The general scientific obligation of the SPS agreement: risk assessments, precautionary actions and the exception - exemption debate

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DESCRIPCIÓN DEL TRABAJO DE GRADO

ANEXO 3

BIBLIOTECA ALFONSO BORRERO CABAL, S.J. DESCRIPCIÓN DE LA TESIS O DEL TRABAJO DE GRADO

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TÍTULO COMPLETO DE LA TESIS O TRABAJO DE GRADO

The General Scientific Obligation of the SPS Agreement: Risk Assessments, Precautionary Actions and the Exception – Exemption Debate

SUBTÍTULO, SI LO TIENE

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Arboleda Suárez Carlos Ignacio

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Castro Riberos Miguel Ángel

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Ciencias Jurídicas

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DESCRIPTORES O PALABRAS CLAVE EN ESPAÑOL E INGLÉS

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ESPAÑOL INGLÉS

Organización Mundial de Comercio World Trade Organization

Medidas Sanitarias y Fitosanitarias Sanitary and Phytosanitary Measures

Acuerdo MSF SPS Agreement

Comercio Internacional International Trade

RESUMEN DEL CONTENIDO EN ESPAÑOL E INGLÉS

(Máximo 250 palabras - 1530 caracteres)

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Portada

PONTIFICIA UNIVERSIDAD JAVERIANA

The General Scientific Obligation of the SPS Agreement: Risk

Assessments, Precautionary Actions and the Exception -

Exemption Debate

Carlos Ignacio Arboleda Suárez

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NOTA DE ADVERTENCIA

Resolución No. 13 de Julio de 1946, artículo 23: La universidad no se hace responsable por los conceptos emitidos por sus alumnos en sus trabajos de tesis. Solo velará por que no se publique nada contrario al dogma y a la moral católica y por que las tesis no contengan ataques personales contra persona alguna, antes bien se vea en ellas el anhelo de

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Contraportada

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A

SSESSMENTS

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P

RECAUTIONARY

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CTIONS AND THE

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ABSTRACT

The Agreement on the Application of Sanitary and Phytosanitary Measures pretended

to harmonize this type of measures around the objective parameters of scientific

information, thus avoiding arbitrary restrictions to international trade. Nevertheless,

the rules set regarding the use of scientific evidence have built a complex obligation

that is difficult to fulfill. It is the purpose of this document to address those provisions,

their extent and the main problems their interpretation has caused in the world of the

WTO.

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TABLE OF CONTENTS

Introduction………... 1

1. SPS Measures in the WTO………... 3

a. GATT 1947………. 3

b. The SPS Agreement……… 6

2. The General Scientific Obligation of Articles 2.2 and 5.1………. 19

a. Article 2.2 and its Interpretation………. 19

b. Article 5.1 and its Interpretation………. 25

c. Relationship Between Articles 2.2 and 5.1 of the SPS Agreement……… 33

3. The Special Case of SPS Article 5.7……… 35

a. Article 5.7 and its Interpretation……… 35

b. The Precautionary Principle………... 39

c. The Nature of SPS Article 5.7……… 43

4. Overall View of the General Scientific Obligation of the SPS Agreement.. 50

5. Key Issues of the General Scientific Obligation of the SPS Agreement….. 54

a. Does the SPS Agreement Establish a Parameter Too Rigorous for SPS Measures?... 54

b. Is the Precautionary Principle Compatible with the SPS Agreement?... 59

c. Article 5.7: Exception or Exemption?... 62

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LIST OF ABBREVIATIONS

ABR………... Appellate Body Report

EC……… European Community

fn./fns……… footnote/footnotes

GATT……… General Agreement on Tariffs and Trade

para./paras………... paragraph/paragraphs

pg./pgs………... page/pages

PR……….. Panel Report

SPS Agreement……… Agreement on the Application of Sanitary and Phytosanitary Measures

US……….. United States

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LIST OF REFERENCES

REPORTS:

REPORT ABBREVIATION

Panel Report, Australia – Measures Affecting Importation of Salmon, WT/DS18/R, 12 June 1998

PR, Australia - Salmon

Appellate Body Report, Australia – Measures Affecting Importation of Salmon, WT/DS18/AB/R, 20 October 1998

ABR, Australia - Salmon

Panel Report, European Communities – Measures Affecting the Approval and Marketing of Biotech Products, WT/DS291/R, WT/DS292/R, WT/DS293/R, 29 September 2006

PR, EC – Biotech

Panel Report, European Communities – Measures Concerning Meat and Meat Products (Hormones), Complaint by the United States, WT/DS26/R/USA, 18 August 1997

Panel Report, European Communities – Measures Concerning Meat and Meat Products (Hormones), Complaint by Canada, WT/DS48/R/CAN, 18 August 1997

PR, EC – Hormones

Appellate Body Report, EC – Measures Concerning Meat and Meat Products, WT/DS26/AB/R – WT/DS48/AB/R, 16 January 1998

ABR, EC – Hormones

Panel Report, EC – Anti-Dumping Duties on Malleable Cast Iron Tube or Pipe Fittings From Brazil, WT/DS219/R, 7 March 2003

PR, EC – Pipe Fittings

Appellate Body Report, EC – Conditions for the Granting of Tariff Preferences to Developing Countries, WT/DS246/AB/R, 7 April 2004

ABR, EC – Tariff Preferences

Panel Report, Japan – Measures Affecting the Importation of Apples, WT/DS245/R, 15 July 2003

PR, Japan – Apples

Appellate Body Report, Japan – Measures Affecting the Importation of Apples, WT/DS245/AB/R, 26 November 2003

ABR, Japan – Apples

Panel Report, Japan – Measures Affecting Agricultural Products, WT/DS76/R, 27 October 1998

PR, Japan Agricultural Products II

Appellate Body Report, Japan – Measures Affecting Agricultural Products, WT/DS76/AB/R, 22 February 1999

ABR, Japan – Agricultural Products II

Appellate Body Report, Korea – Measures Affecting Imports of Fresh, Chilled and Frozen Beef, WT/DS161/DS169/AB/R, 11 December 2000

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Panel Report, Korea – Measures Affecting Government Procurement, WT/DS163/R, 1 May 2000

PR, Korea Government Procurement

Panel Report, Turkey – Restrictions on Import of Textile and Clothing Products, WT/DS34/R, 31 May 1999

PR, Turkey – Textiles

Panel Report, US – Continued Suspension of Obligations in the EC – Hormones Dispute, WT/DS320/R, 31 March 2008

PR, US – Continued Suspension

Appellate Body Report, US – Sunset Review of Anti-Dumping Duties on Corrosion-Resistant Carbon Steel Flat Products From Japan, WT/DS244/AB/R, 15 December 2003

ABR, US – Corrosion Resistant Steel Sunset Review

Appellate Body Report, US – Standards for Reformulated and Conventional Gasoline, WT/DS2/AB/R, 29 April 1996

ABR, US – Gasoline

Panel Report, US – Certain Measures Affecting Imports of Poultry From China, WT/DS392/R, 29 September 2010

PR, US – Poultry

Appellate Body Report, US – Measure Affecting Imports of Woven Wool Shirts and Blouses From India, WT/DS33/AB/R, 25 April 1997

ABR, US – Wool Shirts and Blouses

GATT REPORTS:

 United States – Section 337 of the Tariff Act of 1930, GATT Panel Report, November 7 1989 (GPR, US – Section 337).

BOOKS, JOURNALS AND OTHER DOCUMENTS:

 Broude, Tomer, Genetically Modified Rules: The Awkward Rule-Exception-Right Distinction in EC-Biotech. International Law Forum, The Hebrew University of Jerusalem (2006).

 Committee on Sanitary and Phytosanitary Measures, Summary Report on the SPS Risk Analysis Workshop, G/SPS/GEN/209 (2000).

 Griffin, R., Agreement on the Application of Sanitary and Phytosanitary Measures (SPS) and Agreement on Technical Barriers to Trade (TBT), Module I: History of the Development of the SPS Agreement, Food and Agriculture

Organization (FAO). Available at:

http://www.fao.org/docrep/003/X7354E/X7354e01.htm

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 Shapiro, Hal S., The Rules That Swallowed the Exceptions: The WTO SPS Agreement and its Relationship to GATT Articles XX and XXI, Arizona Journal of International and Comparative Law, Vol. 24, No. 1 (2007).

 Van den Bossche, Peter, The Law and Policy of the World Trade Organization: Text, Cases and Materials, Cambridge University Press: 2005.

 World Commission on the Ethics of Scientific Knowledge and Technology COMEST, The Precautionary Principle, UNESCO: 2005.

 World Trade Organization, The Agreement on the Application of Sanitary and Phytosanitary Measures, WTO E-Learning.

 Yanovich, Alan; Voon, Tania, What is the Measure at Issue? In Challenges and Prospects for the WTO, Cameron May Ltd: 2005.

TREATIES AND AGREEMENTS:

 Agreement on the Application of Sanitary and Phytosanitary Measures, 1994.

 Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade 1994, Antidumping Agreement, 1994.

 Agreement on Implementation of Article VII of the General Agreement on Tariffs and Trade 1994, Customs Valuation Agreement, 1994.

 Agreement on Safeguards, 1994.

 Agreement on Subsidies and Countervailing Measures, 1994.

 General Agreement on Tariffs and Trade, GATT, 1994.

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INTRODUCTION

World trade has been multilaterally regulated since 1947 through the General

Agreement on Tariffs and Trade (“GATT”), which establishes the principles applicable to international trade in goods. Nevertheless, seeking depth, in 1994 the GATT became only one of the various treaties within the newly created World Trade Organization

(“WTO”). The WTO expanded regulations in trade through a series of agreements

(“Covered Agreements”) regarding trade in goods, services, investment, intellectual

property and dispute settlement, among others.

In that sense, GATT lost its “exclusiveness” as the sole tool for trade regulation, to

make way for a more complex system. One of those instruments is the Agreement on

the Application of Sanitary and Phytosanitary Measures(the “SPS Agreement”), which is in charge of setting the standards for measures aimed at protecting human, animal or plant life or health, that have a trade impact for them not to become an arbitrary restriction to trade.

The key element within the rules of the SPS Agreement is the role of scientific information, since it is the objective parameter used to analyze the consistency of a given measure. Three specific provisions in the SPS Agreement refer to the scientific burden: the main obligation of Article 2.2, its development regarding risk assessment in Article 5.1, and the special situation contained in Article 5.7. However, the rules set forth in these provisions are not clear, and have given rise to important debates as to their interpretation and extent. Therefore, the question that arises is: what is the extent of the general scientific obligation of the SPS Agreement?

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provisions, as well as Panel and Appellate Body decisions in order to arrive to a full interpretation of these rules. Then, an overall view of the general scientific obligation will be explored, taking into account the particular characteristics of each provision, and finally tackle three of the most important debates that have arisen from them: (i) the strictness of the general scientific obligation, (ii) the role of the precautionary principle, and (iii) the nature of Article 5.7.

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1. SPS MEASURES IN THE WTO

Despite being true that the WTO seeks free, liberalized international trade between its members, it is inevitable that certain measures adopted by countries wind up being restrictive of international trade. Therefore, the rules of WTO agreements seek not to prohibit any limitation to international trade, but rather regulate them, indicating the conditions and extent to which restrictions to trade are acceptable. The protection of life and health is, undeniably, an extremely important objective that states pursue, and that can sometimes restrict international trade. GATT itself, since 1947, has recognized this situation.

It is the purpose of the first section to show the development of the protection of life and health within GATT, the necessity that arose to regulate the matter independently and finally the creation of SPS Agreement, along with its relationship with GATT.

a. GATT 1947

Since GATT was created in 1947, the protection of life and health has been an issue worthy of regulation in international trade. GATT contains certain provisions that are considered to be justifications for the application of measures that restrict international trade that relate with these matters. The most important rule is paragraph (b) of Article XX (“General Exceptions”), which permits the adoption of measures that, despite being trade restrictive, are aimed at protecting human, animal or plant life or health.

In other words, a measure based on one of the objectives set forth in paragraph (b) of Article XX despite violating GATT provisions, is found justified, and therefore WTO-consistent.

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“Subject to the requirement that such measures are not applied in a manner

which would constitute a means of arbitrary or unjustifiable discrimination

between countries where the same conditions prevail, or a disguised restriction

on international trade, nothing in this Agreement shall be construed to prevent the

adoption or enforcement by any contracting party of measures:” (Underlining not in the original text)

Pursuant to this provision, a measure that violates any of the GATT commitments can be justified by any Member as long as it: (i) follows one of the objectives listed in Article XX (a) to (j); and, (ii) does not encompass a disguised restriction on international trade1.

As to the first requirement, the protection of human, animal or plant life and health is recognized as one of the legitimate objectives for the purposes of Article XX. The relevant paragraph reads as follows:

(b) necessary to protect human, animal or plant life or health;

As can be seen from the text of this provision, the measure must be “necessary” for the protection of life and health2. WTO Adjudicating Bodies have interpreted this concept under Article XX of the GATT. For instance, the Panel in the case US – Section

337 understood necessity in relation to the existence or not of alternative measures3. The Appellate Body in Korea – Beef recalled that conclusion; stating that there must be a “weighing and balancing” process of the reasons that support the adoption of a measure to conclude the existence of necessity. Furthermore, it pointed out that the

1 Committee on Sanitary and Phytosanitary Measures,

Summary Report on the SPS Risk Analysis Workshop, G/SPS/GEN/209 (2000). p. 2.

2 The term “

necessary” appears also in GATT Article XX (a) and (d), which refer respectively to measures that seek to protect public morals, life and health, and customs enforcements.

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decision of compliance with necessity “is comprehended in the determination of

whether a WTO-consistent alternative measure which the Member concerned could

"reasonably be expected to employ" is available, or whether a less WTO-inconsistent

measure is "reasonably available".”4 So, a measure will be necessary if the objective

sought cannot be obtained through a non-restrictive alternative measure to the one adopted.

Regarding the second requirement, that is that the measure is not a disguised restriction on international trade, the negative burden seeks that the measure is not an unfair restriction to trade, since life and health protection could be used as a pretext, rather than as a legitimate objective. The Appellate Body, in US – Gasoline, interpreted:

“The chapeau is animated by the principle that while the exceptions of Article XX

may be invoked as a matter of legal right, they should not be so applied as to

frustrate or defeat the legal obligations of the holder of the right under the

substantive rules of the General Agreement. If those exceptions are not to be

abused or misused, in other words, the measures falling within the particular

exceptions must be applied reasonably, with due regard both to the legal duties of

the party claiming the exception and the legal rights of the other parties

concerned.

(…) We consider that "disguised restriction", whatever else it covers, may

properly be read as embracing restrictions amounting to arbitrary or

unjustifiable discrimination in international trade taken under the guise of a

measure formally within the terms of an exception listed in Article XX. (…) The

fundamental theme is to be found in the purpose and object of avoiding abuse or

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illegitimate use of the exceptions to substantive rules available in Article XX.”5

In conclusion, under GATT, Article XX (b) is the only provision that addressed measures intended to protect human, animal and plant life and health. Therefore, a measure that sought those objectives had to follow the test previously explained, complying with the two aforementioned requirements, in order to be WTO-consistent.

Furthermore, since Article XX (b) contains a defense to justify violations of GATT, the measure would only be analyzed in the event that it resulted challenged in a dispute settlement procedure. Hence, the analysis of WTO consistency turned out to be secondary, ex-post, to a claim of violation under another GATT obligation.

Nevertheless, GATT Article XX(b) needed to be more extensively regulated and so, in 1994, the SPS Agreement came into existence.

b. THE SPS AGREEMENT

As mentioned above, between 1947 and 1994, no objective parameter was applicable to life and health protective measures, other than the treatment given as exceptions to GATT obligations. Nevertheless, these measures needed to be regulated entirely, so it became the duty of an independent agreement to do so: the SPS Agreement.

“During the 1970's, the idea emerged that a specific agreement on technical

barriers to trade was necessary. A plurilateral agreement on technical barriers to

trade (or "standards code") was then negotiated during the Tokyo round (1973

1979). Although this agreement was not developed primarily for the purpose of

regulating sanitary and phytosanitary measures, it covered technical

requirements, and among these, those resulting from food safety and human,

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animal and plant health measures (which include pesticide residue limits,

inspection requirements and labeling).

During the Uruguay round (1985-1994), it was felt that there was a need for more

specific rights and obligations with respect to food safety and human, animal and

plant health measures affecting international trade. An agreement on the

application of sanitary and phytosanitary measures was thus negotiated during

that round of negotiations in a working group under the agriculture committee.”6

What the SPS Agreement finally entails is a non-tariff barrier to trade. These are restrictions to free trade which do not respond to the form of tariffs, the type of barriers that should prevail in the WTO system and are regulated by GATT since 1947.

In the history of the SPS, the goal of harmonization of sanitary and phytosanitary measures, as a non-tariff barrier to trade, that was sought in the Uruguay round was supported strongly by developing countries, concerned about the possibility of developed countries of imposing strict, arbitrary standards7.

“The Working Group on Sanitary and Phytosanitary Regulations, which was

formed in 1988, produced a draft text in November 1990. A consensus was

reached by the parties on the following points: SPS measures should not

represent disguised trade barriers; should be harmonized on the basis of

generally-accepted scientific principles; special consideration should be given to

developing countries; transparency should be ensured in setting regulations and

in solving disputes; and an international committee should be established to

6 World Trade Organization, The Agreement on the Application of Sanitary and Phytosanitary Measures, WTO E-Learning, pg. 5.

7 See: Griffin, R.,

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provide for consultations regarding standards.”8

The working group’s draft was finally agreed upon and became the SPS Agreement.

It is derived from GATT itself, as a means to harmonize and set forth relevant rules for the adoption of trade-restrictive measures needed to protect life and health, but taking into account objective parameters, thus not allowing arbitrary restrictions.

(i) Elaborating GATT 1947

The mandate of GATT Article XX is replicated in the very first sentence of the SPS Agreement, stating in its Preamble that “no Member should be prevented from adopting

or enforcing measures necessary to protect human, animal or plant life or health,

subject to the requirement that these measures are not applied in a manner which would

constitute a means of arbitrary or unjustifiable discrimination between Members where

the same conditions prevail or a disguised restriction on international trade”.

Both GATT and the Preamble of the SPS Agreement recognize the right to protect human, animal or plant life or health, recognizing as well that it is not an unlimited one.

The relationship between GATT Article XX(b) and the SPS Agreement is explicit from the very Preamble of the latter, when it states:

“Desiring therefore to elaborate rules for the application of the provisions of

GATT 1994 which relate to the use of sanitary or phytosanitary measures, in

particular the provisions of Article XX(b)”

The Panel, in the US – Poultry case concluded that “the preamble uses the word

"elaborate" to qualify the relationship of the SPS Agreement with Article XX(b). The

ordinary meaning of the word "elaborate" is to "explain something in detail".

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Accordingly, when the preamble states that the SPS Agreement elaborates the rules for

the application of Article XX(b), it is thus saying that the SPS Agreement "explains in

detail" how to apply Article XX(b).”9 The Panel, in

EC – Hormones, stated that, for

instance, Article 2 of the SPS Agreement (“main obligations”) is a further development

of GATT Article XX(b)10.

It is important to recall that, as the SPS Agreement is, several WTO Covered Agreements are developments of GATT provisions. For example, the Customs Valuation Agreement with respect to GATT Article VII11, the Anti-Dumping Agreement and the Agreement on Subsidies and Countervailing Measures (“SCM”)

regarding GATT Article VI12, and the Agreement on Safeguards with GATT Article XIX13.

The relation between the GATT provisions and other Covered Agreements is different in each case. In the following section the implications and effects of the relationship between Article XX (b) and the SPS Agreement will be examined.

(ii) The Implications of the SPS Agreement as a Development of GATT Article XX(b)

The fact that the SPS Agreement defines itself as an elaboration of GATT has

9 PR, US Poultry, para. 7.471.

10 PR, EC – Hormones, paras. 8.38-8.40.

11 The Preamble of the Customs Valuation Agreement states:

"Recognizing the importance of the provisions of Article VII of GATT 1994 and desiring to elaborate rules for their application in order to provide greater uniformity and certainty in their implementation".

12 Article 1 of the Anti-Dumping Agreement reads:

"An anti-dumping measure shall be applied only under the circumstances provided for in Article VI of GATT 1994 and pursuant to investigations initiated and conducted in accordance with the provisions of this Agreement. The following provisions govern the application of Article VI of GATT 1994 in so far as actions taken under anti-dumping legislation or regulations."

Article 10 of the SCM Agreement provides: “Members shall take all necessary steps to ensure that the imposition of a countervailing duty on any product of the territory of any Member imported into the territory of another Member is in accordance with the provisions of Article VI of GATT 1994 and the terms of this Agreement.”

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consequences of great interest. Firstly it must be noted that the SPS Agreement, albeit

deriving from GATT, is a “stand-alone”14 agreement, and therefore it has autonomous

rights and obligations, independent and different from those of GATT. Hence, despite their closeness, they are different agreements and must be treated accordingly.

Nevertheless, the SPS Agreement sets forth an important rule to be taken into account when analyzing a measure under the SPS Agreement:

“Article 2

Basic Rights and Obligations

4. Sanitary or phytosanitary measures which conform to the relevant provisions

of this Agreement shall be presumed to be in accordance with the obligations of

the Members under the provisions of GATT 1994 which relate to the use of

sanitary or phytosanitary measures, in particular the provisions of Article

XX(b).” (Underlining not in the original text)

This article establishes a presumption of compliance: a measure that complies with the SPS Agreement, is presumed to be consistent with GATT Article XX(b). This presumption is, however, rebuttable15. Hence, since the presumption may be rebutted, the fact that a certain measure complies with the provisions of the SPS Agreement makes it apparently compliant with GATT as well, but it can be proved otherwise.

Now, the question that rises is if there is a similar presumption of consistency in respect to the SPS Agreement when there is evidence of compliance with Article XX (b). In other words, does the SPS Agreement exhaust GATT Article XX(b)?

14 Shapiro, Hal S.,

The Rules That Swallowed the Exceptions: The WTO SPS Agreement and its Relationship to GATT Articles XX and XXI, Arizona Journal of International and Comparative Law, Vol. 24, No. 1 (2007). p. 203.

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The Panel in the US – Poultry case addressed this issue indicating:

“Therefore, if the Panel were to find that Section 727 is an SPS measure, a

finding that it is not inconsistent with the SPS Agreement, would yield a

presumption that Section 727 is in accordance with Article XX(b) of the GATT

1994. Accordingly, the Panel would not need to consider the GATT claims

because the measure would be presumed to be consistent with Article XX(b).

However, we agree with China in that there is no presumption of consistency with

the SPS Agreement for measures that are found to be consistent with Article

XX(b) of the GATT 1994. Hence, if the Panel were to start with the claims under

GATT 1994 and find Section 727 to be consistent with that Agreement, then the

Panel would still have to look at the SPS claims, because a measure consistent

with the GATT 1994 is not presumed necessarily to be consistent with the SPS

Agreement.”16

In this case, the Panel clarified that a measure that complies with Article XX(b) is not necessarily compliant with the SPS Agreement, despite the fact that compliance with the latter does raise a presumption of compliance with the former. It further noted:

“We also note that the definition of SPS measures in Annex A(1) of the SPS

Agreement, although not referring directly to Article XX(b) of the GATT 1994,

does encompass measures applied to protect animal or plant life or health as well

as human life or health. We recall that Article XX(b) of the GATT 1994 refers to

measures "necessary to protect human, animal or plant life or health". Hence, the

same type of measures. Although Article XX(b) of the GATT 1994 could be seen

as encompassing more measures than those defined in Annex A(1) of the SPS

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Agreement; measures of the type defined in Annex A(1) are included within the

type of measures contemplated in Article XX(b) of the GATT 1994.”17

(Underlining not in the original text).

What the Panel indicated in its report was that, despite that the SPS measures are of the same type of measures than those addressed by GATT Article XX(b), as both of them seek to protect life and health, there can be measures that fall under the scope of the GATT but not under the SPS Agreement.

Moreover, the presumption of compliance has been given an additional reach. The Panel, in the case indicated above, stated that a measure that falls within the scope of the SPS Agreement but is inconsistent with the main obligations of that Agreement (Articles 2 and 5) cannot fall under, and hence cannot be justified by, Article XX(b) of GATT:

“Given our conclusion that the SPS Agreement explains the provisions of Article

XX(b) in further detail and because the SPS Agreement only applies to SPS

measures, the SPS Agreement thus explains in detail the provisions of Article

XX(b) in respect of SPS measures. Since that is the case, we have difficulty in

accepting that an SPS measure which is found inconsistent with provisions of the

SPS Agreement such as Articles 2 and 5, which are explanations of the disciplines

of Article XX(b), could be justified under that same provision of the GATT1994.

Additionally, we recall that Article 2.1 of the SPS Agreement provides that

Members have a right to take SPS measures necessary for the protection of

human, animal, or plant life or health, provided that such measures are not

inconsistent with the provisions of the SPS Agreement. Therefore, the Panel is of

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the view that an SPS measure which has been found inconsistent with Articles 2

and 5 of the SPS Agreement, cannot be justified under Article XX(b) of the GATT

1994.

We are not deciding that any analysis of Article XX(b) must be done with

reference to the SPS Agreement. We are only saying that, where an SPS measure

is concerned, the provisions of the SPS Agreement become relevant for an

analysis of Article XX(b) and, furthermore, where such an SPS measure has been

found inconsistent with provisions of the SPS Agreement such as Articles 2 and 5,

the disciplines of Article XX(b) cannot be applied so as to justify such a

measure.”18(Underlining not in the original text)

This finding by the Panel is one of the rare cases of an irrefutable presumption. The Panel is emphatic in the impossibility under WTO rules of finding a measure consistent with GATT Article XX(b) if it violates SPS Articles 2.2 and/or 5.1, leaving no room to prove otherwise19.

In sum, the implications of the SPS Agreement as a development of GATT Article XX(b) are:

 The SPS Agreement does not exhaust GATT Article XX(b). Therefore, there

can be measures justified under that GATT provision that do not fall under the scope of the SPS Agreement.

 A measure that does fall under the scope of the SPS Agreement and fulfills its

requirements is covered by a rebuttable presumption of compliance with GATT Article XX(b).

18 PR, US – Poultry, paras. 7.481-7.482.

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 A measure that falls under the scope of the SPS Agreement can never be

justified by GATT Article XX(b) if it does not comply with Articles 2 and 5 of the SPS Agreement.

 An SPS measure complying with GATT Article XX(b) is not presumed to be

consistent with the SPS Agreement.

(iii) The scope of application of the SPS Agreement

Article 1.1 of the SPS Agreement limits the scope of application to SPS measures that may, either directly or indirectly, affect international trade20. From the wording of this provision it has been interpreted that two requirements must be met for a measure to be assessed under the SPS Agreement: (i) the measure must be an SPS measure; and, (ii) it must affect, or have the potential to affect international trade21. The second requirement has not been subjected to further interpretation since it does not state that actual negative effects need to occur, but just the mere possibility that they may arise22. However, the delimitation of SPS measures does require further scrutiny.

The characteristics of an SPS measure are found in Annex A1 of the SPS Agreement entitled “Definitions”:

“1. Sanitary or phytosanitary measure - Any measure applied:

(a) to protect animal or plant life or health within the territory of the Member

from risks arising from the entry, establishment or spread of pests, diseases,

disease-carrying organisms or disease-causing organisms;

20 Article 1.1 of the SPS Agreement states: Article 1

General Provisions

1. This Agreement applies to all sanitary and phytosanitary measures which may, directly or indirectly, affect international trade. Such measures shall be developed and applied in accordance with the provisions of this Agreement.

21 PR, EC – Hormones, para. 8.36; PR, US – Poultry, para. 7.82.

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(b) to protect human or animal life or health within the territory of the Member

from risks arising from additives, contaminants, toxins or disease-causing

organisms in foods, beverages or feedstuffs;

(c) to protect human life or health within the territory of the Member from risks

arising from diseases carried by animals, plants or products thereof, or from the

entry, establishment or spread of pests; or

(d) to prevent or limit other damage within the territory of the Member from the

entry, establishment or spread of pests.

Sanitary or phytosanitary measures include all relevant laws, decrees,

regulations, requirements and procedures including, inter alia, end product

criteria; processes and production methods; testing, inspection, certification and

approval procedures; quarantine treatments including relevant requirements

associated with the transport of animals or plants, or with the materials necessary

for their survival during transport; provisions on relevant statistical methods,

sampling procedures and methods of risk assessment; and packaging and

labelling requirements directly related to food safety.”

It is interesting to note how this provision does not define an SPS measure, but gives the parameters as to in which cases a measure23 must be understood to be an SPS measure.

The WTO Adjudicating Bodies have not been consistent when interpreting the extent of SPS measures. The first position on this matter was adopted by the Panel in the EC –

Biotech case, where it was stated that in order to determine if a measure is an SPS

23 It is important to recall that the Appellate Body defined a measure within the WTO as:

In principle, any act or omission attributable to a WTO Member can be a measure of that Member for purposes of

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measure, three elements must be examined: the purpose, the legal form and the nature.

The purpose element is addressed in Annex A(1)(a) through (d) ("any measure

applied to"). The form element is referred to in the second paragraph of Annex

A(1) ("laws, decrees, regulations"). Finally, the nature of measures qualifying as

SPS measures is also addressed in the second paragraph of Annex A(1)

("requirements and procedures, including, inter alia, end product criteria;

processes and production methods; testing, inspection, certification and approval

procedures; [etc.]").”24

Regarding the purpose the Panel added that it must not be an express purpose but that it “may be determined by the actual policy objective sought by a member”25

.

Regarding the other two elements, the Biotech Panel considered that a law, decree or regulation is different from a requirement or procedure, and both of these last elements must concur in order for a measure to be an SPS measure. Indeed, in regard to the first group the Panel understood that they are elements of the form, i.e. the kind of act they constitute, while the second belong to the nature, i.e. the object of the measure itself. Hence, under this interpretation, an SPS Measure would be a law, decree or regulation that sets a requirement or procedure aimed at the protection of human, animal or plant life or health under the hypotheses of Annex A1 (a) through (d).

This approximation to SPS measures was followed by the Panel in the case US –

Continued Suspension, which examined the measure at issue under the EC – Biotech test26.

The Panel in the US – Poultry dispute undertook again the study of the determination

24 PR, EC – Biotech, para. 7.149. 25 PR, EC – Biotech, para. 7.2558.

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of SPS measures. The Panel required the parties to that dispute (China as complainant and the US as respondent) to express their views on the three-step test set by Biotech.

China’s allegation was that interpreting Annex A1 in a correct manner would exclude

the existence of the “nature element”, whilst the US considered the element as

necessary. The Panel gave the reason to China arguing that the US failed to explain how

the “nature element” should be understood, and to show therefore, why the Biotech test

had to be followed27. It further explained:

“The Panel has carefully examined the panel's findings in EC Approval and

Marketing of Biotech Products as regards the legal basis for distinction of "form"

and "nature" and has difficulty with following the reasoning. The rationale for

dividing the phrase "laws, decrees, regulations, requirements and procedures

including...," into "form" and "nature" is not clear to us as the panel did not

elaborate on this point. The panel did not explain how "requirements and

procedures" were somehow fundamentally different from "laws, decrees,

regulations" or why it believed that all SPS measures somehow have the nature of

a "requirement" or "procedure". If we examine the text of Annex A(1), we note

that there is no such separation and a plain reading might lead one to believe that

"requirements and procedures" are also descriptions of the possible types or

"forms" of an SPS measure while the substantive descriptions following

"including inter alia" are just illustrative examples of the types of SPS measures

Members have imposed”28

In this vein, the obscure difference between the “legal form” and the “nature” was

found incorrect, as the Poultry Panel understood that the latter is intrinsic to the former,

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and thus the determination of a measure as an SPS measure encompasses only the purpose and the form29.

This interpretation seems quite more accurate than the three part test set forth by the

Biotech Panel, since a measure can be a law, decree, regulation, requirement or procedure independently, and not necessarily must one of the first three concur with one of the last two. Besides, the three-pronged test developed by Biotech made it more difficult for a measure to fall under the scope of the SPS Agreement, since not only

must the objective of the measure be demonstrated, but also two different “form”

requirements. The Poultry solution is more flexible and inclusive, giving more meaning to the SPS Agreement.

Therefore, for a measure to be an SPS measure, according to the WTO case law, it only needs to be a law, decree, regulation, requirement, procedure, etc., with the purpose of protecting human, animal or plant life or health under the cases set by Annex A1 (a) through (d) of the SPS Agreement.

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2. THE GENERAL SCIENTIFIC OBLIGATION OF ARTICLES 2.2 AND 5.1 OF THE SPS AGREEMENT

The SPS Agreement develops the Basic Rights and Obligations in Article 2 and the

Assessment of Risk and Determination of the Appropriate Level of Sanitary or

Phytosanitary Protection in Article 5. Together with Article 5.7, which will have a section of its own, they form the general scientific obligation of the SPS Agreement. Each provision will be analyzed separately.

a. ARTICLE 2.2 AND ITS INTERPRETATION

As was highlighted previously, Article 2 of the SPS Agreement is entitled Basic

Rights and Obligations. Referring to the scientific obligation, regard must be had to the second part of this provision. Article 2.2 states:

“Article 2

Basic Rights and Obligations

2. Members shall ensure that any sanitary or phytosanitary measure is applied

only to the extent necessary to protect human, animal or plant life or health, is

based on scientific principles and is not maintained without sufficient scientific

evidence, except as provided for in paragraph 7 of Article 5.”

According to the Panel in EC – Biotech Article 2.2 sets three requirements that must be met by SPS measures:“(i) the requirement that SPS measures be applied only to the

extent necessary to protect human, animal or plant life or health; (ii) the requirement

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measures not be maintained without sufficient scientific evidence.”30

The Appellate Body in the case Japan – Agricultural Products II confirmed the

Panel’s ruling in the same dispute when interpreting that Article 2.2 requires a “rational

or objective relationship between the SPS measure and the scientific evidence”31 . That qualified relationship between the measure at issue and the scientific information is what will limit the necessity of the measure, and whether or not it is consistent with Article 2.2.

In addition to this, the Appellate Body also stated:

“Whether there is a rational relationship between an SPS measure and the

scientific evidence is to be determined on a case-by-case basis and will depend

upon the particular circumstances of the case, including the characteristics of the

measure at issue and the quality and quantity of the scientific evidence.”32

The Appellate Body in Japan – Apples also used this approximation when examining Article 2.2. In that dispute, the Panel analyzed the measure and the risks through a procedure of breaking the measure into steps and studying those independently. Upon appeal the Appellate Body made clear that:

“[T]he approach followed by the Panel in this case — disassembling the

sequence of events to identify the risk and comparing it with the measure — does

not exhaust the range of methodologies available to determine whether a measure

is maintained ‘without sufficient scientific evidence’ within the meaning of Article

2.2. Approaches different from that followed by the Panel in this case could also

prove appropriate to evaluate whether a measure is maintained without sufficient

30 PR, EC – Biotech, para. 7.1424.

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scientific evidence within the meaning of Article 2.2. Whether or not a particular

approach is appropriate will depend on the ‘particular circumstances of the

case’.”33

In this vein, it has been established that SPS Article 2.2 has no specific test or requirement for the analysis of consistency between the obligation contained in it and the measure at issue, giving total freedom to the parties of a dispute to prove eventual consistency or violations.

(i) Sufficient Scientific Evidence

As it is evident from the wording of Article 2.2 of the SPS Agreement, a measure must be based on sufficient scientific evidence in order for it to comply with this provision of the Agreement. The Appellate Body in Japan – Agricultural Products II, studied the meaning of sufficient, deciding that it is a relational concept reaching the conclusion of the necessity of an objective, rational relationship discussed above34.

The meaning of scientific evidence needed clarifying in order to define the extent of the term. The Appellate Body in Japan – Apples decided that:

“We consider that (…) we must give full meaning to the term ‘scientific’ and

conclude that, in the context of Article 2.2, the evidence to be considered should

be evidence gathered through scientific methods, excluding by the same token

information not acquired through a scientific method. We further note that

scientific evidence may include evidence that a particular risk may occur (…) as

well as evidence that a particular requirement may reduce or eliminate that risk

(…)

33 ABR, Japan – Apples, para. 164.

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Likewise, the use of the term ‘evidence’ must also be given full significance.

Negotiators could have used the term ‘information’, as in Article 5.7, if they

considered that any material could be used. By using the term ‘scientific

evidence’, Article 2.2 excludes in essence not only insufficiently substantiated

information, but also such things as a non-demonstrated hypothesis.”35

(Underlining not in the original text)

Furthermore, the Appellate Body also accepted that the evidence could be direct or

indirect, whether it does or does not directly prove a certain fact. Both kinds are acceptable, but the probative value of the first one is higher in the eyes of the Adjudicating Bodies36.

(ii) Burden of Proof

The burden of proof in Article 2.2 of the SPS Agreement has been interpreted in a very peculiar manner. The subject of the burden of proof will be analyzed with more depth later in this paper37, since it will be the central topic in the assessment of the legal nature of SPS Article 5.7, one of the key debates within the general scientific obligation of the SPS Agreement. Nevertheless, certain precisions are in order in the present topic38.

In Japan – Agricultural Products II, the Panel understood that the burden of proving inconsistency with Article 2.2 was of the claimant, the United States. The US was alleging that Japan had imposed measures not based on sufficient scientific evidence on 8 different varietals. However, the US only brought information on 4 of them. The

35 ABR, Japan – Apples, paras. 8.92-8.93. 36 ABR, Japan – Apples, para. 8.98. 37 See Infra Section 3(c) (i).

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Panel understood that the claimant had not proved inconsistency with Article 2.2 regarding the other four products. Upon appeal, the United States argued that the Panel had set upon it an impossible burden, since there was no scientific evidence available for those products. The Appellate Body understood that there was no such situation:

“[W]e disagree with the United States that the Panel imposed on the United

States an impossible and, therefore, erroneous burden of proof by requiring it to

prove a negative, namely, that there are no relevant studies and reports which

support Japan’s varietal testing requirement. In our view, it would have been

sufficient for the United States to raise a presumption that there are no relevant

studies or reports. Raising a presumption that there are no relevant studies or

reports is not an impossible burden.”39

This presumption is not quite clear. The Appellate Body established that if the US had exhorted Japan to show the evidence that led them to adopt the challenged measures, and Japan had failed to do so, that would have raised a “strong indication

that there are no such studies or reports”40

. That would have been the presumption that the Appellate Body referred to.

The Panel had the opportunity to refer to this subject again in Japan – Apples:

“Japan argues, that, in order for the United States to establish a prima facie case

under Article 2.2, it has to positively prove the ‘insufficiency’ of scientific

evidence. The United States claims that there is simply no scientific evidence

supporting the measure at issue. Under these circumstances, and in application of

the reasoning of the Appellate Body in Japan — Agricultural Products II, we

consider that the United States should raise a presumption that there are no

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relevant scientific studies or reports in order to demonstrate that the measure at

issue is not supported by sufficient scientific evidence. If Japan submits elements

to rebut that presumption, we would have to weigh the evidence before us.”41

Hence, the theory of the presumption of no relevant information is available for a claimant and fulfills its burden of proof.

The Appellate Body in EC – Hormones reversed the Panel’s ruling on the burden of proof in the SPS Agreement, and explained:

“The initial burden lies on the complaining party, which must establish a prima

facie case of inconsistency with a particular provision of the SPS Agreement on

the part of the defending party, or more precisely, of its SPS measure or measures

complained about. When that prima facie case42 is made, the burden of proof

moves to the defending party, which must in turn counter or refute the claimed

inconsistency. This seems straightforward enough and is in conformity with our

ruling in United States - Shirts and Blouses43, which the Panel invokes and which

embodies a rule applicable in any adversarial proceedings.”44

The Appellate Body made clear that the general rule of the burden of proof is the one applicable to the SPS Agreement.

From the analysis of Article 2.2 of the SPS Agreement it is possible to conclude that:

 There must be an objective, rational relationship between the measure and the

scientific evidence that was used to adopt it.

 There is no test or procedure to prove consistency with Article 2.2, and must

41 PR, Japan – Apples, para. 8.106. 42 See infra fn. 85.

43 The Appellate Body Report in US – Wool Shirts and Blouses is the landmark case in the topic of the burden of proof. Its analysis and implications will be explained in detail later in this paper.

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be analyzed on a case-by-case basis.

Scientific Evidence includes direct or indirect data obtained through the

scientific method, excluding unsubstantiated data and non-proven hypotheses.

 The general rule on the burden of proof (it corresponds to the claimant to

prove the alleged inconsistency) is applicable. However, there is a

“presumption” raised when the claimant affirms there are no relevant reports

or studies. The burden will then shift to the respondent to show that they exist.

b. ARTICLE 5.1 AND ITS INTERPRETATION

Article 5.1 of the SPS Agreement imposes a particular obligation on Members, where by it sets the conditions of how they must handle and present the information that serves as a basis for an SPS measure:

“Members shall ensure that their sanitary or phytosanitary measures are based

on an assessment, as appropriate to the circumstances, of the risks to human,

animal or plant life or health, taking into account risk assessment techniques

developed by the relevant international organizations.”

Firstly, the concept of risk must be addressed. The SPS Agreement brings no definition as to what risk entails, leaving the concept with a lack of clarity. However, Professor Matsushita, when referring to risk assessments under the SPS Agreement, gives an approach to risk as “the likelihood that something might happen assuming

certain hypotheses”45.

Nevertheless, the SPS Agreement did include an express definition of risk

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assessment in paragraph 4 of Annex A:

“Risk assessment - The evaluation of the likelihood of entry, establishment or

spread of a pest or disease within the territory of an importing Member according

to the sanitary or phytosanitary measures which might be applied, and of the

associated potential biological and economic consequences; or the evaluation of

the potential for adverse effects on human or animal health arising from the

presence of additives, contaminants, toxins or disease-causing organisms in food,

beverages or feedstuffs.”

(i) General Requirements of Risk Assessments

Regarding risk assessments, case law has interpreted the SPS Agreement with the intention to clarify the topic. Several important rules have risen from the Adjudicating

Bodies’ interpretations:

The first and most important statement made by the WTO Adjudicating Bodies touches the procedural aspect of the risk assessment. In their view, the risk assessment is to be carried out by the Member imposing or adopting the SPS measure, it is not a burden or obligation of panels to conduct their own assessment when analyzing the consistency of measures with the SPS Agreement46. Therefore, the Member must present the pertinent risk assessment to the Adjudicating Bodies, since they will not, albeit possessing the information, carry out the necessary risk assessment.

Moreover, the Appellate Body has maintained that there is no specific methodology that a Member must follow in order to conduct a risk assessment. Nevertheless, it did establish that the risk assessment must take into account the possibility that other

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measures exist different from the one adopted, that still are effective to protect life and health. Basically, the Appellate Body denies the possibility that the risk assessment becomes a tool for justifying a measure already applicable by stating that:

“[t]he evaluation contemplated in paragraph 4 of Annex A to the SPS Agreement

should not be distorted by preconceived views on the nature and the content of the

measure to be taken; nor should it develop into an exercise tailored to and

carried out for the purpose of justifying decisions ex post facto.”47

The second important rule is the existence of an objective relationship. Article 5.1 also uses the words “based on” which are present in Article 2.2. This situation led to the conclusion that a rational, objective relationship is necessary as well between the risk assessment and the measure adopted48. The objective relationship has to be

analyzed “on a case-by-case basis and will depend upon the particular circumstances of

the case, including the characteristics of the measure at issue and the quality and

quantity of the scientific evidence”49.

Thirdly, it has been recognized that conducting a risk assessment is difficult and expensive. Therefore Appellate Body established:

“Article 5.1 does not insist that a Member that adopts a sanitary measure shall

have carried out its own risk assessment (…) The SPS measure might well find its

objective justification in a risk assessment carried out by another Member, or an

international organization”50 .

Hence, recourse may be had to an already conducted risk assessment in order for a

47 ABR, Japan – Apples, para. 208. 48 ABR, EC – Hormones, paras. 193-194.

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Member to adopt an SPS measure.

Fourthly, the Appellate Body in that same case understood that a risk assessment

could gather both the “mainstream” scientific opinion and the divergent, less shared

opinion in a specific situation. SPS measures can be based on any of them, and the fact that a measure is based on the divergent minority does not make them inconsistent with the SPS Agreement. A measure can have its base on a divergent opinion, and still have a rational, objective relationship as required by the SPS Agreement51.

Finally, and as a fifth interpretation, the Hormones case also shed light on the concept of ascertainable risk. The Panel report in that case established, with aid of the scientist that it sought for help, that there would always be an inherent risk in any situation since science can never give definitive answers52. These types of risks that are a consequence of scientific uncertainty are not the ones to be analyzed in a proper, SPS-consistent risk assessment. The Appellate Body, in the appeal, explained that:

“[i]f a risk is not ascertainable, how does a Member ever know or demonstrate

that it exists? In one part of its Reports, the Panel opposes a requirement of an

"identifiable risk" to the uncertainty that theoretically always remains since

science can never provide absolute certainty that a given substance will not ever

have adverse health effects. We agree with the Panel that this theoretical

uncertainty is not the kind of risk which, under Article 5.1, is to be assessed.”53

The Appellate Body also stated that:

“It is essential to bear in mind that the risk that is to be evaluated in a risk

assessment under Article 5.1 is not only risk ascertainable in a science laboratory

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operating under strictly controlled conditions, but also risk in human societies as

they actually exist, in other words, the actual potential for adverse effects on

human health in the real world where people live and work and die.”54

Nevertheless, the Appellate Body emphasized that no threshold or minimum level of risk is needed in order to adopt a measure. There can be any level of risk identified, and, as long as an objective relationship exists between the risk assessment and the SPS measure, the measure is WTO-consistent55.

(ii) The First Risk Assessment in Annex A 4

The Appellate Body in Australia – Salmon understood that Annex A 4 of the SPS Agreement contains two different risk assessments that are “substantially different”56. These are separated in the provision itself by means of the semicolon and the word

“or”57.

The first part of Annex A 4 of the SPS Agreement sets forth the first of the two risk assessments, in the following terms:

“The evaluation of the likelihood of entry, establishment or spread of a pest or

disease within the territory of an importing Member according to the sanitary or

phytosanitary measures which might be applied, and of the associated potential

biological and economic consequences (…)”

The scope of application of this first type of risk assessment is limited to risks arising from pests or diseases.

54 ABR, EC – Hormones, para. 187. 55 ABR, EC – Hormones, para. 186. 56 ABR, Australia – Salmon, fn. 69.

57The division of the two types of risk assessments follows the division of risks between “diseases and

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In the Australia – Salmon case, the Panel concluded that:

“We further note that, in our view, three elements are contained in this definition

of risk assessment:

(1) the definition of risk assessment implies that the Member imposing the

sanitary measure first has to identify the disease(s) whose "entry, establishment or

spread" within its territory it wants to prevent as well as the "associated potential

biological and economic consequences";

(2) the definition then requires an "evaluation of the likelihood" of entry,

establishment or spread of these diseases and of the associated potential

biological and economic consequences"; and

(3) the definition further requires that the evaluation of the likelihood of entry,

establishment or spread of these diseases be conducted "according to the sanitary

... measures which might be applied".”58

What is characteristic of this particular risk assessment is the necessity to evaluate the likelihood of the risk involved. Previous cases studied the definition and extent of the likelihood requirement and all arrived to the conclusion that some degree of probability is involved, rather than just the possibility of the risk occurring. In the report on Australia – Salmon, the Appellate Body applied some “reverse engineering” to assimilate the term likelihood to probability based on the findings of the EC –

Hormones case59. Despite the fact that the Hormones case referred to the second type of risk assessment, which will be analyzed shortly, it concluded that the term potential

58 PR, Australia – Salmon, para. 8.72.

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refers to possibility rather than probability60, paving the way for the Salmon conclusion. Later on, the panel in Japan – Apples established that the likelihood, understood as

probability, could be expressed in quantitative or qualitative terms.

The above leads to the conclusion that the first of the risk assessments contained in Annex A 4 of the SPS Agreement is a matter of likelihood, of probability, which is the key difference with the one to be analyzed immediately.

(iii) The Second Risk Assessment in Annex A 4

Unlike the first of the risks assessments, the second type contained in Annex A 4 does not involve likelihood, but only potential:

“(…) or the evaluation of the potential for adverse effects on human or animal

health arising from the presence of additives, contaminants, toxins or

disease-causing organisms in food, beverages or feedstuffs.” (Underlining not in the

original text)

The scope of application of this type of risk assessment is limited to health concerns caused by certain substances in products that are ingested (food, beverages and feedstuff).

The test for this risk assessment is apparently simpler than the previous one, since it is a two-step process only:

“a risk assessment carried out in accordance with the SPS Agreement should (i)

identify the adverse effects on human health (if any) arising from the presence of

the hormones at issue when used as growth promoters in meat or meat products,

and (ii) if any such adverse effects exist, evaluate the potential or probability of

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