Has the appellate body erred? An appraisal and criticism of the ruling in the wto hormones case

Journal of International Economic Law

Volumn 2, Issue 4, 1999, Pages 603-639

  Quick, Reinhard ^b   Blüthner, Andreas ^a  

^a BASF SE   (Germany)

^b Verband Chemischen Industrie eV V   (Belgium)

Author keywords

[No Author keywords available]

Indexed keywords

EID: 0344949044     PISSN: 13693034     EISSN: None     Source Type: Journal    
DOI: 10.1093/jiel/2.4.603     Document Type: Article

References (190)

1. The Appellate Body is hereafter cited as AB; The AB Report on EC - Measures Concerning Meat and Meat Products (Hormones), WT/DS26/AB/R, WT/DS48/AB/R (16 January 1998) is hereafter cited as AB Report; the complaints brought by the US and Canada resulted in the Panel Report WT/DS26/R/USA (25 September 1997), hereafter cited as US Panel Report, and the Panel Report WT/DS48/R/CAN (25 September 1997), hereafter cited as Canada Panel Report; all reports available at http://www.wto.org/wto/dispute/distab.htm.
2. For the text of the SPS Agreement see GATT Secretariat, The Results of the Uruguay Round of Multilateral Trade Negotiations, the Legal Texts (Geneva 1994), 69-84, reprinted in Official Journal of the European Community (hereafter cited as OJ) No L 336 (1994) at 40-9. For further research on the SPS Agreement see M. D. Carter, 'Selling Science under the SPS Agreement: Accommodating Consumer Preference in the Growth Hormones Controversy', 6 Minn J. Global Trade (1997), 625-56; D. E. Macneil 'The First Case under the WTO's Sanitary and Phytosanitary Agreement: the European Union's Hormone Ban', 39 Va J Int'l L (1998), 89-134; R. M. Millimet, 'The Impact of the Uruguay Round and the Agreement on Sanitary and Phytosanitary Measures: An Analysis of the US Ban on DDT', 5 Transnat'l L & Contemp Probs (1995), 449-91; for the legal situation with respect to GATT see J. Cromer, 'Sanitary and Phytosanitary Measures: What They Could Mean for Health and Safety Regulations under GATT', 36 Harv Int'l LJ (1995), 557-69; for NAFTA see W. A. Kerr, 'Removing Health, Sanitary and Technical Non-Tariff Barriers in NAFTA', 31 J World Trade 5 (1997), 57-73; for an example of the implementation of the SPS Agreement in national law see Y. Shin, 'An Analysis of the WTO Agreement on the Application of Sanitary and Phytosanitary Measures and Its Implementation in Korea', 32 J World Trade 1 (1998), 85-119.
3. For the text of the SPS Agreement see GATT Secretariat, The Results of the Uruguay Round of Multilateral Trade Negotiations, the Legal Texts (Geneva 1994), 69-84, reprinted in Official Journal of the European Community (hereafter cited as OJ) No L 336 (1994) at 40-9. For further research on the SPS Agreement see M. D. Carter, 'Selling Science under the SPS Agreement: Accommodating Consumer Preference in the Growth Hormones Controversy', 6 Minn J. Global Trade (1997), 625-56; D. E. Macneil 'The First Case under the WTO's Sanitary and Phytosanitary Agreement: the European Union's Hormone Ban', 39 Va J Int'l L (1998), 89-134; R. M. Millimet, 'The Impact of the Uruguay Round and the Agreement on Sanitary and Phytosanitary Measures: An Analysis of the US Ban on DDT', 5 Transnat'l L & Contemp Probs (1995), 449-91; for the legal situation with respect to GATT see J. Cromer, 'Sanitary and Phytosanitary Measures: What They Could Mean for Health and Safety Regulations under GATT', 36 Harv Int'l LJ (1995), 557-69; for NAFTA see W. A. Kerr, 'Removing Health, Sanitary and Technical Non-Tariff Barriers in NAFTA', 31 J World Trade 5 (1997), 57-73; for an example of the implementation of the SPS Agreement in national law see Y. Shin, 'An Analysis of the WTO Agreement on the Application of Sanitary and Phytosanitary Measures and Its Implementation in Korea', 32 J World Trade 1 (1998), 85-119.
4. For the text of the SPS Agreement see GATT Secretariat, The Results of the Uruguay Round of Multilateral Trade Negotiations, the Legal Texts (Geneva 1994), 69-84, reprinted in Official Journal of the European Community (hereafter cited as OJ) No L 336 (1994) at 40-9. For further research on the SPS Agreement see M. D. Carter, 'Selling Science under the SPS Agreement: Accommodating Consumer Preference in the Growth Hormones Controversy', 6 Minn J. Global Trade (1997), 625-56; D. E. Macneil 'The First Case under the WTO's Sanitary and Phytosanitary Agreement: the European Union's Hormone Ban', 39 Va J Int'l L (1998), 89-134; R. M. Millimet, 'The Impact of the Uruguay Round and the Agreement on Sanitary and Phytosanitary Measures: An Analysis of the US Ban on DDT', 5 Transnat'l L & Contemp Probs (1995), 449-91; for the legal situation with respect to GATT see J. Cromer, 'Sanitary and Phytosanitary Measures: What They Could Mean for Health and Safety Regulations under GATT', 36 Harv Int'l LJ (1995), 557-69; for NAFTA see W. A. Kerr, 'Removing Health, Sanitary and Technical Non-Tariff Barriers in NAFTA', 31 J World Trade 5 (1997), 57-73; for an example of the implementation of the SPS Agreement in national law see Y. Shin, 'An Analysis of the WTO Agreement on the Application of Sanitary and Phytosanitary Measures and Its Implementation in Korea', 32 J World Trade 1 (1998), 85-119.
5. For the text of the SPS Agreement see GATT Secretariat, The Results of the Uruguay Round of Multilateral Trade Negotiations, the Legal Texts (Geneva 1994), 69-84, reprinted in Official Journal of the European Community (hereafter cited as OJ) No L 336 (1994) at 40-9. For further research on the SPS Agreement see M. D. Carter, 'Selling Science under the SPS Agreement: Accommodating Consumer Preference in the Growth Hormones Controversy', 6 Minn J. Global Trade (1997), 625-56; D. E. Macneil 'The First Case under the WTO's Sanitary and Phytosanitary Agreement: the European Union's Hormone Ban', 39 Va J Int'l L (1998), 89-134; R. M. Millimet, 'The Impact of the Uruguay Round and the Agreement on Sanitary and Phytosanitary Measures: An Analysis of the US Ban on DDT', 5 Transnat'l L & Contemp Probs (1995), 449-91; for the legal situation with respect to GATT see J. Cromer, 'Sanitary and Phytosanitary Measures: What They Could Mean for Health and Safety Regulations under GATT', 36 Harv Int'l LJ (1995), 557-69; for NAFTA see W. A. Kerr, 'Removing Health, Sanitary and Technical Non-Tariff Barriers in NAFTA', 31 J World Trade 5 (1997), 57-73; for an example of the implementation of the SPS Agreement in national law see Y. Shin, 'An Analysis of the WTO Agreement on the Application of Sanitary and Phytosanitary Measures and Its Implementation in Korea', 32 J World Trade 1 (1998), 85-119.
6. For the text of the SPS Agreement see GATT Secretariat, The Results of the Uruguay Round of Multilateral Trade Negotiations, the Legal Texts (Geneva 1994), 69-84, reprinted in Official Journal of the European Community (hereafter cited as OJ) No L 336 (1994) at 40-9. For further research on the SPS Agreement see M. D. Carter, 'Selling Science under the SPS Agreement: Accommodating Consumer Preference in the Growth Hormones Controversy', 6 Minn J. Global Trade (1997), 625-56; D. E. Macneil 'The First Case under the WTO's Sanitary and Phytosanitary Agreement: the European Union's Hormone Ban', 39 Va J Int'l L (1998), 89-134; R. M. Millimet, 'The Impact of the Uruguay Round and the Agreement on Sanitary and Phytosanitary Measures: An Analysis of the US Ban on DDT', 5 Transnat'l L & Contemp Probs (1995), 449-91; for the legal situation with respect to GATT see J. Cromer, 'Sanitary and Phytosanitary Measures: What They Could Mean for Health and Safety Regulations under GATT', 36 Harv Int'l LJ (1995), 557-69; for NAFTA see W. A. Kerr, 'Removing Health, Sanitary and Technical Non-Tariff Barriers in NAFTA', 31 J World Trade 5 (1997), 57-73; for an example of the implementation of the SPS Agreement in national law see Y. Shin, 'An Analysis of the WTO Agreement on the Application of Sanitary and Phytosanitary Measures and Its Implementation in Korea', 32 J World Trade 1 (1998), 85-119.
7. For the text of the SPS Agreement see GATT Secretariat, The Results of the Uruguay Round of Multilateral Trade Negotiations, the Legal Texts (Geneva 1994), 69-84, reprinted in Official Journal of the European Community (hereafter cited as OJ) No L 336 (1994) at 40-9. For further research on the SPS Agreement see M. D. Carter, 'Selling Science under the SPS Agreement: Accommodating Consumer Preference in the Growth Hormones Controversy', 6 Minn J. Global Trade (1997), 625-56; D. E. Macneil 'The First Case under the WTO's Sanitary and Phytosanitary Agreement: the European Union's Hormone Ban', 39 Va J Int'l L (1998), 89-134; R. M. Millimet, 'The Impact of the Uruguay Round and the Agreement on Sanitary and Phytosanitary Measures: An Analysis of the US Ban on DDT', 5 Transnat'l L & Contemp Probs (1995), 449-91; for the legal situation with respect to GATT see J. Cromer, 'Sanitary and Phytosanitary Measures: What They Could Mean for Health and Safety Regulations under GATT', 36 Harv Int'l LJ (1995), 557-69; for NAFTA see W. A. Kerr, 'Removing Health, Sanitary and Technical Non-Tariff Barriers in NAFTA', 31 J World Trade 5 (1997), 57-73; for an example of the implementation of the SPS Agreement in national law see Y. Shin, 'An Analysis of the WTO Agreement on the Application of Sanitary and Phytosanitary Measures and Its Implementation in Korea', 32 J World Trade 1 (1998), 85-119.
8. For the text of the SPS Agreement see GATT Secretariat, The Results of the Uruguay Round of Multilateral Trade Negotiations, the Legal Texts (Geneva 1994), 69-84, reprinted in Official Journal of the European Community (hereafter cited as OJ) No L 336 (1994) at 40-9. For further research on the SPS Agreement see M. D. Carter, 'Selling Science under the SPS Agreement: Accommodating Consumer Preference in the Growth Hormones Controversy', 6 Minn J. Global Trade (1997), 625-56; D. E. Macneil 'The First Case under the WTO's Sanitary and Phytosanitary Agreement: the European Union's Hormone Ban', 39 Va J Int'l L (1998), 89-134; R. M. Millimet, 'The Impact of the Uruguay Round and the Agreement on Sanitary and Phytosanitary Measures: An Analysis of the US Ban on DDT', 5 Transnat'l L & Contemp Probs (1995), 449-91; for the legal situation with respect to GATT see J. Cromer, 'Sanitary and Phytosanitary Measures: What They Could Mean for Health and Safety Regulations under GATT', 36 Harv Int'l LJ (1995), 557-69; for NAFTA see W. A. Kerr, 'Removing Health, Sanitary and Technical Non-Tariff Barriers in NAFTA', 31 J World Trade 5 (1997), 57-73; for an example of the implementation of the SPS Agreement in national law see Y. Shin, 'An Analysis of the WTO Agreement on the Application of Sanitary and Phytosanitary Measures and Its Implementation in Korea', 32 J World Trade 1 (1998), 85-119.
9. For the text of the SPS Agreement see GATT Secretariat, The Results of the Uruguay Round of Multilateral Trade Negotiations, the Legal Texts (Geneva 1994), 69-84, reprinted in Official Journal of the European Community (hereafter cited as OJ) No L 336 (1994) at 40-9. For further research on the SPS Agreement see M. D. Carter, 'Selling Science under the SPS Agreement: Accommodating Consumer Preference in the Growth Hormones Controversy', 6 Minn J. Global Trade (1997), 625-56; D. E. Macneil 'The First Case under the WTO's Sanitary and Phytosanitary Agreement: the European Union's Hormone Ban', 39 Va J Int'l L (1998), 89-134; R. M. Millimet, 'The Impact of the Uruguay Round and the Agreement on Sanitary and Phytosanitary Measures: An Analysis of the US Ban on DDT', 5 Transnat'l L & Contemp Probs (1995), 449-91; for the legal situation with respect to GATT see J. Cromer, 'Sanitary and Phytosanitary Measures: What They Could Mean for Health and Safety Regulations under GATT', 36 Harv Int'l LJ (1995), 557-69; for NAFTA see W. A. Kerr, 'Removing Health, Sanitary and Technical Non-Tariff Barriers in NAFTA', 31 J World Trade 5 (1997), 57-73; for an example of the implementation of the SPS Agreement in national law see Y. Shin, 'An Analysis of the WTO Agreement on the Application of Sanitary and Phytosanitary Measures and Its Implementation in Korea', 32 J World Trade 1 (1998), 85-119.
10. As the AB noted with respect to Article 3.3, see AB Report, para 175.
11. See for instance Frankfurter Allgemeine Zeitung (FAZ), 'Über den Agrarhandel drohen neue Streitigkeiten, Borchert stellt internationales Regelwerk in Frage, Minister verknüpfen Agrarreform mit neuer WTO-Runde', 10 September 1997, at 18.
12. See for example L. Hughes, 'Limiting the Jurisdiction of Dispute Settlement Panels: The WTO Appellate Body Beef Hormone Decision', 10 Geo Int'l Envtl L Rev (1998), 915-42; P. Pescatore, 'Free World Trade and the European Union - The Reconciliation of Interests and the Revision of Dispute Resolution Procedures in the Framework of the WTO', Paper presented at a conference of The Academy of European Law, Trier, in co-operation with the Legal Service of the European Commission, Brussels, 11-12 June 1998, at 25.
13. See for example L. Hughes, 'Limiting the Jurisdiction of Dispute Settlement Panels: The WTO Appellate Body Beef Hormone Decision', 10 Geo Int'l Envtl L Rev (1998), 915-42; P. Pescatore, 'Free World Trade and the European Union - The Reconciliation of Interests and the Revision of Dispute Resolution Procedures in the Framework of the WTO', Paper presented at a conference of The Academy of European Law, Trier, in co-operation with the Legal Service of the European Commission, Brussels, 11-12 June 1998, at 25.
14. The reasonable period of time to implement the Hormones ruling ended on 13 May 1999. In February 1999, the Commission adopted a Communication addressed to the Council and the European Parliament in which it outlines the possible implementation measures; see COM (1999) 81 final of 10 February 1999.
15. See Financial Times, 13 May 1999, at 8, id 14 May 1999, at 6.
16. See Financial Times, 13 May 1999, at 8, id 14 May 1999, at 6.
17. The EC position could be considered as suggesting that the United States and Canada knowingly accept a higher cancer risk for their population when allowing hormones for growth-promotion purposes. We consider that the United States and Canada would strongly oppose such an attack and say that the US/Canadian SPS measures are perfectly justified.
18. See J. McDonald, 'Big Beef Up or Consumer Health Threat?: the WTO Food Safety Agreement, Bovine Growth Hormone and the Precautionary Principle', 15 Envtl and Plan LJ (1998), 115-16.
19. See Sierra Club Legal Defence Fund, Comments on Behalf of Cancer Prevention Coalition. Public Citizen, and Institute for Trade and Agricultural Policy, 4 October 1996, at 4-5.
20. See for example 'Is the Veal Real?' Newsweek, 13 October 1980, at 16; 'Oestrogen-Affaire', Der Spiegel, 10 November 1980, at 130-4; 'Tier-Droge auf dem Schwarzmarkt', Der Spiegel, 27 October 1980, at 112-26.
21. See for example 'Is the Veal Real?' Newsweek, 13 October 1980, at 16; 'Oestrogen-Affaire', Der Spiegel, 10 November 1980, at 130-4; 'Tier-Droge auf dem Schwarzmarkt', Der Spiegel, 27 October 1980, at 112-26.
22. See for example 'Is the Veal Real?' Newsweek, 13 October 1980, at 16; 'Oestrogen-Affaire', Der Spiegel, 10 November 1980, at 130-4; 'Tier-Droge auf dem Schwarzmarkt', Der Spiegel, 27 October 1980, at 112-26.
23. Council Directive 81/602/EEC of 31 July 1981; OJ, No L 222, 7 August 1981, at 32; this general ban contains two exemptions: The first one allowed the application of those substances for zootechnical or therapeutic purposes. The second exemption relates to the three natural hormones oestradiol-17, testosterone, progesterone, and the two synthetic hormones trenbolene acetate and zeranol if allowed under the regulations of the member states of the EEC. The sixth hormone involved in the Hormones Case, melengestrol acetate (MGA), was covered by the general prohibition and was not included in any exception.
24. Council Directive 85/358/EEC of 31 December 1985, OJ No L 382, 31 December 1985, at 228;. For further research on this EC Hormone Judgment of 23 February 1988, Case 68/86, ECR 855; see R. Barents, 'Hormones and the Growth of Community Agricultural Law: Some Reflections on the Hormone Judgment (Case 68/86)', Legal Issues of European Integration (1988), 1-19; and the relating interpretative note on this case by V. Götz, 23 Europarecht (1988), 298-301.
25. Council Directive 85/358/EEC of 31 December 1985, OJ No L 382, 31 December 1985, at 228;. For further research on this EC Hormone Judgment of 23 February 1988, Case 68/86, ECR 855; see R. Barents, 'Hormones and the Growth of Community Agricultural Law: Some Reflections on the Hormone Judgment (Case 68/86)', Legal Issues of European Integration (1988), 1-19; and the relating interpretative note on this case by V. Götz, 23 Europarecht (1988), 298-301.
26. Council Directive 88/146/EEC of 7 March 1988, OJ No L 70, 16 March 1988, at 16. This directive applied to all the five hormones oestradiol-17, testosterone, progesterone, trenbolene acetate, and zeranol (melengestrol acetate (MGA) was not covered by this directive because its use was previously banned) and prohibited both the intra-EEC trade and the importation of meat from animals treated with those substances. Council Directive 88/299/EEC of 17 May 1988, OJ No L 128, 21 May 1988, at 36, contained the prohibition of trade and set out the conditions for the exceptions, like meat and meat products derived from animals that were treated with hormones for therapeutical or zoological purposes. The three Directives 81/602, 88/146, and 88/299 were replaced effective as of 1 July 1997 by a new Council Directive 96/22/EC of 29 April 1996, OJ No L 125, 23 May 1996, at 3. This directive maintains the conditions of the import ban as an essential point.
27. Decision of the Commission 86/189/EEC of 17 February 1986, OJ No L 140, 27 May 1986, at 30.
28. For more research on the early stage of the hormone dispute under GATT see W. Meng, 'The Hormone Conflict between the EEC and the United States within the Context of GATT', 11 Mich J Int'l L (1990), 819-39.
29. See US Panel Report, para 2.34. For an interpretation of the scope of application of the TBT-Code with respect of PPMs see S. W. Chang, 'GATTing a Green Trade Barrier: Eco-Labelling and the WTO Agreement on Technical Barriers to Trade', 31 J World Trade 1 (1997), 137, 140-7.
30. For additional research on the WTO Dispute Settlement System see E.-U. Petersmann, The GATT/WTO Dispute Settlement System (London/The Hague/Boston 1997), ch 5 at 177; see also P. Pescatore, W. J. Davey, A. F. Lowenfeld, Handbook of WTO, GATT Dispute Settlement (NY: Ardsley- on-Hudson 1992).
31. For additional research on the WTO Dispute Settlement System see E.-U. Petersmann, The GATT/WTO Dispute Settlement System (London/The Hague/Boston 1997), ch 5 at 177; see also P. Pescatore, W. J. Davey, A. F. Lowenfeld, Handbook of WTO, GATT Dispute Settlement (NY: Ardsley-on-Hudson 1992).
32. Australia, New Zealand, and Norway participated in the panel proceedings as third parties.
33. Hereafter cited as DSB.
34. US Panel Report, para 9.1; Canada Panel Report, para 9.1.
35. AB Report, para 253.
36. Id, para 97.
37. US Panel Report, para 8.54; Canada Panel Report, para 8.57.
38. US Panel Report, paras 8.86-7; Canada Panel Report, paras 8.89-90.
39. AB Report, para 102.
40. See below ch 3.1.
41. A remand process has been discussed in the literature, see D. Palmeter, 'The Appellate Body Needs Remand Authority', 32 J World Trade 1 (1998), 41-4.
42. See however Art. 22.6 DSU which extends the role of the original panel in cases of arbitration. Could one conclude from this that the AB, even today, could remand a case to the lower panel? The issue of remand is on the agenda of the review of the DSU currently undertaken by the WTO.
43. See also AB Report n 71.
44. It is interesting to note that Canada in its arguments as appellee states that should the AB reverse or modify the Panel's findings on the burden of proof, Canada submits that in any event, Canada has established a prima facie case of violation, see AB Report, para 59. The United States has not said anything on this issue in its arguments as appellee.
45. AB Report, para 132. See also the arguments put forward by the United States as appellee, AB Report, para 44, which read: 'The United States submits that, according to Art. 17.6 of the DSU, factual findings are clearly beyond review by the Appellate Body.'
46. See above n 23.
47. This situation is not unique to the Hormones Dispute. In the Turtle Case the AB had to deal with a similar situation. In this case the Panel only looked at the chapeau of GATT Art. XX, without having established whether the measure at stake was covered by one of the paragraphs of GATT Art. XX, and considered the US measure not to be covered by the chapeau of GATT Art. XX. The AB reversed this ruling, but then had to determine whether one of the paragraphs applied. Here the AB at least recognized the problem by saying In doing this, we are fully aware of our jurisdiction and mandate under An. 17 of the DSU. The AB does however not address the issue that it acts like a panel in doing this nor does it develop any reasoning why it considers that this behaviour is covered by the DSU. The AB only cites other cases where it has acted similarly. See Appellate Body Report on United States - Import Prohibition of Certain Shrimp and Shrimp Products, WT/DS58/AB/R, para 152 (12 October 1998), hereafter cited as Turtle Case. For a criticism of this ruling see R. Howse, 'The Turtles Panel: Another Environmental Disaster in Geneva', 32 J World Trade 5 (1998), 73-100.
48. This situation is not unique to the Hormones Dispute. In the Turtle Case the AB had to deal with a similar situation. In this case the Panel only looked at the chapeau of GATT Art. XX, without having established whether the measure at stake was covered by one of the paragraphs of GATT Art. XX, and considered the US measure not to be covered by the chapeau of GATT Art. XX. The AB reversed this ruling, but then had to determine whether one of the paragraphs applied. Here the AB at least recognized the problem by saying In doing this, we are fully aware of our jurisdiction and mandate under An. 17 of the DSU. The AB does however not address the issue that it acts like a panel in doing this nor does it develop any reasoning why it considers that this behaviour is covered by the DSU. The AB only cites other cases where it has acted similarly. See Appellate Body Report on United States - Import Prohibition of Certain Shrimp and Shrimp Products, WT/DS58/AB/R, para 152 (12 October 1998), hereafter cited as Turtle Case. For a criticism of this ruling see R. Howse, 'The Turtles Panel: Another Environmental Disaster in Geneva', 32 J World Trade 5 (1998), 73-100.
49. This situation is not unique to the Hormones Dispute. In the Turtle Case the AB had to deal with a similar situation. In this case the Panel only looked at the chapeau of GATT Art. XX, without having established whether the measure at stake was covered by one of the paragraphs of GATT Art. XX, and considered the US measure not to be covered by the chapeau of GATT Art. XX. The AB reversed this ruling, but then had to determine whether one of the paragraphs applied. Here the AB at least recognized the problem by saying In doing this, we are fully aware of our jurisdiction and mandate under An. 17 of the DSU. The AB does however not address the issue that it acts like a panel in doing this nor does it develop any reasoning why it considers that this behaviour is covered by the DSU. The AB only cites other cases where it has acted similarly. See Appellate Body Report on United States - Import Prohibition of Certain Shrimp and Shrimp Products, WT/DS58/AB/R, para 152 (12 October 1998), hereafter cited as Turtle Case. For a criticism of this ruling see R. Howse, 'The Turtles Panel: Another Environmental Disaster in Geneva', 32 J World Trade 5 (1998), 73-100.
50. Pescatore, above n 5, at 14, considers the AB's statement in n 180 a surprising result . . ., devoid of any reasoning, a novel way of solving a legal problem of such magnitude. Also Petersmann questions how far the AB can creatively interpret Arts. 17.6 and 17.12 DSU, see Petersmann, above, n 18, at 190-1. For a warning against judicial activism in the WTO, see M. Bronckers 'Better Rules for a New Millennium - A Warning Against Undemocratic Developments in the WTO' 2 JIEL 547 (1999).
51. Pescatore, above n 5, at 14, considers the AB's statement in n 180 a surprising result . . ., devoid of any reasoning, a novel way of solving a legal problem of such magnitude. Also Petersmann questions how far the AB can creatively interpret Arts. 17.6 and 17.12 DSU, see Petersmann, above, n 18, at 190-1. For a warning against judicial activism in the WTO, see M. Bronckers 'Better Rules for a New Millennium - A Warning Against Undemocratic Developments in the WTO' 2 JIEL 547 (1999).
52. Pescatore, above n 5, at 14, considers the AB's statement in n 180 a surprising result . . ., devoid of any reasoning, a novel way of solving a legal problem of such magnitude. Also Petersmann questions how far the AB can creatively interpret Arts. 17.6 and 17.12 DSU, see Petersmann, above, n 18, at 190-1. For a warning against judicial activism in the WTO, see M. Bronckers 'Better Rules for a New Millennium - A Warning Against Undemocratic Developments in the WTO' 2 JIEL 547 (1999).
53. US Panel Report, paras 8.80-6, and Canada Panel Report, paras 8.83-9.
54. US Panel Report, paras 8.81, 8.86, and Canada Panel Report, paras 8.84, 8.89, see also above ch 2.
55. US Panel Report, paras 8.72, 8.73, and Canada Panel Report, paras 8.75, 8.76.
56. For the interpretation of this requirement see US Panel Report, paras 8.72-8.74, and Canada Panel Report, paras 8.75-8,77.
57. US Panel Report, para 8.87, and Canada Panel Report, para 8.90, see also above ch 2.
58. See below ch 3.
59. AB Report, para 165.
60. Id, para 162.
61. Id, para 163.
62. Id, para 164.
63. Id, para 104.
64. Id.
65. See above, ch 2.
66. Para 6 of the SPS preamble reads: Desiring to further the use of sanitary and phytosanitary measures between Members, on the basis of international standards, guidelines and recommendations developed by international organisations (. . .) without requiring Members to change their appropriate level of protection of human, animal or plant life or health.
67. D. Eckert, 'Die neue Welthandelsordnung und ihre Bedeutung für den internationalen Verkehr mit Lebensmitteln', 22 Zeitschrift für das gesamte Lebensmittelrecht (1995), 363, 382.
68. AB Report, para 165.
69. See Eckert, above n 50, at 381; M. Hilf and B. Eggers, 'Der WTO-Panelbericht im EG/USA- Hormonstreit', 8 Europäische Zeitschrift für Wirtschaftsrecht (1997), 559, 564; M. Ritter 'Das WTO-Übereinkommen und seine Auswirkungen auf das Deutsche und Europäische Lebensmittelrecht', 8 Europäische Zeitschrift für Wirtschaftsrecht (1997), 133, 135.
70. See Eckert, above n 50, at 381; M. Hilf and B. Eggers, 'Der WTO-Panelbericht im EG/USA-Hormonstreit', 8 Europäische Zeitschrift für Wirtschaftsrecht (1997), 559, 564; M. Ritter 'Das WTO-Übereinkommen und seine Auswirkungen auf das Deutsche und Europäische Lebensmittelrecht', 8 Europäische Zeitschrift für Wirtschaftsrecht (1997), 133, 135.
71. See Eckert, above n 50, at 381; M. Hilf and B. Eggers, 'Der WTO-Panelbericht im EG/USA- Hormonstreit', 8 Europäische Zeitschrift für Wirtschaftsrecht (1997), 559, 564; M. Ritter 'Das WTO-Übereinkommen und seine Auswirkungen auf das Deutsche und Europäische Lebensmittelrecht', 8 Europäische Zeitschrift für Wirtschaftsrecht (1997), 133, 135.
72. Food and Agricultural Organization (FAO) and World Health Organization (WHO). For additional information see the FAO Web site at http://www.fao.org, and the WHO Web site at http://www.who.int.
73. AB Report, para 165.
74. Ritter, above n 52, at 135.
75. Hilf and Eggers, above n 52, at 564; Ritter, above n 52, at 135.
76. Hilf and Eggers, above n 52, at 564; Ritter, above n 52, at 135.
77. Defined in n 2 of the SPS Agreement.
78. US Panel Report, para 8.80, and Canada Panel Report, para 8.83.
79. US Panel Report, para 8.80, and Canada Panel Report, para 8.83.
80. US Panel Report, para 8.83, and Canada Panel Report, para 8.86.
81. AB Report, para 175.
82. Id, para 175.
83. Id, para 176.
84. Id, para 177.
85. US Panel Report, para 8.93, and Canada Panel Report, para 8.96.
86. AB Report, para 180, confirmed by AB Report on Japan - Measures Affecting Agricultural Products WT/DS76/AB/R, 22 February 1999, paras 75-76, hereafter cited as Japan Agriculture Case.
87. AB Report, para 180, confirmed by AB Report on Japan - Measures Affecting Agricultural Products WT/DS76/AB/R, 22 February 1999, paras 75-76, hereafter cited as Japan Agriculture Case.
88. Id, para 2(a).
89. US Panel Report, para 8.137, and Canada Panel Report, para 8.140.
90. US Panel Report, para 8.113, and Canada Panel Report, para 8.116.
91. US Panel Report, para 8.113, and Canada Panel Report, para 8.116.
92. US Panel Report, para 8.115, and Canada Panel Report, para 8.118.
93. US Panel Report, paras 8.94, 8.109, 8.114, and Canada Panel Report, paras 8.97, 8.112, 8.117.
94. US Panel Report, paras 8.107, 8.110, and Canada Panel Report, paras 8.110, 8.113.
95. US Panel Report, para 8.94, and Canada Panel Report, para 8.97.
96. US Panel Report, para 8.160, and Canada Panel Report, para 8.163.
97. US Panel Report, para 8.160, and Canada Panel Report, para 8.163.
98. AB Report, para 181.
99. Id; although not explicitly mentioning the AB refers to Art. 31 of the Vienna Convention on the Law of the Treaties determining, that for an interpretation the wording of a treaty must be taken as a source of prime importance; as recently stated in Turtle Case, above at n 34, para 114, this rule of interpretation is also incorporated in Art. 3.2 DSU, referring to the 'customary rules of interpretation of public international law'.
100. AB Report, para 208 reads: In the absence of any other documentation, we find that the European Community did not actually proceed to an assessment, within the meaning of Art. 5.1 and 5.2, of the risks arising from the failure of observance of good veterinary practice combined with problems of control of the use of hormones for growth promotion purposes. The absence of such a risk assessment, when considered in conjunction with the conclusion actually reached by most, if not all, of the scientific studies relating to the other aspects of risk noted earlier, leads us to the conclusion that no risk assessment that reasonably supports or warrants the import prohibition embodied in the EC Directives was furnished to the Panel. We affirm, therefore, that ultimate conclusion of the Panel that the EC import prohibition is not based on a risk assessment within the meaning of Art. 5.1 and 5.2 of the SPS Agreement and is, therefore, inconsistent with the requirements of Art. 5.1.
101. US Panel Report, para 8.113; Canada Panel Report, para 8.116.
102. AB Report, para 192.
103. AB Report, para 193.
104. Id.
105. The AB for example says at para 205 that a risk assessment does not have to come to a monolithic conclusion and does not necessarily have to be based on the mainstream scientific opinion, therefore allowing divergent opinions coming from qualified and respected sources to be taken into account in the risk-assessment process; see AB Report, para 194. Furthermore, the AB considers that Art. 5.2 SPS permits to be taken into account risks arising from control issues, such as the problems linked with the control of the correct administration of the hormones on the basis of good manufacturing practices.
106. Art. 5.2 SPS says: 'In the assessment of risks, Members shall take into account available scientific evidence; relevant processes and production methods; relevant inspection sampling and testing methods; prevalence of specific diseases or pests; existence of pest- or disease-free areas; relevant ecological and environmental conditions, and quarantine or other treatment'
107. AB Report, para 187.
108. Id.
109. AB Report, para 194.
110. Id, para 187.
111. See J. Croome, Reshaping the World Trading System (WTO: Geneva 1995), 236; J. J. Schott, The Uruguay Round, An Assessment (Washington DC 1994), 52.
112. See J. Croome, Reshaping the World Trading System (WTO: Geneva 1995), 236; J. J. Schott, The Uruguay Round, An Assessment (Washington DC 1994), 52.
113. Both AB and Panel come to the conclusion that the first part of Art. 5.5 SPS contains a goal to be achieved in the future and does not establish any legal obligation, AB Report, para 213; US Panel Report, para 8.169 and Canada Panel Report, para 8.172.
114. See AB Report, para 240.
115. AB Report, para 214; US Panel Report, para 8.174, and Canada Panel Report, para 8.177.
116. US Panel Report, para 8.176, and Canada Panel Report, para 8.179.
117. US Panel Report, paras 8.192-245, and Canada Panel Report, paras 8.195-248.
118. US Panel Report, para 8.206 and Canada Panel Report, para 8.209.
119. AB Report, para 221.
120. AB Report, para 235; US Panel Report, para 8.244, and Canada Panel Report, para 8.247.
121. US Panel Report, para 8.231 and Canada Panel Report, para 8.234.
122. AB Report, paras 238, 240; US Panel Report, para 8.181, and Canada Panel Report, para 8.184.
123. US Panel Report, paras 8.182-3, and Canada Panel Report, paras 8.185-6.
124. AB Report on United States - Standards of Reformulated and Conventional Gasoline WT/DS2/AB/R (20 May 1996), hereafter cited as Gasoline Case, recalled by US Panel Report, paras 8.182, 8.240, Canada Panel Report, paras 8.185, 8.243.
125. AB Report on United States - Standards of Reformulated and Conventional Gasoline WT/DS2/AB/R (20 May 1996), hereafter cited as Gasoline Case, recalled by US Panel Report, paras 8.182, 8.240, Canada Panel Report, paras 8.185, 8.243.
126. AB Report on Japan - Taxes on Alcoholic Beverages WT/DS8/AB/R, WT/DS10/AB/R, WT/DS11/AB/R (1 November 1996) hereafter cited as Japanese Tax Case, recalled by US Panel Report, para 8.183, and Canada Panel Report, para 8.186.
127. AB Report on Japan - Taxes on Alcoholic Beverages WT/DS8/AB/R, WT/DS10/AB/R, WT/DS11/AB/R (1 November 1996) hereafter cited as Japanese Tax Case, recalled by US Panel Report, para 8.183, and Canada Panel Report, para 8.186.
128. AB Report, para 239.
129. Id.
130. US Panel Report, para 8.181, and Canada Panel Report, para 8.184.
131. See below ch 4.
132. AB Report, paras 214-15, 238.
133. US Panel Report, para 8.184, and Canada Panel Report, para 8.187.
134. AB Report, paras 240, 246.
135. AB Report, para 246.
136. Id, para 240.
137. Id, para 245.
138. Id, para 246.
139. D. A. Freestone, The Precautionary Principle, International Law and Global Climate Change in R. R. Churchill ed (London 1991), 21; E. G. Primosch, 'Das Vorsorgeprinzip im internationalen Umweltrecht', 51 Zeitschrift für Öffentliches Recht (1996), 227, 229.
140. D. A. Freestone, The Precautionary Principle, International Law and Global Climate Change in R. R. Churchill ed (London 1991), 21; E. G. Primosch, 'Das Vorsorgeprinzip im internationalen Umweltrecht', 51 Zeitschrift für Öffentliches Recht (1996), 227, 229.
141. Primosch, above n 114, at 229.
142. Agenda 21, United Nations Conference on Environment and Development, 14 June 1992, UN Doc A/CONF. 151/26/Rev 1.
143. D. A. Freestone, above n 114, at 33.
144. US Panel Report, paras 4.202-3, in particular n 130, and Canada Panel Report, paras 4.212-13, in particular n 153.
145. European Community's appellant submission, para 91.
146. Id, para 94.
147. Id, para 87.
148. Id, para 98.
149. Id, para 94.
150. US Panel Report, paras 8.157-8, and Canada Panel Report, paras 8.160-1; AB Report, paras 124-5.
151. For standard setting and the interaction of legally binding and non-binding norms see E. H. Riedel, International Environmental Law - A Law to Serve the Public Interest? New Trends in International Lawmaking - 'Legislation' in the Public Interest (Berlin 1997), 61, 84.
152. AB Report Japan Agriculture, para 80.
153. US Panel Report, para 4.239, 8.249, and Canada Panel Report, para 8.252. The AB states in Japan - Agriculture, para 89, that Art. 5.7 SPS sets out four requirements cumulative in nature. To meet the requirements of the first sentence, a measure must be (1) imposed in respect of a situation where 'relevant scientific information is insufficient'; (2) adopted 'on the basis of available pertinent information'. Pursuant to the second sentence of Article 5.7 SPS, such a provisional measure may not be maintained unless the Member which adopted the measure: (1) 'seek[s]to obtain the additional information necessary for a more objective assessment of risk'; and (2) 'review[s] the . . . measure accordingly within a reasonable period of time'.
154. AB Report on Japan Agriculture, para 93.
155. Id, ch IV, 3.
156. For a history of the negotiations of the SPS Agreement see M. A. Echols, Sanitary and Phytosanitary Measures, The World Trade Organization, Multilateral Trade Framework for the 21st Century and US Implementing Legislation, T. P. Stewart ed (Washington DC 1996), 191, 194-207; J. Croome above n 89, at 235.
157. For a history of the negotiations of the SPS Agreement see M. A. Echols, Sanitary and Phytosanitary Measures, The World Trade Organization, Multilateral Trade Framework for the 21st Century and US Implementing Legislation, T. P. Stewart ed (Washington DC 1996), 191, 194-207; J. Croome above n 89, at 235.
158. See US Panel Report, paras 4.1-4, and Canada Panel Report, paras 4.1-3
159. See US Panel Report, para 4.4, and Canada Panel Report, para 4.3.
160. US Panel Report, paras 8.39-41, and Canada Panel Report, paras 8.42-44.
161. Pescatore, above n 5, at 23.
162. For the sake of clarity, an AB ruling on this issue would have been welcome. We have no indication why the EC did not appeal this ruling of the Panel and can only speculate. Of course one could argue that if the SPS Agreement is only an interpretation of GATT Art. XX, then also the procedural requirements of GATT Art. XX cases might be applicable in SPS cases, in particular the rules concerning the burden of proof. It has been long-established GATT practice that the burden of proof with respect to GATT Art. XX has to be borne by the Member that invokes this article. If SPS were considered only an application of GATT Art. XX, the EC would have had difficulties appealing the Panel's decision concerning the burden of proof. Of course one can also argue that an Art. XX case would not have arisen, since the SPS measure was not incompatible with GATT Art. III.4. Yet a violation of GATT Article XI can always be established.
163. See above ch 3.
164. AB Report, paras 73, 79.
165. Id, para 250.
166. Id, paras 73, 79.
167. Id, WT/DS18/AB/R (20 October 1998), hereafter cited as Salmon Case.
168. The AB says: Discrimination 'between Members, including their own territory and that of other Members' within the meaning of Article 2.3 first sentence, can be established by following the complex and indirect route worked out and elaborated by Article 5.5. However it is clear that this route is not the only route leading to a finding that an SPS measure constitutes arbitrary or unjustifiable discrimination according to Article 2.3, first sentence. Arbitrary or unjustifiable discrimination in the sense of Article 2.3, first sentence, can be found to exist without any examination under Article 5.5. See Salmon Case, para 292.
169. The Gasoline Case and the Japanese Tax Case, see above n 101, 102.
170. The Panels say: 'We consider the reasoning in both AB Reports to be equally relevant to the relationship between the three elements contained in Art. 5.5. All three elements impart meaning to one another. Nevertheless, in order to give effect to all three elements contained in Art. 5.5 and giving full meaning to the text and context of this provision, we consider that all three elements need to be distinguished and addressed separately. However we also agree that in some cases where a Member enacts, for comparable situations, sanitary measures which reflect different levels of protection, the significance of the difference in level of protection combined with the arbitrariness thereof may be sufficient to conclude that this difference in level of protection, result(s) in discrimination or a disguised restriction in international trade in the sense of Art. 5.5 (in line with the argument that the magnitude of the very differential of a dissimilar taxation may be enough to conclude that a dissimilar taxation is applied so as to afford protection, as provided for in the second sentence of Art. III:2 of GATT)', see US Panel Report, paras 8.182-4, and Canada Panel Report, paras 8.185-7.
171. AB Report, paras 238-9.
172. AB Report, paras 72-6.
173. Id, paras 77-8.
174. Id, paras 79-84.
175. Id, paras 247-52.
176. Id, para 177.
177. Id, para 180.
178. AB Report, para 197.
179. See above n 140-1.
180. I.e., that a finding of a violation of Art. 5.5 SPS automatically leads to a finding of a violation of An. 2.3 SPS.
181. See above n 141.
182. See above ch 3.
183. See above n 141, para 223.
184. See above n 34.
185. See also Pescatore, above n 5, at 14-16. He considers that the AB should follow 'an anti-denial-of-justice strategy to make sure that the party has not only a "right to a panel", but also a right to obtain justice to the full extent of its claims, the sum of which makes up for the matter in dispute'.
186. See above n 34.
187. That such cases are likely to occur is shown by the divergent opinion between the EC and the United States with respect to the issue of genetically modified organisms (GMO), in particular the question of the import of food products made with GMO.
188. See J. H. Jackson, 'The WTO Dispute Settlement Understanding - Misunderstandings on the Nature of Legal Obligations', 91 Am J Int'l L (1997), 60-4. Professor Jackson forcefully rejects the view presented by J. H. Bello, 'The WTO Dispute Settlement Understanding: Less is More', 90 Am J Int'l L (1996), 416-18, that WTO Members have a choice by either complying with a dispute settlement ruling or by paying compensation or accepting retaliatory action in case they do not comply.
189. See J. H. Jackson, 'The WTO Dispute Settlement Understanding - Misunderstandings on the Nature of Legal Obligations', 91 Am J Int'l L (1997), 60-4. Professor Jackson forcefully rejects the view presented by J. H. Bello, 'The WTO Dispute Settlement Understanding: Less is More', 90 Am J Int'l L (1996), 416-18, that WTO Members have a choice by either complying with a dispute settlement ruling or by paying compensation or accepting retaliatory action in case they do not comply.
190. See Ritter, above n 56, at 133.