WT/DS320/R
Page 1
Organization
WT/DS320/R
31March 2008
(08-0898)
Original: English
UNITED STATES – CONTINUED SUSPENSIONOF OBLIGATIONS IN THEEC – HORMONES DISPUTE
Report of the Panel
WT/DS320/R
Page 1
TABLE OF CONTENTS
Page
I.INTRODUCTION...... 1
A.Request for consultations and request for the establishment of a panel...... 1
B.Establishment and composition of the panel...... 1
C.Panel proceedings...... 1
II.FACTUAL ASPECTS...... 2
A.History of the dispute...... 2
B.Measure at issue...... 4
III.PARTIES' REQUESTS FOR FINDINGS AND RECOMMENDATIONS...... 4
IV.ARGUMENTS OF THE PARTIES...... 5
A.Introduction...... 5
B.Parties' requests and arguments on opening the Panel meeting for public observation...... 5
1.Arguments of the European Communities...... 5
(a)Whether panels are permitted to open hearings under Article12 (including Appendix3), Articles 14.1 and 17.10 of the DSU 5
(b)Legal implications of open hearings on covered persons under the Rules of Conduct...... 6
(c)Systemic and political impact of opening hearings...... 6
(d)Whatprocedures can be adopted to protect confidential information in an open hearing....6
2.Arguments of the United States...... 7
(a)Whether panels are permitted to open hearings under Article12 (including the Appendix 3), Articles 14.1 and 17.10 of the DSU 7
(b)Legal implications of open hearings on covered persons under the Rules of Conduct...... 7
(c)Systemic and political impact of opening hearings...... 8
(d)What procedures can be adopted to protect confidential information in an open hearing....8
C.First written submission of the european communities...... 9
1.Introduction...... 9
2.Factual aspects...... 9
3.Legal arguments: Part I – Violation of Articles 23, 21.5, 22.8 and 3.7 of the DSU and Articles I and II of the GATT 9
(a)The structure of Article23 of the DSU...... 9
(b)Applicability of Article23 – Article23.1 of the DSU: Seeking the redress of a WTO violation 10
(c)Violation of Articles 23.2(a) and 21.5 and of Article23.1 of the DSU...... 10
(d)The United States' continued suspension of concessions and related obligations is in violation of Article23.1, read together with Articles 22.8 and 3.7 of the DSU 11
(e)The United States is in violation of ArticleI:1 of the GATT1994 because of the continued suspension of concessions and related obligations 15
(f)The United States is acting inconsistently with ArticleII of the GATT by the continued application of countermeasures on products originating in the European Communities. 15
4.Legal Arguments: Part II – Conditional claim in the event that the Panel does not find any violation of Article23 of the DSU as set out in Part I 16
(a)The United States is violating Article22.8 of the DSU because the measure found to be inconsistent has been removed by the European Communities 16
(b)The United States is in violation of Articles I and II of the GATT1994 following the continued application of suspension of concessions 17
D.First written submission of the united states...... 17
1.Introduction...... 17
2.Factual background...... 18
(a)The six hormones used for growth promotion purposes...... 18
3.Legal arguments...... 19
(a)The EC has failed to demonstrate that the United States has breached DSU Article22.8 because the EC has neither demonstrated that it has "removed" the WTO-inconsistencies of the original hormones ban, nor demonstrated how the amended ban has provided a solution to the nullification or impairment of benefits to the United States 20
(b)The EC has failed to demonstrate that its amended import ban on meat and meat products treated with hormones for growth promotion purposes is WTO-consistent 21
(c)The United States has not breached any other WTO obligations by continuing to suspend concessions to the EC 22
(i)The United States continues to satisfy its obligations under Article23 of the DSU...22
(ii)The US suspension of concessions does not breach Articles 23.2(a), 21.5 and 23.1 of the DSU 23
(iii)The United States has not violated Article23.1 of the DSU, read together with Articles 22.8 and 3.7 of the DSU 24
(iv)The United States has not breached its obligations under ArticleI or II of the GATT1994 25
4.Conclusion...... 25
E.Oral statement of the european communities during the first substantive meeting...... 25
1.Introduction...... 25
2.Seeking redress – Article23.1...... 25
3.Article23.2(a) of the DSU in conjunction with Article21.5 of the DSU..26
4.Article23.1 in conjunction with Articles 22.8 and 3.7...... 26
5.Concluding statement of the European Communities...... 29
F.Oral statement of the united states during the first substantive meeting...... 31
1.Introduction...... 31
2.The European Communities' amended ban...... 31
3.The six hormones used for growth promotion purposes according to good veterinary practices 32
4.The EC's assertion of its own compliance...... 33
5.Burden of proof...... 33
6."Presumption of good faith"...... 33
7.The EC's interpretation of the DSU...... 33
(a)Article21.5...... 34
(b)Article23...... 34
8.Conclusion...... 35
9.Concluding statement of the United States...... 35
G.Second written submission of the european communities...... 38
1.Introduction...... 38
2.PART 1: Violation of Articles 23.1, 23.2(a), 21.5 and 22.8 of the DSU (systemic issues).39
(a)The United States is in violation of Article23.1 and 23.2(a) read together with Article21.5 39
(b)The United States' continued suspension of concessions and related obligations is in violation of Article23.1, read together with Articles 22.8 and 3.7 41
3.PART 2: The WTO-consistency of the EC compliance measure...... 42
(a)Article5.7 of the SPSAgreement...... 43
(b)Article5.1 of the SPSAgreement...... 45
(c)Article3.3 of the SPSAgreement...... 46
H.Second written submission of the united states...... 46
1.Introduction...... 46
2.Legal arguments...... 47
(a)The EC has failed to demonstrate a US breach of DSU Articles 21.5, 22.8 or23....47
(b)The EC has neither removed its WTO-inconsistent bans nor provided a solution to US nullification or impairment within the meaning of Article22.8 of the DSU 49
(i)The EC has failed to demonstrate that its import ban is a provisional measure within the meaning of SPS Article5.7 49
(ii)The EC has failed to base its import ban on meat from cattle treated with oestradiol17β for growth promotion purposes according to good veterinary practices on a risk assessment within the meaning of SPS Article5.1 50
(iii)The EC fails to demonstrate that there is a risk of failure of controls or failure to satisfy good veterinary practices 52
3.Conclusion...... 54
I.Oral statement of the european communities on experts opinions during the second substantive meeting 54
J.Oral statement of the united states on experts opinions during the second substantive meeting 59
K.Oral statement of the european communities on legal issues during the second substantive meeting 63
1.Introduction...... 63
2.Article5.1 of the SPSAgreement...... 63
3.Article3.3 of the SPSAgreement...... 65
4.Article5.7 of the SPSAgreement...... 66
5.Article5.5 of the SPSAgreement...... 66
6.Conclusion on the SPSAgreement...... 66
7.Concluding statement of the European Communities...... 66
(a)Introduction...... 66
(b)The scientific debate...... 68
(c)The context of the scientific debate...... 69
(d)Conclusion...... 71
L.Oral statement of the united states on legal issues during the second substantive meeting...71
1.Oral statement...... 71
2.Concluding statement by the United States...... 75
V.arguments of the third parties...... 76
A.Australia...... 76
1.Introduction...... 76
2.Opening Panel meetings for public observation...... 76
3.Whether the DSB authorization remains in effect...... 76
4.Article21.5 of the DSU...... 76
B.Brazil...... 78
1.Introduction...... 78
2.Opening Panel meetings for public observation...... 78
3.Whether the DSB authorization remains in effect...... 78
4.Article21.5 of the DSU...... 79
5.Burden of proof...... 80
C.Canada...... 80
1.Introduction...... 80
2.Opening Panel meetings for public observation...... 80
D.China...... 81
1.Introduction...... 81
2.Opening Panel meetings for public observation...... 81
3.The current status of the DSB authorized suspension of concessions...... 81
4.Article21.5 of the DSU and burden of proof...... 82
5.Article23.2 of the DSU...... 84
E.India...... 85
1.Introduction...... 85
2.Opening Panel meetings for public observation...... 85
F.Mexico...... 86
1.Introduction...... 86
2.Opening Panel meetings for public observation...... 87
3.Whether the DSB authorization remains in effect...... 87
4.Article21.5 of the DSU...... 88
G.New Zealand...... 88
1.Introduction...... 88
2.Opening Panel meetings for public observation...... 88
3.Whether the DSB authorization remains in effect...... 88
4.Articles21.5, 22.8 and 23 of the DSU...... 89
5.Burden of proof...... 90
6.Article5.7 of the SPSAgreement...... 91
7.Article5.1 of the SPSAgreement...... 93
H.Norway...... 95
1.Opening Panel meetings for observation by the public...... 95
2.Whether the DSB authorization remains in effect...... 95
3.Article21.5 of the DSU...... 96
I.Separatecustomsterritory of taiwan, penghu, kinmen and matsu...... 97
1.Introduction...... 97
2.Opening Panel meetings for public observation...... 98
3.Whether the DSB authorization remains in effect...... 98
4.Article21.5 of the DSU...... 99
5.The relationship between DSU Article22.8 and Article23...... 100
VI.INTERIM REVIEW...... 101
A.Introduction...... 101
B.Parties' comments on the descriptive part...... 102
C.parties' comments regarding the findings of the Panel...... 104
1.Preliminary remarks...... 104
2.Parties' requests for review related to aspects of the report on procedural issues....105
(a)Comments by the European Communities...... 105
(b)Comments by the United States...... 108
3.Comments of the parties regarding the Panel's findings of violation of Article23.2(a) read together with Articles21.5 and 23.1 of the DSU and on the EC claims on Article23.1, read together with Articles 22.8 and 3.7 of the DSU 109
(a)Comments by the European Communities...... 109
(b)Comments by the United States...... 111
4.Comments of the parties on the compliance of the EC ban on meat and meat products treated with the six hormones at issue for growth promotion purposes with the SPSAgreement in relation to the Panel's findings on the EC claims on Article23.1, read together with Articles22.8 and 3.7 of the DSU 113
(a)Comments by the European Communities...... 113
(i)Introductory comments...... 113
(ii)General comments on the Panel's analysis regarding oestradiol-17β...... 119
(iii)Comments on "risk assessment techniques"...... 120
(iv)Assessment of the scientific arguments...... 122
(v)Comments on the Panel analysis regarding the other five hormonal substances...... 129
(b)Comments by the United States...... 139
VII.findings...... 140
A.Procedural issues...... 140
1.Opening of the Panel meetings with the parties and experts for public observation..140
(a)Introduction...... 140
(b)Summary of the main arguments of the parties...... 141
(c)Summary of the arguments of the third parties...... 142
(d)Decision of the Panel...... 145
2.Panel's decisions relating to the consultation of individual scientific experts and international organizations 149
(a)Decision to consult scientific experts...... 149
(b)EC request for a single expert review group...... 151
(c)Experts selection process...... 152
3.Other procedural issues...... 159
(a)Request by the European Communities that relevant scientific evidence and data be provided by the United States 159
(b)Request by the United States to exclude materials not cited in the EC risk assessment as well as those published after the completion of its risk assessment by the European Communities and the adoption of the ban 161
(c)A new version of Exhibit EC-107, submitted by the European Communities on 29May2006. 163
(d)Procedure for allowing the parties to comment on each other's replies to questions after the second Panel meeting 163
(e)Request by the European Communities to be allowed to correct factual errors allegedly contained in the other party's comments on its replies to questions following the second Panel meeting 163
(f)Request by the European Communities for tape recordings of the transcript of the Panel meeting with scientific experts 164
4.Scope of the Panel's mandate...... 169
(a)The measure at issue and the claims of the European Communities...... 169
(b)Are the indications provided by the European Communities on how it wants its claims to be addressed part of the mandate of the Panel? 170
(c)Meaning of "read together with" and "in conjunction with" in the EC submissions...... 171
(d)Conclusion...... 173
5.Approach of the Panel on the basis of its mandate...... 173
B.First series of EC claims: violation of Article23.2(a) read together with Articles21.5 and 23.1 174
1.Summary of the main arguments of the parties...... 174
2.Reasoning of the Panel...... 177
(a)Introduction...... 177
(b)"[S]eeking the redress of a violation of obligations or other nullification or impairment of benefits under the covered agreements" (Article23.1 of the DSU) 178
(c)Violation of Article23.2(a)...... 180
(i)Introduction...... 180
(ii)Did the United States make a determination that the EC implementing measure violates the WTO Agreement? 181
(iii)Did the United States fail to make such determination through recourse to dispute settlement in accordance with the rules and procedures of the DSU? 185
(iv)Did the United States fail to make any such determination consistent with the findings contained in the panel or Appellate Body report adopted by the DSB or an arbitration award rendered under the DSU? 186
(v)Conclusion...... 186
(d)Violation of Article21.5 of the DSU...... 186
(e)Violation of Article23.1 of the DSU...... 187
3.Conclusion...... 187
C.Second series of EC claims: violation of Article23.1, read together with Articles 22.8 and 3.7 of the DSU 187
1.Summary of the main arguments of the parties...... 187
2.Approach of the Panel...... 190
(a)Duty of the Panel to make an objective assessment of the matter before it...... 190
(b)Order of review of the second series of main claims by the European Communities...... 191
3.Violation of Article22.8 of the DSU...... 192
(a)Preliminary remarks...... 192
(b)Jurisdiction of the Panel...... 193
(i)Introduction...... 193
(ii)Does the Panel need to determine whether the EC implementing measure actually complies with the SPSAgreement in order to address the EC claim of violation of Article23.1 read together with Article22.8 and Article3.7 of the DSU? 194
Summary of the main arguments of the parties...... 194
Reasoning of the Panel...... 197
Introductory remarks...... 197
Applicability of the principle of good faith in the WTO and under the DSU...... 197
Introduction...... 197
General international law...... 198
The text of the DSU...... 199
The panel and Appellate Body practice...... 200
(iii)Conclusion...... 205
(iv)Does the Panel have jurisdiction to address the compliance of the EC implementing measure with the SPSAgreement? 206
(c)Burden of proof...... 210
(d)Compatibility of the EC implementing measure with the provisions of the SPSAgreement 212
(i)The EC implementing measure...... 212
(ii)Scope of the Panel review...... 215
(iii)Standard applicable to the review of the compatibility of the EC implementing measure with the SPSAgreement 218
(iv)Whether the EC implementing measure is an SPS measure...... 221
(e)Compatibility of the EC implementing measure with Article5.1 and Article5.2 of the SPSAgreement with respect to oestradiol-17β 223
(i)Introduction...... 223
(ii)Is there a risk assessment within the meaning of Article 5.1 of the SPSAgreement?.224
Do the Opinions take into account risk assessment techniques of the relevant international organizations? 225
Introduction...... 225
Summary of the main arguments of the parties...... 228
Reasoning of the Panel...... 230
Do the Opinions take into account the factors listed in Article5.2?...... 231
Summary of the main arguments of the parties...... 231
Reasoning of the Panel...... 233
Do the Opinions satisfy the definition in Annex A(4) of the SPSAgreement?...... 234
Introduction...... 234
Summary of the main arguments of the parties...... 234
Reasoning of the Panel...... 237
Does the science support the conclusions of the Opinions?...... 244
Introduction...... 244
Summary of the main arguments of the parties...... 245
Reasoning of the Panel...... 247
Conclusion...... 251
(iii)Is the measure "based on" a risk assessment?...... 252
Introduction...... 252
Summary of the main arguments of the parties...... 252
Reasoning of the Panel...... 252
(iv)Conclusion...... 252
(f)Compatibility of the EC implementing measure with Article5.7 of the SPSAgreement 253
(i)Introduction...... 253
(ii)Summary of the main arguments of the parties...... 253
(iii)Approach of the Panel...... 254
(iv)When will "relevant scientific evidence" be deemed "insufficient"?...... 257
Effect of the level of protection on the consideration of the insufficiency of relevant scientific evidence under Article5.7 257
Can relevant scientific evidence become "insufficient"?...... 259
Relationship between insufficiency of the evidence and the existence of an international standard..265
Conclusion...... 268
(v)Alleged insufficiencies which should be addressed by the Panel...... 268
(vi)Issues common to all five hormones for which evidence was not provided on a hormone-specific basis 271
Introduction...... 271
Effects of hormones on certain categories of population...... 271
Dose response...... 274
Bioavailability...... 275
Long latency period of cancer and confounding factors...... 277
Effect of hormones on the immune system...... 281
Effect of hormones on growth and reproduction...... 283
(vii)Is relevant scientific evidence insufficient in the case of progesterone?...... 286
Summary of the main arguments of the parties...... 286
Reasoning of the Panel...... 287
Conclusion...... 289
(viii)Is relevant scientific evidence insufficient in the case of testosterone?...... 289
Summary of the main arguments of the parties...... 289
Reasoning of the Panel...... 290
Conclusion...... 292
(ix)Is relevant scientific evidence insufficient in the case of trenbolone acetate?...... 292
Summary of the main arguments of the parties...... 292
Reasoning of the Panel...... 293
Metabolism of trenbolone acetate...... 293
Inadequate evidence of carcinogenicity in humans...... 294
Conclusion...... 296
(x)Is relevant scientific evidence insufficient in the case of zeranol?...... 297
Summary of the main arguments of the parties...... 297
Reasoning of the Panel...... 298
Conclusion...... 301
(xi)Is relevant scientific evidence insufficient in the case of melengestrol acetate (MGA)?....302
Summary of the main arguments of the parties...... 302
Reasoning of the Panel...... 303
Data on residues of melengestrol acetate...... 304
Inadequate evidence for carcinogenicity in humans, such as no information available on mutagenicity and genotoxicity and no information available on DNA adducts and DNA damage 305
Conclusion...... 307
(xii)Conclusion...... 308
(g)Compatibility of the EC implementing measure with Article3.3 of the SPSAgreement with respect to all hormones at issue with the exception of melengestrol acetate 309
Summary of the main arguments of the parties...... 309
Reasoning of the Panel...... 310
(h)Conclusion on Article22.8 of the DSU...... 311
4.Violation of Articles23.1 and 3.7 of the DSU...... 311
D.Violation of ArticleI.1 and ArticleII of the GATT 1994...... 311
E.Conditional claim of violation of Article 22.8 of the DSU made in the alternative...... 311
F.Conclusion...... 311
VIII.Recommendations...... 312
LIST OF ANNEXES
ANNEX A
CORRESPONDENCE FROM THE PANEL TO THE PARTIES
AND WORKING PROCEDURES
Annex A-1Letter to the Parties dated 1 August 2005 on the Panel Decision on Open Hearings for Public Observation / A-2
Annex A-2Working Procedures for the Panel / A-3
Annex A-3Letter to the Parties dated 20 October 2005 on the Panel Decision on Consulting Scientific and Technical Experts / A-6
Annex A-4Letter to the Parties dated 25 November 2005 on the Panel Decision on Certain Issues concerning the Experts' Working Procedures / A-8
Annex A-5Working Procedures for Consultations with Scientific and/or Technical Experts / A-10
ANNEX B
REPLIES OF THE PARTIES TO QUESTIONS POSED BY THE PANEL
AND OTHER PARTIES AFTER THE FIRST SUBSTANTIVE MEETING
Annex B-1Replies of the European Communities to questions posed by the Panel after the first substantive meeting (3 October 2005) / B-2
Annex B-2Replies of the European Communities to questions posed by the United States after the first substantive meeting (3October2005) / B-73
Annex B-3Replies of the United States to questions posed by the Panel after the first substantive meeting (3 October 2005) / B-76
Annex B-4Replies of the United States to questions posed by the European Communities after the first substantive meeting (3October 2005) / B-98
ANNEX C
REPLIES OF THE PARTIES TO QUESTIONS POSED BY THE PANEL
AND OTHER PARTIES AFTER THE SECOND SUBSTANTIVE MEETING
AND COMMENTS BY THE PARTIES ON THE OTHER PARTIES' REPLIES
Annex C-1Replies of the European Communities to questions posed by the Panel after the second substantive meeting (18 October 2006) / C-2
Annex C-2Comments by the European Communities on the replies of the United States and Canada to questions posed by the Panel and other parties after the second substantive meeting (31October2006) / C-24
Annex C-3Replies of the United States to questions posed by the Panel after the second substantive meeting (18 October 2006) / C-40
Annex C-4Replies of the United States to questions posed by the European Communities after the second substantive meeting (18October2006) / C-47
Annex C-5Comments by the United States on the replies of the European Communities to questions posed by the Panel after the second substantive meeting (31 October 2006) / C-55
ANNEX D
REPLIES OF THE SCIENTIFIC EXPERTS
TO QUESTIONS POSED BY THE PANEL
ANNEX E
REPLIES OF THE CODEX ALIMENTARIUS COMMISSION,
THE JOINT FAO/WHO JECFA SECRETARIAT AND
THE INTERNATIONAL AGENCY FOR RESEARCH ON CANCER
TO CERTAIN QUESTIONS POSED BY THE PANEL
TO INTERNATIONAL ORGANIZATIONS
Annex E-1Replies of the Codex Alimentarius Commission to certain questions posed by the Panel to international organizations / E-2
Annex E-2Replies of the joint FAO/WHO JECFA Secretariat to certain questions posed by the Panel to international organizations / E-104
Annex E-3Replies of the International Agency for Research on Cancerto certain questions posed by the Panel to international organizations / E-127
ANNEX F
COMMENTS BY THE PARTIES ON THE REPLIES
OF THE SCIENTIFIC EXPERTS, CODEX, JECFA AND IARC
TO QUESTIONS POSED BY THE PANELAND
COMMENTS BY THE PARTIES ON THE OTHER PARTIES' COMMENTS
Annex F-1Comments by the European Communities on the replies of the scientific experts to the questions posed by the Panel (30June2006) / F-2
Annex F-2Comments by the European Communities on the replies of Codex, JECFA and IARC to questions posed by the Panel (30June 2006) / F-41
Annex F-3Comments by the European Communities to the comments by the United States and Canada on the replies of the scientific experts to questions posed by the Panel (12 July 2006) / F-54
Annex F-4Comments by the United Stateson the replies of the scientific experts, Codex, JECFA and IARC to questions posed by the Panel (30 June 2006) / F-101
Annex F-5Comments by the United States to the comments by the European Communities on the replies of the scientific experts, Codex, JECFA and IARC to questions posed by the Panel (12 July 2006) / F-141
ANNEX G