WTO Dispute Settlement and the SPS Agreement

1
WTO Dispute Settlement and the SPS Agreement
2
Dispute settlement

• WTO unified dispute settlement procedures
• GATT XXII Consultation
• GATT XXIII Nullification or impairment
• Memorandum of understanding
• Possibility technical experts (group)
• Right to resort to dispute settlement mechanisms
  of other IO

• Article 11

3
SPS disputes

• Korean product inspection (US)
• Korean shelf-life requirements (US)
• Australian ban on salmon imports (Canada and US)
• Korean bottled water (Canada)
• EC ban on use of hormones in beef (US and Canada)

DS 3 / 41 5 18 / 21 20 26 / 48
4
SPS disputes
DS 76 100 133 137 144

• Japan varietal testing requirement (US)
• US poultry requirements (EC)
• Slovakia BSE-restrictions (Switz.)
• EC measure on pine wood nematodes (Canada)
• US state restrictions on Canadian trucks (Canada)

5
Expert Advice

• Legal basis Article 11.2 of the SPS Agreement
• ... a panel should seek advice from experts
  chosen in consultation with the parties ...
  emphasis added
• First submissions Panel determines nature of
  advice
• Suggested names from three sisters and Parties
• Parties may object, but Panel decides
• Panel sends questions to experts (Parties may
  comment)
• Meeting with experts

6
Expert Advice

• Expert advice sought in all three cases
• Hormones
• hormones and veterinary drugs, cancer specialist
  and Codex (6 experts)
• Salmon
• fish diseases, risk assessment, OIE (4 experts)
• Varietals
• entomologist, fumigation experts (3 experts)

7
Hormones

• The Panel process ...
• May 1996 Established
• August 1997 Panel Report
• January 1998 Appellate Body Report
• 13 February 1998 Reports adopted by DSB
• 29 May 1998 Arbitration on reasonable period
  of time
• 15 months 13 Feb 1998 ? 13 May 1999
• 12 July 1999 Arbitration on level of
  nullification or impairment suffered
• US116 million per year
• CAN11.3 million per year

8
Hormones - legal issues in dispute

• International standards (3.1 / 3.3) not based
  on Codex standards (5 of 6) not justified under
  3.3
• Risk assessment no risk assessment available
  scientific evidence showed no risk
• Consistency compared with endogenously
  occurring natural hormones veterinary use
  other veterinary drugs (Carbadox)
• Conclusion
• Panel finding against the EC
• AB upheld Panels finding on risk assessment

9
Hormones

• Current situation
• DSB Meeting of 26 July 1999 authorizes
  retaliation
• US and Canada have imposed retaliatory surcharges
  of 100 tariffs on imports from EU.
• EU working on more scientific studiesFound
  Oestradiol carcinogenic Commission proposed
  permanent ban others provisional ban maintained
• Ongoing consultations US/EU?

10
Salmon - The Panel process

• April 1997 Established
• June 1998 Panel report out
• October 1998 Appellate Body report out
• 6 November 1998 DSB adopts both reports
• 23 February 1999 Arbitration on reasonable
  period of time circulated (Requested by Canada
  on 4 January 1999)
• 8 months from 6 Nov 1998 ? 6 July1999.
• 3 August 1999 Canada requests original Panel to
  rule on consistency of implementation (Article
  21.5 of DSU)

11
Salmon - legal issues in dispute

• Risk assessment (5.1, 5.2) other salmon
  heat-treatment not based on risk assessment
• Consistency (5.5) herring for bait / live
  ornamental fish
• Least trade-restrictive measure (5.6) less
  trade restrictive measure did exist
• Conclusion
• Panel finding against Australia
• AB finding against Australia on 5.1 and 5.5

12
Salmon - current situation

• 18/2/2000 Panel report on implementation
  circulated to Members.
• Arbitration on level of suspension - DSU 22.6
• On 15/7/1999, Canada announced intention to
  impose 100 duties on list of products as
  retaliation
• On 3 August 1999, Australia responded requesting
  arbitration on the level of suspension
• On 18 May 2000, Australia Canada announced
  mutually agreed solution

13
Varietals

• US efforts to export fresh fruits (cherries,
  apples, nectarines, walnuts, etc.) to Japan since
  1970s
• Japan requires re-testing of each variety to
  ensure effectiveness of fumigation against
  coddling moth
• Panel established November 1997, reports October
  1998
• Violations found and sustained by AB
• Japan and US agreed on period for implementation
  (end 1999)
• Japan has announced implementation measures

14
Varietals -- the Panel process

• November 1997 Established
• October 1998 Panel report out
• February 1999 Appellate Body report out
• 19 March 1999 DSB adopted both reports
• Agreement between parties on reasonable period
  of time
• 9 months and 12 days ? 31 Dec 1999.

15
Varietals - legal issues in dispute

• Not in dispute risks from codling moth to
  Japan basis for import prohibition itself
  efficacy of treatment
• Sufficient scientific evidence (Art. 2) risk
  assessment (Art. 5.1 and 5.2) not examined
  further testing of additional varieties expert
  opinions
• Provisional measure (Art. 5.7) need to seek
  additional data reasonable period of time
• Less trade restrictive measure (Art. 5.6)
  sorption test / product-by-product
• Transparency not published / notified

16
Varietals - current situation
31 Dec 1999 Japan abolishes varietal
testing requirement, new testing requirements to
be developed in consultation with US. Since than
Japan reports that mutually satisfactory
solution is close