IV.80 With respect to the synthetic hormones, the European Communities observed that JECFA (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. The European Communities argued that it was contrary to common logic to claim (as it was argued by the United States) that an MRL of 2 mg/kg of bovine meat for zeranol was a "measure" in the sense of the SPS Agreement.⁶⁹ Scientists had defined the MRL as the quantity of a particular residue in meat that would not exceed the ADI for the particular substance concerned, if its administration was done in accordance with the required practice. The decision where to set the level, i.e. at 2 mg/kg or at 10 mg/kg of bovine meat, was a decision on the level of protection, not a "measure" as defined in Annex A of the SPS Agreement. Moreover, the European Communities claimed that as there was no international standard relevant to its measure, there was no contravention of Article 3:1. Codex had not established standards for five of the hormones at issue; all it had done was to recommend maximum residue levels for the two synthetic hormones and decided that it was too difficult to do so for the three natural ones. Maximum residue levels were only of relevance to Members which accepted residues of these hormones in meat. The European Communities did not. Furthermore, as six of the scientists advising the European Communities had pointed out in their written opinions to the Panel⁷⁰, the JECFA Report on the basis of selected studies in laboratory animals had "concluded" that the carcinogenic effect of progesterone (and oestradiol and testosterone) was linked in some way to its hormonal effect, so that if it was present in a concentration insufficient to produce a hormonal effect in animals it would not be carcinogenic; they had then extrapolated this assumption to humans. But the JECFA Report had no scientific basis for making this assumption; contrary to their own stated intent (section 2.1.2 of the 1988 JECFA Report) they had not known (and a decade later it was still not well known) how these hormones produced their effects. Nevertheless, on the basis of these unjustified extrapolations and assumptions, and because detection was too difficult, they had "deemed" it unnecessary to set an ADI.

IV.81 The United States claimed that the European Communities appeared to misunderstand Article 3 and confused a level of protection with a measure when it claimed that the MRLs established by Codex were a "level of protection" rather than a measure. The United States submitted that an MRL was a measure, not a level of protection. If a government wished to ensure, for example, that its public was not exposed to a risk of more than 1 in 10 million of nerve damage from lead in food, the government could establish an MRL to limit total exposure. However, the MRL was not the level of "protection", it was the maximum limit of residue. What level of protection it achieved would depend in large part on where the MRL was set. In other words, the level of protection determined where to set the MRL.

IV.82 The United States rejected the EC argument that Article 3.1 did not apply to its ban because Codex did not have a standard for the use of these hormones, only for their residues. The United States argued that a requirement to base a measure on the relevant international standard included a requirement to base the form of the measure on the international standard. Otherwise, it would be easy to evade the requirements of Article 3.1 by deliberately adopting a measure different in form from the international standard. Under that approach, as soon as a Member had chosen to adopt a measure different from the international standard, there would no longer be any requirement to base its measure on the international standard. In other words, Article 3.1 would cease to apply as soon as a Member acted inconsistently with it. The United States added that to claim, as the European Communities did, that since the Codex ADI was a range from zero to 0.5 mg/kg body weight, setting an ADI of zero was "based on" the Codex standard, was a distortion of the international standard. The ADI was expressed as a range because it referred to the "acceptable" daily intake. In that regard, an intake of zero of these residues was acceptable, but it was not the Codex standard.

IV.83 The European Communities responded that international standards, guidelines or recommendations were based on a certain concept of level of sanitary protection. The SPS Agreement explicitly allowed Members not to follow the international standards, guidelines or recommendations in order to achieve their appropriate level of protection. The objective of Article 3.1 was to harmonize, as far as possible, the sanitary or phytosanitary measures of Members, given that a different level of protection might require different types of measures. An ADI or MRL recommended by Codex could therefore, never be considered to be a measure, because measures were adopted by Members. Science might help in setting a standard 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. But the choice where to set the probability, for example one-in-a-million as opposed to one-in-a-thousand or zero chance, was a choice of public policy, and belonged to the competent democratic authorities of the Members. It was a goal of public policy, not of scientific nature. The EC policy in case of potentially carcinogenic substances like these hormones aimed to avoid exposing consumers to them. Therefore, the European Communities would not consider a level of protection of 1 in one million to be acceptable. That was why its level of protection in this case aimed at reducing that probability to zero.

IV.84 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. There were usually several ways of dealing with any given hazard, and the SPS Agreement did not require Members to change the type of measures they chose. For example, one of the many ways of tackling pathogenic organisms in food was irradiation, and some Members allowed it to be used for certain foods. Codex had adopted standards for irradiation of foods but this did not mean that every Member was now obliged to allow irradiation of foods. Similarly, if a Member chose a level of protection against a contaminant on the basis of an MRL, this did not mean that it should set its MRL at the level recommended by Codex. Also, if a Member chose not to allow any residues of dangerous substances in food, this did not mean that it was obliged to base its protection on the concept of an MRL recommended by Codex, if there existed one for that substance. One of the weaknesses of the SPS Agreement was that a measure in conformity with a Codex standard or recommendation was deemed to be consistent with Article 3.2. Unfortunately, many Codex standards were quite out of date, having been adopted decades before the development of sophisticated analytical methods.

(d) Article 3.3 of the SPS Agreement

IV.85 The European Communities argued that Article 3.3 permitted Members to "... introduce or maintain sanitary or phytosanitary measures which result in a higher level of sanitary or phytosanitary protection than would be achieved by measures based on the relevant international standards, guidelines or recommendations, if there is a scientific justification, or as a consequence of the level of sanitary or phytosanitary protection a Member determines to be appropriate ..." The Codex recommendations were designed to achieve a level of protection which was lower than that applied in the European Communities for the hormones at issue. Moreover, Codex and the other relevant international organisations mentioned in the SPS Agreement might issue standards, guidelines or recommendations, but they were relevant only for those Members which chose to follow them and base their measures on them. If a Member elected not to follow them because it had a different level of sanitary protection, the Member was entitled to take another type of measure necessary to achieve its chosen level of protection. In such a case the SPS Agreement only required the Member to respect the provisions of Articles 5.1 to 5.8 thereof.

IV.86 The European Communities claimed that the "Codex Statements of Principle Concerning the Role of Science in the Codex Decision - Making Process and the Extent to which other Factors are taken into Account", approved on July 1995, explicitly recognized that other legitimate factors, relevant for the health protection of consumers, could be taken into account when elaborating and deciding food standards.⁷¹ In addition, Members which had different views about other considerations (e.g. health concerns of consumers) could abstain from accepting the relevant standards. The SPS Agreement permitted departure from international standards for the same reasons for which Codex standards, guidelines or recommendations were voluntary and could not be made legally binding, i.e., because each Member was free to decide its appropriate level of sanitary or phytosanitary protection. This was not a scientific judgment and scientific committees or expert groups could not replace the democratically elected authorities of Members.

IV.87 The United States argued that the EC ban was not covered by the exceptions in Article 3.3 to the requirements of Article 3.1. The European Communities had not shown that its level of protection was different from that achieved by applying the Codex standards. In fact, the European Communities had not even identified its own level of sanitary protection. Noting that the SPS Agreement defined "appropriate level of sanitary or phytosanitary protection" as "[t]he level of protection deemed appropriate by the Member establishing a sanitary or phytosanitary measure to protect human, animal or plant life or health within its territory", the United States submitted that "level of protection" referred to protection from a particular sanitary or phytosanitary risk. For the level of protection to form the basis for taking action, there must first be identified some activity which gave rise to the identified risk, and the activity must present a level of such risk higher than the level deemed acceptable by the Member.

IV.88 The United States submitted that the level of protection did not refer to protection from foreign competition, nor did it refer to protection from a particular substance or activity per se, only from the risk associated with that activity. Thus, for example, a Member might deem a chance of 1 in 1 million to be the appropriate level of protection from the risk of the establishment of a particular plant pest, or 1 in 10 million to be the acceptable level of risk of harm to nerves from the ingestion of lead in food. In contrast, the measures taken to achieve that level could for example, in the case of the plant pest risk, involve quarantine to ensure the pest was not harboured on imported plants or plant material, or fumigation. In the case of the nerve damage risk, the measures could consist of a maximum residue limit for lead in foods, or a prohibition on the use of lead in ceramic glazes for food utensils such as pitchers or glasses. Finally, the United States agreed that the choice of the appropriate level of protection was a societal value judgment. The SPS Agreement imposed no requirement to establish a scientific basis for the chosen level of protection because the choice was not a scientific judgment.

IV.89 The European Communities responded that the United States' arguments were contradictory. It followed from these arguments that for the United States, the concept of "measures" for the purpose of the SPS Agreement included quarantine, fumigation or prohibition on the use of a substance. In criticizing the EC formulation of "no residue at all", the United States had also admitted that this was also a measure, not a level of protection. However, the United States had also argued that an MRL was a measure. If an MRL was a measure, then what was a prohibition laid down in law on the use of hormones for growth promotion?

IV.90 The European Communities noted that there were two exceptions provided in Article 3.3. The first exception was fulfilled when the international standard was inadequate, faulty or obsolete from a scientific point of view. According to the second exception, a Member was in any case entitled to introduce or maintain measures which aimed at achieving its appropriate level of protection, to be determined in accordance with Article 5 of the SPS Agreement. The European Communities agreed that to invoke either of the options in Article 3.3, which were available to a Member when taking a sanitary or phytosanitary measure, there must exist "a potential risk for adverse effects". But the SPS Agreement left Members free to define the level of probability they wanted to assume: this might range "from zero to infinite" and it also left them free to decide the type of measure they might choose to ensure that the level of protection they considered to be appropriate was achieved. The European Communities further agreed that the choice of the appropriate level of protection was a social value judgement and that the SPS Agreement did not impose a requirement to establish a scientific basis for the chosen level.

IV.91 The United States argued that both exceptions contained in Article 3.3 had the same effect, since both referred to a situation where the basis for departing from the relevant international standard was that the international standard was not sufficient to achieve the Member's appropriate level of protection. The concept of the appropriate level of protection interlaid a number of the provisions of the SPS Agreement. For example, Article 5.6 used the appropriate level of protection to determine if sanitary or phytosanitary measures were more trade-restrictive than required. Article 3.3 also used this concept in permitting a Member to introduce or maintain a sanitary or phytosanitary measure that was more stringent than the relevant international standard where the international standard would not be sufficient to achieve the Member's appropriate level of protection. In the US view, none of the different EC formulations for the purported level of protection was appropriate for purposes of the SPS Agreement. For example, on the one hand, the European Communities had stated that its appropriate level of protection was "the assurance that meat will not contain residues of administered hormones". Elsewhere the European Communities had stated that its level of protection was the "guarantee that EC consumers did not ingest residues of added hormones in meat". In yet another place, the European Communities had stated that its level of protection was "no residue at all".

IV.92 The United States argued that the first formulation, "the assurance that meat will not contain residues of administered hormones" was not a level of protection from sanitary risk. Prohibiting certain residues was a measure, not a level of protection. This formulation said nothing about whether those residues posed a risk. In fact, the United States could only assume that it was a misstatement since the European Communities permitted hormones to be administered for herd management and other purposes. Nor did this formulation say anything about how any residues from administered hormones compared to other residues, such as residues of hormones that were naturally occurring in meat. The second formulation, "guarantee that EC consumers did not ingest residues of added hormones in meat", suffered from the same deficiencies and misstatement as the first formulation. The third formulation, "no residue at all" was also a measure, not a level of protection. The United States also assumed that this so-called "level of protection" applied only to the synthetic hormones since meat would always have residues of the naturally occurring hormones. In fact, the EC measure was not a requirement that there be no residue of these substances. The EC measure was a ban on the use of the substances for growth promotion irrespective of any residue.

IV.93 The European Communities contended that it was obvious that the EC level of protection in this case was no residue of added 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 the above-mentioned 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. In contrast, the level of protection of Codex was the recommended MRLs. 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). Conversely, the MRLs recommended by Codex did not exclude, when followed by a Member, that thyrostatic, oestrogenic, androgenic and gestagenic actions could be exerted on farm animals. Moreover, the EC level of protection was concerned only with added hormones, over and above those which occurred naturally; the reference to natural levels was irrelevant to this case. Its rule were strict and avoided the presence of residues in animals treated for therapeutic or zootechnical purposes. So the fact was that the EC rules did not permit residues of added hormones at all.

IV.94 The United States claimed that the EC ban was not designed to, nor did it, achieve any particular level of protection. Meat naturally had widely varying residues of the endogenous hormones, and many foods had levels of residues which were orders of magnitude greater than that found in the banned meat (as shown in the following tables).

Comparative androgen intakes

Food	Weight of portion (g)	Androgen intake (ng)
Unimplanted bull meat	500	1,560
Steer or female implanted w/ trenbolone1	500	135-150
Heifer implanted w/ testosterone	500	35

¹Assuming 25 per cent fat, 75 per cent muscle
ng = nanograms

Comparative oestrogen intakes from food sources

Food	Weight of portion (g)	Oestrogen intake (ng)
Unimplanted steer meat1	500	61.1
Oestradiol-Implanted steer meat1	500	11.4
Zeranol-Implanted steer meat3	500	7*
Cow meat1,2	500	75 (7.2-540)*
Hen's egg	50-60	1,750*
Cabbage	100	2,400*
Peas	100	400*
Wheat germ	10	200*
Soybean oil	10 ml	20,000*
Milk	500 ml	75*

E.g. 1 egg equivalent in oestrogen content to 76.5 kg of implanted steer beef
¹Assuming 25 per cent fat, 75 per cent muscle
²Oestrone only
³Muscle tissue only
*Oestradiol equivalents
ng = nanograms

IV.95 The United States noted that the European Communities permitted the sale and consumption of meat without regard to the levels of endogenous hormones; did not regulate exposure to hormones found in any other foods, and finally, permitted the sale and consumption of meat from animals that had received the natural hormones for purposes other than growth promotion. If the supposed health problem was exposure to residues of any of these hormones, then the European Communities should regulate dietary exposure to residues of the natural hormones. For the same reasons, the European Communities could not claim that its appropriate level of protection was "zero", since if "zero risk" was intended to refer to the five categories of risk identified by the European Communities (discussed in paragraph 4.126 below), then achieving zero risk was impossible. For example, two of the categories referred to by the European Communities were risks arising from detection and control (or more accurately arising from difficulty in detecting the presence, or controlling the use, of these hormones) and risks arising from the administration and use of hormones (or more accurately from incorrect administration or misuse of these hormones). In both cases the activity of concern to the European Communities was already illegal in the European Communities and with respect to exports to the European Communities. As a result, there was no reason to believe that lifting the ban would mean that there would be a risk that was not now already present. The United States stated that it would also be interested in the EC explanation of how it could guarantee that there was a zero probability that illegal activity would occur. The United States argued that history (including the history of the European Communities' own failure to prevent illegal use of hormones by EC producers) showed that it was impossible to guarantee that there was a zero probability that illegal activity would occur.

IV.96 The European Communities claimed that it did not insist on "zero risk"; it aimed to prevent any residues. The European Communities have never claimed to "guarantee" a "zero probability that illegal activity will not occur". There was always a possibility that any controls would be evaded but that did not mean that the controls should be abandoned. For example, there were measures in the United States which banned murder, and the sale of heroin, but apparently these measures were sometimes evaded. This did not mean that the measures should be dropped. The European Communities contended that the sixth preambular paragraph of the SPS Agreement made clear that it did not require Members to change their appropriate level of protection or to "downward" harmonize them to less stringent Codex sanitary and phytosanitary measures. Also Article 3.3 clearly indicated that a Member was not required to accept international standards that would result in a lower level of protection than the Member had determined to be appropriate. Under Article 3.2, if a sanitary or phytosanitary measure conformed to a relevant international standard, it was then deemed to be necessary to protect human health, and presumed to be consistent with the relevant provisions of the SPS Agreement and of GATT. However, as the USTR itself had stated: "... the fact that a sanitary or phytosanitary measure differs from a relevant international standard, guideline, or recommendation does not, in itself, create any adverse presumption concerning that measure"⁷².

IV.97 The European Communities noted that the approach adopted by the SPS Agreement was in conformity with previous GATT law and practice, and was a sensible approach for the purpose of establishing multilateral rules and disciplines to guide the development and progressive harmonisation in order to minimize the negative effects on trade from national sanitary and phytosanitary measures. This approach was also in conformity with democratic regulatory procedures, where frequently a dichotomy was operated in the decision making process between risk assessment, which established strictly the scientific basis for regulatory action and risk management which was the process by which the competent authority of a Member decided what action to take in the face of the assessment submitted to it by the scientists. Such action was based on factors such as public health and environmental protection, relevant legislation and legal precedent, application of social, economic and political values and consumer concerns. The European Communities argued that the risk management phase, therefore, in a democratic legislative system, expressly recognized the importance of social value choices.

IV.98 The European Communities argued that its interpretation of the disciplines the SPS Agreement imposed on Members was apparently also supported by the United States in the US Statement of Administrative Action, presenting to the US Congress the results of the Uruguay Round for approval, which stated as follows:

"The S&P 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. In the end, the choice of the appropriate level of protection is a societal value judgement. The Agreement imposes no requirement to establish a scientific basis for the chosen level of protection because the choice is not a scientific judgement"⁷³ (emphasis added).

In another public document also submitted by the USTR to Congress it was stated that:

"... the requirement for a scientific basis applies to SPS measures; it does not apply to the level of food safety that those measures are designed to achieve. The SPS Agreement explicitly recognizes the right of governments to choose the level of food safety that they consider appropriate.


"... Moreover, by requiring that a measure be based on scientific principles (rather than, for instance, requiring that a measure be based on the "best" science or on the "weight of evidence") the Agreement recognizes the fact that scientific certainty is rare and many scientific determinations require a judgement among differing scientific views. The SPS Agreement preserves the ability of governments to make such judgments."

IV.99 The European Communities argued that the table of foods such as potatoes and Lima beans was irrelevant. In the first place, consumers had always been exposed to a certain amount of hormones, or hormone-like substances in their diet; humans evolved alongside them and could cope with them. This was not the case for added hormones. Secondly, the figures in the table were fictitious, in the sense that they were examples and might bear little or no relation to the situation where growth hormones were used in practice. Thirdly, plant substances were not identical to the animal hormones (see in this regard the statement of one of the EC scientific experts, Dr. Liehr, in the transcripts of the meeting of 18 February 1997, paragraphs 757-758. The European Communities also claimed that the comparison which the United States cited in its table was incorrect because it compared meat from a treated heifer with meat from an untreated bull. The correct comparison (which had been omitted in the table) must be with an untreated heifer (not bull). This comparison could be found in the 1995 EC Scientific Conference Proceedings (page 278, table 3):

• meat from untreated bull - 1 560 ng;
• meat from untreated heifer - 8 ng;
• meat from treated heifer - 35 ng.

The human diet normally contained a variety of meat; evidently if all the meat came from treated animals the amount of hormone residue ingested would be significantly increased (more than fourfold on the above comparison). If a proper comparison were to be made involving male animals, it would have to be between treated and untreated males to see how much the levels of female hormones were increased in male animals. According to the US argument, heifer meat would be "within the normal range" if it contained as much testosterone as bull meat.

IV.100 The United States insisted that the US Statement of Administrative Action (SAA) did not support the EC ban. The US position in this dispute was fully consistent with the SAA. The United States explained that the SAA was a communication between the President and the Congress of the United States describing the President's interpretation, and intentions with respect to the implementation, of the Uruguay Round Agreements. It was not a document that was applicable for purposes of the generally accepted rules of treaty interpretation embodied in Article 31 of the Vienna Convention on the Law of Treaties. For example, it was not part of the text of the Marrakesh Agreement Establishing the World Trade Organization ("WTO Agreement") nor was it an international agreement made in connection with the WTO Agreement. However, the SAA confirmed the understanding of the US negotiators that an SPS measure must be based on scientific principles, have a basis in science, be based on an assessment of the risks, and not be maintained without sufficient scientific evidence. But these obligations were clearly set forth in the SPS Agreement itself, which should be construed in accordance with the ordinary meaning to be given to the terms of that Agreement in their context and in the light of its object and purpose. The EC ban failed to meet any of these obligations, and nothing in the SAA relieved the European Communities of those obligations. In contrast, the SAA clearly reflected the US understanding that the SPS Agreement fundamentally required an examination of whether a measure was adopted with a basis in science and based on a risk assessment, rather than as a protectionist measure. The United States noted that this dispute would not have arisen if the European Communities had followed the SPS rules referred to in the SAA. The European Communities had not articulated its appropriate level of sanitary protection, nor had it based its ban on scientific grounds. In contrast, the SAA noted that the determination that a particular substance "poses a health risk is made on scientific grounds". The United States consequently claimed that, for all these reasons, the EC ban was inconsistent with Article 3 (and Articles 2 and 5) of the SPS Agreement.

IV.101 The European Communities responded that the Statement of Administrative Action itself explained that it "represents an authoritative expression by the Administration concerning its views regarding the interpretation and application of the Uruguay Round Agreements, both for purposes of US international obligations and domestic law", and that the "Administration will observe and apply the interpretations and commitments set out in it". When approved by the US House of Representatives, the SAA was said "to carry particular authority". The European Communities concluded that the SAA was a highly informative piece of evidence which indicated the way the SPS Agreement had be interpreted officially by the United States in tempore non suspecto. The European Communities did not contest that Article 3.3 required a scientific justification for the measures taken by a Member as a consequence of the level of protection it deemed appropriate. However, the footnote to Article 3.3 confirmed the prerogative which the SPS Agreement left to Members to make risk management decisions that reflected social value choices distinct from the strict scientific process of risk assessment.⁷⁴ The purpose of the footnote to Article 3.3 was to clarify what was meant by "scientific justification" in Article 3.3, not to define the justification for choosing a level of protection. The level of protection was decided by the Member alone and it was not a judgement that must be based on scientific principles or scientific evidence. The European Communities noted that the SPS Agreement specified that sanitary and phytosanitary measures must be "necessary for the protection of human, animal, or plant life or health", must be applied only to the extent necessary to protect human, animal or plant life or health", must not "arbitrarily or unjustifiably discriminate between Members where identical or similar conditions prevail", must not "be applied in a manner which would constitute a disguised restriction on international trade", and must not be "more trade restrictive than required to achieve [a Member's] appropriate level of protection, taking into account technical and economic feasibility". The application of these requirements did not address the scientific underpinnings for a national regulatory requirement. Instead, these tests targeted the choice by national regulatory authorities among a variety of potential measures, as determined by such factors as impacts on international trade, discriminatory effect, economic efficiency and technical feasibility, and the relationship between the regulatory goal and the measure chosen.

IV.102 The European Communities further argued that under Article 13, national governments were fully responsible for the observance of the Agreement by sub-national governments. However, nothing in the SPS Agreement required that state or local governments adopt, or comply with, federal sanitary or phytosanitary measures. The reasons for this were twofold. First, because it was quite possible that within a single Member with federal constitutional structure there could exist different levels of protection and different types of sanitary and phytosanitary measures. Second, the inability of the federal government of that Member and of the WTO dispute settlement panels to substitute their scientific judgment for that of the local government on the level of protection and the measures applied to achieve its chosen level of protection. The European Communities claimed that if such differences might exist within one single Member, it was obvious that such differences were also likely to exist between different Members with different perceptions of what constituted risk to public health.

IV.103 The European Communities argued that the United States attacked not only the level of protection chosen by the European Communities, but also its measures, by insisting that residues of hormones above naturally present levels did not pose any risk to health and, therefore, did not warrant the application of any measures to control them other than the MRLs recommended by Codex. If this argument were to be accepted, then it would in the future be open to any country to oppose any health measure which was based on the precautionary principle. There were very few examples of health hazards where all scientists agreed on the degree of risk, and countries must be allowed to make judgments as to what degree of risk they were willing to accept. The European Communities argued, by way of example, that there was no scientific proof that bovine spongiform encephalopathy (BSE) was transmissible to humans; there was only a "likelihood" based on the appearance of a very small cluster of human cases in the only country with a high incidence of the disease in cattle. Nevertheless, the European Communities (and most other countries) had taken severely trade-restrictive measures to protect public health as a precaution, because if BSE were transmissible to humans the consequences would be devastating.

IV.104 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, the United States in essence argued that the European Communities should accept meat treated with MGA and check only for residue limits as they were set by the United States. 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 (in this case, no residue at all).

IV.105 The European Communities insisted that the US position in this case contrasted sharply with the legal position of the United States when it had presented the SPS Agreement to Congress for approval, and was dictated by short-sighted economic interests (of maximum US$80 per animal), regardless of the danger to human and animal health posed by the use of these hormones for growth promotion. All countries, including the United States, regulated the use of hormones in farm animals, and the difference between the European Communities and the United States in this respect was the extent to which their use was regulated. The European Communities concluded that this difference in degree of regulation was a reflection of the different levels of consumer protection adopted by the European Communities and the United States. The European Communities had taken a precautionary approach, placing the attainment of a high level of consumer protection before the commercial interests of farmers and pharmaceutical companies. Where there existed a doubt over the safety of a product, the European Communities gave the benefit of doubt to the consumer, especially in cases where the potential risks might affect very large parts of the population. The European Communities claimed that, in the case of growth hormones, the United States had taken an opposite approach, giving the benefit of doubt to the producer. It noted that a 1986 report on Human/Food Safety and Regulation of Animal Drugs, approved by the US House of Representatives, had concluded that "the Food and Drug Administration (FDA) has consistently disregarded its responsibility, because it has repeatedly put what it perceives are interests of veterinarians and the livestock industry ahead of its legal obligation to protect consumers thus jeopardizing the health and safety of customers of meat, milk and poultry".⁷⁵ These criticisms appeared equally valid in the present case.

IV.106 The United States rejected the EC argument that because there was no guarantee that science would not one day identify a risk associated with residues resulting from the use of the six hormones for growth promotion purposes, the European Communities were justified to use a "precautionary approach" to ban such use. Speculation that some day there might be a risk identified, even if there was none now, was not a basis for banning something. If it were, then Members could ban anything. To invoke the precautionary principle, there still must be some scientific information indicating a risk, not just mere speculation, but the European Communities had produced no such scientific information with respect to their ban. On the other hand, to invoke the exception of Article 3.3, the European Communities was required to compare its level of protection against that afforded by a measure based on the Codex standard and show that its ban was a consequence of the EC level of protection being more stringent than the level achieved by use of the Codex standard.

IV.107 The United States also stated that the final sentence of Article 3.3 provided, however, that even if Article 3.3 applied, the measure at issue might not be inconsistent with any other provision of the SPS Agreement. Thus, Article 3.3 was limited only to justifying a departure from international standards and did not justify a breach of any other obligation arising under the SPS Agreement. As a result, the fact that the EC ban was inconsistent with Articles 2 and 5 of the SPS Agreement meant that the EC ban was not justified under Article 3.3 even if the European Communities could establish that the Codex standards would not achieve the EC appropriate level of sanitary protection.

IV.108 The European Communities responded that a hazard (cancer) had been identified and a lack of scientific knowledge on the exact mechanisms by which it arose was not a sufficient excuse for failing to take strict measures to prevent it. Article 5.7 was not applicable to this case because EC measures were not based on insufficient knowledge and were not temporary. The European Communities knew about the hazard and had taken measures to prevent it. In fact, there was clear evidence, from IARC, JECFA and others, that these hormones were carcinogens. They posed a risk and the European Communities was therefore justified in acting. There was not enough scientific evidence to conclude that these hormones, particularly when used by farmers without any official control, did not pose a risk to human health. The European Communities added that international standards, guidelines or recommendations were based on a certain concept of level of sanitary protection. But a different level might require different type of measures. This was what the European Communities applied in the case of these hormones: to achieve its level of protection, the only reasonably available and less restrictive measure was to apply a prohibition on the use of these hormones for growth promotion. The Codex recommendations were designed to achieve a level of protection which was lower than that applied in the European Communities.

(e) Articles 5.1 and 5.2 of the SPS Agreement

IV.109 The United States recalled that Article 5.1 reads as follows:

"Members shall ensure that their sanitary or phytosanitary measures are based on an assessment, as appropriate to the circumstances, of the risks to human, animal or plant life or health, taking into account risk assessment techniques developed by the relevant international organizations".

The United States claimed that the central concept underlying the SPS Agreement was "risk". With limited exceptions not applicable to this dispute, a government must scientifically demonstrate the existence of an identified risk to the life or health of humans, animals or plants resulting from a specific activity before that government could impose or maintain a sanitary measure. While the SPS Agreement did not define "risk" as such, it defined "risk assessment" with respect to food safety as "the evaluation of the potential for adverse effects on human or animal health arising from the presence of additives, contaminants, toxins or disease-causing organisms in food, beverages or feedstuffs" (Annex A of the SPS Agreement). The United States concluded that, as a result, in the context of the present dispute "risk" consisted of the "potential for adverse effects on human health" arising from the presence in meat of residues resulting from the administration to animals of any of the six hormones for growth promotion purposes.

IV.110 The United States claimed that the European Communities had never performed any risk assessment, or relied on any risk assessment, that could serve as a basis for its ban with respect to the six hormones. If there was no risk from a substance, then it could not be said that a sanitary or phytosanitary measure was necessary to protect against a risk posed by the substance. By definition, in order to be a legitimate "sanitary" measure, a measure must protect against one or more specified risks. The United States submitted that the remarkable characteristic of the public debate in the European Communities on these hormones was that the "risk" was usually described in terms of consumer anxieties rather than any observable adverse effect on human health. During the consultations, the European Communities had failed to identify any specific risk to human or animal life or health against which the ban was designed to protect. On two occasions, the European Communities had formed groups of scientists to examine the safety of the hormones (excluding MGA), but both the Lamming Group convened in 1982 and the 1995 EC Scientific Conference had concluded that these hormones were safe when used for growth promotion purposes in accordance with good animal husbandry practice. The United States submitted that the European Communities had failed to identify a risk assessment on which its ban was based and, while suggesting that a risk assessment (or risk assessments) had been performed by "scientific groups and/or conferences" or by "groups of experts established by the EC member States and the European Communities", they had failed to provide the time or place of any such risk assessment, the names of the scientists who had conducted the risk assessment, or the documentary evidence of the results. Furthermore, although the European Communities had argued before the Panel that there was new scientific evidence now available, the European Communities had not relied on any of the studies of the scientific experts whom it claimed had new or differing evidence when it introduced the ban in 1989, nor when it had promulgated its new Directives in 1996. Indeed, the European Communities had apparently not consulted any of those scientists until it was well into a WTO dispute settlement proceeding to review its ban. A risk assessment by the European Communities' own regulatory scientists had never been produced.

IV.111 The United States claimed that the European Communities could not just assert that there was a risk associated with these six hormones when used for growth promotion and then prohibit their use. Article 5.1 required that a Member base a sanitary measure on an assessment of the risks to human or animal life or health. The European Communities had failed to produce anything resembling an assessment of the risks that would form the basis for its ban. The European Communities had in fact rejected every scientific review of the six hormones and had been unable to produce any scientific risk assessment of these hormones that it did accept. It was important to distinguish between having a risk assessment, and basing a measure on that risk assessment. This was not a situation in which there was no risk assessment. To the contrary, the European Communities certainly had risk assessments available for its use.

IV.112 The United States noted that during the Article XXIII consultations, the European Communities had stated that the risk assessment on which it had based its ban was the report of the 1995 EC Scientific Conference. Subsequently, the European Communities had indicated that the 1995 EC Scientific Conference "was not to perform for it a risk assessment, but to provide a public forum for discussion of the scientific aspects of the use of growth promoters", a statement which concurred with the US view of the Conference. In any case, the United States argued that the 1995 report failed to satisfy the requirements of Article 5.1 in at least two key ways: first, the 1995 EC Scientific Conference had found that the five hormones it reviewed were safe for use as growth-promoting hormones and that there was no basis for banning animals, or meat from animals, to which these hormones had been administered for growth promotion; and second, the 1995 EC Scientific Conference had not looked at all six hormones ­ it had not discussed MGA. Accordingly, it could not constitute a risk assessment for MGA. In fact, the 1995 EC Conference did not appear to have actually performed a risk assessment on any of the hormones; it simply "discussed the safety assessment" of the five hormones. The United States contended that in the case of the six hormones, since the European Communities had failed to establish through an assessment of the risks that there was in fact any identifiable risk posed by these hormones, there was no basis for the EC ban on the importation of animals to which had been administered these hormones or meat from those animals. The United States consequently claimed that the EC ban was not supported by an assessment of risk and was consequently inconsistent with Article 5.1.

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

⁶⁹ The definition of SPS measures in Annex A of the SPS Agreement specifies that "(...) [s]anitary or phytosanitary measures include all relevant laws, decrees, regulations, requirements and procedures including inter alia end product criteria; processes and production methods; inspection, certification and approval procedures; quarantine treatments including relevant requirements associated with the transport of animals or plants, or with the materials necessary for their survival during transport; provisions on relevant statistical methods, sampling procedures and methods of risk assessment; and packaging and labelling requirements directly related to food safety."

⁷⁰ Dr. Liehr, Adlercreutz, Cavalieri, Letzler, Pinter and Epstein. The European Communities indicated that Dr. Liehr, for example, in his scientific advice on this issue had stated the following: "In the 1988 JECFA Report, the authors considered only the hormonal receptor-mediated activities of the natural hormones. In view of the considerable amount of scientific evidence which has accumulated since the release of that Report, particularly in respect of the genotoxicity of oestradiol, the Report can no longer be considered applicable to a risk assessment of the use of hormone growth promoters."

⁷¹ Alinorm 95/37, Appendix 2. The "Statements of Principle" is an annex to the report of the 21st Session of the Codex Alimentarius Commission. The "Statements of Principle" provide:

"1. The food standards, guidelines and other recommendations of Codex Alimentarius 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.

"2. When elaborating and deciding upon food standards Codex Alimentarius will have regard, where appropriate, to other legitimate factors relevant for the health protection of consumers and for the promotion of fair practices in food trade.

"3. In this regard it is noted that food labelling plays an important role in furthering both of these objectives.

"4. When the situation arises that members of Codex agree on the necessary level of protection of public health but hold differing views about other considerations, members may abstain from acceptance of the relevant standard without necessarily preventing the decision by Codex."

⁷² US Statement of Administrative Action, p.92.

⁷³ US Statement of Administrative Action, point 3(b). The European Communities noted that this Statement used the example of the so-called "Delaney clause" to illustrate the point :

"The Delaney clauses are entirely consistent with the Agreement's requirement 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 carcinogeneses, the United States prohibits the substance." (point 9).

⁷⁴ Footnote 2 to Article 3.3 reads 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".

⁷⁵ US Committee on Government Operations, 27th Report, 99th Congress, 31 December 1985.