IV.43 The European Communities responded that Members were not obliged to demonstrate a scientifically confirmed adverse effect from a particular hazard before they might take measures. 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. For example, it had been recently reported that scientists only now had discovered the exact mechanism by which smoking could cause cancer. But governments all over the world had been taking measures to prevent or reduce smoking, even in the absence of such clear scientific evidence.⁵¹ The European Communities added that the closest the SPS Agreement came to defining sufficient "scientific evidence" was in the footnote to Article 3.3. It followed from that definition in that scientific justification required an examination and evaluation of available scientific information, based on scientific principles. But 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. Moreover, it was incorrect to state, as the United States did, that the choice of a measure was a purely scientific judgement. Measures must be based on scientific principles and not maintained without scientific evidence (conditions which the EC measures clearly meet) but these conditions could be met by a number of measures which could all achieve the same level of protection. If a Member was faced with choosing between several equally effective and scientifically justified measures, the SPS Agreement laid down other criteria, i.e. degree of trade-restrictiveness and technical and economic feasibility. This was the choice faced by the European Communities in the present case; either a ban on use for growth promotion or the imposition of strict veterinary controls. An assessment of trade-restrictiveness and technical and economic feasibility clearly showed that a ban on the use of hormones for growth promotion was the only measure available to achieve its chosen level of protection.

IV.44 The European Communities indicated that Mr. Fischler had been much more cautious on the possible risks to human and animal health arising from the nature and improper use of these hormones for animal growth promotion than suggested by the United States.

IV.45 The European Communities claimed that the question was whether the scientific evidence on which the contested measures were based was "sufficient" in the sense of Article 2.2. The European Communities observed that the term "sufficient" was nowhere defined in the SPS Agreement and noted that it was generally agreed that "sufficient" could not mean other than the "minimal" level of scientific evidence required.⁵² None of the publicly available scientific reports established beyond doubt that the use of these hormones in animal production was safe for human health. The European Communities also claimed that as regarded the three so-called "natural" hormones, all of the scientific reports suggested that they were unlikely to pose a hazard to human health if used in accordance with good veterinary or animal husbandry practice. The scientific evidence for the necessity to maintain its measure was the evidence from the 1995 EC Scientific Conference that there was still a lack of information on, for example, the mode of action, the effect of administering combinations and the effect of ingesting residues over a long period. For example, the United States, in the Statement of Administrative Action, had chosen the so-called Delaney Clause to explain the differences between the basic concepts of the level of protection that a government chooses and the measure that the government used to achieve that level of protection:

"[T]he Delaney Clauses, in the first instance, establish a level of protection. They reflect a decision by the Congress that there should be no risk of cancer to humans from the substances those clauses cover .... A determination that a particular food additive poses a health risk is made on scientific grounds... Importantly, "risk assessment" as used in the SPS Agreement is not limited to quantitative risk assessment, which is a particular type of risk assessment used to evaluate the potential for carcinogenesis. The Delaney Clauses are entirely consistent with the Agreement's requirements in this regard. The determination that a particular substance poses a risk of cancer is a scientific determination, based on an evaluation of the potential for a substance to induce cancer. Based on scientific principles, the United States has determined that if a substance induces cancer in animals, it poses some risk of human carcinogenesis. And since the level of protection under Delaney requires that there be zero risk of carcinogenesis, the United States prohibit the substance" (pages 94-95).

IV.46 The United States replied that conclusions of any scientific review could not be absolute because science was not absolute. Experimental results might either disprove or lend support to a particular hypothesis, but never prove it, and certainly would never prove it "beyond doubt". Yet the European Communities appeared to claim for itself the right to maintain their ban because scientific reports had not "established beyond doubt" that the use of these hormones for growth promotion was safe. Science could be used to determine whether there was a risk associated with the use of a particular substance; it could not eliminate the possibility that a potential risk might be found in the future. The SPS Agreement required a Member to base its measures on a risk assessment and prohibited a Member from maintaining SPS measures without sufficient scientific evidence. The Agreement did not provide that measures might be maintained without scientific evidence of a risk until such time as science proved "beyond doubt" that there was no risk. Moreover the United States noted that the lack of knowledge could not itself be the basis for taking a sanitary measure. The SPS Agreement required the European Communities to demonstrate scientific evidence of a particular risk. Scientists did not claim to know everything about everything. Scientific knowledge was always progressing and evolving. Accordingly, to claim that a Member was justified in banning an activity wherever there were still areas for science to explore would be to render the SPS Agreement meaningless - there were always areas for science to explore. Furthermore, in the US view, scientists knew more about the nature and mode of action of hormones than they did about most, if not all, other classes of compounds.

IV.47 The European Communities claimed that there were three possible methods by which it could achieve its chosen level of protection: by the imposition of controls on hormone use to prevent misuse, by a ban on hormone use, and by a combination of controls and a ban. After a careful and extensive evaluation of the risks to human health and the technical and economic feasibility of each, the European Communities had chosen the third option, for the reasons explained in paragraphs 4.127 to 4.201. The European Communities also argued that the US claim that "it is important to distinguish between having a risk assessment and basing a measure on that risk assessment" revealed nothing. The European Communities based its measures on the risk assessment it conducted for that purpose. Neither the 1982 EC Expert Report nor the 1988 Lamming Committee Report, nor the 1988 JECFA Report constituted in themselves "risk assessment" in the sense of Articles 5.1 to 5.6 of the SPS Agreement; they only formed part of "available scientific evidence." The other factors mentioned in Article 5.2 and in paragraphs 3 to 6 thereof, were not dealt with by the scientific reports on which the United States was basing its claim. Indeed, the assessment of these factors was not a scientific question in the strict sense, and thus they fell within the responsibility of the appropriate political authorities of each Member.

IV.48 The European Communities further argued that the United States had failed to appreciate the difference between the risk assessment required by the SPS Agreement when adopting measures, and the hazards against which members set a level of protection. Paragraphs 4.127 to 4.201 examined the hazards from hormones which were a source of risk to human health, irrespective of the way in which they were used. The European Communities was not obliged by the SPS Agreement to set different levels of protection against hormones used for growth promotion and hormones used for other purposes; on the contrary, one of the few requirements in the SPS Agreement in respect of the level of protection was that it be consistent (Article 5.5). The SPS Agreement imposed more, and stricter, disciplines on measures than it did on the level of protection. This was because measures were capable of being judged against objective universal criteria, while the level of protection was not. The choice of the level of protection might legitimately be influenced by factors such as political and financial priorities. As the United States had said in its Statement of Administrative Action, "it is a societal value judgment". However, once a level of protection had been decided, the measures used to achieve it could be analyzed scientifically. The European Communities claimed that the point was not that science did not know everything about hormones. The point was that it knew a lot, including the fact that they were carcinogenic. The problem was that science did know exactly how, and under what circumstances, this carcinogenic effect occurred. This was why the European Communities took a precautionary approach.

IV.49 The United States indicated that in the United States, as in other countries, hormones were regulated as animal drugs when they were intended for use in animals for either therapeutic or production purposes. The use of hormones for growth promotion purposes had been approved by more than 20 countries, including the United States, Canada, Australia, New Zealand, Japan, Korea, the Philippines, South Africa, Mexico and most Latin American countries, and had been under intense scrutiny by scientists world-wide for over 15 years. The United States affirmed that no scientific review had ever concluded that there was a basis for banning the sale of animals to which one of these hormones had been administered in accordance with good animal husbandry practice or for banning the sale of meat from such animals. The reports which the European Communities had relied on, including the 1983 OIE Scientific Report and the 1988 JECFA report, as well as its internal reports, had all concluded that these hormones were safe when used for growth promotion purposes in accordance with good animal husbandry practice. The fact that the scientists, in their study of these hormones, had also reviewed the data on the effects of hormones at high doses or under other methods of administration did not constitute evidence that the approved uses for animal growth promotion purposes were unsafe. The United States contended that the issue was not whether any hormone was safe for all conceivable purposes at any conceivable level of concentration. The issue was whether the EC ban on the importation of animals, and meat derived from such animals, that had been administered the hormones in accordance with good animal husbandry practice, was supported by sufficient scientific evidence. The European Communities had offered absolutely no evidence that such use of these hormones presented any risk to human health. The United States noted that the experts advising the Panel had confirmed that there was no scientific evidence to support the EC ban.

IV.50 The United States pointed out the Lamming Committee report for the three natural hormones had found that: "Thus no questions of safety arise in relation to the proper use of oestradiol-17b, progesterone and testosterone in an appropriate form of preparation" (emphasis added, page 7). In this regard, Part B of the Pimenta Report stated on page 6 that:

"The present scientific evidence indicates that there is no discernable health risk in the use of the three endogenous hormones where these are, in particular, administered to castrated steers (whose hormone levels are therefore considerably lower than normal) and where they are administered in the form of slow-release implants in a part of the animal which is not consumed (e.g. the ear) and where a specific period with no further administration of hormones is observed before slaughter."

As indicated in paragraph 2.33, the scientific experts and other interested parties which the European Communities had called together for the 1995 EC Scientific Conference had concluded that there was no evidence of possible health risks from the use of the natural hormones for growth promoting purposes.

The 1995 EC Scientific Conference had furthermore concluded that:

"At the doses needed for growth promotion, residue levels [of trenbolone and zeranol] are well below the levels regarded as safe (the MRLs). There are, at present, no indications of a possible human health risk from the low levels of covalently-bound residues of trenbolone."

The United States claimed that these conclusions were consistent with other scientific reviews of the hormones by scientists around the world, including the reviews conducted for the Codex Commission.

IV.51 The United States observed that the concept of the "appropriate level of sanitary or phytosanitary protection" or "acceptable level of risk" was one of the key concepts of the SPS Agreement. The level of protection or risk related to the chance or probability of an adverse health effect resulting from a particular activity. For example, a level of protection or risk might be expressed as a risk of 1 in 1 million, meaning that out of every 1 million humans in the relevant population, one person could be expected to suffer the adverse health effect from engaging in a particular activity. The appropriate level of protection or acceptable level of risk was the maximum level of risk that was considered tolerable. The United States repeated that the choice of what level of protection was appropriate was a social value judgement, not a scientific determination. There was no scientific basis for choosing one level of protection over another. For example, science could not say whether a risk of one in one million of kidney failure from a particular activity was acceptable, or whether a risk of one in 1,000 or one in 10 million should be acceptable. The level of protection was the goal the Member sought to achieve in terms of health protection. Sanitary and phytosanitary measures were the means to achieve that goal.

IV.52 The European Communities claimed that the terms "appropriate level of protection" and "acceptable level of risk" were alternative ways of expressing the concept but they were not synonymous. In the case in question, the European Communities had a level of protection but no acceptable level of risk, because it did not accept any level of residues of added hormones in meat. It rejected the US suggestion that level of protection equalled level of risk; in the EC view, it did not. The level of protection was not the "chance or probability" of an adverse effect. It was particularly incorrect to say that the appropriate level of protection was the maximum level of risk that was considered acceptable. The European Communities did not "accept" any risk from adding carcinogens to food for the sake of a little extra profit for farmers and drug companies. The European Communities was aware, of course, that despite its measures there might be occasions when such contaminated meat slipped through its detection system, but that did not alter the fact that its objective, in setting its level of protection, was to prevent any such residues. The "risk" (i.e. the "potential for adverse effects on human and animal health") from the use of hormones had been explained in detail by the European Communities, especially in paragraphs 4.127 to 4.201. The 1988 JECFA, on which the United States was arguably basing its contention, had also found that there was a potential risk to human health: if there were no such potential risk, the JECFA would have recommended no ADI and MRL for the two synthetic hormones. For the three natural hormones, JECFA had not recommend ADIs and MRLs because of problems in detecting the level of residues in meat. The European Communities further claimed that an ADI or an MRL recommended by Codex could never be considered to be a measure for the purposes of the SPS Agreement. Thus, science might help in setting a standard, guideline or recommendation (i.e. ADI or MRL) designed to exclude the probability that an individual would develop cancer after a lifetime of exposure to a particular chemical substance, or to limit that probability to no more than one chance in a million. The choice of where to set the probability, for example the one-in-a-million as opposed to one-in-a-thousand or zero chance, was one of public policy and belonged to the competent democratic authorities of the Members. The level of protection was subject only to Articles 5.4 and 5.5, not to the whole of Article 5. Contrary to the US view, the European Communities argued that a sanitary measure was not a measure to "limit the risk"; it was a measure to protect human or animal life or health, etc. In the case in question, the EC measure was aimed at eliminating the potential for adverse effects by preventing the occurrence of residues in meat.

IV.53 The United States claimed that the EC reliance on its supposed appropriate level of protection as a justification for their ban was misplaced. First, the European Communities had never articulated what their appropriate level of protection was in respect of the six hormones. The requirement of "no residues", which the European Communities claimed to be its level of protection, was a measure (essentially a measure that set a maximum residue limit, or "MRL", of zero) not a level of protection. Moreover, this was a measure which in fact was not maintained by the European Communities. The European Communities permitted residues of these hormones in meat. First, all meat had residues of the natural hormones ("residues" included amounts in the meat resulting from the animal's natural production of hormones). Second, the EC derogation for herd management and other purposes meant that meat would also have residues of administered hormones. The United States observed that the experts advising the Panel had confirmed that there was no scientific justification, where the concern was with residues of a substance, for only banning one use of the substance and not regulating residues. The United States argued that the EC statement that the aim of the EC Directives was to protect human and animal health by "seeking a level of protection which requires the presence of no residues in meat" suggested that the EC purported "level of protection" was really a way to justify their total ban. In the US view, aside from the fact that it was physically impossible to require the presence of no residues of hormones in meat, this was a case of the measure driving the level of protection, rather than, as it should be, the other way around.

IV.54 The United States submitted that a level of protection with respect to animal drug residues in meat might be "no risk of cancer in humans". If that were the EC appropriate level of protection, then the European Communities could assess whether there were any risks presented by hormone residues in light of this level of protection. But that was not the EC appropriate level of protection. The European Communities studiously avoided naming a level of protection (naming instead the measure it had established), perhaps because naming a level of protection made clear that the EC ban was unjustified. Indeed, there was no scientific evidence that there was a risk of cancer to humans consuming meat from animals to which any of the six hormones had been administered for growth promotion purposes in accordance with good animal husbandry practice. Quite the opposite, there was scientific evidence that the levels of residue under discussion did not pose a risk of cancer in humans. In other words, there was no appropriate level of protection that would justify the EC ban. A "zero risk" level of protection was the most stringent level of protection possible. Since the banned animals and meat already achieved this level of protection, then the ban could not be justified on the basis of the EC appropriate level of protection.

IV.55 The United States further argued that the EC own guidelines for the control of residues of oestradiol and testosterone were inconsistent with the EC position in this dispute.⁵³ For oestrogen, the EC guideline was 40 picograms ("pg")/ml (40 parts per trillion); for testosterone, it was 10 nanograms ("ng")/ml (10 parts per billion) in male cattle younger than 6 months and 30 ng/ml in males 6­18 months; in non­pregnant females it was 0.5 ng/ml (no guideline level had been set for progesterone.) Many animals that had not been administered any of the six hormones for growth promotion purposes violated the EC guidelines. For example, recent data were available to suggest that the very means of slaughter might cause increases in these hormones above these identified limits. At the same time, levels of hormones in animals to which any of the six hormones had been administered for growth promotion purposes fell below the guideline levels set by the European Communities. This was because, as had been confirmed by the experts advising the Panel, the residues in meat of the three natural hormones, when administered for growth promotion purposes in accordance with good animal husbandry practices, were within the normal physiological levels.

IV.56 The United States noted that this was in part related to the fact that producers in EC member States raised bulls (non-castrated adult male cattle) to maximize the growth of animals, whereas in the United States steers (castrated adult male cattle) were predominantly raised and hormones were administered to obtain more efficient growth. Bulls naturally had far higher levels of hormones than steers, including steers to which hormones had been administered for growth promotion purposes. Similarly, in the European Communities there were quite a number of pregnant animals entering the normal slaughter process.⁵⁴ Like bulls, pregnant animals also had far higher than average levels of hormones. In other words, the agricultural practices in the European Communities, in light of the ban, resulted in consumers being routinely exposed to far higher levels of natural hormones in their meat of EC origin than meat of other origins. The selective EC ban was not justified even under their own professed approach. If one were to accept the EC claim that any residue of these hormones would pose a risk of cancer, then the European Communities would be required to prohibit the use of the hormones for herd management and other purposes. However, the European Communities permitted these uses. The United States further noted that meat could have residues identical to those of zeranol, even though zeranol had not been administered to the animal, if the animal had eaten feed contaminated with the common mould Fusarium.

IV.57 The European Communities claimed that there was no obligation to follow scientific principles or to use risk assessment in setting the level of protection. As the United States had said in the Statement of Administrative Action: "The SPS Agreement thus explicitly affirms the right of each government to choose its levels of protection, including a "zero risk" level if it so chooses. A government may establish its levels of protection by any means available under its law, including by referendum." It was, of course, implicit that in order to need a level of protection there must be some hazard against which a Member needed to protect. However, this only implied the identification of a hazard, not an assessment of the probability that it would cause damage. 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 substance which was fatally poisonous, or 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. There would obviously be differences between governments in their approach to setting a level of protection, as a function of their economic priorities and cultural habits. For example, a developed country might consider it desirable to set a high level of protection against contamination of foods by waste material from the chemical industry, whereas a developing country might consider it a higher priority to encourage the establishment of a chemical industry rather than, for the present, worry about some chemical residues in food. This was particularly the case for countries where food supply was more of a problem than food quality. Similarly, cultural habits such as the eating of certain foods in a raw state might cause a government to set a higher level of protection against some pathogens than would be the case for a government whose population cooked the same food thoroughly before eating it. For economic and cultural reasons, the decision on where to set the level of protection was not a purely scientific one, and it was not one which could be subject to international rules, given the great diversity among the Members of the WTO.

IV.58 The European Communities pointed out that, contrary to the US allegations, it had stated clearly, on several occasions, that it aimed to avoid the presence of residues of added hormones in meat. The reference to "zero risk" was misleading. The EC interpretation of "zero risk" in this context was that it was not prepared to accept any residues of added hormones for growth promotion.

IV.59 The European Communities further clarified that it had argued that the Codex recommendation was a level of protection as opposed to a measure. However, it was by no means clear that the MRLs were "standards", as they were adopted under a heading of "Standards and related texts"; they could better be regarded as guidelines or recommendations. It was interesting that now the United States did not refer to Codex MRLs as "measures" in the sense of the SPS Agreement.

IV.60 The European Communities noted that the divergencies in the regulatory approach of Members regarding the use of the hormones at issue demonstrated that countries viewed and appreciated differently the potential risks to human and animal health resulting from the use of these hormones for growth promotion purposes. While the United States allowed the use of all six hormones, Canada allowed the use of all of these hormones except trenbolone;⁵⁵ Australia, New Zealand and South Africa allowed the use of all of these hormones except MGA;⁵⁶ Argentina allowed the use of zeranol and trenbolone, but not the other four hormones; and at least 25 meat-producing countries (other than the 15 EC member States) prohibited the use of these hormones for growth promotion.

IV.61 The United States claimed that the issue in this dispute was the EC ban, not the measures of other Members. Differences among countries in the regulation of these hormones were not scientific evidence supporting the EC ban. As Australia and New Zealand had indicated, a hormone might not be registered due, for example, to a lack of interest associated with differences in production practices. Moreover, it could not be ruled out that the EC ban had influenced other countries to forgo approving the use of the hormones for growth promotion purposes in order to ensure access to the EC market for meat.

IV.62 The European Communities replied that what was significant was that by virtue of the fact that they regulated hormones, all of these countries must consider that a risk existed. The differences in regulation reflected different opinions about the degree of risk. It was untrue that the EC rules had influenced other countries due to fears about a trade ban; there was not, and never had been, a ban on trade. It was entirely possible that other countries had carefully considered the scientific evidence and come to the same conclusion as the European Communities.

(b) Article 2.3 of the SPS Agreement

IV.63 The United States recalled that Article 2.3 required Members to ensure that their sanitary and phytosanitary measures (a) did not arbitrarily or unjustifiably discriminate between Members where identical or similar conditions prevailed, including between their own territory and that of other Members; and (b) were not be applied in a manner which would constitute a disguised restriction on international trade. The United States argued that the EC ban arbitrarily or unjustifiably discriminated between Members where identical or similar conditions prevailed and discriminated against imported animals and meat, both compared to domestic products and to products imported from other Members. The EC ban discriminated between Members that permitted the use of the hormones for growth promotion purposes and those that prohibited their use or permitted the use of the natural hormones for therapeutic purposes (including the European Communities itself); the question for purposes of Article 2.3 was whether the discrimination was justifiable. The United States argued that there were no relevant differences in the conditions prevailing in the United States compared to the European Communities or other supplying Members with respect to these animals or meat and that there was no scientific or other basis for the European Communities' discrimination against US meat and animals. The EC ban was designed, in part, to remove any competitive advantage arising from the use of the hormones at issue for growth promotion purposes and to thereby protect domestic production. As the European Court of Justice had judged, "the possibility of a reduction in surpluses was indeed taken into consideration during the process leading to the adoption of the Directive".⁵⁷ Furthermore, the EC Parliament, in calling for the European Communities to adopt its ban, had explicitly cited the fact that "there is overproduction of meat and meat products in the European Communities which adds considerably to the cost of the CAP".⁵⁸ In March 1989, the draft of the Pimenta Report had also made it clear that control of beef supply was one of the true motives for this Directive: "The Inquiry Committee believes that only a total ban on the use of growth-promoters is concordant with the strategic aims now adopted for the Common Agricultural Policy, in particular the reduction of surpluses and the safeguarding of a viable regionally-diversified farming community". Finally, Directive 88/146/EEC itself cited the desire to alter the conditions of competition in the meat sector.

IV.64 The European Communities responded that European Court of Justice had pronounced itself twice on the aim of Directive 88/146/EEC. In the first case, the Court of Justice found that the aim of the Directive was to protect human health and consumer interests.⁵⁹ This objective was pursued with a view to improving the quality of meat through regulating the conditions for the production and marketing of meat. The United States had totally disregarded this part of the Court's judgment and cited selectively from the other judgment of the Court.⁶⁰ Furthermore, the Court ruling cited by the United States had concluded that "it does not follow that such a reduction, which is not cited in the preamble to the Directive as one of the objectives pursued, was in fact the exclusive or main purpose of the rules adopted". This made evident that the reduction in meat surpluses was no more than a possibility, and any Member was entitled to evaluate the side effects of an act it adopted for other purposes. Moreover, surpluses of meat had not existed in April 1996 when the European Communities had decided to maintain the prohibition by adopting Directive 96/22/EC. Furthermore, the evidence clearly showed that even the first EC Directive 85/649/EEC, which had been replaced by Directive 88/146/EEC, had not in fact contributed to reducing the small beef surpluses. Statistics showed that the European Communities had continued to produce domestically about the same quantities and had continued to import from third countries about the same quantities of meat as before the prohibition. The only difference, after the adoption of these Directives, was that the nature and composition of meat destined for human consumption in the European Communities changed (i.e. came from animals to which no hormones for growth promotion had been administered).

IV.65 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, which was a major beef producer, 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.66 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 the United States) 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 and US allegations to the contrary were unfounded. 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 chosen EC level of protection. The argument that its measures were a disguised restriction on trade was unsubstantiated. The EC measure did not, therefore, contravene Article 2.3.

IV.67 The United States noted that the European Communities admitted to distinguish between Members that permitted the use of the hormones for growth promotion and those that did not. The United States considered that the EC claim that this distinction could be justified by its chosen level of protection was unfounded. The European Communities had not demonstrated any scientific basis or other basis for the discrimination, and it was not justified by any health risks. None of the experts advising the Panel gave any response which would justify a determination that animals to which any of the six hormones had been administered for growth promotion purposes, and meat from such animals, should be considered "unlike" other animals or meat. The European Communities had admitted that residues of hormones resulting from implants could be impossible to detect, and scientists had concluded that such residues were meaningless given the variation in different meat sources and the levels of hormone production in humans. Moreover, the European Communities had not demonstrated that its chosen level of protection was any different from that of any of the Members who had approved the use of these hormones for growth promotion. More importantly, the right of a Member to select its own appropriate level of protection was not a justification for a breach of its obligations under Article 2.3. The United States concluded that the European Communities had failed to show how its asserted defense was even relevant. This discrimination was consequently not justified by any health risks, it was arbitrary and unjustifiable. Accordingly, the United States concluded that the EC ban unjustifiably discriminated between Members where identical or similar conditions prevailed and was inconsistent with the obligations of the European Communities under the first sentence of Article 2.3.

IV.68 Furthermore, the United States contended, the ban constituted a disguised restriction on international trade, in breach of Article 2.3, as demonstrated by the record which showed that economic reasons related to reduction of meat surpluses and to altering the conditions of competition in the EC market were an important purpose of the ban. Moreover, the EC Directives required the EC member States to permit widespread use of hormones for purely economic reasons connected with efficient herd management. The EC measures depended on drawing a distinction between, for instance, domestic beef from cattle injected with hormones for herd-management purposes and imported beef from cattle implanted with hormones for growth promotion purposes. In this connection the United States noted that the doses of hormones used for therapeutic and zootechnical purposes were equivalent to, or in some cases higher, than the average daily dose used for growth promotion purposes. The United States stated that if low level residues of the hormones caused adverse health affects, as claimed by the European Communities, then therapeutic and zootechnical uses should be banned as well. These facts confirmed that the hormone ban was not a valid health-based measure, but an economic measure, and a means of protecting EC producers against imports. The EC measures were designed to protect domestic production. In sum, since the EC measures were not applied only to the extent necessary to protect human life or health, were not based on scientific principles, were maintained without sufficient scientific evidence, were not based on an assessment of the risks, and were more trade-restrictive than required to achieve the appropriate level of protection, it was apparent that the measures were not legitimate sanitary measures. Instead, they were measures designed to protect domestic production in the guise of sanitary measures. That was the essence of a disguised restriction on international trade.

IV.69 The European Communities responded that, although the EC legislation permitted the use of the three natural hormones for therapeutic or zootechnical reasons, this was allowed under strict conditions. Thus, the three hormones might be administered, for therapeutic or zootechnical reasons, (i) only by a veterinarian, (ii) only by injection or vaginal spiral (to the exclusion of implantation), and (iii) only to farm animals which had been clearly identified. Furthermore, such treatments must be registered by the veterinarian and these animals could not be slaughtered for meat production before a waiting period long enough to ensure that no residues were present in their meat. The doses of these hormones required for therapeutic or zootechnical purposes were several times lower than the doses required for effective growth promotion. In the case of animals which were at the end of their reproductive career, such treatments were prohibited during the fattening period following the end of their breeding life. All these conditions ensured that the hormones were administered properly and that no residues of hormones, other than those naturally produced by the animals themselves, were present in the meat destined for human consumption.

IV.70 The European Communities noted that the 1988 JECFA Report had also recognized that a clear distinction should be drawn between the use of hormones for therapeutic or zootechnical reasons and animal growth promotion, indicating that "... residues left after the use of a drug for growth promotion should be considered separately from residues left after the use of that drug for other purposes".⁶¹

IV.71 The European Communities claimed that it was misleading to state that there was widespread use of hormones for therapeutic or zootechnical purposes in the European Communities. Although the European Communities did not possess the exact figure of the number of animals treated for these purposes, of those EC member States which kept records⁶², it was estimated that only between 1 per cent and 2 per cent of breeding cattle in the European Communities were treated each year for such purposes. This percentage corresponded to about the same proportion of total bovine meat of EC origin consumed in the European Communities, to which once in their breeding life such treatments may have been administered. Regardless of the insignificant quantities involved, what needed to be underlined was that allowing the administration of the three natural hormones for therapeutic or zootechnical reasons was in full compliance with the EC policy of ensuring no residues of hormones in meat for human consumption since the strict conditions imposed by EC law effectively ensured its policy objective (no residues at all). Furthermore, the European Communities pointed out that meat from animals which had, at some time in their life, been treated with hormones for therapeutic or zootechnical reasons, under the strict conditions laid down in the EC law, might be marketed for human consumption in the European Communities. Equally, animals treated for therapeutic or zootechnical reasons and meat of such animals were allowed to be imported from third countries under guarantees which were equivalent to those applied for domestic animals and meat from such animals. Therefore, this provision of EC law applied regardless of the country of origin of the animals or meat of such animals. The United States had not brought forward any evidence to show that animals and meat from animals treated in the United States for therapeutic or zootechnical purposes, if they complied with the conditions laid down in EC law, were not allowed to be imported into the European Communities. The European Communities further contended that "identical or similar conditions" did not prevail between the United States and the European Communities in respect of the use of hormones for growth promotion. Neither were the products similar or identical. A measure might be applied only to the extent necessary to protect life or health. If, for example, it could be demonstrated that pasteurizing milk at 72°C for 15 seconds was sufficient to kill tuberculosis, a Member would not be justified in requiring milk to be heated to a higher temperature for a longer time for the purpose of protecting against the same hazard. But in this case, the European Communities had demonstrated that if it had followed the US example in applying the Codex recommended MRLs in the way they were applied in the United States, it would have certainly failed to achieve its level of protection, which was no residues of these hormones in meat for human consumption and also to protect animal health, in view of the very limited number of tests carried out by the United States and the number of violations found even in this limited number of tested samples.

IV.72 The United States noted that the EC claims that it had no solid information about the percentage of meat produced in the European Communities from animals to which hormones had been administered for herd management and other purposes was at odds with the European Communities' constant reference to the strict controls on such use and the need to identify every single animal to which hormones had been administered. Industry sources in the European Communities had indicated to the United States that 3.75 to 4 per cent of all cattle were treated each year based on an average of numbers in Belgium, France, Germany, the Netherlands and the United Kingdom. In addition, about 6 per cent of sheep in the European Communities were treated each year. In 1995, from one company alone, 2 million doses of hormones had been sold (for sheep) and ½ million doses were sold for cattle. Furthermore, the one guess that the European Communities offered was misleading. By stating that hormones were administered to 1 to 2 per cent of the EC herd each year, the European Communities failed to note that this figure should be multiplied by the number of years that the animals in the herd remained in production in order to determine the quantity of the meat supply from animals that, during their lifetime, had been administered these hormones. For example, if the hormones were administered to different animals each year, then over the course of 5 years, 5 to 10 per cent of the herd would have been administered these hormones. Alternatively, if the hormones were administered to the same animals, then an animal might have received five separate sets of treatment. Furthermore, there was no requirement that the hormones administered always be the same substances. Nothing prevented an animal in the European Communities from having been exposed to multiple hormones (or in the EC's words, "combinations" or "cocktails" of hormones).

(c) Article 3.1 of the SPS Agreement

IV.73 The United States claimed that, contrary to the requirements of Article 3.1 to base its sanitary measures on international standards, guidelines or recommendations where they exist, the EC ban was not based on the relevant international standards. The relevant international standards in this respect were those of the Codex Commission. The Codex standards for oestradiol-17b, progesterone and testosterone in foods of bovine origin stated that there was no need to set any Acceptable Daily Intake level (ADI) or any Maximum Residue Limit (MRL).

IV.74 Codex had based its decision not to set ADIs and MRLs for these three hormones on the basis of the 1988 JECFA Report⁶³, which had found that residue levels in treated animals fell well within the normal range of levels found in untreated bovine animals of different types and ages. JECFA thus deemed it unnecessary to set an ADI for hormones that were produced endogenously in human beings and showed marked physiological variations in levels according to age and sex, and had concluded that residues arising from the use of oestradiol-17b, testosterone and progesterone for growth promotion purposes in accordance with good animal husbandry practice were unlikely to pose a hazard to human health. JECFA, in its assessment of the hormones, had defined what was meant by an MRL not specified. It meant that: "Available data on the identity and concentration of residues of the veterinary drug in animal tissues indicate a large margin of safety for consumption of residues in food when the drug is used according to good practice in the use of veterinary drugs. For that reason, and for the reasons stated in the individual evaluation, the Committee has concluded that the presence of drug residues in the named animal product does not present a health concern and that there is no need to specify a numerical MRL".⁶⁴

IV.75 With respect to trenbolone and zeranol, the United States noted that the Codex standards specified both an ADI and an MRL. The Codex definition of an MRL was as follows:

"... the maximum concentration of residue resulting from the use of a veterinary drug (expressed in mg/kg or mg/kg on a fresh weight basis) that is recommended by the Codex Alimentarius Commission to be legally permitted or recognized as acceptable in or on a food.


"It is based on the type and amount of residue considered to be without toxicological hazard for human health as expressed by the Acceptable Daily Intake (ADI), or on the basis of a temporary ADI that utilizes an additional safety factor. It also takes into account other relevant public health risks as well as food technological aspects.


"When establishing an MRL, consideration is also given to residues that occur in food of plant origin and/or the environment. Furthermore, the MRL may be reduced to be consistent with good practices in the use of veterinary drugs and to the extent that practical analytical methods are available."⁶⁵

The Codex standard for trenbolone and zeranol was an MRL of 10 mg/kg of bovine liver and 2 mg/kg of bovine muscle.

IV.76 The United States noted that as early as December 1987, the CCRVDF agreed on MRLs for trenbolone and zeranol, and agreed that no MRLs were necessary for the three endogenous hormones. At the June 1991 biennial meeting of the Codex Commission, four of the hormones (oestradiol, progesterone, testosterone, and zeranol) were at the end of the lengthy 8-stage approval process of which the decision by the CCRVDF was a key point. At that stage in the process, the science on a particular drug had been thoroughly reviewed, and Codex Commission members had been provided numerous chances to voice concerns about the scientific assessment of these hormones - either in writing to the Codex Commission secretariat or at CCRVDF plenary meetings. So, the United States contended, the scientific consensus on the four hormones was clear by the time they came before the Codex Commission. However, the issue continued to become politicized. The United States stressed that in 1994, the Codex Alimentarius Executive Committee (which includes a member from the European Communities) developed four principles clarifying, inter alia, that "[t]he food standards, guidelines and other recommendations of the Codex Alimentarius Commission shall be based on the principle of sound scientific analysis and evidence, involving a thorough review of all relevant information, in order that the standards assure the quality and safety of the food supply." Despite the EC opposition, these principles were adopted by the Codex Commission in June 1995. This paved the way for the Codex Commission to finally adopt standards for the five hormonal substances (by this time, trenbolone was also at the Step 8 of the Codex Commission procedures) recommended by the CCRVDF. Notwithstanding the adoption of the standards, the United States noted that the European Communities had maintained its ban and, in fact was expanding its ban for example by expanding it to new species.

IV.77 The European Communities argued that at the time it had adopted and applied Directive 88/146/EC (1 January 1989), there existed no Codex standards on the hormones. Moreover, the Codex had never studied scientifically the hormone MGA and had never adopted any standard on its use. Furthermore, the European Communities argued that the Codex standards on the five hormones at issue had been adopted by a majority of only 33 votes in favour, 29 votes against and 7 abstentions (i.e. a minority of those participating), that was a very close vote in favour of the adoption of the standards. There were, therefore, at least 14 countries other than the 15 EC member States which had voted against the standard. This close vote clearly indicated that the issue of hormones had been, and continued to be, very controversial both from the scientific and the regulatory policy point of view. The European Communities argued that, despite the fact that the United States knew of the strong and wide opposition to the adoption of these recommendations on hormones for growth promotion purposes throughout the preparation of the Codex Commission's decision of July 1995, it had still insisted on and pressed, the issue for economic reasons, and despite the long established practice of the Codex Commission to adopt decisions on MRLs by consensus. In fact, the unusual procedure of voting by secret ballot had been requested in this case by the United States.⁶⁶ The European Communities argued that even today, no Codex member had notified Codex of its acceptance of the standards adopted in July 1995 on the hormones.⁶⁷ The United States itself seemed to support Codex standards, guidelines and recommendations on a very selective basis, only when they favoured their strict economic and trade interests.⁶⁸

IV.78 The European Communities added that Article 3.1 made it plainly clear that there was no absolute obligation on Members to always follow standards on SPS measures adopted by Codex. There was no doubt that the two systems of the Codex and the SPS Agreement did not interact properly, because a member of Codex, which had different views about other considerations (e.g. health concerns of consumers) and in good faith abstained from blocking the adoption of a Codex standard knowing in advance that in doing so it would not be required to follow the standard whose adoption it did not block, would later find itself to have an obligation to follow under the SPS Agreement. This was an inherent contradiction in the functioning of the two systems, of which both Codex and WTO Members were well aware and efforts were now being made to resolve it in an appropriate way.

IV.79 The European Communities further observed that JECFA could not propose an ADI for natural hormones because when it had 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. Noting that the United States itself set limits for levels of the natural hormones in meat above those naturally present, but did not check annually for the presence of residues from these hormones, the European Communities further argued that the only "international standard, guideline or recommendation" relevant to the EC measure was the "Codex Code of Practice for Control of the Use of Veterinary Drugs". The MRL laid down by Codex was a level of protection, not a measure, and there was no obligation in the SPS Agreement to adopt Codex recommended levels of protection. The European Communities recalled its earlier arguments that neither the Panel nor any other Member, nor a Codex Alimentarius group of scientific experts, could judge the adequacy of the scientific evidence used by a Member. In view of the potential hazards to human health presented by the misuse of hormones in food animals, the European Communities considered that they should only be administered for the purposes and under the conditions defined in Directive 96/22/EC, which were in accordance with the "Codex Code of Practice for Control of the Use of Veterinary Drugs".

TO CONTINUE WITH EC MEASURES ON MEAT - COMPLAINT BY THE U.S.

⁵¹ The European Communities noted that, for example, the GATT panel on Thailand - Restrictions on Importation of and Internal Taxes on Cigarettes (1991) had accepted that "smoking constitutes a serious risk to human health" and, therefore, fell within the scope of Article XX:B of GATT 47.

⁵² D.A. Wirth (1994) "The role of Science in the Uruguay Round and the NAFTA Trade Disciplines", 27 Cornell International Law Journal, 817-859, p.856.

⁵³ "Residues in food producing animals and their products; Reference materials and methods", Final Report, Directorate-General for Agriculture, Commission of the European Communities, 1992. Discussed at p.552 of the 1995 EC Scientific Conference Proceedings.

⁵⁴ B. Hoffmann "Problems of Residues and Health Risks of Anabolic Agents with Sex Hormone-like Activities", 1995 EC Scientific Conference Proceedings, p.284. Note also the conclusion on that same page that: "Thus, due to the lack of formation of extra residues, in principle no risk for public health can be seen following the presently recommend use of endogenous sex hormones as anabolic agents, at least in cattle".

⁵⁵ Canada corrected the EC claim that Canada does not permit the use of trenbolone (see Section V, para. 5.12).

⁵⁶ 1995 EC Scientific Conference Proceedings, pp.597-598.

⁵⁷ "The Queen v. The Minister for Agriculture, Fisheries and Food and the Secretary of State for Health" (Case C-331/88), Judgment of the Court at p.I-4065.

⁵⁸ Resolution "closing the procedure for consultation of the European Parliament on the proposal from the Commission of the European Communities to the Council for a Directive amending Directive 81/602/EEC concerning the prohibition of certain substances having an hormonal action and of any substances having a thyrostatic action," para. I. (Doc. A2-100/85, 11 November 1985, EC Official Journal No. C 288, p.158 et seq.).

⁵⁹ Case 68/86, United Kingdom v. Council (1988) EC Reports p.855, p.897, para. 20.

⁶⁰ Case 331/88, Fedesa and others (1990) EC Reports p.I-4023, p.4065.

⁶¹ 1988 JECFA Report, p.16.

⁶² E.g. Denmark, the Netherlands and Finland.

⁶³ 1988 JECFA Report, p.19.

⁶⁴ Fortieth report of the Joint FAO/WHO Expert Committee on Food Additives, pp.5-6.

⁶⁵ Codex Alimentarius, Vol. 3, Residue of Veterinary Drugs in Foods, Rome 1993, pp.65-66.

⁶⁶ Report of the 21st Session of the Codex Alimentarius Commission, Rome, 3-8 July 1995, Alinorm 95/37, paras 45-46.

⁶⁷ In the meantime, South Africa notified acceptance of the MRLs for veterinary drugs (Codex response to written questions raised by the Panel.).

⁶⁸ The European Communities noted that a Codex press release (Codex Facts, 05-95) had explained that "[t]he countries which voted in favour of the hormone MRL are primarily meat-producing/ exporting countries where the cost of production is either not subsidised or is subsidised to a lesser extent than in the EU. Production efficiencies, therefore, exercised a major influence on the Codex Commission. The animal health industry (commercial producers of the hormones) was also pleased with the Commission's decisions for obvious reasons".