AUSTRALIA - MEASURES AFFECTING IMPORTATION OF SALMON
- RECOURSE TO ARTICLE 21.5 BY CANADA -

2. Animal Quarantine Policy Memorandum 1999/69 (AQPM 1999/69) Importation of Uncanned Salmonid Product

2.21 AQPM 1999/69, of 20 October 1999, clarifies the conditions announced in AQPM 1999/51 with respect to documentation, recognition of competent authorities, definition of "consumer-ready" product, verification and other requirements. Importers must obtain an import permit from the Director of Animal and Plant Quarantine before beginning importation. The application for an import permit must detail the salmonid species to be imported, the country of export and of origin of the salmonid fish, and the product presentation/form.

2.22 Section 1.4 of AQPM 1999/69 states:

"Salmonid product imported into Australia will normally be released from quarantine on arrival in Australia, if it is accompanied by the appropriate documentation and is in consumer-ready form.

For the purpose of this policy, consumer ready product is product that is ready for the householder to cook/consume, including:

• cutlets - including central bone and external skin but excluding fins - of less than 450 g in weight;
• skinless fillets - excluding the belly flap and all bone except the pin bones - of any weight;
• skin-on fillets - excluding the belly flap and all bone except the pin bones - of less than 450 g in weight;
• eviscerated, headless "pan-size" fish of less than 450 g in weight; and
• product that is processed further than the stages described above.

Salmonid product that is not in consumer-ready form (such as head-off, gilled, eviscerated fish of greater than 450 g in weight) must be processed to a consumer-ready stage at an AQIS-approved processing plant before release from quarantine. Information on approved processing plants can be obtained from the Biologicals Unit, AQIS �"

2.23 Section 1.6 of AQPM 1999/69 states: "Equivalent approaches to managing risk may be accepted generally or on a case by case basis. Exporting countries seeking to use alternative risk reduction measures should provide a submission for consideration by AQIS; such proposals should include supporting scientific data that clearly establish equivalence."

2.24 With respect to documentation, Section 2.4 of AQPM 1999/69 indicates:

• Consignments exported to Australia must be accompanied by an official certificate, in English and, were appropriate, the language of the exporting country, confirming that:
• the fish were derived from a population for which there is a documented system of health surveillance and monitoring administered by the Competent Authority;
• the fish were not derived from a population slaughtered as an official disease control measure;
• the fish have been eviscerated;
• the heads and gills have been removed and internal and external surfaces thoroughly washed;
• the fish are not juvenile salmonids⁷ or sexually mature adults/spawners⁸;
• the fish were processed in premises approved by and under the control of a Competent Authority;
• the fish were subjected to an inspection and grading system supervised by a Competent Authority;
• for Atlantic salmon: the fish for export to Australia did not come from a farm known or officially suspected of being affected by an outbreak of infectious salmon anaemia (ISA); and
• the product is free from visible lesions associated with infectious disease and fit for human consumption."

D. MEASURES REGARDING IMPORTS OF NON-VIABLE, NON-SALMONID FINFISH

2.25 After 6 July 1999, Australia also adopted a number of measures for imports of non-salmonid finfish. AQPM 1999/51 contains import policies for these fish imports. AQPM 1999/64 lists a series of cases where no import permit is required, which is clarified by AQPM 1999/79.

1. Animal Quarantine Policy Memorandum 1999/51 (AQPM 1999/51) Final Reports of Import Risk Analyses on Non-Viable Salmonid Products, Non-Viable Marine Finfish Products and Live Ornamental Finfish and Adoption of New Policies

2.26 For non-salmonids, AQPM 1999/51 indicates "under transitional arrangements, existing policies for the importation of � non-viable non-salmonid marine finfish product, and live ornamental finfish will continue to apply. AQIS will specify the time-limit for the transitional arrangements after consultation with relevant stakeholders." Attachment 2 describes the following policies for the importation of non-viable, non-salmonid marine finfish product from any country:

"EITHER

• the fish should be processed in a premises under the control of a competent authority;
• the fish should be eviscerated;
• the fish should be subjected to an inspection and grading system supervised by a competent authority;
• the head and gills should be removed and internal and external surfaces thoroughly washed;
• consignments exported to Australia should be accompanied by official certification confirming that the exported fish meet Australia's import conditions in full;

OR

• for product that has been further processed (beyond that described above) to a consumer-ready state, AQIS will not require an official health certificate."

2. Animal Quarantine Policy Memorandum 1999/64 (AQPM 1999/64) Implementation of New Quarantine Requirements for the Importation of Non-Viable, Non-Salmonid Marine and Freshwater Finfish and Their Products

2.27 AQPM 1999/64, published 22 September 1999, indicates that the new quarantine requirements for the non-salmonid fish will take effect on 1 December 1999. Appendix 1 specifies that no import permit is required for:

(1) Consumer-ready product from all countries (the definition of consumer ready product is a for salmonids, above), with a provision that "Consignments of consumer-ready product should be packaged to facilitate import inspection and will be subject to periodic inspection at the border to confirm that the product is free from lesions associated with infectious disease. As with other imported products, in the event that an imported consignment fails to meet quarantine requirements AQIS would normally detain the consignment at the border, pending a decision to order re-export, further processing or destruction of the product.";

(2) Product of New Zealand origin that is accompanied by a MAF certificate. Product may be partially processed (e.g. head-off, gilled and gutted) or unprocessed (whole, round fish).

(3) Head-off, gilled and gutted fish from countries other than New Zealand, if the fish meet the following conditions:

• "the fish were processed in a premises under the control of a competent authority;
• the fish were eviscerated;
• the fish were subjected to an inspection system supervised by a competent authority;
• the product is free from visible lesions associated with infectious disease;
• the head and gills have been removed and internal and external surfaces thoroughly washed; and
• consignments exported to Australia are accompanied by a health certificate from the competent authority of the exporting country confirming that the exported fish meet Australia's import conditions in full."

All other non-salmonid fish require an import permit. This measure also contains a list of specified finfish species which are normally susceptible to diseases of quarantine concern (Appendix 2).

3. Animal Quarantine Policy Memorandum 1999/79 (AQPM 1999/79) Implementation of New Quarantine Policies for the Importation of Non-Viable, Non-Salmonid Marine and Freshwater Finfish and Their Products

2.28 AQPM 1999/79, published 16 November 1999, clarifies the administrative arrangements for the importation of non-salmonid marine and fresh water finfish product as provided in AQPM 1999/64. The requirements came into effect on 1 December 1999. It contains further specification on the conditions and required documentation for the importation of: (a) non-salmonid finfish product in consumer-ready form; (b) non-salmonid finfish product from New Zealand; (c) eviscerated, head-off non-salmonid finfish product in a consignment accompanied by an official health certificate; (d) other non-salmonid finfish product; and (e) quarantine conditions for the importation of non-viable, non-salmonid marine and freshwater finfish and their products.

E. MEASURES REGARDING IMPORTS OF LIVE ORNAMENTAL FINFISH

2.29 A separate import risk analysis was undertaken with respect to live ornamental finfish (hereafter "the ornamental fish IRA").⁹ After 6 July 1999, Australia also identified certain measures regarding imports of live ornamental finfish. AQPM 1999/51 sets out a number of requirements, to which AQPM 1999/77 provides more detail.

1. Animal Quarantine Policy Memorandum 1999/51 (AQPM 1999/51) Final Reports of Import Risk Analyses on Non-Viable Salmonid Products, Non-Viable Marine Finfish Products and Live Ornamental Finfish and Adoption of New Policies

2.30 As noted in paragraph 2.26, for non-salmonids including live ornamental finfish, AQPM 1999/51 indicates "under transitional arrangements, existing policies for the importation of � live ornamental finfish will continue to apply. AQIS will specify the time-limit for the transitional arrangements after consultation with relevant stakeholders." Attachment 3 to AQPM 1999/51 lists the following requirements for ornamental finfish:

"Policy for all ornamental finfish are that each consignment be accompanied by:

• an animal health certificate from a competent authority attesting to the health of the fish in the consignment and the health status of the premises of export;
• certification from a competent authority that the premises of export are currently approved for export to Australia; and
• certification from a competent authority that the fish had not shared water with food-fish aquaculture premises.

It is policy that each consignment be subject to post-arrival quarantine detention for a minimum period in approved private facilities under quality assurance arrangements approved by AQIS. It is anticipated that the minimum period of quarantine would be 3 weeks for goldfish and 1 week for all other Schedule 6 listed finfish."

In addition, attachment 3 indicates that "�delegates will have regard to the following risk management measures singly or in combination, as appropriate to the pathogens of concern, to the importation of ornamental finfish to address specific disease concerns �" and identifies further additional risk management measures.

2. Animal Quarantine Policy Memorandum 1999/77(AQPM 1999/77) Importation of Ornamental Finfish

2.31 AQPM 1999/77, of 17 November 1999, provides detailed import conditions for ornamental finfish in accordance with the policies announced in AQPM 1999/51. It lists conditions regarding documentation, quarantine, export premises approval, health certification requirements, standards for handling and packaging ornamental finfish, and disinfection procedures. Established quarantine periods are 21 days for goldfish, 14 days for gouramis and cichlids, and 7 days for other ornamental finfish. AQPM 1999/77 states that:

"Implementation of the new requirements will be staged to help facilitate their orderly introduction. From 1 December 1999, importers will require an import permit for marine ornamental finfish. This is an existing requirement for freshwater fish.

All new requirements relating to overseas exporters and Competent Authorities of exporting countries will be implemented from 1 February 2000. �

From 1 May 2000, all importers must fully comply with new post-arrival quarantine requirements. �

�

The new conditions require health certification to accompany all shipments of imported goldfish, including a statement of freedom from specified disease agents. Statements of freedom must ordinarily be based on a testing programme that demonstrates absence of the disease agents in the source population over a period of at least two years. In order to facilitate trade in goldfish in the interim, AQIS will require that goldfish health certification from 1 February 1999 [sic] is based on the following testing regimens: � All health certification from 1 January 2002 must fully comply with testing as detailed in the attached conditions."

F. TASMANIA'S RESTRICTIONS ON SALMONID IMPORTS

2.32 On 20 October 1999, the Government of Tasmania declared a large part of Tasmania to be a protected area for the purpose of preventing the introduction into the area of "whirling disease" (Myxobolus cerebralis). The Tasmanian Government Gazette stated that "fish from the family Salmonidae must not be moved in the protected area", unless an inspector issued an import permit and any conditions specified in that permit were complied with. To date, no import permits have been issued by the Tasmanian Government. The 20 October measure was subsequently revoked on 18 November 1999, and replaced by a measure published in the Tasmanian Government Gazette on 24 November 1999. This new measure prohibits the importation of fresh chilled or frozen salmon unless it is demonstrated to the satisfaction of the Chief Veterinary Officer (of Tasmania) that the salmon has been derived from fish grown in an area free from six specified diseases, or alternatively has been heat-treated in a hermetically sealed container so as not to require refrigeration or freezing. The six diseases identified in the declaration are:

• Infectious haematopoietic necrosis (IHN);
• Infectious salmon anaemia (ISA);
• Aeromonas salmonicida ("furunculosis");
• Renibacterium salmoninarum ("bacterial kidney disease");
• Infectious pancreatic necrosis (IPNV); and
• Myxobolus cerebralis ("whirling disease").

III. CLAIMS OF THE PARTIES

3.1 Canada claims that (a) Australia has failed to take the measures necessary to comply with the recommendations and rulings of the DSB; and that (b) new policies that Australia announced on 19 July 1999, but has not fully implemented, are inconsistent with numerous provisions of the SPS Agreement. Accordingly, both the existence and consistency of Australia's measures are at issue in this dispute. More specifically, Canada claims that on the basis of Australia's actions - and inactions - as of the current date, it cannot reasonably be said that Australia has implemented measures to comply with the recommendations and rulings of the DSB. The necessary measures do not exist.

3.2 Canada further claims that even if Australia has implemented some measures purporting to comply with the recommendations and rulings of the DSB by implementing the policies set out first in AQPM 1999/51 and now in AQPM 1999/69, those measures are inconsistent with numerous provisions of the SPS Agreement. The measures would not remedy Australia's violation of Articles 5.1, 2.2, 5.5 and 2.3 of the SPS Agreement. They are also inconsistent with Articles 5.6, 8 and Annex C.1(c).

3.3 Australia claims that the measures it announced on 19 July 1999, bring it into full compliance with the recommendations and rulings of the DSB. The measures respond in full to the recommendations and rulings of the Dispute Settlement Body (DSB). In product scope they go beyond measures applied to fresh, chilled or frozen salmon from Canada, as well as going beyond the measures relevant to the findings under Article 5.5 of the SPS Agreement (whole frozen herring for use as bait and live ornamental finfish). The transparency of the process and techniques, together with the scientific and analytical rigour employed, resulted in the least trade restrictive measures whilst achieving Australia's appropriate level of protection (ALOP).

3.4 With respect to the finding that the quarantine import prohibition on fresh chilled or frozen salmon was being maintained without a proper risk assessment (Article 5.1 and by implication Article 2.2), a risk assessment was undertaken on fresh chilled or frozen salmon from Canada as part of a generic Import Risk Analysis (IRA) on non-viable salmonid products and other non-viable marine finfish.

3.5 With respect to the finding that there were arbitrary or unjustifiable distinctions in the levels of protection considered to be appropriate in different situations (between fresh chilled or frozen salmon on the one hand and on the other hand whole frozen herring for use as bait and live ornamental finfish) which resulted in a disguised restriction on international trade (Article 5.5 and second sentence Article 2.3), in addition to the measures applying to the salmon product based on a risk assessment, risk assessments were undertaken, inter alia, on the disease risks associated with whole frozen herring for use as bait and on the disease risks associated with live ornamental finfish.

3.6 Therefore, Australia argues, it is clear that Australia has implemented. The measures applying to salmon and other non-viable marine finfish are in force. A certificate for the import of Canadian salmon has been approved and an import permit granted. This certificate is irrefutable evidence that Australia has removed the import prohibition on fresh chilled or frozen salmon from Canada and that the measures as described are being applied to fresh chilled or frozen salmon from Canada. The additional measures applying to live ornamental finfish were progressively introduced from 1 December 1999.

IV. SUMMARY OF MAIN ARGUMENTS OF THE PARTIES¹⁰

A. INTRODUCTION

Australia

4.1 The measures are based on a risk assessment forming part of an Import Risk Analysis (IRA) on non-viable salmonids and on other non-viable marine finfish, together with an IRA on live ornamental finfish, undertaken in parallel and using the same methodology and risk assessment techniques. The approach - disease-based risk assessment and disease-based risk management - together with an enhanced role for certification in risk management - is radically different from the narrowly-defined product/country approach that was the basis of the original Panel's examination.

4.2 The conditions have been drawn up on the basis of the risk management measures necessary to meet Australia's ALOP against the risk associated with a particular disease, including in relation to differences of prevalence in different species or regions (e.g. Atlantic/Pacific, wild/farmed) and different risks that might pertain between, for example, commercially harvested adult fish compared to juveniles or sexually mature adults (spawners in the case of salmon).

4.3 The science-based risk evaluation process of the IRA's destroyed once and for all assumptions that risk could only be managed by applying the same measures to all products, and that the ALOP can be determined by the measures applied, or that a disease found in different host species presents the same risk.

4.4 The IRA's provide a sound basis for the Panel to arrive at legal findings that do not conflict with scientific principles and relevant scientific judgement. The measures applying to salmon and other products do not signal any diminution of Australia's ALOP. What they do reflect is consistency in ALOP across product groups, which is achievable because of the disease-based approach and the evaluation of risk in light of factors relevant to individual disease/product combinations.

4.5 A determination of risk management measures on the basis of comparative risks between diseases, between product types, and between sources (according to past disease status, hosts, etc.) allows for greater precision in the choice of measures and assigns an important role to certification as an effective risk management tool, which, as appropriate, may serve to lessen the need for product-treatment conditions.

4.6 Thus, a combination of a number of conditions applied to one product should be seen as a least trade-restrictive approach to risk management. Crude comparisons between products on the basis of the number of conditions attached to different products are totally devoid of scientific merit and are meaningless. They do not meet the proper scientific objective of comparing risk relativities and reflect outdated concepts that the measure defines the ALOP.

4.7 The measures which Australia has implemented for salmon are substantially trade liberalising, while achieving Australia's ALOP. Australia's largest salmon producer sells a wide range of consumer-ready product. There are no quarantine barriers against Canadian salmon producers competing in that market sector. Canadian producers can also sell to salmon processors, including to manufacturers of smoked salmon. The measures do not serve to preserve any segment of the consumer market for domestic suppliers alone.

4.8 In a wider context, the IRA's and the measures based on those IRA's convincingly demonstrate that Australia's quarantine policies are driven by very high standards of health protection, not trade protection. This is clearly shown by the risk management of diseases identified in New Zealand salmon compared to those of Canadian and US salmon: US and Canadian salmon have broadly comparable disease status, particularly in regard to Pacific salmon. New Zealand has a favourable disease status overall. Accordingly, the quarantine measures applying to New Zealand salmon are less restrictive than those applying to Canadian and US salmon. This is entirely due to disease status and risk.

4.9 The least trade restrictive conditions apply to salmon from New Zealand even though New Zealand is generally regarded as potentially the most commercially competitive supplier to the Australian market. This is overwhelming evidence that the quarantine measures are not arbitrary, unjustifiable or result in a disguised restriction on international trade.

4.10 The disease-based risk management measures applying to salmon from Canada are less trade-restrictive in application than the recommendations contained in the 1995 Draft Report. The 1995 draft recommendations, if adopted, would have continued a quarantine prohibition on salmon other than wild Pacific salmon from Canada and USA and, in some cases would have involved tighter quarantine measures than the risk management measures identified as necessary against specific diseases in the 1999 IRA (VHS, Aeromonas salmonicida).

4.11 The measures respond in full to the recommendations and rulings of the Dispute Settlement Body (DSB). In product scope they go beyond measures applied to fresh, chilled or frozen salmon from Canada, as well as going beyond the measures relevant to the findings under Article 5.5 of the SPS Agreement (whole frozen herring for use as bait and live ornamental finfish). The transparency of the process and techniques, together with the scientific and analytical rigour employed, resulted in the least trade restrictive measures whilst achieving Australia's ALOP.

4.12 Australia recalls the difficulties registered by the original Panel in relation to scientific comparisons between different aquatic products.¹¹ As scientific risk assessments have since been completed on the products forming the basis of the original Panel's findings in relation to Article 5.5 of the SPS Agreement, the Panel is now well placed to go beyond what it freely acknowledged were no more than simplified comparisons, which formed the basis for its earlier conclusions. In relation to a WTO agreement that requires WTO Members to base measures on scientific principles and on sufficient scientific evidence (in particular Articles 2.2 , 5.1 and 5.2 of the SPS Agreement), it is important that legal examinations and legal outcomes respect scientific principles and scientific evidence. The Panel now has a basis to go beyond "first principles".

Canada

4.13 This Panel has been established under Article 21.5 of the Understanding on Rules and Procedures Governing the Settlement of Disputes ("DSU"). Its purpose is to determine the existence and consistency with the Agreement on Sanitary and Phytosanitary Measures ("SPS Agreement") of certain measures purportedly taken by Australia to comply with the recommendations and rulings of the Dispute Settlement Body ("DSB").

4.14 It is Canada's position that Australia has failed to take the measures necessary to comply with the recommendations and rulings of the DSB. It is also Canada's position that new policies that Australia announced on 19 July, but for the most part has not implemented, are inconsistent with numerous provisions of the SPS Agreement. Accordingly, both the existence and consistency of Australia's measures are at issue in this dispute.

4.15 The new policies that Australia announced on 19 July are at odds with sound science and internationally-accepted good practice. On the one hand, Australia would impose extremely stringent and excessive restrictions on salmonids in the place of its complete ban on commercial imports of fresh, chilled or frozen salmon from Canada. On the other hand, Australia did not at the same time impose new restrictions on imports of non-salmonid finfish and live ornamental fish. These latter categories include uneviscerated bait and feed-fish and live ornamental fish known to host many serious disease agents exotic to Australia, including disease agents that Australia uses as an excuse for imposing the stringent restrictions on salmon imports.

4.16 Australia later imposed new restrictions on non-salmonids and, according to its policies, at some point would impose new restrictions on live ornamental fish. However these restrictions are significantly less stringent than its salmonid restrictions and contain loopholes unavailable for salmonid imports. Moreover, Australia continues to impose no legislative restrictions at all to control the spread of diseases from the domestic movements of non-viable finfish for human consumption, despite its insistence that such controls are required on imported products.

4.17 It is no coincidence that the combined effect of these policies is to protect the competitive position of Australia's salmon aquaculture industry against imports while leaving other Australian fisheries and aquaculture interests free to import and trade the products on which they depend, including bait and feedfish and live ornamental fish.

B. TERMS OF REFERENCE

Australia

4.18 Australia sought immediate rulings from the Panel in relation to its terms of reference, the product scope of the dispute, and the examination of evidence in existence at the time of the original panel. Australia contends that Article 21.5 of the DSU limits an Article 21.5 panel's mandate to an examination of the "... measures taken to comply with the recommendations and rulings [of the DSB] ..." This authority cannot be extended by a request for the establishment of an Article 21.5 panel.

4.19 Having elected to request the establishment of an Article 21.5 panel, Canada cannot seek to perfect or correct claims and arguments of the original dispute or to re-open the findings adopted by the DSB. It cannot seek to introduce evidence that existed at the time of the original panel proceedings. Its claims and arguments must be limited to the measures taken to comply - that is, to new circumstances. Australia agreed with the arguments submitted by the European Communities regarding old and new facts and evidence (paragraph 4.355, below). The original dispute resulted in no findings, either under Article 5.5 or Article 2.3, of "discrimination" in the sense of either Article.

4.20 The basis of the Panel and Appellate Body's findings under Article 5.5 was whole frozen herring for use as bait and live ornamental finfish. Australia is not required to take "measures to comply" beyond the product scope of the Article 5.5 findings. Canada cannot raise new claims and arguments on measures other than those applying to imported frozen herring for bait and live ornamental finfish. Nor can it raise new claims and arguments in relation to measures applying to domestic fish. As confirmed by the Appellate Body, the Panel did not conclude that the alleged absence of internal controls constitutes a violation of Article 5.5.¹²

Canada

4.21 Canada argues that Australia's position on the scope of this dispute is not unlike that taken by the European Communities in EC - Regime for the Importation, Sale and Distribution of Bananas - Recourse to Article 21.5 by Ecuador¹³ [hereinafter, the Ecuador case]. In that dispute, the EC argued that the panel's terms of reference were limited to the matters on which the DSB adopted its recommendations or rulings, based on the original panel and Appellate Body Reports.¹⁴ The panel in the Ecuador case determined that the limitation suggested by the EC could not be found in its terms of reference or in the ordinary meaning of the terms of Article 21.5 of the DSU.¹⁵

4.22 The Ecuador panel found support for its interpretation of Article 21.5 in the context and the object and purpose of the DSU, in particular, Articles 21.1 and 3.3 regarding, respectively, prompt compliance with the recommendations and rulings of the DSB and the prompt settlement of disputes. It concluded that acceptance of the EC argument would not promote and would not be consistent with the prompt settlement of disputes.¹⁶

4.23 The findings of the Ecuador panel are relevant to the present case. It is fully within the scope of Article 21.5 for the Panel to consider whether the measures that Australia claims to have taken to comply with the recommendations and rulings of the DSB are consistent with any provision of the SPS Agreement that Canada identified in its request. Indeed, the Panel is bound to do so in order to fulfil its terms of reference under Article 21.5. The fact that the original Panel's findings did not extend to "discrimination" under Articles 2.3 or 5.5 of the SPS Agreement, or that the Panel's analysis under Article 5.5 focused on herring and live ornamental finfish, does not constrain the scope of the current proceedings.

4.24 It would not be consistent with either the prompt settlement of disputes or compliance with the recommendations and rulings of the DSB if, for example, Australia could assert that it had only to comply with Article 5.5 with regard to a "disguised restriction on international trade" but not with regard to "discrimination", and with regard to whole frozen herring but not pilchards (or whole fresh herring) because the reasons of the Panel and the Appellate Body focused on the former only. If Australia's position were correct, panels and the Appellate Body would have to comment on every piece of evidence filed by any party or third party, or in this case, comment on every possible species that could host a relevant disease agent.

4.25 In any event, the findings on which the recommendations and rulings of the DSB are based are not nearly as circumscribed as Australia implies. For example, the findings of the Appellate Body with respect to Article 5.5 are limited neither to a "disguised restriction on international trade" nor to whole frozen herring and live ornamental finfish.

C. THE TASMANIAN MEASURE

Canada

4.26 Tasmania first, on 20 October 1999, put in place a ban on imports of salmonids. On 18 November 1999, it revoked this measure and replaced it with a new form of ban that would require Canada to demonstrate that any dead, eviscerated, fresh chilled or frozen salmon products that it wished to export to Tasmania were from areas free of six diseases. Although these diseases correspond closely to those that are the basis for Australia's measures, the Tasmanian measure is significantly more trade restrictive in that Australia requires a form of area disease freedom for ISA but not the other diseases of concern to it. Thus, even the limited "consumer-ready" product forms that Australia will allow to be imported may not be imported into Tasmania.

4.27 The effect of Tasmania's measure on Australia's obligation to comply with the recommendations and rulings of the DSB is clearly within the Panel's terms of reference, as a matter of both law and policy. Australia claims that it has complied with the recommendations and rulings of the DSB in part by removing the import prohibition on Canadian salmon. The Tasmanian ban restores that import prohibition for part of Australia. Australia is legally responsible for the Tasmanian ban under Article 13 of the SPS Agreement and Article 27 of the Vienna Convention on the Law of Treaties.

4.28 It would be absurd to hold that the effects of a measure by one level of government that thwarts a measure by another level of government cannot be considered by an Article 21.5 panel because it is not itself a measure "taken to comply". Such a result would neither promote nor be consistent with prompt compliance with the recommendations and rulings of the DSB and the prompt settlement of disputes. To hold as Australia would have this Panel do would give an advantage to federal states, which could encourage or simply permit its constituent jurisdictions to enact measures to effectively nullify other measures taken by the federal government to comply with recommendations and rulings of the DSB.

4.29 Canada is asking the Panel to consider the consequences of Tasmania's ban for Australia's non-compliance with the recommendations and rulings of the DSB. The Tasmanian ban perpetuates for part of Australia the now 24 year-old ban that was found by the Panel, the Appellate Body and the DSB to be inconsistent with Australia's obligations under the SPS Agreement. It does so not on any new or independent basis but in a manner already found to be inconsistent with the SPS Agreement.

4.30 As a matter of law, Australia is fully responsible for Tasmania's measure. This is what Canada argued and what the Panel found in its preliminary ruling. As the Panel has already issued its ruling, Australia's further arguments are moot. They are also faulty.

4.31 Australia contends that Tasmania's measure could not be characterized as the measure of a territorial sub-division of Australia but rather a measure taken by "other than a central government body" in the sense of Article 13 of the SPS Agreement. In Canada's view, this is a distinction without a difference. In any event, pursuant to Article 13, Australia is fully responsible for measures taken by "other than central government bodies" within its territory.

4.32 Australia also refers to Article 22.9 of the DSU. However, that article confirms that Canada may invoke the dispute settlement provisions of the "covered agreements" in respect of measures affecting their observance by regional or local governments in Australia. Pursuant to Appendix 1 to the DSU, the covered agreements under the DSU include both the SPS Agreement and the DSU itself. Article 22.9 also makes clear that the provisions of the covered agreements and the DSU relating to compensation and suspension of concessions apply where it has not been possible for Australia to secure observance of the covered agreements by Tasmania.

4.33 In the present case, it appears that Australia has been unable to secure the observance of the DSU and the SPS Agreement by Tasmania. Tasmania's measure - whether the original ban or the new measure - nullifies Australia's own measures taken to comply with the recommendations and rulings of the DSB, regardless of the consistency of Australia's own measures. Thus, contrary to Australia's assertions, Canada need not seek an independent ruling on the consistency of Tasmania's measure with the SPS Agreement. It therefore is fully within the jurisdiction of this Panel, as the Panel has already found, to consider Tasmania's ban in the context of Australia's compliance with the recommendations and rulings of the DSB.

4.34 At a minimum, the additional certification requirement is not based on a risk assessment, contrary to Article 5.1 of the SPS Agreement and, by implication, is also inconsistent with Article 2.2. It is an unnecessary information requirement, contrary to Article 8 and Annex C.1(c) of the SPS Agreement. It is also inconsistent with Article 5.6: Australia has acknowledged by its own measures that there are significantly less trade restrictive measures reasonably available to achieve its appropriate level of protection. This is without prejudice to the separate issue of whether Australia's measures are also inconsistent with Article 5.6.

Australia

4.35 Australia argues that the Tasmanian measure is outside the Panel's terms of reference. Article 21.5 limits the mandate of an Article 21.5 panel to "measures taken to comply". In the current dispute, these are the measures taken by Australia to implement the recommendations and rulings of the DSB relating to the findings of the Appellate Body and the Panel report as modified by the Appellate Body. The effects or consequences of another measure not taken to comply is outside an Article 21.5 panel's mandate. The Tasmanian measure does not form part of the measures taken by Australia to comply with the DSB recommendations and rulings. Canada has not contested Australia's statement of fact that the Tasmanian measure has been taken independently of Australia's measures. Tasmania's measure is separate and distinct from Australia's measures. The Tasmanian measure consists of a completely new measure and a completely new claim.

4.36 The Panel cannot make a finding on the application of compensation or suspension of concessions in relation to any Tasmanian measure. Article 22.9 of the DSU is the operative provision, read in conjunction with Article 13 of the SPS Agreement. At a minimum the DSU provisions relating to compensation and suspension of concessions cannot apply unless the DSB has ruled that a provision of a covered agreement has not been observed in relation to a measure taken by a regional government.

4.37 Canada has not confirmed that it is seeking a ruling on the SPS consistency of the Tasmanian measure. It cannot therefore be inferred that Canada is seeking to "challenge" the SPS consistency of Tasmania's measure. On the contrary, it is reasonable to assume from the statement in Canada's letter of 16 December 1999, "�Canada need not seek an independent ruling on the consistency of Tasmania's measure with the SPS Agreement", that Canada continues to maintain the position put forward in paragraph 5 of its second supplementary submission, i.e. Canada is not requesting the Panel to rule on the SPS consistency of Tasmania's measure.

4.38 If, as is apparent, Canada is not seeking a ruling on the consistency with the SPS Agreement of Tasmania's measure, it follows that the DSB would be prevented from any ruling, under Article 22.9 of the DSU, that a provision of the SPS Agreement had not been observed in relation to the particular measures.

4.39 As stated in paragraph 22 of Canada's Oral Statement of 10 December, the issue for Canada "� is whether the ban effectively obstructs any such compliance measures as Australia may have taken". Consistent with its earlier characterization of the Tasmanian measure as one that "� thwarts a measure by another level of government", Canada has not contested Australia's statement of fact that the Tasmanian measure is distinct and separate from the measures taken by Australia to comply. As confirmed by the Panel, any measure other than a "measure taken to comply" falls outside the scope of a compliance panel. If Canada does not characterize the Tasmanian measure as part of measures taken by Australia to comply with the DSB recommendations and rulings, it is not open to the Panel to conclude otherwise. This is a separate matter from any consideration whether any measure covering the same product should be considered to come within the Panel's terms of reference.

4.40 Moreover, Canada has not sought to clarify whether paragraph 22 of its rebuttal submission - characterized by the Panel as "arguments" - in fact constitutes a "claim" of SPS inconsistency of a Tasmanian measure. There is a difference between "claims" and "arguments" and the issue before the Panel is whether or not Canada has made a "claim" of SPS inconsistency. If it has not submitted a claim of SPS inconsistency, the Panel cannot proceed to make any findings on the basis of "arguments".

4.41 If, on the other hand, Canada is deemed to have submitted a "claim" of SPS inconsistency by virtue of paragraph 22 of its rebuttal submission, it is Australia's contention that any such "claim" - as distinct from "arguments" - cannot be validly made in a rebuttal submission. Canada was not denied the opportunity to put forward claims of SPS inconsistency at the time of its second supplementary submission, but seemingly elected not to do so. Australia refers to its request for a procedural ruling by the Panel on Canada's right to present new claims in its rebuttal submission. This is a matter that relates to the functioning of the WTO dispute settlement system.

4.42 Paragraph 22 of Canada's rebuttal submission does not go beyond a mere assertion of inconsistency of a Tasmanian measure. Canada's oral statement of 10 December and its letter of 16 December do not attempt to elaborate on the assertions made in its rebuttal submission and as such, do not provide Australia with anything to rebut. Canada's "arguments" do not provide any basis for a legal rebuttal by Australia. In particular, Canada has not sought to frame its assertions again the specific legal tests of the provisions of the SPS Agreement cited in its rebuttal submission and in its oral statement, including whether or not the Tasmanian measure is significantly more trade restrictive than Australia's measures.

4.43 Canada has not claimed, against specific provisions of the SPS Agreement, that the Tasmanian measures are inconsistent. However, Canada presumes that the Tasmanian measures are inconsistent with the SPS Agreement. It then seeks to use this presumption to imply non-conformity of the 19 July 1999 measures. Canada cannot imply a presumption of inconsistency by simple reference to Article 13 of the SPS Agreement.

4.44 Canada has not substantiated its assertion of Australia's inconsistency with Article 13 of the SPS Agreement. Article 13 of the SPS Agreement provides, inter alia, that "Members are fully responsible for the observance of all obligations �" [of the SPS Agreement]. Australia's obligations for a measure taken by Tasmania therefore relate to "observance" of SPS obligations by Tasmania.

4.45 Canada has not submitted any claims or arguments that Australia has not formulated and implemented "positive measures and mechanisms in support of the observance of the provisions" of [the SPS Agreement] by Tasmania. In paragraph 8 of its letter of 9 December, Australia submitted positive evidence that it had formulated and implemented such measures and mechanisms, in regard to the Memorandum of Understanding and consultations initiated under that Memorandum.

4.46 Canada has done no more than assert that "it appears that Australia has been unable to secure observance of the DSU and the SPS Agreement by Tasmania". In order to substantiate that assertion, Canada would first need to establish a prima facie case that Tasmania's measure is not observing the provisions of the SPS Agreement. If Canada is not seeking a ruling on the SPS consistency of the Tasmanian measure, Article 13 does not have application.

4.47 Australia has neither required nor encouraged the Government of Tasmania to take its measures. Commonwealth Ministers are on the public record in objecting to such action. Australia has formulated and implemented positive measures and mechanisms in support of the observance of the provisions of the SPS Agreement by Tasmania. Consultations are continuing between the Commonwealth and Tasmania, including consultations under the auspices of the 1995 Memorandum of Understanding on Animal and Plant Quarantine Measures, signed by Commonwealth, State and Territory Ministers. The purpose of the Memorandum is to give effect to Australia's obligations under Article 13 of the SPS Agreement. A further meeting between Commonwealth and Tasmanian officials is scheduled for 21 January 2000.

4.48 Australia continues to apply the measures announced on 19 July 1999 to the whole of Australia's territory. Australia has not taken any action to encourage or give effect to Tasmania's measure. Contrary to Canada's assertion, Tasmania's measure does not "nullify" any measures taken by Australia to comply with the DSB recommendations and rulings. According to the Oxford Dictionary, "nullify" means to "cancel" or "neutralize". Tasmania's measure does not serve to deny access of Canadian salmon to "a large part of Australia", as argued by Canada. In both geographical and population terms, Tasmania is the smallest State in Australia. Tasmania's population accounts for around 2 per cent of Australia's total population of 18 million.

4.49 In the alternative, and without prejudice to Australia's views on the SPS consistency of Tasmania's measure, it is premature to conclude that all possibilities for securing observance have been exhausted. Consultations under the MOU have been scheduled for 21 January 2000. It has not proved possible to schedule a meeting before that date.

4.50 Furthermore, Australia argues, the SPS-consistency of the 19 July measures must be examined separately from the Tasmanian measure. The SPS consistency of a Tasmanian measure cannot be the basis for a finding of inconsistency of the 19 July measures. A Tasmanian measure cannot be used to "shed light on" or read down the conformity of the 19 July measures which are otherwise consistent with the SPS Agreement.

7 Defined as fish that weigh less than 200g in head-off, gilled and gutted presentation.

8 Defined as fish with developed gonads.

9 Import risk analysis on live ornamental finfish, Australian Quarantine and Inspection Service, July 1999.

10 This section presents the summary of main arguments as provided by the parties. Their various arguments have been presented for each of the main issues under consideration.

11 Australia - Salmon Panel Report (WT/DS18/R), Annex 1, Footnote 469.

12 Australia - Salmon Appellate Body Report (WT/DS18/AB/R), para. 176.

13 European Communities - Regime for the Importation, Sale and Distribution of Bananas - Recourse to Article 21.5 by Ecuador, Report of the Panel, (WT/DS27/RW/ECU), 12 April 1999.

14 Ibid., para. 6.3.

15 Ibid., paras. 6.7-6.8.

16 Ibid., para. 6.9.

To continue with D. DUE PROCESS

Return to Table of Contents