What's New?
 - Sitemap - Calendar
Trade Agreements - FTAA Process - Trade Issues 

espa�ol - fran�ais - portugu�s
Search

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)


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.


To continue with J. ARTICLE 8 AND ANNEX C

Return to Table of Contents