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WORLD TRADE
ORGANIZATION

WT/DS18/RW
18 February 2000

(00-0542)
 
  Original: English


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



REPORT OF THE PANEL

(Continued)


3. Diseases of imported salmonids versus domestic fish

Canada

4.208 As both the 1999 Draft Report and the Draft Ornamentals Report acknowledge, there are significant finfish diseases found in Australia that have a restricted or regional distribution. Almost all of these diseases are listed by the OIE. To prevent the spread of these diseases within Australia, interstate movement restrictions are enforced by state and territory governments. Strikingly however, Australia admits that these restrictions apply only to live fish and their genetic material. No legislative restrictions relating to the spread of diseases of finfish currently apply to the movement, within Australia, of non-viable finfish products for human consumption.

4.209 Australia effectively has a double standard. Either Australia has different appropriate levels of protection for its domestic products as compared to imported ones or it believes that only imported dead fish are capable of spreading disease.

Australia

4.210 With respect to Canada's arguments, Australia observed that the following factual issues were relevant. Fish for human consumption is traded in eviscerated form at a minimum to prevent rapid product deterioration. Australia has a 9 million square kilometre fishing zone and a highly diverse climate zone, however, apart from salmonids, it has few of the cooler climate fish species found in Canada. VERV and epizootic haematopoietic necrosis virus (EHNV) have had minimal impact and would not be expected to have particularly significant consequences if spread. In most of the instances cited by Canada, the diseases are associated with a particular host and are only endemic in regions where there are significant host populations.

4.211 Differences in measures applying to imported salmon and non-salmon product does not constitute a prima facie case of the same or similar risk. Moreover, the Panel cannot examine the consistency of measures applying to the importation of all non-viable salmonids. Canada has not established a prima facie case.

4.212 Goldfish ulcer disease (GUD), VERV, EHNV, epizootic ulcerative syndrome (EUS) or herpes virus are not "new diseases". Further restrictions would not be warranted under the ALOP/risk management approach. Canada does not identify a particular species against a specified disease against a particular region. "Restricted or regional distribution" of a disease cannot form the basis of comparisons of "consequences"; the distribution of the host species is equally important. Canada seeks to evade examination of its claims under the first element of Article 5.5 by relegating its comparison-based arguments to the first sentence of Article 2.3 and the second element of Article 5.6

4.213 In the alternative, Australia provides the following rebuttal evidence. GUD is found in goldfish and carp in NSW and Victoria. There are interstate controls on the movement of live product for goldfish; there is no commercial trade in non-viable goldfish. Live carp imports are prohibited; it is an introduced species that has established in inland waterways; it has not been farmed and programmes are in place to attempt its eradication.

4.214 Contrary to Canada's assertions, there are no populations of turbot, grouper, halibut or sea bass in Australia, and only one species of jack (marketed as silver trevally). VERV has been reported only in barramundi in Australia, and only rarely in fish older than larvae and juvenile fish which are not normally harvested for human consumption. VERV in barramundi is considered endemic wherever wild populations of freshwater and saltwater estuarine species of barramundi are found in Australia. Appropriate hygienic and managerial practices instituted to deal with the virus have been so successful that few outbreaks of the disease have occurred since 1990/91.

4.215 Barramundi populations are distributed in the north of Australia from slightly south of the Tropic of Capricorn. It has been suggested that a virus group related to VERV may be endemic throughout the Pacific and associated water bodies. There are a number of viral agents that may lead to the condition known as VERV, which may be seriologically related, but not identical. VERV has not been reported in silver trevally.

4.216 The original Panel has detailed evidence on the hosts of EHNV and the spread of EHNV in different parts of Australia. The primary host is redfin perch, a wild recreational fish found in most regions where salmonids are located, including Tasmania. A recent New Zealand risk assessment on salmonids from Australia concluded that infection of redfin perch was the most likely scenario for EHNV establishment in New Zealand, as rainbow trout are relatively resistant to infection. EHNV is not reported in salmon.

4.217 With respect to EUS, Canada does not identify the species or regional distribution of the disease in Australia. In Australia, EUS most commonly affects wild fish such as mullet, bream, and Australian whiting; it is found in New South Wales, Queensland, the Northern Territory and Western Australia.

4.218 Herpesvirus is highly host specific to pilchards (a wild ocean fish); it is not associated with salmonids. It is endemic to all marine waters where pilchards are found in Australia and appears unique to Australia and New Zealand. AQIS knows of no reports of herpes viruses in pilchards anywhere in the world apart from Australia and New Zealand.

4.219 The 1999 Report notes that there is limited information and little research on disease in "lower value" fish species such as herring. Wild populations of lower value fish such as herring are not normally the target of active health surveillance and monitoring; rather, information on disease in these populations is normally gathered passively and in the course of investigation of specific disease events. In the 1999 risk analysis, Dr. McVicar advised: "� it is only a few exceptional cases that epizootics of acute disease have been detected in wild marine fish populations" (page 26). The 1999 Report also notes that "in addition to the general lack of surveillance for disease in wild fish, the accuracy of information on the prevalence of disease agents is further confounded by uncertainty as to the extent to which populations commingle or overlap within geographic regions" (page 26).

4.220 The best studied disease agent of herring is viral haemorrhagic septicaemia virus (VHSV) which is considered to be endemic in and to have caused significant mortality events in wild herring. The 1999 Report concluded that VHS is the only disease of herring for which specific risk management measures are warranted. This conclusion is based on the paucity of scientific evidence on significant pathogens in wild herring and the fact that VHSV is known to be endemic, sometimes at high prevalence, in the wild herring populations of the world.

4.221 Australia notes that the only practical OIE recommendation in relation to herring product is evisceration to address risks associated with VHSV. (Australia understands that most countries could not meet the alternative recommendation of the OIE, i.e. provision of certification attesting to country or zone freedom from VHS. In considering risk management, the 1999 Report notes: "� as VHSV usually localises in the viscera, evisceration would significantly reduce risk". Accordingly, key risk management measures for herring in respect of VHS include evisceration, removal of the head and gills, inspection and processing in approved premises and certification that the product is free from visible lesions associated with infectious disease (page 367).

4.222 The 1999 Report goes on to state:

"AQIS has been unable to identify pre-export risk management measures that would reduce the risk of establishment to the extent required to meet Australia's ALOP. Accordingly, the importation of whole, round finfish of susceptible species will not generally be permitted."

4.223 In noting that the use of imported herring for bait purposes will not generally be allowed in Australia, the 1999 Report acknowledges that such proposals will be considered on a case-by-case basis, taking into account the specific circumstances, to ensure that there is an acceptably low probability of VHS establishing in Australia. Such circumstances could, for example, include the provision by an exporting country of an official statement certifying the freedom of specific populations from VHSV. In keeping with the arrangements for salmonids, Australia would expect that such certification would be supported by an appropriate system for surveillance and monitoring of the health of wild herring.

4.224 The 1999 Report concludes that the quarantine risks associated with the importation of salmon primarily relate to six serious diseases of salmon, five of which are endemic in Canadian salmonids. All five could have serious consequences if they were to become established in Australia. Most commercial salmonid populations are the subject of active surveillance and monitoring for significant disease agents, the occurrence of which would normally be the subject of official notification. Based on analysis of relevant scientific information, the 1999 Report concludes that certain risk management measures, based on official salmonid health surveillance and monitoring, are warranted for eviscerated salmonid product.

4.225 For herring, the 1999 Report concludes that there is only one disease agent in relation to which specific risk management is warranted and that this agent is endemic in the major herring populations of the world. Most countries do not practise active health surveillance and monitoring of populations of "lower value" wild fish, including herring. The risk management measures appropriate to this species/disease agent combination are based on product processing and certification (comparable with the measures for salmonid product). In light of the requirement to adopt the least trade restrictive conditions and recognising that official surveillance and monitoring of herring health would not significantly reduce quarantine risk, the 1999 Report did not identify a need for measures supported by official health surveillance and monitoring.

4.226 The measures applying - or scheduled to apply - between fresh chilled and frozen salmon and imported fish having diseases in common - or between imported and domestic fish not having diseases in common - do not constitute differences in levels of protection. They are fully justifiable by the scientific risk assessment. The measures applying from 1 December 1999 on non-viable non-salmonids, and that being progressively introduced from 1 December 1999 on ornamental finfish, will eliminate any differences in levels of protection. Canada has not explained how the additional arrangements could be applied more rapidly in practice, given that they cannot be applied retrospectively (e.g. the requirement for countries to maintain health testing records for a 2-year period for goldfish). The different situations applying between imported salmon and domestic fish having different diseases are not rationally comparable.

4. Arbitrary and unjustifiable distinctions

Canada

4.227 There is no tenable explanation for Australia's decision to impose lesser restrictions on non-salmonids and on live ornamentals than on imported salmonids. Nor is there any tenable explanation why Australia would insist on controlling imported dead fish to prevent the spread of disease but would forego such controls entirely on its domestic fish products in the face of serious diseases of restricted or regional distribution.

4.228 Dr. McVicar's comments that Australia's quarantine measures for live ornamental finfish "will not necessarily detect and remove covertly infected fish" with atypical A. salmonicida is an important acknowledgement. Australia's measures do not appear to impose any post-quarantine controls on how live ornamental finfish are handled. Such fish probably will come directly into contact with other fish when in the care of wholesalers, retailers and consumers and may well be released directly into the environment.

4.229 In the case of bait and feed fish, even the 1999 [Draft] Report acknowledges that fish which are imported for use as bait and aquatic animal feed obviously present a greater probability of introducing disease agents (if present in the fish) into the aquatic environment than that associated with imported product for human consumption.80

4.230 As the original Panel noted with respect to herring used as bait and live ornamental finfish, the risk posed by imports of dead, eviscerated salmon for human consumption cannot be said to be higher than that posed by pilchard imports. On the contrary, all evidence suggests that pilchard imports pose the higher risk of the entry, establishment and spread of exotic diseases. The volume of pilchard imports is vastly higher than that of any anticipated salmon imports, pilchards are not subjected to anything approaching the rigorous inspection and grading of salmon for human consumption, they are not eviscerated and they are deposited directly into the aquatic environment.

4.231 Faced with the knowledge that significant pathogens, including the same disease agents that it uses to justify restrictions on salmonids, are found in non-salmonids, including bait and feed fish, Australia nevertheless maintains less restrictive measures on the latter.

4.232 The only partial explanation Australia offers for this distinction in its appropriate levels of protection is that there is an established history of importation of non-viable non-salmonid marine fish into Australia and there are no substantiated reports to indicate that this practice has resulted in the establishment of disease. It relies on an Australian state/industry council report which determined, on this basis that the risk of introducing an exotic disease that is capable of producing a large scale fish kill is either very low or does not exist at all.81

4.233 Throughout the original Panel process, Australia was adamant that the fact that something had not happened offered no evidence that it could not happen or was unlikely to happen. Thus, the fact that there has never been a documented case of disease transmission via imports of dead, eviscerated fish was, in Australia's view, meaningless.82 Now, Australia uses the same type of data as evidence that the risks posed by baitfish imports are extremely low.

4.234 If the absence of disease transmission involving mere thousands of tonnes of product from a few species in a small area is relevant to suggest very low to non-existent risk, then it stands to reason that the absence of disease transmission from billions of tonnes of dead, eviscerated fish of all species moving all around the world for decades is even stronger evidence that the risk from such product is vanishingly small. Moreover, as the 1995 Draft Report acknowledged, prior to 1975 and for many years, Australia imported thousands of tonnes of uncooked salmon product.83 Dr. Wooldridge considers Canada's assertion to be logical in the absence of acceptable evidence to the contrary. Australia has offered no such evidence.

4.235 The type of data that Australia relies on to downplay the risks posed by baitfish imports merely reinforces the arbitrary and unjustifiable nature of Australia's restrictions on dead, eviscerated salmonid imports.

Australia

4.236 In the event of a Panel finding that Australia has adopted distinctions in levels of protection in different situations, those levels of protection do not exhibit arbitrary or unjustifiable distinctions. The evidentiary basis for the original Panel findings has ceased to exist. The Panel now has before it different measures and comprehensive scientific evidence in the form of risk assessments.

4.237 Canada's arguments rest on an assertion that "The type of data that Australia relies on to downplay the risks posed by baitfish import merely reinforces the arbitrary and unjustifiable nature of Australia's restrictions on dead, eviscerated salmonid imports". This is rejected on the facts. Nowhere can Canada point to any "downplaying" by Australia of the risks that might be attached to baitfish imports in the evaluation of risks in the 1999 IRA's. For VHS, the risk evaluation demonstrates precisely the opposite. Canada does not submit any evidence on live ornamental fish. Canada does not examine the relevant conclusions based on the uncontested scientific evidence and evaluations in the 1999 IRA's. Dr. McVicar did not agree that the risk of transmission of a disease in common from bait fish to salmon would always be higher than from salmon for human consumption. While transmission across the species barrier was not impossible, the risk of transmission was generally higher within a species. Dr. McVicar advised that consideration should be given to different strains of a disease, e.g. VHS. If cod was fed to turbot, the risk of transmission would be very low. The same was true for rainbow trout.

4.238 In relation to ornamental finfish, the 1999 Report sets out the basis for the measures applicable to live ornamental finfish and salmonid product. These commodities differ markedly in respect of quarantine risk and intended end-use in Australia. The risk assessments consider inter alia the likelihood and consequences of disease agents entering and becoming established in Australia on a disease-by-disease basis.

4.239 To address risks associated with A. salmonicida in goldfish, the fish must be certified as originating from a source free of A. salmonicida and must undergo a 21-day period of post-arrival quarantine, during which they are observed for signs of disease. The application of similar conditions to imported salmonid product would effectively halt importation because the disease agent is endemic in most commercial salmon populations and the required certification could not be provided. The imposition of 21-day post-arrival quarantine detention would be highly trade restrictive, given the perishable nature of the commodity, and would not add significantly to quarantine security.

4.240 In terms of technical and practical feasibility, it cannot be presumed that measures applied to live ornamental finfish are equally appropriate for non-viable product. For example, evisceration and de-heading is not an option for product whose commercial value is in the live form. Similarly, quarantine witholding periods would not be a practical or effective measure for non-viable product. For live ornamental finfish, certification and permit systems make a significant contribution to risk management, as well as other measures such as quarantine witholding periods and visual inspection. It is not scientifically valid to make simplistic comparisons of measures applied between live ornamental finfish and non-viable fish product.

4.241 In conclusion, Canada's evidence does not constitute a prima facie case. Australia has submitted detailed scientific and factual evidence - based on risk assessments whose science is not contested by Canada - that there are no arbitrary or unjustifiable distinctions in levels of protection. The evidentiary basis for the original Panel's findings have ceased to exist.

5. Discrimination or a disguised restriction on international trade

Canada

4.242 The arbitrary and unjustified distinctions in Australia's appropriate levels of protection result in discrimination or a disguised restriction on international trade. In EC - Hormones, the Appellate Body relied on certain indicators that an arbitrary or unjustifiable distinction in a Member's appropriate levels of protection may result in discrimination or a disguised restriction on international trade. The original Panel in this case took the same approach, and was upheld by the Appellate Body.84

4.243 The only one of these factors that no longer fully applies is the change in conclusion between the 1995 Draft Report and the 1996 Final Report. However, there remain significant inexplicable differences between the recommendations of the 1995 Draft Report and the policies set out in AQPM 1999/51. The most striking of these is that the 1995 Draft Report would have permitted the importation of whole fish with the viscera, head, fins and tail removed as well as fillets and steaks of any weight, with or without the skin. That is, the 1995 Draft Report recommended allowing imports of product for the HRI trade as well as what Australia now calls "consumer-ready" product.

4.244 Despite those findings, Australia's new policies would exclude whole fish with the viscera, head, fins and tail removed and would also exclude skin-on fillets and steaks of 450 grams or more. This might be understandable if there was any new evidence that these products would generate waste of significant quarantine concern. On the contrary, the evidence reviewed in the 1999 Draft Report confirms that waste from such products would be of negligible quarantine significance.85 Nor do the new policies impose these product form limitations on non-salmonid imports. The unavoidable inference is that the new restrictions on salmonids have a non-quarantine motive, such as making imported product less attractive to Australian consumers and to hotel, retail and institutional purchasers.

4.245 Accordingly, there are ample factors, both old and new, that cumulatively lead to the conclusion that the distinctions in Australia's appropriate levels of protection in different situations result in discrimination or a disguised restriction on international trade

4.246 Australia's pilchard requirements are a glaring example of its discriminatory treatment of salmonid imports. By virtue of Australia's decision, imports of whole, uneviscerated pilchards will be eligible for import permits subject only to cursory information and certification requirements. In reaching this decision, Australia has ignored the preponderance of evidence that the risks posed by importations of uneviscerated pilchards are, if anything, greater than those posed by the importation of eviscerated salmonids for human consumption.

4.247 According to the 1999 Draft Report:

"The importation of pilchards for use as fish feed by the tuna industry is a particular case where scientists have raised concerns that exotic disease (pilchard herpesvirus) may have become established by this route."86

4.248 In 1995 and again in 1998, Australian pilchard stocks were devastated by outbreaks of a disease caused by what are believed to be herpesviruses. The 1995 episode has been described in a published article by Australian and New Zealand scientists as "the largest mortality event ever recorded in any fish species in terms of both numbers affected and geographic range".87 The same scientists conclude that the characteristics of the 1995 outbreak are consistent with the theory that it was "due to an infectious disease agent that was not present before in Australian pilchard stocks".88 Moreover, they suggest that the importation of feed or baitfish was a possible mechanism for the introduction of such pathogens. The article notes that Australia imports over 10,000 tonnes per year of species including pilchards and herring for tuna feed, that frozen herring bait is a potential source for the dissemination of VHSV, and that bacterial pathogens are also known to survive in frozen clupeoids.89

4.249 In the light of its professed "highly conservative" approach, Australia's response to the suspicion that pilchard imports may be responsible for such outbreaks borders on wilful blindness. The 1999 Draft Report states that it is not clear whether the virus responsible for the 1995 and 1998 outbreaks is endemic or exotic, and, if exotic, how it was introduced. Nor is it clear, according to the Report, whether the "herpes-like virus apparently responsible for the 1995 mortality event is the same as the one apparently responsible for the 1998 event".90

4.250 Australia's approach appears to be (a) because it does not apply controls on the virus (or viruses), it does not need to consider the risk of not doing so; and (b) because some sort of herpesvirus is now in Australia, possibly due to pilchard imports, there is no need to impose quarantine restrictions on pilchard imports to prevent the introduction of other disease agents.

4.251 Little is known about the diseases of clupeoids generally, and diseases of pilchards are poorly documented.91 What is known is that pilchard imports are a principal suspect in two recent disease outbreaks in Australia, one of which was the largest ever recorded. The 1999 Draft Report also recognizes pilchards as a confirmed host of VHSV.92 Although the 1999 Draft Report does not prescribe additional requirements for salmonids to address VHSV, another new AQIS Policy Memorandum (AQPM 1999/66, 23 September 1999) sets out draft revised heat-treatment policies for salmonid products such as smoked salmon, ostensibly to address disease agents including VHSV.93

4.252 Nevertheless, Australia will continue to permit the importation of uneviscerated pilchards that will be deposited directly into the aquatic environment. At 10,000 tonnes, Australia's imports of one such species alone, Sardinops sagax, are already twice Australia's own estimate of the maximum possible volume of eviscerated salmonids for human consumption.94 Moreover, Australia expects pilchard import volumes to increase because the reduction in domestic pilchard catch, as a consequence of the pilchard mortality, has created a high demand for imported pilchards to sustain the operation of domestic industries.95

4.253 Australia's cavalier approach to pilchard imports stands in stark contrast to its "highly conservative" approach to imports of eviscerated salmonids for human consumption. The unavoidable inference is that Australia applies its "highly conservative" approach to quarantine to products that compete with its domestic industries but not to products on which its domestic industries rely. Canada's suspicions on this point were confirmed in recent testimony to Australia's Senate by Mr. Brian Jeffriess, President of the Tuna Boat Owners Association of Australia. Mr. Jeffriess testified that Australia should logically ban bait imports because of the same concerns about the same diseases, but that the tuna farming industry, which is three times the size of the salmon industry, depends 90 per cent on imported bait. Thus, the resulting discrimination or disguised restriction on international trade can be inferred from Australia applying its "highly conservative" approach to quarantine to imported products that compete with its domestic products but not to imported products on which its domestic industries rely.96

4.254 Australia's categorical statement that "[t]he 1999 IRA notes that the pilchard herpes virus was endemic in Australian pilchards" stands in contradiction to the 1999 Report which reports the chair of the Joint Pilchard Scientific Working Group as advising that the Working Group is still coordinating a national research programme on pilchard mortality to determine whether the virus is endemic or exotic, and if exotic, the source of the virus.97 It therefore appears that the Panel's experts are not the only ones not convinced that the virus is endemic.

4.255 However, the 1999 Report seems to ignore the advice of the chair of the Joint Pilchard Scientific Working Group. It states that the virus "is considered endemic to Australia and there is no evidence to suggest that there are exotic strains of the virus overseas. Thus, the implementation of quarantine measures against this agent is not warranted".98

4.256 Australia's conclusion suggests that if the virus is exotic to Australia - as it might well be - the implementation of quarantine measures would be warranted. Given the scientific uncertainty surrounding the virus, its proven ability to devastate Australia's commercially important domestic pilchard fishery and Australia's purported "high or very conservative" appropriate level of protection, one would expect Australia to take interim measures, such as under Article 5.7 of the SPS Agreement, while continuing to gather the additional information necessary for a more objective assessment of risk. Under the circumstances, it is antithetical to a "high or very conservative appropriate level of protection" for Australia to discount or dismiss the views of the Joint Pilchard Scientific Working Group and to declare quarantine measures unwarranted.

4.257 When one compares Australia's actions, or lack of actions, in this regard to Australia's highly trade restrictive approach to eviscerated salmon for human consumption - a product which has never been implicated in disease introduction anywhere - it is apparent that Australia maintains arbitrary or unjustifiable distinctions in its appropriate levels of protection in different situations resulting in discrimination or a disguised restriction on international trade.

4.258 With regard to New Zealand's disease status, it is unclear what Australia's expression "more favourable disease status overall" necessarily means. Although fewer of the salmonid disease agents in question have been found in New Zealand, New Zealand's disease status is not necessarily "more favourable" than Canada's given the presence of Myxobolus cerebralis (the causative agent of whirling disease) in New Zealand but not in Canada.

4.259 Moreover, the mere fact that certain diseases have been detected in a particular country is of limited relevance when a long and elaborate succession of events must occur before a disease agent present in one country may become established in another country by means of imported fish product.

4.260 Regardless of New Zealand's "disease status", there are a range of explanations for why Australia would impose less restrictive measures on salmon from New Zealand. For example, Australian government officials have testified before the Australian Senate that the Australian salmon industry is interested in exporting whole salmon - that is, with head on and gills in - to New Zealand.99 New Zealand may well consider it a quid pro quo that its salmon be permitted into Australia in the same form.

4.261 It also may be that because New Zealand is a much smaller producer of salmon products than countries such as Canada, the United States or Norway, New Zealand salmon is not considered by Australia to pose the same competitive threat to Australia as salmon product from countries such as Canada. In addition, New Zealand produces only one species of Pacific salmon (chinook) and no Atlantic salmon at all.

4.262 Thus, contrary to Australia's assertion, its decision to impose lesser requirements on New Zealand salmon is not "overwhelming evidence" that its measures do not result in a disguised restriction on trade. There are far less exculpatory explanations than Australia suggests for why it would impose less restrictive requirements on imports of salmon from New Zealand than from countries such as Canada.

4.263 Australia also suggests in its rebuttal submission that, with regard to the third element under Article 5.5, if any of the cumulative warning signals or additional factors ceased to exist, the Panel could not make a finding of inconsistency with Article 5.5.100 Australia's argument is entirely unwarranted.

4.264 It is evident from the Appellate Body's own analysis that the word "cumulatively" could not possibly mean that the absence of one warning signal or additional factor would eliminate the basis for finding Australia in violation of its Article 5.5 obligations. If Australia were correct, then the Appellate Body itself could not have made the finding it did, having excluded from consideration one of the "additional factors" on which the Panel relied.

Australia

4.265 In the event of adverse findings by the Panel under the first two elements of Article 5.5, the measures applied to fresh chilled or frozen salmon from Canada do not result in discrimination or a disguised restriction on international trade. The original Panel findings, as modified by the Appellate Body, concluded that the measures then in existence resulted in disguised restriction on international trade on the basis of three "warning signals" and two "additional factors", considered cumulatively. If one or more of these ceased to exist, the Panel cannot make a finding of inconsistency with Article 5.5. A "warning signal" is not as such "evidence" of a disguised restriction on international trade.101

4.266 The Panel now has before it substantially different scientific and factual evidence. The architecture and structure of the measures is completely different. In regard to the three "warning signals", Australia has submitted positive evidence in regard to comparative risks and introduced new measures supported by risk assessments on the three groups of product.

4.267 In regard to the "additional factors", Canada agrees that the first factor is no longer applicable. On the second factor, Australia has submitted new evidence under the first element of Article 5.5, identifying any risk to salmon as negligible. The only "new factor" which Canada relies on is an inference that the new trade-liberalising restrictions on salmonids have a non-quarantine motive. This is rejected on the facts, including the scientific superiority of the 1999 IRA as a risk assessment. Canada has not claimed that the 1995 draft recommendations are based on a risk assessment within the meaning of Article 5.1. New Zealand is the most commercially competitive supplier to the Australian market, yet whole eviscerated product can be imported from New Zealand. Account must also be taken of the substantial domestic criticisms following the announcement of the 19 July measures.

4.268 In terms of Australia's market for fresh chilled or frozen salmon, Australia provides the following evidence. Around 98 per cent of whole fresh Canadian salmon is exported to the United States market. There are good market opportunities for headless product; whole fish sold at the wholesale level is normally cut up into cutlets and fillets for sale to retail establishments (including the HRI sector) and private consumers. The ABARE report considers that the lower value end of the market (including high volume catering establishments such as hotels and clubs) would require product in consumer ready form. In assessing measures that achieve Australia's ALOP, AQIS considered matters such as practicality and ease of implementation, cost of compliance, cost-effectiveness and impact on trade, subject to the overriding requirement that measures reliably contribute towards achieving Australia's ALOP. AQIS closely consulted with the importers association to ensure that commercial trade would be feasible.

4.269 Australia has addressed all of the matters identified by the original Panel as the basis for its findings of inconsistency with Article 5.5. The evidentiary basis of the original Panel findings has ceased to exist. Canada has not established that any "new" factors have arisen. The measures taken to comply do not result in discrimination or a disguised restriction on international trade.



80 1999 Draft Report, sec. 8.1.2.

81 Ibid., citing the WAFIC Report.

82 Australia - Salmon Panel Report, paras. 4.45 and 4.80.

83 1995 Draft Report, p. i. See also Appendix 5, p. 269.

84 Australia - Salmon Panel Report, para. 8.159, Australia - Salmon Appellate Body Report, para. 177.

85 1999 Draft Report, sec. 5.2.2.3.

86 Ibid., sec. 8.1.2.

87 R.J. Whittington et al., "Epizootic mortality in the pilchard Sardinops sagax neopilchardus in Australia and New Zealand in 1995. I. Pathology and epizootiology," (1997) 28 Diseases of Aquatic Organisms 1, (hereinafter "Whittington"), p. 2.

88 Ibid., p. 14.

89 Ibid., pp. 14-15.

90 1999 Draft Report, sec. 8.1.2.

91 Whittington, p. 12.

92 1999 Draft Report, sec. 6.2.1.

93 AQPM 1999/66, p. 5.

94 1999 Draft Report, sec. 1.6.2.2(b).

95 Ibid., sec. 8.1.2.

96 Canada�s First Supplementary Submission, para. 24.

97 1999 Report, sec. 8.1, pp. 347-348.

98 Ibid., p. 348.

99 Australia, Senate, Rural and Regional Affairs and Transport Legislation Committee, Proof Committee Hansard, Reference: Importation of salmon products into Australia (11 November 1999), p. 358 (testimony of Stephen Deady, Assistant Secretary, WTO Branch, Department of Foreign Affairs and Trade).

100 Australia�s Rebuttal Submission, para. 133.

101 Australia - Salmon Appellate Body Report, para. 162.


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