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(Continued)
H. ARTICLE 5.6
Canada
4.270 All three elements for a violation of Article 5.6 are present in this
case. Less trade restrictive alternatives include not requiring that salmon be
processed to "consumer-ready" form in order to be released from quarantine. This
alternative is reasonably available, would not (according to the experts) have
any bearing on Australia's appropriate level of protection, and would be
significantly less trade restrictive in that it would permit the importation and
sale in the Australian market of salmon product forms that are currently
prohibited.
4.271 Similarly, it would appear that measures such as evisceration plus the
exclusion of juvenile and spawning salmonids along with inspection, grading and
washing could reduce risk to levels acceptable to Australia according to its
matrix. Such measures are reasonably available; they are taken in the ordinary
course by countries that export salmon for human consumption. They are also
significantly less trade restrictive in that they would permit the importation
and sale of product forms such as whole, eviscerated head-on products that are
currently prohibited.
Australia
4.272 Australia was faced with two separate claims by Canada: (a) the claims in
its first submission and (b) the claims in paragraph 82 of its oral submission.
4.273 In the context of a WTO Member's ALOP, a Panel or Appellate Body cannot
substitute its own reasoning about the implied level of protection for that
expressed consistently by a Member.102 It is the ALOP which determines the SPS
measures to be introduced or maintained, not the SPS measure which determines
the ALOP.103 The ALOP may only be implied from the level of protection reflected in
the SPS measure where it was not determined by the Member or expressed with
sufficient precision.104
1. Alternative measures reasonably available, taking into account technical
and economic feasibility
Canada
4.274 There are alternative, technically and economically feasible measures
reasonably available. Australia contends, without any scientific evidence or
evaluation of probability, that a long succession of trade restrictive
requirements must all be satisfied before imported salmon products may enter
Australia. It is not at all clear from the 1999 Report why any one, or several
of these measures, such as evisceration, inspection and grading, or restriction
of imports to non-spawning adults, might not suffice. Individually, each of the
measures required by Australia can be presumed to be reasonably available,
taking into account technical and economic feasibility.
Australia
4.275 Canada has not identified that there are alternative measures reasonably
available, taking into account technical and economic feasibility. Canada's
claim is based on an assertion that: "Individually, each of the measures
required by Australia can be presumed to be reasonably available, taking into
account technical and economic feasibility". Canada does not provide any
evidence on the reasonable availability and technical and economic feasibility
of alternative measures. Nor does it address the science of the risk assessment
on which the measures are based.
4.276 The feasibility of one measure may be dependent on the existence of
another. It cannot be presumed that individual measures or sets of measures are
technically and economically feasible in practice. The measures are not applied
on the assumption that all Canadian salmon potentially hosts all of the six
diseases of concern to Australia's ALOP. The 1999 IRA on non-viable salmonids
was conducted on a disease-by-disease basis in terms of hazard identification,
risk evaluation and risk management. The risk management measures are applied
on
a disease-by-disease basis. The different risks associated with different salmon
(e.g. Pacific/Atlantic/wild/farmed/juveniles/spawners) are directly reflected in
the specific risk management measures applied. For example, the risk management
measures for A. salmonicida do not apply to wild, ocean-caught Pacific salmon.
The specific measures also reflect disease risk at the sub-regional level.
Canada does not provide any evidence that alternative measures are in fact
reasonably available, taking into account technical and economic feasibility.
4.277 In paragraph 82 of its Oral Statement, Canada appears to be suggesting
that a less trade restrictive approach would be to (a) allow the unrestricted
importation of all salmon product in any form for further processing, and (b) simply ensure that such imported product is only treated in fish processing
facilities that do not discharge untreated fish waste. Canada has not provided
evidence supporting its assertions on less trade restrictive and technical and
economic feasibility. Nor has it addressed the third element of the legal test
set out by the original Panel (Panel Report, paragraph 8.167) that the measures
would meet Australia's ALOP, or provided any documented evidence on the market
behaviour of the HRI sector. Neither has Canada rebutted the factual evidence
submitted by Australia on Australia's market for fresh chilled or frozen salmon.
4.278 The approach proposed by Canada would involve imports being treated in
either of two ways: (a) identification at the border of product intended to be
processed and ensuring that it was not diverted to plants not using approved
waste processing methods. This would require an additional monitoring system
involving significant additional administrative cost; or (b) a requirement that
all plants in Australia that could conceivably process imported product use
approved waste processing methods. It would not be feasible for Australia to
monitor all possible processing sites to ensure that no unapproved processing
took place.
2. Alternative measures that would achieve Australia's ALOP
Canada
4.279 Australia's appropriate level of protection for salmonids is, it claims, a
"high or very conservative level of protection aimed at reducing risk to very
low levels while not based on a zero-risk approach". Australia has concluded
that evisceration alone would not achieve this appropriate level of protection
and that all of the additional, more trade-restrictive measures it imposes on
salmon imports are necessary to achieve its appropriate level of protection.
However, Australia has no basis for this assertion, having failed, in the 1999
Report, to evaluate the probability of the entry, establishment or spread of the
disease agents of concern to it according to the measures which might be applied
or which it does apply.
4.280 Some sense of Australia's "very conservative" appropriate level of
protection can be inferred from the 1995 Draft Report, from the "risk evaluation
matrix" in section 1.2.4 of the 1999 Draft Report and from the measures that
Australia applies to prevent the transmission of fish diseases domestically.
4.281 According to the 1995 Draft Report, the imposition of certain import
conditions set out in Appendix 6 achieved Australia's appropriate level of
protection.105 During the original Panel process, Australia confirmed that its
appropriate level of protection had not changed since the 1995 Draft Report was
released.106 Australia has offered no indication that its appropriate level of
protection for salmonids has changed since the Panel process.
4.282 According to the 1995 Draft Report, Australia achieved its appropriate
level of protection without several of the documentation requirements imposed
under its new policies, without prohibiting the importation of whole fish with
the viscera, head, fins and tail removed and without prohibiting the importation
of skin-on fillets and steaks of 450 grams or more. In the absence of any new
evidence of risk, it is therefore clear that Australia's appropriate level of
protection can be achieved by no more than the conditions set out in the 1995
Draft Report.
4.283 It is also possible that even if the conditions in the 1995 Draft Report
achieve Australia's appropriate level of protection, they too are more trade
restrictive than required to do so. For example, Australia has contended that
the lack of importation of juvenile non-salmonids is sufficient to reduce to
negligible the likelihood of even the entry of VERV via the importation of
56,000 tonnes of non-salmonids for human consumption.107 One would therefore
reasonably expect a restriction on juveniles and spawning adults to reduce the
likelihood of the establishment of pathogens such as A. salmonicida , R.
salmoninarum and IHNV to similarly low levels via the importation of a fraction
of the amount of eviscerated salmonids. Even if such a measure did not achieve
"negligible" risk of disease establishment, by merely achieving "extremely low"
risk, according to Australia's "risk evaluation matrix", the exclusion of
juveniles and spawners would satisfy Australia's appropriate level of protection
for all of the salmonid diseases of concern to it.
4.284 Similarly, Australia has not considered the effect of freezing on the
levels of any pathogens present in salmonids for human consumption. There are
quantified data to indicate that freezing reduces pathogen loads for many of the
salmonid disease agents of concern to Australia, including A. salmonicida , R.
salmoninarum and IHNV. For example, the 1999 Report states that a single
freeze-thaw cycle reduced the titre of IHNV by four orders of magnitude (i.e.
10,000 times).108 The 1999 Report states that freezing reduces the titre of A.
salmonicida by 99 per cent.109 The 1995 Draft IRA states that freezing reduces the
viability of R. salmoninarum by 77.5 per cent.110 Australia has offered no
explanation for why it has failed to take this information into account or to
apply less stringent measures to frozen salmonid product than to fresh or
chilled product.
4.285 Another way of assessing which alternative might achieve Australia's
appropriate level of protection is to consider, in the context of Australia's
"risk evaluation matrix", the measures that it applies domestically. As
Australia has acknowledged, the measures it applies domestically to achieve the
objective of preventing the spread of regional diseases within Australia are
limited to restrictions on live fish. The diseases that it manages in this way
include EHNV, an OIE notifiable disease, and VERV and EUS, both OIE "other
significant diseases".111 Australia has no legislative restrictions at all on the
domestic movement of any dead fish, eviscerated or uneviscerated, salmonid or
non-salmonid, for any diseases.
4.286 Given their OIE status and Australia's own description of these diseases
as "significant"112, it can reasonably be assumed that these diseases would have
consequences in at least the "low" to "moderate" range according to the scale
used in Australia's matrix. According to the matrix, this means that even
without risk management measures, Australia considers that the risk of disease
establishment from the movement of uneviscerated dead fish products, including
products known to host these three OIE diseases, is no higher than "low" to
"very low", or additional risk management measures would be required.
4.287 The necessary implication is that the risk of disease establishment from
the movement of eviscerated product would be even lower. A measure that required
evisceration and excluded juvenile and sexually-mature fish would reduce the
risk of disease establishment lower still. These two measures, plus inspection
and grading, would reduce the risk of disease establishment yet lower.
4.288 If these three requirements merely reduced risk one step in the matrix
from "very low" to "extremely low", according to the matrix, it would achieve
Australia's appropriate level of protection for all of the salmonid diseases of
concern to it. Recalling the state/industry council study cited by Australia,
the absence of documented disease establishments as a result of thousands of
tonnes of bait fish imports in Western Australia indicates that the risk from
such imports is somewhere between very low and non-existent.113 This would seem to
confirm that the risk from eviscerated product is at least extremely low, given
the absence of documented disease establishments as a result of the movement of
billions of tonnes of dead eviscerated fish all around the world.
Australia
4.289 Taking into account technical and economic feasibility, there are no
alternative measures identified that would achieve Australia's ALOP. Canada
cannot substitute its own reasoning about Australia's ALOP for that expressed
consistently by Australia to be a high or very conservative level of protection
aimed at reducing risk to very low levels, while not based on a zero-risk
approach.
4.290 Canada has not claimed that the 1995 Draft Report constitutes a proper
risk assessment. Nor has Canada addressed Australia's ALOP in the context of the
limited product coverage of the 1995 Draft Report - fresh chilled or frozen
adult, wild, ocean-caught Pacific salmon from Canada and the United States.
4.291 The risk evaluation matrix is part of the risk assessment evaluation. It
was not developed as a mechanism to articulate Australia's ALOP. Canada seeks to
infer inconsistency in Australia's ALOP in relation to the negligible risk
associated with entry of VERV in relation to non-juvenile marine fish other than
salmonids. VERV is an endemic disease of non-salmonids. It is outside the scope
of the risk assessment's disease evaluation of non-salmonids.
4.292 Australia's ALOP cannot be inferred from the measures applying to prevent
the spread of regionally endemic diseases associated with the internal movement
of non-viable domestic fish. Fish for human consumption are eviscerated at the
point of harvest, and it is not commercial practice to harvest juvenile fish.
The risk management of disease transmission associated with spawning fish
populations within Australia is best targeted at live fish. There is scientific
justification for applying a different set of measures for different products
imported into Australia
4.293 Canada asserts that evisceration, inspection and grading, and restriction
to imports to non-spawning adults, would meet Australia's ALOP. These measures
in fact mirror Canadian commercial production practices. The 1999 IRA
demonstrates that these commercial practices, individually or in combination,
would not achieve Australia's ALOP.
4.294 The 1999 IRA identified diseases requiring risk management to meet
Australia's ALOP for salmon. The risk management measures necessary to achieve
Australia's ALOP were determined on a disease-by-disease basis (Chapter 5). For
each disease agent identified as requiring specific risk management, AQIS
summarised the key risk factors associated with that agent.
4.295 AQIS then evaluated each risk management measure to determine the degree
to which it would address the key risk factors. From this analysis, a measure or
a combination of measures was determined as necessary to reduce the risk posed
by that disease agent to meet Australia's ALOP. Only those measures determined
to be necessary in each case to address the key risk factors were included. It
was found that for none of these disease agents was a single measure sufficient
to reduce the risk to the ALOP. Chapters 4 and 5 of the 1999 IRA concluded that
for specific diseases, implementation of the measures singly would reduce risk,
but not to the extent required to meet Australia's ALOP. Accordingly, a
combination of measures (not identical in all cases but based on the risk
factors for the particular agent) were implemented that would meet the ALOP.
4.296 The measures must address all of the risk factors of all of the diseases
for which Canadian salmon is host to. Given the conclusions of the 1999 IRA, it
is scientifically invalid to assume that one or more, but not all, of the
measures would achieve Australia's ALOP for the diseases of concern in relation
to salmon.
4.297 With respect to the claims in paragraph 82 of Canada's Oral Statement,
paragraph 5.2.2 of the 1999 IRA describes disease risks associated with
commercial processing. The commercial processing of imported salmonids could
generate a significant volume of solid or liquid waste at the premises' point of
discharge. Continuous long-term release of untreated waste at the premises'
point of discharge could result in infective material building up to a
biologically significant level in the aquatic environment.
4.298 To control risk associated with commercial processing, AQIS applies
controls over commercial plants processing imported salmonid products with
regard to location, waste disposal and related matters. To ensure that imported
salmonids were not commercially processed in non-approved premises, only
consumer-ready product will be permitted to be released from quarantine.
Consumer-ready product is product which is ready for consumption/use by the
end-user, or product which if further processed would not generate significant
quantities of waste products of quarantine concern.
4.299 The 1999 IRA identified that some disease agents are associated with skin.
For skinless fillets, commercial processing for consumer sale would generate
minimal waste. Skinless fillets of any weight would be "consumer-ready". For
skin-on fillets of greater than 450 grams, commercial processing would generate
significant quantities of waste, for example from processing into skinless
fillets.
4.300 "Consumer ready" addresses two distinct issues: the scientific basis for
risk management measures; and the practical effectiveness of a measure.
"Consumer-ready" cannot be examined independently of the risk management
measures applied to processing.
4.301 In summary, the 1999 IRA identified as the primary concern the release of
waste (skin, fins, flaps, bones, etc.) into the aquatic environment from
commercial processing of imported product. Product with skin-on in pieces
greater than a consumer-ready portion is likely to be subject to further
commercial processing in Australia. This would produce significant
concentrations and volumes of waste material that would present an unacceptable
risk of biologically significant numbers of organisms capable of causing disease
in salmon being released into the aquatic environment. Commercial processing
must take place in approved premises that are required to dispose of wastes in a biosecure manner.
4.302 It would not be feasible for Australia to prevent the diversion of
imported product "in any form" to commercial processing in non-approved
premises. Accordingly, the cut-off point of 450 grams was not determined in any
arbitrary way but in the light of advice from commercial sources about the size
of salmon portions likely to be commercially processed. This is the least
trade-restrictive way of managing waste processing risk.
4.303 The experts advising the Panel accepted that this explanation was
plausible and could not find evidence on which to dismiss it. The experts agreed
that Australia's measure could logically be connected with risk factors arising
from proper consideration of exposure pathways. Canada has not put forward
scientific evidence to refute Australia's contention that the consumer-ready
requirement is based on genuine disease concerns. Canada's proposal would
significantly increase the volume of waste identified in the risk analysis as
being of higher disease risk. It would not meet Australia's ALOP. Nor has any
third party suggested an alternative measure that would address waste processing
risk. The European Communities, in fact, agreed that the 450 gram measure was
justifiable.
4.304 Adoption of New Zealand's definition of "consumer-ready" would not be
appropriate to Australia and would not achieve Australia's ALOP. This is
explained in its answer to the Panel's question 32.
3. Alternative measures significantly less restrictive to trade
Canada
4.305 The alternative measures are significantly less restrictive to trade.
First, although Australia concluded that evisceration alone is insufficient to
achieve its appropriate level of protection, all salmon exported for human
consumption is subject to far more primary processing than just evisceration. As
Canada has already noted, product is thoroughly washed both inside and out, to
remove residual tissues and mucus on the skin. In addition, it is required by
law to be carefully inspected and graded.
4.306 The evidence shows that these procedures can reasonably be expected to
reduce risk beyond that achieved by evisceration alone. In addition to
evisceration, washing, inspection and grading, all Canadian farmed salmon, which
includes all Atlantic salmon, and some wild salmon is bled thoroughly when it is
killed. If the removal of blood-rich viscera can be expected to significantly
reduce risk, then the removal of the blood itself can be expected to reduce risk
even more. In addition, the gills may be removed in the course of primary
processing.
4.307 All of these alternative measures are subsets of the measure that
Australia would impose under its new policies. The alternative measures
unquestionably would be less burdensome and would allow the importation of forms
of eviscerated product that would still be prohibited by Australia's new
policies. The alternative measures are therefore clearly significantly less
restrictive to trade than Australia's new measures.
4.308 Based on the 1999 Report, Australia's quarantine concern seems to be
directed mostly, if not exclusively at a single pathway: untreated waste
discharges from fish processing plants. If this is in fact the case, it is
impossible to understand why Australia has chosen to restrict the product form
in which imported salmon may reach the retail or hotel, restaurant and
institutional (HRI) trade. It would obviously be significantly less trade
restrictive, and technically and economically feasible, to simply ensure that
imported salmon product imported in any form for further processing is only
processed in facilities that do not discharge untreated waste.
4.309 This alternative would necessarily meet Australia's appropriate level of
protection. If the pathway that does not meet Australia's appropriate level of
protection involves untreated waste, there is no reason for Australia to
prohibit the importation of head-on or any other form of product for processing
provided that processors treat their waste. Nor is there any reason to deny
access to consumers and the HRI trade to product that is not "consumer-ready"
because the 1999 Report does not consider the waste generated by those consumers
and the HRI trade to pose a significant risk.
4.310 In fact, if Australia is really concerned about substantial concentrations
of waste materials such as skin from commercial processing, its measures are
irrational. Thus, the measures that Australia has chosen would not appear to
meet its appropriate level of protection whereas the measures suggested by
Canada would.
4.311 Second, this alternative is reasonably available, taking into account
technical and economic feasibility. Under Australia's current measures,
Australia is prepared to establish an approvals process for such facilities and,
presumably, to enforce it. There is no reason why it would be any less
technically or economically feasible to enforce a requirement that commercial
processing facilities that process salmon do not discharge untreated waste.
4.312 Canada presumes that Australia already inspects and monitors its fish
processing facilities for a variety of purposes, including cleanliness and
safety and compliance with environmental regulations. Canada fails to see why
the same sort of inspections could not feasibly ensure that only facilities that
treat their waste process large quantities of salmon. Such monitoring could be
undertaken in conjunction with deterrent-level penalties for non-compliance.
4.313 Canada's alternative also would be significantly less trade restrictive.
Australia contends that, "the Panel cannot assume to itself that the HRI sector
will only purchase whole salmon or that whole salmon is more attractive to the
HRI sector than consumer-ready salmon". At no point has Canada said that the HRI
sector "will only purchase whole salmon". The relative attractiveness of various
salmon products depends on the uses to which they will be put. Canada has simply
pointed out that there is a market for product other than in "consumer-ready"
form and that Canadian product is excluded from that market by Australia's
measures. Canada has quoted Graham Kerr that the preferred product in the HRI
sector is whole head-on or head-off product. Canada has cited, among other
evidence, the ABARE Report which states that around half of farmed salmon in
Australia is sold as whole fresh, gutted and gilled fish. Canada has indicated
that its principal salmon exports are whole, eviscerated salmon often head-on
and often gills-in. Canada has also cited, twice, Mr. Vaile's admission that the
AQIS requirements may make Canadian exports unviable and uncompetitive.
Australia has not refuted any of this.
4.314 Thus, there is ample evidence before the Panel that Australia continues to
ban product forms for which there is a demand and in which Canada trades. Any
measures that would allow trade in these product forms would be significantly
less trade-restrictive than Australia's current measures. The alternative to
which Canada referred in paragraph 82 of its Oral Statement would allow trade in
these product forms and would therefore be significantly less trade-restrictive
than Australia's current measures.
4.315 Australia asks why Canada has accepted New Zealand's measures but not
Australia's. Canada has not accepted New Zealand's measures. In the light of the
alternative measures, Canada considers that New Zealand's packaging requirements
would still be more trade-restrictive than required but would nevertheless be
significantly less trade restrictive than Australia's current measures.
4.316 Furthermore, pursuant to AQPMs 1999/51, 1999/64, 1999/69 and 1999/79,
Australia also imposes more onerous documentation requirements on salmonids than
those it imposes on non-salmonids. According to the OIE Code, no documentation
or certification related to fish health is required of imports of dead,
eviscerated fish for human consumption. Canada therefore considers that
Australia's extensive and detailed documentation and certification requirements
as they relate to salmonid fish health are burdensome and unnecessary,
particularly as Australia has failed to demonstrate how its specific
documentation and certification requirements achieve its appropriate level of
protection.
4.317 The most burdensome and unnecessary requirements are those that Australia
imposes on dead, eviscerated salmonids for human consumption but does not impose
on non-salmonids including uneviscerated fish imported for bait or feed. A
measure that does not require, for example, a health certificate, is by
definition "reasonably available". It is also less costly, less time-consuming
and less labour intensive and is therefore less trade-restrictive.
Australia
4.318 There is no other significantly less trade restrictive measure reasonably
available, taking into account technical and economic feasibility. Canada's
evidence is limited to a bare assertion that "all of the alternative measures
are subsets of the measure that Australia would impose under its new policies.
The alternative measures unquestionably would be less administratively
burdensome and would allow the importation of forms of eviscerated product that
would still be prohibited by Australia's new policies".
4.319 The alternative measures must be significantly less trade restrictive, and
not merely less trade restrictive. Canada has not demonstrated in what way the
alternative measures are less trade restrictive. Nor has it shown that the
difference in treatment between the 1999 IRA measures and the alternative
measures was significant. "Administratively burdensome" does not equate to
"significantly less trade restrictive".
4.320 The 1999 IRA resulted in the application of the minimum (i.e. least trade
restrictive) measures which achieve its ALOP. Only measures determined to be
necessary for each disease to address the key risk factors are applied.
4.321 In terms of its claims in paragraph 82 of Canada's Oral Statement,
Canada's proposal would involve replacing pre-arrival quarantine conditions with
more administratively burdensome and complex post-arrival quarantine conditions.
In accordance with cost-recovery, the additional costs of such arrangements
would be reflected in the wholesale and retail price of imported product.
4.322 Canada has also not explained how such arrangements might generate
significantly more demand for fresh, chilled or frozen salmon from Canada. It
has not demonstrated in what way its proposal is "significantly less trade
restrictive". Australia has provided evidence - in the form of company product
lists - from commercial producers of salmon in Australia and the Pacific that
there are good market opportunities for headless product. Canada has claimed
that the preferred product in the "commercially important HRI sector is whole
head-on or head-off product" (paragraph 23 of its first submission). Canada
provides no documentation to substantiate this assertion.
4.323 While commercial traders are generally unwilling to provide details of
their own market surveys, advice from traders and end-users in the Australian
market indicates that whole salmon is normally used only as a ceremonial centrepiece. Traders have also advised that whole fish sold at the wholesale
level is normally cut up into cutlets and fillets for sale to retail
establishments (including restaurants) and private consumers. The ABARE
report-in-progress found that, provided Canada was commercially-competitive, it
could take advantage of the potential market growth opportunities identified for
consumer-ready product.
4.324 The 1999 IRA identified specific key risk factors for each disease. For
each risk factor, AQIS identified a range of risk management measures. These
were based on normal commercial procedures (e.g. evisceration, de-heading), the
operations of competent authorities and their interactions with industry (e.g.
surveillance , monitoring and inspection) and common procedures in the
international trade for animals and animal products (e.g. health certification,
testing treatment and quarantine). In assessing the measures that would 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. The importers association was also closely consulted
on commercial practice and consumption to ensure that commercial trade would be
feasible.
4.325 In his response to Question 20, Dr. McVicar advises: "In general, it
appears that Australia has identified the minimum risk reduction measures which
can be implemented to safeguard local stocks from the identified diseases of
concern.".
4.326 In its third party submission, the United States claims:
"Although our exporters are pleased with the market access that we have been
promised we remain concerned about the size limitation particularly as no
processing facilities have yet to be certified or licensed to be able to conduct
the further processing required." (paragraph 6)
"Limiting imports of salmon with skin or bones to 450 grams denies to US
exporters the opportunity they have around the world, including the EU and
Japan, to sell salmon whole to those importers who then cut or process the fish
to the specifications of the market ..." (paragraph 7)
The United States presents analysis that purports to show that the United States
can effectively service only one quarter of the Australian market for salmon
products under the conditions Australia has set (paragraph 8).
4.327 Australian authorities await any request for approval of processing
facilities in Australia. Such approval will be considered against the criteria
that have been published. No request has yet been received.
4.328 Paragraph 7 is clearly misleading. The United States acknowledged in
paragraph 6 that the opportunity to export headless, eviscerated salmon exists
under the conditions Australia has established. Paragraph 8 is incorrect. The
United States can serve all of the Australian market except for the small
proportion of demand for whole (i.e. head-on) fish. This may be by exporting
consumer-ready product, or by exporting head-off, gilled and eviscerated fish to
approved processing plants in Australia.
I. ARTICLE 2.3
Canada
4.329 Australia's measure arbitrarily or unjustifiably discriminates between
Australia and Canada, contrary to Article 2.3, first sentence, of the SPS
Agreement. By imposing stringent restrictions on dead, imported finfish
purportedly to prevent the spread of disease while imposing no restrictions
whatsoever on the domestic movement of dead finfish, Australia's measure
arbitrarily or unjustifiably discriminates between Australia and Canada, to
Canada's detriment.
4.330 As previously discussed, there are a number of what Australia describes as
"significant finfish diseases" that have a restricted or regional distribution
in Australia. In all cases, the only internal restrictions that Australia
applies to prevent the spread of these diseases are on 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 for human consumption.114
4.331 Among the diseases that Australia addresses domestically without any
restrictions on the movement of dead finfish are GUD, EHNV (an OIE notifiable
disease) and VERV and EUS (both OIE "other significant diseases").115
4.332 According to the 1999 Draft Report, VERV "causes epizootic disease
characterized by high mortality rates in larvae and juvenile fish of several
marine species".116 These include turbot, jack, grouper, halibut, sea bass and
barramundi. In fact, VERV is also known as "barramundi nodavirus". Nevertheless,
Australia imposes no internal restrictions on the movement of susceptible
species, including non-viable barramundi or their products.117
4.333 According to the 1999 Draft Report, EHNV is an iridovirus that causes
seasonal outbreaks of disease, including occasionally in rainbow trout. The 1999
Draft Report is silent as to the impact of EHNV on farmed species,118 but it does
state that iridoviruses generally "can cause significant pathological effects on
cultured fish".119 The Report also states that the establishment of iridoviruses
could have an effect on farmed tuna; that they could limit the prospects of
developing mariculture industries; and that many of the species that could be
susceptible to iridoviruses are economically significant in commercial and
recreational fisheries in Australia.120
4.334 According to the 1999 Draft Report, EUS is a "serious disease of wild and
farmed fish", affecting over 100 freshwater and several brackish water species.121
4.335 Thus, Australia imposes no controls whatsoever on domestic non-viable
finfish to control the spread within Australia of serious diseases of proven pathogenicity to commercially significant species. This absence of controls
extends even to susceptible species such as barramundi and rainbow trout.
4.336 Yet under its new policies, Australia will impose controls on imported
non-viable finfish generally, will impose more stringent controls on imported
barramundi and other specified species122, and already maintains particularly
restrictive controls on imports of salmonids. In the case of non-salmonids,
controls will apply regardless of whether the imported species are known to host
diseases of significance to wild or cultured fish species in Australia.
4.337 By imposing these controls on non-viable imported fish products without
imposing equivalent controls - or in fact any controls on non-viable domestic
fish products of acknowledged susceptibility to commercially significant
diseases, Australia's measures arbitrarily and unjustifiably discriminate
against other Members, including Canada, contrary to Article 2.3, first
sentence, of the SPS Agreement.
4.338 Dr. McVicar has indicated his uncertainty as to whether Australia should
appropriately restrict the movement of dead finfish internally in the absence of
"detailed knowledge of the vulnerability of the fish populations in different
parts of Australia to the diseases listed in the question". However, one can
assume that Australia considers its fish populations in different parts of
Australia to be vulnerable to the listed diseases because it has imposed
restrictions on the domestic movement of live fish.123
4.339 It therefore is apparent that the concern Australia professes regarding
the quarantine risk posed by dead fish or fish products extends only to imported
fish. Australia does not seem to consider that once dead, its own fish present a
significant risk of disease transmission, even when they may host significant
diseases that may pose severe pathological dangers to known susceptible and
commercially important fish populations.
Australia
4.340 The Appellate Body stated that: "In the context of an examination under
Article 2.3, first sentence, it would first of all be necessary to determine the
risk to Australia's salmonid population resulting from diseases, such as EHNV,
which are endemic to some parts of Australia but exotic to others".124 The Panel's
mandate is limited to measures taken to comply, i.e. the measures applying to
fresh chilled or frozen salmon. It is not the function of the Panel to reopen
the original findings in respect of facts and evidence in existence at the time
of the original findings. Canada has not adduced any new facts or other evidence
in regard to EHNV, the only disease associated with salmonids.
4.341 The "identical or similar conditions" to be compared are the risk to salmonids and other fish arising from imported fresh chilled or frozen salmon
from Canada with the risk to salmonids and other fish arising from endemic
diseases - with a restricted or regional distribution - of non-viable fish of
domestic origin.
4.342 There are no "identical or similar conditions" prevailing between Canada
and Australia in respect of the measures taken to comply. Canada identifies the
following diseases which are endemic to Australia: GUD, EHNV, VERV, EUS and
herpesvirus. Only one of these diseases is associated with salmonids (EHNV in
rainbow trout). Canada's claim is not based on a comparison of risks, but
"equivalency" on the basis of measures, i.e. that Australia does not impose
controls on the domestic movement of non-viable fish "equivalent" to the
measures applied to imported finfish identified with exotic diseases.
4.343 Canada's comparisons also go beyond the Panel's mandate of measures
applying to fresh chilled or frozen salmon from Canada. It refers instead to
"dead, imported finfish".
4.344 Canada's evidence is rejected on the science and on the facts. Australia
does not apply risk management measures to imported products in respect of the
diseases identified by Canada. Fish for human consumption are, at a minimum,
traded in eviscerated form to maintain shelf life. Australia does not have
domestic populations of many of the species listed by Canada as disease hosts.
There is no commercial trade in the non-viable form of some of the host species,
e.g. there is no trade in dead goldfish. Some host species have a limited
population distribution or correspond precisely with disease distribution. Some
of the diseases are highly host-specific. Some of the diseases have been
reported only rarely in fish older than larvae and juvenile fish, which are not
normally commercially traded for human consumption. Australia has developed and
applied technically feasible control programmes.
4.345 Australia concludes that the comparisons raised by Canada are outside the
Panel's terms of reference. The comparisons are also invalid in the legal
context of Article 2.3, first sentence. Canada has not demonstrated that there
are "identical or similar conditions" prevailing. Much of its evidence is in the
realm of assertion, factually incorrect or without any scientific basis. The
factual and scientific evidence submitted by Australia rebuts any prima facie
presumption by Canada.
4.346 Even if the Panel were to find that there were "identical or similar
conditions" there is no evidence that the measures taken to comply arbitrarily
or unjustifiably discriminate between Canada and Australia. Canada does not seek
to address the second element. The sole basis of its claims is that there must
be absolute equivalency of measures in risk management of all exotic finfish
diseases and endemic diseases which are not widespread.
4.347 This is rejected by the risk assessment sections of the 1999 IRA's, as
well as the Appellate Body's statement in EC - Hormones125, and the experts',
including Dr. Wooldridge's, response to Question 10. To the extent that
"equivalence" is relevant, the 1999 IRA's addressed this in disease surveillance
by exporting countries and in the recognition of subnational regionalisation of
diseases in exporting countries.
4.348 Canada has the burden of proof to establish a prima facie presumption that
different measures arbitrarily or unjustifiably discriminate between Australia
and Canada in respect of the measures taken to comply. It has not put forward
any evidence in this regard. Article 2.3 first sentence does not impose a
requirement of equivalence in measures. Australia's evidence rebuts any
presumption that the measures taken to comply do not take account of relevant
"equivalence". The measures taken to comply do not arbitrarily or unjustifiably
discriminate between Australia and Canada in any prevailing identical or similar
conditions.
102 Ibid., para. 199.
103 Ibid., para. 203.
104
Ibid., para. 207.
105 1995 Draft Report, p. 223.
106 Australia - Salmon Panel Report, para. 4.175.
107 1999 Draft Report, secs. 8.1 and 8.3.2.
108 1999 Report, sec. 4.2.1, p. 100.
109 Ibid., Appendix 7, p. 505.
110 1995 Draft Report, sec. 4.2.7, p. 73.
111 Draft Ornamentals Report, sec. 2.2.1.
112 1999 Draft Report, sec. 1.4.4; Draft Ornamentals Report, sec.
1.4.4.
113 Ibid., sec. 8.1.2, citing the WAFIC Report.
114 1999 Draft Report, sec. 1.4.4; Draft Ornamentals Report, sec.
1.4.4.
115 1999 Draft Report, sec. 1.3.2.
116 Ibid., sec. 6.2.1.
117 Ibid., sec. 8.3.2.
118 Ibid., sec. 7.4.2.2.
119 Ibid., sec. 7.4.2.1.
120 Ibid.
121 Ibid., sec. 6.2.3.
122 AQPM 1999/64.
123 1999 Report, pp. 87, 257 and 470.
124 Australia - Salmon Appellate Body Report, para. 255.
125 EC - Hormones Appellate Body Report, para. 78.
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