that
Member to show that its SPS measure is consistent with Article 3.3 of the SPS
Agreement;
(b) concludes that
the Panel applied the appropriate standard of review under the SPS Agreement;
(c) upholds the
Panel's conclusions that the precautionary principle would not override the
explicit wording of Articles 5.1 and 5.2, and that the precautionary principle
has been incorporated in, inter alia, Article 5.7 of the SPS
Agreement;
(d) upholds the
Panel's conclusion that the SPS Agreement, and in particular Articles
5.1 and 5.5 thereof, applies to measures that were enacted before the entry
into force of the WTO Agreement, but that remain in force thereafter;
(e) concludes that
the Panel, although it sometimes misinterpreted some of the evidence before it,
complied with its obligation under Article 11 of the DSU to make an objective
assessment of the facts of the case;
(f) concludes
that the procedures followed by the Panel in both proceedings -- in the
selection and use of experts, in granting additional third party rights to the
United States and Canada and in making findings based on arguments not made by
the parties -- are consistent with the DSU and the SPS Agreement;
(g) reverses the
Panel's conclusion that the term "based on" as used in Articles 3.1
and 3.3 has the same meaning as the term "conform to" as used in
Article 3.2 of the SPS Agreement;
(h) modifies the
Panel's interpretation of the relationship between Articles 3.1, 3.2 and 3.3 of
the SPS Agreement, and reverses the Panel's conclusion that the European
Communities by maintaining, without justification under Article 3.3, SPS
measures which are not based on existing international standards, acted
inconsistently with Article 3.1 of the SPS Agreement;
(i) upholds the
Panel's finding that a measure, to be consistent with the requirements of
Article 3.3, must comply with, inter alia, the requirements contained in
Article 5 of the SPS Agreement;
(j) modifies
the Panel's interpretation of the concept of "risk assessment" by
holding that neither Articles 5.1 and 5.2 nor Annex A.4 of the SPS Agreement
require a risk assessment to establish a minimum quantifiable magnitude of
risk, nor do these provisions exclude a priori, from the scope of a risk
assessment, factors which are not susceptible of quantitative analysis by the
empirical or experimental laboratory methods commonly associated with the
physical sciences;
(k) reverses the
Panel's finding that the term "based on" as used in Article 5.1 of
the SPS Agreement entails a "minimum procedural requirement"
that a Member imposing an SPS measure must submit evidence that it actually
took into account a risk assessment when it enacted or maintained the measure;
(l) upholds the
Panel's finding that the EC measures at issue are inconsistent with the
requirements of Article 5.1 of the SPS Agreement, but modifies the
Panel's interpretation by holding that Article 5.1, read in conjunction with
Article 2.2, requires that the results of the risk assessment must sufficiently
warrant the SPS measure at stake;
(m) reverses the Panel's
findings and conclusions on Article 5.5 of the SPS Agreement;and
(n) concludes that
the Panel exercised appropriate judicial economy in not making findings on
Articles 2.2 and 5.6 of the SPS Agreement.
254. The foregoing legal findings
and conclusions uphold, modify and reverse the findings and conclusions of the
Panel in Parts VIII and IX of the Panel Reports, but leave intact the findings
and conclusions of the Panel that were not the subject of this appeal.
255. The Appellate Body recommends
that the Dispute Settlement Body request the European Communities to bring the
SPS measures found in this Report and in the Panel Reports, as modified by this
Report, to be inconsistent with the SPS Agreement into conformity with
the obligations of the European Communities under that Agreement.