IV.38 The European Communities also noted that there were several countries which did not allow the use of any or most of these hormones for animal growth promotion, but some of them did not impose any restrictions on imports of hormone-treated meat because they hardly imported any meat as their domestic production sufficed to cover demand. Argentina, for instance, did not allow the use of the three natural hormones for growth promotion (because residues of these hormones could not easily be detected), but did not apply a prohibition on imports of animals or meat treated with these three hormones as there were virtually no imports taking place. In contrast, the European Communities had always imported large quantities of meat and had to adopt the measures in question in order to ensure that the objectives of its domestic sanitary policy were not circumvented through imports from third countries.

IV.39 The European Communities argued that its measures offered equal opportunities of access to the EC market for all third-country animals and meat from animals to which no hormones had been administered for growth promotion purposes. Of the 31 countries which were authorized to export meat to the European Communities, only six apparently allowed the use of some or all of these hormones for growth promotion purposes. All of these 31 countries (including Canada) had continued to export to the European Communities animals and meat from animals to which no hormones had been administered for growth promotion purposes. Thus, overall the same competitive pressure as before was maintained from third-country imports on domestic meat production. The intention of the EC measures at issue, therefore, was not to shield domestic meat production from foreign competition. The EC legislation did distinguish between countries which permitted the use of hormones for growth promotion and those which did not, but this was a justified distinction in view of the EC chosen level of protection, and the argument that its measures were a disguised restriction on trade, was unsubstantiated.

IV.40 According to the European Communities, the Canadian exports of fresh and frozen meat (to the European Communities) for the years 1985 to 1995 were as follows: 1985: 312 tonnes, 1986: 571 tonnes, 1987: 457 tonnes, 1988: 28 tonnes, 1989: 7 tonnes, 1990: 87 tonnes, 1991: 106 tonnes, 1992: 25 tonnes, 1993: 40 tonnes, 1994: 53 tonnes, 1995: 58 tonnes.⁴⁵

(c) Article 2.2 of the SPS Agreement

IV.41 Canada noted that the SPS Agreement indicated the "Basic Rights" of Members in Articles 2.1 and 2.4, and the "Basic Obligations" in Articles 2.2 and 2.3. Article 2.2 set out three conditions:

"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."

IV.42 Canada maintained the EC measures were applied well beyond the extent deemed necessary by the European Communities to protect human life and health from comparable risks posed by antimicrobial growth promoters in feed additives, and the demonstrably greater risks posed by some veterinary drugs used for therapeutic purposes. Consequently, the EC measures were not applied only to the extent necessary to protect human life or health. In addition, the EC measures were maintained without sufficient scientific evidence, since study after study had confirmed that the six hormones in question were safe for use in growth promotion (see paragraph 4.134). Consequently, Canada claimed that the EC measures were contrary to Article 2.2.

IV.43 The European Communities noted that Article 2.2 required that sanitary or phytosanitary measures must be based on scientific principles, as opposed to non-scientific ones, such as superstition. If a measure was aimed at reducing or eliminating a risk to health, then it must actually address that risk in a manner which could be scientifically justified. Canada had not shown that the measures complained against were not based on scientific principles. A logical consequence of the requirement for measures to be based on scientific principles was that they must not be maintained without scientific evidence. The European Communities claimed that all Members had measures in place before the SPS Agreement was drawn up, and in the absence of this requirement it could have been argued that the requirement for basing measures on scientific principles could not be applied retrospectively.

IV.44 The European Communities noted that the SPS Agreement had not defined the term "scientific evidence" since its content was relative in terms of time and was dependent on the principles, methods, experiments and data used. What might be an acceptable scientific method for one scientist might not satisfy another, who might be more interested in certain other scientific principles or aspects totally neglected or partially examined by the first scientist. For that reason the SPS only required "sufficient", not clear or certain, scientific evidence.⁴⁶ The term "sufficient" was also nowhere defined in the SPS Agreement. The European Communities argued that it was generally agreed that sufficient could not mean other than the minimal level of scientific evidence required.

IV.45 The European Communities noted that the SPS Agreement also required Members, in their risk assessment, to take into account "available scientific evidence" and argued that from the "available" scientific evidence, a Member was entitled to rely on that which its own scientists said was appropriate and sufficient and disregard other available evidence. It followed that neither the Panel nor any other Member might judge the adequacy of the scientific evidence upon which a Member based its measure in order to achieve its level of sanitary or phytosanitary protection.⁴⁷ For the same reasons, a Codex group of scientific experts could not judge the adequacy of the scientific evidence used by a Member.⁴⁸ In other words, if the "weight" of available scientific evidence indicated that a substance was not dangerous to human health, but another part of available scientific evidence indicated that there might be potential hazards to human or animal health, a Member was entitled under the SPS Agreement to take a precautionary approach and base its measure on the latter part of the available scientific evidence. It was sufficient if the government maintaining the measure had a scientific basis for it. However, the European Communities stressed that this did not mean that Members were obliged to demonstrate a scientifically confirmed adverse effect from a particular hazard before they might take measures.⁴⁹ The SPS Agreement could not have been intended to operate in such a way that Members must wait until people were actually sick or dying before being allowed to take measures.

IV.46 The European Communities noted that the closest the SPS Agreement came to defining sufficient "scientific evidence" was in the footnote to Article 3.3, where the concept of a "scientific justification" was defined as follows:

"For the purposes of paragraph 3 of Article 3, there is a scientific justification if, on the basis of an examination and evaluation of available scientific information in conformity with the relevant provisions of this Agreement, a Member determines that the relevant international standards, guidelines or recommendations are not sufficient to achieve its appropriate level of sanitary or phytosanitary protection."

It followed that scientific justification required an examination and evaluation of available scientific information, based on scientific principles. However, at the end it was still the prerogative of the Member in question to decide whether the international standard, guideline or recommendation was sufficient to achieve its appropriate level of sanitary protection. The level of protection was decided by the Member alone and it was not a judgment that must be based on scientific principles or scientific evidence.

IV.47 Canada rejected the EC interpretation of Article 2.2, that "... neither the Panel nor any other Member of the SPS Agreement may judge the adequacy of the scientific evidence upon which a Member based its measure in order to achieve its level of sanitary or phytosanitary protection", as it would render the obligation in Article 2.2 a nullity, and violate the principle of effectiveness. "Sufficient scientific evidence" was not an empty requirement. It set a threshold that required more than deficient or scanty evidence. If the level of scientific evidence was insufficient, then a Member was entitled to adopt a provisional measure under Article 5.7. Canada noted that the European Community had stated that its measures were not provisional measures, so Article 5.7 did not provide an exception to the EC's obligation under Article 2.2.

IV.48 Canada agreed with and adopted the argument advanced by Australia that Article 11.2 of the SPS Agreement explicitly acknowledged that disputes may involve scientific or technical issues. In Canada's view, panels must be able to seek expert advice on these issues when it may be relevant to examining whether a Member has complied with its legal obligations. Indeed, the European Communities had suggested that such advice should be sought in the related US-EC Panel⁵⁰, and the experts chosen to assist in that case would also be providing advice to this Panel.

IV.49 Canada submitted that the EC measures were maintained without sufficient scientific evidence, and were, therefore, inconsistent with Article 2.2.

IV.50 The European Communities argued that in the Panel proceedings a number of scientists had explained their views on the potential dangers to human and animal health from the use of these hormones for growth promotion. However, none of the scientific experts advising the Panel had said that the experts advising the European Communities did not employ scientific principles in their research. Article 2.2 of the SPS Agreement did not require the best science nor the weight of scientific evidence to be taken into account; it only stipulated that there should be "scientific principles" and "sufficient" (not absolute) scientific evidence. For example, Dr. Lucier had agreed with the conclusions of the EC scientists that both the natural and synthetic hormones were carcinogenic at low levels (the natural hormones are carcinogenic even at existing physiological levels). Some of the scientists who attended the meetings of the Panel (and those of JECFA 1988) might not agree with the conclusions of the scientists advising the European Communities, but this was not relevant for the purposes of Articles 5.2, 2.2 and 3.3 of the SPS Agreement. What was important was whether, in the scientific research employed by the EC scientists (or the scientific reports to which they made reference in their reports), the minimal attributes of scientific inquiry were respected. The European Communities had not heard the opposite from any of the experts advising the Panel nor from Canada. Therefore, the European Communities was allowed to take into account its scientific views (or the views of the scientists to which it referred) in its assessment of the risks of these hormones for growth promotion.

IV.51 The European Communities noted that the scientific principles on which the 1988 JECFA Report was based might also be said to be also part of available scientific evidence. But it was not necessarily the best nor the prevailing one. The European Communities was entitled to follow the other part of scientific evidence which showed that these hormones were dangerous to human and animal health when used for growth promotion.

(d) Article 2.3 of the SPS Agreement

IV.52 Canada observed that Article 2.3 was based on the requirements of the chapeau of Article XX of GATT, clarifying that the point of comparison for "where identical or similar conditions prevail" included the territory of the Member taking the measure. Article 2.3 read as follows:

"Members shall ensure that their sanitary and phytosanitary measures do not arbitrarily or unjustifiably discriminate between Members where identical or similar conditions prevail, including between their own territory and that of other Members. Sanitary and phytosanitary measures shall not be applied in a manner which would constitute a disguised restriction on international trade."

IV.53 Canada argued that in Reformulated Gasoline⁵¹, the Appellate Body had reviewed the chapeau to GATT Article XX. Stressing the close relationship between the text of the chapeau and the obligation in Article 2.3, Canada submitted that the Appellate Body's interpretation of the requirement that a measure shall "... not be applied in a manner which would constitute a disguised restriction on international trade ..." was relevant to the present case. The Appellate Body had found:

"Arbitrary discrimination", "unjustifiable discrimination" and "disguised restriction" on international trade may, accordingly, be read side-by-side; they impart meaning to one another. It is clear to us that "disguised restriction" includes disguised discrimination in international trade. It is equally clear that concealed or unannounced restriction or discrimination in international trade does not exhaust the meaning of "disguised restriction". 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 in Article XX. Put in a somewhat different manner, the kinds of considerations pertinent in deciding whether the application of a particular measure amounts to "arbitrary or unjustifiable discrimination", may also be taken into account in determining the presence of a "disguised restriction" on international trade. The fundamental theme is to be found in the purpose and object of avoiding abuse or illegitimate use of the exceptions to substantive rules available in Article XX."⁵²

IV.54 Canada claimed that applying this to the present case, a protectionist measure in the guise of a sanitary measure formally within the terms of the SPS Agreement was the essence of a disguised restriction on international trade. One indication that a measure had been taken for a purpose other than the purpose stated was that the measure was more restrictive than necessary. In the present case, the EC measures had been shown to be far more restrictive than necessary to achieve the level of protection achieved by comparable controls over the use of antimicrobial growth promoters and other veterinary drugs. This was not surprising because, as Canada had previously indicated, the relevant Directives, Resolution of the European Parliament and opinion of the Economic and Social Committee demonstrated that there were several additional purposes to the EC measures which were not contemplated or sanctioned by the SPS Agreement (see paragraph 4.27).

IV.55 Canada claimed that in harmonizing their regulations on the most restrictive EC member State regulations, the European Communities had virtually eliminated all imports of beef from countries that permitted the use of growth promoting hormones, such as Canada (see paragraph 4.28). Canada submitted that the EC measures were more restrictive than necessary to meet a legitimate SPS Agreement objective, namely to protect human life or health. The EC measures were applied in a manner that controlled domestic production and effectively limited foreign competition, constituting a disguised restriction on international trade.

IV.56 The European Communities argued that many different kinds of biological, chemical or physical hazards might occur in foods, and governments had to decide to what degree they aimed to protect their populations from these hazards. These decisions were taken, as were any political decisions, in the light of a number of factors including the potential danger to health and the cost and feasibility of achieving effective protection. For example, in the case of a fatally poisonous substance, or one which caused a very serious or fatal condition such as cancer, governments would generally set a very high level of protection, i.e. they aimed to avoid the presence of such a substance in food altogether. However, in the case of a lesser hazard, such as an organism which caused an uncomfortable, but transient and non life-threatening effect, governments might set a level of protection which aimed to minimize, but not necessarily eliminate, the presence of the organism in food. The European Communities stated that its level of protection in this case was no residue of these hormones in meat. This level resulted from the provisions of the EC Directives which prohibited the administration to farm animals, by any means whatsoever, of "substances having a thyrostatic action or substances having an oestrogenic, androgenic or gestagenic action"; or the slaughter or sale of any animal to which these substances had been administered, or of the meat or meat products from such animals. The aim of these provisions was to protect human and animal health by seeking a level of protection which required the presence of no residues in meat from animals to which these hormones had been administered for growth promotion. The European Communities noted furthermore that its measure applied not only to the six hormones in dispute, but to all hormones, substances and combinations thereof which exerted the above-mentioned action on all farm animals (i.e. not only on beef cattle). In reply to the Canadian argument that the level of protection in the case of these hormones was higher than the level of protection the European Communities applied against antimicrobial feed additives and therefore that the objective of the EC measures was to control domestic production and effectively limit foreign competition, the European Communities indicated that there was nothing in the text of the contested measures, the legislative history or in other document to suggest that the purpose for which the measures had been adopted was to protect EC production of meat from foreign competition (paragraphs 2.1-2.5 and ff.).

IV.57 The European Communities argued that the "appropriate level" a Member decided to apply in its territory did not have to be expressed in the same technical fashion, i.e. as an MRL. International practice and the SPS Agreement left this choice to the Member concerned as a matter of policy. Thus, a Member might decide instead of imposing a stricter MRL to prohibit altogether the use of the substance in the first place, if this was the only "reasonably available alternative taking into account technical and economic feasibility that achieves its appropriate level of sanitary or phytosanitary protection and is significantly less restrictive on trade". The European Communities had continued to import about the same quantities of meat as it did before the implementation of the ban, with the difference that this was meat from animals not treated with growth promotion hormones. The EC measure did not, therefore, contravene Article 2.3. The European Communities argued that Canada had failed to discharge its burden of proof in this case. In particular, it had failed to establish that, in the face of the overwhelming scientific evidence that the use of hormones for animal growth promotion was potentially very dangerous to public and animal health, there were other type of measures which, whilst significantly less restrictive on trade, were capable of ensuring that the level of protection which the European Communities had chosen in this case (no residue of hormones in animals and meat) could be effectively achieved. Conversely, the Europeran Communities had gone through that exercise in 1984 and recently in April 1996 and decided that the prohibition on use of these hormones in animal growth promotion was the only measure reasonably available and less restrictive of trade. The European Communities noted that in Canada the administration of the implant at a site other than where recommended was not likely to be sufficient proof of adulteration under the Canadian Food and Drugs Act. The Canadian Drugs Directorate recommended that "the liver and kidney of animals implanted with these drugs in areas other than the ear shall not be permitted for sale as food". But as regarded the carcass of the animal, it recommended only that "all the area of implantation and any adjacent areas showing evidence of inflammation are to be destroyed". So, improper administration did not result in the rejection of the entire carcass from the food chain. It was only when an inspector believed that there had been administered products not licensed for use in Canada that the entire carcass was to be taken out of the food chain. The European Communities argued that not only were there obvious risks to human health arising from this type of policy, but there were practically no controls and checks for residues of these hormones taking into account the entire animal production destined for exportation or for human consumption in Canada. The Food and Drug Regulations of Canada (section B.01.046 and B.01.047) did not specify that food containing hormone residues was to be considered "adulterated", thus such food could be sold. Also section B.01.048 thereof listed only two drugs (chloramphenicol and its salts and derivatives, and a 5-nitrofuran compound) whose administration to animals rendered them and meat thereof unsuitable for sale. These facts alone justified the precautionary approach adopted by the European Communities, it showed the reasonable and proportional nature of its measures in the light of the risks involved, and underlined the failure of Canada to show that there was another type of measure available to the European Communities, equally effective and less restrictive on trade.

(e) Article 2.4 of the SPS Agreement

IV.58 Canada submitted that Article 2.4 confirmed one role of the SPS Agreement as an elaboration of the rules for the application of GATT which related to the use of sanitary or phytosanitary measures, and in particular the provisions of Article XX(b):

"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 which relate to the use of sanitary or phytosanitary measures, in particular the provisions of Article XX(b)."

IV.59 Canada argued that since the EC measures did not conform to the provisions of the SPS Agreement, they could not be presumed to be in accordance with the provisions of GATT which related to the use of sanitary measures, and in particular Article XX(b).

IV.60 The European Communities argued that under Article 3.2, if a sanitary measure conformed to a relevant international standard, guideline or recommendation, it was deemed to be necessary to protect human, animal or plant life or health, and it was presumed to be consistent with the relevant provisions of the SPS Agreement and GATT. However, the fact that a sanitary or phytosanitary measure differed from a relevant international standard, guideline or recommendation did not, in itself, create any adverse presumption concerning that measure. This was all the more the case when there was no such international standard (such as for MGA). The European Communities further argued that the fact that a measure in conformity with a Codex standard was deemed to be consistent with the SPS Agreement was one of the weaknesses of the SPS Agreement, given that many Codex standards, guidelines and recommendations were out of date, having been adopted decades before the development of sophisticated analytical methods.

(f) Article 3.1 of the SPS Agreement

IV.61 Canada noted that other provisions of the SPS Agreement elaborated the basic rights and obligations set out in Article 2. Article 3 detailed the rights and obligations of Members with respect to harmonization. Article 3.1 provided that:

"To harmonize sanitary and phytosanitary measures on as wide a basis as possible, Members shall base their sanitary or phytosanitary measures on international standards, guidelines or recommendations, where they exist, except as otherwise provided for in this Agreement, and in particular in paragraph 3."

IV.62 For food safety, the standards, guidelines and recommendations established by the Codex applied.⁵³ In the present case, Codex had adopted MRLs for trenbolone and zeranol, but had not set MRLs for oestradiol, testosterone and progesterone because the estimated consumption of the natural hormones was well below any numerical value that would ordinarily be assigned to them.

IV.63 Article 3.1 compelled the European Communities to base its sanitary measures on these international standards, except as otherwise provided for in the SPS Agreement. Canada noted that the definition of "base" (usually followed by "on" or "upon") was to "found or establish".⁵⁴ A summary of the MRLs allocated by the EC Committee on Veterinary Medicinal Products⁵⁵ acknowledged that the EC measures were based on MRLs of zero for zeranol and trenbolone, and were not based on the Codex MRLs. Canada further observed that to comply with Regulation 2377/90/EEC, the European Communities was required to determine whether MRLs were necessary for the three natural hormones. The European Communities had determined that oestradiol-17b did not require an MRL (Regulation 3059/94/EC) but did not appear to have yet determined whether MRLs were necessary for the other two natural hormones.

IV.64 Canada claimed that although MRLs were not sanitary measures in and of themselves, full acceptance of the Codex MRLs for residues of veterinary drugs in food dictated that distribution of food conforming with the MRLs "will not be hindered" by legal provisions.⁵⁶ Since the EC measures prohibited the distribution of beef treated with these products for growth promoting purposes, it was clear that the European Communities had not accepted these MRLs and had not based its measures on them.

IV.65 The European Communities responded that international standards, guidelines or recommendations were based on a certain concept of level of sanitary protection. But a different level might require a different type of measure. This was what was applied by the European Communities in the case of the hormones at issue: the EC level of protection aimed to attain no residues in meat of these hormones, in other words, consumers should not be exposed to any level of added hormones in their food. To achieve this level of protection, the only reasonably available and least restrictive measure was to apply a prohibition on the use of these hormones for growth promotion. In the EC view, Canada had not shown that different measures were reasonably available to the European Communities. All that Canada argued was that the European Communities should have followed the Codex recommendations. However, the Codex recommendations were designed to achieve a level of protection which was lower than that applied in the European Communities.

IV.66 Furthermore, the European Communities considered that the MRLs laid down by Codex were not measures but levels of protection and there was no obligation in the SPS Agreement to adopt Codex recommended levels of protection. The European Communities added that even the measures applied by Canada in its territory were not capable of respecting the level recommended by Codex because Canada tested only a very small number of animals each year. For zeranol, for example, in 1996 it was foreseen that samples of only 650 animals would be tested. For trenbolone acetate samples of only 325 animals, for MGA samples of 275 animals, and for the three natural hormones samples of only 40 animals. The European Communities argued that no provision of the SPS Agreement obliged the European Communities to lower its level of sanitary protection; on the contrary, the preamble expressly stated that Members were not required to change their level of protection.

IV.67 The European Communities considered that there was clearly scientific justification for its measures. The 1988 JECFA Report, on whose "scientific" advice Codex had based its recommended MRLs, had established an ADI for zeranol of 0 - 0.5 mg/kg body weight, and for trenbolone of 0 - 0.02 mg/kg body weight. The European Communities was therefore justified, in respect of zeranol and trenbolone, in accepting the lower limit, i.e. an ADI of zero. Codex had made no recommendation for MGA. For the "natural" hormones, it was known that they had adverse effects, which combined with a lack of knowledge of their action, lack of data on the effect of combinations and the lack of a definition of "good veterinary practice", permitted the European Communities to adopt a different level of protection, i.e. ensure EC consumers that there were no residues left other than the ones naturally produced by the animals themselves. In fact, as the scientific opinion of Dr. Liehr and the other scientists advising the European Communities in this case demonstrated, these natural hormones and their metabolites were most likely carcinogenic. The European Communities believed that, in view of the potential hazards to human health presented by the sources of risk referred to in paragraphs 4.151 to 4.209, these hormones should only be administered for the purposes and under the conditions defined in the EC Directives, which were in accordance with the 1993 "Codex Code of Practice for Control of the Use of Veterinary Drugs" ("Codex Code of Practice"). The European Communities further argued that the distinction between agents which acted as "tumour initiators" and "tumour promoters" was clearly over-simplistic and was no longer applicable to these hormones. This distinction permited some scientists to make another prediction by extrapolating tumour incidence observed in test animals at high exposure levels to potential human exposure to low levels of such hormones. However, as shown by Dr. Liehr, hormonal potency was not linked to its carcinogenic activity. Nevertheless, it was on this disputed extrapolation, based on the No Hormonal Observed Level, that JECFA had based its 1988 report and on which Codex had based its recommendations in July 1995. The European Communities argued that the JECFA report had been written in 1988, that it was based on research and experiments carried out about ten to fifteen years earlier, and that its recommendations were adopted by Codex only in 1995. There was a gap of about 18 to 23 years between the performance of the experiments and the adoption of the Codex recommendations.

IV.68 The European Communities rejected Canada's statement that the Codex decision not to recommend ADIs and MRLs for the three natural hormones was because residues of these hormones were below any numerical value that would ordinarily be assigned and argued that JECFA could not propose an ADI because when it considered the matter, in the early and mid 1980s, the technology for measuring increases in levels of the natural hormones was not sufficiently advanced to be appropriate for routine use. The prohibition on the administration of natural hormones to animals for growth promotion was enforced in the European Communities in several ways. EC member States had been requested, in accordance with the conclusions of the Standing Veterinary Committee, to include testing on the natural hormones in their annual plans. Thus, they needed to carry out testing for natural sex hormones, in accordance with Directive 86/469/EEC, on live bovine animals at the farm or at the slaughterhouse in order to determine whether the levels of these hormones exceeded certain levels. For instance, for oestradiol or testosterone if levels exceeding the levels mentioned below were found in the blood plasma of at least one bovine animal, the measures and investigations provided for in Article 6, paragraphs 1, 2 and 3 of Directive 85/358/EEC⁵⁷ should immediately be undertaken:

IV.69 In addition to the testing for oestradiol and testosterone, EC member States should control the use of gestagens in bovine animals for fattening, as there was a possibility of misusing gestagens as growth promoters or for camouflaging the application of oestrogens. More than 69,000 analysis of samples for the detection of natural hormones had been carried out by all EC member States during 1995. Moreover, in cases of suspected use, analysis of hormone levels in herds or groups of fattening animals might be used to confirm suspicion even when natural hormones had been used. This was because when these hormones were used for growth promotion this was done usually by administering female hormones to male animals and vice-versa. If, therefore, all or most of the samples taken from male animals showed high levels of female hormones there was a presumption that these hormones were not endogenous but had been administered. Taken in conjunction with other evidence which had given rise to the suspicion, such analytical results could confirm the administration of the hormones.

IV.70 The European Communities further indicated that the prohibition was also enforced in practice by EC member States, who maintained controls on the manufacture and distribution of veterinary drugs and maintained surveillance of agricultural practices (Article 4 of Directive 88/146/EEC and now Article 9 of Directive 96/22/EC). Illicit use was deterred by the severe penalties imposed in cases of proven misuse.

IV.71 With regard to MGA, the European Communities noted that it was authorized for growth promotion only in the United States and Canada, but apparently nowhere else. Codex had never scientifically examined this hormone and had never recommended any standard. Still, Canada in essence argued that the European Communities should accept meat treated with MGA and check only for residue limits as they were set by Canada. This argument flew in the face of the SPS Agreement, which explicitly allowed the European Communities to adopt a level of protection which it deemed appropriate (no residue at all). The European Communities questioned whether Health Canada had conducted any new tests on MGA or had simply relied on American data from 1968.

IV.72 As regarded Canada, the European Communities indicated that there were two violations reported in 1995/96. Although for MGA there was a withdrawal period of 48 hours prior to slaughter, it should not be taken for granted that this period would always be respected. There were many reasons which might lead to it being disregarded, including label dosage, absence of control by a veterinarian, the sudden spread of a disease or even fluctuations in market prices were some reasons which might precipitate slaughtering while active substances from implants or feedstuffs were still very high. Therefore, the European Communities might choose to adopt a measure which was no more trade restrictive than required to achieve its appropriate level of protection, taking into account technical and economic feasibility, i.e. a prohibition of use of MGA for animal growth promotion.

IV.73 Canada noted that the European Communities had argued that "[t]he MRLs laid down by Codex are levels of protection and there is no obligation in the SPS to adopt Codex recommended levels of protection". Canada submitted that the EC argument was patently contrary to the obligation set out in Article 3.1: "... Members shall base their sanitary and phytosanitary measures on international standards, guidelines or recommendations ..." Codex adopted standards on oestradiol-17b, testosterone, progesterone, zeranol and trenbolone.⁵⁸ Thus, there was a clear obligation under Article 3.1 for the European Communities to base its sanitary measures on these standards.

IV.74 Canada explained that an ADI was expressed as a range, signifying that an intake within the range would be acceptable. For zeranol, an intake of 0 mg/kg body weight would be acceptable, as would an intake of 0.5 mg/kg body weight. Codex defined an MRL based on the type and amount of residue considered to be without toxicological hazard for human health as expressed by the ADI.⁵⁹ As the EC MRLs for zeranol and trenbolone were zero ("no residues"), the European Communities had clearly not based its measures on the Codex standards, pursuant to Article 3.1.

TO CONTINUE WITH EC MEASURES CONCERNING MEAT AND MEAT PRODUCTS (HORMONES) COMPLAINT BY CANADA

⁴⁵ The European Communities argued that the term "scientific evidence" had a different meaning from the requirement to provide "evidence" in a legal trial.

⁴⁶ The European Communities noted that this had been explained in the US Statement of Administrative Action as follows: "It is clear that the requirement in the SPS Agreement that measures be based on scientific principles and not be maintained "without sufficient scientific evidence" would not authorize a dispute settlement panel to substitute its scientific judgment for that of the government maintaining the sanitary or phytosanitary measure. For example, by requiring measures to be based on scientific principles (rather than, for instance, requiring measures to be based on the "best" science) and not to be maintained without sufficient scientific evidence (rather than, for instance, requiring an examination of the "weight of evidence"), the SPS Agreement recognizes the fact that scientific certainty is rare and many scientific determinations require judgments between differing scientific views. The SPS Agreement preserves the ability of governments to make such judgments" (at page 90, emphasis in the original).

⁴⁷ In support of its argument, the European Communities cited an article by D.A. Wirth (1994), "The Role of Science in the Uruguay Round and the NAFTA Trade Disciplines," Vol.27 Cornell International Law Journal, pp.817-859, pp.856-57.

⁴⁸ The European Communities noted that, for example, it had been recently reported that it was only now that scientists had discovered the mechanism by which smoking could cause cancer. But governments all over the world had long ago been taking measures to prevent or reduce smoking.

⁴⁹ US-EC Measures Concerning Meat and Meat Products (Hormones), WT/DS26/7.

⁵⁰ WT/DS2/AB/R, adopted 20 May 1996.

⁵¹ Ibid., p.25.

⁵² SPS Agreement, Annex A, para. 3(a).

⁵³ R.E. Allen, ed., "The Concise Oxford Dictionary of Current English", 8th ed., Oxford: Clarendon Press, pp.89-90.

⁵⁴ R.J. Heitzman, ed., "Agriculture - Veterinary Drug Residues - Residues in food-producing animals and their products: Reference materials and methods" (Luxembourg: Office for Official Publications of the European Communities, 1992), p.4.

⁵⁵ Canada noted that the "General Principles of the Codex Alimentarius," Paragraph 6.A.(i), Codex Alimentarius Commission, Procedural Manual, 9th ed. (Rome: Secretariat of the Joint FAO/WHO Food Standards Programme, 1995), p.45 stated:

"(i) Full Acceptance

Full acceptance of a Codex maximum limit for residues of pesticides or veterinary drugs in foods means that the country concerned will ensure, within its territorial jurisdiction, that a food, whether home-produced or imported, to which the Codex maximum limit applies, will comply with that limit. It also means that the distribution of a food conforming with the Codex maximum limit will not be hindered by any legal or administrative provisions in the country concerned which relate to matters covered by the Codex maximum limit."

⁵⁶ The European Communities drew the attention in particular to Articles 3, 6, 7 and 13 of Directive 96/23, which will enter into force on 1 July 1997.

⁵⁷ ALINORM 91/31, Appendix IV and ALINORM 93/31, Appendix II, as adopted by the 21st Session of Codex.

⁵⁸ Codex Alimentarius, Vol. 3: Residues of Veterinary Drugs in Foods," 2nd. ed. (Rome: FAO, 1996) p.76.